CWG v. MH AND OTHERS

HCMP 643/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 643 OF 2012

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R U L I N G
(leave to appeal against stay order)

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Introduction

1.  This is an application by the 1^st respondent, the husband, for leave to appeal against this court’s order made on 6 December 2013 (“Stay Order”) granting him stay of execution pending determination of his appeal against the order dated 26 March 2013 in relation to the applicant wife’s Part IIA application(“Main Order”), subject to the conditions in the Stay Order (“Conditions”).

2.  On the same day of the Stay Order, I had handed down a judgment (“Stay Judgment”).  Where applicable, I will adopt in this ruling the same abbreviations in the Stay Judgment and also in the Main Judgment of the same date as the Main Order.

3.  The Conditions in the Stay Order are payment of two sums by the husband to the wife within 14 days of the Stay Order:

(i)   A sum of HK$25m

(ii)   Arrears under the MPS Order/Interim Order of HK$3,396,000

4.  The husband now applies for leave to appeal against the Stay Order, to the extent that the Conditions to be (i) set aside or (ii) varied down.

The Legal Principles

5.  Under s 14 AA (4) of the High Court Ordinance, leave to appeal from an interlocutory judgment or order shall not be granted unless the court hearing the application for leave is satisfied that-

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

(b) There is some other reason in the interest of justice why the appeal should be heard

6.  As has been said in SMSE v KL [2009] 4 HKLRD 125,  “reasonable prospect of success” involves the notion that the prospect of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable”[1] (SMSE v KL [2009] 4 HKLRD 125 at §17).

7.  Further even if the threshold test of reasonable prospect of success is satisfied, the court still retains discretion whether to grant leave, although the fact there is, ex hypothesi, a reasonable prospect of success would heavily influence the court’s exercise of discretion (Ho Yuen Ki Winnie v Ho Hung Sun Stanley, HCA 391/2006, 25 May 2009, §§3 and 8).

8.  The above has also been referred to by Kwan JA when refusing R2 leave to appeal against this court’s order not to allow her to be heard on the husband’s Stay Application[2], when she also pointed out that the court may refuse leave to appeal in the interests of procedural economy and proportionality (Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 at §30), and further referred to Order 1A rule 2 of the Rules of the High Court.  Under that rule, the court shall seek to give effect to the underlying objectives in Order 1A rule 1 in the exercise of its powers under the Rules or its inherent jurisdiction.  Among the underlying objectives are: “to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings” (rule 1(c)), and “to ensure that the resources of the Court are distributed fairly” (rule 1(f)).

9.  The terms on which a stay is granted is a matter of discretion, and has been recognized that “where the court below has imposed terms, the Court of Appeal will be loath to interfere with its exercise of discretion[3]”.

10.  In appeals against exercise of discretion, the principles are[4]:-

“There are many authorities for the proposition that an appeal will not be entertained from an order which it was within the discretion of the judge to make, unless it be shown that he exercised his discretion under a mistake of law … or in disregard of principle … or under a misapprehension as to the facts … ; or that he took into account irrelevant matters … or failed to exercise his discretion … or the conclusion which the judge reached in the exercise of his discretion was “outside the generous ambit within which a reasonable disagreement is possible” …”

Draft grounds for the Stay Appeal

11.  The draft grounds of appeal are that this court has erred in exercising discretion in the husband’s application for stay and imposed the unduly onerous Conditions.  Briefly, the main reasons are:

(1)   Failure to properly consider that the strong likelihood of success of the grounds of the husband’s appeal against the Main Order;

(2)   Further or alternatively, failure to consider or take into full account that as a result of the husband’s appeal, there is a real likelihood that the wife would not receive any financial award, and hence it was wrong in principle to impose any conditions;

(3)   Further or alternatively, this court erred in finding that the husband “clearly continued to have financial resources after the trial”;

(4)   Further or alternatively, this court erred in finding that the wife was “in dire financial straits “ by placing undue weight on her 52^nd affirmation and the fact that she was applying for legal aid, when she was clearly guilty of non-disclosure of her finances during and since the trial;

(5)   This court was plainly wrong in making the Stay Order which (i) clearly contradicted by the findings in the Main Judgment, and (ii) are so unduly onerous as to be clearly far beyond the husband’s financial position.

