FCMC 14114/2015
[2019] HKFC 221
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES NO. 14114 OF 2015
-----------------
BETWEEN
WYM
Petitioner
and
LYW
Respondent
GFL
Intervener
-----------------
Coram:
His Honour Judge G. Own in Chambers (Not Open to Public)
Date of Hearing:
30 November 2018
Date of Decision:
28 August 2019
-------------------------
D E C I S I O N
-------------------------
Background
1. The Petitioner is the Wife (“W”) and the Respondent is the Husband (“H”). The Intervener is a licenced money lender registered under the Money Lenders Ordinance, Cap.163.
2. On 4 November 2015, W filed a Petition for divorce relying on the fact of unreasonable behaviour. There are 2 children of the family both of them are over 18 years of age. In the Notice of Application for Ancillary Reliefs, W sought monetary reliefs and also property orders in respect of the matrimonial home which I will refer to it as “FMH”.
3. At all material times the FMH was registered under the sole name of H as the legal owner.
4. On 5 January 2017, the Decree Nisi was granted. Questions of ancillary relief and costs were adjourned to 24 January 2017.
5. On 25 July 2017, the Decree Absolute was granted.
6. By a Summons dated 29 August 2017 (“Joinder Summons”), GFL as proposed intervener sought to be joined in these proceedings and for directions on the filing of pleadings in respect of the FMH of which W sought property orders against H. It is common ground that such steps were taken for determination of respective parties’ beneficial interests in the FMH in line with the commonly called “TL v. ML TL v. ML
7. By an Order dated 18 October 2017 (“Joinder Order”) which was granted by this Court upon the said Joinder Summons issued by GFL and with the consent of H and W, GFL was joined as the Intervener and directions were also granted as sought. Those directions which are relevant to the present application are set out as paragraphs 3 to 7 and 9 in the Joinder Order which are repeated as follows :-
“1. ………
2. ………
3. The Intervener do file and serve on the Petitioner and the
Respondent the Points of Claim within 28 days;
4. The Petitioner and the Respondent do file and serve the Points of
Defence (if any) within 28 days thereafter;
5. The Intervener do file and serve on the Petitioner and the
Respondent the Points of Reply within 28 days thereafter;
6. Discovery of documents by parties within 14 days thereafter;
7. The Parties do exchange their witness statements within 28 days thereafter;
8. ………
9. There be a direction hearing on a date to be fixed after the exchange of witness statements; and
10. ………”
(collectively called “Joinder Directions”)
The HCMP 499/2016 proceedings
8. Back on 3 March 2016, the Intervener commenced proceedings in the High Court as Plaintiff against H as Defendant seeking recovery of outstanding loan due under a Deed of Mortgage dated 11 June 2015 (“the Deed”). These proceedings were commenced under Order 83A (Money Lenders’ Actions) and Order 88 (Mortgage Actions) of the Rules of the High Court, Cap.4.
9. On 28 September 2016, leave was granted by Master Lai in the High Court in HCMP 499/2016 for W to be joined as 2nd Defendant in the proceedings. The Intervener’s claim for money judgment against H (who was named as the 1st Defendant) was adjourned to 14 October 2016. The Intervener’s claim for possession of the FMH be adjourned sine die with liberty to restore.
10. On 14 October 2016, judgment was entered by Master Lai in the High Court in HCMP 499/2016 in favour of the Intervener against H (as 1st Defendant) for the sum of HK$1,989,829.68 together with interest on the sum of HK$1,764,719.20 at the rate of 24% per annum (with a rate of HK$1,160.36 per day) from 23 July 2016 until payment (the “HCMP money Judgment”).
11. On 2 June 2017, leave was granted to amend the Intervener’s action to include Sections 2, 3 & 6 of the Partition Ordinance, Cap.352. Accordingly, further reliefs were added which includes, inter alia :-
- declarations that H (1st Defendant) is the sole equitable and beneficial owner of the FMH;
- alternatively, a determination of the equitable and beneficial ownership of the FMH and a declaration thereof;
- an order for sale of the FMH pursuant to Sections 2, 3 & 6 of the Partition Ordinance, Cap.352;
- delivery of vacant possession of the FMH;
- consequential directions on the mode of sale and distribution of sale proceeds.
