HANNELORE DE LASALA-DEBRING v. ERNEST FERDINAND PEREZ DE LA SALA

HCMP 1029/2013

[2019] HKCFI 932

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1029 OF 2013

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J U D G M E N T

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Introduction

1.  The parties divorced some 49 years ago and they have a son E, who is now aged about 52.  I shall continue to refer to the plaintiff as W and the defendant as H in this judgment, for ease of reference.  In the present proceedings, W is seeking to set aside a consent order made on 23 May 1970 (“Consent Order”), pursuant to which a deed of arrangement executed by the parties on 22 May 1970 (“Deed of Arrangement”) containing financial provisions for her and E were approved by Briggs J, as he then was.

2.  The background of these proceedings has been set out in an earlier judgment of this Court of 8 July 2015 dismissing W’s appeal in relation to an order for security for costs made by Master S Lo against her (“2015 Judgment”).  

3.  After this Court’s dismissal of W’s appeal, she had paid the security and the proceedings continued, with the parties exchanging their first witness statements in February 2017.  The parties have each filed a supplemental witness statement in May 2017, with H’s nephew (“James”) and his nephew-in-law Edward Copinger-Symes (“Edward”) each filing a witness statement on behalf of W. 

4.  On 30 July 2017, H took out a summons under Order 18 rule 19 of Rules of High Court and inherent jurisdiction of this Court to strike out W’s statement of claim and to dismiss the present proceedings (“Striking Out Summons”).

5.  Counsel Mr Benjamin Yu SC and Ms Sara Tong appeared for H at the hearing of the Striking Out Summons, and Mr Russell Coleman SC and Ms Corinne Remedios appeared pro bono on behalf of W.

Brief history of the matrimonial proceedings

6.  W issued her 1^st divorce petition on 1 November 1969, based on H’s sodomy and cruelty.  After accepting terms of settlement offered to her by H, she issued a 2^nd petition based on H’s confession of adultery.  She and H then executed the Deed of Arrangement, and on 23 May 1970, the Consent Order was granted. 

7.  The Consent Order contained the following essential terms:

(i)  H to pay W a lump sum of HK$850,000 in full and final satisfaction of her claims for maintenance, secured provisions and lump sum which were to be dismissed;

(ii)  A trust was to be set up with HK$400,000 for purchasing a home in either United Kingdom or Germany for W and E to live and W had the right to live there for life, together with a further sum of HK$50,000 for furniture;

(iii)  A trust was to be set up with HK$500,000 for the maintenance needs of E.

8.  The Decree Nisi was granted on 23 May 1970 and made absolute on 30 May 1970.

9.  Sections 4 and 6 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (MPPO) came into effect in Hong Kong in 1972 following major reforms in England.  W made her 1^st application in the matrimonial proceedings to set aside the Consent Order and/or to apply for further financial provision for herself and E on 1 August 1975 (“1975 Proceedings”).  Her application was supported by her affidavit made in February 1975 (“W’s 1975 Affidavit”).

10.  The 1975 Proceedings eventually led to the landmark Privy Council decision of 6 April 1979[1] (“Privy Council Decision”), which  allowed in part the appeal from H and held, amongst other things, that since the Consent Order was a final order of the Supreme Court of Hong Kong, it could not be challenged by W in the matrimonial proceedings on the grounds of fraud or mistake and would require a fresh action be brought for that purpose and  hence W’s application for further financial provision for herself in the matrimonial proceedings was dismissed.  W’s application for further financial provision for the benefit of E was remitted to the judge for hearing and the Privy Council had expressed their view that it would be appropriate for E to be separately represented.

11.  After the Privy Council Decision, W did not take any further steps to bring any fresh action to set aside the Consent Order nor did she proceed with the application to apply for further financial provision for E.  On 15 March 1980, W remarried and has since been living in Germany.

12.  As mentioned in the 2015 Judgment, W purported to rely on evidence filed  in the Singapore Proceedings (seen below) to support her present case and it is W’s position that since 2012 and thereafter, she has been made aware of substantial evidence which emerged from the Singapore Proceedings that H had been dishonest, including evidence of the actions taken by him actively to conceal his financial position at the time of the Consent Order and had misled both W and the Court and that had W and the Court not been misled, a substantially different order for ancillary relief would have been made.  This led to W issuing the originating summons in the present proceedings in May 2013, and the proceedings were later ordered to proceed as if commenced by writ.

The Singapore Proceedings 

Suit 178 of 2012

13.  The Singapore Proceedings were commenced in March 2012 by 6 companies (“6 Companies”) under Suit No 178 of 2012 (“Suit 178”).  The brief background of the De La Sala family, as set out below, is gathered from the judgment of the trial judge Quentin Loh J (“Justice Loh”) dated 27 January 2017 (“Loh Judgment”). 

14.  H’s late father Robert Sr, the son of a British master mariner of Spanish descent, was born in Manila in 1908.  He moved to Hong Kong and joined John Manners & Co Limited (“JMC”), a shipping company incorporated in Hong Kong in 1916, as an apprentice or clerk in 1922 when he was not quite 14 years old.  Robert Sr worked his way up and by 1 January 1940 became the Chairman as well as the majority shareholder of JMC.  

15.  In April 1939, Robert Sr incorporated in Hong Kong a company called Lasala Investments Limited, which was renamed Northern Enterprises Limited (“NEL”) in 1959.

16.  Robert Sr married H’s mother Camilla and they have 4 children, Tony, H, Bobby and Isabel. Camilla and the 4 children have been collectively referred to as “JERIC” in the Singapore Proceedings, whereas excluding H, they have been referred to as “JRIC”.  

17.  H later moved to Hong Kong to work for JMC and was made a director of JMC in 1953.  He  became Joint Managing Director of JMC with Robert Sr in 1957[2].

18.  H’s younger brother Bobby has two children, namely Edward and Christina.  Edward, Christina and Christina’s former husband James have been collectively referred to as “ECJ” in the Singapore Proceedings.

19.  As seen in the Loh Judgment, NEL’s and JMC’s assets were transferred to various corporate vehicles, eventually ended up being held by the 6 Companies.

20.  It was the case of ECJ that they became involved in managing the assets of the 6 Companies as a result of H asking them to join him so that he could train them to be the ‘next generation’ team to manage the De La Sala family assets.  ECJ became directors of the 6 Companies with H.

21.  There was a falling-out between H and ECJ in August 2011, as a result of which H transferred all assets of the 6 Companies to himself, and this sparked off the Suit 178 by the 6 Companies.  

22.  It was ECJ’s case in Suit 178 that the assets of the 6 Companies formed part of a family trust set up by Robert Sr for the benefit of the De La Sala family, or JERIC[3].  H’s case on the other hand  was that the 6 Companies were “personal investment holding companies used by [him] to hold and invest his personal funds and assets”[4]. 

