DGC v. SLCneeC

CACV 37/2005

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 37 OF 2005

(ON APPEAL FROM FCMC NO. 6358 OF 2004)

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Reasons for Judgment and
Decision on Costs

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Hon Cheung JA (giving judgment of the court) :

Reasons for Judgment

1. At the conclusion of the hearing on 27 July 2005 we dismissed the respondent wife’s appeal.  We now give our reasons.

The appeal

2. This is an appeal from the decision of HH Judge Geiser who refused the wife’s application to stay the husband’s petition for divorce and ancillary relief. 

Facts

3. The parties are Australian citizens.  The husband was born on 14 August 1953 while the wife was born on 22 December 1956.  The husband is a pilot employed by Cathay Pacific Airlines (‘Cathay’) and has been living in Hong Kong since 1988.  He is a permanent resident of Hong Kong and lives in a property (‘the Hong Kong property’) purchased in his name.  This property is the former matrimonial home.  It is subject to mortgage. 

4. The husband was formerly a pilot in Ansett Airlines, Australia and the wife was a flight attendant in the same airline when they first met in Australia in 1984.  The husband came to Hong Kong when he was offered the present job with Cathay in 1988.  There is some dispute whether the parties had cohabited in Australia before the husband came to Hong Kong but what is clear is that the wife visited him in Hong Kong from time to time in 1988 and came to live with him in 1989.  They cohabited for three years before they became married on 14 June 1991 in Hawaii, USA.

5. After marriage, the parties continued to live in Hong Kong.  The position remained until February 2002 when the wife left Hong Kong and returned to Australia.  The couple do not have any children.

6. The Hong Kong property was purchased in the 1990’s and is valued at about HK$5.85 million with a mortgage of about $3,230,000.  The parties also have purchased a property in Sydney, Australia which the wife occupies since her return to Australia.  This property was purchased off the plan in late 1987 and was completed in mid-1988.  This property is valued at AUD$500,000.  The parties also own an investment property in Noosa Head, Australia valued at about AUD$1.5 million to AUD$2 million.  The Australian properties are subject to mortgage of about AUD$370,000.

7. The husband has a provident fund provided by his employer.  This is valued at HK$5,422,360.10 in February 2002 (the time of separation of the parties) and HK$8,498,616.63 in November 2004.

The stay application

8. On 15 June 2004 the husband petitioned for divorce in Hong Kong based on two years separation and applied for ancillary relief.  The court documents were served on the wife in Australia.  On 8 September 2004 the wife applied for a stay of the divorce proceedings which was one day before the Hong Kong District Court was due to pronounce the decree nisi of the divorce.  Both matters were then adjourned. 

9. On 14 October 2004, the wife commenced proceeding in Sydney, Australia for property settlement (‘the Australian proceeding’).  The husband lodged an application in Australia to stay the Australian proceeding.  It was refused by Steele J of the Family Court of Australia at Sydney on 17 December 2004.  The appeal against that decision had been heard and decision is pending. 

The principles

10. The principles governing stay of a Hong Kong proceeding by reason of forum non conveniens or forum conveniens (the terms are the same), have been set out by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd, The Spiliada [1987] AC 460.  The principles are adopted by this Court in The Adhiguna Meranti [1987] HKLR 904 (Yang VP (as he then was), Hunter JA and Nazareth J (as he then was)) and Louvet v Louvet and Another [1990] 1 HKLR 670 (Fuad VP, Hunter and Penlington JJA).

11. The principles are :

1.	The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action i.e. in which the action may be tried more suitably for the interests of all the parties and the ends of justice?
2.	In order to answer this question, the applicant for the stay has to establish that first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action) and second, there is another available forum which is clearly or distinctly more appropriate than Hong Kong.  Failure by the applicant to establish these two matters at this stage is fatal.
3.	If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceeding has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.
4.	If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer.  Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.

