ZJW v. SY

CACV 10/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 10 OF 2017

(ON APPEAL FROM FCMC NO 7824 OF 2015)

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J U D G M E N T

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Hon Poon JA (giving the Judgment of the Court) :

1.  On 22 June 2015, the Wife presented a petition for divorce on the ground of unreasonable behaviour. She also sought ancillary relief.

2.  By a judgment dated 21 September 2016, HH Judge Bruno Chan (“the Judge”), upon the Husband’s application, dismissed the Wife’s petition on the ground of lack of jurisdiction, having found that the Husband had no substantial connection with Hong Kong at the time of the presentation of the petition under section 3(c) of the Matrimonial Causes Ordinance, Cap 179 (“MCO”).

3.  Pursuant to the leave granted by the Judge on 11 January 2017, the Wife appealed to this Court. After hearing the parties on 27 July 2017, we reserved judgment, which we now hand down.

A.   Background

4.  The background facts may be summarized as follows.

5.  The Husband is in his mid-50s; the Wife, late 40s.  They were both born, raised and educated in the Mainland.  They were married on 14 December 1992 in Gu Lou District, Fuzhou City, Fujian Province.  Thereafter, they made their home in Shenzhen where the Husband ran various companies and the Wife became a full-time housewife.  In 2001, the Husband purchased a property at Luohu District, Shenzhen which had since become their matrimonial home.

6.  In 1995 the Wife gave birth to their only son in Shenzhen.  He was raised and educated in Shenzhen. In September 2013, he attended a university in Shanghai.  Later in December 2014, he went to the US to attend Rensselaer Polytechnic Institute and had since remained as a student there.

7.  On 1 January 2009, the Husband was appointed an executive director of a company known as CGFGRG Limited, listed on the Hong Kong Stock Exchange.  In the same year, he obtained a working permit from the Hong Kong Immigration Department under the Admission Scheme for Mainland Talents and Professionals.  Hong Kong Identity Cards were issued to him as well as the Wife and their son as his dependants.  On 30 September 2009, the Husband resigned from CGFGRG Limited.  Thereafter, he had been involved in several other companies in Hong Kong.

8.  On 12 May 2014, the Husband commenced HCA 813/2014 in the High Court of Hong Kong (the “High Court Action”), claiming against a company and the Wife’s younger brother for relief including a declaration that they hold the assets in certain accounts on trust for him, and for an order that they pay, deliver and transfer such assets to him, and an injunction restraining them from disposing of or otherwise dealing with such assets pending the outcome of the action.  On the day after the Husband instituted the High Court Action, the Wife moved out of the matrimonial home to another flat in Shenzhen and has since lived apart from the Husband.

9.  In October 2014, the Husband rented a serviced apartment at the Convention Plaza in Wanchai, Hong Kong under a 2-year lease where he would reside whenever he stayed over in Hong Kong.

10.  On 22 June 2015, the Wife issued the petition for divorce in the proceedings below against the Husband based on his unreasonable behaviour.  In the petition, the Wife alleged the Husband had a substantial connection with Hong Kong at the time of the presentation of the petition under Section 3(c) of MCO, thus conferring jurisdiction on the Hong Kong Court in the divorce proceedings.

11.  The Husband disputed that he had a substantial connection with Hong Kong as the Wife alleged.  On 20 August 2015, he took out the application for dismissal of the petition for lack of jurisdiction on that ground or, failing which, for a stay of the divorce proceedings on the ground of forum non conveniens in that the Shenzhen Court is the more suitable forum than the Hong Kong Court for these proceedings.

B.   The Judgment BeloW

12.  Before the Judge, the Wife relied on the following matters in support of her case that the Husband had a substantial connection with Hong Kong at the time of the presentation of the divorce petition :

(1)   In 2009 the Husband obtained a working permit from the Hong Kong Immigration Department under the Admission Scheme for Mainland Talents and professionals.  Hong Kong Identity Cards were then issued to all three family members.  Since then the Husband had obtained the right of abode in Hong Kong and had been living in Hong Kong.

(2)   The Husband had worked for several listed companies in Hong Kong as executive director between 2009 and 2014.

(3)   The Husband was currently working for BP Limited which is a subsidiary of a listed company in Hong Kong, with his residential address close to the Hong Kong office of BP Limited.

(4)   The Husband held Hong Kong bank accounts.

(5)   The Husband’s residential address in Hong Kong was at his rented serviced apartment at Convention Plaza.

(6)   The Husband had over the past years come and lived in Hong Kong for more than 30 days per year on average.

(7)   The Husband was the plaintiff in the High Court Action involving disputes over assets worth HK$337 million, and he also had substantial assets in Hong Kong.

13.  The Husband did not dispute having a connection with Hong Kong.  However, he argued that it was not sufficiently substantial at the time of the issue of the petition for, among others, the following reasons :

(1)   All three members of the family were domiciled and habitually resident in Shenzhen.

(2)   His companies and businesses were all based in Shenzhen and while he had been involved in some investment consultancy employments in Hong Kong, he would perform his duty mostly in the Mainland. His trips to Hong Kong were mainly for business meetings and were mostly same-day visits.

(3)   His application under the Admission for Mainland Talents and Professionals was for convenience only, to facilitate his travel to Hong Kong and he had no plan to live in Hong Kong.

(4)   Renting the serviced apartment in Convention Plaza just as a temporary arrangement to save on his accommodation costs while visiting Hong Kong for dealing with the High Court Action and for his business meetings and was by no means with an intention to set up a permanent home in Hong Kong.

