JWH v. TSM

CAMP 479/2022, [2024] HKCA 388

On Appeal From [2022] HKFC 192

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 479 OF 2022

(ON AN INTENDED APPEAL FROM FCMC NO. 10176 OF 2017)

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DECISION

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Hon Cheung JA (giving the Decision of the Court)  :

I. Introduction

1.  In this decision, we will refer to the respondent wife as ‘the wife’ and the petitioner husband as ‘the husband’.

2.  There are three applications before us.

3.  The first is the wife’s renewed application for leave to appeal against a judgment for ancillary relief made by Her Honour Judge Melloy on 14 September 2022 (‘AR Judgment’). Leave to appeal against the AR Judgment was refused by the Judge in a ruling handed down on 3 November 2022 (‘Leave Decision’).  The second is the wife’s application to adduce new evidence.  The third is the wife’s application for a Hadkinson Order.

II.  The background

4.  The parties were married in January 2007.  There is one child of the family, a girl named C (‘C’), born in 2009.  At the time of the trial, C was 13 years of age and was attending an international school in Hong Kong.

5.  The parties separated in 2017 and the husband filed a petition for divorce in August 2017.  The decree nisi was pronounced on 22 August 2018.

6.  Initially, the parties were given joint custody and shared care and control of C by consent.  In October 2020, however, the wife was convicted of assaulting C when C was in her care and custody.

7.  By a consent order dated 1 June 2020, the husband was granted sole custody, care and control of C, while access was granted to the wife.

8.  However, by reason of the wife’s continuous harassment and abuse of the husband and C, the husband obtained a non-molestation and exclusion order from the Court against the wife.[1] 

9.  After the ancillary relief trial (14 to 17 September 2021)  and before the AR Judgment was handed down (on 14 September 2022), the husband was given leave to temporarily remove the child from the jurisdiction of Hong Kong in order to go on holiday from 7 May to 8 August 2022.  In breach of the Court order, however, the husband has not returned the child to Hong Kong. 

10.  According to the husband’s affirmation filed in these proceedings, he has been habitually residing in Switzerland since 29 August 2022.  Child abduction proceedings have been initiated by the wife against him in Hong Kong and Switzerland.[2]

11.  In his 2^nd affirmation, the husband further revealed that C has been attending an international school in Switzerland and that he has purchased an apartment in Switzerland with the financial assistance from his parents.[3]

III.  The decisions below

1)  The AR Judgment

12.  By the AR Judgment, the Judge, applying the four-step approach in LKW v DD (2010)  13 HKCFAR 537, made the following findings and determination :

(1)  Step 1 – identification of the assets : the Judge assessed the parties’ asset pool to be worth approximately $9,353,910, which consists of (1) joint assets of $7,375,050 (comprising the Cheung Chau Property and the Japan Property); (2) husband’s assets of $237,230; and (3) wife’s assets of $1,741,630 (AR Judgment, [41]).

(2)  Step 2 – assessment of the parties’ financial needs : the Judge noted the wife’s case that she needed at least $27,000 per month for her expenses, and the husband’s claim that he has outgoings in the region of $120,000 per month (including $46,000 as general expenses for himself and C)  (AR Judgment, [35]-[36], [64]).

(3)  Step 3 – whether or not the sharing principle should be adopted : the Judge concluded that there was insufficient money available in the matrimonial pot to make a clean break feasible, and that the sharing principle ought to apply (AR Judgment, [44], [46]).

(4)  Step 4 – if so whether any good reason to depart from an equal division of the assets : having considered the section 7 factors, the Judge concluded that it was justified to depart from the yardstick of equality on limited basis, namely, given the husband is wholly responsible for C’s expenses going forward, he should be given ‘a bit of a buffer’.  He was therefore granted 55% of the asset pool and the wife 45% (AR Judgment, [60]).

13.  To effect the 55:45 division of the asset pool, the Judge determined that (1) each party shall retain their own assets; (2) the Japan Property should be transferred to the husband; (3) the Cheung Chau Property should be sold with the net proceeds of sale be divided 1/6 to the husband and 5/6 to the wife (AR Judgment, [61]).

14.  Further, given there were insufficient assets to achieve a clean break, the Judge found that the wife should be entitled to receive and that the husband should be able to pay to the wife a monthly maintenance of $13,000.  The wife has stated that she needed at least $27,000 per month.  The Judge was of the view that the balance of $14,000 per month should be covered by the wife’s own salary (AR Judgment, [64]).

2)  The Leave Decision

15.  On 28 September 2022, the wife applied to ‘review’ the AR Judgment.  The Judge treated this as an application for leave to appeal.

