WPH v. SCH

FCMC 11500/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES N0.11500/2014

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Decision
(Forum non conveniens)
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Introduction

1.  The Petitioner wife and the Respondent husband were Taiwanese.  They were married in Taiwan in February 2000.  During the marriage the couples lived and worked in Hong Kong, and they had four children (aged 14, 12, 9 and 5), all were born in Taiwan but were brought up in Hong Kong.  The husband came from a wealthy family and substantial assets located in Taiwan and Hong Kong were held in his sole name and in joint name with his mother.  The husband alleged that most of the assets belonged to his aged parents (who were living in Taiwan) he only held the assets on their behalf, the wife disputed.

2.  The marital relationship had started to dwindle well before 2012.  The wife presented a divorce petition in Hong Kong on 2 year separation on 28 August 2014 and prayed for custody and ancillary relief; the husband disputed the separation and was yet to file his Defence and Cross-petition.  Instead the husband issued a Summons on 29 October 2014 to stay the Hong Kong divorce proceedings on ground of forum non conveniens (the present application).    

3.  Time being on 7 October 2014 the husband commenced divorce proceedings in the Taiwan Court on ground of adultery and embezzlement of which the wife disputed, the husband did not make any claim for ancillary relief.  Initially the husband prayed for the custody of the children but later withdrew this claim.  Further, the husband indicated through his lawyer before the Taiwan Court that it was the parties’ common intention to dissolve the marriage and suggested to resolve the divorce through mediation.  Though during the hearing the husband indicated he intended to restore his claim for custody, it appeared that the real concern of the parties was the forum of the wife’s application for ancillary relief.

Background

4.  The parties were both born in Taiwan the husband was aged 50 and the wife aged 44.  They were raised and grew up in Taiwan.  They met in Taiwan in 1999 and got married in February 2000. After their marriage, the parties moved to work and lived in Hong Kong.  Their 4 children were born in February 2001, December 2002, January 2006 and April 2009 respectively in Taiwan but all were brought up and received education in Hong Kong.  All along the extended families of the parties were in Taiwan.  The parties and the children would travel to Taiwan to visit the extended families and friends.  

5.  The marital relationship had started to dwindle well before 2012.  The wife issued her divorce petition on 2 year separation on 28 August 2014 and prayed for custody and ancillary relief.  The husband was served the petition on 4 September 2014 and the husband disputed any separation by his Form 4 dated 8 September 2014.  During the marriage the parties were working for the husband’s family business, which was operated through S Ltd, a company incorporated in Hong Kong. The wife resigned from S Ltd before she issued her petition, while the husband resigned after he was served the petition.

6.  The wife moved out from the matrimonial home with the children and the domestic helpers on 13 October 2014 to a rented flat.  The husband issued a Summons on 17 October 2014 for interim custody of the children returnable on 22 October 2014.  On 22 October 2014, order was made for interim defined access for the husband and preparation of social investigation report (SIR).  The husband continued to live alone in the matrimonial home and had defined access to the children including defined staying access.  As the husband did not consider the Hong Kong court is the appropriate forum, he refused to participate in the SIR, upon the husband’s request, his Summons for interim custody was adjourned sine die with liberty to restore on 22 January 2015.  The children continued their education in Hong Kong and both parents remained unemployed and continued to live in Hong Kong at time of the hearing.

7.  The wife issued a Summons for maintenance pending suit (MPS) on 19 November 2014.  In response the husband undertook to pay the children’s education and their existing extra-curricular activities, allowed the wife to receive all the rental income and paid $3,200 cash to the wife for the children’s food expenses.  Later upon the parties’ consent the cash payable by the husband to the wife increased from $3,200 to $7,000 and an order for MPS at the rate of $7,000 was made on 5 December 2014.  

8.  Time being on 7 October 2014 the husband commenced divorce proceedings in the Taiwan Court on ground of adultery and embezzlement of which the wife disputed, and issued a Summons on 29 October 2014 to stay the wife’s divorce proceedings on ground of forum non conveniens.  Initially the husband prayed for custody in his Taiwan divorce application, later on 12 January 2015 he withdrew his claim for custody.  In the latest Taiwan court hearing on 20 January 2015, the husband through his lawyer suggested to resolve the divorce by mediation. During the hearing of the present application, the husband indicated he intended to claim for the custody of the children and relocated to Taiwan with them.

