CTW nee CW v. SGW

FCMC 4115/2015

[2022] HKFC 197

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 4115 OF 2015

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J U D G M E N T
( Stay of Proceedings )

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A.  Introduction

1.  This is the hearing of the Respondent husband’s Summons dated 14 July 2021 (“Summons”). The Summons seeks to stay the parties’ Hong Kong summonses regarding spousal maintenance on grounds of forum non conveniens. The Respondent says the Courts of Queensland, Australia is a more appropriate forum to determine those summonses.

2.  For the purposes of this decision, the Petitioner and Respondent shall be referred to as W and H respectively.

B.  Background Facts

3.  W is now 61, and H is 65. They were married on XX November 1990 in Australia. W is a British and Australian citizen, while H has Australian citizenship. W now works as an air stewardess with Qantas Air. H was a pilot with Cathay Pacific (CP), he had a long career of 28 years as a CP pilot, earning HK$106,000 – 130,000 per month before he resigned in November 2020.

4.  There are four children born in wedlock. All are adults. Two daughters are still residing with the W in Queensland, Australia.

5.  W has been living in Australia with the children since 1994. H has been residing and working in Hong Kong; both parties commuted to and from Hong Kong and Australia.

6.  Parties separated in June 2013, W petitioned for divorce on 10 April 2015; Decree Absolute was pronounced on 23 August 2016.

B1.  Court Proceedings

7.  On 4 February 2016, after an FDR hearing, HHJ Melloy made a Consent Order of even date. The Consent Order was amended on 6 May 2016 (“Amended Consent Order”).

8.  The relevant part of the Amended Consent Order provided for:

“...

H to pay W a monthly sum of HK$50,000 from date of Order until either the W remarries or the H turns 65 whichever first to occur [“Monthly Maintenance”]; and

H to pay W 57.5% of the [CP] Provident Fund (“CPP Fund”) as at the date of Decree Absolute (23 August 2016) upon realization of the fund and receipt by H [“Lump Sum”].”

9.  On 1 December 2020, H filed a Summons to (i) have his Monthly Maintenance owed reduced from $50,000 to $0, effective from November 2020 onwards; and (ii) have all arrears (then at HK$125,000) remitted (“H’s Maintenance Summons”).

10.  On 6 July 2021, W filed her Summons for (i) H’s spousal Monthly Maintenance to be reduced to $25,000 per month, to take effect upon H turning 65 on 18 May 2022 (“W’s Maintenance Summons”); and (ii) leave to enforce arrears of over 12 months.

11.  Approximately a week after W’s Maintenance Summons, H filed the current Summons. The parties’ Maintenance Summonses were stayed by Order dated 1 December 2021 pending this hearing.

B2.  H’s Version of Events on the Amended Consent Order

Monthly Maintenance

12.  H accepts he has not paid W all of the Monthly Maintenance owed. In particular, he accepts he owes W as follows for the stated periods:

(1)  March to July 2020: H says he only paid part of the Monthly Maintenance due for this period. He did not pay in full because of his own liabilities, and because of reduction in flying due to covid. H acknowledges that he owes W $125,000 for this period;

(2)  November 2020 to March 2021: H paid W HK$50,000 per month. However, H says those payments were to pay the Balance (as hereinafter defined), rather than Monthly Maintenance. In other words, H acknowledges that he did not pay any Monthly Maintenance during this period, and owes W HK$250,000 (HK$50,000 x 5). In this regard:

(i)  H decided to resign in around November 2020;

(ii)  H’s resignation was premature, as the retirement age for international pilots is 65, but he was only 63. H says he resigned early because: (i) his salary package was revised in “grossly unfair” fashion; (ii) he is entitled to $529,585 compensation upon resignation, but not if he is dismissed; and (iii) his benefits might be affected if he is dismissed;

(iii)  Notably, H stopped paying Monthly Maintenance in around the time he issued H’s Maintenance Summons.

(3)  From April 2021 onwards: H continued to not pay Monthly Maintenance.

Lump Sum

13.  As for the Lump Sum, H proposed and W accepted that the CPP Fund was worth HK$7,889,665.68 as of the date of Decree Absolute. 57.5% thereof was HK$4,540,157.

