LCFM v. LSF

FCJA 2346 / 2018

[2023] HKFC 218

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

JOINT APPLICATION NO. 2346 OF 2018

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BETWEEN

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D E C I S I O N
(Leave to Appeal)

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This Application

1.  The 1^st Applicant was the wife. The 2^nd Applicant was the husband. Although Decree Absolute has been granted, I would refer to them conveniently as “W” and “H” respectively in this Decision.

2.  On 30/6/2023 this Court handed down its Decision (“30/6/2023 Decision”) dismissing H’s application by Summons dated 25/9/2020 (which was amended on 22/4/2021) (“H’s Amended Summons”) in respect of which 3 paragraphs therein went for trial and was dismissed. The other paragraphs of H’s Amended Summons were resolved by the parties with consensus reached before trial thus requiring no adjudication.

3.  The 3 paragraphs that were dismissed after trial are paragraphs 2, 3 and 9 in H’s Amended Summons. Broadly said, paragraphs 2 and 3 related to discharge of undertakings given by H and embodied in the Consent Order dated 18/6/2019 for settlement of the parties’ ancillary reliefs (“AR Consent Order”). Paragraph 9 related to suspension of 118 days of unpaid periodical maintenance for the 2 children of the family, the arrears added up to a reduction of HK$465,534 in total.

4.  On 28/7/2023 H issued a Summons seeking leave to appeal the 30/6/2023 Decision. W opposed H’s application for leave to appeal and filed her Skeleton Submissions by Counsel Mr. Eugene Yim who appeared on her behalf at the trial before me.

H’s Draft Grounds of Appeal

5.  The 2 draft grounds of appeal are :-

“Ground 1 : Error of Law; and

Ground 2 : Failure to attach sufficient weight to relevant factors”

6.  For Ground 1, I was said to have misdirected myself and erred in fettering my exercise of discretion by adopting an unduly narrow interpretation of the circumstances where variation of undertaking(s) was possible.

7.  H submitted that :-

(a) there was a duty to give the undertaking(s) sought to be varied or discharged a purposive and not a literal interpretation;

(b) I could have accepted a new undertaking and that H had actually suggested an alternative undertaking;

(c) the undertaking(s) sought to be varied or discharged by H was in the nature of a maintenance agreement which are variable under Section 15 of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”).

8.  It was then said that I had erred in relying on the strict confines of the 4 situations set out in the case of L v C (FCMC No.5952 of 2012). It was said there was a fundamental error on my part for not considering the decision of Family Court Judge Melloy in D v D [2021] HKFC 48 and the Court of Appeal decision in AEM v VFM [2008] 3 HKFLRD 36.

9.  For Ground 2, I was said to have incorrectly believed that my discretion was unduly restricted by the immutable nature of an undertaking. Hence, I have robustly approached H’s application in :-

(a) deciding not to vary the AR Consent Order even though I could have done so pursuant to Section 15 of the MPPO;

(b) not accepting or even considering alternative undertaking;

(c) not interpreting the undertaking(s) as what the parties had intended;

(d) alternatively, even the parties had intended the undertaking(s) to achieve any particular effect, I should have varied it now given the then intended effect of the parties had proven to be unworkable; had served its purpose, and was inconsistent with the principle of a “clean break”.

10.  It was also said with the error of relying on the strict confines of the 4 situations in L v C (supra), I did not consider in the entirety or give any due weight or consideration to :-

(a) all the circumstances of the case in a broad sense and; in particular, the meaning of “free access” used by the parties;

(b) the basis on which and the intent upon which the “free access” clause was used by the parties in the AR Order;

(c) the literal interpretation adopted by me being inherently unlikely to be intended by the parties when :-

(i) the parties had intended a “clean break”; and

(ii) the parties decided not to transfer the FMH to W and thus inherently unlikely that H would have granted “free access” to W.

(d) the proper meaning and construction of the “free access” clause;

(e) whether the undertaking(s) had served its intended purpose and having no usage and hence should now be discharged;

(f) W’s “threat” to move back to the FMH;

(g) the parties’ intention when they entered the AR Consent Order and the related evidence.