9.  At one stage the wife invited the court to consider her Form E but did not agree the husband to know the content (as the husband refused to file any Form E) and objected to the admission of the husband’s 4^th affirmation which was filed out of time without leave.  Before the commencement of the submission, the parties came into consensus, leave was granted to the husband to file his 4^th affirmation which contained a schedule of his assets and liabilities, and the wife’s Form E be provided to the husband and be used in the present application.  And upon this court enquiry of the progress of the Taiwan proceedings, a set of Taiwan Court documents and record of proceedings were submitted for my information.   

Issue in dispute

10.  It was clear during the discussion that there was no longer dispute that both the Hong Kong court and the Taiwan court have jurisdiction over the parties’ respective divorce applications.  It is common ground that there is no mutual recognition of judgment between Hong Kong and Taiwan.  It is the husband’s case that because of the parties’ substantial connection with Taiwan, their divorce should be heard by Taiwan court; of which the wife disagreed. 

11.  It was not disputed that both parties born, raised and grew up in Taiwan, with their respective extended family based in Taiwan. During their marriage, the parties lived, worked and raised their children in Hong Kong while maintained their connection with Taiwan.  The wife indicated during the hearing that she would continue to live in Hong Kong with the children while the husband indicated that he wanted to relocate to Taiwan with the children.  Although the parties and their children are Hong Kong permanent residents, they all maintain their Taiwanese citizenship and the husband continues to pay Taiwan tax and make contribution for the family national Medicare in Taiwan. 

12.  The husband has substantial assets in Taiwan which according to his case, he is only holding on behalf for his grandfather or his father, and likewise certain assets in Hong Kong are held for his father and mother respectively; while the wife’s assets are predominantly in Hong Kong.  It is the parties’ common intention to dissolve their marriage, yet for their own reasons they disputed the ground for divorce relied upon by the other party.   It is the husband’s case that Hong Kong is not the natural or appropriate forum and the Taiwan court is clearly or distinctly more appropriate than Hong Kong Court; while the wife considers otherwise.

13.  It is the wife’s case that the husband has failed to show the Taiwan Court is more appropriate.  Further the wife alleged she would be deprived of her legitimate personal and juridical advantage and would be placed in a very disadvantaged position if the present proceedings are stayed.    The husband disagreed and said the wife failed to identify any personal or juridical disadvantage.  Adultery is a criminal offence in Taiwan and an adulterer may liable to civil damages in Taiwan, however, during the hearing the husband undertook not to pursue any criminal charges nor pursue any civil damages against the wife if adultery is found against her.  Further, the husband indicated during the hearing that he will consent to the Taiwan court to consider all the overseas properties and make full and frank disclosure in Taiwan of all his means, assets and liabilities.  In broad terms there are three issues to be determined, namely:

1. Where jurisdiction is founded as of right, is this court a natural and appropriate forum to the parties’ divorce proceedings or is Taiwan more appropriate?

2. If so, will the wife be deprived of any legitimate personal or juridical advantage if the case is tried in Taiwan?

3. If so, how should I exercise my discretion?

Discussion

Jurisdiction

14.  Section 3 of the Matrimonial Causes Ordinance Cap.179 (MCO) provides that:

“The court shall have jurisdiction in proceedings for divorce under this Ordinance if:-

(a) either of the parties to the marriage was domiciled in Hong Kong at the date of the petition or application;

(b) either of the parties to the marriage was habitually resident in Hong Kong throughout the period of 3 years immediately preceding the date of the petition or application; or

(c) either of the parties to the marriage had a substantial connection with Hong Kong at the date of the petition or application.”

15.  Ms Antia Yip Senior Counsel for the husband did not dispute jurisdiction.  Plainly sub section (b) and (c) are applicable to the present case.  During the hearing, it was clear also that Ms Lorinda Lau Counsel for the wife also did not challenge the jurisdiction of the Taiwan Court thus Taiwan is an alternative available forum with competent jurisdiction is not in issue.