14.  After carefully analysing and evaluating the evidence, the Judge found that :

(1)   The Husband had never resided with his family in Hong Kong;[1]

(2)   The Husband’s own limited time spent in Hong Kong had essentially been for business meetings and the High Court Action, with the latter to be suitably regarded as a short-term and purpose-driven project which can be overseen from time to time only;[2]

(3)   The Husband had spent insignificant amounts of time coming to Hong Kong for almost 5 years before deciding to rent a small serviced apartment in Wanchai instead of luxurious accommodation in an expensive neighbourhood, as most people in his means and position would no doubt do.  During the 5-year period, about half of which times he would leave on the same day; for the rest of the time he would stay over in hotels.  None of these suggested any real intention on the part of the Husband to establish a substantial connection with Hong Kong;[3]

(4)   The Husband’s employments in Hong Kong were mostly of consultancy basis rather than substantial posts or positions, and as he had alleged (and supported by some of the employment documents) they could be carried out mainly on the Mainland and by just attending occasional meetings in Hong Kong;[4]

(5)   As for the Husband’s investments in Hong Kong, whilst there was no question that they were very substantial (they were essentially cash and equities and land properties were conspicuously absent), the fact that the Husband chose to hold them through a nominee and/or trustee and to deal with them mostly by telephone from his home in Shenzhen did not go to support the Wife’s case of a desire or intention on his part to establish any substantial connection with Hong Kong.[5] The Judge refused to accept that a person who has not come to “live” in Hong Kong in the ordinary sense and meaning of that word, but has instead held substantial investments in Hong Kong through a nominee, by that fact alone, is capable of establishing a substantial connection with Hong Kong.[6]

15.  For the reasons that he gave, the Judge disagreed that at the time of the issue of the petition the Husband was residing in Hong Kong or that he had any real intention to do so.  He further held that while he did have a connection with Hong Kong through his employments and investments here, it was not of sufficient substance to properly form a basis for “determining the law governing the dissolution of his marriage to the Wife and the matters that flowed from it”.  He therefore ruled that the Wife had not been able to demonstrate that the Husband had the requisite substantial connection to invoke the court’s jurisdiction.[7]

16.  For completeness, the Judge did not allow the stay application sought by the Husband as he found that grave injustice would be caused to the Wife if she were to be deprived of the juridical advantage had the Judge been able to find jurisdiction for a Hong Kong Court to deal with their divorce.[8]

C.   Overview of the parties’ stance

C1.   The Wife’s principal arguments

17.  In the notice of appeal dated 18 January 2017, the Wife advanced a total of 12 grounds of appeal :

(1)   The Judge erred in law in applying section 3(c) of the MCO.  The Judge approached and considered the evidence as if some specific intention either “to make Hong Kong his home”; “to establish substantial connection with Hong Kong”; or “to reside in Hong Kong” was required to be established before a party could be found to have a substantial connection with Hong Kong.

(2)   Further or alternatively, the Judge erred in holding that there was no intention on the part of the Husband to reside in Hong Kong.

(3)   In considering whether the Husband had a substantial connection with Hong Kong, the Judge erred in law in failing to focus, as required by section 3(c) MCO, on the Husband’s position (i.e. whether he had a substantial connection with Hong Kong) as at the date of the petition, instead of the previous 6 years before the date of the petition.

(4)   Having correctly held at [17] that in order to satisfy section 3(c) MCO, ‘it was sufficient to demonstrate “a” substantial connection with Hong Kong but not necessarily the only substantial connection or the most substantial connection’, the Judge erred in law in comparing the connections between Hong Kong and Shenzhen to determine if the connection with Hong Kong was more substantial or most substantial in order to determine if section 3(c) MCO was satisfied.

(5)   The Judge should in any event have held that the Husband had a very well-established career and business in Hong Kong at the date of the petition, and held very substantial properties in Hong Kong which point to his having a substantial connection with Hong Kong as at that date.

(6)   The Judge erred in holding that the Husband’s connections with Hong Kong were “purpose-driven”.  In any event, he erred in law in holding that “purpose-driven” connections were incapable of constituting a substantial connection with Hong Kong.

(7)   The Judge failed to give proper weight to or to appreciate the significance of the very substantial period of time spent by the Husband in Hong Kong as “at the date of the petition”.[9]

(8)   Having correctly found that the assets of the Husband in Hong Kong were very substantial, the Judge failed to give sufficient weight to this factor, and wrongfully discounted the same on the basis that there was no landed property in Hong Kong.

(9)   The Judge erred in law in holding that the fact that some assets of the Husband were held through trust arrangements carried with it the implication that the Husband did not intend to reside in Hong Kong and would militate against a substantial connection with Hong Kong.

(10)   The Judge erred in finding that the Husband’s career in the Mainland was much more well-established and substantial than in Hong Kong.  The Judge should have held that the Husband’s career and employment connections were substantial in Hong Kong.

(11)   The Judge erred in ignoring or attaching insufficient weight to the undisputed fact that the Husband has integrated into Hong Kong society and has established his own personal social circle in Hong Kong.

(12)   Overall, the Judge erred in finding that the Husband did not have a substantial connection with Hong Kong at the time of the petition, despite ample evidence to the contrary.

18.  Mr Horace Wong, SC (together with Mr Clark Wang), grouped the grounds of appeal under three major complaints, namely :

(1)   The Judge had wrongly introduced a non-existent mental element, namely, the Husband’s intention, to the test of substantial connection (Complaint (1) – GOAs 1, 2, 7(c)).

(2)   The Judge had failed to properly apply the statutory test provided in section 3(c) of the MCO, namely by focusing on the Husband’s position as at the date of the petition; instead the Judge wrongly placed excessive weight on matters of background and the historical position relating to many years before the presentation of the petition (Complaint (2) – GOAs 3, 7 and 10).

(3)   The Judge had committed various errors in his approach to various aspects of the evidence, thereby failing to conclude on the evidence that the Husband had a substantial connection with Hong Kong at the time of the presentation of the petition (Complaint (3) – remaining GOAs).

19.  Complaints (1) and (2) concern the approach that the Judge had adopted in his determination under section 3(c) of the MCO.  Complaints (3) concerns the Judge’s assessment of the evidence and findings of fact.  In this regard, Mr Wong submitted that the Judge’s assessment of the evidence is based solely on paper and there is no question of his enjoying any special advantage of having received live evidence at first hand.  Thus he argued that the Court of Appeal is in as good a position to assess the evidence as the Judge and should not be deterred from forming an independent opinion about the proper inference of fact if we take the view that Judge was wrong.  He cited, among others, Beacon Insurance Company Limited v Maharaj Bookstore Limited [2014] UKPC 21, Pang Ketian Sally v Tam Yuk Hung Annie, CACV 147/2013, unreported, 25 April 2014, DBS Bank (Hong Kong) Limited v Sit Pan Jit, CACV 91/2015, unreported, 10 June 2016.

