Z, SN also known as K, SN v. K, VSF

FCMC 9107 / 2018

[2019] HKFC 68

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 9107 OF 2018

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________________________

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J U D G M E N T
(Domicile and Substantial connection)

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Introduction

1.  This is an application by a respondent husband dated the 19 September 2018 that the wife’s divorce petition filed on the 18 July 2018 be dismissed. He has not issued any application with respect to forum. His case is simply that the wife has no jurisdiction to issue the petition. 

Issues

2.  Consequently, the only issues presently before the court are as follows:

a)  Is the husband domiciled in Hong Kong? And/or in the alternative does he have a substantial connection with Hong Kong?

b)  In such circumstances does the Petitioner wife have jurisdiction to issue divorce proceedings in Hong Kong?

Background to the marriage 

3.  By both parties accounts the party’s marriage was both short lived and unhappy. The wife accuses the husband of having multiple affairs and other liaisons and of leaving the marriage on at least one other occasion. The husband for his part says that the wife was volatile and difficult and that she could on occasion be violent.

4.  Whatever the truth or otherwise of these allegations, it is not disputed that in or about August 2017 the husband left the former matrimonial home in Shanghai and came to Hong Kong, which is where both his parents and his sister and her family currently reside.

5.  The husband is an American citizen who was born in Fairfax, Virginia in 1977.  His father is American and his mother is Vietnamese American.  It seems that he travelled around a lot in his childhood as his father was in the U.S diplomatic corp. Consequently, in addition to Hong Kong he also lived in Taiwan, Beijing and Singapore during his childhood and he then went to College in the States.

6.  In 2001 he moved to live and work in Shanghai and remained there until August 2017.  He married a Shanghainese woman in 2007; that marriage was also short lived and they divorced in Shanghai in 2009.  He subsequently met the Petitioner and they married on the XX March 2012.  The marriage was registered in Hong Kong but there was also a significant ceremony in Shanghai, including a day-long celebration that began with a tea ceremony and ended with a banquet for approximately 300 people.

7.  The wife is also an American citizen, although she was born and educated in China and is of Chinese parentage.  However, she went to the US for her tertiary education and she also worked there for four years after graduating.  She then returned to Shanghai and she has lived there ever since.  She works and holds a senior position in her family’s business, which has been listed on the Hong Kong stock exchange.

8.  The parties also have two young children, C, a girl who is now aged 5 and B, a boy, who is 2 ½ years old. The children both hold US passports, although they have only ever lived in Shanghai.  There are currently some difficulties concerning the renewal of C’s passport.

9.  The wife explains their predicament thus:

11.  Neither the Respondent nor I have any “Hukou” (government account) nor identity cards in mainland PRC.  Whenever we are in mainland PRC or Shanghai, our status is a temporary one in that we are only allowed to stay on the basis of non-permanent working visa that have to be renewed from time to time.  Neither the Respondent nor I have mainland PRC or Shanghai citizenship, nationality passport or identity cards.

10.  Consequently, I am told that the parties are unable to divorce in Shanghai, notwithstanding the fact that they have lived in Shanghai for their entire married life, unless both parties consent to the same.  It is the wife’s case that she has attempted to issue proceedings for divorce in Shanghai on three separate occasions, but that the husband has refused to participate each and every time.  She is particularly concerned about the children’s status and wishes to have sole custody and care and control of them. The husband for his part now says as follows:

I have instructed a PRC lawyer to [be on] standby for carrying out negotiation with the Petitioner’s lawyer in PRC after conclusion of these proceedings in Hong Kong.  There is now produced and shown to me and marked “KVSF3-1” a copy of the letter from my PRC lawyer confirming my instructions.

The law

Jurisdiction for Divorce

11.  Section 3 of the Matrimonial Causes Ordinance, Cap 179 states as follows:

“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 three 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.”

The court is only concerned with a) and c).

The law on Domicile

12.  The law on domicile is set out in the Domicile Ordinance, Cap 596.  In summary this states that a person is domiciled where he has his permanent home.  In order for an adult to obtain a new domicile in Hong Kong he must be present in Hong Kong and there must be an “intention”, presumably on the part of the individual concerned, here the husband, to make Hong Kong their “home” for an indefinite period.  A child’s domicile generally follows that of his parents and will be where he is for the time being most closely connected.  A child retains the domicile that he had immediately before becoming an adult.  Reference in that respect should be made to section 4 of the Domicile Ordinance which states inter alia as follows:

4.  Domicile of children

(1)  A child is domiciled in the country or territory with which he is for the time being most closely connected.