Forum non convenies

16.  Taking the words of Lord Templeman in Spiliada Maritime Corporation and Cansulex Ltd [1987] AC 460 (Spiliada), where the wife was entitled to commence her petition in Hong Kong, the court, applying the doctrine of forum non conveniens would only stay the proceedings if the husband satisfied the court that some other forum was more appropriate.  But whatever reasons might be advanced in favour of the Taiwan Court, the wife would be allowed to pursue her petition in Hong Kong if it would be unjust to her to confine her to remedies elsewhere.  In Spiliada His Lordship stated that:

“The factors which the court is entitled to take into account in considering whether one forum is more appropriate are legion. The authorities do not, perhaps cannot, give any clear guidance as to how these factors are to be weighed in any particular case. Any dispute over the appropriate forum is complicated by the fact that each party is seeking an advantage and may be influenced by considerations which are not apparent to the judge or considerations which are not relevant for his purpose…. Domicile and residence and place of incident are not always decisive.”

17.  In the present case, it is reasonably clear that the wife wants her divorce petition be heard in Hong Kong because she and the children live in Hong Kong, any matter related to recognition and enforcement would only at most cause inconvenience and she did not have confidence that she would obtain a just award in the Taiwan Court.  On the other hand, the husband is with the view that with the ground of his divorce and the nature of the assets held by him, the matter should be heard in Taiwan, the parties would not encounter any recognition or enforcement difficulties and the wife would not be subjected to any juridical disadvantage.

18.  The main judgment of Spiliada was given by Lord Goff, after considering a number of earlier authorities, his Lordship summarized the principle as follows:

“(a) The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.

(b)… in general the burden of proof rests on the defendant to persuade the court to exercise its discretion to grant a stay. It is however of importance to remember that each party will seek to establish the existence of certain matters which will assist him in persuading the court to exercise its discretion in his favour, and that in respect of any such matter the evidential burden will rest on the party who assets its existence. Furthermore, if the court is satisfied that there is another available forum which is prima facie the appropriate forum for the trial of the action, the burden will then shift to the plaintiff to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in this country(see (f) below).

(c) The question being whether there is some other forum which is the appropriate forum for the trial of the action, it is pertinent to ask whether the fact that the plaintiff has, ex hypothesi, founded jurisdiction as of right in accordance with the law of this country, of itself gives the plaintiff an advantage in the sense that the English court will not lightly disturb jurisdiction so established… In my opinion, the burden testing on the defendant is not just to show that England is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum… I may add that if, in any case, the connection of the defendant with the English forum is a fragile one…, it would be all the easier for him to prove that there is another clearly more appropriate forum for the trial overseas.

(d) Since the question is whether there exists some other forum which is clearly more appropriate for the trial of the action, the court will look first to see what factors there are which point in the direction of another forum. The use of the word “convenience” in this context, I respectfully consider that it may be more desirable,… to adopt the expression used by Lord Keith, in The Abidin Daver [1984] AC 398, 415, when he referred to the “natural forum” as being “that with which the action had the most real and substantial connection.” So it is for connecting factors in this sense that the court must first look; and these will include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction, and the places where the parties respectively reside or carry on business.

(e) If the court concludes at that stage that there is no other available forum which is clearly more appropriate for the trial of the action, it will ordinarily refuse a stay...

(f) If however the court concludes at that stage that there is some other available forum which prima facie is clearly more appropriate for the trial of the action, it will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted.  In this inquiry, the court will consider all the circumstances of the case, including circumstances which go beyond those taken into account when considering connecting factors with other jurisdictions  One such factor can be the fact, if established objectively by cogent evidence, that the Plaintiff will not obtain justice in the foreign jurisdiction … on this inquiry, the burden of proof shifts to the plaintiff.”        

19.  The general principles of forum non conveniens apply to the stay of matrimonial proceedings.  The re-statement of the principles in matrimonial proceedings by the Court of Appeal in DGC v SLC (née C) [2005] 3 HKC 293 have been adopted by the Court of Final Appeal in SPH v SA [2014] 3 HKLRD 497:

“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 i.e. 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 or 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 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.”

