YS v. TTWD

FCMC 676 / 2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 676 OF 2011

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J U D G M E N T
(Substantial connection and forum non conveniens)

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Introduction

1.  There are three interlinking applications before me that now require adjudication. The first in time is the respondent husband’s summons dated the 23 February 2011 when he asks that a) the wife’s petition be struck out or dismissed for want of jurisdiction and b) that in the alternative and without prejudice to the first point that all further proceedings be stayed on the basis that the people’s Court of Hai Dian, Beijing is the forum conveniens.

2.  On the 7 April 2011 the petitioner wife issued a second summons seeking to amend her petition to plead inter alia substantial connection as being an alternative jurisdictional base for the divorce petition.

3.  On the 11 May 2011 the wife issued a further summons seeking to restrain the husband from a) proceeding with his application for a divorce in the Hai Dian Court and b) restraining him from filing any other divorce proceedings in any other districts of Beijing or elsewhere in the PRC until further order.        

Issues

4.  Both parties filed substantial skeleton arguments in support of their respective positions. The husband’s original skeleton included significant research and argument on domicile. By the time the matter came to be heard however it seemed to be accepted that the central issues were

a)  Whether or not the wife had a substantial connection with Hong Kong?

b)  If so whether Hong Kong or the Hai Dian People’s court is the appropriate forum to hear this matter?

c)  In the event that Hong Kong is the more appropriate forum should the husband be restrained from proceeding with his present application for divorce and from filing any other divorce proceedings in any other district of Beijing or elsewhere in the PRC?

Background to the marriage 

5.  In my judgment of the 29 June 2011 I set out in some detail the background to the marriage and the litigation up until that point as follows:

… The wife issued proceedings for divorce in Hong Kong on the 31 December 2010. On the 12 February 2011 the husband issued proceedings for divorce in the Chao Yang People’s Court in Beijing. Although an obvious point it should be noted that this application was second in time. These proceedings were dismissed on the 11 March 2011 seemingly because the husband could not establish that the wife was habitually resident in the relevant district in Beijing. The husband appealed against that decision, which was also dismissed. On the 25 April 2011 the husband issued a fresh set of proceedings in the Haidian/Hai Ting People’s Court, also in Beijing. At the time of writing this judgment the outcome of that application is not known. In 10 days time, on the 8 July this court will hear the husband’s application to dismiss and/or stay the Hong Kong proceedings. 

Background to the Marriage

3. This is by any definition a very short marriage between two people of Chinese descent from seemingly affluent families. Although both parties were born in Beijing, they were each educated overseas. The husband is 38 years old and was educated at public school in England followed by University in the States. He obtained his bachelor’s degree from a  university.  The wife also went to public school in England  followed by a university where she obtained her undergraduate degree and a university, where she obtained her master’s. The wife is 29 years old.  Each has connections with Hong Kong and both hold permanent Hong Kong I.D’s. There is almost a suggestion that the marriage was arranged, such was the haste with which the parties met, married, set up home and conceived a child together. The husband says that they met through a marriage agency whereas the wife says that they met through a mutual acquaintance.

4. In either event it appears to be accepted that they met in Beijing in September 2009 and married in December of the same year, i.e. within a period of three months. The marriage was registered in Hong Kong, but was celebrated in Beijing. In August 2010 the parties’ son was born in Hong Kong and on the 21 August 2010 the wife left the husband, taking the son with her. In the words of Ms Yip for the husband the parties had been married 8 months and 18 days. On leaving the husband the wife initially lived in a serviced apartment and then returned to Beijing. She presently resides in Beijing with her parents and the child. 

5. The husband’s mother is a businesswoman and it seems that the husband works in the family business. He is the Director and shareholder of a number of companies. He owns some property in Beijing and Shenzhen. There is an issue in relation to a number of shares that he says he is holding on trust for his mother. The wife’s s.17 application relates to the transfer of some of these shares back to the mother. There is a further issue in relation to a loan of RMB 10 million. The husband says he earns HK$30,000 per month and that he receives other benefits such as free housing, benefits and the provision of a driver from the company.

6. The wife works for a club as a corporate affairs officer. She earns HK$14,320 per month. Whilst living in Hong Kong and prior to marriage and the birth of her son, she was also entitled to accommodation in Hong Kong. It is not clear what accommodation if any she would be entitled to now. The wife’s parents live in Beijing but have had business interests in Hong Kong. The wife says that they ran a car business in Hong Kong during her childhood. There is an issue regarding other financial resources open to the wife and in particular the extent to which she is being supported by her parents.  