23.  In July 2012, W was contacted by ECJ to give information about H in Suit 178 on their behalf, and she filed an affidavit to support ECJ’s case and in relation to her information about H’s finances from 1969-1970.

24.  W had appeared as a witness for ECJ in the trial of Suit 178. Justice Loh had found that W to be a truthful witness[5], and that Edward and James were also found to be credible and reliable and their evidence was accepted[6]. On the other hand, Justice Loh had found H an unimpressive and totally unreliable witness who regarded truth as a transitory, flexible concept, which could be moulded to his current purposes[7].

25.  There were two main issues identified by Justice Loh in Suit 178, namely (a) Trust Issue-whether Robert Sr had set up a family trust before he died; and (b) Ownership Issue - if not, whether all the assets in the 6 Companies belonged to H.

26.  As seen in the Loh Judgment, the 6 Companies’ assets had their origins in the two companies NEL and JMC.  H’s case was that he obtained full control of NEL and JMC after he bought out his mother’s and his siblings’ (ie JRIC’s) shares in the two companies respectively in 1960s and in 1970.

27.  On the Trust Issue, Justice Loh found, amongst other things, that[8]:

(i)  Robert Sr did not set up a formal trust in his lifetime;

(ii)  Robert Sr died unexpectedly on 27 May 1967;

(iii)  H managed NEL after his father died, hid it behind nominee companies and an “orphan structure”[9], and was extremely successful in multiplying the family’s wealth;

(iv)  H never bought out the interests of JRIC;

(v)  H came to be regarded with great respect as head of the De La Sala family;

(vi)  After Robert Sr’s death, H took over, ran and managed all the businesses, their assets and funds as Robert Sr did, ie he had absolute discretion and control.

28.  On the Ownership Issue, Justice Loh found, amongst other things, that[10] :

(i)  H, as the putative beneficial owner of both the shares and the assets of the 6 Companies was entitled to transfer to himself the assets of the 6 Companies;

(ii)  H is not entitled to dispose of all the assets or treat them as if they belonged to him; he holds part of those assets on trust for JRIC.

The appeals

29.  Thereafter, there were appeals from both sides, and the Court of Appeal of the Supreme Court of Singapore handed down its judgment on 22 March 2018, namely [2018] SGCA 16.  The Court of Appeal pointed out that the central issue for determination in Suit 178 was who owned the assets which H removed from the control of the 6 Companies[11].  The Court of Appeal held that the 6 Companies were the legal owners of their assets and that H was not the sole beneficial owner of the assets, rather the assets were held on resulting trust for NEL and JMC; moreover, even if H were the sole beneficial owner of the assets, this would not have entitled him to deal with those assets in the manner in which he did[12].

30.  The Court of Appeal further found that H failed on the crucial point as to whether there was a buy-out of JRIC’s shares in NEL and JMC[13]. The effect of the order of the Court of Appeal is that H has to account to the 6 Companies regarding the assets removed by him and any profits made on them and H has to return the assets to the 6 Companies after the account has been taken, but the 6 Companies are not the absolute owners of the assets which are subject to a resulting trust in favour of NEL and JMC[14].

31.  The Court of Appeal did not disturb Justice Loh’s findings on matters relating to H and W and/or his findings that H and his witnesses lacked credibility and were unreliable.  The Court of Appeal had further affirmed the Judge’s findings that H and his witnesses lacked credibility.

The movement of NEL shares and JMC shares after death of Robert Sr

32.  Justice Loh had said that when H took full charge of NEL after Robert Sr’s death on 27 May 1967, H very swiftly engaged in a complex restructuring of the companies and shareholdings[15]. It appeared from the Loh Judgment that the movement of the NEL shares and JMC shares first took place about 3 months after death of Robert Sr in August 1967 and later there was a restructuring of the companies holding those shares in the 1970s, and then in the 1990s.

33.  H had alleged in Suit 178 that (i) he purchased the shares of NEL from JERIC in August 1967 for US$10m (the price was based on NEL’s shareholder funds as at 31 March 1967 of about HK$51m),  through two of JMC’s redundant subsidiaries (being H’s nominees) and referred to as “SR” and “SM” in the Loh Judgment, and that (ii) he further purchased the shares of JRIC in JMC (being 45%) for about HK$15m, or about US$2.5m through his nominee company referred to as Compass (CE)[16].

34.  In short, according to H, the movement of the NEL and JMC shares in August 1967 was the consequence of H’s buy-out of JRIC’s shares.  Further, according to H’s evidence in his Affidavit of Evidence In Chief in Suit 178, CE was incorporated on 19 December 1969 and the 1^st “orphan structure” was set up on 22 December 1969 by CE acquiring SM from JMC.  Under the 1^st “orphan structure”, CE owned SM, SM owned SR, and SR owned CE[17]. As mentioned earlier, according to H, CE was the nominee used by him to purchase JRIC’s 45% interest in JMC.

35.  To complete the picture, there was further restructuring of the companies undertaken by H in April 1973 when he incorporated a number of companies for transfer of shares and, in particular on 30 July 1975, the shares in SR were transferred from SM to one of the 6 Companies and the corporate structure changed again[18].  Later, the 1990s restructuring commenced in 1995 when H decided to create the 2^nd “orphan structure” which  involved the 6 Companies[19].

36.  As said earlier, the assets of NEL and JMC ended up being held by the 6 Companies.  According to W, the assets of the 6 Companies  claimed by H to belong to him amount to some US$600m to US$800m[20]. However, the result of the Court of Appeal decision meant that H would have to return all such assets removed by him back to the 6 Companies.

Whether the findings of the Singapore Courts are admissible in the present proceedings and/or binding on this Court 

37.  Mr Yu argued that the findings made by the Singapore Courts are not admissible and not binding on the parties herein or on this Court, referring to Secretary of State for Trade v Bairstow [2004] Ch 1.

38.  However, W was granted permission by the Singapore Courts to obtain copies of various affidavits and transcript of H’s oral evidence in the Singapore Proceedings for use in the present proceedings. Whether the findings of the Singapore Courts are admissible or binding on this Court or not, there is no reason why this Court cannot refer to such evidence.

General legal principles on striking out

39.  The applicable principles for strike out applications have been summarized in paragraphs 18/19/4 to 18/19/23 in HKCP 2019.

40.  Mr Coleman also referred to Wong Chi Ching v Bocom International Holdings Ltd [2015] HKCU 879[21] where this Court had summarised the general principles as follows:

(1)  The burden is on the party seeking to strike out the pleading to demonstrate that the case is a plain and obvious one in which the other party’s claim is bound to fail[22];

(2)  A proceeding is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed. A proceeding is vexatious when it is oppressive or lacks bona fides.  The expression “frivolous or vexatious” includes proceedings which are an abuse of the process[23].

