SUZANNE RUTH HENDERSON v. SCOTT HENDERSON

HCMP 1780/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO1780 OF 2013

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J U D G M E N T
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Section

A. Introduction

B. Undisputed or indisputable facts

C. Grounds for seeking injunction and grounds for discharge

D. Legal principles under section 21M of the High Court Ordinance 22

E. The evidence

F. Good arguable case on registration under the Ordinance

G. Registration under common law

H. Discharge of the Mareva injunction

J. Regrant of the Mareva injunction

K. Other reliefs claimed

L. Conclusion

M. A note on the Ordinance

A.  INTRODUCTION

1.  This is the substantive hearing of the re-amended originating summons whereby the plaintiff (“Ms Henderson”) seeks a Mareva injunction in aid of enforcement of the maintenance orders she obtained in Ontario.  Her bases are that the orders are registrable under the Maintenance Orders (Reciprocal Enforcement) Ordinance, Cap 188 (“the Ordinance”) and under common law.

2.  There is a related summons dated 27 June 2014 by the defendant (“Mr Henderson”)to discharge the Mareva injunction.

B.  UNDISPUTED OR INDISPUTABLE FACTS

3.  The parties were divorced in 2003.  They have 2 daughters, now aged 22 and 19 respectively and both are in universities.  They have been under the custody of Ms Henderson.

4.  Between 2001 and 2009, 10 orders for maintenance (“the Ontario AR Orders”)had been made by the Superior Court of Justice Family Court Branch, Brampton, Ontario, Canada (“the Ontario Court”). 

5.  The 10^th order was made on 15 January 2009 by Madam Justice van Rensburg (“the 2009 AR Order”) in the absence of Mr Henderson.  It was a consolidation of the previous 9 orders.  It declared that Mr Henderson owed Ms Henderson child support arrears, inclusive of interest in the amount of CAD$360,699 as at 31 December 2008.  It also ordered that:

“2. [Mr Henderson] shall pay [Ms Henderson] table child support for the children, … in the amount of $4,915.00, based upon [Mr Henderson’s] income being $402,000 …”

…

10. Unless the support order is withdrawn from the office of the Director of the Family Responsibility Office, it shall be enforced by the Director and amounts owing under the support order shall be paid to the Director who shall pay them to the person to whom they are owed.

11. This Order, as it relates to child and spousal support, is subject to possible variation upon [Mr Henderson] purging all existing contempts, providing all answers to his undertakings, providing complete income disclosure and reopening his pleadings…”  (underline added)

6.  Mr Henderson failed to comply with the Ontario AR Orders in full.  He moved from Ontario to California and then to Arizona.  There has been a warrant of arrest and committal against him since 2003 in Ontario.

7.  Mr Henderson has no assets in Canada.  The Family Responsibility Office (“the FRO”) of Ontario has made 4 requests for registration of the Ontario AR Orders: in Hong Kong in 2009, in California in 2011, in Arizona in 2012 and in Hong Kong again in 2013. 

8.  The 2009 registration was cancelled in Hong Kong.

9.  Mr Henderson appeared in the California court to be cross-examined as a judgment debtor.  He claims to have updated FRO of his mailing address each time he moved.  There was no evidence from FRO to contradict this and I accept that he had. Despite Mr Henderson’s objection, registration of the Ontario AR orders was granted but enforcement was unsuccessful.  The California court held that Mr Henderson had made an unwarranted collateral attack on the Canadian Judgment and that his claims should have been advanced to the Canadian appellate court than to the California court.  Mr Henderson fled before hearing of contempt proceedings. 

10.  Mr Henderson had remarried on 16 December 2011.  His wife is M.  In March 2012, he purchased a house in Arizona at the price of US$1.5 million and has been living with M there.  On 6 March 2013, he transferred half share in the house to M.

11.  Ms Henderson found out about the purchase of the Arizona property. FRO applied for and obtained registration in Arizona. 

12.  Meanwhile, on 7 May 2013, Mr Henderson brought a motion in the Ontario Court seeking (i) an order purging all contempts and declaring him compliant with all outstanding court orders; (ii) an order to rescind the warrant of arrest issued in 2003; (iii) an order to permit him to bring a motion to vary; (iv) an order for the retroactive adjustment of the support payments; and (v) an order fixing the amount of arrears and on-going support in accordance with the relevant guidelines. 

13.  Madam Justice Snowie of the Ontario Court struck out the motion, noting that it was “a complete abuse of the process of this Court and a transparent effort on his part to delay enforcement of this Court’s Orders in Arizona.” She ordered that Mr Henderson could not bring any motion or take fresh steps in the Ontario Court until he had complied with the 2009 AR Order.

14.  Whilst negotiation for settlement was ongoing in Arizona, Ms Henderson obtained on 22 July 2013, ex parte, a worldwide Mareva injunction from L Chan J in the present case freezing Mr Henderson’s assets up to CAD$803,610.50 (“the Mareva injunction”)[1].

15.  On 4 October 2013, Deputy Judge Hartmann varied the Mareva injunction ordering Mr Henderson to make support payments of CAD9,774 per month retrospectively from August 2013 before he could  use the balance of his monthly salary (“the Hartmann order”). That order was the subject of interpretation in my judgment under the slip rule dated 27 August 2014 (“the Slip Rule Judgment”).

16.  On 22 October 2013, at the inter partes hearing before Deputy Judge Sakhrani for the Mareva injunction, it was discovered that there was no application for registration of the Ontario AR Orders under the Ordinance.  The hearing was adjourned to enable Ms Henderson to do so.  Ms Henderson requested FRO on the following day and FRO applied for registration in Hong Kong on 3 December 2013.

