JAH v. VH

FCMC 14350 / 2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 14350 OF 2009

----------------------------

--------------------------------------------

JUDGMENT
(Leave to file Answer and Direction)

--------------------------------------------

Introduction

1.  There are two summonses presently before me. The first is the respondent husband’s summons dated the 8 February 2010 seeking an order that inter alia he be granted leave to file and serve his Answer within 14 days from the date of the order. In other words he is seeking leave to file his Answer out of time.

2.  The second is a summons issued by the wife dated the 29 April 2010 seeking an order that:

1. without prejudice to the Wife’s position that her Petition (in FCMC No. 14350 of 2009) ought to remain in the special procedures list and/or that decree nisi ought to be granted on the Wife’s Petition and that the Husband’s Petition ought to be dismissed together with costs, the cause FCMC 14350/2009 be consolidated with the cause FCMC 4402/2010 and be carried on in the title as per the proposed “Title of Consolidated Cause” hereto annexed and marked “A” with the description of the Petitioner and Respondent be generally referred as “Wife” and “Husband”;

2. The Wife’s Petition in FCMC 14350/2009 do stand as the Petition and the Husband’s Petition in FCMC 4402/2010 do stand as the Cross-Petition in this consolidated cause;

3. The parties’ Financial Statements (Form Es) filed in FCMC 14350/2009 do stand in this consolidated cause;

4. Such other directions as this Honourable Court may deem fit; and

5. Costs be provided for.

3.  This summons is necessary given that the husband has also issued his own divorce petition dated the 16 April 2010 based on the wife’s unreasonable behaviour. This is notwithstanding the fact that he has issued an application for leave to file an Answer out of time. It is not clear exactly why he chose to do this. Presumably in order to put forward his own case on the reasons for the breakdown of the marriage. In any event, in order to prevent duplication and unnecessary confusion the wife’s solicitors have taken the sensible step of issuing the current summons. 

4.  Dealing with the wife’s summons first, the husband has consented to this in his solicitor’s letter of the 19 May 2010 and I accordingly make an order in terms of paragraphs 1 – 3 to that effect. There shall be no order as to costs on that summons.

5.  There is thankfully some measure of agreement concerning other matters. The parties have for example, agreed to enter into mediation with a view to resolving all matters in dispute and have appointed Ms Y as their mediator. This is to be encouraged.

The issues to be determined

6.  The main issue to be determined then is whether or not the husband should be given leave to file his Answer out of time. Other matters arise from this and will be discussed below.

7.  Reference was also made, during the hearing, to the manner in which the wife’s petition has been drafted and I was taken to Order 18 rule 7 of the White Book. No formal application had been made in that respect and the wife objected to the suggestion that the court could deal with this of its own motion. Consequently that issue was not taken any further.    

Background

8.  The parties married on the 8 June 1987 following a substantial period of cohabitation of some 8 years or so. They have two children both of whom are presently studying at HB School. The daughter, F is now aged 28 and the son, C is 26. The husband has expressed the wish that the children should both go into the family business. The husband is Cambodian and he holds dual French and Cambodian nationality. He is presently based in Cambodia. The wife is a Korean national and she is based in Hong Kong. The husband is in his early 70’s and the wife is 55 years old. They separated on the XX July 2009 and on the 16 November 2009 the wife issued proceedings based on the husband’s unreasonable behaviour. 

9.  The husband is a well-known businessman of some repute in Cambodia.  Both he and the wife hold substantial business interests through a myriad of different corporate structures. They also hold a large number of properties. The extent of their wealth is yet to be determined, but it is likely to be very considerable.

10.  It is accepted by both sides that the divorce petition was eventually served on the husband in Hong Kong on the 2 January 2010, whilst he was having his hair cut in the barbershop in the Hotel. It is also accepted that the time for filing of the Answer expired on either the 30 January or the 1 February 2010. The summons presently before me was filed on the 8 February 2010.