12. On 31 July 2017, the HCMP 499/2016 proceedings (as amended) were adjourned sine die with liberty to restore.
The application by the Intervener
13. On 8 January 2018, the Intervener issued the present Summons seeking to set aside the Joinder Directions and to stay these proceedings pending determination of HCMP 499/2016.
14. The Intervener referred to the case of Yuen Yin v. Yuen Mei Ling & Others
15. It is the Intervener’s stance that since the subject matter of dispute in these proceedings and HCMP 499/2016 is the beneficial ownership of the FMH; on grounds of convenience and better case management, it should be conclusively determined by the High Court rather than by this Court by way of a preliminary issue. Furthermore, this would also remove any doubts as to whether the Family Court has jurisdiction to grant order for sale under the Partition Ordinance, Cap.352 which the Intervener is seeking in respect of the FMH.
The Petitioner’s (W’s) opposition
16. W’s grounds of opposition are set forth in the Affirmation of her solicitors as the grounds are essentially legal or procedural in nature rather than any factual objections.
17. In short, W opposed the setting aside of the Joinder Directions since they were sought for by the Intervener, negotiated at the hearing on 18 October 2017 between respective parties’ legal representatives and eventually agreed and accepted by W and H. It was then endorsed and became an Order of the Court.
18. The Intervener’s sudden change of stance by not complying the Joinder Directions which were asked for by them but now sought a stay of these proceedings is inconsistent with their intention of joining in these proceedings. Had W been aware of the Intervener’s present stance to stay these proceedings, W would not have consented to the Joinder Summons. The Intervener’s change of stance was unreasonable, inconsistent and to a certain extent, misled W and H in giving their consent, and even misled this Court in granting the Joinder Directions.
19. Moreover, the Intervener knowing full well that they have in mind of seeking order for sale under the Partition Ordinance, Cap.352, they ought to have known whether the Family Court had jurisdiction to make orders under the Partition Ordinance, Cap.352 when they chose to issue the Joinder Summons.
20. As to the jurisdictional point, W has no issue that the Family Court, being a division of the District Court, has jurisdiction to make orders under the Partition Ordinance, Cap.352 since the Ordinance provides that “Court” includes the District Court. As a further contention, W considers that the Intervener does not have the “locus” to seek order for sale under the Partition Ordinance, Cap.352 for the fact that they are not “party/person interested” as defined under the Partition Ordinance, Cap.352.
21. From a practical perspective, W would be seeking order for sale of the FMH under the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”) and agreed to the net proceeds of sale be paid into the Family Court pending further disposal. This would afford the Intervener a chance to seek reliefs out of the net proceeds of sale deposited in the Family Court since the Intervener’s interest would be a monetary one in light of the HCMP 499/2016 money Judgment already obtained as opposed to claiming a share in the beneficial ownership of the FMH.
The Respondent’s (H’s) opposition
22. H filed his 2nd Affirmation in opposition.
23. In short, H’s grounds of opposition are that the Intervener should have complied with the Joinder Directions sought by them which had been agreed to by his lawyers and W’s legal team. It was his wish that after the joining of the Intervener, the matter could be moved forward as quickly as possible. He considered the Joinder Directions are fair to him because at least it would keep the action moving forward.
24. H agreed to transfer all his interests in the FMH to W for settlement of W’s ancillary reliefs. He also agreed to the outstanding debt owed to the Intervener under the HCMP 499/2016 money Judgment. There is also another debt owed to a company called The One Property Credit Express Limited in another court case under DCCJ No.1010/2016 where Judgment had not yet been entered.
