GM SA aka DG, M S v. DDPJ

FCMC 9657/2016

[2022] HKFC 55

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 9657 OF 2016

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D E C I S I O N

(Leave to Appeal)

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The Application

1.  The Petitioner was the wife.  The Respondent was the husband.  I will refer to them conveniently as “W” and “H” in this Decision.

2.  On 30/11/2021 this Court handed down its Decision (“30/11/2021 Decision”)  dismissing H’s application for leave to adduce expert evidence on French law at a 5-day trial of his setting-aside application of a Consent Order dated 20/9/2016 (“Consent Order”).  Background of the case has been set out in the Decision which I do not intend to repeat here save as and when necessary to do so.

3.  The 5-day trial has now been scheduled to start on 6/4/2022, that is to say, around 5 weeks ahead of this Decision.

4.  On 10/12/2021 H issued a Summons seeking leave to appeal the 30/11/2021 Decision.  In the Summons, H also sought a stay of these proceedings pending the determination of his leave to appeal application and; if leave was granted, the determination of the substantive appeal.

5.  W opposed H’s application for leave to appeal and also the grant of a stay of proceedings.

The Draft Grounds of Appeal

6.  There are altogether 10 paragraphs in H’s draft Notice of Appeal annexed with the Summons.  Adopting the numbered paragraphs therein (with reference to paragraph numbers in the 30/11/2021 Decision), they are summarised as follows :-

(1)  That this Court was wrong and had applied incorrect legal principles   when concluding that the expert evidence sought to be adduced and   the difference in monetary sum under the PNA had no material    bearing to the issues to be litigated (§§ 30-34; §§41 -50; §§58-59);

(2)  That this Court failed to consider the import of the validity and effect    of the French PNA to the issues at trial, which required expert evidence to prove, namely that the validity and effect of such was    relevant to the question of whether, had W’ misrepresentations and/or   non-disclosure been known at the time of the Consent Summons, whether on balance of probabilities a different ancillary relief order    would have been made;

(3)  That this Court erred in proceeding on the erroneous assumption that the French PNA was adduced for determining the factual issue of W’s    alleged misrepresentations/non-disclosure (§§41 -42; §§50);

(4)  That this Court proceeded to pre-emptively determine important    issues relevant to H’s pleaded case under the HCA before proper consideration of evidence in full at trial and after hearing witness testimony (§37; §§41 -42; §§45 -49);

(5)  That this Court erred in law when determining the issue of  misrepresentation and/or material non-disclosure in the context of an    application for setting aside a Consent Order (§§30 -34; §§41 -50);

(6)  That this Court failed to consider both (1)  statutory duty of full and frank disclosure; and (2)  contractual duty in the Consent Summons   filed in ancillary relief proceedings and that W’s deliberate    misrepresentations and failure to make full and frank disclosure was    relevant to the validity of the Consent Order and undermine the basis of the Consent Order. Further, where the non-disclosure was   deliberate, there is a presumption of materiality and the exception to such presumption constitutes a high bar;

(7)  That this Court was wrong to categorize H’s application as an    application premised upon an attempt to resile from a bad bargain.   Rather, H’s application was that he was induced to enter into a   Consent Summons by W’s misrepresentations and without W’s giving full and frank disclosure.  H was thus unable to make an    informed decision and that he was also deprived of receiving full legal    advice;

(8)  That this Court was incorrect to find that H had not explained the   reason for delay in the application when there was moratorium of the   proceedings in the High Court due to H’s transfer application filed in   the High Court in February 2019 which ended up with a Judgment in   January 2021.  H then filed his application to adduce expert    evidence in June 2021 (§53-54; §§70 -71; §76);

(9)  That this Court failed to have sufficient regard to Order 1A rule 2(2) of the Rules of the High Court which mandates the Court to secure just resolution of disputes in accordance with the substantive rights    of the parties.  Further, this Court failed to recognise that refusing   leave to H would adversely affect such aim; and

(10)  That this Court failed to acknowledge or take into account the overall   circumstances of the case in that granting leave to H to adduce expert evidence would not jeopardize the trial dates or unduly prolong the   same.  The Court failed to give due consideration that there was still more than four months’ time to arrange consequential matters and the Court could give directions expediting matters (§55-57).

7.  The above draft grounds of appeal are then categorized under 4 separate headings in H’s written skeleton submissions dated 10/12/2021 as follows :-

(A)  Failure to consider and apply correct law regarding the Setting aside of a consent order;

(B)  Pre-determination of Trial issues (including “materiality” of non-disclosure/misrepresentations)  without proper consideration of evidence;

(C)  Failure to correctly consider the import and effect of the parties’ French Pre-nuptial Agreement; and

(D)  Failure to properly consider Order 1A rule 2(2)  of the RHC; That there was reasonable explanation or any apparent delay, no prejudice was caused to the Petitioner in allowing the application, nor was there any prejudice to the forthcoming trial dates.    