Connection

20.  In RI v SSH [2010] 4 HKC 588, the Court of Appeal dismissed the respondent husband’s appeal against the refusal by Hartman JA (sitting as an additional judge of the Court of First Instance) to stay the petitioner wife’s divorce petition on the ground of forum non conveniens.  In considering whether the proceedings had a real and substantial connection to Hong Kong, the Court of Appeal held that:

“… Matrimonial proceedings are concerned with human beings and the regulation of their lives after the dissolution of their union as husband and wife in terms of custodial and financial provisions. Hence in order to see whether the proceeding has a real and substantial connection to Hong Kong one must, first of all, ascertain whether at the time of its commencement the parties have substantially conducted their matrimonial life in Hong Kong. Hong Kong being an international commercial city, the identification of this issue is most acute for expatriate families who live in Hong Kong. The relevant considerations are, for example, whether the parties’ matrimonial home is here, what is their past pattern of life; do they regard Hong Kong as their home for the time being even if their life style may indicate that they may not take root in one place for too long a time. Related to the issue are matters such as the place of work of the spouses; do they choose to work here; even if one of them has to ‘commute’ overseas to work, is Hong Kong still treated as their home base. Likewise for the children of the family: are they studying here or spending their vacations here even if they are studying abroad.”

21.  In a stay application, we are not only focusing on whether one party has substantial connection with Hong Kong or Taiwan, but to which jurisdiction the parties have the most real and substantial connection.  It is the husband’s case that their divorce should be heard in Taiwan Court.  It is for the husband to establish Hong Kong is not the natural or appropriate forum, and that Taiwan is distinctly more appropriate than Hong Kong.

The marriage

22.  The husband is Taiwanese and is now 50.  He was brought up and received education in Taiwan.  After he completed his tertiary education he started to work in Taiwan, around 1994 he joined the S Ltd, a company incorporated in Hong Kong.  S Ltd was formed by the husband’s family and had a factory in mainland, thus the husband was required to work in mainland from time to time.  The husband resigned from S Ltd after he was served the divorce petition and remained unemployed at time of the hearing.      

23.  The wife is also Taiwanese and is now 44.  She was also brought up and received education in Taiwan.  She had her own business in Taiwan before she was introduced to the husband by common friend.  After the parties engaged in 1999, the wife closed down her business and sold all her investment in Taiwan, to make her cash available for use in Hong Kong.  In October 1999 the wife moved into the husband’s residence in Hong Kong.

24.  In February 2000 the parties got marry in Taiwan and thereafter returned back to Hong Kong.  The wife joined the S Ltd in 2000, she tendered her resignation in May 2014 and worked up to end of July 2014.  They have 4 children out of their marriage. The children were born in February 2001, December 2002, January 2006 and April 2009 respectively.  The parties arranged the children to be born in Taiwan but all the children were brought up and received education in Hong Kong.  The children are now living with the wife who intends to stay in Hong Kong and let the children continue their life and education here.

25.  The parties had three matrimonial homes in Hong Kong.  The first matrimonial home was purchased in the joint name of the husband’s brother and mother.  The parties lived in the first matrimonial home from 1999 to 2004, during which the first two children were born.  The parties purchased their second matrimonial home in joint name in 2005, they lived in this property until 2009.  Time being the third matrimonial home was purchased in 2007 in the husband’s sole name, the parties moved into the third matrimonial home in 2009, the husband continued to live there alone after the wife and the children moved out.  The second matrimonial home has been rented out since 2010. 

The parties’ assets and liability

26.  In Hong Kong apart from the third matrimonial home, the husband has another landed property in his sole name and two landed property in joint name with his mother.  According to the husband’s 4^th affirmation, the value of landed property in Hong Kong held by him is about HK$ 42.15mils, bank saving in Hong Kong less than HK$ 1mil, and 10% shareholding of S Ltd (he held on trust for his father) worth less than HK$ 3mils while he still owes his mother about $30mils after repaying the mother HK $30mils in October 2014 and bank loan around HK$1.73mils. 

27.  In 2012 the wife purchased in her sole name an investment property in Hong Kong for rental income.  Apart from landed property, the wife has other assets in Hong Kong, including bank accounts, stock investment, insurance etc.  According to the wife’s Form E, she only has certain outstanding credit bills, the value of her net assets is about HK$ 7 mils, the total value of her Hong Kong assets is about HK$ 6.65mils, while the Taiwan assets is about HK$350,000, and her only landed property in Taiwan valued at HK$125,000 was inherited from her late father.  It is clear that the wife’s assets are predominantly in Hong Kong.