25. The fact that he is the registered legal owner of the FMH prevented him from applying for public housing and he had remained “homeless”. The FMH was used and occupied by W. The sudden and drastic change of stance of the Intervener now to seek setting aside the Joinder Directions created delay for the disposal of W’s ancillary reliefs against him. H had agreed to transfer all his interests in the FMH to W for her ancillary reliefs. This would mean that upon transfer he would be stepping out the arena leaving the competing claims between W and the Intervener to be further adjudicated by the Court, be it in the Family Court or elsewhere, without affecting his right to seek public housing.
26. H deposed his age is now 75 and suffering from cervical myelopathy. Despite his age, he had lost the capacity to work as the function of his right forearm and right hand are seriously impaired. He badly need speedy conclusion of these proceedings which had now been delayed by the Intervener’s sudden change of stance to seek setting aside and not complying with the Joinder Directions.
The Court’s Views
27. As there is no factual dispute in the present application, I will consider the Intervener’s Summons from the legal and procedural perspective against the prevailing practice for resolution of disputes over matrimonial finances; in particular, where there are third party involved.
28. I will start with the case of Yuen Yin v. Yuen Mei Ling & Others
29. The Yuen Yin
(a) The learned Master had not formed any views as to how the parallel proceedings in the Family Court should be dealt with. Parties in that case were invited to handle the two sets of proceedings with good sense. Quoting paragraph 33 of the Decision dated 7 November 2017 where the learned Master said :
“33. The Family court has not yet ruled on whether or not preliminary issues are to be heard. Counsel for the plaintiff has indicated that if the present action is not stayed, the plaintiff will oppose the trial of preliminary issues in the Divorce Proceedings, and will proceed with the present action with reasonable diligence. I invite parties and their legal representatives to approach these procedural issues in the two proceedings with good sense . (my emphasis )”
(b) In that case, the stay application was filed by the Defendant hoping not to have to file the Defence. Failure in the stay application had no impact on the parallel family court proceedings;
(c) The decision of the learned Master had not and indeed could not have overruled the decision of Mostyn QC (as he then was) in TL v. ML
(d) The deputy family court judge had not made any order to stay the proceedings before it even after noting that there was an application to stay the High Court proceedings. The deputy family court judge simply adjourned the application to intervene sine die with liberty to restore, and by a separate order, adjourned the hearing of the first appointment sine die with liberty to restore. However, in the HCMP 499/2016 proceedings, Master Lai after noting the Intervener’s application to take part in these proceedings, ordered the HCMP 499/2016 proceedings be stayed.
(e) As can be seen from paragraph 33 of the decision of Master Elaine Liu, the family court involved in that case had not yet ruled whether preliminary issues are to be heard. In the present case, it had been determined that preliminary issues would be heard and that was why the Joinder Directions dated 18 October 2017 were granted and the HCMP 499/2016 proceedings running in parallel were stayed.
30. The cases of Uplink Finance Limited v. Lee Sze Tai & Others Law Chun Wai v. Chu Sauk Har putting the cart before the horse ”; if not a sham argument for the present application on setting aside Joinder Directions and stay of proceedings.
31. The cases of LWYA v. KYW & others LLP v. LWYA & others TL v. ML
“30. It is well established that a dispute between a spouse and a third party as to the beneficial ownership of properties can be adjudicated in ancillary relief proceedings. In TL v. ML & Ors (ancillary relief: claim against assets of extended family) [2006] 1 FCR 465, Mostyn, QC. sitting as a Deputy High Court Judge, had this to say about the task of a judge determining such a dispute and the procedure that should be followed :
‘[34] It is to be emphasised, however, that the task of the judge determining a dispute as to ownership between a spouse and a third party is of course completely different in nature to the familiar discretionary exercise between spouses. A dispute with a third party must be approached on exactly the same legal basis as if it were being determined in the Chancery Division….
……..
[37] In my opinion, it is essential in every instance where a dispute arises about the ownership of property in ancillary relief proceedings between a spouse and a third party, that the following things should ordinarily happen : (i) the third party should be joined to the proceedings at the earliest opportunity; (ii) directions should be given for the issue to be fully pleaded by points of claim and points of defence; (iii) separate witness statements should be directed in relation to the dispute; and (iv) the dispute should be directed to be heard separately as a preliminary issue, before the [Financial Dispute Resolution].’
