CW v. CC

FCMC 11025/2022

[2024] HKFC 92

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 11025 OF 2022

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DECISION
(JURISDICTION)

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1.  On 18 August 2023, I had a substantive hearing (the “Hearing”) for a summons taken out by the Respondent Husband (“H”) on 25 May 2023 on whether Hong Kong has jurisdiction to entertain a Petition taken out by the Petitioner Wife (“W”) on 14 November 2022 (the “Petition”). The following chronology is relevant to the Petition and the Hearing.

2.  On 14 November 2022, W took out the Petition based on Unreasonable Behaviour. W pleaded either W, H or both had a substantial connection with Hong Kong at the time of the Petition.

3.  W pleaded 7 grounds that W, H or both had a substantial connection with Hong Kong at the date of the Petition in paragraph 4 of the Petition (paragraph 4(a) to 4(g)).

4.  On 12 April 2023, H filed Acknowledgement of Service. H stated he would dispute the jurisdiction of the Petition in Question 4 of the Acknowledgement of Service.

5.  On 25 May 2023, H took out a Summons:

(1)  to dismiss the Petition as neither W nor H had a substantial connection with Hong Kong as at the date of the Petition; or

(2)  in the alternative, the Court should not exercise any jurisdiction on the ground of forum non conveniens, that the proceedings should be conducted in Shanghai Xuhui District People’s Court.

(“Jurisdiction Summons”)

6.  On 9 August 2023, H took out another Summons for retrospective leave be granted to H to take out the Jurisdiction Summons out of time (“Leave Summons”). W did not oppose the Leave Summons in the Hearing. Therefore, I granted retrospective leave to H to take out the Jurisdiction Summons during the Hearing.

7.  On 10 August 2023, W took out a Summons for leave to amend the Petition (“Amendment Summons”). 2 grounds were added that H had a substantial connection with Hong Kong at the date of the Petition (paragraph 4(h) to 4(i)).

8.  H did not oppose the Amendment Summons. Therefore, by consent, I granted leave to W to amend the Petition in the Hearing (the “Amended Petition”).

9.  Paragraph 4 of the Amended Petition stated as follows:

“4. At the date of the Petition, the Petitioner, the Respondent or both have a substantial connection with Hong Kong: -

(a) The Petitioner and the Respondent continue to file tax returns and, if required, pay tax in Hong Kong.

(b) The Respondent is the owner of MT, Hong Kong – which was initially used as the parties’ matrimonial home and subsequently as an investment property. He continues to pay the monthly mortgage instalment of such property and manage it by renting it out and collecting rent.

(c) The Respondent is required to travel to work in Hong Kong from time to time.

(d) The Petitioner and the Respondent both maintain and operate bank accounts in Hong Kong.

(e) The Petitioner and the Respondent are both holders of Hong Kong Permanent Identity Card.

(f) The Petitioner and the Respondent conducted majority of their married life in Hong Kong (see paragraph 2 above) with the children of the family having received education in Hong Kong until 2021.

(g) Upon the breakdown of the marriage, the Petitioner intends to bring the children of the family back to Hong Kong to reside at the matrimonial home and to reside at the matrimonial home and to receive education (see also her Statement as to Arrangement for Children to be filed in these proceedings).

(h) The Respondent conducts commercial activities and/or business in Hong Kong.

(i) The Respondent beneficially owns a significant number of shares in FT under an employee incentive plan trust which is governed by the Laws of Hong Kong. These shares are valuable and constitute a substantial part of the matrimonial assets.”

10.  As a result of the above chronology, the Jurisdiction Summons is the only one remains to be contested, the issue to be determined in this judgment therefore is on whether W could establish either W or H had a substantial connection with Hong Kong at the time of the Petition such that Hong Kong has jurisdiction to entertain the Petition based on the 9 grounds as set out in paragraph 9 above. If I find that Hong Kong has jurisdiction, then I have to consider the alternative relief sought by H in the Jurisdiction Summons, namely to stay these proceedings on the ground of forum non-conveniens.

JURISDICTION

Background of the Family

11.  It will be useful to set out the background information of the family first as these are pertinent to the issues of the Jurisdiction Summons.

12.  H was born in 1982 and was 40 years old at the time of this Hearing. He grew up in Mainland China and was graduated from Tsing Wah University in 2004. After graduation, he moved to live in Hong Kong in 2004.

13.  W was also born in 1982 and was 40 years old at the time of this Hearing. Her early days was in Mainland China with her family until she moved to live in Japan with her mother and step-father in 1997. She obtained Japan nationality in 2000. Then, she moved to live in Hong Kong in 2008 and worked in M Bank, Ltd Hong Kong.

14.  The couple knew each other in 2007 in Beijing through the introduction of their parents. They married on 23 January 2009 in Beijing. After the wedding, they lived at 28B MD in Hong Kong (“Former Matrimonial Home”). The parties moved to a bigger flat, 31C MD, in around 2016 as they were considering having the 2^nd child. Former Matrimonial Home was rented out in the same year.

15.  W gave birth to the elder son in Beijing in 2011 and the younger son in Hong Kong in 2018. The children were 11 years old and 5 years old at the time of the Hearing.

16.  Workwise, H worked in Hong Kong as an analyst, vice-president, and executive director respectively in the banking industry from 2004 till 2017. H was employed by LL, a subsidiary of FT in 2017. H then moved to Shanghai for work in around May/June 2017. He is now the Chief Financial Officer of FT.

17.  FT was incorporated in Cayman Islands was listed on the New York Stock Exchange in June 2021. It was registered as a non-Hong Kong company in the Companies Registry in Hong Kong on 28 February 2022.

18.  According to W, H would return to Hong Kong once to twice per month to visit and spend time with the family since he worked in Shanghai in 2017. When the pandemic began, H reduced his visit to Hong Kong to once in 2-3 months due to quarantine requirements.

19.  In relation to the work of W, W stopped working for around 3 years after giving birth to the elder son. W then resumed working in Miz Bank Hong Kong in 2014 till she left Hong Kong with the children to live with H in Unit 501, Block 7, SR in Xuhui District, Shanghai in April 2021 (“Shanghai Flat”).

20.  W regards herself as a housewife with a part-time job in Shanghai since October 2022. W said she also took up a sinecure post at a subsidiary company of FT under H’s arrangement in January 2021.

21.  The children were raised and resided in Hong Kong until W and the children moved to Shanghai in April 2021. Thereafter, the children received education in Shanghai.

22.  Parties had different perspectives on whether H was relocated from Hong Kong to Shanghai in 2017 and further, whether the whole family also permanently relocated to Shanghai in April 2021. I will deal with this issue in the later section.

23.  According to W, the relationship between the parties deteriorated since October 2021 when W suspected H had extra marital affair but H did not respond to the issue directly.

24.  It was not disputed that H left the Shanghai Flat and lived elsewhere in Shanghai in September 2022.

25.  W then filed the Petition in Hong Kong on 14 November 2022.

26.  H commenced divorce proceedings in the Shanghai Court on 24 November 2022. W’s challenge to the jurisdiction of the Shanghai Court was unsuccessful at first instance. W then appealed the ruling but was dismissed by the First Intermediate People’s Court of Shanghai Municipality on 27 June 2023.

Legal Principles on Substantial Connection

27.  The starting point is s.3(c) of the Matrimonial Causes Ordinance (Cap. 179) (“MCO”), which provides that:

“3. Jurisdiction in divorce

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.” (emphasis added)

28.  In JQ v. CLH [2022] 2 HKLRD 632, para.21, the Court of Appeal described the principles for determination on substantial connection under s.3(c) MCO as “well-established”.

