CPGK v. TMSK

FCMC 16628/2017

[2021] HKFC 189

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 16628 OF 2017

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DECISION

(Leave to Appeal & Stay of Execution)

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The applications

(i) Leave to appeal

1.  The respondent (“the husband”) filed a summons for leave to appeal on 24 June 2021 against my judgment on ancillary relief dated 18 May 2021 (“the judgment”). 

2.  The husband should have filed this summons by 15 June 2021. The application for leave was filed out of time by 9 days late.

3.  The husband’s summons will be considered in accordance with the new arrangement on application for leave to appeal in the Family Court dated 13 August 2018. The husband filed an affirmation of service on 12 July 2021. The husband filed his written submissions on 24 June 2021. By way of consent, the time of filing written submissions for the wife was extended to 19 August 2021.

(ii) Stay of Execution

4.  The husband further filed a summons for stay of execution on 8 July 2021 and I have directed to be dealt with by paper disposal. By way of a consent order, time for filing written submissions for the petitioner (“the wife”) in reply was extended to 10 September 2021.

Background

5.  The background of the parties has sufficiently appeared in the judgment. As a recap, the wife has been a kindergarten teacher since marriage whereas the husband has carried on business at home as a jewelry designer, he became a personal assistant of a CEO of a PRC company after separation.  The husband and wife have one son aged 11. By consent, both parties were granted with joint custody and the wife was granted care and control of the child, the husband was granted with reasonable access with some defined access arrangements.

6.  On ancillary relief, the parties were able to narrow down their dispute that the husband agreed to pay HK$3,000 periodic child maintenance to the wife for the child’s expenses until the child attains the age of 18 or ceases his full time education. The only dispute at trial was whether a non-matrimonial property inherited by the husband which is held by him in his sole name (“the Mei Foo Property”) shall be applied to satisfy the general needs of the child and the accommodation needs of both the wife and the child.   

7.  The parties’ dispute had resulted a full trial and I ordered in the judgment, inter alia, the husband do pay lump sum payment HK$2,716,684.80 to the wife within 3 months from granting decree absolute. The decree absolute was granted on 4 June 2021.

The husband’s out of time application for leave to appeal

8.  The husband stated in his submission in explaining the delay of taking out the said application as follows:

(i)  he was acting in person since the commencement of proceedings in 2017;

(ii)  he was rejected legal aid;

(iii)  he did not expect the judgment will bring detrimental effect to the Mei Foo Property; he was not legally trained and had never come across the term of beneficial ownership of a property;

(iv)  it was after the judgment then the husband’s family members to pull resources together to seek legal representation;

(v)  he sought legal advice on 11 June 2021;

(vi)  the summons for leave to appeal was filed on 15 June 2021, 9 days late.

9.  The relevant tests in considering leave to appeal out of time are set out in Joy Design Company Limited v. Fung Pui Wa & anor (HCA 2548/2014 / [2020] HKCFI 1196), DHCJ M.K. Liu said in this judgment, at paragraph 2 & 3 as follows:

“2 The principle concerning leave to appeal out of time is well established. In Tang Chai On v Tang Sing Ki, the Court of Appeal said[1]:

“The legal principles regarding an application to extend time for an appeal are well established.  In the exercise of its discretion, the court will take into account the length of the delay, the reasons for the delay, the chances of the appeal succeeding if an extension of time is granted, and the degree of prejudice to the other party if the application is granted.  Where the delay is substantial and not wholly excusable, the applicant must show a real prospect of success on the merits, not merely a reasonable prospect of success.”

3. Ignorance of the law on the part of a litigant acting in person is generally not an excuse for delay.^[2] After the expiration of the appeal period prescribed in the rules of the court, the successful party should be entitled to regard the legal battle as finished.  In the absence of any good reason, the court would not extend the appeal period.  All litigants, including litigants acting in person, have the duty to find out the relevant appeal period and to lodge an appeal in time[3].”