(3)  An “abuse of the process of the Court” connotes that the process of the Court must be used bona fide and properly and must not be abused.  The Court will prevent the improper use of its machinery, and will, in a proper case (eg where an action is absolutely groundless, where the claim is time-barred) summarily prevent its machinery from being used as a means of vexation and oppression in the process of litigation[24]. 

(4)  The court has inherent jurisdiction to stay all proceedings before it which are obviously frivolous or vexatious.  The inherent jurisdiction is preserved by section 16(3) of the High Court Ordinance (Cap 4) and is separate to that which exists under Order 18 rule 19 – the two may be invoked cumulatively or alternatively.  In pursuance of its inherent jurisdiction, the court may strike out part of an indorsement of a writ, or will stay, or dismiss before the hearing, actions which it holds to be frivolous or vexatious or strike out a statement of claim and remove from its files any matter improperly placed thereon[25].

(5)  Where the court comes to the conclusion after full argument that the case is plainly and obviously unsustainable, the court should not decline to strike it out just because the issues are difficult or complicated, see: Byjoy Ltd v Thorogood Estates Ltd [1985] 2 HKC 746[26].  There is a public interest element in seeing an otherwise lengthy and costly trial which will take up substantial judicial resources simplified, if not resolved, even if difficult questions of law may be involved, provided it is proper to do so, see: Guang Xin Enterprises Ltd v Kwan Wong Tan & Fong [2002] 2 HKLRD 319[27].

41.  There was no dispute to the above general principles.

W’s claims

Reliefs sought by W

42.  The reliefs claimed by W in her statement of claim are as follows:

(i)  Setting aside the Consent Order on the basis of fraud, misrepresentation, deceit and/or material non-disclosure by H;

(ii)  Re-assessment of an appropriate award of ancillary relief for herself and child of the family;

(iii)  Damages in a sum to be assessed;

(iv)  Interest;

(v)  Further and/or other relief and consequential orders as the Court deems fit;

(vi)  Costs on an indemnity basis.

Cause of action

43.  W’s claim to set aside the Consent Order and to seek a re-assessment of the award, or a re-hearing of W’s application for ancillary relief is on the basis that under matrimonial jurisdiction, there is a duty on the parties to make full and frank disclosure of their property and financial resources to each other and to the Court.  As seen in the case of Livesey v Jenkins [1985] FLR 813, the Court’s power to set aside orders is not limited to cases of fraud or mistake, but extended to cases of material non-disclosure; and where it could be said that, on the true facts, the orders should not have been made, then the orders could be set aside[28].

44.  As for the basis for W’s claim for damages in a sum to be assessed, this is not quite clear as it has not been clearly pleaded.  As pointed out by Mr Yu, it would appear that W’s claim is based on an action in tort, ie on fraudulent misrepresentation.   

Grounds for H’s striking out

45.  H’s striking out summons is issued under Order 18 rule 19(b) and (d) of the RHC, and also inherent jurisdiction of the Court :

(1)  the statement of claim is frivolous or vexatious; and/or

(2)  it is otherwise an abuse of the process of the Court.

46.  Mr Yu in his skeleton submissions relied on the following:

(1)  W failed to act promptly in seeking to set aside the Consent Order;

(2)  W’s delay was inordinate and inexcusable and has occasioned serious prejudice to H and/or to the fair trial of the action;

(3)  W failed to establish that the alleged non-disclosure or misrepresentation was “material” in that she would have obtained a substantially different order absent such alleged non-disclosure or misrepresentation;

(4)  W’s allegation of fraudulent misrepresentation was not supported by her own evidence;

(5)  Insofar as W’s claim for damages for alleged misrepresentation, P’s action is statute-barred;

(6)  Insofar as W seeks a re-assessment of an ancillary award for herself and her child, there is no conceivable basis on which the Court could do so, and in any event, W has failed to show that any re-assessment would be materially different.

Non-disclosure

General legal principles on setting aside consent orders on non-disclosure

47.  Mr Yu had drawn the Court’s attention to “an emphatic word of warning” from Lord Brandon in Livesey v Jenkins[29] :

“It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal. On the contrary, it will only be in cases where the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed …” (emphasis added)

48.  At the time of the 2015 Judgment, the two Supreme Court decisions in England of  Sharland v Sharland [2015] 3 WLR 1070 and Gohil v Gohil (No 2) [2015] 3 WLR 1085 had not yet been handed down and those decisions were only handed down about 3 months after the 2015 Judgment.

49.  Mr Coleman submitted that the ratio of Sharland and Gohil was that where there is evidence of intentional non-disclosure such non-disclosure is deemed to be material: it is presumed that proper disclosure would have resulted in a different order; and the burden of showing otherwise is thus shifted to the dishonest party, to show that the Court would not have made a different order, had the Court been given proper disclosure, and that the principle in Livesey v Jenkins must now be read in the light of the Supreme Court decisions in Sharland and Gohil.

50.  Having read those observations of Lady Hale in Sharland [30] and Lord Neuberger in Gohil[31], it is clear that where a party’s non-disclosure was inadvertent, accidental or negligent, there is no presumption that it was material and the onus is on the other party to show that proper disclosure would on balance of probabilities have led to a different order.  However, where a party’s non-disclosure was intentional, then it is deemed to be material, and it is presumed that proper disclosure would have led to a different order, unless that party can show, on the balance of probabilities, that it would not have done so. 

51.  There was no dispute to the above principles.

Whether there was non-disclosure on the part of H

52.  It was not disputed that neither party had made any formal disclosure of their respective financial means, in that no affidavit of means was filed by them at the time of the Consent Order.  H was at that time represented by Mr Raymond Moore of Messrs Deacons, and W was at that time represented by Mr Brian Tisdall of Messrs Johnson, Stokes and Master. 

53.  The representations pleaded by W in her statement of claim (“Representations”) are as follows:

(1)  In December 1969, H’s solicitor Mr Raymond Moore had told W’s solicitor Mr Tisdall that he had represented H for many years and he was not as wealthy as they had thought (para11);

(2)  In December 1969, H made repeated oral representations to W as to his supposedly by dire financial circumstances during a period of around one week in December 1969 at around the time when H’s solicitors had sent an offer letter dated 11 December 1969 (“Offer Letter”)[32] (para 12);

(3)  Representations in an affidavit made on 18 January 1970 by Mr Moore on H’s instructions (“Moore’s Affidavit”)[33] (paras 14 & 15).

54.  In short, the Representations pleaded took the following forms:

(i)  Direct oral representations made by H to W;

(ii)  Oral representations made by Mr Moore to Mr Tisdall;

(iii)  Written representations made in the Moore Affidavit.