16.  The Judge noted that the wife attempted to reargue the case afresh and to introduce new evidence, without making any application in accordance with the Ladd v Marshall principles (Leave Decision, [6]).

17.  The Judge concluded that the intended appeal had no reasonable prospect of success, nor was there any other reason in the interests of justice why the appeal should be heard.  The Judge therefore dismissed the application by the Leave Decision.  Given the husband was then in breach of the court order for the return of the child, the Judge reserved the costs of the application pending further consideration of the Docket judge in due course (Leave Decision, [7]-[8]).

IV.  Grounds of appeal and new evidence

18.  Together with the summons for leave to appeal dated 17 November 2022 (‘Leave Summons’), the wife submitted a document entitled ‘Grounds of Appeal’ in which she advanced 10 intended grounds of appeal, as follows :

1)  ‘Ground 1 – I was not legally represented and Judge Melloy, the Petitioner’s counsel Mr. Giles Surman, and the Petitioner all speak English fluently.  They were very friendly with each other, as if they knew each other socially, and my English was not good enough to catch all of their meaning.’

2)  ‘Ground 2 – Judge Melloy erred in omitting the property of the Petitioner in US.  She stated that she would not include it because in his 13^th affirmation he states that his property was purchased in 2003, before meeting me and his property should be regarded as being either pre or non-martial [sic].’

3)  ‘Ground 3 – Judge Melloy erred in including my mother’s Malaysian property, counting it as if I owned 50%.  My Mom used my name to get the bank loan.  It is a joint account with her.  Also, my mother acquired the property in 2004 before I met the Petitioner.  Hence, if Judge Melloy determined that the property, with which the Petitioner purchased with his parents was “pre or non-martial [sic],” then the Malaysian property, where my mother resides, should be treated the same.’

4)  ‘Ground 4 – Judge Melloy erred in not having the full picture of the assets of the Petitioner. For example, the U.S. property in California, his US bank account in Alhambra, California and his bank account at Bank of Communications Hong Kong.  She excluded from the “Matrimonial Pot” money the Petitioner stole from our joint account totalling HK$350,000 and our daughter’s savings of HK$20,000.’

5)  ‘Ground 5 – Judge Melloy erred in allowing the Petitioner to allege and believe that he paid for everything, and that I did not pay a cent.  I have presented evidence that I was paying the household bills for 12 years and our daughter’s education at a local school, Catholic Mission School from my savings.’

6)  ‘Ground 6 – Judge Melloy erred in not considering my contribution to the properties and his business.  I paid some amount of down payment for all three properties with my savings and assisted him to set up his business.’

7)  ‘Ground 7 – Judge Melloy erred in saying that she reasoned that the Petitioner had legal fees to pay, she did not consider that I also had paid legal fees until I could not afford to be represented, I moved house twice due to her Order to oust me out from my home and ordered me to see psychologists.  These were large expenses.’

8)  ‘Ground 8 – Due to his recent court violation regarding The Hague Convention with the aspect of Child Abduction, (see page 361)  the Addendum, the “Statement of Claims” for Responding to the Petitioner’s letter dated 5 August 2022.  Cathay Pacific confirmed that the Petitioner had spent HK$761,000 on Business Class flight tickets, but had cancelled the booking after he secured the court order to bring my daughter out of Hong Kong.  The airline refunded the money to him. This information shows that he has more assets than the HK$237,230 determined by Judge Melloy (see page 271)’.

9)  ‘Ground 9 – Judge Melloy stated in her judgment that I am hiding funds.  I did not.  Judge Melloy unfairly chose to believe him and included the expired bank accounts that no longer exist.  I also mentioned I am not able to reveal the exact figures for Form E, because the Petitioner had stolen my bank documents, which Judge Melloy had ordered him to return to me on 15 September 2021.  When I told Judge Melloy in chamber that the Petitioner did not return all the bank documents, she shrugged her shoulders to end the discussion.’

10)  ‘Ground 10 – Judge Melloy did not consider that the Petitioner is an American and he has properties in the United States.  He is currently living outside of Hong Kong with a female companion and he has abducted my daughter and the family dog.  He has no intention of returning to Hong Kong.  He can sell the properties and not comply with the court order to pay me the settlement.  There is no way for me to chase him and the monthly HK$13,000 MPS.’

19.  In the Leave Summons, the wife identified three intended grounds of appeal which essentially overlap with Grounds 2, 3, 4 and 9 above.