C2.   The Husband’s principal arguments

20.  Mr Benjamin Yu, SC (together with Ms Anita Yip, SC and Ms Lily Yu) anchored his arguments on the well-established proposition that whether a party to a marriage has a substantial connection with Hong Kong at the time of the petition is a question of fact.  The factors to be taken into consideration and the weight to be given to each relevant factor would vary according to the particular circumstances of each case.  This is a matter for the Judge at first instance.  Such a case may be closely analogous to the exercise of a discretion and the Court of Appeal ought not to interfere unless it is satisfied that the Judge’s conclusion lay outside the bounds within which reasonable disagreement is possible.  In support, Mr Yu cited, among others, LCYP v JEK (Children: Habitual Residence) [2015] 4 HKLRD 798; Assicurazioni Generali SpA v Arab Insurance Group (BSC) [2003] 1 WLR 577; citing Henwood v Barlow Clowes International Ltd (in liquidation) [2008] EWCA Civ 577; RI v SSH [2010] 4 HKC 488; Piglowska v Piglowski [1999] 1 WLR 1360; China Gold Finance Ltd v CIL Holdings Ltd, CACV 11/2015, unreported, 27 November 2015.

21.  Mr Yu then submitted that the Judge had adopted the proper approach under section 3(c) of the MCO as laid down by authorities.  By taking into account the Husband’s intention as one of the relevant circumstances, the Judge had not introduced any non-existent mental element as contended by the wife.  He argued that the Wife’s argument in this respect confuses “requirement” with “relevance”.

22.  As to the Wife’s argument that the Judge erred in placing too much weight on the past pattern of life of the parties, Mr Yu submitted that weight is a matter for the Judge. Unless he is plainly wrong, we should not interfere.

23.  As to other alleged errors on the part of the Judge, Mr Yu submitted that they involved factual findings.  Since the Judge made those findings after a careful and full analysis of the evidence, the Wife has failed to demonstrate any basis for us to interfere.

D.   Appellate approach to reviewing findings of fact in a section 3(c) determination

24.  In our view, it is convenient to first state the proper approach to be adopted by the Court of Appeal on appeals against findings of fact made in the context of a determination under section 3(c) of the MCO.

D1.   General approach

25.  Under Order 59, rule 3, Rules of the High Court,[10] an appeal to the Court of Appeal shall be by way of rehearing.  Although the rule expressly refers to a “rehearing”, the exercise which the Court of Appeal undertakes is essentially one of review.  The same applies to appeals on findings of fact : see Assicurazioni Generali SpA v Arab Insurance Group (BSC), supra, per Clarke LJ at [13].

26.  The general approach adopted by the Court of Appeal for reviewing findings of fact on appeal has been visited time and again over the years.  For more recent English authorities, see Assicurazioni Generali SpA v Arab Insurance Group (BSC), supra; Datec Electronic Holdings Ltd v UPS Ltd [2007] 1 WLR 1325; In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] 1 WLR 1911; and Beacon Insurance Company Limited v Maharaj Bookstore Limited, supra.  For more recent Hong Kong authorities, see Ting Kwok Keung v Tam Dick Yuen & Others (2002) 5 HKCFAR 336; China Gold Finance Ltd v CIL Holdings Ltd, supra, Pang Ketian Sally v Tam Yuk Hung Annie, CACV 147/2013, supra; and DBS Bank (Hong Kong) Limited v Sit Pan Jit, CACV 91/2015, supra.  The general approach is well settled and may be restated briefly as follows.

27.  Where the judgment on appeal turns on an issue of fact, as is the question if a party had a substantial connection with Hong Kong under section 3(c) of the MCO, the Court of Appeal must have regard to the nature of that issue of fact : Ting Kwok Keung v Tam Dick Yuen & Others , supra, per Bokhary PJ at [42].  For the purpose of considering appeals against findings of fact, findings of fact may be categorised as (1) findings of primary fact; (2) findings based on evaluation of facts; and (3) findings based on inferences.

D1.1  Findings of primary fact

28.  Where the finding is of primary facts, the occasions where the Court of Appeal interferes would be rare.  It has often been said that the Court of Appeal must be satisfied that the trial judge has gone “plainly wrong” in his findings of fact : Ting Kwok Keung, ibid.  In Beacon Insurance Company Limited v Maharaj Bookstore Limited, supra, Lord Hodge at [12] explained the plainly wrong test thus :

“ This phrase does not address the degree of certainty of the appellate judges that they would have reached a different conclusion on the facts…Rather it directs the appellate court to consider whether it was permissible for the judge at first instance to make the findings of fact which he did in the face of the evidence as a whole. That is a judgment that the appellate court has to make in the knowledge that it has only the printed record of the evidence. The court is required to identify a mistake in the judge’s evaluation of the evidence that is sufficiently material to undermine his conclusions.”

29.  Under the “plainly wrong” test, the Court of Appeal must be satisfied that the first instance judge had fallen into palpable error in his findings of primary fact under appeal : China Gold Finance Ltd v CIL Holdings Ltd, supra, per Lam VP at [15] and [16].  Such palpable errors which would warrant the Court’s interference are described by Lord Neuberger in In re B (A Child) (Care Proceedings: Threshold Criteria), supra, at [53] in these terms :

“ … such as where that conclusion was one (i) which there was no evidence to support, (ii) which was based on a misunderstanding of the evidence, or (iii) which no reasonable judge could have reached…”

30.  There are different bases upon which a first instance judge made findings of primary fact as he did.  It is well put by Clarke LJ in Assicurazioni Generali SpA v Arab Insurance Group (BSC), supra, thus :

“ [14] …In some cases the trial judge will have reached conclusions of primary fact based almost entirely upon the view which he formed of the oral evidence of the witnesses. In most cases, however, the position is more complex. In many such cases the judge will have reached his conclusions of primary fact as a result partly of the view he formed of the oral evidence and partly from an analysis of the documents. In other such cases, the judge will have made findings of primary fact based entirely or almost entirely on the documents. Some findings of primary fact will be the result of direct evidence, whereas others will depend upon inference from direct evidence of such facts.”