32. Intervener’s Counsel Mr. Alvin Tsang had not been able to say how these cases assist his client’s present application for setting aside the Joinder Directions or for a stay of these divorce proceedings.
33. The next case of Leung Wing Yi Asther v. Kwok Yu Wah TL v. ML
“29. ……. In this regard, I endorse the practice commended by the Court of Appeal that in the context of matrimonial proceedings for ancillary relief, disputes between a spouse and a third party as to ownership of property should procedurally be approached as in standard claims for ownership of property : in other words, after a direction for trial of the dispute as a preliminary issue and the joinder of the claimant as intervener, by directions for the filing of pleadings on the preliminary issue and for witness statements and discovery relevant to that issue[1] . It does not however lie at the door of any party to the present proceedings now to complain about the procedural lacuna since the flawed directions were sought on the joint application of the parties and ordered by consent without anyone suggesting that appropriate directions be given for the preliminary issue.”
34. There are a number of other cases where Intervener’s Counsel Mr. Alvin Tsang referred to in his 21-page written submissions. The cases are :
- Lit Wing Yee v. Tang Cheuk Lun
- Fok Chun Yue Benjamin v. Fok Chun Wan Ian
- Asia-Pac Infrastructure Development v. Ing Yim Leung Alexander
- Lau Hei Wing v. Apple Daily Ltd
- Leung Yee v. Ng Yiu Ming
- Ropac Ltd v. Inntrepreneur Pub Co (CPC) Ltd
- Parkin v. Bromley Hospitals NHS Trust
- Smart Trike MNF Pte Ltd v. Chiu Sui Chun [2018] HKCFI 562 ;
- Cristel v. Cristel
- Tebbutt v. Haynes
- AEGI Capital Ltd v. Wai Sik Yin Felicia
35. I am minded to say not each and every case cited are of relevance and importance. I will only go to those cases which are worth mentioning and when necessary in the following paragraphs.
36. Intervener’s Counsel Mr. Alvin Tsang sought to argue that at the time when the Joinder Directions were granted, that is at the hearing on 18 October 2017, there was no guidance about what were “extraordinary ” cases when the TL v. ML
37. I do not agree with Counsel Mr. Alvin Tsang. With respect, such contention is a complete red herring. The Intervener was at all material times legally represented. With the benefit of legal advice, it was the Intervener who took out the Joinder Summons and sought for directions in line with the TL v. ML extraordinary ” cases which would or could be exempted or departed from the TL v. ML extraordinary ” cases so to speak, the Intervener should have applied for Court’s directions or guidance and not to seek those TL v. ML retract ” from their original position under the disguise that the decision in Yuen Yin Yuen Yin
38. I have already decided that the Yuen Yin Yuen Yin
39. Moreover, the Joinder Directions were granted upon the parties’ consensus and embodied in a consent order of the Court which had been sealed and perfected. Unless a consent order was obtained under one or more of those established grounds for setting aside, such as fraud, duress or misrepresentation, the legal effect and impact of it could not be vitiated purely because of a wrong decision or bad choice. According to the records, all parties were legally represented at the hearing on 18 October 2017 when the Joinder Directions were granted. The Intervener was represented by another Counsel Mr. Kaiser Leung. The hearing started from 11:56 am until 12:23 pm. It was then stood down until after lunch and resumed at 1:31 p.m. and then continued until 1:41pm when a handwritten consent summons seeking for the Joinder Directions to be granted was presented to the Court. Given such circumstances, the consent order must stand and given its full effect.
40. Intervener’s Counsel Mr. Alvin Tsang referred to the case of Lit Wing Yee v. Tang Cheuk Lun
41. Having said, this brings me to the other submission made at paragraphs 21 and 45 of Intervener’s Counsel 21-page written submissions dated 16 November 2018. This Court was invited to make a specific ruling about whether the Family Court has jurisdiction and power to make orders under the Partition Ordinance, Cap.352.