29.  In ZJW v. SY CACV 10/2017 (1 December 2017), para. 36, the Court of Appeal stated how to determine a “substantial connection” in the context of section 3(c) of MCO is “a well-trodden area”.

30.  JQ v. CLH is a recent Court of Appeal case on substantial connection which recognized that the leading authority on this topic in Hong Kong is the judgment of the Court of Appeal in ZC v CN (Divorce: jurisdiction) [2014] 3 HKLRD 43 and quoted the relevant principles in paragraph 21 of the judgment.

“21. The principles for determining whether a person has a “substantial” connection with Hong Kong for the purpose of s 3(c) of the Ordinance are well established. The leading authority on this topic in Hong Kong is the judgment of the Court of Appeal in ZC v CN (Divorce: jurisdiction) [2014] 5 HKLRD 43, where Cheung JA (with whom the other two members of the Court of Appeal agreed) considered in depth the statutory requirement of substantial connection under that section:

“[9.1] In line with the modern approach of statutory interpretation, one should not simply look at the natural and ordinary meaning of the words ‘substantial connection’ but also the context and purpose of this term.

[9.4] Whether a person has a substantial connection with Hong Kong is clearly a question of fact. No definition for this term will be succinct or comprehensive enough. What one may do is to look at the surrounding factors to see whether that person is substantially connected with Hong Kong at the time of the petition. As a starting point, one begins to see if that person has connection here and then decide whether that connection is a substantial one, see S v S [2006] 3 HKLRD 751 paragraph 15. In terms of connection, there must be physical presence in Hong Kong, this must be the ground rock of invoking the divorce jurisdiction. But because of the requirement of ‘substantial’, the presence cannot be of a transitory nature otherwise this will encourage ‘fly in’ and ‘fly out’ divorces, a theme that the Court has consistently emphasised, see, for example, Griggs (nee Sharp) v Griggs [1971] HKLR 299, Ta Tran Thi Thanh v Ta Van Hung and Another [1981] HKDCLR 37 and more recently S v S, B v A [2008] 1 HKLRD 43.

[9.5] In the majority of cases, where a married couple is in Hong Kong, the Court will have no difficulties in ascertaining whether they have a substantial connection here. Thus in RI v SSH [2010] 4 HKC 588, this Court held that:

‘4. …… 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.’

See also LN v SCCM (CACV 62/2013), Judgment dated 4 June 2013 and DGC v SLC (née C) [2005] 3 HKC 293.

[9.6] While the discussion in RI v SSH was in the context of forum non conveniens, the question of forum is dependent on the place where the parties have the most real and substantial connection with the action. Hence the suggested factors are clearly applicable to the present discussion.

[9.7] Traditionally, the discussion of this topic mainly centred on the foreign expatriate community who are present in Hong Kong because of business commitments or to avail themselves of the opportunities in this international commercial city, see, for example, S v S, B v A, G v G [2005] 1 HKFLR 182 and Z v Z (Substantial Connection and Forum) [2012] HKFLR 346. Increasingly in recent years this issue is extended to many of the Hong Kong and Mainland China families who have homes or businesses both here and in the Mainland. Examples can be found in this and other cases such as LS v AD (Forum; Discovery in the PRC) [2012] HKFLR 376 and YS v TTWD (Substantial Connection: Forum) [2012] HKFLR 129. The focus of discussion in these cases is not about mainlanders who came here on visitors’ two way permit but those who have resident status in Hong Kong. Needless to say, the same approach of looking at the surrounding circumstances in order to ascertain the presence of substantial connection is to apply to these parties as well.

[9.8] The fact that a party has resident status which allows him or her to live here legally is only a factor to be taken into account. He or she may not be living here on a long term basis and only comes here occasionally. No doubt one has to look at other factors such as the party’s past pattern of life, the frequency of his visit to Hong Kong, the length and purpose of the stay, whether the party is engaged in business or work here, whether the rest of the family is here and whether a home has been established here and whether the children are at school here. It is also important to bear in mind that since the legislation only requires the party to establish a substantial connection in Hong Kong, he or she at the same time may have a substantial connection elsewhere, see S v S. In my view, if a party is shown to have substantial connection elsewhere by reason of his home or work, this may be used to contrast with the connecting factors he has in Hong Kong to see whether the Hong Kong connection is a substantial one.

[9.9] It is said in Savournin at page 184 (and also B v A at paragraph 20) that a meaning must be given to substantial connection wider than domicile or three years’ ordinary residence. But this is not intended to be interpreted so loosely as to encourage residence of passage (Indyka v Indyka [1969] 1 AC 33 at 105) or divorce of convenience. At the same time it will be unduly restrictive if one confines the connecting factors solely to that of a family context, namely, accommodation in a matrimonial home and presence of spouses and children. While in the majority of cases, family context is the focus of the inquiry and a material factor, there may well be situations where a party is in Hong Kong without the presence of his family, but nonetheless is able to show that he has a substantial connection here. It really depends on the circumstances of the case. Such cases, however, must be regarded as exceptional.”

31.  Meanwhile, ZJW v. SY laid down a specific approach on how the court makes a determination on substantial connection under s.3(c) MCO (ZJW v. SY, paras.35-43).

“D2. Specific approach

35. We next turn to the specific approach to be adopted by the Court of Appeal in reviewing findings of fact made in the context of a determination under section 3(c) of the MCO. That approach is, in our view, to be informed by how the court makes a determination on substantial connection under section 3(c).

D2.1 Determining “substantial connection”

36. How to determine a “substantial connection” in the context of section 3(c) is a well-trodden area, as the case law demonstrates. The Judge in his judgment at [15] – [26] referred to a line of cases from Jean Michel Savournin v Lau Yat Fung [1971] HKLR 180, S v S [2006] 3 HKLRD 751; B v A [2008] 1 HKLRD 43 and culminating in ZC v CN (Divorce: jurisdiction) [2014] 5 HKLRD 43. Based on the well-established principles derived from the authorities, the proper approach to determine if a substantial connection is established for the purpose of section 3(c) on the facts of a particular case may be stated as follows.

37. First, whether a party to a marriage had a substantial connection with Hong Kong at the time of the presentation of the petition is a question of fact. Like any other question of fact, the court must have regard to all the circumstances of the case to determine if that party had the requisite substantial connection.

38. Second, a two-stage process is usually adopted :

(1) If the person concerned has a connection with Hong Kong;

(2) If yes, is the connection a substantial one.

39. For (1), connection must mean physical presence in Hong Kong. For (2), substantiality means that the connection cannot be of a transitory nature. It must be of sufficient significance or worth to justify the courts of Hong Kong assuming jurisdiction in respect of matters going to and consequential upon the dissolution of the parties’ marriage. The court will identify all the factors relevant to substantial connection or the lack of it, evaluate them and give them such weight as is appropriate in the overall circumstances of the case.

40. Third, what are the relevant factors and how much weight is to be given to each of them depend on the actual circumstances of the case. Since it is a fact-sensitive exercise, there can be no comprehensive list exhausting all the relevant factors to be taken into account. Nor can there be any mechanistic formula directing how much weight is to be attached to a particular relevant factor. As Kwan JA recently observed in LCYP v JEK, supra, at [40], citing S v S [2006] 3 HKLRD 751, [18] :

“ …whether a party to a marriage would have a substantial connection with Hong Kong is a question of fact, so the factors to be taken into consideration and the weight to be given to each relevant factor would vary according to the particular circumstance of each case.”

41. Without attempting an exhaustive list, this Court (differently constituted) held in RI v SSH [2010] 4 HKC 488 at [4] :[1]

“ [4] …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.”