17.  On 27 November 2013, Deputy Judge Sakhrani handed down his decision (“the Sakhrani Judgment”).  He held that there was a good arguable case for registration under the Ordinance.  Notwithstanding that he found Ms Henderson guilty of material non-disclosure, he ordered the Mareva injunction to continue. 

18.  On 24 June 2014, the District Court Registrar declined to register the Ontario AR Orders (“the 2014 Rejection”).  Mr Henderson thus applied for discharge of the Mareva injunction (now before the court) and the Hartmann order.

19.  The 2014 Rejection was quashed by me by a judgment dated 31 March 2015 in HCAL 82/2014 (“the JR Judgment”).  The application for registration under the Ordinance is under reprocessing before the Registrar.

C.  GROUNDS FOR SEEKING INJUNCTION AND GROUNDS FOR DISCHARGE

20.  The core issue turns on whether there was a good arguable case on registration under the Ordinance or enforcement at common law.  There is no issue that there are assets within the jurisdiction and that there is a real risk of dissipation of assets.

21.  The grounds for discharge can be summarized as:

(1) Failure to disclose the 2009 Rejection;

(2) Intentional misrepresentation in relation to the 2013 application for registration;

(3) Lies to the court;

(4) Breach of undertaking; and

(5) Miscellaneous grounds.

D.  LEGAL PRINCIPLES UNDER SECTION 21M OF THE HIGH COURT ORDINANCE

22.  Under section 21M of the High Court Ordinance, Cap 4 (“s.21M”), the court has jurisdiction to grant interim relief, including Mareva injunction, in relation to proceedings which (a) have been commenced in a place outside Hong Kong; and (b) are capable of giving rise to a judgment which may be enforced in Hong Kong under any Ordinance or at common law.

23.  The Court of Appeal in Hong Kong has held that in exercising the power under s.21M, the court has to abide by the general principles governing interim relief: Pacific King Shipping Holdings Pte Ltd v Huang Ziqiang [2015] 1 HKLRD 830 at §27.

24.  This means an applicant has to show a good arguable case, that there are no or no sufficient assets within her jurisdiction to satisfy her claim; that there are assets within the jurisdiction and that there is a real risk of dissipation of assets: Hong Kong Civil Procedure 2016, Vol 1, §29/1/83.

25.  As to what constitutes a good arguable case, the plaintiff need not go so far as to persuade the judge that she is likely to win but that her case is one that is more than barely capable of serious argument and yet not necessarily one which the judge believes to have a better than 50% chance of success: Hong Kong Civil Procedure 2016, Vol 1, §29/1/66, citing Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co [1984] 1 All ER 398, Akai Holdings Ltd v Ho Wing On, HCCL 37/40 of 2005.

26.  The approach of a section 21Mapplication is to consider first whether the facts warrant the relief sought if the substantive proceedings were brought in Hong Kong; and second whether it is unjust or inconvenient to grant the interim relief sought: Beyonics Technology Limited & anr v Goh Chan Peng & ors, unrep, CACV 244/2014, 12 August 2015 at §23.

27.  The court should make a separate exercise of judgment rather than simply accepting the decision of the foreign court: Compania Sud Americana De Vapores SA v Hin-Pro International Logistics Limited, CACV 243/2014, 11 March 2015, at §32.

28.  In considering the question of convenience, there are 5 main considerations: Motorola Credit Corpn v Uzan & ors (No.2) [2004] 1 WLR 113, §115:

(i) whether the making of the order would interfere with the management of the case in the primary court, eg whether the Hong Kong order would be inconsistent/overlap with the primary court’s order;

(ii) whether it is the policy of the primary court not to make worldwide freezing/disclosure orders;

(iii) whether there was any danger that the orders made would give rise to disharmony or confusion and/or risks of conflicting, inconsistent or overlapping orders in other jurisdictions, in particular the courts of the state where the person enjoined resides or where the assets affected are located;

(iv) whether at the time the order was sought there was likely to be a potential conflict as to jurisdiction making it inappropriate and inexpedient to make the order;

(v) whether, in a case where jurisdiction was resisted and disobedience to be expected, the court would be making an order which it could not enforce.

29.  On material non-disclosure, whether or not a plaintiff has made full and frank disclosure in obtaining an ex parte Mareva injunction should be investigated at the trial: Sino Wood Investment Ltd v Wong Kam Yin, HCA 307/2002, 23 December 2002, at §§27-28, per Deputy Judge A Cheung (as he then was).

30.  What constituted material non-disclosure was succinctly summarized by Ralph Gibson LJ in Brink’s Mat Ltd v Elcombe & ors [1988] 1 WLR 1350, 1356G-1357B:

“(1) The duty of the applicant is to make ‘a full and fair disclosure of all the material facts’.

(2) The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers.

(3) The applicant must make proper inquiries before making the application. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries.

(4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the defendant; and (c) the degree of legitimate urgency and the time available for the making of inquiries”.

31.  It is not necessary to demonstrate that had the alleged material facts been disclosed to the court, the court would necessarily or likely have arrived at a different decision: Behbehani & ors v Salem & ors [1989] 1 WLR 723, 729 E-F.

32.  Where the non-disclosure was the result of a suppression of material facts, the practice of the courts is to discharge the order without further going into the merits: Velatel Global Communications Inc & anor v Chinacomm Limited & ors, HCA 1978/2011, 26 October 2012, at §§25-27.

33.  The Court may however, quite exceptionally, exercise its discretion to continue or re-grant the order, although such power should be exercised sparingly: Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642, at §56, CA.