28.  According to the husband’s evidence, around 1994 his grandparents invested in a property development project in Taiwan and arranged him to hold a flat of that development on trust for the family.  However the rental of that flat was deposited into a bank account opened in his name (the rental account) which was operated by his parents; he had no control of the flat and the rental.  The flat was subsequently sold in September 2014 and the proceeds had been withdrawn for use of the extended family.  It is the husband’s case that he had no idea about the sale proceeds but from the related bank account provided by the husband, during the time of the sale, a total of HK$ 4.1mils was deposited into that account, for the present purpose, the value of this property taken at HK$ 4.1mils. 

29.  According to the husband’s evidence, the grandparents had given out two units of the aforesaid development to his father, and his father arranged him to hold one in his name for the father to avoid inheritance tax.  The property (the estimated value is about HK$ 12.5mils) he held for his father was one of his parents’ main residence in Taiwan until it being rented out in 2004, the rent was deposited into the rental account, and he has no control of the rental.

30.  According to the husband’s evidence, his grandparents had formed four companies in Taiwan.  The one controlled by his father is Y Ltd, to avoid inheritance tax, his father over the years, had transferred certain shares of Y Ltd to him and his brother to hold the same for the father’s benefit.  The estimated value of the Y Ltd share held by him for his father’s benefit is about HK$ 3.5mils, but in all the years no dividend has been paid out to the shareholders by Y Lid.  Further, he had opened an investment account in Taiwan for the benefit for his father and he has no control or knowledge of the transactions of that account.  Thus the total Taiwan assets under the husband’s name would be about HIK$20mils and a rental account and investment account with unknown value.  

31.  During the marriage both parties were working for the husband’s family business (S Ltd), receiving salaries and benefit from S Ltd, and rental income from their investment property in Hong Kong.  According to the husband, the family did not derive any benefit from the Taiwan assets held by him, he has no control of those assets, and he simply holds those assets for his grandfather or his father’s benefit.  Though the wife does not agree the husband holds the Taiwan assets for others’ benefit, the evidence at present shown that during the marriage the parties’ income in Hong Kong was sufficient to meet their family’s needs.       

32.  The parties do maintain theirs and the children’s connection with Taiwan.  They kept their Taiwanese citizenship, paid tax and made Medicare contribution.  They travelled to Taiwan with or without their children to visit their families and friends and the wife would also travel to Taiwan for medical reason.  On the other hand apart from the family business operated through S Ltd, the husband’s mother also holds properties in Hong Kong and would also travel to Hong Kong. 

33.  The marriage was a long one.   The Taiwan landed properties now in question were all acquired by the husband well before the parties’ marriage.  The evidence shown that during their marriage the parties chose to invest Hong Kong landed property rather than in Taiwan.  Though the husband is yet to provide his Form E, according to the husband’s evidence he started to borrow money in Hong Kong currency from his mother in 1990 for investment, from 1990 to 2007 he had borrowed HK$63mils from his mother and were able to repay the mother HK$ 30mils in October 2014. This is consistent to the wife’s evidence that the husband has no plan of relocation and in recent years spent most of his time in Hong Kong on shares, foreign exchange and funds investment.  The husband’s evidence that he repaid HK$ 30mils to his mother in October 2014, to certain extent reflected the scale of the husband’s overall investment in Hong Kong.  In my view the husband has substantial investment in Hong Kong during the marriage.

Break down of the marriage

34.  The parties’ marital relationship has started to dwindle well before 2012.  It is the wife’s case that both have had their own room and separated under the same roof since 2012.  The husband disputes separation however it is also his evidence that the parties have not shared the same room since May 2012.  Although dissolution of the marriage is the parties’ common intention, the husband chose to divorce on ground of adultery and embezzlement related to S Ltd.  The wife denies committed any adultery or embezzlement. 

35.  The embezzlement complained happened in S Ltd, while the alleged adulterous acts relies upon by the husband took place in Hong Kong and Mainland; the witnesses involved are mainland residents, and employees of the related company of S Ltd.  The only Taiwan connection is that the two alleged adulterers (Mr X and Mr Y) are Taiwanese.  Ms Lau submitted that the present evidence does not support a case of adultery, while Ms Yip submitted otherwise.  There is, however, nothing to stop the husband to improve his case.  The relevant consideration is to ascertain the whereabouts and the service of the husband’s application/cross-petition to the respondents (Mr X and Mr Y), the husband would have to do the same wherever he instituted his divorce application.  By virtue of Rule 3 of the Matrimonial Causes Rules (MCR), where it is not provided for by the MCR, the Rules of the High Court shall apply with the necessary modification.  In the present case the husband can apply service out of jurisdiction pursuant to Order 11 of the Rules of High Court, once the respondents are properly served, the husband can then continue the proceedings despite the response of the respondents.  After all it is for the husband to prove his case.     