(2)  Where the child’s parents are domiciled in the same country or territory and the child has his home with either or both of them, it shall be presumed, unless the contrary is proved, that the child is most closely connected with that country or territory.

(3)  Where the child’s parents are not domiciled in the same country or territory and the child has his home with one of them, but not with the other, it shall be presumed, unless the contrary is proved, that the child is most closely connected with the country or territory in which the parent with whom he has his home is domiciled.

13.  In Ms Rattigan’s submission for the husband she adds that:

35.  In Y v. W [2012] 2 HKC 455 the Court reviewed the legal principles concerning domicile.  A party asserting domicile will have to provide sufficient evidence of a clear intention to reside permanently or indefinitely in Hong Kong.

36.  It was held that holding a permanent ID card was not sufficient in itself to establish domicile, and a checklist of factors to assist the court in determining domicile was set out. This would include matters such as (i) length of residence; (ii) condition of residence: purchased property? leased property? furnished lodgings?, hotels?; (iii) marriage with a local partner; (iv) whereabouts of the family; (v) business interest; (vi) whereabouts of personal belongings; (vii) whereabouts of property and investments; (viii) the fact of naturalization; (ix) decision made as to the nationality of children; (x) education of the children; (xi) membership of clubs or religious associations; (xii) place of work; (xiii) relation between a man and his family…  

14.  It is not disputed that the burden is on the wife to show that jurisdiction does exist.  She is required to do so on the balance of probabilities.

Is the husband domiciled in Hong Kong?

15.  The wife argues that the husband must be domiciled in Hong Kong, almost by default and contrary to what the husband expressly states.

16.  She maintains that he was originally domiciled in Hong Kong as a child because his parents were by then domiciled in Hong Kong.  It is not disputed that the husband’s parents moved to Hong Kong in 1992, after the husband’s father left the US diplomatic service and that they have been based in Hong Kong ever since.  The husband would have been about 15 years old at the time.  The husband went to school in Hong Kong from that time and then to College in the States.  In contrast the husband maintains that his domicile of origin was American and that this did not change.

Discussion

17.  I agree that the husband’s domicile of origin was the United States and that this would have remained until his parents permanently settled in Hong Kong.  At that stage the husband’s domicile will have changed to Hong Kong.  Consequently, once he turned 18 years, his domicile would have been Hong Kong.  The fact that he went to College in the United States would not have changed this.

18.  However there is no doubt that this changed in 2001 when he moved to Shanghai.  He then remained there for the next 16 years.  He has married twice, to women with strong local ties and he conducted his businesses there.  He lived and worked there.  His life was there.  His children were born there.  There is no doubt that from a Hong Kong perspective his domicile during those years was Shanghai, notwithstanding the fact that he remained an American citizen and paid US tax.

19.  The fact that the husband left Shanghai in August 2017 is not in dispute.  The reasons why he left are, however, not agreed.  He says that he was evicted from the matrimonial home and that fearing for his personal safety he had no alternative but to leave town.  He says that he has not been back since.  Thus it is the husband’s case that he had no intention, either at that time or since, of making Hong Kong his permanent home.  He says he came to Hong Kong temporarily and out of necessity.  In his affidavit dated the 19 September 2019 he puts it thus:

MY RETURN TO HONG KONG TEMPORARILY

27.  Even though I returned to Hong Kong since Aug 2017, I have never intended and am still not intending to make Hong Kong my home or residence for an indefinite period.  I only stay here because of the Petitioner’s eviction and to think about my future and to explore other business opportunities elsewhere but not in Hong Kong and to visit my parents and sister.

28.  After I returned to Hong Kong, I have been travelling to other places in China (except Shanghai), Southeast Asia and the US in pursuit of more promising business opportunities and prospects.  It is likely that I will be starting my next business venture in Southeast Asia in the coming few months.

29.  When this divorce petition was issued on 18^th July 2018, I was not even present in Hong Kong.

20.  Mr Pilbrow S.C argued, on behalf of the wife, that notwithstanding the husband’s clear statement of intent, that he must be domiciled in Hong Kong, as there is no other alternative.  With respect I do not agree.  Ms Rattigan for her part argues that it is clear that his domicile changed in 2001 when he went to Shanghai to live.  She says that this has not changed by virtue of him being in Hong Kong on a temporary basis. I accept what she says in this respect.

21.  In any event the husband filed a further affidavit on the eve of the hearing, which states inter alia as follows:

“2. I would like to confirm that I have since 1^st January 2019 moved to Thailand to live. I am conducting regional business ventures from there.”

Although this affidavit may be criticized as “litigation window dressing”, it certainly seems, on the face of it, that the husband is not currently living in Hong Kong.  He expressly states that he has left Hong Kong and that he intends to live and work in Thailand.

