S v. S

HCMC 1/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MATRIMONIAL CAUSES NO. 1 OF 2005

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J U D G M E N T

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Introduction

1. This judgment concerns the jurisdiction of the Hong Kong courts in divorce proceedings, specifically the jurisdiction given to the courts by s.3(c) of the Matrimonial Causes Ordinance, Cap.179 (‘the Ordinance’).  The subsection bestows jurisdiction on our courts when a petitioner has ‘a substantial connection’ with Hong Kong.

2. In January of this year, the petitioner in this matter – the husband – was living with his wife and child in the city of Adelaide, South Australia.  On 18 January, he flew to Hong Kong.  Ostensibly, the journey to Hong Kong was a business trip, the husband having business interests here.  It is his case, however, that at the time there were deep divisions in his marriage and he knew there was little likelihood of him returning to the matrimonial home.  As it is, upon his arrival in Hong Kong on either 18 or 19 January, the husband took up residence here and has lived in Hong Kong since that time.

3. Shortly after his arrival, it is the husband’s case that he spoke over the telephone to his wife, hoping that the marriage could be saved.  He wanted the wife to leave Australia with the child of the marriage and to fly to Switzerland where the family had a home.  He would then join the wife and child so that a reconciliation could be attempted.

4. Regrettably, no agreement could be reached that accorded with the husband’s wishes and on 1 February – some 13 or 14 days after his arrival – he issued a petition out of the Matrimonial Division of the District Court seeking a divorce from the wife.  He sought the divorce on the allegation that the marriage had broken down irretrievably, the fault for that being the wife’s unreasonable behaviour.

5. I am told that in Australia the law no longer provides for ‘fault’ divorce, the single ground being a period of separation.  If he had remained in Australia, the husband would not therefore have been able to institute proceedings for divorce at the time when he instituted them in Hong Kong.

6. In respect of jurisdiction, the husband accepted that he and his wife had never lived together in Hong Kong.  However, it was asserted that —

“The petitioner has a substantial connection with Hong Kong; the Petitioner is a businessman and resides at …”  [my emphasis]

7. The jurisdiction of the Hong Kong courts in matters of divorce is governed by s.3 of the Ordinance which reads :

“	The court shall have jurisdiction in proceedings for divorce under this Ordinance if—
	(a)	either of the parties to the marriage was domiciled in Hong Kong at the date of the petition or application;
	(b)	either of the parties to the marriage was habitually resident in Hong Kong throughout the period of 3 years immediately preceding the date of the petition or application; or
	(c)	either of the parties to the marriage had a substantial connection with Hong Kong at the date of the petition or application.”  [my emphasis]

8. It is therefore the husband’s assertion that the Hong Kong courts have jurisdiction because on 1 February 2005 — that date being both the date of the petition and the date of its issue – he had a substantial connection with Hong Kong.

9. The wife does not accept the husband’s assertion.  To her knowledge and belief, while the husband may have had some business interests in Hong Kong and may from time to time have spent a few days in Hong Kong – invariably on his way to or from Europe – his connection with the Territory has never been ‘substantial’.

10. In March of this year, by order of Deputy Judge Woo, the divorce proceedings were transferred to this court.  That is how the matter now comes before me, the dispute over jurisdiction to be determined as a preliminary issue.

The meaning of ‘substantial connection’

11. The first reported authority concerning the meaning and extent of s.3(c) of the Ordinance appears to be Savournin v. Lau Yat Fung [1971] HKLR 180, a judgment of Briggs J.  Having identified the origins of the phrase ‘substantial connection’ in English family law, the judge confirmed that s.3(c) had established a new basis for determining the personal law of the parties to a marriage; in short, a new and additional ground of jurisdiction.  He said :

“Domicile in a country is obviously a substantial connexion with that country: so may three years ordinary residence be so considered.  Paragraph (c), a substantial connexion with Hong Kong, is in addition to those two requirements.  It is not substituted for them.  A meaning must be given to the phrase wider than domicile or three years ordinary residence.”  [my emphasis]

12. As to the meaning of the phrase, Briggs J said that it was to be given its ordinary meaning; in short, it was not a term of art.  Whether or not a party to a marriage had a substantial connection with Hong Kong has to be decided therefore within the factual context of each case.

