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HCMP 815/2008
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
MISCELLANEOUS PROCEEDINGS NO. 815 OF 2008
(ON APPEAL FROM HCMC NO. 1 OF 2007 )
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| BETWEEN |
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ZSH |
Petitioner |
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XY |
Respondent |
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Before: Hon Yeung JA in Chambers
Date of Hearing: 22 May 2008
Date of Decision: 22 May 2008
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DECISION
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1. The husband and wife are wealthy people originally from the Mainland. The husband now resides in Hong Kong and the wife commutes between the Mainland and USA.
2. In 2006, the wife petitioned for a divorce on two-year separation and her subsequent claim for ancillary relief took many twists and turns.
3. For the purpose of the present applications, it is neither necessary nor desirable to go into details of those twists and turns. Suffice it to say that a purported consent order dated 25 August 2006 granting the wife US$ 300,000 per annum as maintenance pending suit was not honoured by the husband.
4. The wife sought to enforce the purported consent order and the husband sought to vary it.
5. The husband served questionnaire on the wife and the wife applied for specific discovery of certain audited company accounts documents, said to be relevant to her ancillary relief applications.
6. The husband contended that he was unable to disclose the documents without the consent of the majority beneficial owner of the companies.
7. However, on 30 October 2007, Deputy High Court Judge Carlson ordered the husband to disclose, within 14 days of the date of the order, all financial documents relating to New Asia International (Group) Ltd and New Universe Holding Ltd and their subsidiaries since 1 April 2002. A Penal Notice was endorsed on the order.
8. On 27 November 2007, Deputy Judge Carlson extended the time for the husband to comply with the discovery order until 7 December 2007. The order for the extension of time was also endorsed with a Penal Notice.
9. Despite the extension of time, the husband failed to comply with the order for specific discovery.
10. On 17 December 2007, the wife made an ex parte application for, and was granted, an order allowing her lawyers to enter certain premises, including the office premises of the company auditors, for the purpose of searching and seizing all audited financial statements of the relevant companies.
11. There is a disagreement as to whether the ex parte order granted on 17 December 2007 should be called an Anton Pillar Order. I do not consider it important as to how the order should be called, but for convenience, it shall be referred to as the Anton Pillar Order.
12. Under its terms, the Anton Pillar Order would remain in force up to 2 January 2008 (the return date), and one of the undertakings given by the wife was to issue and serve an inter parte summons on the husband returnable on the return date.
13. After the execution of the Anton Pillar Order and the seizure of the relevant documents on 19 December 2007, the wife took out another inter parte summons returnable on 2 January 2008, seeking an order that she could use the documents obtained in the execution of the Anton Pillar Order in the ancillary relief proceedings. The wife also sought costs of the summons dated 19 December 2007.
14. Soon thereafter, on 27 December 2007, the husband filed a Notice to Act in Person, and then wrote a letter to the wife’s solicitors, saying that he would not attend the hearing on 2 January 2008 in order to save time and costs.
15. On 2 January 2008, the wife did not find it necessary to pursue the summons dated 19 December 2007, and in the absence of the husband, Deputy Judge Carlson made no order on that summons, which was in fact the only summons before him. Deputy Judge Carlson also made no order as to costs on that summons.
16. However, Deputy Judge Carlson ordered the husband to bear the wife’s costs of the Anton Pillar Proceedings and he made a gross sum award under Order 62(9)(4) of the Rules of the High Court on an indemnity basis in the sum of $500,000.
17. The husband now seeks an extension of time to appeal against the Anton Pillar Order granted on 17 December 2008. He also seeks leave to appeal against the gross sum costs order made on 2 January 2008.
18. The application for leave to appeal against the gross sum costs order can be easily disposed of as it appears to have been conceded by Mr Denis Chang, senior counsel for the wife, that the order should never have been made although Mr Chang SC suggests that the matter can be dealt with by consent without the need of an appeal.
19. The husband, through his counsel, Mr Coleman SC, informs the court that, on the basis put forward by Mr Chang SC, such consent is not forthcoming.
20. The wife had failed to comply with her undertaking of taking out an inter parte summons returnable on 2 January 2008 for the making or the continuation of the Anton Pillar Order.
21. Contrary to the submission of Mr Chang SC, the inter parte summons dated 19 December 2007 only dealt with the proposed use of the documents obtained in the execution of the Anton Pillar Order and otherwise had nothing to do with the Anton Pillar Order itself although under its terms, it would remain up to and including the 2nd January 2008.
22. Despite the fact that the terms of the Anton Pillar Orders were that the orders were to remain in force up to the return date, namely 2nd January 2008 and that there would be a further hearing on the return date, there was never an application for the costs of the Anton Pillar Proceedings, let alone one for a gross sum assessment costs order on an indemnity basis of $500,000.
23. The issue on the costs of the Anton Pillar proceedings was simply not before the court on 2 January 2008, and the costs order should never have been contemplated, let alone made. The application for a gross sum assessment on an indemnity basis was in fact a gross abusive application, and the order made thereon is liable to be set aside.
24. I therefore grant leave to the husband to appeal against the gross sum costs order made on 2 January 2008.
25. Deputy Judge Carlson had already ordered the husband to disclose the relevant documents on or before 7 December 2007 and the order was endorsed with a Penal Notice. If the husband’s failure and/or refusal to comply with the order were not explained and justified, the wife could have taken steps to enforce the order, possibly with a committal proceeding.
26. There was no suggestion of any urgency. The suggested risk of the destruction of the documents was not real when the documents in question were audited financial statements of limited companies. It had always been the husband’s contention that he was unable to disclose the documents without the consent of the majority beneficial owner of the companies.
27. It is also surprising that the Anton Pillar Proceedings was considered necessary and that it should even be directed at the office premises of the auditors, who were not parties to the proceedings.
28. It is not appropriate for me to express too strong a view on the merits of the case. However, despite the reservation that I have about the husband’s explanation for the delay and other matters put forward by Mr Chang SC to resist the husband’s application, I am satisfied that this is an appropriate case to extend time for the husband to appeal against the Anton Pillar Order.
29. I therefore also extend the time for the husband to appeal against the Anton Pillar Order made on 17 December 2007 by 14 days from today.
30. Having heard arguments from the parties, I order the husband to bear the costs of the application for an extension of time to appeal, and that the costs of the application for leave to appeal against the costs order is to be in the cause of the appeal.
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(W Yeung)
Justice of Appeal |
Mr Dennis Chang, SC and Mr Neal Clough instructed by Messrs King & Co for the Petitioner.
Mr Russell Coleman, SC and Mr Robin Egerton instructed by JSM for the Respondent.
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