14.  From 18 January 2021 to 23 March 2021, H paid W HK$4,289,907 in eight instalments, leaving HK$250,250 outstanding (the “Balance”).

15.  At one point, H appeared to claim in an email to W dated 8 May 2021 that he was keeping the Balance essentially as security for these proceedings:

“I have conferred at length with Massie and Clement. They advised me that I well in my rights to hold onto an amount until the Magistrates decision on final Alimony. This being a decision for the monies that I have underpaid or have been paying during Covid and since my retirement from [CP].”

16.  However, H now says he does not owe W the Balance because, as mentioned in §12(2) above, H says the 5 monthly HK$50,000 payments he paid W from November 2020 to March 2021 (HK$250,000) was to pay off the Balance.

17.  Before moving on to set out W’s version of events, I note that H has emphasised that he wants to honour his obligations to pay for two of his daughters, and is not applying to vary maintenance for the children. He has also said that he has bought an Australian property.

18.  As such, it is not the case that H has no funds to pay W the Monthly Maintenance and the Lump Sum. H clearly has funds, and is just choosing not to pay W.

19.  I also note that H has put forward arguments on maintenance in his opening and closing submissions. They will not be dealt with in this decision, and should be dealt with at the hearing of the two Maintenance Summonses instead.

B3.  W’s Version of Events on the Amended Consent Order

20.  Since the parties separated, W has obtained a degree in criminology, and had found a job as a parole officer for the Queensland State Government. After the divorce, and due to stress, W instead sought employment as a flight attendant with Qantas Airline. She works 24 hours a week. She has reported in her Form E that her monthly income is $16,670, and her monthly expenses are $58,603. She has been relying on her income and H’s spousal maintenance to support herself.

21.  W remains concerned about her job security, as covid has affected the airline industry. W planned on using money she would receive from H to buy a real property on Gold Coast, but the price of properties on Gold Coast has risen substantially over time. The partial payment of the Lump Sum and the cessation of the spousal maintenance have now put her in a precarious position to proceed with this plan due to the uncertainties arising from the H’s Maintenance Summons.

22.  As of the time of the hearing, W says H owes her:

(1)  From March 2020 to September 2020: HK$125,000 Monthly Maintenance;

(2)  From November 2020 to March 2021: HK$250,000 Monthly Maintenance (if the HK$250,000 H paid during this period is for the Lump Sum);

(3)  From April 2021 to May 2022: HK$700,000; and

(4)  The Balance (HK$250,250) (if the HK$250,000 H paid W from November 2020 to March 2021 is for Monthly Maintenance rather than to pay off the Balance).

23.  At a directions hearing on 24 March 2021, HHJ Melloy said whether the $250,000 H paid from November 2020 to March 2021 was Monthly Maintenance or payment towards the Lump Sum should be determined at the two Maintenance Summonses’ trial. I agree. Either way, as at date of this hearing, H owes W $1,075,000 or $1,075,250.

C.  SJE evidence for the Summons

24.  A SJE report was called for at a hearing on 16 July 2021.

25.  Ms Shanna Quinn (the “SJE”) was appointed. She produced a report dated 11 April 2022 (the “Report”); she also attended court to give evidence.

26.  The Report seeks to address whether a Hong Kong maintenance Order is registrable and enforceable in Queensland; and the likely outcome of an application for variation of maintenance and the time frame required.

27.  On whether a Hong Kong maintenance order is registrable and enforceable in Queensland, the Report states:

(1)  Generally speaking, a maintenance order made in Hong Kong (being a reciprocating jurisdiction), which makes one party to a marriage liable to pay the other an amount periodically, is registrable in Australia. Registration will take 28 days;

(2)  Once the Hong Kong maintenance order is registered, the payee of the liability is not entitled to and cannot enforce payment other than by instituting legal proceedings in the Federal Circuit and Family Court of Australia;

(3)  Before instituting such proceedings, the parties must comply with “pre-action procedures”, i.e. participate in mediation;

(4)  The proceedings would take no more than six months, and the parties would receive judgment within two months.