42. In cases where a substantial connection is alleged to have been established by the fact that a party has resident status in Hong Kong, or his/her travelling to or stays in Hong Kong, Cheung JA in ZC v CN, supra, at [9.8], observed :

“ The fact that a party has resident status which allows him or her to live here legally is only a factor to be taken into account. He or she may not be living here on a long term basis and only comes here occasionally. No doubt one has to look at other factors such as the party’s past pattern of life, the frequency of his visit to Hong Kong, the length and purpose of the stay, whether the party is engaged in business or work here, whether the rest of the family is here and whether a home has been established here and whether the children are at school here. It is also important to bear in mind that since the legislation only requires the party to establish a substantial connection in Hong Kong, he or she at the same time may have a substantial connection elsewhere, see S v S. In my view, if a party is shown to have substantial connection elsewhere by reason of his home or work, this may be used to contrast with the connecting factors he has in Hong Kong to see whether the Hong Kong connection is a substantial one.”

43. Fourth, after carefully evaluating and weighing all the relevant factors in the overall circumstances of the case, the court will find as a matter of fact if the party had a substantial connection with Hong Kong at the time of the presentation of the petition under section 3(c).”

32.  In summary, the guidance from the above Court of Appeal cases are as follows:

(a)  Whether a person has a substantial connection with Hong Kong is clearly a question of fact (ZC v. CN, para.9.4 and ZJW v. SY, para.37).

(b)  Two stage process is adopted:

(i)  If the person concerned has a connection with Hong Kong – connection must mean physical presence in Hong Kong (ZC v. CN para. 9.4 and ZJW v. SY, para.38-39).

(ii)  If yes, is the connection a substantial one – connection cannot be of a transitory nature. It must be of sufficient significance or worth to justify the courts of Hong Kong assuming jurisdiction in respect of matters going to and consequential upon the dissolution of the parties’ marriage. (ZC v. CN, para. 9.4 and ZJW v. SY, para.38-39.)

(c)  What are the relevant factors and how much weight is to be given to each of them depend on the actual circumstances of the case. There is no comprehensive list exhausting all the relevant factors to be taken into account. Nor there be any mechanistic formula directing how much weight is to be attached to a particular relevant factor (ZJW v. SY, para.40). Without attempting an exhaustive list, the Court of Appeal listed some relevant considerations for expatriate families who live in Hong Kong, and Hong Kong and Mainland China families who have homes or businesses both here (i.e. Hong Kong) and in the Mainland:

(i)  For expatriate families who live in Hong Kong – 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. (ZC v. CN, para.9.5 and ZJW v. SY, para.41, by quoting RI v. SSH [2010] 4 HKC 488, para.4.)

(ii)  For Hong Kong and Mainland China families who have homes or businesses both here and in the Mainland – the fact that a party has resident status which allows him or her to live here legally is only a factor to be taken in account. He or she may not be living here on a long term basis and only comes here occasionally. No doubt one has to look at other factor such as the party’s past pattern of life, the frequency of his visit to Hong Kong, the length and purpose of the stay, whether the party is engaged in business or work here, whether the rest of the family is here and whether a home has been established here and whether the children are at school here. (ZC v. CN, para.9.8.)

(d)  The legislation only requires the party to establish a substantial connection in Hong Kong, he or she at the same time may have a substantial connection elsewhere. If a party is shown to have substantial connection elsewhere by reason of his home or work, this may be used to contrast with the connecting factors he has in Hong Kong to see whether the Hong Kong connection is a substantial one. (ZC v. CN, para.9.8.)

(e)  Meaning must be given to substantial connection wider than domicile or three years’ ordinary residence. But this is not intended to be interpreted to loosely as to encourage residence of passage or divorce of convenience. (ZC v. CN, para.9.9.)

(f)  Focus of the inquiry - family context is the focus of the inquiry and a material factor in majority of cases. However, at the same time, it will be unduly restrictive if one confines the connecting factors solely to that of a family context, namely, accommodation in a matrimonial home and presence of spouses and children. There may well be situations where a party is in Hong Kong without the presence of his family, but nonetheless is able to show that he has a substantial connection here. However, such cases must be regarded as exceptional. (ZC v. CN, para.9.9.)

(g)  After carefully evaluating and weighing the relevant factors in the overall circumstances of the case, the Court is required by the statute to determine, as a matter of fact, whether a party had a substantial connection with Hong Kong at the time of the presentation of the petition under s.3(c) (ZJW v SY, para.43).

33.  In addition to the principles established by the Court of Appeal, I also bear the following legal principles in mind:

(a)  The burden rests on the Petitioner to satisfy the Court that this Court does have jurisdiction under s.3 MCO. Parties cannot confer jurisdiction on the court if the court does not have one. (W v. C (Domicile and Forum) [2013] HKFLR 213).

(b)  The standard is on balance of probabilities. (JQ v. CLH, para.22, by quoting S v S [2006] 3 HKLRD 751, para. 15).

(c)  It is also trite that whether it is under domicile or substantial connection, the Court should focus on matters and “the position as at the date of the petition” which is determinative, notwithstanding a holistic approach is otherwise called for (ZJW v SY, para.56).

H’s 3 broad propositions

34.  Before going into the discussion concerning the Jurisdictions Summons in detail, it is pertinent to note that the H has put forward three broad propositions which H submitted those propositions are relevant to how the said legal principles should be applied to the facts of this case. W has made her reply submissions and I will set out my view on the three broad propositions below.

35.  First, H submitted that the focal point should be at the date of the petition. Pre-petition events may be taken into account, but only for the purpose of ascertaining the state of affairs as at the date of the petition. Further away these historical events, less weighty they would be. Future events are irrelevant because they have not yet happened and they may not happen at all. Declaration of intention is irrelevant until and unless it puts into action.

36.  W stressed that nothing prevents the court to look at the entirety of the marital life to consider whether the parties have substantially conducted their matrimonial life in Hong Kong. W referred to the facts of JQ v. CLH (especially paragraphs 24-26) to support her proposition. W submitted that the court has to look at the totality of the facts, the entirety, all the circumstances, and not just focus, because any such attempt to just focus on one point or one period of time would be off-focus.

37.  In my view, parties’ views of this proposition are not mutually exclusive. It is clear that the Court needs to ask whether either of the parties had a substantial connection with Hong Kong as at the date of the petition within the meaning of s.3(c) of MCO. At the same time, I am reminded that in ZJW v. SY, para.56, Poon JA emphasized that the court should take a “holistic approach and evaluates all the relevant factors including any pre-petition event, matter, conduct or circumstance, if pertinent, while always bearing in mind that it is the position as at the date of the petition that is determinative. As said, how much weight is to be attached to a relevant factor would vary according to the particular circumstances of the case. It is essentially a matter for the first instance judge”.

38.  Secondly, H submitted that the focus of the inquiry should be primarily on “matrimonial factors”, broadly speaking, how the family arranged their family affairs. So, as at the date of the presentation of the petition, the matrimonial life of the family must have been substantially conducted in Hong Kong. Factors like whether there is a bank account in Hong Kong, whether there are properties in Hong Kong, whether tax is paid in Hong Kong and whether salary is received in Hong Kong, are of little significance. It will be a rare case for there to be substantial connection in Hong Kong without physical presence.

39.  In relation to H’s second proposition, W stressed that when discussing whether the connection is substantial, paragraph 39 of ZJW v. SY is relevant:

“For (2), substantiality means that the connection cannot be of a transitory nature. It must be of sufficient significance or worth to justify the courts of Hong Kong assuming jurisdiction in respect of matters going to and consequential upon the dissolution of the parties’ marriage. The court will identify all the factors relevant to substantial connection or lack of it, evaluate them and give them such weight as is appropriate in the overall circumstances of the case.” (emphasis added by W)

W stressed that finances of the parties would justify the court assuming the jurisdiction to try this matter or to hear the matter, and this is a significant connecting factor with Hong Kong.