E.  THE EVIDENCE

34.  My direction not to duplicate but update bundles already in the court’s possession was not complied with.  The trial bundles contained all sorts of irrelevant, repetitive affidavits, summonses for extension of time, leave to appeal and other interlocutory matters.  The affidavits were not arranged in chronological order.  Messrs Deannie Yew & Associates (“DYA”), solicitors for Ms Henderson, gave me a list of reading materials on the day of hearing.  That list was deficient in that it left out all the affidavits and was not prepared with the input of Mr Henderson. 

35.  I have gone through all the trial bundles.  In case this matter may be taken up further, items 13, 24, 27-29 in Bundle B (affidavits) were irrelevant.  A lot of exhibits (too numerous to identify) were also repetitive, and irrelevant.

36.  In writing this judgment, I have taken into account matters which came to my attention in other proceedings between the parties, ie (a) the Slip Rule Judgment; (b) theJR Judgment; and (c) the judgment dated 15 July 2015 in HCMP 2016/2014 (“the Contempt Judgment”).

37.  Expert evidence on Ontario law was contained in various documents.  The “experts” (Mr Fanjoy, Wyland Law PC and Mr Delaney) were lawyers who acted for either party in Ontario or Arizona and hence lacked independence.  Some legal opinions (eg in Fanjoy-1^st [2] filed on 9 October 2013) was not supported by legal authorities.  Some experts (eg Wyland Law PC, Lawrence Ben-Eliezer and those from FRO) did not even state their qualifications.  Only Mr Michael Marra was independent.

38.  The letters purportedly from the FRO (stating eg that the Ontario AR Orders were “final” in nature and that FRO would not send provisional orders to other reciprocating jurisdictions for enforcement), were not supported by legal authorities and were thus inadmissible opinion evidence.

39.  I shall not rely on the legal opinions referred to in paragraphs 37-38 above.  I approach the legal opinion of Mr Michael Marra with caution as it was not prepared with leave of the court.

F.  GOOD ARGUABLE CASE ON REGISTRATION UNDER THE ORDINANCE

40.  There is no dispute that the 2009 AR Order fell within s.7(1).  The FRO is the responsible authority who shall send a certified copy of the maintenance order to the Chief Executive of Hong Kong (“the CE”).  If it appears that the payer under the order “is residing in Hong Kong”, the CE shall send the copy of the maintenance order to the Registrar.

41.  The Registrar shall take such steps as he thinks fit for the purpose of ascertaining whether the payer is residing in Hong Kong and if he is, register the certified copy of the order: s.7(3) and (4) of the Ordinance.  A registered order is enforceable in Hong Kong as a civil debt as if it had been made by the District Court: s.9(1) and (3)(a) of the Ordinance.

42.  Both L Chan J and Deputy Judge Sakhrani based their decisions on registration under the Ordinance only.

43.  The Sakhrani Judgment found that there was a good arguable case that Mr Henderson was residing in Hong Kong and that the 2009 AR Order was registrable in Hong Kong (§72).  I agree.  See also §90 of the JR Judgment. 

G.  REGISTRATION UNDER COMMON LAW

G1.  Legal principles

44.  A foreign judgment in personam given by the court in a foreign country with jurisdiction to give that judgment may be enforced by a claim for the amount due under it if the judgment is (a) for a debt or definite sum of money; and (b) final and conclusive, but not otherwise.  A foreign judgment may be final and conclusive, though it is subject to an appeal, and though an appeal against it is actually pending in the foreign country where it was given.  Dicey, Morris and Collins on The Conflict of Laws, 15^th ed, Vol 1, §14R-020.

45.  A definite sum of money includes a final order for costs, eg in a divorce suit: Dicey, Morris and Collins, §14-022.  If a mere arithmetical calculation is required for the ascertainment of the sum it will be treated as being ascertained: Beatty v Beatty [1924] 1 KB 807, CA.

46.  The test of finality is the treatment of the judgment by the foreign tribunal as res judicata:

“In order to establish that a final and conclusive judgment has been pronounced, it must be shown that in the court by which it was pronounced, is conclusively, finally and forever established the existence of the debt of which it is sought to be made conclusive evidence in this country, so as to make it res judicata between the parties. It follows that the possibility of an appeal to a higher court does not alter the finality of the judgment. A foreign judgment which is liable to be abrogated or varied by the court which pronounced it is not a final judgment. But a default judgment may, in this sense, be final and conclusive, even though it is liable to be set aside in the very court which rendered it. Otherwise the clearer the claimant’s case, the more useless his judgment would be. The test has been stated as whether the default judgment was “entirely floating as a determination, enforceable only as expressly provided and in the course of that enforcement subject to revision”, in which case it will not be final, or “given the effect of finality unless subsequently altered”, in which case it will be final.” Dicey, Morris and Collins, §14-023.

47.  Maintenance orders are no different from other foreign judgments.

“The class of foreign judgments in relation to which it is most difficult to decide whether or not they are “final and conclusive” are maintenance orders, providing for periodical payments.  The principle applicable to such orders is, however, the same as that applying to all other foreign judgments.  If they are incapable of alteration by the court which made them, then they are actionable in England.  But if they are capable of variation by the court which made them, as are orders for periodical payments made by the Family Division of the High Court, no action is maintainable upon them, just as no action in the Queen’s Bench Division will lie upon an order of the Family Division.  Yet an order variable in respect of future payments may be invariable in so far as arrears are concerned in which case an action may be brought for the recovery of the arrears.”  Dicey, Morris and Collins, §14-025

48.  A foreign judgment is impeachable on the grounds of, amongst others, fraud; or that its enforcement would be contrary to public policy; or if the proceedings in which the judgment was obtained were opposed to natural justice: Dicey, Morris & Collins, §14R-137, 152, 162.

G2.  Was the 2009 AR Order a final judgment?

49.  Deputy Judge Sakhrani held, obiter, that there was not a good arguable case on enforcement under common law (§74-87).  I agree with him and would supplement as follows.