28.  On whether and how a Hong Kong maintenance Order can be varied in Queensland, the relevant parts of the Report states:

(1)  Australian courts have discretion to vary spousal maintenance orders;

(2)  When deciding whether to vary a spousal maintenance order, the following considerations are key:

(i)  The parties’ finances at the time of the original order and at the time of the application to vary; and

(ii)  Whether a party is able to support himself or herself after variation;

(3)  Australia strongly favours clean break principle, this is enshrined in section 81 of their Family Law Act 1975:

29.  On whether the Queensland courts would order a party to pay arrears of maintenance, the Report states an Australian Court will order payment of arrears if there is a “just cause” for doing so.

30.  The parties were required to disclose their finances so that the SJE could address the likely outcome of an application for variation of the Amended Consent Order, and whether the Queensland courts would order H to pay W arrears of maintenance. H failed to do so. On that basis, the Report made the following observations:

(1)  Given W’s financial disclosure, W would not be able to support herself. She would, in fact, be probably “struggling”;

(2)  Given how lacking H’s financial disclosure was, the SJE could not properly assess the merits of H and W’s Maintenance Summonses;

(3)  Given how lacking H’s financial disclosure was, the SJE could not assess whether there is a “just cause” for ordering H to pay W arrears of maintenance:

“If the Court has determined that the Petitioner has a right to spousal maintenance …, it must be persuaded that there is a just cause to order arrears be paid. Without knowing the particularity of the Respondent’s financial circumstances at the time of non-compliance and his present financial circumstances, I am unable to form a view as to whether the court would establish there is a just cause.”

D.  Witnesses’ credibility

31.  W has argued that H had failed to disclose certain information at the material time:

(1)  At time of H’s Maintenance Summons in December 2020, he did not disclose that he had resigned from CP in November 2020, nor did he respond to W’s email dated 10 February 2021 requesting information about his resignation.

(2)  He did not disclose he received a final payment of $574,654 on 30 November 2020; nor the amount of his CPP Fund of $11,308179 received on 8 January 2021 until he responded to W’s Questionnaire in November 2021.

(3)  He did not disclose that he listed his property in Discovery Bay for sale in November 2020 until he was cross examined in Court, nor that he signed a Sale & Purchase Agreement in February 2021 until his Answers in November 2021. He also failed to disclose that he received the sale proceeds of HK$4M at the end of April until he was cross examined.

(4)  He did not disclose that he had relocated to Australia, and it was only in cross examination that he stated that this happened in April 2021.

(5)  He acknowledged that he did not disclose the receipt of AUD150,000 from his mother’s estate.

(6)  He did not disclose that he purchased a property in Australia in June 2021, and this information did not appear in his Form E filed in July 2021. His purchase contract was only provided in his Answers in November 2021.

32.  When asked in Court, his answers were vague and riddled with ambiguity. While this information is not relevant to this Summons, I am of the view that his attitude to full and frank disclosure and his credibility left a lot to be desired.

33.  I find the W to be a credible witness, and the SJE’s evidence clear and unimpeachable.

E.  Principles regarding Forum Non Conveniens

34.  Both sides referred me to various authorities on this matter. I will rely on the more recent decision of YJH v LKHM [2019] HKFLR 418, where Au Yeung J summarized the principles of forum non conveniens:

“43. The Court of Final Appeal summarized the principles governing applications to stay Hong Kong actions on forum non conveniens in SPH v SA (2014) 17 HKCFAR 364 at §51:

“1. The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action ie in which the action may be tried more suitably for the interests of all the parties and the ends of justice?

2. In order to answer this question, the applicant for the stay has to establish that, first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action) and second, there is another available forum which is clearly and distinctly more appropriate than Hong Kong. Failure by the applicant to establish these two matters at this stage is fatal.

3. If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceedings has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.

4. If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer. Deprivation of the one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.” (emphasis added)

44. For proper assessment, it is not enough to load up factors which connect a case or the parties to any particular jurisdiction. The court is required to focus on the appropriateness of a forum from the point of view of the trial of the action: Rambas Marketing Co LLC v Chow Kam Fai David [2001] 3 HKC 250, at 255B-E, Recorder Ma SC as he then was.