13. In my view, when considering the meaning and extent of the phrase, it is important to recognise that the legislature saw fit to qualify it with the indefinite article ‘a’.  It is not therefore necessary for a petitioner to demonstrate that his substantial connection with Hong Kong is the only substantial connection he has with any jurisdiction or that his connection with Hong Kong is the most substantial connection he has with any jurisdiction.  No exercise of comparisons is required.  It is sufficient if he demonstrates that, among others perhaps, he has ‘a’ substantial connection with Hong Kong.

14. Increasingly we are living in a world without borders.  Capital sums are moved in moments from one side of the world to the other with little or no regard for national boundaries.  The internet is universal.  It is commonplace for even the modestly affluent to have homes in two countries.  It is no longer only in the world of fiction that successful business people may at the same time live and work in two countries.  S.3(c) is not at odds with this new reality.  The subsection recognises that a petitioner who asserts a substantial connection with Hong Kong may also have a substantial connection with one or more other jurisdictions.

15. But, of course, if the Hong Kong courts are to exercise jurisdiction, it must be shown on a balance of probabilities that a petitioner not merely has a connection with Hong Kong but that, bearing in mind the scope and purpose of the Ordinance, the connection is ‘substantial’.

16. ‘Substantial’ is a plain enough English adjective.  We all understand what it means – at least in substance (if I may be excused the play on words).  I say that because it is not a word that lends itself to precise definition or from which precise deductions can be drawn.  To say, for example, that ‘there has been a substantial increase in expenditure’ does not of itself allow for a calculation in numerative terms of the exact increase.  It is a statement to the effect that it is certainly more than a little but less than great.  It defines, however, a significant increase, one that is weighty or sizeable.

17. It speaks for itself, I think, that an artificially constructed connection will not be a substantial one.  A connection must be real in the sense, for example, that it has not been engineered for temporary tactical advantage.  It was not the intention of the legislature (in passing s.3(c) into law) to create a convenient off-shore divorce jurisdiction.  As it has been said in an earlier authority, the subsection is not intended for ‘birds of passage’.

18. As the jurisdiction looks to the determination of matrimonial proceedings, a material factor will be whether both parties to the marriage have lived in Hong Kong and, if so, how long they have lived here as man and wife.  But those factors will not necessarily be determinative.  In each case the factors to be considered will be different and the weight to be given to them, in the factual context of each case, will no doubt be different too.

19. In summary, whether – for the purposes of the Ordinance – a connection is substantial or not can only be determined on the basis of a broad objective assessment, taking all relevant factors into account.

A chronology

20. Both the husband and the wife were born in South Australia.  Both were raised and educated there.  They married in January 1994 in the city of Adelaide and commenced married life together in that city.

21. The husband is a highly gifted mathematician.  In or about 1987, he began to devise mathematical programmes for assessing probabilities in the sport of horse racing.  In that way he was able to turn his gift to extraordinary financial advantage and is now a man of very considerable affluence.

22. The husband and a partner, Mr G, advanced their fortunes by joining with other gamblers in punters’ clubs.  Initially, these clubs were all in Australia but in 1992 they set up a club in Hong Kong.  Mr G came to live in Hong Kong to manage the affairs of the club and since that time the husband has been a regular visitor to Hong Kong.  He has an interest of some 14.6% in the Hong Kong punters’ club.

23. In 1994, the year that the husband and wife were married, the husband opened a bank account in Hong Kong with HSBC.  He has been employing the services of HSBC in Hong Kong since that time.

24. In 1998, with the husband enjoying increasing affluence, he and his wife investigated living in Switzerland.  The decision was made to live there and on that basis the husband began to learn the language : Swiss-German.

25. In 1999, the family took up residence in Switzerland in the Canton of Zug.  In ‘tidying up’ his affairs before his departure from Australia, the husband had himself removed from the electoral roll.

26. The family lived in Switzerland from 1999 until 2002.  In that time, property was purchased in Switzerland and necessary bureaucratic steps were taken to ensure that the family would enjoy undisturbed right of residence.

27. In December 1999, the punters’ club in Hong Kong purchased a commercial premises here, the husband acquiring an interest in the property.

28. In September 2001, the husband acquired an Italian passport.  He was able to obtain this through his wife who was of Italian parentage and who had herself acquired an Italian passport some years earlier.