7. Each makes allegations against the other. The husband alleges that the wife told him that she was granddaughter of a well known political figure in the PRC.  The husband also alleges that right from the beginning of their marriage that there were lots of disagreements over money. He also states that the wife and her mother have tried to obtain money from him through illegal means. The wife for her part says that the marriage turned sour when her family refused to use their connections in order to help the husband’s mother in her business. The wife also alleges that the husband was conducting an intimate relationship with a third party. The truth or otherwise of these assertions may need to be dealt with on another occasion. Suffice it to say that each party generally denies the allegations made by the other. 

6.  The wife issued her petition in Hong Kong on the 31 December 2010 based on the husband’s unreasonable behaviour. The original jurisdictional basis for the divorce was the husband’s domicile in Hong Kong. In the husband’s affirmation in support of the first summons dated the 25 February 2011 it soon became clear that he did not accept that he was domiciled in Hong Kong. Although he had been educated in the United Kingdom, Hong Kong and the United States and held both a Hong Kong ID card and was also an American citizen with a green card, he said that he regarded Beijing as being his permanent home.

7.  On that basis the wife sought leave to amend her petition “since the Respondent now disputed that he is domiciled in Hong Kong”.

The law

Jurisdiction for Divorce

Section 3 of the Matrimonial Causes Ordinance, Cap 179 provides:-

“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.”

8.  Both parties referred me to the same case law – including the Hong Kong authorities B v A, [2007] 4 HKC 610 and S v S [2006] 3 HKLRD 751. 

Stay of proceedings and Forum non conveniens

9.  Quoting from Cheung JA in RI v SSH, CACV No 261 of 2009, 26 May 2010, counsel for the husband said that

“The underlying principle in challenges against the Hong Kong Court’s jurisdiction on the ground of forum non conveniens is whether the Hong Kong proceedings has a real and substantial connection to Hong Kong. This theme is manifested by the test that in order to succeed in the challenge not only is Hong Kong not the appropriate forum but another jurisdiction is the more appropriate forum. In other words, Hong Kong is not the appropriate forum because another jurisdiction has a real and substantial connection to the proceeding: see Spiliada Maritime Corporation v. Cansulex Ltd [1987] AC 460. Since Louvet v Louvet and others [1990] 1 HKLR 670, Hong Kong Courts have consistently applied the Spiliada principle: see, for example DGC v SLC nee C [2008] HKFLR 160. The application of the Spiliada principle to the matrimonial jurisdiction was expressly approved of by the House of Lords in De Dampierre v De Dampierre [1988] 1 AC 92.” [emphasis added]

With respect I agree.

10.  The principles in Spiliada have been summarized by counsel for the wife as follows:

i. The grant of a stay of proceedings is discretionary and not as of right;

ii. The court must first be satisfied that there is another available forum;

iii. The burden then falls to the party seeking the stay to show that Hong Kong is not the natural or appropriate forum and that the other available forum is clearly or distinctly more appropriate than Hong Kong for the trial of the issues in the action; and

iv.  Even where this is established, the Court will not grant a stay if the party seeking to continue the Hong Kong proceedings can show that he will suffer some juridical disadvantage in the other jurisdiction, and on the balance that substantial justice will not be done in the other forum.

28. In assessing where the natural and appropriate forum the court will assess the connecting factors, which include not only those affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction and the places where the parties respectively reside at the time of the anticipated trial or carry on business:

Does the wife have a substantial connection with Hong Kong?

11.  In summary Mr Clough for the wife points out as surely as “night follows day” that the wife must have a substantial connection with Hong Kong by virtue of her permanent residency status.  He added

the wife points to the following: the place of celebration of the marriage was Hong Kong where the marriage was registered in accordance with the provisions of the Marriage Ordinance.  The wife was and is employed in Hong Kong by a club.  She was previously provided with accommodation in Hong Kong by her employers.  She continues to be employed in Hong Kong by the club.  She resides in Hong Kong together with the child of the family.

12.  The husband has sought to undermine the wife’s case on permanent residency by arguing that there is no evidence that she has actually resided in Hong Kong for the requisite 7 years period necessary for her to obtain that status. With respect I do not think it is for this court to look behind the basis of the wife’s permanent residency status. It is clear from her Hong Kong ID card that she first obtained an ID card in 1995 and that at some point thereafter, presumably after she had reached the age of 18 years that she satisfied the necessary requirements and was granted a Hong Kong permanent ID card. Likewise the husband holds a Hong Kong permanent ID card as does his mother. Infact the husband’s mother does not appear to have rights of residency in the PRC. In any event I accept that these parties hold valid Hong Kong ID cards and that in the absence of any evidence to the contrary I also accept that these were obtained legally and according to the Immigration rules and regulations that prevailed at the time. Ms Yip has attempted to argue that at best this is a “neutral factor”. With respect I do not agree.         