….

45. The court has to consider a basket of other factors. In V & M (A Child) (Stranding: Forum Conveniens: Anti-Suit Injunction) [2019] 4 WLR 38, Williams J stated at §35(iii):

“In assessing the appropriateness of each forum, the court must discern the forum with which the case has the more real and substantial connection in terms of convenience, expense and availability of witnesses. In evaluating this limb the following will be relevant; (a) … parties’ connections with the competing forums in particular the jurisdictional foundation; (b) the relative ability of each forum to determine the issues including the availability of investigating and reporting systems. In practice judges will be reluctant to assume that facilities for a fair trial are not available in the court of another jurisdiction but this may have to give way to the evidence in any particular case; (c) the availability of witnesses and the convenience and expense to the parties of attending and participating in the hearing; (d) the availability of legal representation; (e) any earlier agreement as to where disputes should be litigated; (f) the stage any proceedings have reached in either jurisdiction and the likely date of the substantive hearing; (g) principles of international comity, in so far as they are relevant to the particular situation in the case in question. However public interest or public policy considerations not related to the private interests of the parties and the ends of justice in the particular case have no bearing on the decision which the court has to make; (h) it has also been held that it is relevant to consider the prospects of success of the applications.” (emphasis added)

….

53. Ultimately, whether to stay or refuse a stay depends on whether the defendant can establish that to refuse a stay would cause injustice. In MacShannon v Rochware Glass Ltd [1978] AC 795, Lord Salmon at 818-819 of his judgment stated as follows:

“In an action brought in England when its natural forum is Scotland, I consider the question as to whether it should be stayed depends upon whether the defendants can establish that to refuse a stay would produce injustice. Clearly if the trial of the action in England would afford the Scottish plaintiff no real advantage and would be substantially more expensive and inconvenient than if it were tried in Scotland, it would be unjust to refuse a stay. If, on the other hand, a trial in England would offer the plaintiff some real personal advantage, e.g., if he had come to live in England, a balance would have to be struck and the court might in its discretion consider that justice demanded that the trial should be allowed to proceed in England (see e.g. Devine v. Cementation Co. Ltd. [1963] N.I. 65). To my mind, the real test of stay or no stay depends upon what the court in its discretion considers that justice demands. I prefer this test to the test of whether the plaintiff has behaved ‘vexatiously’ or ‘oppressively’ on a so-called liberal interpretation of these words.” (emphasis added)

35.  Taking into account these principles, I will proceed to apply to the facts of this case.

F.  Discussion

F1.  H must show Hong Kong is not the natural or appropriate forum

36.  For the Summons to get off the ground, the onus is on H to prove that Hong Kong is not the natural or appropriate forum for the Summons.

37.  The parties agree that they do not have ties to Hong Kong at this point in time. They are both now resident in Australia. Their income, earning capacity, and assets are all Australia based. Accordingly, enforcement of any Orders resulting from the parties’ Maintenance Summonses would take place in Australia. So on a prima facie basis, all of the parties’ connections are to Australia, not in Hong Kong.

F2.  H must show there is another clearly and distinctly more appropriate forum

38.  While I am not here to deal with the merits of the two Maintenance Summonses, I need to consider the issues that are likely to arise from them. The variation of maintenance applications call for the Court to look at matters de novo, the material change of circumstances leading to the applications, the parties’ updated financial positions and expenses, the basis and circumstances under which the previous order was made; and with those considerations, to consider whether the Amended Consent Order would warrant an earlier termination of spousal maintenance (as requested by H) or a reduction of the amount for an extended period of time (as requested by W).

39.  H must additionally show there is another clearly and distinctly more appropriate forum than Hong Kong. To this end, H raises two main arguments to suggest Queensland is such a forum.

40.  First, H argues the parties’ disputes – their earning capacities, their expenses and standard of living, and how much it would cost W to purchase a property in Queensland – all concern Queensland only, not Hong Kong; and the Queensland Family Court is best placed to determine those disputes. I accept that this should normally be the case, as the local court is in a better position to assess these factors.