50.  Firstly, the 2009 AR Order lacked finality on its face.  As revealed from the transcript of the proceedings before Madam Justice van Rensburg in Exhibit HMYE-2 (“the Ontario transcript”), Mr Fanjoy made it very clear that Ms Henderson did not know what Mr Henderson’s income was and “speculated” that his income might be higher because he might be training on a much larger plane which would increase his pay.  Madam Justice van Rensburg, noting that it was a “final order”, was very concerned with the lack of firm evidentiary basis for finding Mr Henderson’s annual income as CAD402,000.  She specifically referred to the evidence of his income in 2007 to be at US$213,000.  Mr Fanjoy expressly stated that he was not able to bridge that gap (at pp 5-8 of the Ontario transcript). 

51.  At the insistence of Madam Justice van Rensburg, the 2009 AR Order was expressly stated to be “subject to possible variation”.  It did not lay down a time limit for Mr Henderson to seek variation or purge his contempt.  The fact that he has been unable to do so till now would not turn the 2009 AR Order into a final and conclusive order. 

52.  Secondly, Madam Justice Snowie’s order, likewise, did not specify a time by which Mr Henderson had to purge his contempt.

53.  Thirdly, the Ontario Court of Appeal’s decision dated 31 July 2014 (exhibit SRH-119) would not take the matter further.  There, Mr Henderson applied to vary the 2009 AR Order and sought extension of time to perfect his appeal. The notice of appeal was filed without Mr Henderson complying with the conditions.  The Court of Appeal held that if the lower court’s order has had the effect of permanently staying Mr Henderson’s long motion, the stay had resulted not from the nature of the order itself but from his failure to satisfy the conditions. 

54.  Unlike Madam Justices van Rensburg and Snowie, the lower court had imposed a deadline for Mr Henderson to comply with conditions.  Both the lower court and the Court of Appeal’s decisions were made after filing of the present originating summons.

55.  Fourthly, the opinion of Mr Michael Marra was that the 2009 AR Order was a final judgment.  He said that by its terms the payer had no right to vary the 2009 AR Order unless he first obtained an order from the Ontario Superior Court of Justice giving him permission to participate in the proceeding and re-open the pleadings.  This opinion carry no weight in the light of the analyses under Section G2.

56.  Fifthly, even on Ms Henderson’s own purported expert evidence, the support payments under the 2009 AR Order were not final in that the Ontario Court can even vary arrears retrospectively.  Under section 37 of the Family Law Act, RSO, 1990, cF3,

“37.(2) In the case of an order for support of a spouse …, if the court is satisfied that there has been a material change in the dependant’s or respondent’s circumstances or that evidence not available on the previous hearing has become available, the court may,

(a) discharge, vary or suspend a term of the order, prospectively or retroactively; (emphasis added)

(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and (emphasis added)

(c) make any other order under section 34 that the court considers appropriate in the circumstances referred to in section 33.”

Under sub-section (2.1), the court has similar powers in the case of an order for child support.

57.  Sixthly, Mr Ng submits that judgments for maintenance in Ontario are final and conclusive as regards arrears for the purpose of affording a cause of action to collect such arrears outside the jurisdiction. He relies on Lear v Lear (1974) 51 DLR (3d) 56 (Ont CA), at pp 61 and 63 and Patton v Reed (1972) 30 DLR (3d) 494.

58.  With respect, this sweeping proposition was taken out of context.  In both cases, the maintenance orders were held to be final and conclusive judgments. That was why the payee could sue for arrears.  In Lear v Lear, additionally, the maintenance order was made pursuant to agreement between the parties (who were represented).  These facts were clearly distinguishable from the present case where the 2009 AR Order was made in default and subject to possible variation.

59.  Accordingly, as at the date of the originating summons, the 2009 AR Order was not a final and conclusive order, let alone the other 9 interlocutory orders.  If Ms Henderson had intended to rely on the Ontario Court of Appeal’s judgment, it was pre-mature for her to issue the originating summons.  There was no good arguable case for enforcement under common law.

60.  If I am wrong, applying Dicey, Morris & Collins, only CAD803,610.50 accrued up to June 2013 as a debt, would have been enforceable under common law.  There is no common law principle which would have enabled enforcement of a monthly maintenance order.

H.  DISCHARGE OF THE MAREVA INJUNCTION

H1. The failure to disclose the 2009 application ground

61.  The 2009 application was rejected on the ground that Mr Henderson was not residing in Hong Kong.  FRO did not pursue further in Hong Kong until 2013.  See §30 of the JR Judgment.

62.  Both Ms Henderson and Mr Fanjoy stated on affidavit (P-3^rd and Fanjoy-1^st) that they did not know of the 2009 application and its subsequent cancellation until Mr Henderson raised it in D-1^st.

63.  They also relied on the legal opinion of Mr Michael Marra that as a matter of general law and procedure in Ontario law, FRO did not inform payees that FRO sought registration of an Ontario maintenance order and its result. With respect, this is not a matter of law but of fact.

64.  In its letter dated 29 October 2013 to Mr Fanjoy, FRO stated that it has been unable to ascertain definitely if Ms Henderson was advised of the registration failure in 2009 in Hong Kong (Exhibit YYWD-15).  However, FRO never confirmed that Ms Henderson or Mr Fanjoy was not informed of the application for registration in 2009.   

65.  Deputy Judge Sakhrani held (§§111-112 of his judgment) that on the evidence before him, he was not satisfied that Ms Henderson or Mr Fanjoy knew of the 2009 registration and its subsequent cancellation at the time of the ex parte application. 

