N v. W

FCMC 5026/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 5026 OF 2015

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RULING
(Transfer up to the High Court)

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Introduction

1.  This is an application by the 1^st Intervener to transfer up to the High Court, the Respondent husband’s section 17 application dated the 7 April 2016 to set aside the transfer of 490 shares from the Petitioner wife to the 1^st Intervener. The 1^st Intervener is the brother of the wife and the transfer summons is dated the 12 October 2016. It is supported by an affidavit from the 1^st Intervener’s solicitor, Mr Colin Cohen.   

Background

2.  I have set out the background to this case in my previous judgments and in particular to the judgment on litigation funding dated the 29 August 2016. Reference can and should be made to that judgment as necessary. Much has been made in the affidavits and witness statements filed within the s 17 application and the application to transfer up, to comments made by myself within that judgment. For the avoidance of doubt I was critical of all three parties; I did not on the face of it find any one party particularly credible. In particular reference should be made to paragraphs 25 - 27 of that judgment where I said as follows:  

25. Here it is almost impossible for me to form a definitive preliminary view. The credibility of each of the three parties is very much in issue. It will therefore be necessary to hear from each of them in the witness box in order to make the appropriate findings.

26. Having said that it is of note that on the one hand, even on the case of the brother and the wife, they admit to creating a paper trail which at best was economical with the truth in order to hood wink both the Inland Revenue Department in the United States and possibly the brother’s then wife. The documents and their explanation do not paint either of them in a particularly good light. I am asked to now disbelieve part of the documentary evidence produced and to believe their present story, when they already have a history of lying to others because that is what suited them at the time. On the other hand, should I now give them the benefit of the doubt for “coming clean” notwithstanding the obvious difficulties with their evidence?

27. In so far as the husband is concerned did he know the reality of the situation and is this why he signed the letter on the 20 September 2011? Is this his attempt to now gain a strategic litigation advantage when in truth there is very little money available to either side otherwise? 

The law   

3.  The application to transfer up is made pursuant to Rule 32 and Rule 80 of the Matrimonial Causes Rules, Cap 179A, together with Practice Direction 15.14. I have also been referred to a number of cases as set out in the Practice Direction including the judgment of His Honour Judge Saunders in H v H, FCMC 7173/2000 dated the 1 February 2002 (unreported).

4.  It is accepted that in accordance with those authorities that the Family Court has an unfettered discretion to order a transfer up of any application to the High Court and that such an unfettered discretion also extends to deciding when such an order should be made.

“The fundamental principle is whether in light of the overall circumstances including the nature of the issues of fact or law involved, the proceedings or part of them are more desirable to be dealt with in the Court of First Instance” (§2)

It is also accepted that:

… an application for transfer should be made as soon as practicable after it becomes apparent that a transfer is required.

5.  In H v H His Honour Judge Saunders also stated as follows:

… there must be cogent reasons why a case should be removed from the ambit of a group of specialist judges.  It is right that R 80 requires the court to take into account the financial limits for the time being relating to the jurisdiction of the District Court in other matters, but that is only one consideration.  Very large sums of money alone will rarely be sufficient to justify transfer.  There must be some special complexity in the case which will demand that it be given the attention of a Judge of the Court of First instance.

With respect I agree.

Decision  

6.  I should say at the outset that in this instance I have decided to transfer the section 17 application up to the High Court as requested by the 1^st Intervener. I do so because I am largely persuaded by the arguments advanced by Mr Todd as follows, namely that the application

(a) … raises very substantial points of law.

(b) Included within the substantial points of law is that it is a case which involves allegations of fraud.

(c) The margin of error on the dispute runs to many tens of millions of Dollars.

(d) This separate matter involving the intervention of a third party will probably resolve all matters.

7.  I agree in particular that it would be more appropriate for the Court of First Instance to consider the law on ex turpi causa, as pleaded by the husband, especially given the recent Supreme Court decision in England on this point, namely the judgment in Patel v Mirza [2016] UKSC 42. I accept that in an ideal world the High Court should be in a much better position to “consider the discursive and intellectually invigorating debate surrounding such changes in the law”. Although from a personal perspective I would perhaps like to accept that challenge, I also agree that this is beside the point and that given the circumstances it is more appropriate for such matters to be dealt with by a higher level of court than the Family Court.  

8.  It is also clear to me that this case has criminal overtones and perhaps other civil law ramifications. The 1^st Intervener has already indicated, for example, that he is considering issuing proceedings for defamation. There are also issues of fraud to consider and I accept that it is likely that expert evidence may be necessary. Again I accept that these issues can more properly be canvassed in the High Court as opposed to the Family Court.

9.  Ms Rattigan for the husband also expressed some concern about delay, accusing the 1^st Intervener of already causing some delay given that his application was not made until the 12 October 2016. It seems to me that there is little in this point. The 1^st Intervener made the application to transfer up after the husband had filed his Reply to both the Petitioner and 1^st Intervener’s Points of Defence. This is dated the 12 August 2016. It seems to me that it would have been completely inappropriate for the 1^st Intervener to have made the application to transfer up before the close of pleadings. It was only at this point that the fully pleaded case would have been known. The 1^st Intervener then wrote to both the Petitioner and the Respondent seeking their consent to transfer the matter up. On the 30 September 2016 the husband’s solicitors wrote refusing to give such consent. The application to court was made some 16 days later. In such circumstances I accept that the 1^st Intervener issued his application as soon as it was practicable to do so.

10.  Finally it is of note that although quantum of itself is rarely a reason on its own to transfer a matter up to the High Court, it may nevertheless form part of the issues to be considered. In this instance there is at least US$18 million at stake – not an insubstantial amount. Again this points to the application being dealt with in the High Court as opposed to the Family Court.

11.  Consequently I will make an order in terms of paragraph 1 of the 1^st Intervener’s summons dated the 12 October 2016. The 1^st Intervener has asked for costs on an indemnity basis. I do not accept that this application falls into the category of cases where costs may be ordered on an indemnity basis. Costs should though follow the event in the normal way. Consequently, the Respondent husband shall pay the costs of and occasioned by this application on a party and party basis to be taxed if not agreed. There shall be certificate for counsel.

12.  It is further directed that the solicitors prepare a paginated bundle as set out in paragraph B2 of the Practice Direction and then proceed as set out in paragraph C. It is of note that given that this is a discreet application that it may not be necessary to include all of the documents in the First Directions Hearing Bundle as set out in paragraph B.2. I should add that it is also accepted that this case will in all probability be re transferred back to the Family Court once the section 17 trial has been concluded. In addition, the Family Court will continue to have jurisdiction over the children related matters. In that regard it is noted that there will a call over in 2018 with respect to the children’s arrangement.