10.  Be it the wife did not oppose to the late application (subject to costs), I shall consider the same in light of the legal principles cited above.

11.  Save and except the length of delay is insubstantial, merely 9 days, I am not satisfied the husband is able to explain his reasons for delay with those particularized above.

12.  Firstly, for the fact that the husband was acting in person since 2017 was irrelevant. Directions since 1^st appointment was unequivocally given including but not limiting to the beneficial ownership of the Mei Foo Property. The unsuccessful application for legal aid is neither here nor there.

13.  Secondly, neither the husband’s mother nor his sister had joined as a party to the proceedings. In the 1^st pre-trial review heard by HHJ C.K. Chan on 6 September 2019, the husband confirmed he has no preliminary issues to be determined.

14.  Thirdly, premised on the husband’s candid reasons for not expecting an order with an impact on the Mei Foo Property, the family member then pulled resources to seek legal advice after the judgment. Having said that, the husband has failed to explain the reasons of delay in taking out this summons when legal advice has been sought on 11 June 2021, which is still within the 28 days period.  

15.  Fourthly, although the length of delay is insubstantial, however, if such application was granted, it would cause prejudice to the wife and the son when both of them are merely relying on totaling HK$6,000 maintenance pending suit for the wife and interim maintenance for the son since the order dated 9 November 2016. The wife and the sons’ accommodation concern has yet to be resolved.

16.  Fifthly, I do not find the husband has a reasonable prospect of success in the appeal which the reasons are set out hereinbelow.

17.  After looking at all relevant matters, I refuse to exercise discretion to allow the husband’s application for leave out time.

Applicable legal principles on granting leave to appeal

18.  Leave to appeal shall not be granted unless the court is satisfied the appeal has a reasonable prospect of success or there is some other reason in the interest of justice why the appeal should be heard. (See section 63A(2) of the District Court Ordinance, Cap 336).

19.  Reasonable prospect of success connotes the prospect of succeeding in the intended appeal must be reasonable and more than fanciful, without having to be probable.  An applicant is required to show more than just an arguable case, but he does not have to demonstrate the appeal will probably succeed. Even if the court takes the view that there is a reasonable prospect of success, it still remains a discretion as to whether to grant leave, though the fact that there is, ex hypothesi, a reasonable prospect of success would heavily influence the court in exercising its discretion. (See commentary of Hong Kong Civil Procedure 2021, §59/2A/4)

Grounds for leave to appeal

20.  The grounds of leave of appeal are categorized hereinbelow.

Delay in handing down judgment (Ground 1)

21.  Counsel for the husband did not specify the exact error in her written submissions in delay in handing down judgment. I note from the husband’s supporting affirmation that I have erred in his age when calculating his accommodation needs.

22.  I said in paragraph 8 of the judgment that the husband is 48 years of age and subsequently my error on calculation appeared in paragraph 36 therein. The calculation was meant to be quantification of the husband’s accommodation needs. The original calculation appeared in paragraph 36 was HK$14,500 x 12 months x 32 years = HK$5,568,000; whereas the correct calculation with the husband’s correct age should be HK$14,500 x 12 months x 22 years = HK$3,828,000.

23.  The aggregate accommodation needs of the husband, the wife and the son should therefore be HK$3,828,000 + HK$2,716,684.80[4] = HK$6,544,684.80. This error in calculation has no impact on the husband because the aggregate sum of all the needs of the husband, the wife and the son are still within the value of the Mei Foo Property, HK$8.4 million. The lump sum award for the wife and the child is unaffected.

Beneficial interest of the Mei Foo Property (Ground 2, 3, 4, 5, 6, 7, 8, 9, 10)

24.  The husband submitted I have erred not to have directed a preliminary hearing on beneficial ownership of the Mei Foo Property.