66.  The Ontario transcript showed that Mr Fanjoy knew more than he would admit:

“My client [Ms Henderson] has been trying to get the FRO to assist with collection of these monies in Hong Kong, but it’s just been stonewalled throughout. It’s been a pretty horrible process that they don’t seem to be of much assistance so far. (at page 3)

Whether the FRO through the Hong Kong office can help us on that [ie the provident fund] I don’t know. They’ve been unhelpful so far. … And my client advises me the State of Illinois has just recently advised they’re working with the FRO in Hong Kong. (at page 9)

Ms Henderson had been in contact with FRO recently. She had been back and forth on the phone all week with FRO. (at page 16)” (underline added)

67.  It was simply incredible for Ms Henderson and Mr Fanjoy not to know about the 2009 application, which took place just 3 months after the 2009 AR Order was made, the very first application of its kind.  She had been with the FRO in court at “probably every couple of weeks recently” before that Order was made (p16 of the Ontario transcript). 

68.  At §§45-52 of the JR Judgment (subsequent to the Sakhrani Judgment), I rejected Ms Henderson’s explanation for not being aware of the 2009 decision.  I find her guilty of non-disclosure of the 2009 application.

69.  Even if she did not know about the 2009 Decision, it was clear that she had talked to FRO in 2013 about her intended application for enforcement in Hong Kong.  I have held that she could have discovered the 2009 application, at the latest, by 19 July 2013 (§51 of the JR Judgment). 

70.  Applying Brink’s Mat Ltd, it would still be non-disclosure if, with reasonable enquiry, the truth could have been unearthed.  Deputy Judge Sakhrani came to the same view (§100 of the Sakhrani Judgment).

71.  Failure to disclose the 2009 application or its subsequent cancellation was material because:

(a) It would have cast doubt on whether or not there was a good arguable case for registration under the Ordinance in 2013. 

(b) There was simply no urgency to justify an application for a Mareva injunction ex parte, 4 years after FRO decided not to pursue the failed 2009 application. 

(c) There was no secrecy to justify going ex parte either.  As early as 2002, Ms Henderson was aware that Mr Henderson had stated on oath that he was “technically resident” in Hong Kong since the time he joined Cathay Pacific in January 1994: transcript of the Ontario Superior Court of Justice dated 25 January 2002 in Exhibit SRH-128.  Mr Henderson himself was aware of the 2009 Application.  He has still been flying to Hong Kong as a pilot in those 4 years and has held bank accounts in Hong Kong.

72.  It is not necessary to demonstrate if L Chan J or Deputy Judge Sakhrani would have come to a different conclusion: Behbehani v Salem.  I find the failure to make disclosure ground proved.

H2.  Intentional misrepresentation ground

73.  Ms Henderson had represented to L Chan J that registration of the Ontario AR order was “pending” when no registration was applied for.  She only applied, with the indulgence of an adjournment granted by Deputy Judge Sakhrani, to FRO (not to CE) on 23 October 2013.  By then, it was 4 months after the Mareva injunction was granted on ex parte basis.  FRO applied for registration the 2^nd time on 3 December 2013. 

74.  The representation was intentionally false.  The relevant  passages from P-4^th (filed after the adjournment) have been quoted in §§108-110 of Deputy Judge Sakhrani Judgment:

“108. The evidence shows that on or about 19 July 2013 [ie 3 days before the Mareva injunction] Ms Henderson did instruct her Ontario lawyer to start looking into the matter to seek the FRO’s assistance in registering the order in Hong Kong. However, there was no formal application made to the FRO at that time.

109. Ms Henderson says that on 30 July 2013 she personally made follow up telephone calls to the FRO to inquire about the registration procedures in Hong Kong. She also says that in September 2013 workers from the FRO told her orally that if she were now seeking registration of the Ontario AR Order in Hong Kong, the FRO would stop representing her for the reason that the Arizona proceedings were ongoing and the FRO would not attend to the Hong Kong registration. For that reason, she withheld making a formal application to the FRO. However, she says that she did not inform her solicitors in Hong Kong about this as she did not want them to directly communicate with the FRO. She was worried that her Arizona enforcement proceedings would have to stop once there was a request to the FRO to register the Ontario AR Order in Hong Kong.

110. Clearly, on the evidence before me, there is nothing to prevent the FRO from seeking registration of the Ontario AR Order in different jurisdictions at the same time. I accept that Ms Henderson was mistaken as to whether the FRO could seek registration of the Ontario AR Order in different jurisdictions at the same time. Nevertheless, in my view, her legal advisers should have made proper enquiries with Ms Henderson before submitting that she had procured the FRO to seek registration in Hong Kong. I accept that counsel’s mistake in his written skeleton submissions was made because Ms Henderson had decided not to inform her legal advisers of her concern and of her decision not to make a formal application to the FRO for registration in Hong Kong.” (underline added)

75.  She also said in §15 of P-4^th that:

“I mistakenly thought I could wait and withhold procuring the FRO to seek Hong Kong registration of the Ontario AR Order until the Hong Kong Court decide to continue the Mareva injunction. And then at the enforcement stage, I will (sic) could choose to pursue enforcement of the Ontario AR Order more conveniently under the common law only, without having to involve the FRO anymore.” (underline added)

76.  These passages clearly showed that Ms Henderson concealed material facts not only from the court but also her own lawyers.  DYA first wrote to the CE Office on 30 July 2013, stating that “they were given to understand that Ministry of the AG in Ontario has sent out the letter to the CE Office enclosing a certified copy of the Ontario AR Order”.  In view of the quoted passages in P-4^th, one wondered where DYA could have got that understanding.

77.  With the past experience in California and Arizona, Ms Henderson knew very clearly that FRO should be the applicant in the Hong Kong registration.  Knowing that FRO was not willing to do so, she deliberately flouted the proper procedure.   