55.  It is further W’s pleaded case that :

(1)  The Representations were made by or at the direction of H with the intention that W should accept them as true and should rely upon them and be induced to accept the terms of the Consent Order, and with the intention that the Court should accept them as true and be induced to make an order in terms of the Consent Order (para 16);

(2)  The Representations were not true and were made falsely to W and to the Court by H who knew them to be false and/or there was material non-disclosure by H (para 22).

56.  W has set out the particulars of “Falsity, Knowledge and Material Non-Disclosure” and relies on H’s own case in the Singapore Proceedings that there was a buy-out of JRIC’s shares in NEL and JMC.

57.  In H’s defence filed in the present proceedings, he admits that he visited the former matrimonial home on several occasions after W had issued her 1^st petition for the purpose of seeing E and that there were various discussions that took place between them and also between the parties’ representatives, and that his solicitors did send the Offer Letter to W’s solicitors and that the Moore Affidavit was filed on behalf of H.  However, H denies that he had made any of the direct oral representations to W as alleged/pleaded by W or any of the Representations with the alleged intention as pleaded by W.  H has specifically denied that he had any intention to conceal his financial position from W or from the Court at the time of the Consent Order. 

58.  H also complained that W had given inconsistent accounts of his alleged direct oral representations to her, and that she did not and could not have believed that they were true even if he had made the same. 

59.  In his 1^st witness statement, H said he never represented to W that he was in “dire financial straits” as pleaded by W or that his financial circumstances or wealth had degenerated, nor had he made any financial investments in any “Alaskan pipeline business” at any time prior to or during the marriage with W.  H had also said he had no knowledge of any of those oral representations allegedly made by Mr Moore to Mr Tisdall indicating that H was not as wealthy as they had thought.

60.  Further, H pointed out in the Moore Affidavit, Mr Moore had said he had been given by H details of his assets and means and H said although he does not now recall the precise details of what he had disclosed to Mr Moore at the time, Mr Moore could contact his accountants at Lowe, Bingham and Matthew, should Mr Moore require further information or access to documents, and that he had provided Mr Moore with all the documents and information he had asked for[34].

61.  H had also produced a note said to be made by his then solicitor in 1975, Mr Robert Low, of a telephone conversation with Mr Tisdall on 19 September 1975 (“Low Note”)[35], in which Mr Tisdall was alleged to have said Mr Moore assured him that H was not worth anything more than HK$16m, despite that Mr Tisdall had thought H was worth about HK$40 or HK$50m.  H relies on the Low Note in support of his case that there had in fact been disclosure by him through Mr Moore.

62.  W had in her 1^st divorce petition stated that it was her belief that H had capital in excess of HK$50m and was in receipt of annual income in excess of HK$250,000.  It would appear from the Low Note that Mr Tisdall was alleged to have said that the estimate of HK$50m was a “stab in the dark”.  

63.  H also pointed out that W had received advice from her own counsel Mr Jackson-Lipkin at the time, that based on their assessment of H’s means, she had reasonable grounds for expecting a settlement of approximately HK$1.5m for herself and HK$2m for E and yet she nevertheless accepted the terms of the Consent Order.  H further pointed out that in W’s 1975 Affidavit, W had admitted that she had considered a number of different factors before accepting the terms, such as risks in litigation.

64.  H said it would have been easy for Mr Tisdall or W herself to find out from the annual return filed by JMC in May 1969 that H held 2,160 out of 8,000 shares and that JMC was the registered owner of various real properties situated at 94 Repulse Bay Road, which was an entire block of land comprising 8 apartments of about 2,500 sq ft with a substantial grass lawn.  

65.  However, even if W/Mr Tisdall could have obtained some information from public records, there was no sufficient evidence that they could have obtained financial statements of NEL or JMC at the time without H disclosing them.  There was no sufficient evidence that Mr Moore had sought access to the financial records held by H’s accountants prior to filing the Moore Affidavit, or that he had considered any financial records, and in any event there was no sufficient evidence that such financial records in the possession of H’s accountants would reveal in detail H’s beneficial ownership in the various nominee companies holding the shares of NEL and JMC.

66.  W has referred to a Record of Dividends of JMC disclosed in the Singapore Proceedings which recorded HK$8m of dividends paid in each of the years of 1968, 1969 and 1970.  W has also referred to the Record of Dividends of NEL which indicated dividends paid in 1968 and 1969 of HK$12m and HK$6.1m.

67.  In H’s Amended Defence filed in the present proceedings,  he  stated that in 1969 he was the beneficial owner of 27% of JMC (2,160 shares) and that by 1970 he had become the beneficial owner of 70% of JMC (5,600 shares)[36]. As for NEL, H stated in his Amended Defence that in 1969, he was the sole beneficial owner of NEL[37].

68.  Based on H’s own case that there was a buy-out of JRIC’s shares and that he was the sole beneficial owner, his interest in NEL would be worth at least the shareholders’ funds of about HK$51m.  As for JMC, H’s case was that he held a total of 5,600 shares in JMC, namely after buying out JRIC’s shares for HK$15m and by 1970, he held 70% in total.  Thus, his 70% interest would be worth at least the shareholders’ funds of about HK$25m.  These two assets would on the face of it appear to be worth a total HK$76m, without taking into account other liabilities. 

69.  H admitted that the Moore Affidavit was made on his behalf for the purpose of the Court to consider the offers H made for W and E.  H has further admitted that Briggs J, as he then was, had considered the Moore Affidavit, W’s affidavit filed on 14 January 1970[38] and the joint affidavit of Mr Tisdall and Mr Moore sworn on 22 May 1970[39] in approving the terms of the Consent Order[40].

70.  As noted by Justice Loh, during cross examination of H in the trial, it was pointed out to H that his offer to W in their divorce proceedings was less than US$300,000[41], and this represented less than 3% of the value of NEL and JMC shares which H had allegedly acquired from JRIC by 1970, and H’s only explanation was that the figure offered by him was arrived at after consultation between lawyers and accountants and his assets had to be off-set against liabilities[42]. However,  as further noted by Justice Loh, US$300,000 represented less than 10% of the value of H’s assets sans liabilities[43] .

71.  W has produced a draft schedule of H’s assets and income at the time of the Consent Order which indicated that on the basis that there was no buy-out, H’s assets would be a minimum of about HK$37m at that time, and if there was the buy-out, H’s assets would be a minimum of about HK$133m.

72.  Bearing in mind that H’s case was that there was a buy-out, and having considered the above, whether there was in fact a buy-out or not, I am of the view that the Low Note, even if admissible, would not indicate that there had been full and frank disclosure of H’s means to Mr Tisdall by Mr Moore (on behalf of H) at the time, in that the HK$16m figure would seem to be still off the mark. 

73.  Mr Yu had submitted that the Moore Affidavit was like a “millionaire’s affidavit”.  However, Mr Moore did not state in the affidavit that H had the ability to pay whatever reasonable sums awarded by the Court for W and for E.  There was in any event no sufficient evidence that the Moore Affidavit was intended by H/Mr Moore to be a “millionaire’s affidavit” at the time of the Consent Order.