11.  The parties also each accept that the marriage has irretrievably broken down and that a decree nisi will be pronounced in due course. The difficulty is with the very serious allegations made by the wife against the husband in the particulars of the divorce petition. The husband is willing to proceed on the basis of a “watered down” petition. He has waived privilege with respect to a number of without prejudice letters. These were produced for the court’s consideration during the hearing. His position is made clear in that he said that he was willing not to file an Answer if the wife agreed to amend the petition in line with his amended draft petition. He also agreed to split the family assets equally referring quite correctly in his solicitor’s letter to assets belonging to both parties. The wife chose not to waive privilege in respect to her own without prejudice correspondence. She is maintaining her open position. In her solicitors letter of the 12 February 2010 she states as follows:

It is clear beyond peradventure that this marriage has irretrievably broken down.  We understand that your client is concerned that his representation (reputation) will be damaged by the existing allegations of unreasonable behaviour, but no doubt you have advised your client that unless the Divorce Petition is defended, the contents of a Divorce Petition are entirely confidential, and the papers are available only to the parties, and no outside third parties, save and except the parties legal advisors.

You have no doubt advised your client that if he defends the Divorce Petition, then the Trial is in open Court.  Our client has supporting evidence in respect of her allegations, and witnesses available to give evidence.

Our client believes that your client wishes to delay the progress of the divorce, only because he wishes to delay any progress in the ancillary relief proceedings.

With that in mind, notwithstanding the fact our client confirms that the contents of her existing Petition are true and correct, if financial settlement can first be reached our client would be prepared to amend the allegations of unreasonable behaviour to the usual standard and mild terms.

And later in the same letter:

To summarise, our client would agree to the following:

1. Our client will undertake to amend her existing Divorce Petition to a mild and agreed Petition provided financial settlement terms have been agreed between our clients, and such terms are encompassed in an endorsed Consent Summons.

2. Until such time as settlement terms have been reached, our client will undertake not to take any further steps to progress her existing Divorce Petition without giving your client 14 days notice of the same.

3. Our clients Form E’s will need to be exchanged by the 22^nd February 2010.

4. Your client must agree to attend mediation in Hong Kong commencing the week beginning the 22^nd February 2010.

5. Your client must instruct Maruhan Japan Bank to deposit the sale proceeds of his shares into a nominated bank account in the joint names of our clients, or into your firm’s bank account on your undertaking not to transfer the money without an Order of the Court.

6. Your client must undertake not to dispose of any assets of US$20,000.00 or more without our client’s consent or Order of the Court.

7. Your client must undertake not to defend the agreed mild Divorce Petition, when filed.

12.  It appears that the husband has complied with most if not all of these requirements. Given that the court has not had sight of all the without prejudice correspondence, it is not therefore clear why some consensus was not reached on the issue of the divorce petition itself and the parties still chose to proceed on a litigious basis.

13.  In any event there was one difficulty which then became apparent namely that the husband’s without prejudice position (which was now open) did not accord with his original open position as set out in his draft Answer. After seeking clarification his counsel confirmed that the husband now seeks to file “an Answer” which accords with his open position as stated in court. He does not seek leave to file the draft Answer originally proffered for the court’s consideration.        

The law

14.  Both sides have referred me to a number of cases on point, including the Hong Kong Court of Appeal decision namely YSP v HFF & HA, CACV No 235 of 2003, 15 October 2003 (unreported).  In that case the relevant principles were identified as follows:

13. The following are the relevant principles gleaned from the authorities on how the court should deal with the delay and extension of time by a party in filing an answer to the petition.

1. The starting point is that under the special procedure the registrar has certified that the petitioner has proved the contents of the petition and is entitled to a decree : Day v Day [1979]2 WLR 681.

2. This being the position an application for extension of time to file the answer should be dealt with by analogy to the principle governing the former procedure of an application for re-hearing after decree nisi : Day v Day.

3. This principle is that the application should have been refused unless there were “substantial grounds for the belief” that the decree would have been obtained “contrary to the justice of the case”: Owen v. Owen [1964] P.277.

4. Each case has to be dealt with on its own facts : Rogers v Rogers [1974]1 WLR 709.

5. Broadly speaking, the cases may be divided into two types.  This division is not exhaustive:

(1) Where the applicant was not served at all and the proceedings took place without his knowledge.  He would get a re-hearing almost immediately.

(2) The applicant knew of the proceedings but chose not to defend.  He then changed his mind again and asked for time.  He had to satisfy the court that it was more probable that the decree was obtained contrary to the justice of the case.