31.  The different bases upon which the first instance judge made the findings of primary fact give him different advantages over the Court of Appeal in terms of fact-finding.  And it is such advantages which determine the appellate approach to reviewing the findings on appeal.  As Clarke LJ in Assicurazioni Generali SpA v Arab Insurance Group (BSC), supra, went on to explain :

“ [15] In appeals against conclusions of primary fact the approach of an appellate court will depend upon the weight to be attached to the findings of the judge and that weight will depend upon the extent to which, as the trial judge, the judge has an advantage over the appellate court; the greater that advantage the more reluctant the appellate court should interfere. As I see it, that was the approach of the Court of Appeal on a “rehearing” under the Rules of the Supreme Court…”

In a similar vein, Lord Bridge in Whitehouse v Jordan [1981] 1 WLR 246, at pp 269-270 observed :[11]

“ [T]he importance of the part played by those advantages in assisting the judge to any particular conclusion of fact varies through a wide spectrum from, at one end, a straight conflict of primary fact between witnesses, where credibility is crucial and the appellate court can hardly ever interfere, to, at the other end, an inference from undisputed primary facts, where the appellate court is in just as good a position as the trial judge to make the decision.”

See also In re B (A Child) (Care Proceedings: Threshold Criteria), per Lord Neuberger, ibid. 

32.  Recognising that the advantages the trial judge has over the Court of Appeal (and hence the degree of reluctance with which the latter would interfere with his findings) may vary from case to case, generally speaking :

(1)   In cases where oral evidence is determinative of the case, the trial judge makes the findings based on assessment of demeanour, credibility and reliability after seeing and hearing the witnesses.  The advantages that he has in terms of seeing and hearing the witnesses are not available to the appellate court.  That being the case, the Court of Appeal will be extremely slow to disturb the findings, which can be said to be “virtually unassailable” : Benmax v Austin Motor Co Ltd [1955] AC 370; Biogen Inc v Medeva plc [1997] RPC 1, per Lord Hoffmann at p 45; quoted in Assicurazioni Generali SpA v Arab Insurance Group (BSC), supra, at [19]; Beacon Insurance Company Limited v Maharaj Bookstore Limited, supra, at [17].  This applies to cases where only oral evidence is involved or where although both oral and documentary evidence is involved, the oral evidence plays a more significant part in determining the issue. 

(2)   In cases where the trial judge makes the findings entirely or almost entirely on undisputed documents, no question of credibility of witnesses is involved.  The Court of Appeal has the same advantages as the judge did in terms of analysing the documents in its context.  In this respect, the Court of Appeal would be in the same position as the judge.  However, it does not mean that on an appeal against such findings, the Court of Appeal would embark on a de novo exercise of fact-finding on its own : cf Biogen Inc v Medeva plc [1997] RPC 1, per Lord Hoffmann at p 45; quoted in Assicurazioni Generali SpA v Arab Insurance Group (BSC), supra, at [19].  The appellant still needs to show that the judge’s finding is plainly wrong : cf Pang Ketian Sally v Tam Yuk Hung Annie, CACV 147/2013, supra, per Cheung CJHC at [29] – [30].

D1.2  Findings based on evaluation of facts

33.  In Assicurazioni Generali SpA v Arab Insurance Group (BSC), supra, Clarke LJ explained what findings based on evaluation of facts mean and what the corresponding appellate approach to appeals against such findings is, as follows :[12]

“ [16] Some conclusions of fact are, however, not conclusions of primary fact of the kind to which I have just referred. They involve an assessment of a number of different factors which have to be weighed against each other. This is sometimes called an evaluation of the facts and is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and, in my opinion, appellate courts should approach them in a similar way.”

D1.3  Inferences

34.  Facts are commonly found on inferences.  An inference can be made from primary facts or after a process of evaluation : Bessant’s case [2002] EWCA Civ 763, per Walker LJ at [24]. If the former, the Court of Appeal approaches them in the same way as discussed in Part D1.1 : Beacon Insurance Company Limited v Maharaj Bookstore Limited, supra, Lord Hodge at [17]; China Gold Finance Ltd v CIL Holdings Ltd, supra, per Lam VP at [22]; DBS Bank (Hong Kong) Limited v Sit Pan Jit, supra, per Poon JA at [111] – [117].  If the latter, the Court of Appeal adopts the same approach as per Part D1.2 above.

D2.   Specific approach

35.  We next turn to the specific approach to be adopted by the Court of Appeal in reviewing findings of fact made in the context of a determination under section 3(c) of the MCO. That approach is, in our view, to be informed by how the court makes a determination on substantial connection under section 3(c).

D2.1  Determining “substantial connection”

36.  How to determine a “substantial connection” in the context of section 3(c) is a well-trodden area, as the case law demonstrates.  The Judge in his judgment at [15] – [26] referred to a line of cases from Jean Michel Savournin v Lau Yat Fung [1971] HKLR 180, S v S [2006] 3 HKLRD 751; B v A [2008] 1 HKLRD 43 and culminating in ZC v CN (Divorce: jurisdiction) [2014] 5 HKLRD 43.  Based on the well-established principles derived from the authorities, the proper approach to determine if a substantial connection is established for the purpose of section 3(c) on the facts of a particular case may be stated as follows.

37.  First, whether a party to a marriage had a substantial connection with Hong Kong at the time of the presentation of the petition is a question of fact.  Like any other question of fact, the court must have regard to all the circumstances of the case to determine if that party had the requisite substantial connection.

38.  Second, a two-stage process is usually adopted :

(1)   If the person concerned has a connection with Hong Kong;

(2)   If yes, is the connection a substantial one.