42. With respect, I fail to see the basis of such submission for the following reasons.
43. First, according to the marginal notes of the present Summons dated 8 January 2018[2] , it was taken out under Rule 3 of the Matrimonial Causes Rules, Cap.179A; O.1, r.2(2) & (4), O.1B, r.1(2)(e) & (l) of the Rules of the High Court, Cap.4A, and/or the inherent jurisdiction of the Court. There was no reference to any provisions of the Partition Ordinance, Cap.352 whereby reliefs or directions under the Ordinance was sought.
44. Secondly, even in the reliefs sought within the terms of the present Summons dated 8 January 2018, there was no reference to the applicability or non-applicability of the Partition Ordinance, Cap.352.
45. Thirdly, the reference to the Partition Ordinance, Cap.352 first appeared at paragraph 5 of the 3rd Affirmation of Cheng Steven John[3] filed in support of the present Summons dated 8 January 2018 where he said :-
“5. It is doubtful whether it is convenient for the Family Court to determine the claims for possession and an order for sale under the Partition Ordinance, and whether it has jurisdiction to determine such claims. As such, it may be a more efficient use of the parties’ and the Court’ time and resources to have everything conclusively determined in the HCMP action where there is no room for doubt about jurisdiction.”
46. It is clear that the Intervener, or at least the lawyer Mr. Cheng, was stating their views from the perspective of convenience on the basis that an order for sale have to be made under the Partition Ordinance, Cap.352. In my view, it is wrong to first assert a positive case that an order for sale would have to be made under the Partition Ordinance, Cap.352 and then raise an issue over this Court’s jurisdiction under the asserted position and to seek a ruling in the way as it is now being sought by Counsel Mr. Alvin Tsang.
47. I noticed that even in the HCMP 499/2016 proceedings, the reliance on the Partition Ordinance, Cap.352 was only brought into the scene by way of a subsequent amendment made with leave granted by Master Lai on 2 June 2017[4] , which was 8 months after the HCMP money Judgment was obtained[5] , and 7 months before issuing the present Summons dated 8 January 2018[6] . In my view, had there been any doubt on the part of the Intervener as to the proper venue for exercising jurisdiction under the Partition Ordinance, Cap.352, they should and could have clarified it before issuing the Joinder Summons on 29 August 2017[7] .
48. Although it is open for the Intervener to seek recovery of the HCMP money Judgment by way of Foreclosure or Order for sale of the FMH as opposed to issuing a Writ of Fieri Facias, and this is in fact what had happened when the Intervener amended the reliefs sought in HCMP 499/2016 proceedings 8 months after the HCMP money Judgment was obtained by bringing in the Partition Ordinance, Cap.352, it is plainly wrong, inequitable and unjust if the Intervener could now take advantage of their amended reliefs (that is, by way of sale under the Partition Ordinance, Cap.352) as a ground for setting aside the Joinder Directions obtained 4 months later on 18 October 2017. When the Joinder Summons was issued on 29 August 2017, the Intervener already had in mind of reliance upon the Partition Ordinance, Cap.352.
49. Nonetheless, what had happened was that not only had the Interveners issued the Joinder Summons on 29 August 2017, they had then pursued it to the fullest extent on 18 October 2017 and obtained directions from this Court with consensus of all parties. Thus, it is fundamentally wrong and inequitable for the Intervener to be able to turn everything around now and fall back to start raising doubts and questions over the jurisdictional aspect of this Court under the Partition Ordinance, Cap.352, and to make it a ground for setting aside the Joinder Directions and staying these proceedings.
50. There are references to the law about ordering stay of proceedings[8] and the case of Fok Chun Yue Benjamin v. Fok Chun Wan Ian
51. As to the legal position for variation of a consent order, reference was made by Counsel Mr Alvin Tsang to the case of Leung Yee v. Ng Yiu Ming
- A consent order may evidence a contract;
- On the other hand, a consent order may only mean the parties to it not objecting to the order being made, and the court can alter its terms;
- Where there is a true contract contained in a consent order, the court has no power to set it aside or to vary its terms;
- In matrimonial financial relief cases, the court will not alter the terms of an agreement contained in a consent order unless there are changed circumstances;
- However, where the consent order founded on a true contract is not sought to be set aside or altered, unless it is plain that time was intended to be of essence or that the jurisdiction of the court under O.3 r.5 of the Rules of the High Court to extend time is ousted by agreement, that the court can grant extension of time.”