25.  In answering the husband’s grounds of appeal with regard to the issue on beneficial interest of Mei Foo Property, it is worth mentioning the onus is upon the person (i.e. the husband) seeking to show that the beneficial ownership is different from the legal ownership. (See Stack v. Dowden [2007] 1 AC 432 (HL) at paragraph 56).

26.  The husband articulated his failure to discharge the onus in Stack v. Dowden because I have erred in directing a preliminary issue hearing. It is fair to canvass the history of hearings prior to trial of whom both parties had attended a total of 8 hearings.[5]

27.  Amongst those hearings, in the1^st appointment (2^nd hearing) on 5 July 2018, HHJ Ivan Wong first raised the issue on beneficial ownership and has directed, inter alia, as follows:

“7. 若答辯人有第17a條的申請，須於2018年7月9日或之前提出。

8. 答辯人須於2018年11月27日或之前以書面通知法庭他就前婚姻居所實質擁有人是誰的立場，並將書面通知副本送達呈請人。” [emphasis added]

28.  Subsequently on 4 December 2018, HHJ Ivan Wong directed parties to obtain valuation of the Mei Foo Property.

29.  On 6 September 2019, in the 1^st Pre Trial Review hearing, HHJ C.K. Chan directed that the parties to file of narrative affirmations by reference to section 7 of MPPO, Cap 192.

30.  On 6 December 2019, the 2^nd Pre Trial Review hearing, HHJ C.K. Chan further directed the husband “to file and serve all witness statement within 21 days, failing which no witness can be called except the husband himself”. The husband’s mother had only filed an affirmation on 27 December 2019 seeking an order to allow her daughter (the husband’s sister) to testify at trial. She further stated her daughter was in Canada in the moment and can only return in town to give evidence in July 2020. On 6 January 2020, HHJ C.K. Chan replied to the husband as follows and no further application was noted.

“若 [name of husband’s sister][6]女士有任何申請，不應由[name of husband’s mother][7]女士代為提出，而是由她本人親自向法庭作出適當申請。如有任何疑問，請索取獨立法律意見。”

31.  On 10 January 2020, the 3^rd Pre Trial Review hearing, trial date was duly fixed by HHJ C.K. Chan.  

32.  On 11 May 2020, the 4^th Pre Trial Review, for reason the affirmation of the husband’s mother was far from a witness statement, I directed the wife and husband be the only witness at trial upon non-compliance of the order of HHJ C.K. Chan dated 6 December 2019 above.

33.  As seen from the above chronology, the above directions since 5 July 2018 are best to illustrate the husband’s inaction on the issue of the beneficial interest of the Mei Foo Property throughout the entire ancillary relief proceedings. The husband was being asked of his view as early as 5 July 2018; valuation of the Mei Property was directed on 4 December 2018. Not to mention no application on preliminary issue was filed, no witness statement (of his mother and sister) was filed on a timely manner. Notwithstanding numerous opportunities were given to the husband, he blatantly failed to take out application (or to adduce evidence) on the issue of beneficial ownership of the Mei Foo Property when he is at all material times the sole registered owner of the said property.

34.  Apart from the above, the husband should be well aware that an impact on the Mei Foo Property was very likely when he stated in paragraph 26 and paragraph 35 of his written final submissions for ancillary relief filed on 9 June 2020 and 16 June 2020 respectively, the particular paragraphs are reproduced hereinbelow.

“26. 在考慮雙方的經濟需要和為本人的謀生能力作出補償，如需分配這非婚姻物業的權益，本人所得的份額應比呈請人多才公平合理。”

“35. 呈請人結案陳詞第80段稱：若按呈請人的要求作財產分配，本人仍可獲分配$4,98,219.80 [sic] 以應付今後的生活。由於有關物業的權益須分作3份，本人只持有1/3。如須出售這物業，本人須按比例把淨收入與母親和妹分攤，本人只可取得1/3，即$2,768,666，根本不足以支付呈請人要求的金額。”[emphasis added]

35.  As seen from the above paragraphs, the husband was well aware the wife and the child’s general needs will be ordered in light of the Mei Foo Property. The lump sum order that I have made was HK$2,716,684.80, a sum within the husband’s ability to pay.