39.  For (1), connection must mean physical presence in Hong Kong.  For (2), substantiality means that the connection cannot be of a transitory nature.  It must be of sufficient significance or worth to justify the courts of Hong Kong assuming jurisdiction in respect of matters going to and consequential upon the dissolution of the parties’ marriage.  The court will identify all the factors relevant to substantial connection or the lack of it, evaluate them and give them such weight as is appropriate in the overall circumstances of the case.

40.  Third, what are the relevant factors and how much weight is to be given to each of them depend on the actual circumstances of the case.  Since it is a fact-sensitive exercise, there can be no comprehensive list exhausting all the relevant factors to be taken into account.  Nor can there be any mechanistic formula directing how much weight is to be attached to a particular relevant factor.  As Kwan JA recently observed in LCYP v JEK, supra, at [40], citing S v S [2006] 3 HKLRD 751, [18] :

“ …whether a party to a marriage would have a substantial connection with Hong Kong is a question of fact, so the factors to be taken into consideration and the weight to be given to each relevant factor would vary according to the particular circumstance of each case.”

41.  Without attempting an exhaustive list, this Court (differently constituted) held in RI v SSH [2010] 4 HKC 488 at [4] :[13]

“ [4] …Hence in order to see whether the proceeding has a real and substantial connection to Hong Kong, one must, first of all, ascertain whether at the time of its commencement the parties have substantially conducted their matrimonial life in Hong Kong. Hong Kong being an international commercial city, the identification of this issue is most acute for expatriate families who live in Hong Kong. The relevant considerations are, for example, whether the parties’ matrimonial home is here, what is their past pattern of life; do they regard Hong Kong as their home for the time being even if their life style may indicate that they may not take root in one place for too long a time. Related to the issue are matters such as the place of work of the spouses : do they choose to work here; even if one of them has to ‘commute’ overseas to work, is Hong Kong still treated as their home base. Likewise for the children of the family : are they studying here or spending their vacations here even if they are studying abroad.”

42.  In cases where a substantial connection is alleged to have been established by the fact that a party has resident status in Hong Kong, or his/her travelling to or stays in Hong Kong, Cheung JA in ZC v CN, supra, at [9.8], observed :

“ The fact that a party has resident status which allows him or her to live here legally is only a factor to be taken into account. He or she may not be living here on a long term basis and only comes here occasionally. No doubt one has to look at other factors such as the party’s past pattern of life, the frequency of his visit to Hong Kong, the length and purpose of the stay, whether the party is engaged in business or work here, whether the rest of the family is here and whether a home has been established here and whether the children are at school here. It is also important to bear in mind that since the legislation only requires the party to establish a substantial connection in Hong Kong, he or she at the same time may have a substantial connection elsewhere, see S v S. In my view, if a party is shown to have substantial connection elsewhere by reason of his home or work, this may be used to contrast with the connecting factors he has in Hong Kong to see whether the Hong Kong connection is a substantial one.”

43.  Fourth, after carefully evaluating and weighing all the relevant factors in the overall circumstances of the case, the court will find as a matter of fact if the party had a substantial connection with Hong Kong at the time of the presentation of the petition under section 3(c).

D2.2  Findings of primary facts and evaluation of facts

44.  On a closer analysis, there are two different kinds of fact-findings involved in a section 3(c) determination.

(1)   The first kind is findings of primary fact. They concern resolutions of factual disputes on (a) the existence or otherwise of factors alleged to be relevant; and (b) matters, events or circumstances that form the objective basis for the evaluation and weighing exercise of the relevant factors found to be in existence.  Since evidence in a section 3(c) application is usually adduced by way of affidavits, the court will resolve such factual disputes by employing the usual technique of assessing the conflicting versions appearing in the affidavits by reference to the undisputed or indisputable factual matrix; contemporary documentation, if available; internal inconsistencies, if any; inherent probabilities or improbabilities; and other corroborative or countering evidence, if any.  On the rare occasions where the disputes cannot be resolved on affidavit, the court may need to direct cross-examination of the deponents and then make the necessary findings with the additional benefits of seeing and hearing the live evidence unfold before him.  In reviewing these findings of primary fact, the Court of Appeal adopts the approach as discussed in Part D1.1 above.

(2)   The second kind is findings based on evaluation of facts.  They concern the evaluation and weighing of all the relevant factors as found by the judge to have been in existence on the evidence.  In reviewing these findings based on evaluation, the Court of Appeal adopts the approach as discussed in Part D1.2 above : LCYP v JEK (Children: Habitual Residence), supra, per Kwan JA at [19].

45.  Having stated the correct approach to reviewing the findings of fact made in a section 3(c) determination, we for completeness reject any submissions by counsel to the contrary.  We now turn to Complaint 1.

E.   Complaint 1 – GOas 1, 2 & 7(c)

46.  This Complaint can be disposed of shortly.

47.  Section 3(c) of the MCO provides that the court shall have jurisdiction in proceedings for divorce under the MCO if either of the parties to the marriage had a substantial connection with Hong Kong at the date of the petition.  Without dwelling on his legal submissions, Mr Wong is entirely correct that as a matter of law there is no requirement of any intention to reside in Hong Kong to establish one’s substantial connection here within the meaning of section 3(c).

48.  However, contrary to Mr Wong’s contention, the Judge did not take the Husband’s intention to reside in Hong Kong as a requirement as such.  He merely approached it as a relevant factor if established.  And it was said to be relevant because of the Wife’s case that the Husband had the intention of taking up permanent residence in Hong Kong.[14]

49.  Mr Wong next submitted that even if a party has no intention to reside in Hong Kong subjectively, he can still have a substantial connection here objectively.  So even if the Judge was correct to find that the Husband did not have the intention to reside in Hong Kong, he could still find a substantial connection.  But the Judge took the lack of intention to reside on the Husband’s part as the key factor in finding that there was no substantial connection.  The Judge’s approach was therefore flawed.

