HLF v. MTC

FAMV No. 29 of 2003

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 29 OF 2003 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM

HCMP NO. 4117 OF 2002)

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REASONS FOR DETERMINATION

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Mr Justice Ribeiro PJ:

1. At the hearing which took place on 30 April 2004, we dismissed this application for leave to appeal and indicated that we would give our reasons later. This we now do.

Proceedings before the judge

2. On 27 June 2002, after a number of hearings spanning the period 13 August 2001 to 12 April 2002, Deputy District Judge Casewell resolved certain questions of ancillary relief which were outstanding between the parties to these matrimonial proceedings.

3. One of the main issues concerned the beneficial ownership of a company whose business represented the respondent husband's sole source of income. The judge found, upholding the respondent's case, that this business was beneficially owned in equal shares by the respondent and his business partner, a Mr Lau, the intervener in these proceedings.

4. The other principal issues dealt with by the judge concerned the true extent of the respondent's means, in particular regarding the financial position of the company and its business dealings with certain mainland entities. The petitioner alleged, for instance, that the respondent had manipulated the records of the company and its purported mainland activities to siphon off assets, taking them out of her reach.

5. The judge examined these allegations in detail and found that the company's records had numerous irregularities. However, he accepted the respondent's explanation that these were due to inadequate book-keeping and to what the judge called "the exigencies of doing day-to-day business" on the mainland. He found that the evidence did not establish the alleged concealment and diversion of assets and that the respondent's evidence as to his assets should be accepted. The judge then proceeded to make various orders for financial relief on the basis of the available evidence.

Application for leave before Leong CJHC

6. The petitioner wished to appeal to the Court of Appeal. But before such an appeal can be brought, leave to appeal must first be obtained either from the District Court or the Court of Appeal: s 63 of the District Court Ordinance, Cap 336; and O 58 r 2(3) of the Rules of the District Court.

7. The petitioner's application for leave to appeal to the Court of Appeal came before Leong CJHC sitting in open court. After hearing her application, his Lordship refused leave to appeal, holding that the judge's decision was based on findings of fact which could not be interfered with. That was on 19 December 2002.

The January application

8. The petitioner wished to challenge this refusal of leave and, on 14 January 2003, made a renewed application for leave to appeal to the Court of Appeal which was listed before Woo and Cheung JJA ("the January application"). We will return later to an argument that the rules did not permit such a renewed application. In the event, the Court of Appeal permitted the hearing to proceed. In support of her criticisms of the judge's findings, the petitioner sought to introduce fresh evidence consisting of copies of cheques which she had recently obtained from her own bank. Those cheques had been given to her by the respondent for family expenses but had been referred to in the company's financial records as payments made to meet certain subcontractors' charges. This, she argued, showed that false company records had been created and used to hide the respondent's assets.

9. It is well-established that a party who wishes to introduce fresh evidence on appeal must satisfy three conditions. He must show (i) that the evidence could not have been obtained with reasonable diligence for use at the trial; (ii) that such evidence, if given, is of such a nature as would probably have an important influence on the result of the case, though it might not be decisive; and (iii) that the evidence is apparently credible and so is presumably to be believed (see Ladd v Marshall [1954] 1 WLR 1489, 1491 and Hong Kong Civil Procedure 2004, 59/10/8-13).

10. The Court of Appeal refused permission to introduce this new evidence, holding that the first of the three conditions had not been satisfied. It considered that, with reasonable diligence, the petitioner ought to have been able to produce the copy cheques at the trial. Proceeding on the basis of the available evidence, the renewed application for leave to appeal to the Court of Appeal was dismissed by a judgment handed down on 20 January 2003.

The September application

11. The petitioner next applied, on 26 September 2003, to the same two judges of the Court of Appeal for leave to appeal to the Court of Final Appeal ("the September application"). In support of this application, she sought to rely on a further additional item of evidence, namely, a tape recording which she said showed that the respondent and the intervener had made an agreement regarding the company indicating that the evidence leading to the judge's finding that they each had a 50% beneficial interest in it was false.

12. By its judgment of 2 October 2003, the Court of Appeal refused leave to appeal to the CFA. It noted that the decision of the Court of Appeal sought to be appealed against was a refusal of leave to appeal (to the Court of Appeal). This, it was held, was an interlocutory judgment so that leave to appeal would only be granted if the appeal raised a question of great general or public importance. The Court of Appeal regarded the issues here to be entirely factual and involving no questions of such importance. It also refused to allow evidence of the tape recording to be used, holding that the petitioner had not shown that, with reasonable diligence, she could not have produced the tape at trial. Additionally, it held that the indicated contents of the tape were such that it was not likely to have an important impact on the result of the case.