13.  I also accept that the fact that the wife works for the club also support her case on substantial connection.

14.  The husband has sought to undermine this by pointing out that although the wife has worked for the club since 2007 and is employed according to a Hong Kong contract of employment, that in reality she has been based in Beijing. The wife does not seek to seriously refute this. She accepts that she was required by her Hong Kong employer to work in Beijing and other mainland cities. In particular she was involved in organizing the equestrian events in the Beijing Olympics in 2008 and similarly for the Asian Games in 2010.

15.  The husband has also relied on the wife’s travel documents. He says that these prove that the wife has not spent very much time in Hong Kong of late. According to his analysis she spent 146 days in Hong Kong in 2007, 75 days in 2008, 38 days in 2009 and 115 days in 2010. Therefore the husband argues that at the time that the wife issued her petition on the 31 December 2010 that she did not have a substantial connection with the territory because, simply put, she had not spent enough time here in the run up to issuing the petition.

16.  Although there is some force in this argument, it seems to me that the circumstances in which the wife found herself also probably had some bearing on this pattern. In 2007 she was working for the club and seems on the face of it to have been dividing her time between Hong Kong and the mainland. In 2008 and for most of 2009 she seems to have spent more time on the mainland, presumably at the bequest of her Hong Kong employer. In September 2009 she met the husband. They married in December 2009 in Hong Kong and also celebrated their marriage in Beijing. The wife became pregnant shortly thereafter. Although this is a matter of some dispute between the parties it seems that they stayed both in Hong Kong and Beijing during their very short marriage. I accept that it was intended that a baby’s room would be prepared for their son at the Fontana Gardens property.  Their son was born in Hong Kong in August 2010. The parties separated shortly after the son’s birth. I think it is hardly surprising that in a situation like that that the wife should choose in the first instance to return to Beijing so that she could benefit from the support of her maiden family.

17.  I do not think that this state of affairs means that the wife did not have a substantial connection with Hong Kong. Ms Yip says that “it was a very lame kind of connection”. I do not agree. Mr Clough argues that

… the fact that someone intends, whether temporarily or permanently, to reside outside Hong Kong does not in any way negative a substantial connection with Hong Kong. Many, many, cases are brought within this jurisdiction where the ground for jurisdiction or what gives the court jurisdiction is what is described as substantial connections.  Sometimes cases are brought by people who reside in Macau and intend to continue to reside outside Hong Kong but have a substantial connection with Hong Kong.

Your Honour many cases were brought in the past by those who were, “unlawfully” in Hong Kong whose whole aim was to relocate elsewhere, namely Vietnamese refugees.  Your Honour they came to Hong Kong, they came as unauthorised entrants within the terms of the Immigration Ordinance.  They were here under detention, sometimes their chances of relocation to Australia, the US or wherever, which was their aim in coming to Hong Kong in the first place, depended on this court exercising its divorce jurisdiction to enable them to be divorced because for one reason or another the other – normally the husband – but the spouse was ineligible for relocation very often because of criminal convictions.

If my learned friend’s submissions were right this court was wrong in all those cases in exercising any jurisdiction at all because the intention was to relocate elsewhere.  Your Honour it’s simply not the case.  Of course my friend is right when she says – because they’re not her words that she says, they’re the words of the Ordinance – the question of substantial connection is a connection at the time of the presentation of the petition.  It’s emphasised at her paragraph 5, “The only basis on which she assets the Hong Kong Court has jurisdiction is substantial connection.” Well, your Honour, yes but your Honour that is the basis of jurisdiction that the legislature has given and the suggestion that somehow your case is better if there’s more than one jurisdictional basis makes no sense at all.

18.  With respect it seems to me that this must be the case. Further just because a person has a substantial connection in one jurisdiction, it does not necessarily follow that they cannot have a substantial connection elsewhere. We live in an increasingly international and mobile age. The wife has spent significant periods of time in Beijing and on the Mainland. She also the right to live and work in Hong Kong and has spent time here also. She intends to do so going forward. Consequently it seems to me that she must be said to have a substantial connection with Hong Kong. That does not mean that she doesn’t also have a substantial connection with Beijing. That may also be the case.

19.  As Hartmann J said in S v S,

“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.”

20.  It seems to me that in the circumstances of this case and on a broad and objective assessment there can be no doubt that the wife does have a substantial connection with Hong Kong.

Is Hong Kong or the Hai Dian People’s court the forum conveniens for this matter?