22.  To that end it is of note that references have been made to the court drawing certain adverse inferences and to the fact that this matter is being dealt with on the basis of submissions only.  The court originally offered the parties an early date, but only one day was available.  Thus it was agreed that the matter would proceed without hearing oral evidence.  Had the wife wished, this matter could have been adjourned to a later date and for a longer period of time, so that both parties might be cross examined.  She chose not to do so, preferring to move matters along more expeditiously.  It is not therefore open to her to criticize this approach now, after the event and when the expedited hearing was at her request.  In the absence of hearing oral evidence, it seems to me that it is very difficult for the court to draw any adverse inferences.

23.  In conclusion then I agree with Ms Rattigan that the husband cannot be said to be domiciled in Hong Kong.

In the alternative does the husband have a substantial connection with Hong Kong?

The law

24.  The law on substantial connection has been clarified several times in recent years. It is clear that the court is required to conduct a two stage enquiry namely, to a) determine whether or not there is a connection to Hong Kong and b) to ascertain whether or not that connection can be said to be substantial.  It has also been said that this exercise is highly fact sensitive. In S v S [2006] 3 HKLRD 751, Hartmann J, as he then was reiterated this when he said as follows:

“13.  In my view, when considering the meaning and extent of the phrase, it is important to recognise that the Legislature saw fit to qualify it by the indefinite article “a”. It is not therefore necessary for a petitioner to demonstrate that his substantial connection with Hong Kong is the only substantial connection he has with any jurisdiction or that his connection with Hong Kong is the most substantial connection he has with any jurisdiction. No exercise of comparisons is required. It is sufficient if he demonstrates that, among others perhaps, he has “a” substantial connection with Hong Kong.

   14.  Increasingly we are living in a world without borders. Capital sums are moved in moments from one side of the world to the other with little or no regard for national boundaries. The Internet is universal. It is commonplace for even the modestly affluent to have homes in two countries. It is no longer only in the world of fiction that successful business people may at the same time live and work in two countries. Section 3(c) is not at odds with this new reality. The subsection recognises that a petitioner who asserts a substantial connection with Hong Kong may also have a substantial connection with one or more other jurisdictions.

   15.  But, of course, if the Hong Kong courts are to exercise jurisdiction, it must be shown on a balance of probabilities that a petitioner not merely has a connection with Hong Kong but that, bearing in mind the scope and purpose of the Ordinance, the connection is “substantial”.

   16.  “Substantial” is a plain enough English adjective. We all understand what it means – at least in substance (if I may be excused the play on words). I say that because it is not a word that lends itself to precise definition or from which precise deductions can be drawn. To say, for example, that “there has been a substantial increase in expenditure” does not of itself allow for a calculation in numerative terms of the exact increase. It is a statement to the effect that it is certainly more than a little but less than great. It defines one that is weighty or sizeable.

   17.  It speaks for itself, I think, that an artificially constructed connection will not be a substantial one. A connection must be real in the sense, for example, that it is not engineered for temporary tactical advantage. It was not the intention of the Legislature (in passing s. 3(c) into law) to create a convenient off-shore divorce jurisdiction. As it has been said in an earlier authority, the subsection is not intended for “birds of passage”.

   18.  As the jurisdiction looks to the determination of matrimonial proceedings, a material factor will be whether the parties to the marriage have lived in Hong Kong and, if so, how long they have lived here as man and wife. But those factors will not necessarily be determinative. In each case the factors to be considered will be different and the weight to be given them, in the factual context of each case, will no doubt be different too.

   19.  In summary, whether – for the purposes of the Ordinance – a connection is substantial or not can only be determined on the basis of a broad objective assessment, taking all relevant factors into account.”

25.  In ZC v CN [2014] 5 HKLRD 43 the Court of Appeal added as follows:

41.  …

“Whether a person has substantial connection with Hong Kong is clearly a question of fact. No definition of this term will be succinct or comprehensive enough. What one may do is look at the surrounding factors to see whether a 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 a connection here and then decide whether that connection is a substantial one, see S v. S... In terms of connection there must be a physical presence in Hong Kong, this must be the rock of invoking the divorce jurisdiction. But because of the requirement of substantial, the presence cannot be one of transitory nature otherwise that will encourage “fly in” and “fly out” divorces.” (§9.4)

42.  It was further stated by the Court that:

“the fact that 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... No doubt one has to look at other factors such as the parties’ past pattern of life, the frequency of his visits 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 αre at school here ...” (§9.8) §

26.  In that case the Court of Appeal found that the fact that the husband came to Hong Kong frequently, owned property in Hong Kong, held Hong Kong bank accounts and had a company registered in Hong Kong, together with Hong Kong ID was not sufficient to establish a substantial connection. In that case the parties were similarly unable to issue proceedings for divorce in China as of right.