74.  As said earlier, H had pointed out that W’s case on the oral representations made to her is inconsistent.  H also pointed out that W had mentioned that the parties maintained a yacht in Hong Kong for the parties’ use at a monthly cost of HK$800, and that H’s father died intestate in 1967 leaving an estate valued in excess of 100m Australian Dollars and that H received not less than one fifth of this sum from his father.  With such knowledge and with the information W and her lawyers could find from public records, W or her lawyers ought to have known that even if the alleged oral representations were made by H to W, they could not be true and that H could not have been in “dire financial straits”.  

75.  However, W is relying on not only the oral representations made by H to her in relation to his dire financial straits/severe financial difficulties/losses in a pipe-line project, but also oral representations made by H’s solicitor to W’s solicitor and also representations in the Moore Affidavit. 

76.  Whether H had made any oral representations to W or through Mr Moore to Mr Tisdall, and whether W ought to have known that H was not in dire financial straits, these would be matters for trial.

77.  As has been made clear in cases such as Livesy v Jenkins, and Gohil v Gohil, in ancillary relief applications in matrimonial proceedings, H owed the duty to make voluntary, full and frank disclosure, not only to W but also to the Court. 

78.  Mr Moore stated in the Moore Affidavit that the amounts offered by H to W and R were “no less than” what the Court would properly order if W were to succeed in contest proceedings against H.  Mr Moore’s statement must have been based on the instructions of H and whatever disclosure said by H to have been made by him to Mr Moore.  Such a statement was extremely vague and would not in my view have constituted “full and frank disclosure”.  Further, it would appear that had Mr Moore known H’s case of his beneficial interest in NEL and JMC and the value of his interest, it did not seem likely that he would have made the statement as he did in the Moore Affidavit. 

79.  Having considered all the above, I am of the view that W has a reasonable prospect of proving that there had been non-disclosure on the part of H, in that he had failed to make a full and frank disclosure of his means at the time of the Consent Order. 

Whether H’s Non-Disclosure was intentional

80.  W has produced a schedule setting out the matters she relies on for her allegations of fraud against H which was attached as Appendix 7 to her Counsel’s Skeleton Arguments (“Appendix 7”).

81.  In short, in Appendix 7, W relies on, amongst other things, H’s self-recorded telephone conversations with Mr Mitford in early November 1969, H’s typewritten letter to his mother and siblings of 8 November 1969, H’s self-recorded audio memo to his mother and siblings on 8 November 1969, Mr Mitford’s arrival in Hong Kong from Alaska on 27 November 1969, and the incorporation of CE by H on 19 December 1969 and minutes of a meeting of the board of CE of 22 December 1969 for CE to acquire the shares of SM, the undated Mitford’s Note (the authenticity of which is disputed by H), Records of Dividends of NEL and JMC. 

82.  The Offer Letter was sent on 11 December 1969.  The new company CE was set up on 19 December 1969 and the 1^st “Orphan Structure” was set up at around that time.  The Moore Affidavit was filed on 18 January 1970.

83.  The matters in Appendix 7 as set out earlier would indicate that H was intending to camouflage his true asset position in the event that he had to file an affidavit of means.  Even though he was not eventually required to file one at the time of the Consent Order, I am of the view that W has a reasonable prospect in succeeding in proving that H’s non-disclosure or failure to make a full and frank disclosure through Mr Moore was intentional on the part of H.  

Whether the non-disclosure was material

84.  As seen in the Sharland and Gohil cases, if the lack of full and frank disclosure were found to be intentional, such non-disclosure would be deemed to be material and it is presumed that proper disclosure would have resulted in a different order; and the burden of showing otherwise is thus shifted to the dishonest party to show that the court would not have made a different order, had the court been given proper disclosure.

85.  It is however H’s case herein that the terms of the Consent Order were sufficient and adequate to meet the needs of W and E.  Mr Yu had referred the Court to a judgment dated 27 February 1970 made by the Full Court comprising Blair-Kerr and Briggs, JJ & Mr Commissioner Pickering in the case of Cheung Yuk-lin v Hui Shiu–wing (No 4) [1970] HKLR 119.  That case concerned a husband who was described by the Full Court to be a very rich man, his fortune consisted of large, although minority, holdings in two private companies owned by his family and a half share in two very valuable leaseholds.  He had a salary as a business manager of one of the family hotels, which was HK$3,500 per month and he had no car of his own.  While the spouses lived together, they had enjoyed a modest standard of living although they were living at a rate higher than his salary.   The marriage lasted 13 months, and they had no children.

86.  The Deputy Registrar ordered the husband to pay a lump sum of HK$250,000 and periodical payments of HK$60,000 per annum during their joint lives until further order, of which two-thirds of the HK$60,000 per annum to be secured to the wife for life or until further order.  The Deputy Registrar had said, in not fixing the sum at a higher figure, he had taken into account the past conduct of the parties.  The wife appealed and sought a single lump sum payment. 

87.  Blair-Kerr J, of the Full Court, was of the view that the Court should order the husband to pay one single lump sum of HK$1,250,000 upon the order being made.  Mr Commissioner Pickering, as he then was, concurred with Blair-Kerr J.  Briggs J however dissented.

88.  Blair-Kerr J had said his judgment that it was agreed on all sides that the old one-third rule had been rather discredited, perhaps more especially where the husband was a very wealthy man [44].  It was also clear from the judgments of the Full Court that the Deputy Registrar’s award of the lump sum of HK$250,000 was to provide the wife with a home suitable to her condition in life, and then there was an award of maintenance for her.  Blair-Kerr J was of the view that since there was no doubt of the husband’s ability to pay, after balancing the pros and cons of a single lump sum, he came to the conclusion that this would be the best course to pursue in that case, and that the award of HK$1,250,000 would be reasonable.

89.  In his dissenting judgment, Briggs J had said that he had no quarrel with the sum of HK$250,000 ordered by the Deputy Registrar for the provision of a suitable flat or home for the wife, but he was of the view that the periodical payments for the wife should be increased to HK$7,000 per month.

90.  The Cheung Yuk-lin case was decided about 3 months before the Consent Order.  What can be seen from the Cheung Yuk-lin case is that by February 1970, in ancillary relief applications in matrimonial proceedings, where the husband was a very wealthy man, the award to the wife on divorce would no longer be based on the “one-third rule” of division of family assets, but based on the reasonable financial needs of the wife, which would include a sum for the wife to have a home suitable to her station in life and periodical payments for her maintenance.  In the case of a short marriage with no children, and where the husband had the ability to pay, the award could be by way of a single lump sum taking into account a sum required for a home and a capitalised sum required for the wife’s maintenance. 