11.  Given the absence of discussion of the term “free access” by the parties as to what it meant at the time of the AR Consent Order, there was possible a mistake or misunderstanding by the parties, mutually or otherwise. Section 15 of the MPPO provides the Court with broad powers of variation in order to achieve a workable solution, discharge the undertaking(s) or accept alternative undertaking(s) or to interpret the existing undertaking(s), in respect of which I had not conducted any or any sufficient enquiry as to its meaning and how it operated on a practical day to day basis.

12.  Without exploring and deciding on the true meaning of the term “free access”, it would dramatically impinge upon H’s rights to privacy and security for W to treat H’s home as an entitlement to reside in the FMH. This would affect the best interests of the 2 children and is antithetical to the “clean break” intended by the parties.

13.  Further, H said I had failed to pay regard to W having broken her promise of moving out from the FMH within 30 days of the pronouncement of the Decree Absolute and hence I fell into error.

W’s Grounds of Opposition

14.  On H’s Ground No.1, W’s submission in opposition was that I did not consider it to be fair to her for H to be able to “set the clock back now in the absence of any valuable consideration”. Citing the case of Wong Din Shin v Nina Kung (CACV No.460/2002), there is no duty on a judge, in giving reasons of his decision, to deal with every argument presented by counsel. Hence, it could not be said that I have not considered the case of AEM v VFM cited by H’s counsel. The decision in Birch v Birch [2017] 1 WLR 2959 which had been cited by Judge Melloy in her decision in D v D [2021] HKFC 48 stating that the court enjoyed very wide discretion must be read in the context of Birch. The same paragraph in Birch decision had actually also been cited by me at paragraph 18 of the 30/6/2023 Decision.

15.  The permission to argue variation of maintenance agreement under section 15 of the MPPO should not be allowed. Reason being that section 15 was not put forward as the basis of H’s application at the trial. H’s application was proceeded on the basis of section 11 of the MPPO[1]. It is difficult to see why H should now be allowed to embark on an argument which was not advanced at the trial.

16.  On H’s Ground No.2, W’s submission was that it actually goes to challenge my findings of fact. Despite how it was framed, H in essence was saying that I should not have held “free access” to bear the meaning as my Decision said it bore[2].

17.  The circumstances under which an appellate court would interfere with the trial judge’s findings on fact are well settled. It must be satisfied that the trial judge’s conclusion was plainly wrong (see Ting Kwok Keung v Tam Dick Yuen & Others (2002) 5 HKCFAR 336 at §42).

18.  None of the pre-requisites of (i) no evidence to support my conclusion on facts; (ii) my conclusion was based upon a misunderstanding of the evidence; or (iii) no reasonable judge could have reached my conclusion on facts; exists in the present case. H was not contending that I had misunderstood the parties’ evidence or the conclusion that I arrived at was one which no reasonable judge could have reached[3]. Accordingly, Ground No.2 must fail.

The provisions on granting leave to appeal

19.  The jurisdiction to grant leave to appeal rests with section 63A of the District Court Ordinance, Cap.336 which provides that leave to appeal shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success or there are some other reasons in the interests of justice that the appeal should be heard.

20.  The relevant test for determining whether the appeal has a reasonable prospect of success is whether the applicant for leave can show that he or she has an arguable case with reasonable chances of success on appeal. A reasonable prospect of success means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable” (see KNM v. HTF, HCMP No.288/2011) per Fok JA (as he then was) at paragraphs 8 and 9 of the Judgment.

Appeal on exercise of judicial discretion

21.  It is trite that an appellate court may only interfere with the exercise of the judge’s discretion in the court below in accordance with the well-established principles in Hadmor Productions Ltd v Hamilton [1983] 1 AC 191 at 220B to E.

22.  Further, the appellate court would not interfere the judge’s discretion in the court below merely because it would have reached a different conclusion had it been hearing the application at first instance. It can only interfere in three types of cases : (1) where the judge has misdirected himself with regard to the principles in accordance with which his discretion had to be exercised; (2) where the judge, in exercising his discretion, has taken into account matters which he ought not to have done; or (3) where his decision was plainly wrong. (see Bright Shipping Ltd v Changhong Group (HK) Ltd (No.2) per Kwan VP at paragraph 5)[4].