Hong Kong has the real and substantial connection

12. Applying these principles it can be seen readily that the wife who wished to stay the Hong Kong proceeding has failed to establish the first two requirements in the inquiry, namely, Hong Kong is not the appropriate forum and Australia is the more appropriate forum.  We would observe that in essence these are not two separate inquiries because the factors that need to be considered are the same and overlapping.  In this case Hong Kong is clearly the forum which has the most real and substantial connection with the case.  As Lord Goff of Chieveley in Spiliada observed, the connecting factors will include not only those affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction and the places where the parties respectively reside or carry on business. 

13. The husband has been living and working in Hong Kong for the past 17 years.  On the evidence presented before us, he is to remain as an employee with Cathay.  The injuries he had earlier sustained as a result of a fall in February 2004 are now under control and would not affect his employment.  The parties spent practically the whole of their cohabitation and married life of about 13 years in Hong Kong.  Their married life began and ended in Hong Kong.  The acquisition of properties by this couple took place while they were in Hong Kong.  The provident fund of the husband is provided by a Hong Kong employer.  The wife has, of course, returned to live in Australia, but taking an overall view, the real and substantial connecting factor is not in any way lessened; certainly it cannot be said that her connection with Hong Kong is a fragile one.

14. The jurisdiction of the Hong Kong courts to deal with the husband’s petition for divorce and ancillary relief was invoked by reason of his substantial connection with Hong Kong (section 3(c) of the Matrimonial Causes Ordinance (Cap. 179).  The husband is entitled to sue in Hong Kong as of right.  This is a factor that has to be given proper recognition : see Nan Tung Bank Ltd, Zhu Hai v Wangfoong Transportation Ltd [1999] 2 HKC 606 and Yap Lup Man v Good First Investment Ltd [1998] 1 HKC 726.

15. The family courts in Hong Kong have vast experiences in dealing with cases of an international dimension.  Many involved the large expatriate community in Hong Kong whose assets are located both in Hong Kong and overseas.  The Hong Kong courts regularly deal with the valuation of overseas properties and make orders thereto.  In terms of convenience and expense of hearing, Hong Kong has a purpose-built technology court room with video linkage to overseas countries.  Further, the husband has been paying for the wife’s airfares and hotel expenses.  There is nothing to show that he will not shoulder this responsibility if the wife is required to come to Hong Kong for the court hearing.

Position in Australia

16. In our view the wife has failed to show that Hong Kong is not the appropriate forum.  As to whether Australia is the more appropriate forum, it has, of course, a highly reputable legal system and retired chief justices of the High Court of Australia regularly sat in the Hong Kong Court of Final Appeal.  But in terms of the ‘appropriateness’ of its courts in a stay application, we have to say that the wife has also failed to establish that Australia is the more appropriate forum.  Apart from the wife’s resumption of residence in Australia, all the other connecting factors we have mentioned earlier remain unchanged.

17. The Australian courts are able to deal with property adjustments even without a divorce but this is not a real issue in this case because the wife wants a divorce as well. 

18. In practical terms the courts in Hong Kong and Australia are able to make the same financial provisions for the parties.  The jurisdiction of the Australian courts to ‘split’ a provident fund does not extend to one which is located overseas.  This is the position regarding the husband’s provident fund.  Hence there is no specific advantage to be gained if the case is to be tried in Australia.  It is said that Australian courts are more generous in terms of property distribution between married couples and the proportion awarded to the wife could be as high as 60%.  On the other hand, the Hong Kong approach is based on the ‘reasonable requirement’ of the spouse, see C v C [1990] 2 HKLR 183.

19. In our view this factor alone does not necessarily mean Australia is the more appropriate form.  In any event at this stage there is nothing to indicate that the Hong Kong courts will firmly not follow the more generous approach of property distribution recently developed in the English decisions such as White v White [2001] 1 AC 596. 

Multiplicity of proceedings

20. Mr. Egerton, counsel for the wife, argued that since the Australian court have refused to stay the wife’s proceeding there, there would be multiplicity of proceedings with undesirable consequences if the husband’s proceeding in Hong Kong is allowed to continue.