6. The following are examples of some of the factors the court may consider in the exercise of its discretion in favour of granting an extension of time:

(1) The delay in filing the answer is not due to the fault of the applicant, but, for example, due to the delay in processing legal aid application or the fault of his legal advisers: Nash v. Nash [1967] 1 All ER 535.

(2) The delay is of relatively short duration such as a few days: Lawlor v. Lawlor [1995] 1 FLR 269.

(3) Allegation of adultery contains a stigma which a party may wish to defend: Huxford v. Huxford [1972] 1 WLR 210; Collins v. Collins [1972] 2 All ER 658.

(4) The conduct of the parties is relevant in ancillary relief; where allegation of adultery or unreasonable behaviour is made against a party and if he is precluded from defending the petition he would be estopped in ancillary proceedings from denying such allegations; further he would also be ordered to pay the costs of the divorce suit: Rogers v. Rogers and Edinger v. Edinger [1990] HKCU 222.

14. In considering these principles, in our view, it is also important to bear in mind that a divorce affects the status of a person.  While a petitioner has confirmed the contents of the petition by an affirmation, the allegation against the respondent remains untested in court proceedings.

15. Further, as pointed out in Day v. Day, there are matters which show that a respondent may be in a position of handicap such as the different rules which may give an impression that the answer may be filed at any time before the directions for the trial of the cause had been given despite the other specific rules on time limits.  Further no notice is given by the Registrar to the respondent that he is about to consider the evidence with a view to making his certificate that the petitioner has proved his or her case.  The first time that the respondent knows of what is happening, is the receipt of a notice of the date and place for the pronouncement of the decree, by which the process of adjudication is over.

15.  In this case the Court of appeal allowed the appeal and gave permission for the husband to file his Answer out of time.

16.  I have also been referred to a more recent Court of Appeal decision namely BCA v IOF HCMP No 1901 of 2005; 10 April 2006 HKCA. In that case the husband was not given leave to file his Answer out of time. In conclusion the following comments were made:

19. We have considered the background of the case and everything urged upon us by the husband.  We have also taken into consideration the husband’s draft submissions.  We are satisfied that on the husband’s admissions, he has no realistic prospect of succeeding in the appeal and the decree granted to the wife was inevitable.

20. There is no injustice in granting the decree and there is no valid basis upon which the court could over-rule the judge’s decision.

17.  In addition I have been referred to my own case of KEWS v NCHC, FCMC No 13087 of 2008, 19 February 2009. In that case I refused the wife leave to file an Answer. The husband also seeks to rely on the principles originally elucidated in Grenfell v Grenfell [1978] Fam 128.

Discussion

18.  Would then the granting of the decree, on the particulars filed, be contrary to the justice of this particular case? Reference is made above to a number of examples where the court is more likely to exercise its discretion in favour of an applicant. I will go through each of these in turn.

1)  The delay is not the fault of the husband

19.  This is not a case where the husband complains of not being served. It is also not a case where he knew of the proceedings but chose not to defend. Rather it appears that he knew of the proceedings but initially only sought advice from a Cambodian lawyer who advised him that Hong Kong was not the appropriate forum. Initially he did not take the matter any further, notwithstanding the fact that the wife’s solicitors quite properly explained something of the procedure to him in their letter of the 18 January 2010 when they suggested that the husband should seek independent legal advice from a Hong Kong lawyer. Contact details of six such lawyers are given. Notwithstanding that I am willing to accept that the delay was due to the husband accepting the incorrect advice given to him by his Cambodian lawyer. I also accept that the husband relied on the advice given in good faith and that once he received advice from a Hong Kong lawyer that he acted upon that advice in a sensible way. The wife argues that the husband has not been full and frank in this respect and complains of lack of particulars. Although I accept that there is a lack of detail in the husband’s affidavit I am nevertheless inclined to accept the explanation that he gives.