23.  In the Court of Appeal decision in the case of Wong Kar Gee Mimi v Severn Villa Ltd[5] where Kwan JA, having cited the general principles on granting leave to appeal, further said :-

“30. Even if the threshold test of reasonable prospect of success is satisfied, the court still retains a discretion whether to grant leave, although the fact there is, ex hypothesi, a reasonable prospect of success would heavily influence the court’s exercise of discretion. The court may refuse leave to appeal in the interests of procedural economy and proportionality (emphasis added).

31. It must also be borne in mind that the orders made by the Judge in the intended appeal are case management decisions in the exercise of the discretion of the Trial Judge. Case management decisions are only subject to appeal in rare circumstances. The appellant faces a “very high hurdle” and must show that the Judge “has gone clearly wrong and made orders which will clearly involve an injustice or an inability for the trial court to carry out its task”, or if the Judge “erred in principle or the order was irrational having regard to the issues that had to be resolved”. It need hardly be emphasised that generally, an appellate court will not interfere with a judge’s exercise of discretion unless the Judge has misunderstood the law or the evidence or the exercise of discretion was plainly wrong such that it was outside the generous ambit within which a reasonable disagreement is possible.”

Discussion

24.  H has fairly conceded that the 30/6/2023 Decision was an exercise of judicial discretion since nowhere in H’ Amended Summons and his Written Submissions contended otherwise. Discharge of an undertaking is a draconian measure and is a judicial discretion[6].

Ground No.1

25.  H has labelled his Ground No.1 as “Error of Law” and elaborated in his Written Submissions as to what I have erred. The error of law being raised was that I have fettered my discretion (emphasis added) in adopting an unduly narrow interpretation of the circumstances where variation of undertaking(s) was possible.

26.  Given the alleged fettering was in respect of the exercise of a “judicial discretion”, first and foremost H has to spell out persuasively and precisely the boundaries and limits within which judicial discretion should be exercised, which I doubt that there are any. Without any boundaries and limits or parameters being set, how could H be able to say that I have adopted an “unduly narrow” approach ? Actually H’s contention rests upon his personal views and perceptions and not upon any objective perspective. The 3 bases put forward by H purportedly to justify his submission that I have fettered the exercise of discretion are, with respect, far from convincing if not a manipulative attempt to ground an appeal against judicial discretion.

27.  One of the unique nature of undertaking(s) is that they are perpetual (unless specifically defined or confined) contractual promise voluntarily given by a party and which are legally binding. To suggest that the court has a duty (emphasis added) to give a purposive and not a literal interpretation must fail for the following reasons.

28.  Judicial intervention to give purposive interpretation would only be called for or appropriate when there are clear and obvious ambiguities in the meaning of the words or phrases used, rather than the purpose or reason behind for using those words or phrases (emphasis added). From time to time, there are always many reasons for parties in matrimonial proceedings to provide undertaking(s), mutually or otherwise, just to deal with their differences without any compelling reasons for so doing. Provided that there was no illegality on the contents of the undertaking(s) or their implementation, there is no room, or duty (as H so alleged), for the court stepping into the arena to give a purposive interpretation and not taking the clear literal meaning of the words and phrases chosen and used by the parties in the undertaking(s). As a matter of fact, H had not been able to produce any cases or authorities to show that giving purposive judicial interpretation on clear and unambiguous undertaking(s) embodied in a consent application should be the correct approach to take or was the practice of the Family Court.

29.  The often cited decision of the Court of Appeal in AEM v VFM[7] would be applicable if and only if H was able to show that variation or discharge was called for, from the legal perspective (emphasis added), such as material change of circumstances which are unforeseeable or that there are clear and obvious ambiguities as I said in the preceding paragraph. A mere dislike or disagreement to be continuously bound by the undertaking(s) with the passage of time and/or because of personal wishes or desires or self-serving purposes, such as re-marriage commonly seen in matrimonial cases, could not even get off the ground for mounting an application for variation or discharge of undertaking(s). It is thus incorrect to say that the case of AEM v VFM (supra) had not been considered by me. This leading and binding authority would “click-in” after a case of variation or discharge could be shown.

30.  The same reason applies to H’s 2^nd bases that a new undertaking could have been accepted but was not even considered by me. Any new undertaking or replacement undertaking would be considered if and only if one or more of the situations set out in L v C (supra) occurs.

31.  H’s 3^rd bases that the undertaking(s) sought to be varied or discharged are maintenance agreement and thus they are variable under section 15 of the MPPO is, with respect, a non-starter.