91.  Further, as seen in the Cheung Yuk-lin case, in February 1970, after concluding that a single lump sum award would be the best course in the case and that based on the information before the Court, an award of HK$1,250,000 would be reasonable, Blair-Kerr J then compared the figure with what the Deputy Registrar had awarded.  Blair-Kerr J assumed that the husband would be obliged to maintain his wife for 36 years, and the annual sum of HK$60,000 ordered by the Deputy Registrar was to be capitalized on an 8% per annum (which Blair-Kerr J considered to be reasonable despite the unusual rate of interest prevailing in Hong Kong at the time) and adopting a multiplier, or number of years’ purchase of 11.717, ie HK$60,000 x 11.717, which would give a sum of HK$703,020.  Thus, a figure of HK$703,020 would have produced HK$5,000 per month for 36 years.  This plus the HK$250,000 for the home, the total would have been HK$953,020.  Blair-Kerr J also compared the figure of HK$1,250,000 with Briggs J’s figure of HK$7,000 per month or HK$84,000 per year,  which if capitalized on the basis of 8% over a period of 36 years (or 11.717 years’ purchase), the result would be HK$984,338, and if this was added to the HK$250,000 for the home, the total would be HK$1,234,228[45].

92.  In the Cheung Yuk-lin case, the marriage lasted 13 months and the parties led a modest life style, although the husband was said to be a very wealthy man.

93.  In the present case, the marriage between H and W lasted some 3½ years.  It was still considered by Briggs J to be a short marriage.  Although the parties were said to have led a very high standard of living and also E was very young at the time of the Consent Order, it was W’s own evidence in her affidavit of 14 January 1970, that she had discussed the Offer Letter with her solicitors and her counsel and was advised and she verily believed that the financial provisions which were being offered by H were just and proper having regard to their respective means.  W herself had not filed any affidavit of means at the time and it was not clear what means she had at the time.  Later in the 1975 Affidavit, she herself had said that throughout her meetings with Mr Tisdall, she had emphasised that she would need the equivalent of HK$6,000 net per month to maintain herself and E. 

94.  The effect of the terms of the Consent Order was that W was to receive a lump sum of HK$850,000 for herself plus a total of HK$450,000 for a furnished residence for life, with another HK$500,000 on trust for E’s maintenance.  As seen in the Privy Council Decision, it would have been possible for W to apply for further provision for the benefit of E.

95.  At the time of approving the terms of the Deed of Settlement, Briggs J had in fact described H’s lump sum offer to W to be “generous”.

96.  W had alleged that the lump sum of HK$400,000 for the purchase of a home for W and E and a further sum of HK$50,000 for furniture was “patently inadequate”.  However, there were  letters between the parties’ then solicitors and the intended trustee which showed there had been enquiries over prices of  properties and tax positions in both Germany and in the UK during the period between 26 November 1969  to 13 May 1970[46].  There appeared to be a range of properties available within the lump sum figure.  

97.  In any event, those enquiries took place before the execution of the Deed of Arrangement and the Consent Order.  According to W’s 1975 Affidavit, the basic needs of her and E, after tax, would come to HK$6,000 per month, and that she had believed the expected income from the investments of the sums to be provided by H for her and E would produce after tax this net sum so that they could utilise the whole of such income[47]. 

98.  Based on, say a rate of return of 8% and 11.717 years’ purchase adopted by Blair-Kerr J in the Cheung Yuk-lin case, HK$6,000 per month, or HK$72,000 capitalised over 36 years would produce a capitalised sum of HK$843,624.

99.  W had in fact said in her 1975 Affidavit from meeting with her advisers that she had verily believed that she could look forward to a gross return in the region of 13% per annum on  the capital sums offered  by H[48], although later she then mentioned 10%-13% per annum.  In any event, the evidence would appear to indicate that on W’s own case and on the advice she had received at the time, and even with taxes in UK or Germany, those sums to be provided by H (being HK$850,000 for W plus the HK$400,000 for E, of a total of HK$1,250,000) should still be able to produce what would be equivalent to HK$6,000 net per month for her and E if not more.  Further, there was no evidence of W’s own means at the time.  Also as it turned out, W remarried about 10 years after the Consent Order.

100.  In my view, even if H’s intentional non-disclosure is deemed to be material, it is not improbable that H may be able to demonstrate that the Court would not have made a substantially different order had there been proper disclosure on his part.

Delay

General legal principles

101.  Thorpe LJ had said in Shaw v Shaw [2002] 2 FLR 1204:

“There are a number of routes that may be taken in an endeavour to reopen a final order…. Given the importance of the overriding principle of finality in litigation, whatever the chosen route the court should clearly exact promptitute and censure delay[49].”

102.  Thorpe LJ further went on to say:

“What then constitutes reasonable promptitude? Obviously each case must be determined upon its own facts and circumstances. In cases falling within the Livesey v Jenkins category no application can precede the discovery of the evidence that suggests or proves the wrongful advantage taken by the adversary at the trial. Similarly, in cases that fall within the Barder v Caluori category no application can precede the happening of the event relied upon. In either case any judgment must recognise the need to comprehend the extent and consequence of the discovery, the need to obtain competent legal representation and, in many cases, the need to obtain public funding. But where there has been a manifest failure to issue the application or appeal with reasonable promptitude the court should not hesitate to refuse further investigation both in order to uphold the overriding need for finality in litigation but also to avoid the risk of an expensive and fruitless second trial on oral evidence[50].”

W’s reasons for delay

103.  In the present case, there was a 34 year gap between the Privy Council Decision and the commencement of the present proceedings.  W’s reasons for such long delay are that:

(i)  she could not have applied to set aside the Consent Order before having access to the evidence in the Singapore Proceedings when H’s fraud came to her attention, whereas she had little or no reliable evidence previously;

(ii)  W could not afford to pay solicitors, counsel and investigation agents to try to set aside the Consent Order anytime earlier.

W’s state of knowledge in 1975

104.  Mr Yu submitted that it was apparent from W’s 1975 Affidavit that she had already at the time, with the benefit of legal advice, formed the view that:

(i)  The Consent Order ought to be set aside on the basis of, amongst other things, misrepresentations made to her by H and his solicitors on his behalf;

(ii)  Had she known the true position, she would not have agreed to the terms of the Consent Order, which did not sufficiently provide for her needs and those of E.

105.  It can be seen in W’s 1975 Affidavit that at the time she had knowledge of:

(1)  H had maintained a yacht in Hong Kong at a monthly costs of HK$800;

(2)  H was a director and shareholder of several companies and H’s father died intestate in 1967 leaving an estate valued in excess of AUD100m and that H received not less than 1/5 of this sum from his father;

(3)  Information in  two reports dated 28 September 1973 and 27 March 1974 prepared by CA Sinclair & Associates (“CA Sinclair”) in connection with investigations as regards H’s assets and financial resources in Australia[51].