36.  It is reasonably clear that because both parties wants to have the wife’s ancillary relief application be heard in their respective preferred forum, a trial on the divorce cannot be avoided.  Unless the Taiwan proceedings are stayed, the wife will contest the husband’s divorce application.  Likewise there is all the possibility that unless the Hong Kong proceedings are stayed, the husband will file an Answer with or without a Cross-petition in due course.  However, I do agree with Ms Lau that a not ‘fault’ based trial would attract less emotional disturbance.  As the Court of Appeal in Harkishin v Harkishin CACV 845/2000 held:

“It must unquestionably be in the parties’ best interests to achieve a divorce through the no fault provision rather than bitterly contested proceedings. Where the common goal of the parties (i.e. the dissolution of the marriage) can be attained swiftly and without the unavoidable expense, aggravation and emotional toll that come with a contested divorce, there is every reason for the court to encourage the parties to pursue that alternative.”

37.  Further, although at present there is no mutual recognition of judgment between Hong Kong and Taiwan, with the mandatory mediation procedure under the Taiwan Divorce Law, with a Hong Kong divorce judgment, a no-fault divorce can be obtained speedy in Taiwan.  Adultery is a criminal offence in Taiwan and an adulterer may liable to civil damages in Taiwan, however, to save the wife from relying on this to claim juridical disadvantage, during the hearing the husband undertook not to pursue any criminal charges nor pursue any civil damages against the wife if adultery is found against her.

Relocation

38.  Initially the husband has issued a Summons for interim custody (no mention of relocation) despite he considered this court is not an appropriate for the wife’s divorce application.   A SIR has been called because of the husband’s application; unfortunately he refused to participate in it.  It is noted that the husband has claimed for custody in his later Taiwan divorce application, however, he withdrew this claim before the present hearing. 

39.  All the children have been habitual residents in Hong Kong since birth, and they are still living and receiving education in Hong Kong.  It is the wife’s case that she will continue to live in Hong Kong with the children while the husband indicated during the hearing that he intends to claim for the custody and relocate to Taiwan with the children.  The husband may want to minimize the children’s connection to Hong Kong by making such application, but it would not change the circumstances that all the children are habitual residents in Hong Kong and are living and receiving education here.  As Cheung JJA has stated in LN v SCCM CACV 62/2013:

“in jurisdictional challenges which may involve children, their interest is a matter of high importance : Rev (Forum Conveniens) [2005] 1 FLR 718. I am prepared to proceed on the basis that, in general, the jurisdiction where the children habitually reside should try the matter. In the absence of express statutory provisions, this is a matter of good common sense rather than a recognize custom orconvention. After all, if the children are here, issues concerning their well being can be conveniently dealt with in terms of the Court’s locak knowledge and experience on the way they are to be raised and d educated, inquiry by social workers and experts, testimony from witnesses and the Court’s wish to hear the views of the children directly. More importantly, this will ensure that there is no undue disruption of the children’s normal daily life when the matter is heard on home grounds.”

In the present case, it is my view that Hong Kong is the most natural and appropriate forum to consider any intended relocation application. 

40.  Further the long term maintenance for the children is yet to be determined in light with the family living standard in Hong Kong during the marriage.  The children’s maintenance is part and partial of the wife’s ancillary relief application, unless with good reason, the whole ancillary relief application should be heard together.      

The ancillary relief application

41.  The differences between the parties’ respective assets and liabilities explain why the husband does not have any claim for ancillary relief.  At present all the children are living with the wife.  In the previous mention hearings, the husband indicated that he would give sufficient financial provision to his children, he undertook to pay for their education and extra-curricular activities directly, and his concern is whether the cash he gives to the wife will benefit the children.  The real issue between the parties is the wife’s application for property division and or her own maintenance.  The husband indicated during the hearing, in order to alleviate the worries of the wife, he is prepared to undertake that he will consent to the Taiwan court to consider all his overseas, and if the case is stayed in favour of Taiwan, to make full and frank disclosure in Taiwan of all his means, assets and liabilities.  No such undertaking is required in Hong Kong proceedings, where the matter is to be heard here, the husband is obliged to make full and frank disclosure of all his means, assets and liabilities.     