41.  However, it is my view that the Hong Kong Courts is no less competent in assessing the costs of living in another country. In particular, the Hong Kong Family Courts are well versed in tackling such international issues. As the Hon Cheung JA (as he then was) said at §15 of DGC v SLC nee C [2008] HKFLR 160:

“The Family Courts in HK have a vast experience in dealing with cases of an international dimension. Many involved the large expatriate community in Hong Kong whose assets are located both in Hong Kong and overseas. The Hong Kong courts regularly deal with the valuation of overseas properties and made orders thererto.”

42.  My conclusion also receives support from evidence the SJE gave when W’s counsel asked her about this Court’s ability to assess the parties’ costs of living in Australia:

“Q: Would be it fair to say, to your knowledge, that the Hong Kong Courts have experience dealing with evidence relating to the costs of living in Australia

A: Yes

Q: And would you agree that a Hong Kong Court would be competent to assess those costs and standard of living of people living in Australia?

A: I think it would be very competent.”

43.  Secondly, H argues Queensland is a better forum because if the Maintenance Summonses were dealt with in Hong Kong, the parties would have to give evidence in Hong Kong. Not only is it now difficult for an Australian to leave the country, but the parties will also waste costs and time on travel, accommodation, and quarantine.

44.  I disagree with this argument. The parties can give evidence in Hong Kong without incurring those costs and wasting that time, as they can give evidence through VCF. In that regard, I note that this entire trial was smoothly conducted with both parties attending from Australia through VCF, and arguments by legal representatives in Hong Kong.

45.  I would reject this argument in any event, as mere convenience is not sufficient to make a forum clearly and distinctly more appropriate than another. As was stated in Rambas Marketing Co LLC v Chow Kam Fai David [2001] 3 HKC 250:

“The emphasis is upon “appropriate” rather than “convenient” because this is not simply a matter of practical convenience.” (at 254B)

“Mere convenience is not enough nor is it enough simply to point to factors which connect a case or the parties to any particular jurisdiction.” (at 255B)

46.  Based on the above analysis, I am not of the view that Queensland is “clearly and distinctly more appropriate” forum than Hong Kong.

47.  Strictly speaking, the above analysis is sufficient to have the Summons dismissed. Nonetheless, for the sake of completeness, I will proceed to consider some important aspects of the Australian processes that clearly tip the scales in W’s favour.

F3.  Will W be deprived of a legitimate personal or juridical advantage if the matter is tried in Australia?

48.  In my judgment, W will be deprived of a legitimate personal or juridical advantage if the parties’ Maintenance Summonses are tried in Queensland.

49.  First, the Amended Consent Order may not be registrable in Queensland. If so, it would also not be enforceable or variable in Queensland. If this happens, W’s Maintenance Summons would be a non-starter:

(1)  The Amended Consent Order should have lapsed: The Amended Consent Order provided for H to pay spousal maintenance to W until he turned 65, this he did in May 2022, a month prior to this hearing; and H had received his CPP Fund after he resigned in November 2020 and on his case, he had paid the Lump Sum to W. The SJE was asked whether W has the ability to apply to vary maintenance contained in a lapsed Hong Kong order in Australia, the SJE answered:

“A: Yes, that’s correct. I mean there’s no order to vary.

…

A: Mm. I hadn’t thought about that … but it’s a pretty obvious question….

I mean I can’t see how [W] can because there’s no order.”

(2)  Further, the Amended Consented Order may also not be registrable in Queensland, because it was made based on legal principles that may be different from Australia’s legal principles. The SJE gave clear evidence to this effect:

Q: So it’s not necessarily the case that the order from the other jurisdiction would just be accepted if it didn’t comply with the norms that the Australian court would have assessed to accept, would it?

A: That’s not my understanding.

Court: That is or isn’t?

A: No, that … it could possibly be a factor.

Court: That they will decide not to register.

A: Possibly.”

50.  Secondly and relatedly, if W cannot register the Amended Consent Order in Queensland, she would not be able to pursue her claim for arrears thereunder.