29. It is the husband’s case that, in acquiring his Italian passport, he automatically lost his Australian citizenship.  This has been disputed by the wife.  In my view, in determining whether on 1 February 2005 the husband had a substantial connection with Hong Kong, not much turns on the point.  However, it is to be noted that, when it was convenient, the husband continued to travel on his Australian passport.

30. In June 2002, the family returned to live in Australia.  Since that time, the matrimonial home has been in Adelaide.  The wife and child still live there.  Indeed, as I have said, it was only on 18 January of this year – some 14 days before the issue of the divorce petition – that the husband left the matrimonial home in Adelaide to come to Hong Kong.

The basis of the husband’s case

31. As I understand it, it is the husband’s case that from about mid-2002 he began to take an ever-increasing interest in Hong Kong, committing himself more and more to the Territory.  In the result, by 1 February of this year, whether his wife knew of it or not, he had in fact acquired a substantial connection with this jurisdiction.

32. It does not appear to be disputed that, after the move of the family back to Australia in June 2002, the husband continued to make regular trips to Switzerland.  He would make these trips, he said, five or six times a year and invariably would stop off in Hong Kong for a few days.

33. Increasingly, Hong Kong became of interest to the husband as a commercial and financial centre.  In July 2002, the husband arranged for the incorporation of a company in Hong Kong : MF Ltd.  The company continues to trade globally in futures.  The husband has always held a majority shareholding and takes an active managerial interest in the day-to-day affairs of the company.

34. While actively involved with MF, the husband was also involved from time to time in managing the affairs of the Hong Kong punters’ club.  There is evidence, for example, that in 2003 the husband was in correspondence with the Internal Revenue Department on behalf of the club.  He was, however, continuing to use his Swiss address.

35. In early 2004, the husband used the good offices of HSBC in Hong Kong to take out a life insurance policy.

36. In the event, said the husband, by about mid-2004 something like half of his liquid assets had been moved to Hong Kong.  Hong Kong had become the centre of his commercial life.  Whereas in the past Hong Kong had served essentially as a stop-over en route to or from Switzerland, it now became increasingly his intended point of destination, Switzerland becoming more of a side trip.

37. The pivotal trip, said the husband, was in June 2004 when he decided that he wished only to come to Hong Kong.  By then, he said, his interest in living and working in Hong Kong was so intense that he decided to begin learning Cantonese.  Initially, he studied alone but in September 2004 booked in for a series of one-on-one lessons with a leading language school here.  By November 2004, as a frequent passenger on Cathay Pacific Airways, he had lodged a request that his ‘preferred language’ on flights should be Cantonese.  In his affidavit of 23 June 2005, the husband explained this interest in the following terms :

“… I wanted to integrate more with people in Hong Kong and I wished to understand the people with whom I was spending more and more time and to connect with them.”

38. In October 2004, the husband obtained a Hong Kong mobile telephone number with global roaming facilities.

39. A month later, the husband obtained details of a scheme which would give him right of residence in Hong Kong.  It is a business investment scheme, the residence visa acquired through the scheme being known as a ‘capital entrance investment visa’.  It appears, in fact, that the husband signed the necessary application form at the end of November 2004 although it was not submitted until this year.

40. By late 2004, said the husband, the small, domestic matters of his personal life were also centred in Hong Kong.  He began to see a dentist here, to buy spectacles here.  He obtained membership of a club here, the Butterfield Club.

41. However, it was only after the husband had left Adelaide in January of this year and arrived in Hong Kong that a number of important steps were taken to secure his longer-term right to reside in Hong Kong and, in addition, to secure his lifestyle here.

42. It was, for example, only on 22 January – some four days before the issue of the petition – that the husband submitted his application for a capital entrance investment visa.  It appears that his application was still under consideration therefore when the petition was issued although it has subsequently been granted.

43. It was only on 28 January – three days before the issue of the petition – that he entered into an agreement to purchase a residential property in Hong Kong, the first of three in the same apartment block.

The attempt at reconciliation

44. It is relevant, I think, to take note of the fact that, after the husband’s arrival in Hong Kong, while he was busy seeking a visa, negotiating for property and the like, he was also in contact with the wife.

45. The husband does not appear to have told the wife that he was in the process of acquiring a residence visa with a view to settling in Hong Kong.  Instead, in an attempt to secure a reconciliation, he suggested to the wife that the family should return to Switzerland.  On 28 January – three days before the issue of the petition – he sent the following e-mail to his wife :

“I want you, S and me (and no one else) to leave Australia on Sunday 13^th Feb.