106.  As said earlier, H pointed out that W should be aware in 1970 that H was a director and majority shareholder of JMC and JMC’s ownership of the properties at 94, Repulse Bay Road.  Further, CA Sinclair’s reports indicated that H was a director and/or shareholder of various property holding companies in Australia at that time.  CA Sinclair further indicated in his reports and indicated that a comprehensive survey of De La Sala’s assets and their estimated value would be a time consuming exercise and the probable cost could well be approximate HK$1,000[52].

107.  W had however referred to what was said by the Privy Council in the Privy Council Decision:

“… the only means now open to the wife to set it aside on grounds of fraud or mistake would be by bringing a fresh action for this purpose. It is, however only fair to the husband to say that her allegations of fraud are couched in terms that suggest that she is willing to wound and yet afraid to strike. ‘I now dispute,’ she says in her affidavit, ‘the veracity of the representations made to me by [the husband] in 1969 and 1970, and to my then legal advisers through his solicitors, concerning his financial position at the time.’ Reports of inquiry agents made in 1973 and 1974, to which she refers as supporting this half-hearted charge, go nowhere near doing so and would be insufficient to justify English counsel in putting his name to a statement of claim in an action claiming to set aside the consent order of May 23, 1970, on the ground that it was obtained by fraud.[53]”

108.  Mr Coleman argued that it was clear from the above observations that the Privy Council did not think those facts or evidence W had were sufficient for W to launch a fresh action to set aside the Consent Order.

109.  However, those observations made by the Privy Council were only in relation to W’s allegations of fraud. 

110.  In fact, Pickering JA in his judgment in the Full Court of 17 December 1976[54], when allowing W’s appeal against Huggins J’s decision, had said that in his view, W’s 1975 Affidavit amply demonstrated that her subscription to the Deed of Arrangement was the product of mistake as to the true interpretation and possible effect of the Trust Deed[55]. Further as pointed out by Pickering JA, there being no affidavit by H in clarification of his holdings[56] and there being a firm allegation by W that she was misled by H as to his financial position and would not have signed the deeds had the true position been known to her, it seemed that it was then open to her to come to the Court on the basis of alleged misrepresentation by H as to his finances[57].

111.  Mr Yu submitted that W would have at least sufficient prima facie grounds or evidence for her to mount a case of misrepresentation or material non-disclosure and to start a fresh action after the Privy Council Decision.  Mr Yu also submitted that once a fresh action was launched, W could also seek discovery of documents relating to H’s means.

112.  I agree with Mr Yu’s submissions.  Further, as seen in W’s evidence on the Trust Deeds in her witness statement herein, and as seen from comments of Pickering JA referred to earlier, W would also seem to have sufficient grounds or evidence to mount a prima facie case on mistake of the true interpretation and effect of the Trust Deeds.

W’s impecuniosity

113.  W had said in her 4^th affidavit that after almost 10 years of litigation she could not afford to continue paying solicitors, counsel and investigation agents to try to set aside the Consent Order, or to try and obtain an appropriate settlement for E and herself when she had no reliable evidence of H’s fraud until the Singapore Proceedings[58].

114.  Mr Yu however submitted that W had the means to pursue the 1975 Proceedings all the way to the Privy Council and was represented by reputable solicitors and counsel throughout, and she was also residing at the Hilton Hotel for an extended period while pursuing the 1975 Proceedings, and that even after the 1979 Privy Council Decision, W would have been in no worse a financial position then as compared to her financial resources in 2013 when she commenced the present proceedings.

115.  It was quite clear that she did have funds to proceed to Privy Council and there was no sufficient evidence of her impecuniosity as alleged by her.

Whether W could have acted with promptitude

116.  As seen in Burns v Burns [2004] EWCA Civ 1258, the UK Court of Appeal refused to give permission for an appeal of a consent order in ancillary relief by reason of the applicant’s delay of 3 years.  Once the material facts justifying the setting aside of a consent order are known, it is incumbent upon the applicant to act promptly.  It was held that the applicant’s state of knowledge need not be complete, and the fact that some additional information became available at a later stage could not be a reason to justify the delay.  Further, once the applicant is put on notice of a supervening event or breach of duties of disclosure which may justify setting aside of a consent order it is incumbent upon he/she to act with reasonable alacrity, including conduct reasonable inquiries and make an application to the court as soon as possible[59].

117.  Mr Yu had also referred this Court to the case of Peconic Industrial Development Ltd v Lau Kwok Fai (2009) 12 HKCFAR 139 and submitted that the test which ought to be applied in the present case should be when W could reasonably have been expected to commence the fresh action. 

118.  In the Peconic case, the Court was considering whether the action by the plaintiff against the defendant based on his fraud was time-barred and whether the limitation period was postponed pursuant to s 26(1) of the Limitation Ordinance.  As Lord Hoffman had said in the Peconic case, the purpose of the inquiry into whether Peconic could with reasonable diligence have discovered the defendant’s fraud was to establish when Peconic could reasonably have been expected to commence proceedings and that for that purpose, Peconic needed only to know facts which amounted to a prima facie case [60].

119.  W had said in her 4^th affidavit that there was no basis for H to assert that the evidence disclosed in the Singapore Proceedings would have been available to her either in 1969/70 or in 1975-1979, and she had set out a schedule of evidence, namely HHD4-1, which only came to be known to her after she was made aware of the Singapore Proceedings in 2012.

120.  Whether it was possible for W to discover the evidence disclosed in the Singapore Proceedings or not, the duty was on her to act with reasonable diligence to try and discover.  There was no evidence of any reasonable diligence made by W at all after the two reports by CA Sinclair and/or after Privy Council Decision.  She did not even instruct CA Sinclair to prepare the more comprehensive survey as indicated by them. 

121.  In any event, as said earlier, I accept Mr Yu’s submission  that W would have at least sufficient prima facie grounds or evidence for her to mount a case of misrepresentation or material non-disclosure after the Privy Council Decision.  The information W had available to her by 1975 would in my view be at least sufficient for her to demonstrate that H was not in dire financial straits.  Further, as said earlier, W would also seem to have grounds or evidence to mount a prima facie case on mistake.  W did not even proceed with her application for further financial provision for E.

122.  Having considered all the above, the evidence showed W had clearly made a decision not to proceed with a fresh action after the Privy Council Decision in 1979 nor to proceed to apply for further provision for E.  In my view, she could have done so latest by 1979. In my view, W had failed to act with reasonable promptitude or with reasonable alacrity in issuing the fresh action to set aside the Consent Order after the Privy Council Decision and the delay had been too long.