50.  In our view, a careful reading of the Judgment shows that when the Judge analysed and evaluated the evidence, he, on the one hand, dealt with the Husband’s subjective intention to reside in Hong Kong, or the lack of it, and on the other, also looked at the evidence with respect to each of the matters relied on by the Wife to determine if objectively, the Husband had a substantial connection with Hong Kong.  After a careful analysis and evaluation, the Judge at [74] concluded both that (a) the Husband did not have the intention to reside in Hong Kong subjectively; and (b) the Husband’s connection with Hong Kong was not a substantial one for the purpose of section 3(c) objectively.  He did not base his finding that the Husband did not have a substantial connection only on his lack of intention to reside in Hong Kong.  The Judge did not err in the way as Mr Wong contended.

51.  Mr Wong finally submitted that the Judge erred in finding that the Husband did not have the intention to reside in Hong Kong.  This is a finding of primary fact which, if proved, is plainly relevant to the issue of substantial connection.  The Judge’s analysis of the evidence on this aspect is careful and thorough.  His finding is well supported by the evidence before him.  Mr Wong has not been able to show any palpable error in either the Judge’s reasoning or conclusion.  There is no basis for us to interfere.

F.   Complaint 2 – GOAS 3, 7 & 10

52.  On this Complaint, Mr Wong submitted that while the history and past pattern of life is a relevant consideration as a matter of background, section 3(c) of the MCO requires only a substantial connection as at the date of the petition.  Citing LCYP v JEK (Children: Habitual Residence), supra, Mr Wong submitted that the Judge, like the first instance judge in that case, erred in placing excessive weight on the past pattern of life of the Husband and Wife pre-dating the issue of the petition while failing to give due weight to the material change of circumstances since the marriage broke down and the couple started to live apart in May 2014.  He argued that since the marriage broke down :

(1)   There had been a significant surge of time spent by the Husband in Hong Kong, which almost tripled from 63 days in the year of 7/2013-6/2014 to 171 days in the year of 7/2014-6/2015.  In the year immediately before the petition, the Husband spent 65 days for the last 6 months of 2015 and 106 days for the first 6 months of 2016 in Hong Kong.

(2)   In October 2014, the Husband rented an apartment at the Convention Plaza, located next to the office of BP Limited to facilitate his stay in Hong Kong.

(3)   There were increasing business activities in Hong Kong that necessitated the Husband’s increased stay in Hong Kong, as admitted by him in his evidence filed in the High Court Action.

53.  In respect of his increased stay in Hong Kong, the Husband’s case was that it was not due to his business activities but due to the High Court Action, which was accepted by the Judge.  Mr Wong submitted that the Judge has clearly erred.

(1)   It is not correct for the Judge to hold at [68] that there is a choice between the case of the Husband and the argument of the Wife.  The fact is that the Husband seeks to renounce what he has previously affirmed on oath in the High Court Action that his “increasing business activities in Hong Kong” required him to spend “half of each week in Hong Kong” to “work and manage his investments” and to rent the apartment at the Convention Plaza.[15]

(2)   Unlike the affirmation of the Husband in these proceedings which were made specifically for the purpose of arguing for a lack of substantial connection with Hong Kong, his 4^th affirmation filed in the High Court Action was filed before the petition or the summons to challenge jurisdiction in these proceedings.  This was not only a much more contemporaneous but clearly a much less “motivated” (in the sense of being less motivated by the desire to play down his connection with Hong Kong) description of the Husband’s situation at the time.

(3)   Moreover, the explanations made in the High Court Action were against the interest of the Husband, and hence they constituted a quasi-admission/statement against the interests of the Husband. Time-honoured legal principles are settled that such statements against one’s own interests are to carry considerably more weight and credibility than self-serving exculpatory statements : see Wong Tak Yue v Kung Kwok Wai and another (1997-98) 1 HKCFAR 55 of 69B-D; Powell v McFarlane (1979) 38 P&CR 452 at 476.

(4)   Furthermore, as a matter of common sense, given the close proximity between Shenzhen and Hong Kong and modern technology/communication convenience, it is inconceivable that dealing with a set of court proceedings in Hong Kong that is not particularly complicated (despite the amount of money involved, the High Court Action was essentially about the ownership of the shares of the company Superb Jade Ltd.) would require the physical presence of the lay client in Hong Kong for an additional 100 days in a single year (the rough difference between 63 days in the year 7/2013-6/2014 and 171 days in the year 7/2014-6/2015), bearing in mind that the lay client’s attendance in interlocutory court hearings is usually not required.

(5)   Even if additional time was needed for the Husband to have conferences with and provide instructions to solicitors, he could easily have done so during day trips to Hong Kong.  It could not explain the long trips for extended stays in Hong Kong for many days or weeks in 2015, still less the necessity to rent an apartment in Hong Kong to facilitate these long stays.  In fact, the Judge at [69] correctly found that the High Court Action was a project “which can be overseen from time to time only”.  Similarly, at [42], the Judge found that the renting of the apartment was “more for his convenience to be close to his employment at BP Ltd”.  If this was the purpose found by the Judge to be the reason for renting the apartment, it could not be right that his renting of the apartment for his stay in Hong Kong was mainly or only for the purpose of dealing with the High Court Action.

(6)   In any event, it was wrong for the Judge to categorize the High Court Action as a “short-term and purpose-driven project”, and to hold that the connection is of very limited substance.  If, as the Judge had found, the High Court Action required the Husband to spend half of his time in Hong Kong to deal with it, this fact itself should be a strong factor pointing to a substantial connection with Hong Kong.  Whilst transient purposes (such as shopping, casual touring) may by reason of the transience or shortness itself render the connection insufficient or insubstantial, there is no reason why prolonged stays in or frequent regular visits to Hong Kong driven by purposes such as overseeing a long-term project cannot be good evidence of a substantial connection.

54.  Mr Wong therefore submitted that the Judge has failed to focus on the Husband’s position at the time of the petition and has fallen into error by placing excessive weight on past events which no longer persisted at the time of the petition.  In particular, the Judge had wrongly relied upon matters such as (1) the Husband’s employment history in the Mainland before 2009; (2) his length of stay in Hong Kong for the five years before May 2014 (which are not insubstantial in themselves); and (3) the fact that the Husband mostly lived in hotels in Hong Kong before October 2014 [70].  These matters are not what prevailed at the date of the petition, and the Judge should not have allowed them to affect his assessment of the evidence.