78.  It was incredible that a litigant like her would know the nicety between enforcement under the Ordinance and common law without legal advice.  If she really had intended to enforce under common law, her counsel would have been able to say so when L Chan J expressly raised the issue on common law enforcement

79.  Failure to involve FRO should not be overlooked.  Mr Henderson has been able to show that costs of CAD37,547.34 that he paid to Ms Henderson in 2003 was not credited to FRO allegedly because the sum was “mis-located for more than 10 years and it was not until 2013 that the FRO found the credit sum and credited back” to Mr Henderson.

80.  Further, as a matter of law, both under §10 of the 2009 AR Order and the Ordinance, the power of enforcement rested with FRO.  Ms Henderson had no locus to apply for the Mareva injunction.  Mr Michael Marra stated that FRO had no authority to commence enforcement action outside Ontario. Rather, it would send the maintenance order to the appropriate authority in the reciprocating jurisdiction.  That opinion did not state how Ms Henderson could have locus in view of §10 of the 2009 AR Order.  The question of Ms Henderson’s locus was not brought to the attention of either L Chan J or Deputy Judge Sakhrani.   

H3.  The lies ground

81.  There were 2 lies:

(a) Ms Henderson relied on Mr Henderson’s “admission” of being resident in Hong Kong in the Arizona proceedings, which was never made.  See §102 of the JR judgment.

(b) Mr Fanjoy asserted that Mr Henderson had represented to the Arizona Superior Court that he was a resident of Hong Kong.  I have found Mr Fanjoy to be wrong (§45 of the Contempt Judgment).

82.  There was other evidence capable of showing that Mr Henderson was resident in Hong Kong.  However, purported admissions of Mr Henderson were weighty factors.  Deputy Judge Sakhrani has relied on Mr Henderson’s admission (§71 of his Judgment):

“71. …This has not been denied by Mr Henderson. It is significant that Mr Henderson himself claimed to be a resident of Hong Kong as recently as March 2013 thereby contradicting his evidence that he was never a resident of Hong Kong.”

83.  Ms Henderson insisted that her US attorney was correct.  She explained that the admission was made by Mr Henderson after their respective Arizona attorneys had completed the arguments in the Arizona court, a very different version from that made to Deputy Judge Sakhrani.  I reject her explanation.

84.  In addition, Mr Henderson pointed out that in October 2013, Mr Fanjoy applied to the FRO, giving the Caribbean Coast address as Mr Henderson’s, when there was no basis to believe that he lived there.  Mr Henderson said it was a “fraudulent change of address” for Mr Fanjoy to say that Mr Henderson had resided with M there since 1 January 2011 when they were only married in December 2011.  Mr Henderson was probably right in his criticism of Mr Fanjoy although “misleading” was a more suitable word than “fraudulent”.

85.  The lies ground was established.

H4.  The breach of undertakings ground

86.  Ms Henderson undertook not to, without leave of the Hong Kong court, begin any civil or criminal proceedings against Mr Henderson in any jurisdiction (§8 of the Mareva injunction order).  She was given leave to take the necessary steps to seek (including court proceedings) registration and enforcement of the Ontario AR Orders in Arizona (§9).  

87.  Ms Henderson had taken out civil proceedings: (a) against Mr Henderson and M’s fraudulent transfer of the matrimonial home in Arizona (Exhibit SRH-130) said to be in an effort to avoid a family support judgment; and (b) for contempt against Mr Henderson.

88.  Proceeding (a) was arguably an act to enforce the Ontario AR Orders and not breach of undertaking for, if the transfer was set aside, any asset recovered could be used to settle the support payments.

89.  Proceeding (b) was clearly in breach of the undertaking not to institute civil or criminal proceedings.  P-9^th dated 28 May 2015 averred that contempt was part of the enforcement proceedings in Arizona.  With respect, that was not in accordance with common law notion that the plaintiff is not the only interested party but that the public is.  It should be known that it is of the highest importance that orders made by the court are there to be obeyed and not flouted: AO Smith Holdings (Barbados) SRL v Zhang Dacheng HCMP 1132/2011 (unreported, 1 June 2012) at §§58 to 61 (breach of a Mareva injunction).  The consequence of a finding of contempt is eg imprisonment or a fine.  An order for payment of maintenance was purging of the contempt instead.  Ms Henderson had pressed on with the contempt proceedings despite being alerted by Mr Henderson to her breach in his affidavit.  The breach of undertakings ground was established.

H5.  Miscellaneous grounds for discharge

90.  Firstly, Mr Henderson denied the allegation of attempt to steal the assets such as changing the title of the former joint property to that of his own so that he could sell it without Ms Henderson’s knowledge and to steal retirement investments.  He pointed out that all the matrimonial assets were transferred into her name by court order, and she had sold the property without paying him the equalization payment.

91.  Secondly, Mr Henderson claimed to have paid maintenance directly to Ms Henderson from July 1999 to the date of separation in December 2001.  As Ms Henderson did not inform him that she had registered the case with the FRO, so he continued to make payments directly to Ms Henderson and yet she did not report the payments to FRO.  She then attended court for increased support and claimed that Mr Henderson was not paying. As a result the judges would order retrospective support based on the misrepresentation of Ms Henderson. 

92.  Thirdly, Mr Henderson complained that Ms Henderson has misrepresented his income to the Ontario courts.  In February 2001, Justice Templeton determined his income to be CAD170,688.  In December 2001, Justice Van Melle determined it to be CAD180,265 by.  In 2002, Mr Henderson reported his income of CAD202,422 to the court.  After his pleadings were struck, his income was grossly over stated.  Overnight, CAD136,085 was added to the arrears. 