32.  I agree with W’s Counsel, who was present at the trial before me, that such argument was not advanced or relied upon at all at the trial. It could not be raised for argument at this juncture. I also failed to see any procedural fairness for allowing H to be able to seek leave or permission to proceed with his “completely” new argument as part of his grounds of appeal application now and also conveniently through the lodgement of his Written Submissions and not in the usual course of an application.

33.  In my view, there may also be the issue as to whether the undertaking(s) sought to be varied or discharged by H are “maintenance agreement” defined under section 14 of the MPPO in respect of which alteration was permissible under section 15 of the same Ordinance. Since this was not a live issue that need to be canvassed at this stage of seeking leave to appeal, suffice was it for me to express my preliminary views by saying that there might be a difference between undertaking(s) embodied within the compulsion of a court order as in the present case when comparing with an agreement recorded in writing not being clothed by a court order but nonetheless subject to the court’s statutory powers of alteration under section 15 of the MPPO.

34.  For the above reasons, I find there is no reasonable prospect of success on appeal in respect of Ground No.1.

Ground No.2

35.  From reading H’s Ground No.2 in context and as a whole, and his Written Submissions, I agree with W’s Counsel that it actually goes to appeal my findings of fact and not law. The main theme of such ground was that I have erred in relying on the strict confines of the 4 situations in L v C[8] and thus failed to apprehend (i) the original intention of the parties back in 2019 and all the circumstances when they agreed upon the AR Consent Order; (ii) the proper and underlying intended meaning of the term “free access” used by the parties whilst there was absent in discussion of such term; and (iii) the breach of promise of W to move out the FMH within 30 days of pronouncement of the Decree Absolute.

36.  Given careful consideration to H’s Written Submissions, I agree with W’s Counsel that despite how nicely was the submissions framed, the crux of the challenge was on facts and not law. The fact found by me which was being challenged was the meaning of the term “free access” which I decided to take its literal meaning without paying heed to the other factors such as the surrounding circumstances and the parties’ intention. As said, I am not convinced that judicial intervention for finding purposive interpretation of undertaking(s) should be made in the present case.

37.  There was no suggestion that I had misunderstood the parties’ evidence or the conclusion that I arrived at was a conclusion that no reasonable judge would have reached. Thus, there was no basis for interfering my finding on facts. Accordingly, leave to appeal should not be granted nor was there any reasonable prospect of success on appeal.

Section 15 of the MPPO, Cap.192

38.  It was common ground that section 15 of the MPPO was not argued or even raised at the trial. I decided that this could not be argued at his juncture nor was there any reason for granting leave to H to do so at this stage.

39.  I find there was no reasonable prospect of success on appeal in respect of Ground No.2.

Any other grounds in the interests of justice ?

40.  Apart from the 2 grounds of appeal aforementioned, there was no submission by H that leave to appeal should be granted on the “interest of justice” ground. Nonetheless, I have also considered this limb.

41.  Upon considering the background and circumstances of this case, I find that there are no other grounds in the interests of justice to grant leave to appeal to H.

42.  Quite to the contrary, I stand by my decision that it was unfair and unjust (emphasis added) to grant leave to appeal to a litigant who, having provided undertaking(s) as part and parcel of the consensual package terms of settlement on ancillary reliefs, be allowed to “set the clock back” to renege from what he had volunteered and undertaken to do or agreed upon on settlement in the absence of any of the L v C (supra) situations or providing any additional valuable consideration. Even if this was done, it still have to be agreed upon by the other party since undertaking(s) have to be accepted by the receiving end and could not be casted or forced upon either parties to give or to take.

Decision

43.  For all the reasons above, I decided that H’s application for leave to appeal the 30/6/2023 Decision fails.

Costs

44.  Given the outcome of H’s application and the above reasons, I decided that it is only fair and reasonable for costs to follow the event. I will so order accordingly.

45.  I also grant Certificate for Counsel.

Orders

46.  I now grant the following Orders :-

(a) H’s Summons dated 28/7/2023 for leave to appeal be dismissed;

(b) H to pay W’s costs of his application, to be taxed if not agreed;

(c) There be Certificate for Counsel.

47.  This is a costs order nisi which would become absolute if no application to vary the same was made within 14 days from the date of this Decision.