…

I want to stay in Switzerland until December, (just like we did in 2000 & 2001).  We can then review if it was worth all the effort at Christmas time.

Please let me know that you agree.”

46. On 31 January, a second e-mail was sent to the wife :

“As I’m leaving the Mandarin around 9:00 a.m. Hong Kong time tomorrow morning, and I’ll be moving into a serviced apartment, it would be helpful if you could reply to my fax … regarding leaving Australia on 13^th February, before I check out! (especially given the apartment has no fax installed yet)  Of course my Swiss mobile and email will continue.”

47. It is apparent that, if the wife had agreed to fly with the child of the marriage to Switzerland, barring some last minute change of mind by the husband, he would have left Hong Kong in or about mid-February in order to take up residence again in Switzerland and, all else being equal, would have remained in Switzerland.  

My conclusions

48. Counsel for the husband, Mr Clough, urged me to take into account the husband’s full odyssey in acquiring his link with Hong Kong.  He and his wife may not have come together to live in Hong Kong, he may even have forged his links with the Territory without the wife being aware of all his actions.  But nevertheless, said Mr Clough, step by steady step, the husband had acquired weighty links with Hong Kong by the date the petition was issued, not only financial links but personal links also.  By that date Hong Kong had become the place where the husband wished to live, the place where he felt at home and indeed where he was becoming increasingly more able to speak the language of the great majority of the population.

49. Mr Clough urged me to take into account that, in terms of the Ordinance, it was sufficient if either party had a substantial connection with Hong Kong.  It was not therefore necessary, directly or indirectly, to demonstrate in this case that the wife herself had any connection with the Territory.

50. Mr Clough also urged me to bear in mind that the demonstration of jurisdiction in terms of s.3(c) of the Ordinance was a different and distinct matter from demonstrating that Hong Kong was the most convenient forum for the resolution of matters concerning the divorce.  In this, of course, he was right.  Principles going to jurisdiction in terms of s.3(c) of the Ordinance and principles guiding the court in respect of determining a forum conveniens are distinct from each other.

51. This has not been the easiest matter.  In many respects it has been finely balanced.  I accept fully that in late 2004 and in January of this year, after leaving the matrimonial home and coming to Hong Kong, the husband was in the quickening process of acquiring a substantial connection with Hong Kong.  However, taking all matters into account, I am not satisfied that – for the purposes of the Ordinance – he had acquired that substantial connection by the date of the issue of the petition. 

52. While I accept that in many different respects a substantial connection may be forged in a matter of weeks, or even days, what cannot be ignored, in my judgment, is that the substantial connection which is contemplated in the Ordinance is one which gives jurisdiction to the Hong Kong’s courts in respect of matrimonial causes; that is, to matters going to the dissolution of marriage – still a profound matter in the eyes of the law – and to matters which flow from that, for example, matters of custody and property distribution.  In this respect, and I consider it critical, while the husband was no doubt, in the months leading up to the issue of the petition, acquiring a substantial connection with Hong Kong he has not been able to demonstrate on the balance of probabilities that his links were so substantial at the time of the issue of the petition that the Hong Kong courts should take on jurisdiction to deal with issues concerning the dissolution of the marriage and other matters flowing from it.

53. The husband had not, for example, as I understand it, formally acquired of a visa to reside in Hong Kong on the date when the petition was issued.  Indeed, he had only filed an application in this regard a few days before.  Equally, he had only taken steps to acquire residential property – a place where he and the child of the marriage could, if necessary live – a few days before the issue of the petition. 

54. In my judgment, it is not entirely irrelevant – bearing in mind that we are talking about matrimonial proceedings – that the wife herself, on the date when the petition was issued, was apparently ignorant of the fact that the husband was seeking to live in Hong Kong, indeed, to the contrary, was of the rational belief that husband was prepared, if a reconciliation could be effected, to fly almost immediately to Switzerland to take up residence there.

55. In all the circumstances, while I do not suggest that the husband has in any way contrived to construct an artificial jurisdiction, I am not satisfied that a connection of sufficient substance has been demonstrated by him as at 1 February of this year so as to give the Hong Kong courts the power to adjudicate on matters going to the dissolution of his marriage to his wife.  It is my finding therefore that the Hong Kong courts do not have jurisdiction.

56. As to costs, there will be an order nisi in favour of the wife.