55.  With respect, we are unable to accept Mr Wong’s submissions.

56.  Section 3(c) of the MCO asks the question if a party has a substantial connection with Hong Kong at the time of the issue of the divorce petition.  In answering the question, the court takes a holistic approach and evaluates all the relevant factors including any pre-petition event, matter, conduct or circumstance, if pertinent, while always bearing in mind that it is the position as at the date of the petition that is determinative.  As said, how much weight is to be attached to a relevant factor would vary according to the particular circumstances of the case.  It is essentially a matter for the first instance judge.  The Court of Appeal will not lightly interfere with the weight he has attached to a particular factor, including those relevant pre-petition factors.

57.  Here, the Wife sought to establish the Husband’s substantial connection with Hong Kong on matters some of which came into existence since 2009, in particular, those referred to at [12(1)] and [12(2)] above. The Judge was plainly entitled to look at those matters and in doing so, attach such weight to them as he considered appropriate in the overall circumstances of the case in determining if, at the time of the petition, the Husband had a substantial connection with Hong Kong.  Mr Wong submitted that he placed excessive weight on them mainly because, according to him, there had been a material change of circumstances since the marriage broke down in May 2014, as evidenced by the matters referred to at [52] above, which the Judge had failed to give due regard to.  This entails a closer examination of those matters and how the Judge dealt with them.

58.  We pause to make one important observation, which is this.  As rightly submitted by Mr Yu, SC, it is not the Wife’s case, as can be seen from the two affirmations she filed in opposing the Husband’s application, that his purported substantial connection with Hong Kong was caused by the marriage breakdown in May 2014.  For she relied on matters which came into existence since 2009.  Indeed, a common theme running through her case is that the Husband intended to take up residence in Hong Kong as early as 2009, long before the marriage broke down in 2014.  The purported material change of circumstances that Mr Wong relied on must be examined with this in mind. 

59.  Objectively speaking, the Husband did visit Hong Kong more and spend more time here in 2014 and 2015 as compared to previous years.  The Judge at [32] to [34] analysed the evidence of the Husband’s stays in Hong Kong with care.  He noted that based on the travel records produced by the Husband, he visited Hong Kong 53 times in 2014, of which 32 were same-day visits and of the 45 visits in 2015, 21 were same-day visits.  The Judge did not consider such visits to be substantial.  The Judge then turned to the Wife’s case on his travel records, as summarised at [52(1)] above, and noted the Husband’s argument that the increased visits were necessitated by the High Court Action.  He at [61] – [68] dealt with the evidence pertaining to the High Court Action at length.  Essentially, he looked at the Husband’s increased visits to Hong Kong in 2014 and 2015 in the context of the procedural chronology and the steps taken by the Husband in the High Court Action.  In light of the chronology and given the amount of money involved in the High Court Action, which is on any view very substantial, the Judge accepted the Husband’s case and found as a fact that the substantial surge in both the number of (a) trips he had made to Hong Kong and (b) days he had stayed over, since the commencement of the High Court Action up to June 2015, was mainly because of his handling of the High Court Action.  Subject to Mr Wong’s complaints set out in [53] above, to which we will return in a moment, we can see no basis to interfere with the Judge’s finding in this regard.

60.  It is also an objective fact that the Husband did rent an apartment at the Convention Plaza in October 2014.  The Husband’s case was that the main reason for him to do so is to handle the High Court Action. Renting the apartment had nothing to do with his intention to move to Hong Kong in the future.  And in any event, it was an undisputed fact that the parties had never conducted their marital life in Hong Kong.  The Judge at [42] found that the Husband had not established any formal or permanent home in Hong Kong as otherwise he could have acquired a much more substantial and permanent residence than renting the apartment at Convention Plaza, which was a small serviced apartment.  He found that renting the apartment was more for the Husband’s convenience to be close to his employment at BP Ltd instead of staying in the hotel during his visits in Hong Kong, whether for his business meetings or handling the High Court Action.  Again, we can see no error in the Judge’s finding in this respect.

61.  This brings us to Mr Wong’s submissions that the Judge erred in finding that the Husband’s increased stays in Hong Kong was not due to his business activities but the High Court Action.  We need not deal with every single point taken by counsel.  What we are going to say below will suffice.

62.  The Judge at [47] – [53] looked at the evidence on the Husband’s employments in Hong Kong.  He noted that based on the evidence, the Husband’s career in the Mainland was much more well-established and substantial than in Hong Kong; that there was no evidence to suggest that the Husband had formed any business in Hong Kong; his responsibilities and involvements in those employments were mostly carried out in the Mainland; and that by June 2015, the Husband’s only employment in Hong Kong was as an investment consultant of BP Ltd in which he was responsible for giving advice on investment opportunity wherever required without any involvement in its management or any office in the company.  Looking at the time the Husband spent in Hong Kong in the context of the procedural history of the High Court Action again, the Judge found that the Husband’s employment with BP Ltd could hardly be said to be substantially connected with Hong Kong.  Again, we can see no error in the Judge’s approach to the evidence and his finding.

63.  Mr Wong complained that the Judge had put insufficient weight on the Husband’s 4^th affirmation filed in the High Court Action in which he stated that his increase of stay and renting of the apartment in October 2014 in Hong Kong was due to his increased activities. However, as rightly submitted by Mr Yu, SC for the Husband :

(1)   His 4^th affirmation is only one piece of evidence before the Court.  The Judge also had to consider the Husband’s evidence in his 1^st affirmation in these divorce proceedings, where he clearly stated “the only reason I started renting the Service Apartment was to deal with the [High Court Action] against the brother of the Petitioner since 2014”.  The Court was also provided with evidence regarding the procedural steps taken in the High Court Action.

