TYT v. TLH

FCJA 3690/2017

[2019] HKFC 231

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

JOINT APPLICATION NO. 3690 OF 2017

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Decision
(Leave to Appeal)

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1.  This is the 2^nd Applicant/Wife’s(“W”) application for leave to appeal against the Decision made on 5 July 2019 whereby it was ordered that W’s Summons filed on 24 September 2018 for discovery be dismissed with costs (“the Decision”). The 1^st Applicant/Husband (“H”) opposed this application.

2.  Section 63A of the District Court Ordinance Cap 336 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. 

Scope of Intended Appeal

3.  The Court has dismissed all four heads of W’s discovery requests. As described in paragraph 2 of the Decision, they are (i) Bank Statement Request; (ii) Table A Request; (iii) Audited Financial Statement Request; and (iv) List of Assets Request.

4.  W’s intended appeal covers only the first two heads, namely Bank Statement Request and Table A Request.

Grounds of Intended Appeal

5.  It is apparent from the paragraph structure of the Decision that the Court’s dismissal of the two subject requests was based respectively on different grounds and reasoning: paragraphs 13 to 17 on the Bank Statement Request, and paragraphs 18 to 23 on the Table A Request.     

6.  However, instead of identifying precisely her ground(s) of appeal under a particular dismissed request, W’s grounds of intended appeal have got muddled up, stretching across different reasoning in the Decision including those given under Requests (iii) and (iv) which are beyond the scope of the intended appeal.

7.  According to the draft Notice of Appeal, the grounds of the intended appeal can be summarized as follows :

(i)     The Court did not properly consider the following, hence failed to find that discovery is necessary for the fair disposal of the cause or matter or for saving costs.

(a)     there is a strong prima facie case of H concealing assets;

(b)     it can readily be inferred that there are most likely to    have been significant outflows and dissipations to be set aside; and

(c)     the ‘bare minimum’ 12-month Form E period is plainly   insufficient and disproportionate for this big money case.

(ii)     The Court erred in adopting the threshold of requiring findings of fact, an approach which is wrong and self-contradictory in the Decision.

(iii)     The Court also adopted a wrong approach in requiring W to make application for joinder when such obligation is on H;  hence reversing the burden and misapplied TL v ML principles/procedures.

Whether the intended appeal has a reasonable prospect of success

Bank Statement Request

8.  As set out in paragraphs 14(b), 14(c) and 15(a) of the Decision, main reason for disallowing the Bank Statement Request is that suspected dissipations of matrimonial assets do not justify an extension of general discovery period for W to fish for any possible Section 17 setting-aside applications or to hunt around for improprieties on the part of H.

9.  On the evidence available (without conducting forensic examination at the interlocutory stage : paragraph 15(b) of the Decision), the Court did not accept that there is sufficient prima facie evidence to infer concealment of assets or likely outflows and dissipations to be set aside. This led to the conclusion in paragraph 16(c) that W failed to discharge her burden to establish a prima facie case for discovery.

10.  W also takes issue that the Court erred in elevating the 12-month Form E period to become a statutory requirement. Although the mandatory Form E is not a statutory form, it is clear from the Decision that the Court recognized and exercised its power and duty to consider the appropriate level and extent of discovery for this case.

11.  Whether the ‘minimum’ 12-month Form E period is sufficient depends on the facts of each case, it being a big money case is simply one amongst various factors to be considered. While the Court was well aware that this case involves substantial matrimonial assets, it nonetheless rejected W’s discovery requests because W has not established that they are necessary either for disposing fairly of the cause or matter or for saving costs.

12.  A decision to discovery is an exercise of judicial discretion. W failed to show the Court’s exercise of discretion is plainly wrong such that it was outside the generous ambit within which a reasonable disagreement is possible.

13.  Due to misapprehension of the Court’s reasoning, it is also submitted for W that paragraph 15(b) of the Decision (the Court declined to conduct forensic examination of evidence at the discovery stage) contradicted paragraph 24 (the Court required evidence of H’s beneficial ownership before holding him being privy to the documents sought).