93.  In my view, these 3 grounds should be put before the Ontario courts to vary the Ontario AR Orders.  They fell short of showing eg fraud to enable the Hong Kong courts to decline enforcement under common law (if applicable).  The wrong computation of arrears may be a matter for the Registrar if he decides to register the 2009 AR Order.

94.  Fourthly, it is said that Ms Henderson refused to provide her financial information.  Her expenses exceeded her income and yet she had net worth of CAD500,000.  Mr Henderson’s driver and pilot licenses were never seized.  He had not siphoned off taxes through a separate account.  He was a loving father and maintenance proceedings for over 16 years have been stressful.  With respect, even if accepted as true, these grounds would not justify setting aside the Mareva injunction.

95.  Fifthly,Mr Henderson says that Ms Henderson has received more than 50% of his net income (D-6^th filed on 19 June 2015) despite herself having a high income.  He said that the contrast was as much as US$273,738 per year compared to his of US$36,000 per year (after tax).  With respect, again Mr Henderson has not provided a legal opinion on his assertion that an ex-spouse could not get more than 50% of the net income of the other party. In any case, such arguments should have been before the Ontario courts than the Hong Kong courts. 

96.  The miscellaneous grounds do not support a discharge.

97.  In summary, by reason of material non-disclosure, intentional misrepresentation and lies to the court, there is enough for the court to discharge the Mareva injunction and the Hartmann order without going into the merits: Velatel Global Communications Inc. The breach of undertaking is another nail to the coffin.

J.  REGRANT OF THE MAREVA INJUNCTION

98.  In considering whether to regrant the Mareva injunction, I have considered the conduct of both parties, the assets of Mr Henderson, the potential prejudice to Ms Henderson and the delay in the registration. 

J1.  Conduct of both parties

99.  Mr Henderson has, for 15 years, evaded support payments in 3 jurisdictions.  Even on his own case, paying CAD2,400 per month for child support from July 1999 to July 2013 until his account was frozen by the Mareva injunction was still below the amount ordered.  Although he said that he was held up at some places on the eve of entering into settlement in California/Arizona, there was no documentary proof of where, when and why he was held up.

100.  He used undisclosed inheritance and savings of US$4,000 per month in a trust account to buy the Arizona property instead of paying arrears of support payments.  Till now the account which received the inheritance and the savings have not been disclosed.  

101.  There was no documentary proof of repayments for the mortgage and hire purchases of his cars, household expenses or loans from family members.

102.  He did not give a satisfactory account with documents of how his tax reserves were kept or applied.

103.  He avoided payment of CAD9,774 per month under the Hartmann Order, using what I found to be disingenuous submissions (§§17-26 of the Slip Rule Judgment).

104.  He had opened 2 accounts and siphoned off US$205,446.64, without telling his then lawyers. He had been committed for contempt of court and sentenced to 3 months’ imprisonment as a result: §§19-20, 28 & 62 of the Contempt Judgment; paragraph 23 of the judgment dated 14 April 2016 in HCMP 2016/2014.

105.  His conduct had deprived Ms Henderson and the children of financial support.  The arrears as of November 2015 (SRH-144) has allegedly gone beyond CAD1,000,000. 

106.  On the other hand, Ms Henderson’s violation of the principles for seeking Mareva injunction was of the grossest kind.  She had stolen the march and received a total of not less than CAD304,341 [3], representing, in effect, monthly support payments for the period from August 2013 to January 2016.  That was something she was not entitled to if she had intended to enforce under common law.

J2.  The assets of Mr Henderson

107.  In the 2 years since the parties’ cases have been docketed to me, Mr Henderson’s known assets have been his house in Arizona bought at about US$1,500,000, with a downpayment of about US$500,000, payroll bank accounts in Hong Kong, the provident fund and a car in Arizona not of much value.

108.  Ms Henderson wants some security.  She is worried that if no Mareva injunction is in place, Mr Henderson might cash out and dissipate his provident fund (see letter of his employer USA Basing Limited dated 1 December 2014 and the notice of Cathay Pacific Airways Ltd dated 12 May 2015, Exhibits SRH-137 & 138).  It also appears that Cathay Pacific wants to change the payroll arrangement from its Hong Kong office to North America with effect from 1 January 2016.

109.  Ms Henderson estimates (in P-10^th) that the amount in his HSBC payroll account should be quite substantial, after hearing of the slip rule application in October 2014. 

110.  Despite Ms Henderson’s concerns, there was no evidence that the provident fund was cashed out.  The payroll account has not changed. Mr Henderson’s monthly income is about HK$173,550 (US$22,250).  Ms Henderson has inspected copies of the bank and salary statements each time there was payment out of his salary for her support payments and his living expenses.  She was exaggerating in saying that his payroll account still had a substantial amount.

111.  Apparently, Mr Henderson has been barred by procedural hurdles from varying the 2009 AR Order or seeking to convince the Ontario courts of his true annual income.  But 3 judges have queried the annual income of CAD402,000 on which that Order was based:

(a) Madam Justice Douglas of the Arizona court found on 15 May 2014 that the information regarding Mr Henderson’s income provided to the court was false.  It was material information, clearly intended to be relied upon by the court.  The court was unaware of the falsity and relied on this information.  In §10 of her ruling, the learned judge said that Mr Henderson did give credible evidence that the FRO had not given him credit for some payments towards his judgment.  Ms Henderson had no answer to these.

(b) Deputy Judge Hartmann of the Hong Kong court, when deciding to vary the Mareva injunction on 4 October 2013 to provide for Mr Henderson’s living expenses, stated that Mr Henderson’s income was nowhere near CAD402,000.

(c) I, for 2 ½ years, in handling all the proceedings between the parties, have not seen a document that showed his income to be anywhere near CAD402,000.