40.  W also quoted paragraph 26 of JQ v. CLH, to show that the Court in that case found the jurisdiction based on “economic and social presence”.

41.  On this, I consider paragraphs 24 and 25 of JQ v. CLH also relevant,

“24. Mr Chan’s argument on “exceptionality” is based on sub-paragraph (6) of the Judge’s summary, which is itself based on §9.9 of Cheung JA’s judgment in ZC v CN. It is important to emphasise, however, that there is only one statutory test, or question, for determining whether the jurisdictional requirement under s 3(c) of the Ordinance is satisfied, namely, whether a party to the marriage had a substantial connection with Hong Kong at the time of the petition. There is not a separate category of parties without the presence of family in Hong Kong who have to satisfy the requirement of “exceptionality” before jurisdiction under s 3(c) can be established. We do not read the judgment of Cheung JA in ZC v CN as seeking to lay down any such principle. It seems to us to be clear, from reading §9.9 of his judgment in ZC v CN as a whole, that the learned judge was merely emphasising that in the majority of cases, the family context is the focus of the inquiry and a material factor for determining the question of substantial connection, while recognising that there could be cases where, without the presence of his/her family here, a substantial connection with Hong Kong can nonetheless be established. Such case may not be frequent, and thus may be regarded as “exceptional”. It is, however, wrong to elevate “exceptionality” as the test for determining substantial connection. A test based on “exceptionality” is not useful either, because it would only lead to further, fruitless debates on what may or may not be exceptional, or sufficiently exceptional. Ultimately, each case must be looked at on its own facts to determine whether a person had a substantial connection with Hong Kong at the material time. Thus, in LCYP v JEK (Children: Habitual Residence) [2015] 4 HKLRD 798, at §42, Kwan JA (as she then was) made the following observation:

“… And as stated in ZC v CN at [9.9], it will be unduly restrictive if one confines the connecting factors solely to that of a family context (matrimonial home and the presence of spouse and children), and while in the majority of cases family context is the focus of enquiry and a material factor, there may be exceptional situations where a party is in Hong Kong without the presence of his family and nonetheless has a substantial connection here.”

25. In our view, the Husband’s repeated submissions that his case is “unexceptional”, or “not exceptional”, in the current social and/or economic situation in Hong Kong, or that the Judge is wrong to find “exceptionality” on the facts of the present case, is off-focus. The pertinent, and only, question to ask is whether the Husband had a substantial connection with Hong Kong as at the date of the petition within the meaning of s 3(c) of the Ordinance. This is a question of fact, which has been said to be “highly fact sensitive”, per HH Judge Sharon Melloy in Z v K [2019] HKFC 68, at §24.” (emphasis added)

42.  In my view, Chow JA in JQ v. CLH made it clear in paragraphs 24-25 of the judgment that the court of first instance should focus on the facts of each case and there is only one statutory test or question for determining whether the jurisdictional requirement under s.3(c) of MCO. It also stressed that there is not a separate category of parties without the presence of family in Hong Kong who have to satisfy the requirement of “exceptionality” before jurisdiction under s.3(c) can be established. Accordingly, I consider JQ v. CLH does not say whether the focus should be on physical presence or economic and social presence in deciding whether substantial connection is established.

43.  Further, JQ v. CLH also considered it is clear that Cheung JA in ZC v. CN only emphasized that in the majority of the cases, the family context is the focus of the inquiry and a material factor for determining the question of substantial connection, while recognizing that there could be cases where, without the presence of his/her family here, a substantial connection with Hong Kong can nonetheless be established (JQ v. CLH, para. 24).

44.  Therefore, I will consider both physical presence factor and also economic and social presence factors in deciding whether substantial connection was established.

45.  Thirdly, H submitted that whilst a person may have more than one place of substantial connection, a finding by the court that the person has a substantial connection to somewhere else other than Hong Kong undermines the suggestion that there is a substantial connection in Hong Kong.

46.  W disagreed and referred to paragraph 9.8 of ZC v. CN, which emphasized that all W needs to show is “a” substantial connection in Hong Kong, not “the” substantial connection in Hong Kong.

47.  In my view, para.9.8 of ZC v. CN already made it clear a party can have substantial connection in 2 places but at the same time, substantial connection elsewhere may be used to contrast with the connecting factors he has in Hong Kong to see whether the Hong Kong connection is a substantial one. Therefore, while I only need to consider whether either party has a substantial connection in Hong Kong, I am not prevented from comparing either of the parties’ connection in Shanghai with the connecting factors the either the parties have in Hong Kong to consider whether Hong Kong has a substantial connection.

Discussion

48.  As set out in paragraph 9 above, W pleaded 9 grounds in the Amended Petition. As a matter of pleading, her affirmation evidence ought to be considered only in the context of fitting into those grounds and those grounds alone. This is in accordance with rule 9(9) of the Matrimonial Causes Rules, Cap.179A as well as demonstrated in CN v. YTW [2020] HKFC 146. My detailed findings in respect of the said 9 grounds are as follows.

I. Whether H has substantial connection with Hong Kong for the purpose of s 3(c) of MCO?

Relevant considerations for Hong Kong and Mainland China families as mentioned in ZC v. CN, para.9.8

Physical Presence

49.  It is not in dispute that H, W and the children were not living and physically present in Hong Kong at the date of presentation of the Petition. However, this is not the only factor that I should take into account in considering substantial connection of H.

Holder of Hong Kong Permanent Identity Card/ HKPR status

50.  It is undisputed that H has always remained a Hong Kong Permanent Resident (“HKPR”) and is a holder of Hong Kong Permanent Identity Card. W submitted that it is clear from H’s evidence that he appreciates the benefit of having a HKPR status, as he considers that it allows greater travel convenience. This was also why he said he had to place specific emphasis that the family had made Hong Kong their “primary residence city” and elder son was “well adapted to the life in Hong Kong” in the letter to the Immigration Department concerning elder son’s HKPR status. W submitted that H’s HKPR status is a strong evidence of substantial connection with Hong Kong, not to mention this HKPR status is enjoyed by the whole family.

51.  H submitted that it was immaterial that H has a HKID card as H and W had relocated to Shanghai and no longer reside in Hong Kong. H further submitted that W has not produced any movement records to show that she has travelled frequently to, or stayed in, Hong Kong in the period preceding the presentation of the Petition as a resident of Hong Kong.

52.  It is not disputed from the evidence that H, W and the elder son have Hong Kong Permanent Identity Cards. According to the guidance from the Court of Appeal in ZC v. CN, para 9.8, for Hong Kong and Mainland China families who have homes or businesses both here and in the Mainland, the fact that a party has resident status which allows him or her to live here legally is only a factor to be taken into account. Therefore, H’s HKPR status (i.e. ground 4(e) of the Amended Petition) is only a factor to be taken into account and I should go further to look at other factors.

H’s past pattern of life

53.  H grew up in Mainland China from 1982 to 2004 and had a PRC Identity Card. According to W, since the parents of H and W lived in Beijing when they were married, the parties married in Beijing in 2009. In my view, from W’s evidence, it showed that H’s ties with his family of origin is in Mainland throughout.

54.  H stayed in Hong Kong for work since 2004 after his graduation at Tsinghua University and H continued to stay in Hong Kong for work and residence from the year of marriage (i.e. 2009) till May 2017. He then lived in Shanghai for work since May 2017.

Frequency of visit to Hong Kong since May 2017

55.  According to W, although H lived in Shanghai for work since May 2017, he would travel to Hong Kong 1-2 times per month to visit the family. When the pandemic began, he reduced the visit to Hong Kong to around 1 time per 2-3 months.