The relevant provisions on granting leave to appeal

8.  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.

9.  The relevant test for determining whether the appeal has a reasonable prospect of success is whether the applicant for leave can show that he 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).

Discussion

10.  First and foremost, no issue was raised in H’s skeleton submissions that the 30/11/2021 Decision was not one of case management nature as W’s Counsel had so emphasized[1].  Having said, it is trite that an appeal against a case management decision is an appeal against an exercise of discretion where the appellate court would only interfere in wholly exceptional circumstances (see Cheung Yee-mong v So Kwok-yan, per Bokhary JA (as he then was)[2].

11.  In the Court of Appeal decision in the case of Wong Kar Gee Mimi v Severn Villa Ltd[3] 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.

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.”

12.  Secondly and at the risk of repetition, it must also be emphasized that the substantive trial, where H sought to produce expert evidence on French Law for the Pre-Nuptial Agreement (“PNA”), was for the determination of his application to set aside (emphasis added)  the Consent Order in question, which was the Order on global settlement of the parties’ ancillary reliefs granted by the Court back in September 2016 (that is, around 5½ years ago).  That said, the substantive trial scheduled for 5 days in April 2022 was not for the determination or re-hearing of the parties’ ancillary reliefs.  It was emphatically scheduled to consider whether or not the Consent Order should be set aside on any of those established legal principles.

13.  With these caveats and background in mind, I will now deal with each of the draft grounds of appeal in sequence.

14.  Grounds (1)  and (2)  hinge upon the expert evidence and the PNA with the issues that are to be litigated at trial.  The issues at trial, as found by this Court at paragraph 42 of the 30/11/2021 Decision, was simply that whether there was misrepresentation and/or non-disclosure by W.  This was a question of fact to be found upon parties’ evidence and credentials being tested through cross examination after trial rather than upon proof of the validity and effect of the PNA with the aid of expert evidence before trial. Whether, on balance of probabilities, a different ancillary reliefs order would have been granted would “click in” and become a live issue for the Court only after H was able to set aside the Consent Order in April 2022.  With respect, such submission as a ground of appeal to the 30/11/2021 Decision are simply “putting the cart before the horse” and could not be accepted.

15.  Further, such submission of an “Otherwise Order”, so to speak, as a ground of appeal must fail since this was akin to say that the Court, when being faced with a Consent Summons for approval, must have satisfied itself that the terms therein reflected the “would-be” result even though the parties chose to compromise and not to litigate.  Such approach of approving a Consent Summons must be wrong.  Day in and day out, there are all sorts of reasons behind for the spouses in litigation to settle their ancillary reliefs on terms which, had there been a full-blown trial, may be materially different from what would have been normally expected.  Had the parties’ consent in the Consent Summons been given against any underlying considerations or terms, which might affect, vitiate or undermine the consent so provided, as commonly seen in family cases, this could easily be safeguarded in the drafting exercise through the use of “undertakings and/or acknowledgement” as recitals recorded in the preamble to the Consent Summons.  This is an easy task and commonly engaged by practitioners with extensive matrimonial experience.

16.  Hence, Grounds (1)  and (2)  have no reasonable prospect of success on appeal.

17.  Ground (3)  is a complete non-starter.  In no way had this Court erroneously assumed that the French PNA was adduced to determine the substantial issue of misrepresentation/non-disclosure by W.  It was rather to the contrary when this Court said at paragraph 42 of the 30/11/2021 Decision : “…… The Court requires no expert evidence or opinion in the fact-finding exercise.  I decided that expert evidence on French Law is not required for determining the issue of the alleged misrepresentation and/or failure in full and frank disclosure pleaded by H in the HCA to be tried in April 2022.”

18.  Ground (3)  has no reasonable prospect of success on appeal.

19.  Ground (4)  referred to this Court erred in pre-emptively determined the issues in dispute before proper consideration of the evidence at trial and after hearing witnesses’ testimonies.  Reference was made by H to paragraphs 37, 41 to 42 and 45 to 49 of the 30/11/2021 Decision. 

20.  Upon review of those paragraphs cited from the 30/11/2021 Decision, none of them shown this Court had “pre-emptively determined” any of the important issues in dispute.  Paragraphs 45 to 49 was just referring to the need of “materiality” of the 2 factual matters complained of by H, namely, that “W having formed a relationship with T” and “W’s plan to relocate with the children” vis-à-vis H’s case that W had failed to disclose them.  It was no more than that.  Providing an objective view on factual matters should not be taken as having formed any definitive view or pre-emptive determination of those factual matters.  Any such submission, with respect, is devoid of logic.

21.  Ground (4)  has no reasonable prospect of success on appeal.

22.  Ground (5)  is unclear. This Court would have, but have not yet, to determine the issue of misrepresentation and/or material non-disclosure at the upcoming trial in April 2022.  Any submission that this Court had, at the time of the 30/11/2021 Decision (where leave to appeal is now being sought)  already erred in law in the context of H’s application for setting aside the Consent Order is misconceived.