112.  Recently, when assessing the attorney fees, the Arizona court was using an income of $28,000 per month (for February to April 2015 only, much less for the months before).  Judging from the context it should be in Canadian dollars. Again it would have produced only CAD336,000 per year, 15 years after the 2009 AR Order was made.  See p.9 of the judgment of the Arizona court dated 31 July 2015. 

113.  Even in the transcript of proceedings of 8 April 2015 before the Arizona court (SRH-151, pp 2516-2517), the base income of Mr Henderson was CAD21,000.  He expressly said that it was uncommon for him to have CAD28,000 a month gross.  In P-10^th, Ms Henderson still said that he had CAD28,000 gross per month, an averment without sufficient evidentiary basis.

114.  I have no power to set aside the Ontario AR Orders and I have high regard for the Ontario courts in controlling its own process very effectively over a defaulting payer.  I just observe that arrears of support payments decided on Mr Fanjoy’s speculative submission before Madam Justice van Rensburg continues to accumulate. 

J3.  Potential prejudice to Ms Henderson

115.  Discharge of the Mareva injunction means that Mr Henderson might be free to dispose of his income and provident fund to the prejudice of Ms Henderson and their children. 

116.  However, Ms Henderson has recently obtained a judgment dated 31 July 2015 from the Arizona court.  That court has found Mr Henderson guilty of civil contempt in failing to comply with the registered order in Arizona.  Amongst others, the Arizona court also:

(i) gave judgment for US$755,313.73, at a fixed exchange rate for US and Canadian dollars;

(ii) ordered that Ms Henderson was entitled to place a lien on the home and real estate purchased by Mr Henderson to satisfy in part the judgment entered for unpaid support payments;

(iii) ordered Mr Henderson to purge the contempt by taking any action necessary (within 60 days) so that his assets were released and distributed to his support obligations and his monthly support was to be paid directly from his income to FRO within 60 days; and

(iv) enjoined Mr Henderson from withdrawing his pension.

117.  Mr Henderson’s pension statement showed US$965,260.46 as at 29 March 2015 (SRH-136).  This, together with the house in Arizona (even assuming that he was entitled only to half, with a downpayment of US$500,000), would have provided sufficient security for the arrears of support payments on the most generous computation.

118.  One could see, with hindsight, the wisdom of FRO in focusing on enforcement in Arizona.  However, I do not need to rest my decision on hindsight. 

119.  Applying Motorola Credit Corpn v Uzan, a Hong Kong Mareva injunction would overlap the Arizona judgment.  Refusal of regrant would not prejudice Ms Henderson.

120.  Mr  Ng submits that an order should be made to support the Arizona proceedings. With the greatest respect, that was not the basis of the application in the re-amended originating summons.

121.  P-10^th filed on 23 November 2015 exhibited other sets of Arizona rulings and transcripts.  I have read them.  Save as referred to above, those documents contained nothing else which would have affected my decision.

J4.  Delay in registration

122.  Over 2 years have elapsed since the application for registration in December 2013.  Part of the time was spent on the judicial review proceedings, which was not Ms Henderson’s fault.  Since the JR Judgment in March 2015, the Registrar has been waiting for papers and updated information from the FRO (see DYA’s letter dated 5 November 2015). The FRO was not even informed of this hearing.  The delay in registration was unreasonable and defeats the purpose of the Ordinance.

123.  In summary, notwithstanding the bad conduct of Mr Henderson, the grounds for discharge have been raised by him at the beginning of these proceedings. There was ample time for Ms Henderson to correct herself before this hearing.  There are no exceptions to justify regrant of the Mareva injunction: Excel Courage Holdings Ltd v Wong Sin Lai. If I am wrong, I would seriously consider denying Ms Henderson costs in view of her conduct in this piece of litigation.

K.  OTHER RELIEFS CLAIMED

124.  In D-7^th which was undated, Mr Henderson asked for damages to his reputation as a professional pilot and credit rating.  Quite apart from D-7^th not being sworn, Mr Henderson cannot make this claim at such a late stage without proper formulation of his claim.

L.  CONCLUSION

125.  There is a good arguable case that the 2009 AR Order was registrable under the Ordinance but not under common law.  Ms Henderson was guilty of material non-disclosure, intentional misrepresentation and telling lies when seeking the Mareva injunction.  She also breached the undertaking not to institute proceedings without leave of the Hong Kong court by pursuing contempt proceedings in Arizona. I discharge the Mareva injunction and decline to regrant it.  I dismiss the originating summons.  For the avoidance of doubt, the Hartmann order, my order dated 27 August 2014 and any orders freezing the assets of Mr Henderson are also discharged.

126.  On a nisi basis, Ms Henderson should pay costs of the originating summons and the summons for discharge to Mr Henderson.  I will decide whether to order taxation or summary assessment in consultation with the parties.

127.  This judgment has taken longer than necessary to produce for the following reasons.  I have alluded to the bad preparation of bundles in Section E above.  In addition, counsel only presented legal arguments for his side.  He rendered little assistance to the court in summing up the evidence, all the defences, the purported legal opinions which were spread over several affidavits, or identify the salient parts of various transcripts of foreign proceedings. I have made a similar comment in §3 of the JR judgment.  If I have erred in my judgment and needed to award costs to the plaintiff, I would have cut down costs substantially and awarded less than half of what was claimed in the costs statement.

M.  A NOTE ON THE ORDINANCE

128.  It may be time to review the Ordinance.  The test for registration is, amongst others, “that the payer resides in Hong Kong”.  This case illustrates the time and costs involved in meeting that test.  As a lay person, Mr Henderson (applying common sense) may genuinely have thought that he does not reside in Hong Kong.  Given the ease of travel these days and the convenience of operating bank accounts on the internet, one cannot help thinking if a better test is “that the payer has assets in Hong Kong”.