56.  It appears to me that although H’s ties with Hong Kong have been reduced since H went to Shanghai for work from May 2017 onwards, H still kept his family ties by visiting the family 1-2 times per month until the pandemic. W and the children stayed in Hong Kong and the children were still studying in Hong Kong.

57.  However, the situation further changed when W and the children moved to live with H in Shanghai in April 2021.

58.  W and the children moved to live with H in Shanghai in the Shanghai Flat in April 2021. W described the Shanghai Flat as a “serviced apartment”. W submitted that the parties did not have intention to stay in Shanghai permanently therefore they chose to live in the “serviced apartment”. However, even when H moved out from the Shanghai Flat in August/September 2022, W and the children were still living in this Shanghai Flat and they were still living in the same flat on the date of presentation of the Petition. It shows that although the Parties lived in a rented place in Shanghai, the place is not as temporary as it seems as described by W.

59.  Further, it is not in dispute that the children studied in Shanghai since 2021.

60.  According to the movement records of H from 1 July 2021 to 31 December 2022, H stayed in Hong Kong from 24 September 2021 to 6 October 2021 (i.e. 13 days). H explained he visited Hong Kong during that period for work. It showed that H would only travel to Hong Kong after W and the children stayed in Shanghai for work purpose only. Further, the period of 13 days out of period of 18 months showed that it is a short-term and episodic visit only. Apart from the short 13-days visit to Hong Kong, there is no evidence showing H has any social and family ties in Hong Kong since April 2021.

61.  From the evidence above, it appears that H, W and the children established the family in Shanghai since April 2021. When W and the Children moved to instead of stayed in Shanghai in April 2021, H’s ties with Hong Kong were substantially reduced. Accordingly, the connections mentioned in ground 4(c) and ground 4(f) of the Amended Petition were less significant since April 2021.

Letter to Immigration Department

62.  W argued that when applying for the elder son Hong Kong Permanent Identity Card, H and W wrote a letter to the Immigration Department in January 2021 stating, “We and ZB (elder son) have made Hong Kong as our primary residence city since 2012” and “ZB (elder son) is well adapted to the life in Hong Kong” (“Letter to Immigration Department”).

63.  When I look at the Letter to Immigration Department closely, the purpose of the Letter to Immigration Department was to respond to an issue raised by the Immigration Department on whether Japan Government allows elder son’s application to hold dual nationality of the elder son as the elder son got a Japan passport as well. I accept H’s explanation that the purpose of the letter was for applying for a Hong Kong Permanent Identity Card for the elder son as at that time the elder son has lived in Hong Kong for 7 years and it would be easier for the elder son to travel more conveniently with the legal status of HKPR. In fact, the Parties also stated in the Letter to Immigration Department that they “applied Japan passport for ZB (elder son) for easier travel arrangement between China/Hong Kong and Japan.”

64.  Although the Parties mentioned in the Letter to Immigration Department that they “expect him (elder son) to retain Hong Kong citizenship by the time he is required to make a decision on nationality”, I consider a mere statement of wish of elder son’s choice of nationality in the future (which will only happen when the elder son reaches 18 years old, which is around 7 years from the date of the Petition) cannot be relied on to establish H has a substantial connection with Hong Kong at the time of the presentation of the Petition.

H’s economic presence in Hong Kong at the date of the Petition

65.  This relates to grounds 4(a), (b), (d), (h) and (i) of the Amended Petition.

66.  In gist, W submitted that majority of H’s assets are in Hong Kong.

Landed Property

67.  For landed property, W submitted that the Former Matrimonial Home became an investment property in 2016 when the parties moved to a bigger flat. H collected rental income from the Former Matrimonial Home and made monthly mortgage repayment. Both parties used Former Matrimonial Home as their address of correspondence with, inter alia, the banks and the Inland Revenue Department. It is one of the factors showing H has always maintained a strong economic presence in Hong Kong.

68.  However, as pointed out by H which I also agree, from the evidence in W’s affirmation, in addition to the Former Matrimonial Home in Hong Kong, there are two other landed properties held by H and by both parties respectively outside Hong Kong. H bought a property in Zhuhai in 2015. The parties owned a property in Japan since 2011.

69.  According to W, the estimated net value of Former Matrimonial Home estimated by W is HK$12,467,970 and the estimated value of the Zhuhai Property pursuant to the value of a similar flat is HK2,507,000. However, W did not provide current valuation of the Japan property. W was unable to prove that the landed property in Hong Kong is the most substantial asset by comparing with the Zhuhai property and the Japan property.

70.  Further, in my view, when a person moves to another city or country for work and for living, it is common for that person to find a correspondence address or use the address of the relatives or friends in his or her original city or country to receive some letters from banks or other organizations. I do not consider H’s connection to Hong Kong would become substantial by relying on the fact he uses the Former Matrimonial Home to receive correspondence of banks and Inland Revenue Department. In fact, by using the Former Matrimonial Home to receive correspondences, in my view only shows that H did not have other connections in Hong Kong other than keeping an investment property for investment and as a correspondence address in Hong Kong.

71.  In view of the above, I consider keeping the Former Matrimonial Home as an investment property is not sufficient to satisfy the Court that H has a substantial connection with Hong Kong. W failed to rely on ground 4(b) to prove H’s substantial connection with Hong Kong.

FT Shares

72.  Further, W stressed that H owns shares in FT pursuant to an employee incentive trust plan governed by Hong Kong Law (“FT Shares”). W submitted H’s ownership of the shares under the trust shows H has a “substantial connection” with Hong Kong because as follows:-

(a)  The FT Shares had a market value of about HK$170 million in February 2023 and they constitute a majority of the matrimonial assets.

(b)  The FT Shares were acquired by H in the course of his employment with a Hong Kong company, i.e. LL, a subsidiary of FT.

(c)  FT is registered as a non-Hong Kong company in the Companies Registry with a Hong Kong address as its principal place of place; and has subsidiaries in Hong Kong; the appointed trustee of the trust, Futu, is a Hong Kong company.

(d)  According to W, W discovered 3 files in an USB in November 2022. The files were 3 draft documents showing H tried to transfer his FT Shares under the trust to his mother. According to W, one of the documents was the draft deed for a beneficiary to transfer his interests of FT Shares under the trust and this draft deed was governed by Hong Kong law.

(e)  W submitted that H, by being a beneficiary of the trust and creating the 3 draft documents for transferring his FT Shares to H’s mother, H must have accepted that any disputes arising from the transfer of his interests in the FT Shares should be tried by Hong Kong courts in accordance with Hong Kong Law.

73.  In relation to FT Shares:

(a)  W relied on a capped photo sent by H on 28 February 2022 to show that H should have 3,022,838 American Depository Shares in FT. According to the capped photo, it only showed that H had 303,248 shares under可行权期权; 1,750,000 shares under待归属期权 ; 968,890 shares under 在途股票.

(b)  From the capped photo, it is not clear whether and how many FT Shares have been vested and whether H owned those shares on 28 February 2022. Therefore, I raised whether the FT Shares were vested during the Hearing. W’s Counsel Ms. Yip admitted that the evidence did not tell. However, W submitted that it does not have to be vested. W submitted the situation was similar to a person receiving inheritance from dying parents, i.e. he still has not got the inheritance, but then if the parents are dying, it is likely that he would get hold of the inheritance.

(c)  However, upon further reading of the option award agreements provided by W, including期权授予协议, 期权授予协议之补充协议 , FT Logistics Information Co. Ltd Award Agreement, FT Alliance Co. Ltd 2018 Share Incentive Plan (W provided only 1 page of this document) and Option Award Agreement of FT Alliance Co. Ltd 2018 Share Incentive Plan, it is obvious the option is subject to further terms and conditions. In the Option Award Agreement of FT Alliance Co. Ltd 2018 Share Incentive Plan, it stressed that “this option award agreement does not represent a securities interest in the company, which interest may accrue only upon the exercise of the option in accordance with its terms.”

