NHUT v. WKM

CAMP 62/2024, [2024] HKCA 1007

On appeal from [2023] HKFC 203

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 62 OF 2024

(ON AN INTENDED APPEAL FROM FCMC NO 8223 OF 2020)

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J U D G M E N T

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Hon Kwan VP (giving the Judgment of the Court):

1.  We have before us the respondent’s summons filed on 5 April 2024 seeking leave to appeal out of time against the decision made by Deputy District Judge J Chow on 12 October 2023 ([2023] HKFC 203) (“Decision”).

2.  The relevant background is set out in §§2 to 12 of the Decision, which we will not repeat. We note that while the petitioner (“Wife”) seeks 50% of the beneficial interest in the two disputed properties in the ancillary proceedings, there is a dispute between the respondent (“Husband”) and the Husband’s mother (“Intervener”) with each claiming to have 100% beneficial interest in the properties[1]. The intended 2^nd respondent, who is the respondent’s sister (“Sister”) and was a joint tenant with the Husband before 16 September 2020 and a tenant in common afterwards, takes the same position as the Intervener, namely that the Sister holds the properties on trust for the late father whose estate acts through the Intervener. The Husband’s position is that the Sister holds the two properties for and on behalf of him.

3.  By the Decision on 12 October 2023, the judge dismissed the Husband’s summons filed on 28 June 2022 to join the Sister as 2^nd respondent and made an order nisi that the Husband do pay the costs of the Intervener and the Sister, to be taxed if not agreed. The judge held that the issue of determining the beneficial interest (and ratio) between the Husband and the Sister is a non-issue in the ancillary relief proceedings, noting that the Wife’s claim is only in respect of the half share of the Husband’s title and interest in the two properties[2].

4.  On 28 November 2023, the Husband sought leave from the judge to appeal against the Decision out of time. The judge refused leave in a decision handed down on 22 March 2024 (“Leave Decision”; [2024] HKFC 39).

5.  For the renewed leave application before this court, the Husband’s summons has appended to it a draft Notice of Appeal, which sets out the grounds of appeal in six numbered paragraphs. Having considered the papers, we have decided to exercise our power under Order 59 rule 2A(5) of the Rules of the High Court (Cap 4A) to determine this application without an oral hearing on the basis of written submissions only.

6.  We will first address the issue of delay. The deadline for taking out the leave application in the Family Court expired on 26 October 2023, so the Husband was late for 33 days.

7.  The draft Notice of Appeal states in ground numbered 6 that “the delay for 33 days was not substantial” and that the reason of the delay was the Husband’s financial difficulty in raising funds for litigation as he was and is paying maintenance to the Wife and the children. In the Husband’s 2^nd affirmation filed on 28 November 2023, he claimed that since the commencement of the divorce proceedings, he “ha[s] always been tight on [his] budget and living from paycheck to paycheck”, and that he had to wait to receive his salary at the end of October 2023 to pay and confirm his instructions to his solicitors and counsel on 3 November 2023.

8.  What is not before us but was before the judge was the Husband’s statement of costs. We note that the judge refused to accept the above explanation given by the Husband, as the costs of his leave application before the judge at $179,552 signaled an inexplicable disparity with his allegations on his financial resources[3]. As no further explanation is given by the Husband in the renewed application, we reject the Husband’s reason for the delay.

9.  In any event, we are not satisfied that the Husband’s intended appeal has any merits to justify the granting of an extension of time for leave to appeal.

10.  The intended grounds of appeal (apart from the issue of delay) can be grouped under two heads. Firstly, the judge erred in law in failing to apply Order 15 rule 6(2)(b)(i) (the first limb; grounds numbered 1 and 2). Secondly, the judge erred in law in ruling that Order 15 rule 6(2)(b)(ii) is not satisfied (the second limb; grounds numbered 3 to 5)[4]. The Husband had relied on the same grounds in his application for leave to appeal before the judge, and they were addressed by the judge in the Leave Decision.

11.  Regarding the first limb, the judge took the view that the first limb is not satisfied as, “by joining [the Intervener], the disputed issue, being the beneficial ownership of the [Husband’s] ½ share of the two Units is able to be ‘effectually and completely determined and adjudicated upon’ ”, there is no competing claim between the Wife and the Sister on the other half share (held by the Sister as legal owner), and the judgment in the ancillary relief proceedings will bind the Sister who has had notice of the proceedings by virtue of Order 15 rule 13A(4)[5].

12.  As for the second limb, this has been dealt with in the Decision. We do not think the judge’s approach can be faulted.

13.  Order 15 rule 6(2)(b)(i) concerns a person who “ought to have been joined as a party” or “whose presence is necessary” for the effectual and complete determination and adjudication of all matters “in the cause or matter”. The Intervener who has a competing claim with the Husband over the entire beneficial interest in the two disputed properties is a necessary party to the matter of matrimonial assets in the ancillary relief proceedings, but not the Sister who holds the legal title of a half share of the properties on trust. The only argument given by the Husband is that the Sister should be joined so that the judgment can bind her. We do not accept this submission, for reasons given by the judge.

14.  In respect of Order 15 rule 6(2)(b)(ii), there is no question or issue between the Husband and the Sister arising out of or relating to or connected with any “relief or remedy claimed in the cause or matter”. The Husband and the Sister are tenants in common, holding the legal title in equal shares in the disputed properties. The Wife has confirmed that her relief or remedy claimed is only in respect of the Husband’s share in the disputed properties. There is no need to transfer the legal title of the Sister’s half share whatever the outcome in the ancillary relief proceedings[6].

15.  For the above reasons, we take the view that the intended appeal has no reasonable prospects of success. We dismiss the Husband’s summons seeking leave to appeal. As the application is wholly without merit, we make an order under Order 59 rule 2A(8) that no party may request the determination to be considered at an oral hearing inter partes.

16.  There is no reason to depart from the general rule that costs should follow the event. We order the Husband to pay the costs of the Intervener and the Sister for this summons.

17.  A statement of costs was lodged by the solicitors for the Intervener and the Sister seeking costs in the sum of $141,010. We note that the same team of lawyers was retained by the Intervener and the Sister in the leave application before the judge, and the same grounds of appeal made before the judge are relied on in the present application. There would appear to be duplication of work and excessive time was spent. We tax down their costs to $76,760.

18.  The costs order and gross sum assessment are orders nisi. They will be made absolute if there is no application for variation by any party within 14 days of the handing down of this judgment.