27.  In LCYP v JRK (CACV No’s 98 and 125 of 2015) the Hon Cheung JA further reiterated as follows

A substantial connection

38.  The phrase ‘a substantial connection with Hong Kong’ in section 3(c) of Cap.179 is not a term of art and should be given its ordinary meaning (B v. A [2007] 4 HKC 610 at §18; ZC v. CN at §9.1).  Although a wider meaning is to be given to this phrase than the requirement of domicile in section 3(a) or three years ordinary residence in section 3(b) of Cap.l79, this is not intended to be interpreted so loosely as to encourage residence of passage or divorce of convenience, as it was not the legislative intent to create a ‘fly in and fly out’ divorce jurisdiction (Saνournin ν. Lau Yat Fung [1971] HKLR 180 at 184; S v. S [2006] 3 HKLRD 751 at §17; B v. A at §26; ZC v. CN at §9.9).

39.  Unlike domicile which a person cannot have more than one at the same time and for the same purpose, one can have a substantial connection with more than one jurisdiction at a time. Hence, it is not necessary for the Wife to demonstrate her connection with Hong Kong is the only substantial connection or the most substantial connection she has with any jurisdiction.  It is sufficient is she demonstrates among others that she has ‘a’ substantial connection with Hong Kong (S v. S at §13).

40.  It is unnecessary to repeat the guidance given by the Court of Appeal in ZC ν. CN.  As in the case of the guidance given regarding factors relevant to domicile.  I emphasise again that 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 circumstances of each case (S v. S at §18).

Does the husband have a substantial connection with Hong Kong?

28.  In her amended petition the wife sets out a number of factors which she says go to support her case that the husband has a substantial connection with Hong Kong.  These are as follows:

(a)  The Respondent has a Hong Kong identity card.

(b)  The Respondent has interests in various bank accounts with banks in Hong Kong such as HSBC and Citibank, in which there is a huge amount of cash.

(c)  The Respondent has his own insurance policies in Hong Kong.

(d)  The Respondent has investment accounts in Hong Kong.

(e)  The Respondent is paid his salary and/or commission fee to his Hong Kong bank account.

(f)  The Respondent conducts business in Hong Kong through and offshore company.

(g)  After the Respondent left the matrimonial home in or about July or August 2017 and up to the date of Petition on 18^th July 2018. the Respondent had spent a substantial amount (around 60% to 70%) of time in Hong Kong.

(h)  The Respondent’s parents and sister reside in Hong Kong.

(i)  The Respondent’s parents have purchased a landed property in Hong Kong under a Hong Kong company.  They have been living there since 2008 and the Respondent has his own bedroom in the said landed property with his personal properties placed there from then till now.

(j)  The Respondent decided to register the marriage in Hong Kong.

(k)  The Respondent has strong connections with Hong Kong. coming to Hong Kong for at least two four times a year during the marriage.

(1)  The Respondent would come to Hong Kong whenever there were any big changes in his life, such as graduation, marriage, and separation.

(m)  The Respondent has his driving license in Hong Kong.

I will deal with each of these factors in turn.

The Respondent has a Hong Kong ID card

29.  The husband has a Hong Kong ID card, but not a permanent HKID card. This is clearly evidence of a connection with the Territory, but it has repeatedly been found that the mere fact that someone holds a HKID card is not sufficient to confer a substantial connection as of right.

The Respondent has interests in various bank accounts with banks in Hong Kong such as HSBC and Citibank, in which there is a huge amount of cash

30.  There is a dispute between the parties with respect to a bank account that the wife maintains is held by the husband whereas the husband says he holds it as trustee.  There is said to be a lot of cash in this account.  In any event, as with the HKID card, the fact that a party holds bank accounts in Hong Kong is not sufficient to confer a substantial connection.  This was discussed in ZC v CN referred to above.

The Respondent has his own insurance policies in Hong Kong   

31.  It is the husband’s case that the only insurance policy he holds is a medical policy with BUPA.  This is not specific to Hong Kong.  This does not assist the wife in showing a substantial connection with the Territory.

The Respondent has investment accounts in Hong Kong

32.  It is the husband’s case that although he has historically held investment accounts in Hong Kong, that this is no longer the case.  In any event as in paragraph 29 above, this is not sufficient to show a substantial connection with the Territory.