36.  The husband’s ground that he did not expect the ancillary relief order has an impact on the Mei Foo Property is unmeritorious.

Errors on findings of on Mei Foo Property, the non-matrimonial property (Ground 11, 12, 13, 14, 15, 16)

37.  Notwithstanding the above, the husband submitted I have erred in applying relevant legal principles on non-matrimonial property in ancillary relief application by concluding to have applied the entire value of the Mei Foo Property as matrimonial asset. I have failed to take into account the wife has never resided there but the husband’s family member. I have also failed to take into account the husband has inherited the Mei Foo Property for 20 years whereas the length of marriage was only 8 years.

38.  With respect, counsel for the husband has failed to identify the relevant principles and how they should have applied in her skeleton submissions. The grounds of appeal on error of findings could not stand.

Double counting of general expense of the child (Ground 17)

39.  The husband submitted I have failed to deduct a sum of HK$3,000 being the monthly maintenance of the child from the child’s general expenses. The figure of HK$6,000 per month was double counted.

40.  The husband’s ground is misconceived. The child’s monthly expense is HK$8,848 per month which appeared particularly in Part 4.3 of the wife’s Form E filed on 4 October 2019, this sum consisted of school fees, tuition, books, stationery, transport to school, medical / dental fees, entertainment, clothing / shoes, lunches / pocket money and uniform. The husband’s agreement to pay the child’s expenses is HK$3,000 per month was recorded in the outset and was so ordered in paragraph 57(ii) of the judgment.

41.  The wife and the child’s general expenses (excluding Part 4.3 of Form E) was found in Part 4.1 of the said Form E. The aggregate sum is HK$23,950 per month. This sum consisted of rent, utilities, food, household expenses, insurance premium and domestic helper salary. For easy reference, the particulars of general needs are reproduced as follows.

Item	Amount ($)
Rent	11,000.00
Utilities	1,038.00
Food	3,200.00
Household expenses	400.00
Insurance premia	2,210.40
Domestic helper	4,520.00
Total ($): 22,368.40

42.  For reason accommodation needs of the wife and child are inseparable, the needs of paying rent has been separately considered and ordered. In paragraph 40 of the judgment, the remaining items of the wife and child’s general expenses was (HK$22,368.40 – HK$11,000) = HK11,368.40. In other words, the child’s general expenses should be HK$11,368.40 ÷ 2 = HK$5,684.20 per month. 

43.  The quantification of the child’s general needs was stated in paragraph 47 of the Judgment. No double counting was noted.

Errors in calculating financial needs of the husband (Ground 18)

44.  The husband submitted I have erred in calculating financial needs of the husband by not (i) including a sum of HK$5,300 being personal expenses of the husband and (ii) excluding a monthly repayment of the foreseeable re-mortgage loan of the Mei Foo Property.

45.  I made a finding that the husband is unable to meet his needs with his monthly salary of HK$17,000 taking into account of paying child’s monthly maintenance and accommodation needs in paragraph 35 of the judgment.

46.  No evidence on ability to re-mortgage Mei Foo Property has been elicited upon the husband at trial. I therefore concluded in paragraph 52 of the judgment that the needs of the parties “can be satisfied by pulling resources from the Mei Foo property which is likely to be realised”.

Errors in concluding the wife’s financial ability (Ground 19, 20, 21)

47.  The husband submitted I have erred in failing to give sufficient consideration of the wife’s income at least 50% higher than the husband; she has higher earning capacity and younger than the husband.

48.  There is no formula on how child maintenance (general expenses) should be determined in light of the parties’ income. In this case, the husband is coupled with an asset of HK$8.4 million which he has an overwhelmingly better financial position than the wife. In paragraph 47 of the judgment, I have quantified a sum for child maintenance (general expenses) for the son which will be satisfied by the resources from Mei Foo Property as opposed to periodic maintenance to be paid by the husband on a monthly basis.