14.  On proper reading of these two corresponding paragraphs, the reasoning should be obvious : while the Court considers discovery on factual basis and evidence, it will not decide upon questions of fact which may or may not lend credence to W’s suspicion. The approach adopted by the Court was to consider whether, on the evidence before the Court, disclosure is necessary for the fair disposal of the cause or matter.

15.  By reason of the aforesaid, I do not think the intended appeal against the dismissal of the Bank Statement Request has a reasonable prospect of success.

Table A Request

16.  By the Table A Request, W seeks particulars of bank transactions and documentary evidence in support. The reasons for refusing Table A Request and W’s request for an O 24 r 7 affidavit from H are set out in paragraphs 19 to 22 of the Decision.

17.  H (as stated in paragraphs 6 and 7 of the Decision) has already in his affidavit given explanation of why he could not provide the information sought, that is conclusive for the purpose of discovery.

18.  Therefore, ordering an O 24 r 7 affidavit of H will not be purposeful unless W can identify specific document(s) for H to depose to, i.e. to state whether it (the specified document) has at any time been in his possession custody or power, and if not then in his possession custody or power, when he parted with it and what has been of it.

19.  It is against the above reasoning the Court said in paragraph 22 of the Decision that “if the documents in support of the bank transactions can be specified, I agree that W is entitled to an O 24 r 7 affidavit of H”. Unfortunately it appears from paragraph (5)(c) of the draft Notice of Appeal that W still missed the point. W now submits that she has specified the bank transactions in Table A, and the particulars and documents sought are already set out in paragraph 2 of her Summons for discovery.

20.  Paragraph 2 of W’s Summons for discovery simply states “ The 1^st Applicant do provide particulars of the transactions listed in the “Table of Ping An Bank Transactions” annexed as Table A within 14 days. For withdrawals, please give full particulars including the destination and purpose with documentary evidence in support; for deposits, please give full particulars including the source of payments and purpose with documentary evidence in support.”  W has not identified any “documentary evidence in support” for the purpose of seeking an O 24 r 7 affidavit.

21.  As regards paragraph (4) of the draft Notice of Appeal, the Court has never required W to apply for joinder in respect of the Ping An accounts which are held in H’s name; to do so would be wrongly reversing the burden and misapplied TL v ML procedures. It would be both confusing and misconceived if W regards paragraph 25 of the Decision to be of relevance to the intended appeal.

22.  Paragraph 25 deals with the four PRC companies of which H is not the legal owner. In alleging H is the beneficial owner, the obligation to apply for joinder indisputably rests on W. In any event, paragraph 25 is irrelevant to the present intended appeal because it is only concerned with the dismissal of the Audited Financial Statement Request and the List of Assets Request.     

23.  By reason for the aforesaid, I do not think the intended appeal against the dismissal of the Table A Request has a reasonable prospect of success.

Whether there are other reasons in the interests of justice that the appeal should be heard 

24.  W by the intended appeal invites the Court of Appeal to consider the appropriate test and relevant factors for financial disclosure in big money cases where there is an issue as to adequacy of the discovery of a party, and/or applications for the same in the context of matrimonial proceedings for ancillary relief. W submits the Hong Kong Court of Appeal has not had the opportunity to consider the scope, ambit and proportionality of discovery in a ‘big money’ divorce case.

25.  As H submits which I agree, there is a body of case law on discovery in matrimonial context setting out the principles to be applied. It is unnecessary and impossible to craft one standard test solely applicable to all so-called ‘big money’ cases. Facts of each case differ widely. The scope of discovery depends on peculiar factual matrix of each individual case. The significance of a ‘big money’ factor varies from case to case.

26.  Furthermore, having one standard test for “big money” cases may potentially increase costs and delay the process of adjudication. There may even be argument on a preliminary issue on whether a case qualifies as a “big money” case.  

27.  I do not accept that to have the Hong Kong Court of Appeal  consider the scope, ambit and proportionality of discovery in a ‘big money’ divorce case is a reason in the interest of justice that the appeal should be heard. 

Conclusion

28.  By reason of the aforesaid, I am not 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.  Leave to appeal is refused.

Order

29.  The 2^nd Applicant’s Summons dated 19 July 2019 is dismissed.

30.  The 2^nd Applicant do forthwith pay the 1^st Applicant’s costs of the application, summarily assessed at HK$185,000.