(d)  Therefore, I do not agree with W that H will be in any event receive those FT Shares in the future no matter what happens.

(e)  From the evidence available, W could not show how many FT Shares H owned at the time of the Petition as there is no evidence that H has exercised the option and H owned the FT Shares.

(f)  Even if all the FT Shares were fully vested, H received all the shares and those shares worth HK$170 million (which W could not clearly show the value of each share), the FT Shares are clearly not Hong Kong shares.

(g)  W admitted that the FT is a Cayman Island company and the FT Shares are listed in New York. It is trite that the situs of an asset is the place where an asset is considered to be located for legal purposes, which means the FT Shares are New York shares instead of Hong Kong. It is a foreign asset instead of a Hong Kong asset.

(h)  W submitted that more important is that the trust deed was governed by Hong Kong law and the trustee is a Hong Kong company. H’s Counsel Mr. Chang submitted there was no relevance between the trust deed being governed by Hong Kong law and the substantial connection of H. I agree that although the trust deed is governed by Hong Kong law, it does not mean H held such assets in Hong Kong.

(i)  In view of the above, I consider W fail to rely on ground 4(i) to prove H’s substantial connection in Hong Kong.

Bank Accounts

74.  In relation to ground 4(d) of the Amended Petition, W submitted that H has maintained and operated bank accounts in Hong Kong, including his HSBC account and Citibank account. As revealed by the bank statement of H’s HSBC account, he actively used the account for investment. There were also frequent transactions involving large amount of cash.

75.  H submitted that the ownership of Hong Kong bank accounts cannot per se support a substantial connection with Hong Kong.

76.  According to the evidence available, W produced a screenshot of H’s HSBC account in March 2022, 3 monthly HSBC bank statements of H on 22 January 2022, 22 February 2022 and 22 March 2022 respectively and a statement of H’s Citibank account from 4 July to 3 August 2022. The amount involved in Citibank account is around HK$59,000 which I consider to be minimal and the transactions does not appear to be active. In relation to HSBC account, it appears the main portion of the money in the HSBC account was used for investment of shares. The transactions were more active than Citibank account. However, I agree that having bank accounts in Hong Kong or having investment transactions does not automatically establish a substantial connection in Hong Kong. We need to look at the overall condition holistically.

Assets Overall

77.  In summary, while H has a Former Matrimonial Home at around $12.5 million and around $23 million in HSBC Bank Account (mainly for investment transactions and some money deposit purpose), when I compare the portion of H’s Hong Kong assets with foreign assets, I am unable to form a view that H held substantial assets in Hong Kong and had a strong economic base in Hong Kong at the time of the Petition to establish a substantial connection with Hong Kong:

	Ascertainable assets	HK assets (estimated HK value)	Foreign assets (estimated HK value)
1.	Former Matrimonial Home	12,467,970
2.	Property in Zhuhai		2,507,000
3.	Property in Japan		Unknown
4.	Shares in FT		170,705,708*
5.	Shares held by H in a Beijing Company		Unknown
6.	Shares held by H in a Shanghai Company		Unknown
7.	Shares held by H by HT, a HK company	Unknown
8.	HSBC account by H	23,194,487
9.	HSBC MPF account by H	323,985
	Total:	35,986,442 PLUS unknown valuation of HT	173,212,708 PLUS unknown valuation of Japan property + valuation of 2 companies

*which I consider the value was in fact unknown as there was no evidence showing the shares have been vested.

H’s work and tax arrangements

78.  It is not in dispute that H has been employed by LL, a subsidiary of FT incorporated in Hong Kong since May/June 2017 as the Chief Financial Officer. According to H’s employment contract with LL, it was stated that the employment was governed by Hong Kong law. The evidence showed that H also paid his salary tax in Hong Kong.

79.  W submitted that H was maximizing all the Hong Kong benefits, including tax benefits as H specifically requested for his salary to be paid in Hong Kong to take advantage of the lower tax rate. W emphasized that H adopted such an arrangement to ensure generous financial provision for the benefit of his family. W further submitted that the financial aspect of the family, is one of the most important aspects in this case as H maximized all the financial advantages that he can use in relation to Hong Kong. W submitted that even though family is physically in Shanghai, H remotely controls all his finances and savings, the economic mainstay of the family remains in Hong Kong, and this alone constitutes substantial connection in Hong Kong.

80.  H acknowledged it is a factor connecting H to Hong Kong but that’s not substantial as Parties are at liberty to arrange their own finance and this is of no concern to the Court at all. Further, H submitted that W has not proven that H relied upon his tax dealing in Hong Kong for family related expenses in Shanghai. H submitted the purpose of tax savings is to allow H to pay insurance premium in Hong Kong.

81.  I also queried about H’s employment agreement governed by Hong Kong law. H accepted that the employment agreement was governed by Hong Kong law but submitted that in fact H was working in Shanghai. H submitted that it is not sufficiently substantial as a connecting factor because the key is not the nature of the employment contract but rather where he did the work, i.e. does he have to come to Hong Kong to do the work etc.

82.  In my view, I consider it is undisputed that H retained a connection with Hong Kong through paying taxes in Hong Kong and received salary in Hong Kong, yet what is important is whether a substantial connection could be established under the facts in this case.

83.  In deciding whether the facts in this case can establish a substantial connection, I revisited the facts of JQ v. CLH [2021] HKFC 105 in which the first instance court found H to have a substantial connection with Hong Kong notwithstanding he had resided in Dongguan for 17 years before the Petition.

84.  I noted in the first instance court of JQ v. CLH, HHJ I. Wong found that on its facts, the case was a marginal one in establishing whether husband’s presence in Hong Kong, mainly for economic reasons, is sufficient to constitute a substantial connection (JQ v. CLH [2021] HKFC 105, para.33 and 39). HH J I. Wong found that although husband did not have to be physically in the office and monitor his staff on a day to day basis, but he oversaw and managed his team remotely and came to Hong Kong for business meetings with bankers (JQ v. CLH [2021] HKFC 105, para.41-42]. HHJ I. Wong further highlighted that husband admitted the comfortable standard of living that the family enjoyed during the marriage was and is made possible with the support of the perks that he had been enjoying as a Chairman and Management Director of his electrical company listed in Hong Kong (JQ v. CLH [2021] HKFC 105, para.43). Husband had drawn various loan facilities in Hong Kong, including mortgage loans of his Hong Kong properties, for his projects in the Mainland. Therefore, HHJ I. Wong considered the case was not one where husband holds some companies and bank accounts in Hong Kong “offshore”, but a case where husband enjoyed “economic” presence in Hong Kong to ensure generous financial provision for the benefit of the family (JQ v. CLH [2021] HKFC 105, para.45).

85.  From the evidence available, there is no evidence showing H’s employment with LL, which is a subsidiary of FT involved any Hong Kong business. Although FT has been registered in Hong Kong Companies Registry as a non-Hong Kong company, there is no evidence showing its business involves Hong Kong. H mentioned that FT has no substantive business in Hong Kong and it is an internet/logistics company, involving operation in Guiyang, Nanjing, Beijing, Shanghai, and Chengdu etc.

86.  W had not shown H had any working ties in Hong Kong through his employment with LL/FT. I consider this factor is one of the important factors that distinguish from the application of facts in JQ v. CLH. In JQ v. CLH, the first instance court found that the husband in fact managed work in Hong Kong remotely. In this case, H’s work is in Shanghai and or Mainland cities. H made use of tax benefits to receive salary in Hong Kong and pay tax here only.