The Respondent is paid his salary and/or commission fee to his Hong Kong bank account

The Respondent conducts business in Hong Kong through an off shore company

33.  These two factors are inter related. It is not clear whether the husband has ever received any commission income via his Hong Kong bank account, but in any event he has never been employed in Hong Kong, nor has he received any income by virtue of any such employment.  Ms Rattigan states in her submission, and I would accept this to be the case, that there is no evidence that the husband conducts business in Hong Kong via an off shore company.  Consequently, these two limbs do not assist the wife either.

After the Respondent left the matrimonial home in or about July or August 2017 and up to the date of the Petition on 18 July 2018, the Respondent has spent a substantial amount (around 60 – 70%) of time in Hong Kong.  

34.  The lawyers spent quite a lot of time arguing this point during the hearing and Ms Rattigan was able to produce a table showing the Respondent’s Post Separation Travel Record.  This showed that since August 2017, the husband has been in and out of Hong Kong on a regular basis and tended to support his case that he was travelling frequently because he was looking for other business opportunities in the region.  He was seen staying in Hong Kong for a number of days and then leaving again often for a similar number of days. The longest period he spent in Hong Kong at any one time, in the period from August – December 2017, was 19 days. Clearly then, on that basis, the husband did have a connection of sorts with Hong Kong when the petition was issued – but it does not appear to be an overly substantial one. It is not accepted that he spent 60 – 70% of his time in Hong Kong.

The Respondent’s parents and sister reside in Hong Kong

The Respondent’s parents have purchased a landed property in Hong Kong under a Hong Kong company. They have been living there since 2008 and the Respondent has his own bedroom in the said landed property with his personal properties placed there from then until now.

35.  With respect, it seems to me that there is little of substance to either of these points.  They simply show that the husband has some sort of family connection with Hong Kong, which is not disputed.

The Respondent decided to register the marriage in Hong Kong

The Respondent has strong connections with Hong Kong, coming to Hong Kong at least two to four times a year during the marriage

The Respondent would come to Hong Kong whenever there were any big changes in his life, such as graduation, marriage and separation.  

36.  Again, it seems to me that these points are of little import. They show that the husband has a connection with Hong Kong, mainly because his immediate family are living here.

The Respondent has his driving licence in Hong Kong    

37.  Again this is neither here nor there.

Generally

38.  In general it is clear that the husband has a connection with Hong Kong. He also has a connection inter alia with Shanghai, Thailand and the United States. The issue is whether or not the connection to Hong Kong is sufficiently strong to confer jurisdiction. To that end Ms Rattigan also made the following points in her submission:

57.  Further to the above, and very significantly, there is a complete absence of matrimonial-related connecting factors. There is no dispute that:

(a)  the parties met in Shanghai;

(b)  while they had a marriage ceremony in Hong Kong, the main celebration of the marriage was in Shanghai where this was done on a far bigger and more elaborate scale;

(c)  since meeting and marrying the parties have never lived anywhere other than Shanghai;

(d)  the parties’ married life was always centered in Shanghai, they have never lived in Hong Kong nor have they ever contemplated doing so;

(e)  neither of the parties has ever worked in Hong Kong, whether during the marriage or otherwise;

(f)  both children were born in Shanghai, the daughter has only visited Hong Kong twice and then only for a matter of days in order to visit her paternal grandparents.  The son has never even been to Hong Kong;   

(g)  The Petitioner’s own case is that it is not in the Children’s interest to even come to Hong Kong as it will disrupt their routines in Shanghai, their home;

(h)  none of the parties have permanent residency in Hong Kong    

(i)  the Petitioner and children have no right to residency in Hong Kong;  

In such circumstances does the Petitioner wife have jurisdiction to issue divorce proceedings in Hong Kong?

39.  I accept as argued by Ms Rattigan that there are no matrimonial related factors connecting the husband to Hong Kong. I have also carefully considered all of the factors relied upon by the wife as referred to above, both separately and together. Taken separately it is clear that many of the factors have not been considered as sufficient to confer substantial connection in other cases. I also agree that in this particular case the husband’s connection to the territory does not seem to be a particularly substantial one. In addition, I have also considered whether, if taken altogether, there can also be said to be a cumulative effect? I think not.

Conclusion  

40.  In such circumstances it seems to me that the wife does not have jurisdiction to issue divorce proceedings in Hong Kong. Consequently, I shall make an order in terms of paragraph 1 of the husband’s summons dated the 19 September 2018.  In so far as costs are concerned I can see no reason why costs should not follow the event in the normal way.  Thus there shall be an order nisi to be made absolute in 14 days’ time that the wife do pay the husband’s costs of and occasioned by the summons dated the 19 September 2018 to be taxed on a party and party basis if not agreed. There shall be certificate for counsel.