42.  It is the husband’s case that virtually all the Taiwan assets under his name is held on trust for his grandfather or his father, two landed property in Hong Kong is held on trust for his mother, his shareholding of S Ltd is held on trust for his father, and between 1990 and 2007 he had borrowed $60mils from his mother and he repaid $30mils to his mother in October 2014.  Subject to further discovery, the differences between the parties may be narrowed down.  But at present the third party interests and the $60mils loan alleged by the husband are not agreed and taken as disputed for the purpose of this application.

43.  The set up date of the Taiwan securities account is unknown but it appears that apart from the shareholding of Y Ltd which the husband from his father over the years, the Taiwan landed properties and the related bank accounts was acquired by the husband well before the marriage of the parties.  Wherever the wife’s application is to be heard, the husband, in order to support his case, would be required to gather all the documentary evidence to show that the Taiwan assets are distinct and separate from their marriage, and that he has no beneficiary interests in these assets.  Where all the documentary evidence is in order, I see no reason to call any oral evidence just for their production.  The time of acquisition of the overall Taiwan assets and that of the Hong Kong assets is different, and this would give rise to different consideration in the wife’s ancillary relief application.  Where no concession/settlement can be reached, the likely witnesses would then be the husband and his father.  Wherever the matter is to be heard, the husband and his father would be required to prepare their own witness statements/affirmations, they can do so at the place of their choice.

44.  The composition of the husband’s Hong Kong assets and liabilities are equally complicated.  S Ltd was incorporated in Hong Kong by the husband’s family, including his parents, over 20 years ago to carry out the family business in Hong Kong and Mainland.  Though the scale of the business of S Ltd has been dwindled in recent years, the company has its own landed property, plant and equipment, and is still operating its business in Hong Kong and Mainland, unless the parties able to agree upon the value of the shares of S Ltd, to ascertain its value would require a comprehensive valuation according to acceptable principles and valuation methods.  To save costs and time, such valuation should be conducted in Hong Kong.

45.  Further, the other assets or liability in Hong Kong are equally substantial, if not more, when compared with that in Taiwan.  It is the husband case that he held certain Hong Kong assets on trust for his parents, again wherever the matter is to be heard, it is for the husband to gather the evidence.  Where all the documentary evidence is in order, I see no reason to call any oral evidence just for their production. Where no concession/settlement can be reached, the likely witnesses would then be the husband and his parents.  Likewise the mother can prepare her witness statement/affirmation at the place of her choice.  As the Court of Appeal held in Louvet v Louvet and another CACV 75/1989:

“The evidential burden is here upon the applicant.  The emphasis is upon “appropriate” rather than “convenient” because this is not simply a matter of practical convenience.  The purpose is to identify the forum “with which the action has the most real and substantial connection” per Lord Keith in The Abidin Daver.  Failure by the applicant at this stage is normally fatal.” 

46.  As mentioned above the parties only have investment in Hong Kong (either in their own name or jointly with others) after their marriage.

The main Taiwan connection relied upon by the husband is that his parents, the beneficial owners of the Taiwan assets and certain Hong Kong assets, are Taiwanese.  Yet at the same time, the parents have substantial connection with Hong Kong because of their substantial investment/assets here. 

47.  Ms Yip submitted that the joinder of parties outside Hong Kong is not an easy application, could be timely and costly.  Service out of jurisdiction is governed by Order 11of the Rules of the High Court, the whereabouts of the parents are known to the parties, where the parties minded to join the parents, I do not consider they would encounter difficulties in service out of jurisdiction.  However, in the present case, the disputed assets concerned are all held by the husband, as Ms Yip contemplated, the wife may not want to join the parents.  The wife may, however, choose to send a Form F to the parents to invite them to join in the proceedings.  It then up to the parents to intervene, where they do so, the wife may want to apply security for costs pursuant to Order 23 of the Rules of the High Court but where the parents have substantial assets in Hong Kong, such application would not be necessary.