Errors in concluding the husband’s financial ability (Ground 22, 23)

49.  The husband submitted that I have erred to have failed to take into consideration of the accommodation needs of the husband if he was required to re-mortgage the Mei Foo Property or to sell the same. I have also erred by to have failed to take sufficient consideration of the detrimental effects on the husband and his family in compliance of the judgment.

50.  I repeat no evidence on re-mortgaging of the Mei Foo Property was elicited at trial. I have duly considered the husband’s accommodation needs (and his mother) in paragraph 36 of the judgment[8]. This ground of appeal could not stand as well.

Stay of execution

51.  The general principle to order a stay of execution when seeking leave to appeal is well decided by Ma J (as he then was) in Star Play Development Limited v. Bess Fashion Management Limited, (6 June 2002, Ma J (as he then was)). This is still good law and the same principle was applied by DHCJ MK Liu in Progetto Jewellery Company Limited v. Lau Chiu Ying & anor (by original action; Joy Design Company Limited v. Progetto Jewellery Company Limited (by counterclaim) (HCA 2548 of 2014 / [2020] HKCFI 1835) as follows:

“2. The principles concerning stay of execution have been succinctly summarized by Ma J (as he then was) in Star Play Development Ltd v Bess Fashion Management Co Ltd^[9]. The matters to be borne in mind include the following:

(1) The burden is on the party seeking a stay to make out a positive case to justify the indulgence, not for the successful party to justify why a stay should not be granted.

(2) The existence of an arguable appeal (that is, one with reasonable prospects of success) is the minimum requirement before a court would even consider granting a stay. If there is no arguable appeal, no stay would be granted, however exceptional the circumstances may be otherwise justifying a stay of execution.

(3) Even if the court is satisfied that there is an arguable appeal, the appellant must provide additional reasons as to why a stay is justified.

(4) If the suggested additional reason is the possibility of the appeal being rendered nugatory, it is incumbent upon the appellant to provide evidence to substantiate it.  Where it is said that the levying of execution would result in financial ruin or serious financial consequences for the appellant, the court will require good evidence to support this contention, such as the production of accounts or other documents to justify the assertion.  A bare assertion is unlikely to meet with much sympathy where more substantial evidence is available.”

52.  The reasons the husband is asking for a stay of execution are seemingly the same as those pleaded in his grounds of appeal. He repeated he was holding the Mei Foo Property on trust for both his mother and his sister of whom both of them intended to testify at trial. The husband also said he has difficulty in securing mortgage at his age.

53.  Apart from repeating himself, I failed to see the husband has demonstrated an arguable appeal, nor did he put forward an exceptional circumstance that stay of execution should be granted. I also failed to see the husband can justify good reasons for such an order. The application for stay of execution shall be dismissed.

Conclusion

54.  I refuse to exercise discretion to allow the husband to apply of leave to appeal out of time.

55.  Notwithstanding the above, the husband has no reasonable prospect of success in the appeal. I refuse to exercise my discretion to grant him leave to appeal. I also failed to see there are some other reasons in the interest of justice why the appeal should be heard.

56.  I refuse the husband’s application for stay of execution.

Costs

57.  I see nothing in these applications shall depart from the usual costs order to follow the event. I so order the husband shall pay the wife’s costs of both summonses, unless otherwise ordered, with certificate for counsel, to be taxed if not agreed.

58.  I make the following orders:

(i)  The husband’s (the respondent’s) summonses filed on 24 June 2021 and 8 July 2021 be dismissed.

(ii)  Unless otherwise ordered, the husband (the respondent) do pay the wife’s (the petitioner’s) costs of the said summonses, with certificate for counsel, to be taxed if not agreed.

(iii)  The wife’s (the petitioner’s) costs be taxed in accordance with the Legal Aid Regulations.