87.  I am aware of W’s argument that all along H was the family’s financial provider and made various contributions to the living expenses of the family and maintained W (e.g. H also issued supplementary credit cards in favour of W for her spending). The financial arrangement made by H by receiving salary in Hong Kong and pay tax in Hong Kong was to ensure generous financial provision for the family so this should be one of the main reasons of finding a substantial connection.

88.  However, I am aware that W did not have the full picture of H’s financial situation and W believed H had some investment projects in Shenzhen, Beijing and Shanghai in relation to children playground business and AI medical business.

89.  While I acknowledged H all along was and is the main financial provider of the family since marriage, when H was employed by LL/FT since 2017, it was unclear from the evidence as to how H arranged his finances to support the family and whether his financial support was purely based on his salary received in Hong Kong. In fact, W admitted that the rental of the Shanghai flat was paid by 江蘇 Company, which is a subsidiary of FT, under H’s arrangement with his employer.

90.  Therefore, in my view, W cannot establish H has a substantial connection by relying on the Hong Kong tax and financial benefits to support the family financially. The tax arrangements and the salary arrangements are H’s own arrangements of his financial affairs, and I agree with DDJ Felix Li comments in 朱 v. 劉 [2022] HKFC 223, para.54 that the Court should not slip into becoming his money manager to comment on how his financial affairs should be managed.

91.  In view of the above, W failed to rely on ground 4(a) to prove H’s substantial connection in Hong Kong.

H’s commercial activities and/or business in Hong Kong

92.  W also submitted that H has actively conducted business in Hong Kong in his own capacity. H is the sole shareholder and director of HT. On behalf of HT, he entered into a consultancy agreement with a PRC company on 1 March 2022 to provide pre-IPO share-financing advice to the latter in Hong Kong for 12 months (covering the date of the Petition). Whilst H claimed that the agreement was not performed, he did not offer any explanation. Further, in light of his commercial background, H should be expected to have at least obtained some kind of written confirmation from the other party that HT was discharged from performing its contractual obligations. No such evidence is produced to rebut such a strong indication of H’s substantial connection with Hong Kong. In any event, the mere fact that H had entered into the consultancy agreement when he was physically present in Shanghai for the provision of service in Hong Kong shows that he maintained a consistent “economic” presence in Hong Kong.

93.  H submitted that HT is a BVI company and has no substantive business. H submitted that according to the affirmation of H, although HT has signed a consultancy agreement with a PRC company, the agreement was not performed and W failed to provide further evidence that the agreement has been performed. Even leaving that aside, H submitted that if there was only one deal in the one and a half year period between HT and the third party under a consultancy agreement, H submitted this is no substantial connection.

94.  From the evidence, HT is a BVI company. Under the consultancy agreement, HT is providing some consultancy services for a PRC company in relation to pre-IPO share-financing advice in Hong Kong. I note that the consultancy agreement between HT and the PRC company is in fact governed under PRC law. In addition, W did not provide any evidence on how much work H has done and what kind of work H has done under this consultancy agreement through HT. Even if H has rendered work under the consultancy agreement, whether the work required H to stay in Hong Kong to give the advice to the PRC company was unknown. I am also aware that according to the immigration records, H was not in Hong Kong during 1 March 2022 (i.e. the date of signing the consultancy agreement) and 14 November 2022 (i.e. the date of filing the Petition). Therefore, I do not consider H actively conducted business in Hong Kong or need to stay in Hong Kong for his business through Hantak. W fail to rely on ground 4(h) to prove H’s substantial connection in Hong Kong.

95.  W further highlighted that H holds an APEC business Travel Card issued by the Hong Kong Immigration Department. Under the APEC Business Travel Card (ABTC) Scheme, “[a] business person residing in the Hong Kong Special Administrative Region may apply… if he/she: a. holds a Hong Kong permanent identity card and a valid national passport.” However, in my view, the purpose of applying this travel card was to enhance the mobility of business travelers among the APEC economies. H’s holding an APEC business is not sufficient at all to show H has a substantial connection with Hong Kong.

96.  In view of the above, W also fail to rely on ground 4(c) to prove H’s substantial connection in Hong Kong as the evidence does not show the Respondent is required to travel to work in Hong Kong from time to time.

Summary

97.  For the reasons above, all 8 grounds (pleaded in the Amended Petition paragraphs 4(a) to 4(f) and 4(h) to 4(i)) relied upon by W, whether considered individually or cumulatively, have failed to establish that H had a substantial connection with Hong Kong as at the date of Petition.

II. Whether W has substantial connection with Hong Kong for the purpose of s 3(c) of MCO?

Relevant considerations for Hong Kong and Mainland China families as mentioned in ZC v. CN, para.9.8

W’s HKPR status

98.  W has a HKPR status. However, as mentioned in the paragraph 52 above, according to the guidance from the Court of Appeal in ZC v. CN, para 9.8, for Hong Kong and Mainland China who have homes or businesses both here and in the Mainland, the fact that a party has resident status which allows him or her to live here legally is only a factor to be taken into account. Therefore, same as the situation of H, W’s HKPR status (i.e. ground 4(e) of the Amended Petition) is only a factor to be taken into account and I should go further to look at other factors.

W’s past pattern of life

99.  W was born in 1982 and her early days was in Mainland China and in Japan. In 1997, W lived with her mother and step-father in Japan. W received Japan nationality in 2000. From W’s 2^nd affirmation, W’s mother is now living in Japan while her step-father passed away in 2015. It appears W’s own family of origin is now in Japan.

100.  W first moved to live in Hong Kong in 2008 and worked in M Bank, Ltd, Hong Kong. After the wedding in January 2009, W lived with H in the Former Matrimonial Home in Hong Kong. It is not in dispute that W lived and worked in Hong Kong until the children and herself moved to live with H in Shanghai in April 2021.

101.  As mentioned above, W lived with H and the children in the Shanghai Flat since April 2021. Currently, the tenant of the Shanghai Flat is W and the rental was paid by 江蘇Company, as arranged by H with his employer. Children were also studying in Shanghai since April 2021 as well.

W’s intention to stay in Shanghai temporarily

102.  W submitted that it is always her intention to stay in Shanghai temporarily. W emphasized her intention to stay in Shanghai was a temporary measure were evident from the following:

(a)  W continued to file tax returns in 2021 and received a letter from IRD regarding her application for joint assessment of tax.

(b)  W’s Form IR56G cannot be conclusive evidence reflecting W’s intention to sever her financial ties with or leave Hong Kong.

(c)  W has not withdrawn her MPF after she left Hong Kong in April 2021.

(d)  W retained significant portion of cash in her HSBC account.

103.  It is undisputed that W was not physically present in Hong Kong on the date of the Petition. There was also no evidence from W showing that she has been back to Hong Kong from April 2021 until the date of filing of the Petition.

104.  It is not disputed that W did not have any right of abode in Shanghai, and hence H needs to arrange a sinecure post in 江蘇company, which is a subsidiary of FT, for W so that W could obtain a work visa to stay in Shanghai. W’s employment contract with 江蘇company was signed in January 2021, which was 3 months before W moved to live in Shanghai. Now the W had a working visa that will be expired on 26 April 2025. It appears to me that the parties made careful arrangement to ensure W can continue to stay in Shanghai from April 2021 onwards.

105.  Although I agree Form IR56G cannot be conclusive evidence reflecting W’s intention to sever her financial ties with or leave Hong Kong, it is not in dispute that W had a job and was supported financially through a job arranged by H. W further admitted that she had an additional part-time job in October 2022 in Shanghai to avoid dependency on H in relying on the sinecure post arranged by H (although W did not mention how much she could earn under this part-time job that could assist her to release the financial control by H). It is not in dispute that on the date of the Petition, W worked in Shanghai.