48.  Ms Yip submitted that she had firm instructions that the parents were to start proceedings in Taiwan.  As the wife has not filed any claim for ancillary relief in Taiwan, it is not clear what kind of proceedings are in mind of the parents.  It is, however, clear that the husband, being the legal owner of the assets in question, has acknowledged the beneficiary interests of his parents, and it is most unlikely that the husband would decline his parents’ request for a transfer back.    It is yet to understand why the parents would want to incur legal costs in Taiwan in this stage.  As to the wife’s claims in Hong Kong, where the parents decided to intervene, or be joined as respondent, with their wealth, they can instruct lawyer to represent them and may apply leave to be excused from attending mention or direction hearings.

49.  There is no mutual recognition of judgment between Hong Kong and Taiwan.  Wherever the wife’s ancillary relief application is to be heard, where the local assets are not sufficient to satisfy the award, overseas enforcement would be required.  On the other hand where the local assets are sufficient to satisfy the award, no overseas enforcement would be involved.  And according to the husband’s evidence he only has assets in Hong Kong.    

50.  Another connecting factor is the Taiwan law that related to the family arrangement alleged by the husband.  According to Ms Yip’s submission, this court may require to hear expert opinion on the Taiwan Tax Law to understand the background of the family arrangement between the husband, his grandparents and his parents.  Further according to the expert opinion there is only a subtle difference between the concepts of 信託and 借名登記 under the Taiwan Law.  Should the case be heard in Hong Kong the Hong Kong court would be required to deal with complicated Taiwan Tax Law and Trust Law.  And where there is any wrong interpretation of the Taiwan Law, as the信託and 借名登記 only has a subtle difference, the parties would be prejudiced. 

51.  As noted in many of the earlier authorities, the Hong Kong court has vast experience dealing with family cases having an international dimension.  As Ms Lau put in her submission, Hong Kong being an international and dynamic global city, the Hong Kong court often faces with difficult legal issues which involved foreign law and the court would seek assistance from expert.   I consider the relevant issue related to the alleged family arrangement is not so much that of the complexity of foreign law (of which the court can seek assistance from expert) but rather the alleged common intention of the husband, his grandparents and parents at the material time.  Wherever the matter is to be heard, again, the husband and or the parents would be required to gather evidence to prove their case.  With the wealth of the husband and the parents, the legal costs in either jurisdiction are well within their means.  

52.  Another concern of the husband is the mobility of his parents.  According to the husband, his parents are senior and both are over 70.  It is difficult to tell the health and mobility of an elder just by his/her age.  There is however evidence that the mother has travelled to Hong Kong.  Further the wife has proposed giving evidence via video link, and this suggests the wife will be accommodating where the parents cannot travel to Hong Kong to testify for legitimate reasons.

Conclusion

53.  It is for the husband to show that Hong Kong is not the natural or appropriate forum for the trial of their case and to show that Taiwan is clearly or distinctly more appropriate than the Hong Kong forum.  The parties’ marriage is a long one.  The evidence shown that connection of the parties and their children with the Hong Kong forum is real and substantial, the parties conducted their whole matrimonial life in Hong Kong and chose to further their respective investment in Hong Kong rather than in Taiwan since their marriage.  Although the husband’s alleged family arrangement need to be considered in light of the Taiwan Tax Law and Trust Law, the question of third party interests is not exclusive to the Taiwan assets.  And the husband’s parents who reside in Taiwan also have substantial investment/assets in Hong Kong.

54.  For all the reasons discussed above, after due consideration of all the connecting factors, I am of the view that the parties have the most real and substantial connection with Hong Kong.  Even the intended interveners have substantial connection with Hong Kong.  I am satisfied that Hong Kong is a natural and appropriate forum, for the parties’ divorce petition, claims for custody and ancillary relief.   That being so, it is no longer required to consider whether the wife will be deprived of any legitimate personal or juridical advantage if the case is tried in Taiwan.

55.  In the circumstances I dismiss the husband’s application for stay on grounds of forum non conveniens, with a costs order nisi to be made absolute at the expiration of 14 days that he is to pay the wife’s costs of this application, including all reserved costs, to be taxed if not agreed, with Certificate for Counsel.