RE MS LUCY STONE QC

HCMP 675/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 675 OF 2013

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REASONS FOR JUDGMENT

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1.  After hearing, the court dismissed the application for the admission of Lucy Stone QC, a London specialist in matrimonial law, to appear on behalf of the petitioner wife in her appeal from the judgment of Deputy High Court Judge Carlson dated 10 August 2012, following a 14‑day ancillary relief trial in HCMC 9/2010. The appeal will be heard by the Court of Appeal on 20 and 21 June 2013. These are the court’s reasons.

The facts

2.  The trial before the deputy judge concerned the division of matrimonial assets of a very significant value.  They consisted of, amongst other things, a collection of ancient Ming and Qing antique furniture.  The judge applied the guidelines laid down by the Court of Final Appeal in LKW v DD (2010) 13 HKCFAR 537 and found no valid reason to depart from a 50:50 split.  In relation to the antique collection, the deputy judge gave directions for the selection and division of the furniture.  At issue also was the treatment of the expenditure by the husband of some HK$66 million of family assets on his mistresses and the children he had with them.  That is, whether the expenditure should be added back to the family pot before division between the parties as being “reckless” (or otherwise extravagant, unreasonable or unnecessary) expenditure from joint assets, or whether this should be regarded as a reasonable financial expense incurred both pre‑ and post‑separation.  All these issues will be raised again before the Court of Appeal.

The arguments

3.  Mr Adrian Leung, for the applicant, submitted that the case is likely to be the first to require the Court of Appeal to lay down principles and clarification of the law in Hong Kong regarding financial provision for children born out of wedlock, and in particular, their mothers, under section 10(2) of the Guardianship of Minors Ordinance (Cap 13); combined with the exercise of adding back joint assets into the matrimonial pot in respect of the allegedly lavish spending by the husband on his mistresses and their children.  There will also be consideration of the most appropriate mechanism to divide the unique collection of antique furniture, which commands a special value as a set, and in relation to some of which the wife has developed emotional attachment.  Mr Leung submitted that there is therefore unusual complexity and difficulty on the facts, and the appeal involves determination of legal principles which may impact on the development of local jurisprudence.

4.  Mr Leung also submitted that given the undisputed expertise of the applicant, her participation in the appeal would add a significant dimension to the case.

5.  Mr Leung further submitted that the pool of local senior counsel who specialise in matrimonial finance is relatively small; most of the local matrimonial silks are either conflicted out or unavailable to take up the appeal.  Moreover, the wife is unwilling to instruct a number of local senior counsel, who have acted for her previously in this and some related litigation, given the course and outcome of that litigation.  No less than 6 senior counsel fall within this category.

6.  Finally, Mr Leung emphasized the continued involvement of the local Bar in the appeal in that local junior counsel has been and will continue to be instructed and there will be cross‑fertilisation of the local Bar and overseas counsel of high standing.

7.  The Bar opposed the admission.  Mr Horace Wong SC (Mr Christopher Chain with him) submitted that whilst the appeal might involve some difficulty or complexity, it is not one of unusual difficulty or complexity so as to justify the admission of overseas counsel.  As regards the first issue of the mechanism to split the valuable collection of antique furniture, senior counsel pointed out that it is not a rare circumstance for parties to a marriage to attach sentimental value to certain chattels.  The manner by which the court may split the chattels between the parties to the matrimonial dispute simply involves a balancing exercise by the court between competing assertions and interests.  Such an exercise involves no special legal complexity, nor would it generate jurisprudence of any particular significance.

8.  Mr Wong also pointed out that there was no valuation evidence before the deputy judge that the value of the furniture was enhanced as a set.  In any event, it is difficult to see why it would raise any unusual difficulty or complexity.

9.  As regards the question of adding back some post‑separation expenditure, counsel argued that the two lines of authorities, referred to by Mr Leung as requiring reconciliation by the Court of Appeal on this subject, actually do not contradict or compete with each other.  The first line of authorities (Norris v Norris [2003] 2 FCR 245 and other cases) simply represents the general principle that the court may take into account the reckless and extravagant spending of a party to the marriage by adding back to the pool of matrimonial assets the value of the assets frittered away, or by departing from the yardstick of 50‑50 equal distribution.  The second line of authorities (Blower v Blower [1986] 1 FLR 292 and other cases), on the other hand, represents cases where the court took into account the husband’s obligations and spending towards a further family in deciding the fair distribution of matrimonial assets.  There is no conflict between these two lines of authorities as a matter of general principle.  It is a question of fact as to whether a particular case falls within one line or the other of authorities.  In any event, it does not make the matter unusually complex or difficult.