52. It is the Intervener’s position that the Joinder Directions are essentially case management and thus could be set aside if circumstances so require notwithstanding that they were embodied in a consent order. Whilst I agree this is the legal position, the ultimate question is whether the Intervener could show any change of circumstances or sufficient cause that the Joinder Directions need not be complied with.
Conclusion
53. Given careful consideration, I find against the Intervener. The Intervener failed to come up with any legitimate reasons or sufficient cause that this Court should not determine beneficial interests under the TL v. ML
54. Since W is the party seeking ancillary reliefs against H on the FMH and had consented to the net proceeds of sale of the FMH be deposited into this Court pending resolution of the Intervener’s beneficial interests (if any), there is no room for the Intervener to contend that their position would be prejudiced when W’s and their beneficial interests in the FMH are to be determined by this Court under the TL v. ML
55. For all the above reasons, I dismiss the Intervener’s Summons dated 8 January 2018.
56. The Joinder Directions dated 18 October 2017 do stand.
57. In light of the delay for compliance of the Joinder Directions dated 18 October 2017 caused by the present application, I now extend the time stipulated under paragraphs 3, 4, 5, 6 and 7 of the Joinder Directions for the same period of time thereunder respectively but counting from the date of this Decision.
58. To facilitate the progress of these proceedings, I also ordered that a penal notice be endorsed.
Costs
59. Given the fact that the Intervener lost completely on the application, I decided that it is fair and reasonable for costs to follow the event.
60. I ordered that the Intervener do pay to W (Petitioner) and H (Respondent) the costs of and occasioned by the Summons dated 8 January 2018; including all costs reserved, to be taxed if not agreed. H’s (Respondent’s) own costs be taxed in accordance with Legal Aid Regulations.
61. I also grant Certificate for Counsel.
62. This is a costs order nisi which will become absolute if no application to vary it is made within 14 days from the date of this Decision.
Orders
63. I now grant the following Orders :-
(a) The Intervener’s Summons dated 8 January 2018 be dismissed;
(b) The Intervener do pay W (Petitioner) and H (Respondent) the costs of and occasioned by the Summons dated 8 January 2018; including all costs reserved, to be taxed if not agreed;
(c) H’s (Respondent’s) own costs be taxed in accordance with Legal Aid Regulations;
(d) There be Certificate for Counsel;
(e) The time stipulated under paragraphs 3, 4, 5, 6 and 7 in the Order dated 18 October 2017 be extended for the same period of time thereunder respectively but counting from the date of this Decision; and
(f) Penal Notice be endorsed.
Other Matters
64. At the last hearing, H’s Summons dated 26 March 2018 was adjourned sine die with liberty to restore pending determination of this application. Following this Decision, H’s solicitors may wish to restore the said Summons for further disposal.
65. Last but not least, I wish to thank all parties’ legal representatives and Counsel for their valuable assistance to this Court.
(George Own)
District Judge
Mr Henry L.W. Fung instructed by Messrs. Jal N. Karbhari & Co., Solicitors for the Petitioner
Miss Leung Ki Hin, Constance of Messrs. Leung Kin & Co., Solicitors for the Respondent
Mr. Alvin Tsang instructed by Messrs. J. Chan & Lai, Solicitors for the Intervener
[1] Court of Appeal judgment, [30], citing with approval TL v ML [2006] 1 FCR 465, [34] and [37]
[2] TB: pages 4-6
[3] TB at page 23
[4] TB at page 136
[5] HCMP 499/2016 Judgment dated 14 October 2016
[6] TB at pages 4-6
[7] TB at pages 1-3
[8] See paragraphs 23 to 26 of Counsel’s written submissions