23.  Ground (6)  is, once again, a non-starter.  H failed to show why there was a need for the Court to consider (1)  the statutory duty and (2)  the contractual duty so alleged when the only question before the Court was whether or not to grant leave for him to adduce expert evidence.  The simple and short answer to such question turned upon the established principle of “relevance” of the expert evidence sought to be adduced to the issue ought to be decided, as succinctly set out in the case of Yeung Ga Wai v. Lau Ming Shum, per Mr. Registrar K.W. Lung at paragraphs 11 & 12).

24.  Consideration of (1)  statutory duty of full and frank disclosure and (2)  contractual duty in the Consent Summons would only “click in” after the Consent Order in question was successfully set aside by H, when the terms of the Consent Summons might be “re-visited” and examined by the Court, but not at any time sooner.

25.  Further, the submission as to the presumption of materiality whilst the non-disclosure was deliberate would only “click in” upon H successfully obtained the finding of fact of deliberate non-disclosure against W at or after the trial of his setting aside application in April 2022.  Such submission at present, as a ground for seeking leave to appeal, is pre-mature and misconceived.

26.  Ground (6)  has no reasonable prospect of success on appeal.  

27.  Ground (7)  referred to H having been induced to enter into a Consent Summons by W’s misrepresentations and W without giving full and frank disclosure.  This had removed H’s ability to make an informed decision upon the facts in existence and thus deprived him the opportunity to receive full legal advice on those existing facts.

28.  As said, the 30/11/2021 Decision of which H is presently seeking to appeal was the refusal of leave for him to adduce expert evidence rather than his application to set aside the Consent Order.  It was only for the latter when such submission may be of relevance.  The moment in time for H to come up with any informed decision, or to receive full legal advice, has no bearing to whether leave should now (emphasis added)  be granted for him to adduce expert evidence.  The two simply does not sit happily together.

29.  Moreover, it was always open to H and was all possible that he had had the benefit of his own expert advice, and might even possibly also with legal advice, when he entered into the Consent Summons.  Same and again, relevance of the expert evidence to be adduced on French Law on the PNA vis-à-vis the alleged issue of W’s misrepresentation and/or non-disclosure had not been substantiated by H. 

30.  Ground (7)  has no reasonable prospect of success on appeal.

31.  Ground (8)  was in respect of this Court’s views on the delay in time of the application for leave to adduce expert evidence.  The short and simple submission that there was a moratorium of the proceedings in the HCA arising from H’s transfer application did not address each of the events set out in detail by this Court under paragraphs 61 to 76 of the 30/11/2021 Decision.   Hence, the submission that this Court had incorrectly found H not explaining the belated application must fail.

32.  Ground (8)  has no reasonable prospect of success on appeal.

33.  Ground (9)  referred to this Court having failed to have sufficient regard to Order 1A rule 2(2)  of the Rules of the High Court (Cap. 4A).

34.  At paragraph 51 of the 30/11/2021 Decision, clear and express reference have been made to the aims and underlying objectives of the Civil Justice Reform (“CJR”)  under Order 1A rule 1.  At paragraphs 54 to 57 of the 30/11/2021 Decision, full consideration had been duly given.

35.  Ground (9)  has no reasonable prospect of success on appeal.

36.  Ground (10)  referred to no possible jeopardy to the trial dates scheduled for April 2022 or that granting leave to H to adduce expert evidence at this stage would not unduly prolong the trial. 

37.  At paragraphs 56 to 57 of the 30/11/2021 Decision, H’s submission had been fully considered.  Apart from prejudice (if any)  to W who has had the benefit of the Consent Order on ancillary reliefs for more than 5 years, the need for procedural economy and proportionality, the need for expediency all built in, the discretion not to allow H adducing expert evidence at this stage was rightly exercised.

38.  Paragraph (10)  has no reasonable prospect of success on appeal.

Any other grounds in the interests of justice ?

39.  Apart from the listed grounds of appeal, there was no submissions by H that leave to appeal should be granted on the “otherwise ground”, that is, it is in the interests of justice to grant him leave to appeal.  Nonetheless, consideration had also been given to this limb.

40.  After giving full and careful consideration, this Court found that no such ground exists in the circumstances of this case.

Stay of Proceedings

41.  Given the fact that none of the grounds of appeal was found to have any reasonable prospect of success, and that H has provided no other reasons justifying a “stay”, I refused to grant any order for stay of these proceedings.

Decision

42.  For all the reasons above, I decided that H’s application for leave to appeal fails.

Costs

43.  Given the outcome of H’s application, I decided that there was no basis for departure from the usual costs order that it should follow the event. 

44.  I also grant Certificate for 2 Counsel.

Orders

45.  I now grant the following Orders :-

(a)  H’s Summons dated 10/12/2021 for leave to appeal be dismissed;

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

(c)  There be Certificate for 2 Counsel.

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