JAH v. VH

FCMC 14350 / 2009
(Consolidated with FCMC No4402/2010)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 14350 OF 2009

(Consolidated with FCMC 4402/2010 as per order of HH Judge Melloy dated 23 June 2010)

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BETWEEN

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R U L I N G
(To Set Aside Decree Absolute)

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Introduction

1.  This is an application by a Petitioner wife to dismiss the husband’s ex parte notice of application for a decree nisi to be made absolute and to set aside the corresponding decree absolute pronounced on the 9 February 2011.

2.  The main issue here is whether or not in the context of the present application I have jurisdiction to set aside the decree absolute or alternatively whether the matter should more properly be dealt with in the Court of Appeal. In the event that the Family Court has jurisdiction, on what basis can the application be granted?

Background

3.  This matter first came before me on the 23 June 2010. On that occasion the parties agreed in court as follows:

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.  The only matter left for me to determine was whether or not leave should be given to the husband to file his Answer out of time. I refused that application but in doing so I gave the following directions:

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.

5.  Matters did then proceed in a more sensible way. On the 16 July 2010 an order was made by consent that the wife be given leave to amend her petition (to a milder form). The husband’s cross petition was also withdrawn. From that point on matters have proceeded on the basis of the wife’s amended petition. On the 25 August 2010 a decree nisi was pronounced in favour of the Petitioner wife.

6.  The parties also entered into mediation with a view to resolving the issue of ancillary relief. On the 13 January 2011 a very comprehensive consent summons was made an order of the court. This deals with the parties’ very extensive business and property interests, which appear to be mainly based in Cambodia. One interesting feature of the consent summons was that the parties undertook inter alia to transfer a series of properties to each other within 12 months of the date of the mediation agreement i.e. by the 22 December 2010. These transfers were only expressed in the form of undertakings. They were not expressed as an order. Presumably this was because an order can only take effect upon the pronouncement of a decree absolute whereas an undertaking is binding on the parties in the form of the undertaking given. In Hong Kong a breach of a financial undertaking can be enforced either by contempt of court proceedings and/or by a judgment summons.  It was also agreed and each party undertook to enter into a Letter of Promise. The husband also undertook to pay the wife a lump sum of US$8 million, the first instalment of US$3 million to be paid within 14 days of the date of the order and the remaining instalments of US$3 million each to be paid on the anniversary of the first payment. The first instalment was eventually paid and on the 10 February 2011 the wife’s solicitors acknowledged receipt of the same. There were also undertakings given in relation to other matters. Nowhere does the wife undertake to apply for the decree nisi to be made absolute. Both parties were legally represented throughout.    

7.  What followed next does not appear to be in dispute. On the 14 January 2011 the husband’s solicitors wrote reminding the wife to apply for the decree absolute. On the 27 January the wife’s solicitors wrote asking the husband to comply with his undertaking and to pay the first tranche of US$3 million and also the monthly support of US$80,000. On the 31 January the husband’s solicitor wrote confirming that remittance had been arranged and asked the wife to apply for the decree absolute failing which they had instructions to make an application to the court. The following day the husband issued a Form 5 asking the court to make the decree nisi absolute. There is no doubt that this is incorrect. The Form 5 is an ex parte application made on paper. It is an application that can only be made by a Petitioner. In this instance the application states:

TAKE NOTICE that the husband applies for the decree nisi pronounced in his favour on the 25 day of August 2010 to be made absolute.

8.  The Divorce Registry then erroneously granted a decree absolute in favour of the wife although she had not applied for it.

9.  It is agreed that the correct procedure is set out in section 17(2) (a) of the Matrimonial Causes Ordinance, which states that:

(2) (a) Where a decree nisi of divorce has been granted and no application for it to be made absolute is made, then, at any time after the expiration of 3 months from the earliest date on which such an application could have been made, an application for a decree absolute may be made by –

(i) in a case where the decree nisi was granted on a petition for divorce, the person against whom it was granted; or

(ii) in a case where such a decree was granted on an application for divorce, either of the parties by whom the application was made.

10.  Rule 65(4) of the Matrimonial causes Rules adds

(4) An application by a spouse for a decree nisi pronounced against him to be made absolute may be made to a judge or the registrar, and the summons by which the application is made (or, where the cause is pending in the District Court, notice of the application) shall be served on the other spouse not less than 4 clear days before the day on which the application is heard.  (L.N. 26 of 2002)

11.  This was not done. There was no summons and no affidavit in support. The wife was not given an opportunity to put her case as to why the decree absolute should not be granted at this time. I accept that this opportunity should have been afforded to her. Whether she is successful in that application or not is a completely different issue.

12.  To that end Ms Ser for the wife has referred me to a number of cases and in particular to Manchanda v Machanda [1995] 2 FLR 590. In her written submission she summarizes the case, also quoting from Thorpe J as follows:

23.   In Manchanda v Manchanda [1995] 2 FLR 590, as in Woolfenden v Woolfenden and this case, the party (husband) against whom the decree nisi was obtained applied for it to be made absolute and without notice to his wife.  In that case, a decree nisi of divorce was granted to the wife and her husband (against whom the decree nisi was made) applied for a decree absolute before the necessary period of time had elapsed, and that no notice of it had been given to the wife.  The husband failed to comply with section 9(2) of the Matrimonial Causes Act 1973 and Rule 2.50 of the Family Proceedings Rules 1991, Part II (which are similar if not identical to section 17 of MCO and Rule 65(4) of MCR).  The wife succeeded in her appeal in the Court of Appeal in setting aside the Decree Absolute.  Leggatt LJ stated at p.595D that :-

“In my judgment a distinction has to be drawn between cases in which the court lacks jurisdiction because it has no power to grant a decree absolute in the circumstances in which it has purported to do so, and cases in which though the court enjoys jurisdiction, it has through the inadvertence of one of the parties failed to observe a statutory provision against the exercise of it, or there has been a procedural irregularity in the process of exercising it. This case falls within the former category, as is shown by Callaghan v Hanson-Fox (Andrew) [1992] Fam 1, sub nom Callaghan v Hanson-Fox and Another [1991] 2 FLR 519, in which Sir Stephen Brown P specifically approved Woolfenden. In addition, all the cases I have cited relating to service, save foe Batchelor (above) which is to be doubted, show that the failure to serve a summons on the wife in accordance with r 2.50renders the decree absolute null and void, and the wife is entitled to have it set aside. The jurisdictional and fundamental procedural irregularities are both fatal. I would allow the appeal and set aside the decree absolute.”

Thorpe J, further stated at p.595F that :-

“I agree that this appeal should be allowed and for the reasons stated by my Lord. The present case is indistinguishable on its facts from the case of Woolfenden (Otherwise Clegg) v Woolfenden (Otherwise Clegg) [1948] P 27 therefore the petitioner is entitled to have the decree absolute set aside unless Woolfenden is no longer good law. Mr McCormick’s [Counsel for the husband] efforts to undermine or devalue the decision were quite unpersuasive. The decree nisi is the decree of the party upon whose prayer it was pronounced. The parliamentary intention is clear. That party, after the passage of 6 weeks, has a period of 3 months within which he or she has the sole right to elect whether to apply for it to be made absolute and when to apply for it to be made absolute. The other party’s protection against sloth, caprice or strategy is to initiate the application by inter partes summons after the expiration of the 3-month period. Although the grant of a decree absolute is by administrative process, it is the climax and culmination of the proceedings since it is the vital pronouncement that changes status. A review of authorities over the last 48 years shows that Woolfenden has been followed, cited with approval or cited to distinguish in eight cases, several of them in this court. It has never been disapproved.

The reality is that the decision in Woolfenden has been of considerable use over nearly half a century.  The rule is easily understood. Practitioners know where they stand.  Instances in which court staff make the elementary mistake that was made in this case are fortunately rare. Accordingly there seems to me to be no practical argument for reconsidering its rule.  Despite the passage of time the considerations that then applied have not substantially changed.  Many petitioners have applications for ancillary relief that are not finally determined until long after the decree nisi.  For many reasons they are generally loath to lose their marriage status until financial claims have been settled.  If they are to lose that protection it should only be in the exercise of a judicial discretion after they have had a proper opportunity to present their opposition.” [emphasis added.]

13.  With respect I agree.     

14.  The primary issue is whether or not I have the jurisdiction to deal with this application, or whether it must, and certainly in the first instance, go up to the Court of Appeal. Counsel for the husband has referred me to LCM v LYY CACV 445 of 2002. In that case the Court of Appeal considered three different options for setting aside a decree absolute and accepted that the matter should proceed by way of an appeal to the Court of Appeal. This procedure has been accepted since in MSK v PSK CACV 219 of 2005 and FHFK v NCM CACV 182 of 2007, judgment dated the 20 June 2008. In that case there were no administrative errors on the part of the court. Rather the husband deliberately misled the court in that he made representations to the effect that the petition had been served when he knew that that was not the case. The situation here is very different and on that basis it seems to me that LCM can be distinguished. Instead I would seek to rely on the earlier Court of Appeal decision in Zinkin v Wong [2000] 1 HKC 642. In that case the Court of Appeal referred the matter back to the Family Court on the basis that the pronouncement of the decree absolute was an administrative mistake only. Here it is also clear that there has been an “administrative mistake” and consequently I will accede to the wife’s request and make an order in the terms of her summons. The costs of the application shall be to the wife on a party and party basis to be taxed if not agreed.  

15.  Finally I should like to add that I do not accept the argument advanced by counsel for the husband that setting aside the decree absolute will somehow unravel the existing court order on ancillary relief. It is very common in the family court for undertakings to be given as an alternative to orders. This is generally because for some reason or another a party may not wish to wait until the pronouncement of a decree absolute inter alia for a payment of a lump sum or transfer of property order. This is perfectly permissible. Prima facie the husband is still bound by the court order and the undertakings that he has given. The only outstanding matter relates to the dismissal of claims. That will only come into effect once the parties have complied with their undertakings and a decree absolute has been pronounced.