51.  Thirdly, Australian law may preclude W from pursuing spousal maintenance:

(1)  In the light of the answers given by the SJE mentioned in §49(1) above, H’s legal representative asked her as to W’s ability to bring an application for spousal maintenance in Australia after H turns 65. According to the SJE, under Australian law, a spouse cannot claim spousal maintenance 12 months after a divorce order is made. While she was not absolutely sure, the SJE was quite confident that the time for W to do so has passed under Australian law;

(2)  Further, according to the Report, the Australian courts prefer to achieve a clean break between the parties. Accordingly, they do not appear to entertain claims for spousal maintenance as readily as Hong Kong courts do.

52.  Fourthly, it appears that Hong Kong and Australia’s tests for determining whether a spouse is entitled to maintenance maybe different. Whereas Hong Kong looks at needs (generously interpreted), Australia looks at W’s ability to support herself. As I have received no evidence on whether these tests are actually synonymous or different, I cannot rule out the possibility that W’s Maintenance Summons may be prejudiced if proceeded with in Australia.

53.  Fifthly, even if W were to overcome the above hurdles and initiate spousal maintenance proceedings afresh in Australia, according to the SJE, this could take up to 2 years, and could end up taking longer, as Australia mandates mediation before proceedings commence. The parties’ Maintenance Summonses started in December 2020, and these proceedings have no doubt drained on W’s resources. Requiring her to start afresh would be unfair.

54.  Finally, I note that H had said this in his closing submission:

“It is for the Petitioner to show deprivation of a legitimate personal or jurisdictional advantage. She lives in Queensland. On jurisdictional advantage Ms Quinn saying she doesn’t know cannot satisfy the burden of showing one exist.”

55.  H should be made aware that the Court is looking for deprivation of juridical advantage to W, not jurisdictional.

Balance the two forums / issue of Injustice?

56.  In view of the matters stated above, I am of the view that W will suffer distinct juridical disadvantages if this Summons is allowed. On the other hand, I cannot see any disadvantage or injustice H would suffer if the Maintenance Summonses are heard in Hong Kong – certainly not to the extent W would be disadvantaged if the matter were proceeded with in Queensland.

57.  I therefore conclude that the Summons should be dismissed.

G.  Costs

58.  I do not see any reason why costs should not follow the event. I will therefore make an Order that H is to pay W’s costs of this stay application.

59.  In this regard, I further make two relevant observations.

60.  First, on the very morning of the first day of trial, H’s legal representatives sent a letter to Court seeking to expunge a transcript of the FDR which took place in 2016 from a hearing bundle they themselves prepared. W’s counsel objected to this 11^th hour “application by letter”.

61.  H’s application was denied. H had ample opportunity to make this application earlier. He could have done so since July 2021. The parties had since exchanged affirmations, had a number of directions hearings, and H did not make this application on any of those occasions. I ordered the cost for the time spent on this late “application” against H. The actual hearing started at 12:30pm on the first day.

62.  Secondly, H’s conduct caused all those involved in this trial to incur costs unnecessarily.

63.  The SJE said in her Report that H’s financial disclosure was not anywhere near sufficient. She also noted that, in March 2022, H’s legal representatives asked her to amend her brief to “remove that part which asked for an opinion about likely outcome of a variation application”. This was done without W’s knowledge or agreement.

64.  The SJE said that H’s conduct “exceptionally hindered” her from compiling her Report. This in turn affected this Court’s ability to consider the merits of the Maintenance Summonses in the light of Australian law. H’s conduct is without good reason or justification. If it persists for the parties’ Maintenance Summonses, this Court will not hesitate to draw adverse inferences against H with regards to his ability to pay W maintenance, and will consider adverse costs consequences upon H.

H.  The Order

65.  Is as follows:

(1)  The Respondent’s Summons is dismissed.

(2)  Leave is granted to the Respondent to restore the H’s Maintenance Summons.

(3)  Leave is granted to the Petitioner to restore the W’s Maintenance Summons.

(4)  The Respondent is to pay the Petitioner the costs of this Summons, including all costs reserved; to be taxed if not agreed, with certificate for counsel. This is a costs order nisi to be made absolute 14 days from the date of this Judgment.