106.  Even though it appears W filed tax returns in 2020/2021 and retained the MPF balance of HK$111,455.30 in Hong Kong, there was no evidence of W paying tax from April 2021 onwards nor filing tax returns for the year of 2021/22. The amount of MPF was comparatively small in proportion with other assets and it is not sufficient to establish a substantial connection by saying W continue to retain MPF balance in Hong Kong.

107.  As to W’s submission that she retained substantial cash in her HSBC account, although W retained around HK$1,668,542 of deposit in her Hong Kong bank account in April 2023 (which was reduced to HK$1,359,426.19 in June 2023), W also retained HK$104,518 in her PRC bank account and HK$574,475 and HK$94,112 in two of her Japan bank accounts. I consider W retained a connection with Hong Kong through retaining a bank account but this is not sufficient to establish a substantial connection with Hong Kong.

108.  W also relied on the parties’ Letter to Immigration Department to show that both of them do not have an intention to stay in Shanghai for long term basis. As analyzed in paragraphs 62 to 64 above, I consider the purpose of the Letter to Immigration Department is to reply to the Immigration Department query on whether Japan Government allow application to hold dual nationality of the elder son, such letter cannot be regarded as a letter to prove parties don’t have an intention to stay in Shanghai in a long term basis.

109.  W submitted that there is a possibility H had an intention to divorce in 2019 as W found that H downloaded an article of “Guide to Divorce in Hong Kong” at the computer at home then H induced her to move to Shanghai in 2021 to weaken her connections with Hong Kong. W submitted she was forced to remain in Shanghai because she and the children were financially at the mercy of H. Therefore, W submitted the Court should place little weight on W’s connections with Shanghai.

110.  In my view, W did not produce any sufficient evidence to show that H intentionally induced her to move to Shanghai to weaken her connections with Hong Kong. I agree with H’s submission that W’s reliance on H had an intention to divorce in 2019 by downloading an article of “Guide to Divorce in Hong Kong” at home (which was denied by H in his 2^nd affirmation) is too far-fetched. In fact, according to W’s 4^th affirmation, when deciding to live in Shanghai in April 2021, W herself also has considered factors such as the physical separation between H and W and that the children needed time to be with H. Further, there was no contemporaneous evidence supporting W’s assertion that the parties would like to stay in Shanghai temporarily too (no matter on the assertion of H’s promise to return to Hong Kong after H developed his Shanghai career in 2017 or H’s promise to return to Hong Kong after preparing for a listing in June 2021).

111.  In relation to W’s submission that she was forced to remain in Shanghai because she and the children were financially dependent of H, I consider this could not be an excuse for staying in Shanghai and failing to prove her substantial connection with Hong Kong. In my view, the fact that W alleged herself and the children were unable to return back to Hong Kong because their lives in Shanghai were under absolute control of H, only showed W did not have a substantial connection with Hong Kong on the time of the Petition.

112.  In summary, I consider that children study in Shanghai since April 2021; W and the children continue to live in a Shanghai Flat; and W work in Shanghai show that W has established a Shanghai connection. W’s connection with Hong Kong has been substantially reduced since April 2021 as discussed above.

W’s intention to relocate back to Hong Kong on the date of the Petition

113.  W submitted that W’s affirmed evidence that she plans to relocate back to Hong Kong with the children to start school in April 2024. W submitted she has disclosed this plan at the very beginning of these proceedings in the Petition and the Statement as to Arrangement for Children.

114.  W also submitted that her intention to move back to Hong Kong is evidenced by contemporaneous and written evidence. Apart from schooling in Hong Kong, she made an appointment to obtain a Hong Kong Identity Card for the elder son and secured a job with her former employer on an informal basis. The steps W could take must be limited because her plan could not yet be fully implemented due to financial constraints.

115.  I agreed with H’s submission that “action speaks louder than words”, i.e. when W stated she had an intention to come back to Hong Kong with the children, even if it was mentioned in the Petition and Statement as to Arrangement for Children, such intention must be put into action instead of just a mere declaration without supporting actions. As mentioned in JQ v. CLH [2021] HKFC 105, a party’s intention or plan, which did not materialize, would not have made such party having more connection with Hong Kong (JQ v. CLH [2021] HKFC 105, para.35).

116.  In my view, as at the date of the Petition, W’s intention to relocate back to Hong Kong was not supported by contemporaneous evidence at that time:

(a)  Although W tried to show that the children had difficulties in finishing the homework in the school in Shanghai and produced some WeChat messages between H and the elder son from November 2022 onwards, the messages did not show W’s intention to relocate the elder son back to Hong Kong on the date of the Petition;

(b)  The email between W and the Hong Kong Japanese International School for exploring requirements for enrolling the children was on 9 May 2023, which was around 6 months after the issuance of the Petition and shortly before W made her affirmation in reply for this application.

(c)  Although elder son’s application for verification of eligibility for Hong Kong Permanent Identity Card was approved on 21 January 2021, W only apply for elder’s son Hong Kong Identity card on 6 May 2023, which was again around 6 months after the issuance of the Petition and shortly before W made her affirmation in reply for this application.

(d)  W asserted in W’s 4^th affirmation that she and her children have a large circle of friends in Hong Kong. W has failed to provide any evidence as to how close she was and how frequent she had kept contact with these alleged friends of hers and of the children.

Summary

117.  In summary, while I consider Parties conducted part of their married life in Hong Kong, when looking at the above holistically, W’s connection with Hong Kong reduced since April 2021, and as such I consider W has not established a substantial connection with Hong Kong as at the date of the Petition.

118.  In view of the above, I consider W has failed to establish her substantial connection with Hong Kong for the purpose of s.3(c) of MCO under grounds 4(a), (d), (e), (f) and (g) of the Amended Petition.

CONCLUSION ON JURISDICTION

119.  For the reasons above, all 9 grounds pleaded in the Amended Petition and relied upon by W, whether considered individually or cumulatively, have failed to establish that H and/or W had a substantial connection with Hong Kong for the purpose of s.3(c) of MCO. As such, I am not satisfied that W has proven on the balance of probabilities that the Hong Kong Courts have jurisdiction over the Amended Petition and accordingly the Amended Petition is dismissed for want of jurisdiction.

120.  By reason of having rejected W’s claim of jurisdiction, it is no longer necessary to decide on H’s alternative argument of forum non-conveniens.

SUMMARY AND ORDERS

121.  By reasons above, I order the Petitioner’s Amended Petition be dismissed for want of jurisdiction, as neither the Petitioner nor the Respondent had a substantial connection with Hong Kong, such that the court has no divorce jurisdiction over the parties herein.

122.  In relation to costs, on 22 April 2024, I wrote to the Parties to clarify their position on costs in relation to the Leave Summons and the Amendment Summons. On 25 April 2024, the Parties confirmed by joint letter that as consented at the Hearing, the costs of the Leave Summons and the Amendment Summons be in the cause of the Jurisdiction Summons.

123.  For the reasons stated above, for the Jurisdiction Summons, I see no reason why costs should not follow the event. I therefore make a costs order nisi as follows:

(a)  Costs of the Jurisdiction Summons and the costs of this suit (including the Leave Summons and the Amendment Summons) be to the Respondent, to be taxed if not agreed, with certificate of 2 counsel.

(b)  Unless any party applies to vary the above costs order nisi within 14 days hereof, the costs order shall become order absolute.

124.  Suffice it to say that I have considered all the submissions and relevant documents in reaching this decision, I do not intend to repeat each and every submission advanced by the parties in this judgment.

125.  Last but not least, I wish to express my gratitude to counsel of both sides for their most valuable assistance provided to this court throughout the Hearing.

Representation: