WLK v. TMC

FAMV No. 50 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 50 OF 2009 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL
FROM CACV No. 339 of 2008)

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Appeal Committee:  Mr Justice Bokhary PJ, Mr Justice Chan PJ and Mr Justice Ribeiro PJ

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DETERMINATION

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Mr Justice Ribeiro PJ:

1.  On 30 November 2009, leave to appeal was refused on the “as of right” basis but granted on discretionary grounds, with reasons to follow.  These are our reasons.

2.  The applicant husband in this case seeks leave to appeal from the Court of Appeal’s judgment determining the respondent wife’s application for ancillary relief under the Matrimonial Proceedings and Property Ordinance, Cap 192 (“the Ordinance”).

3.  At first instance,[1] HH Judge Bruno Chan ordered the husband to transfer to the wife assets with a total value of HK$9.2 million, comprising a house in Malaysia worth HK$2.25 million, a net lump sum of HK$4.25 million, having taken into account a portfolio of shares and certain monies advanced to the wife together worth about HK$2.7 million.  The Court of Appeal[2] overturned that order, substituting an order that the husband should pay to the wife a lump sum of $37.5 million. 

Leave as of right

4.  Mr Benjamin Yu SC, appearing for the applicant with Ms Anita Yip, seeks to argue that an application for leave to appeal against such an order falls within section 22(1)(a) of the Court’s statute[3] as explained in China Field Ltd v Appeal Tribunal (Buildings) (No. 1).[4]  That submission proceeds upon a basic misunderstanding of what was decided in China Field. 

5.  Section 22(1)(a) provides as follows:

“An appeal shall lie to the Court ... as of right, from any final judgment of the Court of Appeal in any civil cause or matter, where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more, or where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more...”

6.  It has two limbs, each providing a basis for an appeal as of right.  The first limb encompasses appeals “where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more”.  The second limb – which is what China Field was concerned with – covers cases “where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more”.

7.  As was pointed out in China Field,[5] it is well-established that a narrow construction is given to the first limb.  The words “where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more” have consistently been confined to claims for liquidated sums of money.  A proposed appeal involving an unliquidated monetary claim, such as a claim for damages requiring assessment, has repeatedly been held to fall, not merely outside the first limb, but outside section 22(1)(a) altogether.  This includes cases where the unliquidated claim has actually been assessed.[6]  The present case falls within that category.

8.  It is essential to understand that China Field did not in any way change the position regarding the first limb.  As we there stated:

“Construction of the second limb of section 22(1)(a) must be consistent with, and must not undermine, the established construction of the first limb.”[7]

9.  The second limb is not concerned with money claims (whether liquidated or unliquidated): that is the province of the first limb.  It addresses applications involving “some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more”.  In the context, it is plainly intended that the “civil right” should be a right which is proprietary in nature.  It was in connection with such property rights that we stated at §24 of the China Field judgment,as follows:

“Consistently with the strict approach adopted in relation to the first limb of section 22(1)(a), it is only proper to ascribe a value which qualifies for leave as of right to the candidate claim or question if (i) on the evidence, such value is clearly quantifiable as a value of $1 million or more; and (ii) the court is satisfied that the Court’s order made upon disposing of the proposed appeal would take effect by immediately conferring or imposing on the relevant parties a financial benefit or detriment in the quantified amount.  It is not enough that one is able plausibly to say that such a financial impact is a likely eventual result of the appeal.”[8]

10.  It is suggested that that paragraph recognizes an appeal as of right in cases where the court’s order crystallizes an unliquidated claim and orders the payment of a specified sum exceeding HK$1 million on the basis that such an order “would take effect by immediately conferring or imposing on the relevant parties a financial benefit or detriment in the quantified amount”.  That is an untenable reading of the decision.  Such a construction of the second limb would obviously cut right across the narrow construction long established for the first limb and, as the Appeal Committee emphasised, that was not the intention in China Field.[9]  The paragraph referred to above addresses the conditions necessary for bringing property claims within the second limb.  It does not qualify or change the established position regarding claims to which the first limb is applicable.

11.  As we explained in China Field, a narrow construction of the provisions on appeals as of right is necessary as a matter of principle:

“Litigants in Hong Kong have a right of appeal to the Court of Appeal in respect of final judgments generally.  The role of the Court of Final Appeal is not to permit a third bite of the cherry to any litigant who wishes to have another go.  An appeal to the Court as of right is in principle oppressive to the party who has won in the Court of Appeal where the further appeal is without substance.  Unless the appeal involves a point of law of public importance or unless grievous injustice would be done if the final court does not intervene, a successful litigant should not be dragged before a third tier of court. This approach does not, of course, argue against the Court retaining a discretion to grant leave to appeal in appropriate cases.”[10]

12.  For a claim to fall within the second limb, it must be a claim to some particular property or to a proprietary right of the requisite value and it is insufficient for section 22(1)(a) purposes if the claim is of some other kind, say one for unliquidated damages, even if it is incidental to the enjoyment of property rights which are not themselves the subject-matter of the claim. 

13.  The Appeal Committee made this clear in Wing Ming Garment Factory Limited v The Incorporated Owners of Wing Ming Industrial Centre,[11] as follows:

“The plaintiff’s argument is that a claim to a right of exclusive possession necessarily underlies its claim for damages for trespass and that it is the value of that underlying claim that should be taken for the purposes of qualifying the proposed appeal as one as of right.  That is a proposition which was rejected in China Field where the Appeal Committee stressed that s 22(1)(a) of the Court of Final Appeal’s statute focuses on the value of the claim which is the subject-matter of the appeal – here the claim for damages for trespass – and not on any property or right which has some connection with that claim.”

14.  We do not accept Mr Yu’s submission that the present case involves a claim for the “division or distribution of property”.  The wife’s claim for ancillary relief which the husband seeks to contest on appeal is undoubtedly an unliquidated monetary claim.  While it is true that the court’s powers to grant such relief include the power to make orders for the transfer of property,[12] the claim involves no assertion of any entitlement to a particular item of property or proprietary right.  It is an application requiring the court to decide the nature and scope of the appropriate ancillary relief, taking into account all the circumstances and the matters specified in section 7 of the Ordinance.  When the court arrives at its decision, the nature and amount of the award of course becomes ascertained.  But it is by its nature an unliquidated monetary claim and fails to qualify under section 22(1)(a) of the Court’s statute.  It is accordingly clear that the proposed appeal is not as of right in the present case.

Leave on discretionary grounds

15.  Mr Yu SC submits that the Court of Appeal erred in law regarding the proper approach to the parties’ pre-marital relationship when assessing the duration of the marriage or as a circumstance to be taken into account under section 7.  He contends as well that the Court erred in adopting the compensation principle in the present case.   He suggests that much legal uncertainty has resulted.

16.  Mr Yu furthermore complains that the Court of Appeal unjustifiably interfered with a number of important primary findings made by the Judge, crucial to the assessment of the husband’s assets and to the process of making the award.  He also argues that the Court of Appeal’s own findings contain self-evident arithmetical and other errors.

17.  We are cannot accept the submission of Mr Russell Coleman SC, appearing with Mr Robin Egerton, that the abovementioned complaints involve purely questions of fact.  We are satisfied that they raise reasonably arguable questions of law of the requisite importance which ought to be referred to the full Court for decision.  We grant leave on that basis.  In relation to allegedly self-evident errors, we grant leave on the “or otherwise” basis.

Mr Benjamin Yu, SC and Ms Anita Yip (instructed by Messrs Chaine, Chow & Barbara Hung) for the Applicant

Mr Russell Coleman, SC and Mr Robin Egerton (instructed by Messrs Stevenson, Wong & Co) for the Respondent

[1] HH Judge Bruno Chan, FCMC 5508/2005 (14 July 2008).

[2] Tang VP, Le Pichon JA and Stone J, CACV 339/2008 (22 July 2009).

[3] Hong Kong Court of Final Appeal Ordinance, Cap 484.

[4] [2009] 2 HKLRD 135.

[5] At §18.

[6] See Cheng Lai Kwan v Nan Fung Textiles Ltd (1997-1998) 1 HKCFAR 204; Paul Ki Ping Ki v Oriental Daily Publisher Ltd FAMV 25 of 2000, 7 September 2000; Shum Kam Fai v Lam Chi Wai & The Kowloon Motor Bus Company (1933) Ltd FAMV 38 of 2002, 16 December 2002; and Bill Chao Keh Lung v Don Xia (2004) 7 HKCFAR 260. 

[7] At §18.

[8] §25 goes on to explain that the section embraces claims which are indirect as exemplified by “a claim for specific performance of a contract to convey land or a declaration that a party comes within a class of beneficiaries entitled under a trust to certain property would be covered as involving indirect claims to the relevant property if over the threshold in value”, making it clear that property rights were being addressed.

[9] At §§17, 18 and 24.

[10] At §16.

[11] Per Bokhary PJ, FAMV 40/2009 (16 September 2009).

[12] MPPO ss 6 and 6A.