20.  Together with the Leave Summons and the ‘Grounds of Appeal’, the wife also lodged with the Court a written ‘Statement As To Why Leave To Appeal Should Be Granted or a New Trial’ of nine pages (‘wife’s Statement’).

21.  It can be seen from Grounds 8 and 10 that the wife sought to introduce fresh evidence as to post-trial developments.  For this purpose, the wife took out a summons dated 3 January 2023 (‘New Evidence Summons’)  seeking leave to file new evidence. 

22.  The New Evidence Summons was accompanied by an affidavit of the wife dated 3 January 2022 to which a 9-page written statement was exhibited (‘wife’s Affidavit’).

23.  The husband initially failed to file any evidence in opposition to the wife’s applications. On 5 July 2023, CLM Lawyers entered a notice to act for the husband in these proceedings.  On 13 November 2023, CLM Lawyers took out a summons on behalf of the husband seeking an extension of time to file his affirmation in opposition to the wife’s applications.  The summons was supported by Husband 1^st.

24.  On 14 December 2023, Yuen JA granted the husband’s application for extension of time to file his affirmation in opposition within 21 days.  Leave was also given to the wife to file her affirmation in reply within 14 days thereafter.

25.  On 5 January 2024, the husband’s solicitors filed the affirmation of Chan Lok Man dated 4 January 2024, to which the unaffirmed version of Husband 2^nd was exhibited.  The signed and notarized version of Husband 2^nd was eventually filed on 24 January 2024.

26.  Meanwhile, on 18 January 2024, the wife filed an affidavit entitled ‘Challenge Petitioner’s Lies’ (‘wife’s Reply Affidavit’).

V.  Legal principles

1)  Leave to appeal

27.  Section 63A of the District Court Ordinance (Cap. 336)  provides that leave to appeal shall not be granted unless the Court is satisfied that :

(1)  The appeal has a reasonable prospect of success; or

(2)  There is some other reason in the interests of justice why the appeal should be heard.

28.  An ancillary relief order made by the Judge is an exercise of discretion.  It is well established that in challenging the exercise of discretion, it is not enough to establish that the appeal court might have made a different order. It is only where the discretion was wrongly exercised when, for example, the Judge has erred in principle, taken irrelevant factors into account, ignored relevant factors or where the decision is plainly wrong, or that the decision exceeds the generous ambit within which reasonable disagreement is possible, would the appeal court interfere: YSG (YX) v LYAG [2023] HKCA 1319, [27].

29.  Insofar as a party seeks to challenge the Judge’s findings of fact, it must be shown that the Judge had gone plainly wrong, such as his evaluation was tainted by a misapprehension of facts, or that he took into account irrelevant matters or failed to take into account relevant matters, or that his conclusion was one that is outside the generous ambit within which a reasonable disagreement is possible, before the appeal court would interfere: YSG (YX) v LYAG (supra), [28].

2)  Fresh evidence

30.  The New Evidence Summons is procedurally misconceived.  An application for leave to adduce new evidence could not be entertained until after leave to appeal has been granted.  However, an applicant in an application for leave to appeal can support such application by reference to new evidence if he can demonstrate that it is reasonably arguable that the new evidence would satisfy the Ladd v Marshall criteria.  If these criteria are not satisfied, such evidence should be disregarded for the purpose of the application for leave to appeal: YSG (YX) v LYAG (supra), [29]; Man Lin Heung, the Administratrix of the Estate of Man Kwai Yin v 梁根林& Ors [2019] HKCA 846, [2]-[3].

31.  Applying these principles, the wife would only be able to rely on the fresh evidence in support of her leave application if she can demonstrate that it is reasonably arguable that the Ladd v Marshall criteria are satisfied, viz :

(1)  The evidence could not have been obtained with reasonable diligence for use at the hearing below;

(2)  The evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and

(3)  The evidence must be such as is presumably to be believed or it must be apparently credible, though it need not be incontrovertible.

VI.  Our view

1)  Fresh evidence

32.  The fresh evidence which the wife seeks to introduce pertains to the husband’s removal of C to Switzerland.  In addition to the fact that the husband is in continuing breach of court order by refusing to return C to Hong Kong, the wife mainly wishes to highlight the ‘luxurious’ nature of the husband and C’s new life in Switzerland, where he has bought a new property and C is attending an international school.  The wife believes that such a lifestyle is inconsistent with the picture presented by the husband about his financial position at the ancillary relief trial.

33.  To this end, the wife seeks to introduce fresh evidence comprising :

(1)  Evidence pertaining to C’s new school in Switzerland (including photos depicting C from the school’s Facebook account and general information about the school) – the wife wishes to show that C is now attending an international school in Switzerland which has a high tuition fee of CHF 31,000 to CHF 46,000 per year (approximately $262,211.67 to $389,088.29).