21. We accept that generally speaking, multiplicity of actions of the same subject matter in different jurisdictions should be avoided.  But very often when parties realised that they have to face multiple proceedings, they would choose to pursue only one set of proceedings.  In any event this problem will not by itself cause the Hong Kong proceeding to be stayed because ultimately the real issue is still whether Hong Kong is not the appropriate forum to try the case.  Lord Diplock in The Abidin Daver [1984] 1 A.C. 398 has clearly stated that,

‘... but as a general rule the fact that to permit the England action to be pursued would result in concurrent actions on the same subject matter proceeding in two different jurisdictions could not be sufficient to justify depriving the plaintiff of the advantage to which he was entitled, if an English court of competent jurisdiction could be found, to choose it as the forum in which he preferred to litigate the matter.’

Similar view was expressed by Liu JA in Nan Tung Bank Ltd, Zhu Hai. 

The Australian proceeding

22. Steele J of the Australian Family Court has refused to stay the Australian proceeding.  We do not need to discuss this save to draw attention to the fact that jurisdictions like the United Kingdom, New Zealand, Canada, Hong Kong, Singapore and India have adopted the principle of forum non conveniens.  The Australian approach is different.  It is said to be stricter and is closer to that which formerly prevailed in England.  The question there is whether the Australian forum is ‘clearly inappropriate’ which in effect means examining that choice for elements of vexation or oppression : see Dicey & Morris, The Conflict of Laws (13^th Ed) Vol 1, Para 12-011 and Morris, The Conflict of Laws (5^th Ed) Vol 1, page 120).

23. It is further argued that the husband had ‘stolen the race’ by issuing the Hong Kong proceeding in a pre-emptive move when he knew the wife was contemplating proceedings.  The criticism of Thorpe L.J. in the English Court of Appeal in Butler v. Butler (Nos. 1 and 2) [1997] 2 FLR 311 about this undesirable practice was relied upon.  Paragraph 5 of the Hong Kong Family Law Association Protocol also enjoins its members to be judicious in commencing hostile proceedings.

24. The present evidence which is not tested in cross-examination does not show that the husband has in bad faith taken such a move.  The wife’s lawyer had made proposals of settlement to the husband by letter in May 2004.  However the husband did not receive the letter.  It was sent to his business address without giving the details that can be found in the husband’s name card.  The parties had discussions about their marriage and property matters in April and May 2004.  The letter was resent to the husband in June 2004.  By that time he had already instructed his own lawyers to proceed with the divorce and ancillary relief in Hong Kong. 

25. In Butler, the English proceeding was stayed in favour of the proceeding in Florida U.S.A.  This was based on the facts of the case : the connection of the parties to England was tenuous to the extreme.  Thorpe L.J. described the parties relationship ‘budded, blossomed and withered’ in Florida. 

Other matter

26. Mr. Pilbrow S.C. counsel for the husband, has further argued that the stay application in Butler was based on the English Domicile and Matrimonial Proceedings Act 1973 in which the courts are required to assess the balance of fairness as between the parties whereas the stay application in Hong Kong is based on the principles governing forum non conveniens.  In our view this is not a valid distinction.  As Lord Goff observed in de Dampierre v de Dampierre [1988] 1 AC 92 at 108, the underlining purpose of the principles in these two areas are the same and he suggested the structuring of the approach in cases of forum non conveniens is relevant to cases under the English statute.  This, however, is not a matter that concerns us in this case.

Conclusion

27. The husband’s choice to invoke the jurisdiction of the Hong Kong courts cannot in any way be described as ‘forum shopping’.  The wife has simply failed to establish Australia is the more appropriate forum.  This is fatal to her application.  As a result we do not need to address the other principles relevant to stay applications.

28. The judge has exercised his discretion correctly.  The appeal is accordingly dismissed. 

Direction

29. We had also directed that the pronouncement of the divorce decree nisi be restored for hearing at the earliest available date.

Decision on Costs

30. The husband is to have the costs of the appeal.

31. We would like to thank counsel for their assistance.