The present application for leave to appeal to the CFA

13. The petitioner now applies to the Appeal Committee for leave to appeal to the Court of Final Appeal. She appears in person, but in support of her application, she exhibits an opinion obtained pro bono from Mr Andy Hung of counsel, which puts forward as questions of great general or public importance which ought to be decided by the Court the following, namely:

(a) Does the general rule laid down in Ladd v Marshall apply in all strictness to application (sic) for ancillary relief in matrimonial cases?

(b) Where in an appeal new evidence is to show material non-disclosure on the part of a party in an application for ancillary relief, does the rule laid down in Ladd v Marshall apply?

Preliminary question

14. The petitioner sought to supplement her application by addressing the Appeal Committee on various factual aspects of the evidence relevant to her claim for financial relief. However, as had been pointed out in written submissions filed by Ms Anita Yip acting on the respondent's behalf, before such questions or those raised in counsel's opinion can be considered, a preliminary issue regarding the availability of an appeal from the decision complained of must be addressed.

15. The starting point is that the petitioner had no right of appeal from the decision of the judge. Leave to appeal to the Court of Appeal was required and it is crucial to the present application that this has never been obtained by the petitioner. Leong CJHC refused leave in December 2002, and, having entertained the January application, the Court of Appeal also refused leave. Accordingly, in making the September application, the petitioner was seeking leave to appeal to the Court of Final Appeal against the Court of Appeal's refusal of leave to appeal to itself. That application is now being renewed before us. The fundamental preliminary question is therefore whether an application for leave to appeal to the Court of Final Appeal against the refusal by the Court of Appeal to give leave to appeal from a District Court judgment to itself can be entertained.

The basis of the January application

16. The provisions relevant to the January application are contained in O 59 r 14 to the following effect :

(2) An application to the Court of Appeal for leave to appeal shall-

(a) ......

(b) be made ex parte in writing setting out the reasons why leave should be granted and, if the time for appealing has expired, the reasons why the application was not made within that time,

and the Court may grant or refuse the application or direct that the application be renewed in open court either ex parte or inter partes.

(2A) If an application under paragraph (2) is refused otherwise than after a hearing in open court, the applicant shall be entitled, within 7 days after he has been given notice of the refusal, to renew his application; such renewal application shall be made ex parte in open court.

17. The rules envisage that there is generally to be an ex parte application on paper followed, if unsuccessful, by an ex parte application heard in open court, if such course is desired. As the editors of Hong Kong Civil Procedure 2004 point out at 59/14/22, the practice is generally to have the open court hearing listed before two judges of the Court of Appeal. However, the rules also provide for the application to be dealt with directly at an open court hearing (as evidently happened here). Equally, if there is an ex parte ruling on the papers, the rules permit a renewed application to be dealt with by a single Court of Appeal judge in open court, although the usual practice is to list it before a two-member court.

18. The important point is that renewed applications are only provided for by O 59 r 14(2A) where the initial refusal was otherwise than after a hearing in open court. The policy of the Rules is evident: no one should be refused leave to appeal to the Court of Appeal without being given a hearing in open court. But equally, after such an open court hearing there is no further right to renew the application or, if the open court hearing was before a single judge, no right to appeal the single judge's refusal of leave to the full Court of Appeal. Thus, O 59 r 14(12) provides that an appeal lies to the Court of Appeal from any determination of a single judge "not being the determination of an application for leave to appeal".

19. In the present case, Leong CJHC evidently considered it appropriate to have a hearing in open court, no doubt taking it into account that the petitioner was unrepresented and might have had difficulty making an adequate application on paper. Accordingly, given that there was a refusal of leave to appeal made after that open court hearing before Leong CJHC, O 59 r 14(2A) did not permit the application to be renewed, as in fact occurred pursuant to the January application. The petitioner was acting in person on an ex parte application so that the attention of Woo and Cheung JJA was evidently not drawn to this question of jurisdiction. Their Lordships proceeded to hear the application and to dismiss it on the merits, when they ought simply to have dismissed it as having been brought without jurisdiction.

20. It should be noted that the foregoing conclusion is not inconsistent with the provisions of section 35 of the High Court Ordinance. Sections 35(1) and 35(3) provide as follows :

(1) Subject to subsection (3), in pursuance of the civil jurisdiction of the Court of Appeal, any order or direction not involving the determination of the appeal may be made or given by a single judge sitting in court or in chambers, and a single judge may likewise make any interim order which he may think fit to prevent prejudice to the claims of any party pending an appeal.

(3) Every order or direction made or given by a single judge under subsection (1) may be discharged or varied by the Court of Appeal.