Introduction

21.  As at the date of the maintenance pending suit application the husband had issued proceedings in the Hai Dian People’s court following the dismissal of his original proceedings in the Chao Yang Court. The husband appealed against the original decision and this was also dismissed. On the 19 July 2011 the Hai Dian People’s court also decided not to accept the husband’s claim for divorce. The husband appealed to the Beijing 1^st Intermediate Court. On the 1 December 2011 that appeal was also dismissed. On the 23 December 2011, shortly before the adjourned hearing, the husband lodged a further appeal in the Beijing Supreme People’s Court. This appeal is pending. He wishes the Hai Dian People’s Court to accept jurisdiction and to determine the issue of the divorce.         

Is there another available forum?

22.  In essence Mr Clough argues that the husband’s case does not get off the ground as there are no competing proceedings. He says that the husband has tried and failed to issue proceedings on the mainland. Therefore it is not possible for him to argue that there is another available forum that is clearly or distinctly more favourable than Hong Kong to determine this matter.

23.  Ms Yip has argued vehemently against this proposition. She refers to a number of cases in support of her stance that this is not necessarily fatal to her client’s case on forum. With respect I do not agree. Most of the cases that have been cited can be distinguished and relate to a very different set of circumstances to those presently before the court.          

24.  For example in D V P (forum conveniens) [1998] 2 FLR 25 it was held that:

although there were no Italian proceedings underway at present, Italy was the appropriate forum for this case.  Neither party now lived or worked in England and the only connection with the jurisdiction was that the husband’s bank account was currently in England.  The divorce proceedings and the proceedings for financial relief were not inextricably linked.

25.  In D v P it was clear that neither party presently lived or worked in England. In this case the wife is presently living and working in Hong Kong. The parties’ son is also attending play group here. I accept that this was not the case when the petition was issued and that there were valid reasons for that.  Further it could be said that both parties have a connection with both Hong Kong and Beijing. On occasion it is not possible for proceedings to be issued in a timely manner in the jurisdiction which is infact the most appropriate forum. For example there may be a time bar or a residency requirement as was the case in SMM v TWM, JR (unreported) FCMC No 11230 of 2008.

26.  Similarly in W v W (financial relief: appropriate forum) [1997] 1 FLR 257 it was also held as follows:

(1)  The question of whether the court in Alberta had jurisdiction to determine the proceedings brought in that court by the wife was a question for that court alone …

(3)  The burden rested on the wife to show that there was another available forum which was clearly or distinctly more appropriate than the English forum.  On discharging that burden, the court would ordinarily grant a stay unless the circumstances of the case required otherwise.  In the present case, Alberta was plainly the more natural forum.  The parties’ entire background and upbringing was in Canada, and the majority of their lives had been spent there.  Whilst the husband still lived in England, the wife had returned to Alberta.  The parties had not bought a home in England and the majority of their assets were in Alberta.  On the face of it, therefore, this would be an appropriate case in which to order that the English proceedings be stayed.

27.  I agree that it can only be a matter for the courts on the mainland to determine whether or not they have jurisdiction to determine this matter. That can only be a matter for them. The fact however that to date, despite the husband’s best efforts, there are no competing proceedings is certainly a matter that I can take into account when determining whether or not the Hai Dian People’s Court is clearly or distinctly the more appropriate court to determine this matter as compared to Hong Kong.

28.  It has been suggested that what the husband is really asking me to do is to accept his case regarding the appeal. With respect it is not possible for me to do this.

29.  The burden rests on the husband to show that the Hai Dian People’s court is the more appropriate jurisdiction. I do not accept that he has been able to do this for all of the reasons that have been set out above. Consequently there can be no basis for his application to stay the proceedings.     

In the event that Hong Kong is the more appropriate forum should the husband be restrained from filing any other divorce proceedings in any other district of Beijing or elsewhere in the PRC?

30.  Ms Yip makes the point that by appealing in the Beijing Supreme People’s Court the husband is not filing any other divorce proceedings. He is simply attempting to proceed with the original proceedings filed in the Hai Dian People’s Court. Although I understand the point I am concerned that notwithstanding this judgment that the husband will continue in his attempts to have the matter dealt with in Beijing by every means possible. Consequently I will make an order in terms of paragraphs 1 and 2 of the wife’s summons dated the 11 May 2011.

Costs   

31.  I asked both parties to provide me with an estimate of costs to date. I have been staggered by them. The wife’s estimate dated the 19 January 2012 stands at just over HK$1 million. The husband’s estimate is just over double that at HK$2,190,000. Given that both parties want a divorce this seems an extraordinary high figure. That be as it may, given the fact that the wife could be said to have “won” this application I will make an order that the husband do pay the wife’s costs on a party and party basis to be taxed if not agreed. There shall be certificate for all counsel involved.