(2)   The Judge also correctly looked at the undisputed contemporaneous facts.  As he at [66] rightly pointed out, the plain fact was that for the 4 years since the Husband started to work for BP Ltd in 2010, he was also a director of two other companies in Hong Kong.  Yet as shown he had spent only 40 and 74 days a year during those 4 years working on 3 jobs.  It would be too much of a coincidence to say the increased number of stays in 2015 had nothing to do with those increased applications and activities in the High Court Action.

We can see no substance in Mr Wong’s complaints.

64.  Mr Wong then submitted that even if the Husband’s increased stays in Hong Kong and the renting of the service apartment was the result of his need to attend to the High Court Action which was “short-term and purpose driven”, it should still constitute a substantial connection.  With respect, we disagree.

65.  Whether or not a short-term and purpose driven project could establish a substantial connection with Hong Kong must depend on all the circumstances of the case.  Here, the Judge did consider the High Court Action in the overall context of the case with all the other relevant factors in mind.  His finding that the High Court Action did not give rise to a sufficiently substantial connection after careful evaluation of the evidence cannot be flawed.

66.  For completeness, we wish to point out that Mr Wong’s reliance on LCYP v JEK (Children: Habitual Residence), supra, is misplaced.  There, the wife was born and raised in Hong Kong, while the husband was an American and grew up in New Jersey.  They met in Hong Kong in 1994, married in New Jersey in 1997 and subsequently lived there.  In July 2013, the wife moved to Hong Kong with two sons (then aged 10 and 14) for a limited duration.  In December 2013, upon discovery of the husband’s affair, she changed her mind and chose to remain in Hong Kong.  In April 2014, she issued the divorce petition. This Court (differently constituted) found a substantial connection on the part of the wife at the time of the divorce petition.  It was held that the first instance judge failed to have regard to the material fact that, in light of the breakdown of her marriage, there was a change of intention on the part of the wife and that the period that she had been living in Hong Kong with the children for close to 10 months should have been viewed as a substantial connection since that period of residence was with the intention that they should continue to do so, at least until the children have completed their high school education in Hong Kong.

67.  In the present case, the undisputed facts were that even though Hong Kong identity cards were issued to the Husband and the Wife and their son since 2009, none of them were permanent residents of Hong Kong at the time of the petition and they still lived in Shenzhen.  Shenzhen had always remained the home base even though the Husband sometimes had to commute to Hong Kong.  And there was no evidence to support the Wife’s assertion that it was the marriage breakdown in May 2014 that led to the Husband’s increased stay in Hong Kong and the renting of a serviced apartment at the Convention Plaza.  As the Judge found, it was because of the one-off purpose-driven High Court Action.  Because of these factual differences, we do not think Mr Wong can derive any meaningful assistance from LCYP v JEK (Children: Habitual Residence).

68.  All in all, there is no merit in Complaint 2.

G.   Complaint 3 – Remaining goas

69.  Mr Wong took a number of points.

70.  First, Mr Wong complained that that the Judge has wrongly compared the respective positions of the Husband in Shenzhen and in Hong Kong.  He submitted that although the Judge has correctly held at [17] that the only requirement was to demonstrate “a substantial connection with Hong Kong” and that there could be two places that a person had a substantial connection with, the Judge had allowed himself to engage in the comparison between the Husband’s connection with Hong Kong with his connection with Shenzhen, as if he had to make a choice between the two places.  Accordingly to counsel, this is apparent :

(1)   when the Judge at [50]-[51] compared the career development of the Husband in mainland PRC and in Hong Kong and discounted the weight of the Husband’s various jobs in Hong Kong over the years and the position of an investment consultant with BP Ltd;

(2)   when the Judge at [58] and [72] sought to compare the size and nature of the property that the Husband stayed in Shenzhen and those of the property that he stayed in Hong Kong;

(3)   when the Judge at [58] sought to compare the nature of the Husband’s assets located in Hong Kong and those located in Shenzhen.

71.  With respect, we agree with Mr Yu that Mr Wong’s submission is out of context.  It was the Husband’s case that he lived in Shenzhen and his roots were there, raising evidence on his career in Shenzhen, his property and assets in Shenzhen in support.  On the other hand, it was the Wife’s case that he intended to take up residence in Hong Kong since 2009.  In the circumstances, the Judge had to deal with those facts as he did.  But that does not mean that he was picking between the two as Mr Wong argued.  He was merely examining the overall picture of the Husband’s past and present patterns of life in Shenzhen and Hong Kong, as part of his evaluation of the relevant factors.

72.  Second, Mr Wong contended that the Judge has placed insufficient weight on the Husband’s time spent in Hong Kong by reason of the amount of same-day visits.  For the reasons that he gave, which we have alluded to above, the Judge found that those same-day visits to Hong Kong showed lack of substantial connection with Hong Kong.  We reiterate that we can see no error in such a finding.  Mr Wong then argued that those same-day visits also arose out of the purpose of doing business in Hong Kong or should be treated no differently from the other longer periods of visits.  But as rightly submitted by Mr Yu, Mr Wong is effectively asking us to ignore the Husband’s length or the pattern of his stays in Hong Kong.  That is impermissible.  For the purpose of visits is obviously one matter that the court should consider, as with the length and the nature of the visits : see ZC v CN, supra, per Cheung JA at [9.8].

73.  Finally, Mr Wong argued that the Judge has placed wrong weight on the Husband’s assets, that the only landed property was in Shenzhen and that assets in Hong Kong were held through trust arrangement.  It is undisputed that the Husband’s very substantial assets in Hong Kong were all liquid assets, such as cash and equities, and that they were held through some trust arrangement.  The Judge was plainly entitled to have regard to the nature of his assets in Hong Kong and the trust arrangement and, after careful evaluation of all the relevant factors, found at [74] that his investments were of insufficient substance to properly establish a substantial connection in the overall context of the case.

74.  In our view, there is no substance in Complaint 3.

H.   CONLCUSION

75.  For the above reasons, the Wife’s appeal must fail.  We dismiss it accordingly.

76.  Costs should follow the event.  We order, on a nisi basis, the Wife to pay the Husband’s costs of the appeal, with a certificate for two counsel, to be taxed if not agreed.