2) The delay is of relatively short duration such as a few days

20.  Here the delay was relatively short – only 7 or 8 days.

3) Allegations of adultery contain a stigma which a party may wish to defend

21.  This is where the real dispute lies. The wife’s unreasonable behaviour particulars run to over 7 pages. She subdivides her complaints, which include allegations of dishonesty, financial misconduct (including the allegation that the husband is a gambling addict, that he ran two sets of accounts in some of his businesses and that he spent money on call girls), improper association with other women, aggressive behaviour towards the wife and generally inconsiderate behaviour. The wife’s case seems to be that given that she does not intend to rely on any of these matters in her claim for ancillary relief and given that they are private and confidential in any event, that they are really of no import and that therefore the husband’s application should be refused and the petition should proceed on an undefended basis.

22.  In the words of her counsel, Mr Jeremy Chan             

For the avoidance of doubt – the Wife repeats once again – other than the fact that the marriage has irretrievably broken down, the Wife will not in these proceedings be asserting that ‘facts’ have been ‘proven’ or ‘admitted’ for any other purposes (and there isn’t anything else left other than financial ancillary relief anyway) – in other words, the Wife’s position is that the divorce decree is without prejudice to and does not affect financial and/or ancillary relief matters, and the Wife will not be asserting otherwise.

23.  Why then did the wife choose to proceed on this basis? For the avoidance of doubt this is an extremely aggressive petition of the like rarely (thankfully) nowadays seen in our courts. When I asked Mr Chan why the wife had chosen to proceed in this way, i.e. when it was acknowledged that in reality doing so meant very little, he replied that the wife did not know which parts of the particulars the husband would agree to and which he would not. For the avoidance of doubt I simply do not accept that explanation. The reply was both disingenuous and on the face of the file simply wrong.   

24.  I have no doubt that the wife’s solicitors fully and accurately advised the wife in this respect. Indeed the wife alludes to this in her Form E, when she says that

I repeat herein the particulars of the respondent’s behaviour as stated in my petition and the court can deal with the matters as it thinks fit. I have been advised that conduct is generally only relevant when obvious and gross but I feel it is important. 

25.  Thus it appears that the wife has chosen to proceed in a way that is contrary to the more modern and the more accepted approach of drafting divorce particulars. I am reminded of the very sensible advice given in the Hong Kong Family Law Association’s Code of Conduct, where it states that

Court Proceedings

5.1       The taking of any action or proceedings which is likely to cause or increase animosity between the parties must be balanced against the likely benefit to the client and the family.

5.2       Where the purpose of taking a particular step in proceedings may be misunderstood or appear hostile, the solicitor should consider explaining it, at the first practical opportunity, to the other party or his solicitors.

5.3       Before filing a petition, the solicitor should consider with the client whether the other party or his solicitor should be contacted in advance as to the intention to petition, the ‘facts’ on which the petition is based and/or the particulars to be alleged, with a view to proceeding by agreement. A client should be advised that by filing a Petition and/or Statement of Arrangements without first attempting to agree the contents is likely to increase feelings of contentiousness and hostility, making any settlement much more difficult to achieve. It may also earn the disapproval of the Court and may have a bearing on the issue of costs.

5.4       The solicitor should advise the client that on receipt for approval from the other spouse of a Petition or Statement of Arrangements, that other than in exceptional circumstances, a client should not first file their own petition without giving their spouse at least 5 working days written notice of their intention to do so.

26.  Here there is no doubt that the wife took a deliberate and calculated decision to file an extremely aggressive divorce petition without prior notice to the husband, when it was agreed that the marriage was at an end. There is no doubt that doing so has “increased feelings of contentiousness and hostility”. The difficulty from the husband’s perspective is that the wife does not seek to rely on the particulars going forward. Is this then simply an issue of “feelings”? To that end I have been referred by both counsel to Grenfell v Grenfell [1978] Fam 128 where it is stated that

There is no point, as I see it, in a case like this in conducting an enquiry into behaviour merely to satisfy feelings, however genuinely and sincerely held by one or other of the parties.  To do so would be a waste of time of the court and, in any event, would be running, as I think, counter to the general policy or philosophy of the divorce legislation as it stands today.  The purpose of Parliament was to ensure that where a marriage has irretrievably broken down, it shall be dissolved as quickly and as painlessly as possible under the Act, and attempts to recriminate in the manner in which the wife in this case appears to wish to do so should be, in my judgment, firmly discouraged.”