Grounds (1) and (2)

12.  As set out in paragraphs 15 and 16 of the Stay Judgment, the starting point in the Stay Application is the consideration of the well known principles as summarized in Star Play, and further in paragraph 21 thereof, in accordance with what was stated in Star Play, I then set out preliminary views of the aspects and merits of the husband’s appeal against the Main Order.

13.  Whether the husband had “very strong “grounds of appeal which would result in no capital award to the wife had been fully argued by his Senior Counsel Mr Pilbrow at the hearing of the Stay Application.  The crux of his submissions was that there was a lack of evidence to support this court’s finding that the husband had at least a 50% beneficial interest in the Offshore Companies.  Mr Pilbrow at the present hearing referred this court to a transcript of a hearing before Poon J on 8 May 2012 where the Learned Judge had commented that technically the documents sought by the wife in relation to the Offshore Companies were not in the husband’s possession, power or custody.  At the hearing, Poon J had also commented that those documents were clearly relevant to the hotly contested issue of beneficial ownership of those Offshore Companies.

14.  The hearing before Poon J was before R2 was joined, and after her joinder, a specific discovery order was made against her by Poon J, which this court found that she had not complied in full.  The court had made adverse inferences against her and the husband’s lack of full and frank disclosure, and made the finding in the Main Judgment that the husband had at least a 50% beneficial interest in the Offshore Companies.

15.  After considering each of the husband’s grounds of appeal against the Main Order, on a preliminary basis, as set out in paragraph 43 of the Stay Judgment, I was unable to come to a view that the husband had such “very strong” grounds of appeal which would result in the wife receiving no award.

16.  I appreciate that Mr Pilbrow had not been provided a copy of Kwan JA’s Decision of 9 January 2014, and he was not aware of the comments made therein.  As reminded by Kwan JA, PD 4.1 Part N para 15 provides that the skeleton arguments in an application for leave to appeal “should not normally exceed 5 pages on A4 paper in no smaller than 14pt size”.  His Skeleton Submissions were of 24 pages, and about 14 pages were on Grounds (1) and (2) and basically his previous submissions were repeated.

Grounds (3) and (4)

17.  Essentially, at the hearing of the Stay Application, Mr Pilbrow was submitting that the husband’s appeal against the Main Order would be rendered nugatory because if he had paid the award, it would mean that (i) the wife would not be able to pay him back and (ii) it would cause the husband financial ruin such that he would not be able to continue the appeal.

18.  As mentioned in paragraphs 45 and 46 of the Stay Judgment, I was of the preliminary view that it would be unlikely for the husband to succeed to the extent that the wife’s capital award would be reduced to zero, and also there was no sufficient evidence from the husband why there would be an appreciable risk that the wife would not be able to repay any amount in the event of a successful appeal by the husband.

19.  In any event, even if the husband is successful in his appeal, he still has obligations to meet the reasonable needs of the wife and the children.  In the Main Judgment, the wife’s needs had been assessed to be in the region of HK$80m.  The husband also has a duty to provide reasonable accommodation for the wife and the children. The husband has so far not even complied with the payment of the arrears under the MPS/Interim Order made over 3 years ago.  Such arrears have been outstanding for some time.

20.  Further, more importantly, the normal rule is that a successful party should not be deprived of his/her judgment.

21.  In paragraphs 47 to 58 of the Stay Judgment, I had considered the husband’s reasons of saying why he would be in financial ruin, and I did not accept his assertions.

22.  Further I had considered the wife’s 52^nd affirmation and accepted that she did not have unlimited litigation funds and that she was in dire financial circumstances.

23.  Again, Mr Pilbrow was simply re-arguing these matters in his present submissions.

Ground (5)

24.  The HK$25m was based on the husband’s own Revised Open Offer made on 8 November 2012, and in paragraphs 63-65 of the Stay Judgment, I set out my reasons as to why I exercised my discretion in ordering the Conditions.

Conclusion

25.  Having considered all the submissions made on behalf of the husband, I am not satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.  I therefore dismiss the husband’s application for leave to appeal against the Stay Order.  The wife should be entitled to her costs, on party and party basis.