Effect of Delay

Prejudice to H

123.  H had said in his 1^st affidavit that the gross delay on W’s part in bringing the present action has caused “tremendous prejudice” to him.  Not only is he now unable to precisely recall matters which happened almost five decades ago, a number of material witnesses and contemporaneous documentary evidence are no longer available, and also that both W’s then solicitor Mr Tisdall and H’s then solicitor Mr Moore had passed away[61].   H had also said that following the downsizing of JMC’s business in the 1980s (and its relocation from Central to Kwun Tong), many of its historical records were not retained, and that JMC closed its operation in Hong Kong in 1997 and that only limited records of JMC (as disclosed in the Singapore Proceedings) are available.  H said he was severely handicapped in being able to properly defend the claim.

124.  H is some 8 years older than W.  Trial dates are now likely to be end of 2020 or early 2021 in the High Court.  Even though numerous documents were produced in both the Singapore Proceedings and the present proceedings, historical records of JMC and NEL would be important in identifying the source of H’s assets.  Further, in light of H’s age, the long passage of time must have an effect on his memory.  I accept there will be prejudice to H due to the long delay.

125.  Mr Yu had also referred the Court to Allen v Sir Alfred McAlpine & Sons Ltd [1967] 2 QB 229, and argued there would be prejudice to the fair trial of the action.  However, I note that the Striking Out Summons was not based on Order 18 rule 19 (1)(c) of RHC.

Whether any conceivable basis on which Court could be asked to reassess the financial provisions

126.  Mr Yu had referred this Court to the case of Redmond v Redmond.  It appears from this case and the cases referred therein, namely Allsop v Allsop, and Robinson v Robinson, that once a consent order is set aside, the matter will proceed for a re-hearing de novo, based on the current capital and income of the parties.  However, as pointed out by Mr Yu, it is not clear from the authorities as to whether the re-assessment should be based on the law existing at the time of the Consent Order, or the current law.  Mr Coleman submitted that this is an issue which should be determined at trial.

127.  Mr Yu however submitted that it would be grossly unfair to H and unjust if the settlement is to be re-opened now and a re-assessment of ancillary relief is to be made based on the current law in respect of a divorce which took place almost half a century ago.    

128.  Whether on the basis of the law then or now, I would accept neither would be fair or realistic.

129.  H is now 86 years old and W is now 78 years old, and E is now 52 years old.  W had remarried in 1980. Upon remarriage, her entitlement to any periodical payments had ceased.  W has not put forward any basis for reassessment at this stage. 

130.  The Consent Order had been implemented almost 50 years ago, and all the authorities showed that there must be an overriding need for finality in litigation and it must be in public interest to avoid the risk of a long and expensive trial on oral evidence.  In fact, there may need to be two trials, the first one to determine whether the Consent Order should be set aside, and if so, then the trial for the re-assessment de novo.  W had provided very little information as to her own circumstances in the past 50 years.  Even in assessing her application for ancillary relief de novo, the Court will have to consider all the circumstances of this case, and cannot simply jump from 1970s to 2019 (or 2020/2021 when trial will be), without any information as to what transpired in between.

131.  In fact, Pickering JA had already said in 1976 too much time had elapsed and too much water had passed under the bridge for it to be appropriate to set aside the Consent Order or to revoke the financial arrangements contained in the Deed of Arrangement[62].  Even though he had allowed W’s appeal and had remitted the matter for hearing W’s application for further financial provision for herself and E in the matrimonial proceedings, such did not include W’s application to set aside the Consent Order.

132.  In any event, even if the Consent Order were to be set aside, having considered the present evidence, I have come to the view that due to the long and inordinate delay, there can be no conceivable basis for any re-assessment de novo to be done on present circumstances.

W’s claim for damages 

133.  As said earlier, the cause of action for this claim by W would appear to be based on the tort of fraudulent misrepresentation.  Mr Yu submitted that such a claim would be barred by section 4 of the Limitation Ordinance, Cap 347.

134.  Mr Yu, had referred to authorities such as the Peconic case, and submitted that, insofar as W seeks to rely on section 26 of the Limitation Ordinance, the law is well established in that the question is not whether W should have discovered the alleged fraud sooner but whether she could with reasonable diligence have done so, the burden being on W.

135.  Whether W’s allegation of fraudulent misrepresentation was supported by her own evidence or not, for reasons already indicated, I am of the view that there was no evidence of there having been any “reasonable diligence” on her part after the Privy Council Decision.  W has not managed to discharge the burden on her.   In the circumstances, in my view, this is a case where it is plain and obvious that W’s claim based on tort is statute-barred.

H’s delay in issuing the Striking Out Summons 

136.  W complained that the H only took out the Striking Summons at a very late stage, namely 4½ years after the present proceedings were issued.

137.  Mr Coleman referred the Court to Tang Wai Cho v Tang Wai Leung [2011] 1 HKLRD 1.  In his judgment, Cheung JA had referred to the case of Johnson v Gore Wood & Co [2002] 2 AC 1 where the defendant applied to strike out an action four years after its commencement on the ground that it was an abuse of process and the House of Lords had reversed the Court of Appeal’s decision to strike out the plaintiff’s claim.  Lord Millet had said that he did not consider that a defendant should be permitted to raise such an objection as late as this, and a defendant ought to know whether the proceedings against him were oppressive[63].

138.  Mr Yu pointed out that what was said by Lord Miller in the Johnson v Gore Wood case was said in the context of that case when after the defendant had settled claims from various companies, a director and majority shareholder then brought claims against the defendant.

139.  In any event, in the Tang Wai Cho case, Cheung JA held that an application for striking-out made shortly before or at trial should only be entertained in the clearest of cases, and that if grounds for striking-out existed, they should normally be apparent at the close of pleadings, and at the latest after exchange of witness statements[64].

140.  In the present case, all the witness statements and supplemental witness statements were exchanged by 19 May 2017, followed by discovery.  The Striking Out Summons was issued on 30 November 2017.  The delay was in my view insignificant in the circumstances of this case when no trial dates have even been fixed.  As said earlier, the trial is likely to take place only towards end of 2020, if not early 2021. 

141.  Mr Yu referred to the principles set out in the Wong Chi Ching case cited earlier, and submitted that in the present case, the striking out is in public interest and the interests of justice, to save judicial resources and to avoid a lengthy and costly trial in particular when the parties are advanced in age. 

142.  I accept Mr Yu’s submissions.  I am of the view this is a clear case where the W’s claim should be struck out on abuse of process. 

Conclusion

143.  Having regard to all the above, I will order W’s claim be struck out and these proceedings be dismissed.

144.  As for costs, I will direct the parties to make written submissions and the matter is to be dealt with on paper.

Order

145.  My order is therefore as follows:

(i)  W’s statement of claim be struck out and these proceedings be dismissed;

(ii)  The matter of costs will be dealt with on paper.  The parties to lodge their written submissions within 21 days hereof, and any reply submissions are to be lodged within 21 days thereafter.