21. Section 35 is not concerned with applications for leave to appeal but forms part of the provisions dealing with "Sitting and Distribution of Business" of the High Court. The power conferred by s 35(1) is to give "an order or direction not involving the determination of the appeal". The definite article indicates that this is a power to give orders and directions in relation to an appeal which is already pending in the Court of Appeal. Section 35(3) empowers the full court to discharge or vary such orders and directions and is not concerned with refusals of leave to appeal.

The basis of the September application

22. It is doubly clear that the September application was not competently brought. An appeal on a civil matter lies to the Court of Final Appeal as of right in certain cases from a "final judgment of the Court of Appeal" and, in the discretion of the Court "from any other judgment of the Court of Appeal, whether final or interlocutory" subject to certain conditions as prescribed by s 22 of the Hong Kong Court of Final Appeal Ordinance, Cap 484.

23. Where the Court of Appeal refuses leave to appeal, it declines to hear the appeal at all and no judgment of that court, whether final or interlocutory, comes into being. Therefore no appeal lies under s 22 to the Court of Final Appeal and the Court of Appeal ought to have dismissed the September application on that basis instead of proceeding to apply the substantive conditions for leave to appeal prescribed by that section. Moreover, it has long been recognized in the case-law that a refusal of leave to appeal is generally to be regarded as final and incapable of itself being made the subject of an appeal. In the absence of any legitimate constitutional challenge (discussed below), to hold otherwise would be to defeat the very purpose of the leave requirement.

24. The propositions in the preceding paragraph find support in the decision of the House of Lords in Lane v Esdaile [1891] AC 210, where the applicant sought leave to appeal to the House of Lords out of time against the Court of Appeal's refusal of leave to appeal to that intermediate court.

(a) It was sought to be argued that the Court of Appeal's refusal of leave fell within the terms of the relevant statute which provided that "an appeal shall lie to the House of Lords from any order or judgment of" the Court of Appeal. Lord Halsbury LC held that such refusal of leave did not constitute an "order

" of the Court of Appeal within the statutory language, which he construed to involve "something that is done by the order of the Court" (at p 211).

(b) Lord Halsbury continued :

"......when I look not only at the language used, but at the substance and meaning of the provision, it seems to me that to give an appeal in this case would defeat the whole object and purview of the order or rule itself, because it is obvious that what was there intended by the Legislature was that there should be in some form or other a power to stop an appeal - that there should not be an appeal unless some particular body pointed out by the statute ...... should permit that an appeal should be given. ...... Surely if that is intended as a check to unnecessary or frivolous appeals it becomes absolutely illusory if you can appeal from that decision or leave, or whatever it is to be called itself. ...... My Lords, I confess that when I look both at the subject-matter with which the order deals and at the language of the order itself it seems to me obvious that it was intended that the decision should be final (whether that is said in terms or not seems to me to be immaterial), unless the Court of Appeal, the body there prescribed, in the exercise of that jurisdiction should give leave to appeal." (pp 211-213)

(c) The other members of the House agreed. Lord MacNaghten commented that on the true construction of the relevant Act :

"...... the Court of Appeal are constituted the sole and final judges of the question whether an appeal to them should or should not be admitted when the proposed appellant has allowed the prescribed period to elapse, and therefore that there can be no appeal from the grant or refusal of that indulgence." (at p 215-216).

(d) Lord Field added :

"...... if your Lordships were to say now 'We will give leave' and the Court of Appeal must enforce that, it would be imposing upon them the duty of giving a leave, as their leave, which they in their own judgment, think ought not to be given." (at p 216)

25. Many similar authorities can be found, including In re Housing of the Working Classes Act 1890, Ex parte Stevenson [1892] 1 QB 609; In re Poh [1983] 1 WLR 2; and Geogas SA v Trammo Gas Ltd [1991] 1 WLR 776.

No constitutional challenge

26. We ought to emphasise that there has been no challenge to the constitutionality either of the provisions requiring leave to appeal to the Court of Appeal nor of the finality of a refusal of leave, in the context of the present case. In Solicitor v Law Society of Hong Kong and Secretary for Justice [2004] 1 HKLRD 214, the Court of Final Appeal recognized the possibility, in appropriate cases, of challenging a statutory limitation against recourse to the final court on the basis of the proportionality test referred to in that judgment. No such issues arise in the present case. Indeed, the imposition of a requirement for leave to appeal in cases involving family litigation to enable the court to exclude unwarranted appeals, the costs of which may often be to the financial detriment of all parties concerned, will generally be entirely legitimate and proportional.

Conclusion

27. Subject to a constitutional challenge, no appeal lies to the Court of Final Appeal from a refusal by the Court of Appeal to grant leave to appeal to that intermediate tribunal. There is no such challenge nor any basis for any such challenge in the present case. It follows that the present application for leave to appeal must be dismissed.

Costs

28. Having heard counsel for the respondent and for the intervener, we think it right to make no order as to the costs of this application given the context of this family dispute.