10.  Mr Wong also submitted that the attempt to instruct local counsel was less than reasonable, serious and genuine.  He pointed out that prior to April 2013, only two local senior counsel, and a local senior junior who is a silk in England and Wales, were approached.  However, as early as January 2013, the applicant had been approached to advise on the appeal, and in fact confirmation had been sought as to the applicant’s availability to take on the appeal even before the two local silks replied whether they would be available to take on the appeal.

11.  The Secretary for Justice also found it difficult to support the present application.  Ms Leona Cheung, Senior Government Counsel, submitted that the issues raised in the appeal appear to be fact sensitive ones based on the manner and circumstances in which the husband spent money on his further families, and on the combined value feature of the particular set of antique furniture.  She pointed out that the wife is not contending in the appeal that established legal principles or guidelines were wrongly decided or otherwise not applicable. Rather, the case appears to be more on what is, on the facts, a fair distribution of assets (in terms of the division ratio and the mechanism of splitting the non‑monetary valuable items), applying the Court of Final Appeal’s guidelines in LKW and other relevant case law.

12.  Ms Cheung therefore doubted whether the appeal involves any unusual complexity or difficulty or is likely to have any impact on the local jurisprudence that is “substantial” to the extent that admission of the applicant is warranted.

13.  Ms Cheung also reminded the court that whilst certainly the wife as litigant is entitled to be represented by counsel of her own choice, it means no more than that she is free to choose her counsel from those available to represent her at a proper fee on the day fixed for the hearing of the appeal.  It does not entitle her to demand the admission of an overseas barrister for representing her in every case: Re Gray [1984] HKLR 367.

My reasons

14.  The legal principles for admission of overseas counsel are very well established: Re Flesch QC [1999] 1 HKLRD 506; Re McGregor QC [2003] 3 HKLRD 585; Re Perry QC [2013] 1 HKLRD 145.  They require no repetition here.

15.  I am not satisfied that the appeal involves any unusual complexity or difficulty.  I agree with Mr Wong and Ms Cheung that the appeal raises issues that are highly fact sensitive.  The legal principles are hardly in dispute.  The mechanism for dividing the assets, including the furniture, does not seriously involve any legal principles.  Rather, it requires the application of commonsense and practical wisdom.  There might be some difficulties involved given the competing claims and interests.  But certainly it is not a matter of unusual complexity or difficulty.  The fact that the furniture is unique and of a very high value is neither here nor there.

16.  As for the adding back issue, I agree entirely with Mr Wong that the two lines of authorities do not conflict with each other at all.  They simply represent the two sides of the same coin.  The issue depends on the facts and the findings of the court, based on which one has to decide what, if any, adjustments need be made to reflect the expenditure in question.  It is a question of fact and of application of relatively straight forward general principles.  No question of unusual difficulty or complexity is involved.

17.  The great expertise of the applicant is not in doubt.  However, the appeal does not, in my view, involve the determination of any legal principles which may substantially impact on the development of local jurisprudence for which her participation would bring a significant dimension.  This is simply not such a case.

18.  As regards the wife’s right to be represented by counsel of her own choice, I agree with Ms Cheung that that right means nothing more than what Ms Cheung has submitted.  It also begs the question of whether the case is one that justifies the involvement of overseas counsel in the first place.  If the answer is in the negative, as I think it is, the wife’s right to be represented by counsel of her own choice is limited to local counsel only, save where, as here, it is suggested that no suitable local silks are available.

19.  In this regard, the evidence suggests that a number of local senior counsel have been conflicted out and some others are not available to take on the appeal.  But I note that no less than six senior counsel have previously worked for the wife, who, however, is unwilling to instruct them.  Mr Leung told the court from the Bar table that three of them are equally not prepared to act for the wife in the forthcoming appeal.  But that still leaves the remaining three.  They all have the advantage of knowing at least something about the disputes between the parties.  The fact that the wife may not be happy with some of her previous counsel because of the course and outcome of the previous proceedings, is not something that I can seriously take into account, at least in the absence of details and some objective evidence to justify her dissatisfaction.

20.  More importantly, there are still many local silks who have not been approached for conducting the appeal.  Given the nature of practice of some of those whom the wife has approached and the court’s view on the difficulty or complexity of the issues involved in the appeal, the fact that the wife may not be able to find a local silk who specialises in matrimonial cases to conduct the appeal for her is quite insufficient to establish a case of lack of suitable and available local counsel.

21.  I am not convinced that the wife will not be able to find a suitable local counsel who is available to represent her in the forthcoming appeal.  Insofar as this is put forward as a standalone ground to justify the application for admission, it is rejected.

22.  Cross‑fertilisation is a factor to be borne in mind.  But on the facts of the present case, it plays only a very minor role.

Disposition

23.  For these reasons, the application for admission was dismissed.