27.  And to our own Court of Appeal decision in BCA v IOF (HCMP No 1901 of 2005), where it stated that

13.       It is never the function of a divorce court to apportion the responsibility of the parties for a broken marriage.

14.       Although the wife had made certain allegations against the husband in her petition, a decree made on such petition, when the husband did not file any Answer, did not mean that the court must have accepted those allegations in their entirely.  It was just an indication that the court accepted that there were grounds for the petition and that the husband decided not to defend.

28.  I agree. The difficulty however is that it seems to me that this is not simply a matter of hurt feelings, nor is it a matter of simply wishing to apportion blame.

29.  Counsel for the husband puts his case very succinctly when he says that:

(4)        The allegations levelled at the Husband in the Petition are extremely serious – to say the least – and are strenuously denied.  The Petition charges inter alia that the Respondent:

(i) Threatened her with death on various occasions (Petition § 9D, at p.6);

(ii) Is a dishonest person who is guilty of fraudulent accounting in relation to his businesses, and of employing falsified accounts for the purpose of tax-dodging (Petition § 9B(v));

(iii) Has committed adultery and frequently engages prostitutes (Petition §§ 9A(ii), 9B(iv), 9C, 9D(v)). The Petitioner further says that that the Respondent has transmitted sexually transmitted diseases to her (Petition § 9C(vii));

(iv) Is guilty of “financial misconduct” including using company money for personal purposes, excessive gambling and making large gifts to call-girls (Petition § 9B); and

(v) Lying to his family (Petition § 9A).

30.  In this instance the wife has made very serious allegations against the husband. This was done deliberately on her part. I do not believe it is sufficient to simply say that this should not be a cause for concern given the confidential nature of the proceedings. I accept that the husband is concerned about this and rightly so.

The conduct of the parties is relevant in ancillary relief

31.  Counsel for the husband adds that

(5) Charges of such exceptional gravity plainly require an answer.  The allegations made in the Petition would be highly prejudicial to the Respondent at the ancillary relief stage, and the Respondent may be estopped from denying them (see: YSP v HFF, Rogers v. Rogers and Edinger v. Edinger [1990] HKCU 222).  Granting the decree on an “undefended” basis and allowing the Petitioner’s account to stand by default – when not a shred of evidence has been proffered in support of the grave allegations levelled at the Respondent – is contrary to the justice of the case; and

(6) At base, the particulars in § 9 of the Petition are entirely gratuitous because they are totally unnecessary to establish irretrievable breakdown (which is in any event agreed upon).  They are calculated to scandalise and prejudice.  The Husband is a prominent businessman and is well respected in his community: he is the Chairman of a major Bank in Cambodia, and has received high civilian honours both in Cambodia and in France (see: Respondent’s Affirmation § 12 and Exhibit VH-1).  He ought to be entitled to defend his reputation.

32.  Although I accept that it is unlikely that the allegations made in the petition are of the type likely to be regarded as “obvious and gross” I do accept that they were in part calculated to scandalise and prejudice and that the husband should be entitled to seek resolve this in an acceptable way. I have also taken into account the fact that the delay could not be said to be entirely the fault of the husband and is in any event of a fairly short duration. However I also accept that given the status of the law at the present point in time and given the fact that the wife has stated that she does not intend to rely on these allegations in any shape or form, the apparent confidential nature of the particulars and the fact that both parties wish to proceed to a decree nisi, that the husband’s application for leave to file an Answer out of time must be refused. I do however have a great deal of sympathy with the husband’s position. Consequently the matter shall not be set down in the special procedure list on either the wife or husband’s petitions for the next six weeks. This will enable the husband to make whatever further application to the court that he deems appropriate in all the circumstances of the case. In the event that a further application is made the setting down of either petition in the decree nisi list shall be adjourned pending the resolution of that summons or the expiration of six weeks whichever is the later.  I would add however that I make these directions in the hope that the parties will now resolve this issue in a more sensible way and preferably by negotiation, either through solicitors or with the assistance of their mediator.   

33.  Although initially the husband was seeking the court’s indulgence and the wife seeks her costs on that basis, given the circumstances I will make an order nisi that there be no order as to costs to be made absolute in 14 days time .