(2)  Evidence pertaining to the flight taken by the husband and C to leave Hong Kong (including the husband’s 14^th Affirmation filed in FCMC 10176/2017 on 18 January 2022 in support of his application for leave to take C on holiday, and C’s Facebook post) – the wife claims that the husband and C did not take the flight as mentioned in the husband’s 14^th Affirmation. Instead, they cancelled those flights and received a refund of $751,000 from Cathay Pacific, and then they booked a different flight from Hong Kong via South Korea to Los Angeles.

(3)  Documents pertaining to the child abduction proceedings in Switzerland – the wife relies on these documents to show inter alia the husband has revealed in the child abduction proceedings that he has i) purchased a property in Switzerland and ii) applied for residency there.

(4)  Information from a real estate website which shows what the wife believes to be the value of the husband’s new property in Switzerland (CHF 9,350,000 or $79,086.423).

(5)  A web page about ‘Financial requirements for the Switzerland Investor Visa’ – the wife relies on this to show that in order to become a Swiss resident, the husband must show that he has CHF 1 million.

34.  In his two affirmations, the husband does not dispute that he and C are now living in Switzerland, that he has purchased a new property there, and that C is attending a Swiss international school.  He explains that the tuition fee of C’s new school is similar to that of the Hong Kong international school that she previously attended.  He denies the wife’s contentions that i) the new property is likely worth $79 million and ii) he must have had CHF 1 million when he applied for Swiss residency.  Instead, the husband explains that i)  he purchased an apartment of 700 sq ft in Switzerland after the trial.  The down payment was made with financial assistance from his parents, for which he will have to repay when he is capable to do so.  He is currently paying interest of mortgage at a rate far lower than that in Hong Kong and ii) given he and C are EU residents, it is not a requisite condition for them to hold CHF 1 million to be a resident in Switzerland.

35.  We are prepared to accept that the fresh evidence came into light after the AR Judgment and some of the fresh evidence such as those dealing with the Hague Convention issue are credible.  However, we are not satisfied that the fresh evidence would have an important influence on the result of the case.  In any event, even if we are to take into account the new evidence, we are not persuaded that this is an appropriate case for granting leave to appeal on the grounds proposed by the wife. 

2)  Intended grounds of appeal

(1)  Grounds 1 and 9

36.  Grounds 1 and 9 may be considered together.  The gist of the wife’s complaint appears to be that she did not receive a fair trial.  She pointed to her limited English ability and lack of legal representation, but did not particularise how these matters affected the fairness of the trial.  From the numerous statements and submissions filed by the wife, it appears to us that she is proficient in English.  We also note that she attended university in the United States where she obtained a degree in mass communication.  She also obtained a diploma teaching English as a foreign language and was at one point employed as a teaching assistant at an international school (AR Judgment, [5]).

37.  The wife made similar allegations to the Judge in the application for leave to appeal below.  The Judge explicitly rejected any suggestion that she was prejudiced against the wife (Leave Decision, [6]).

38.  In any event, having reviewed the AR Judgment carefully, it appears to us that the Judge has treated the parties in a fair and equal manner.  The Judge has fairly accepted various points raised by the wife and rejected the husband’s case in different aspects.

39.  The wife accused the Judge of ‘unfairly’ choosing to believe the husband’s allegation that the wife was hiding funds, but this ignores the fact that the Judge had largely rejected the husband’s case and found that there was no ‘hidden pot of gold’ (AR Judgment, [36]).  The Judge noted the wife’s evidence that two of the accounts which the husband alleged to be ‘undisclosed assets’ had been closed, and accepted that the money in those accounts had been spent (AR Judgment, [34]).

40.  The so-called ‘undisclosed assets’ that were taken into account in assessing the wife’s assets comprise i) $128,328 in an ‘Old Mutual Investment Account’ and ii) a total of $119,808 in two MPF accounts.  These were based on the statements produced by the wife at trial (AR Judgment, [37]-[39]). 

41.  As for the allegation that the Judge ignored the wife’s complaint about the husband ‘stealing’ her bank documents, the wife has not explained how this had adversely affected her position at trial.  The Judge did not draw any adverse inference against her from any failure to produce bank documents.  Instead, her assessment of the wife’s available funds in bank accounts was based on the wife’s own statements.

42.  Grounds 1 and 9 therefore have no merits.

(2)  Grounds 2 and 4

43.  Ground 2 is premised on an erroneous reading of the AR Judgment.  The Judge did not omit the US property which was jointly owned by the husband and his parents. The Judge included the husband’s 1/3 interest in the US property in the calculation of the husband’s assets (AR Judgment, [23]-[24]).

44.  Under Ground 4, the wife accused the Judge of not taking into account the husband’s alleged bank accounts in the US and at Bank of Communications Hong Kong, and the $350,000 that he stole from their joint account.  The wife has not adduced any evidence on these allegations.

45.  The wife also complained that the Judge excluded from the ‘matrimonial pot’ C’s savings of $20,000.  There is no explanation why C’s savings should be taken into account in the first place.

46.  Grounds 2 and 4 are bound to fail.

(3)  Ground 3

47.  Ground 3 is a challenge to the Judge’s factual finding that the wife was a 50% legal and beneficial owner of the Malaysian property registered in the joint names of the wife and her mother.  The Judge’s holding is premised on the wife’s own admission at trial that she held a 50% interest in the property, which the Judge found to be ‘unequivocal’ (AR Judgment, [30]-[31]).  We see no basis to disturb the Judge’s finding. 

48.  The wife argued that the Judge should have found the Malaysian property to be pre or non-marital because the Judge had excluded the husband’s interest in the US property.  As said, the Judge in fact included the husband’s 1/3 interest in the US property in the calculation of the husband’s assets.  The wife did not otherwise explain why her interest in the Malaysian property should not be included in the asset pool.

49.  Ground 3 is hence not reasonably arguable.

(4)  Grounds 5 and 6

50.  Grounds 5 and 6 challenge the Judge’s assessment of the parties’ respective contributions to the marriage.  The complaint disregards the Judge’s finding that historically both parties made a full contribution to the marriage (AR Judgment, [58]).

51.  In any event, this complaint is irrelevant.  The Judge has applied the sharing principle and only departed from the yardstick of equality on a limited basis, namely, to reflect the fact that the husband would be wholly responsible for C’s expenses going forward, including her educational costs (AR Judgment, [60]).  The parties’ past contributions to the marriage were not a contributing factor to the decision to depart from the yardstick of equality.

52.  Grounds 5 and 6 are therefore not reasonably arguable.

(5)  Ground 7

53.  Ground 7 is again based on an incorrect reading of the Judgment.  The Judge did take into account the fact that the wife had to pay for her legal representations and other expenses after the parties separated (AR Judgment, [34]). Ground 7 has no merits.

(6)  Grounds 8 and 10

54.  Grounds 8 and 10 involve the new evidence which the wife seeks to present.  The fact that the husband is in breach of a court order and facing child abduction proceedings which took place after the AR Judgment is, in itself, less relevant insofar as ancillary relief is concerned.  We are not persuaded that this would have a significant influence on the outcome of the ancillary relief trial.  The true gist of the wife’s complaint here is that the husband’s ‘luxurious’ lifestyle post-trial is inconsistent with his account at trial.  In the wife’s statement, she asked for leave to appeal or a ‘new trial’.  We are not persuaded that the wife is able to show that it is reasonably arguable that the findings by the Judge is plainly wrong in respect of the hidden assets of the husband.  There is no documentary evidence that Cathay Pacific had refunded $751,000 to the husband which the wife claimed that the husband has more assets than the $237,230 as determined by the Judge.

VII.  The wife’s application for a Hadkinson order

55.  On 22 January 2024, the wife applied for a Hadkinson order (‘Hadkinson Application’).  She seeks for this Court to refuse hearing the husband until he has purged his contempt.

56.  The husband has not filed any submissions or evidence in opposition to the Hadkinson Application.

57.  We will refuse the wife’s Hadkinson Application as it will not have any impact of her Leave Summons and New Evidence Summons.  Even if we had refused to hear the husband and disregarded his evidence in Husband 1^st and 2^nd, it would not have affected our decision to dismiss her applications as discussed above.  This is without prejudice to the wife’s right to seek a Hadkinson order in the future. 

VIII.  Orders

58.  For the above reasons, we dismiss both the Leave Summons and the New Evidence Summons.

59.  We are of the view that the application for leave to appeal is totally without merit.  We will, pursuant to Order 59, rule 2A(8)  of the Rules of the High Court, further order that the wife is not allowed to apply for a hearing to reconsider her application.

IX.  Costs

60.  The husband has been in contempt of a court order since August 2022.  He has not offered any explanation nor taken any action to purge his contempt.  In the circumstances, the appropriate costs order in our view is that there shall be no order as to costs.