WLK v. TMC

CACV 339/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 339 OF 2008

(ON APPEAL FROM FCMC NO. 5508 OF 2005)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Tang VP:

1.  I have had the benefit of reading in draft Le Pichon JA’s judgment. I agree with it and have nothing to add.

Hon Le Pichon JA:

2.  This was an application by the respondent husband for leave to appeal to the Court of Final Appeal from an order of this court dated 22 July 2009 allowing the petitioner wife’s appeal and ordering the respondent to pay the petitioner a lump sum of $32.26 million by way of ancillary financial relief. At the conclusion of the hearing leave was refused with costs to the petitioner, with reasons to be handed down later. The reasons appear below.

3.  The background facts are not in dispute and may be gleaned from paragraphs 12 to 35 of this court’s judgment. The judge ordered the payment of a lump sum of $4.25 million together with the transfer of property in Malaysia. This court set aside that order and, in lieu, ordered the payment of a lump sum of $32.26 million to the petitioner.

4.  The application for leave was made under both paragraphs (a) and (b) of section 22(1) of the Hong Kong Court of Final Appeal Ordinance.

“As of right”

5.  Section 22(1)(a) reads:

“An appeal shall lie to the Court … as of right … in any civil cause or matter, where the matter in dispute on the appeal amounts to or is of the value of $1 million or more, or where the appeal involves directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1 million or more …”

6.  It is well-settled that this paragraph has two limbs: where the first limb applies (namely, where the matter in dispute in the civil cause or matter amounts to or is of the value of $1 million or more), leave is ‘as of right’ only if the claim is a liquidated claim. See the recent decision of the Court of Final Appeal in China Field Ltd v Appeal Tribunal (Buildings) (No. 1) [2009] 2 HKLRD 135 at §18.

7.  In that case, the Court of Final Appeal also gave definitive guidance on the proper construction of the second limb:

“20.  It directs the Court of Appeal or the Appeal Committee (which we will refer to together as “the court”) dealing with the leave application to examine what the proposed appeal involves.  In particular, it requires the court to ask what claim or question is involved in the appeal.

21.  … The Court does not address questions in the abstract so that an appeal involving a question respecting property or some civil right is one where that question forms an integral part of someone’s substantive claim in respect of that property or right.  It may well be that the provision mentions both a “claim” and a “question” to ensure that it covers relief, whether expressed in terms of claims typically contained in a writ or in declaratory terms arising out of questions posed in originating summonses.

22.  Having identified the claim or question involved in the appeal, the section requires the court to ask whether it is a claim to property or a civil right amounting to or of the value of $1,000,000 or more, or what amounts to the same thing, whether it is a question respecting such property or right.

23.  In our view, the language of the section undoubtedly focuses on the value of the claim which is the subject-matter of the appeal and not on any property or right which has some connection with that claim…

24.  Consistently with the strict approach adopted in relation to the first limb of s.22(1)(a), it is only proper to ascribe a value which qualifies for leave as of right to the candidate claim or question if (i) on the evidence, such value is clearly quantifiable as a value of $1 million or more; and (ii) the court is satisfied that the Court’s order made upon disposing of the proposed appeal would take effect by immediately conferring or imposing on the relevant parties a financial benefit or detriment in the quantified amount.  It is not enough that one is able plausibly to say that such a financial impact is a likely eventual result of the appeal.

25.  In so holding, we bear it in mind that the section applies to an appeal which involves “directly or indirectly” some claim or question to or respecting property or some civil right of the requisite value.  In our view, the words in quotation marks do not detract from the foregoing construction.  We construe those words as applying to the nature of the claim asserted and not as affecting the requirement for immediacy of the consequences of the Court’s order.  Thus, for instance, a claim for specific performance of a contract to convey land or a declaration that a party comes within a class of beneficiaries entitled under a trust to certain property would be covered as involving indirect claims to the relevant property if over the threshold in value.  In such instances, it remains the case that the measurable financial impact on the parties is immediately felt upon the Court disposing of the appeal and making or refusing the order sought.”

8.  Mr Yu SC who appeared for the respondent submitted that the proposed appeal comes within the terms of §24 of China Field and so satisfies the test for the second limb. It was said that on the evidence the value was quantifiable as $1 million or more and upon disposing of the proposed appeal, the Court’s order made would take effect by immediately conferring or imposing on the relevant parties a financial benefit what detriment in the quantified amount.

9.  Mr Yu’s stance in relying on the second limb was hardly surprising given his acceptance that the respondent would not be entitled ‘as of right’ to appeal under the first limb because the petitioner’s claim is an unliquidated claim.

10.  To my mind, the first question to decide is whether the present application, namely, a claim for ancillary relief in divorce proceedings not being a proprietary claim, is a claim that properly falls within the first limb of section 22(1)(a) rather than the second limb. That such a claim does come within the wording of the first limb cannot be gainsaid. That being the case, can the second limb nonetheless avail the respondent?

11.  The guidance given by Ribeiro PJ in China Field has to be applied bearing in mind the recurrent theme in that case that a narrow construction is to be applied to the provisions allowing appeals as of right, it being exceptional for courts of final appeal to entertain appeals as of right. As Ribeiro PJ observed (in §16),

“… An appeal to the Court as of right is in principle oppressive to the party who has won in the Court of Appeal where the further appeal is without substance.  Unless the appeal involves a point of law of public importance or unless grievous injustice would be done if the final court does not intervene, a successful litigant should not be dragged before a third tier of court.  This approach does not, of course, argue against the Court retaining a discretion to grant leave to appeal in appropriate cases.”

12.  If §24 of the judgment in China Field is to be read and applied literally, the Court of Final Appeal could be vexed by a large numbers of cases concerning ancillary relief since even in run-of-the-mill cases the value of the matrimonial assets may be over a million and often substantially more.

13.  In my view, §24 cannot be read and applied disregarding its context. The remarks in §25 show that the matters within the second limb are proprietary in nature, such as a claim for specific performance to convey land or a claim to an interest in a trust. Mr Yu acknowledged that a claim for ancillary relief in matrimonial proceedings is not such a proprietary right but, at best, merely something that may be akin, or almost equivalent (but not quite), to such a right. In my view, consonant with the approach adopted in China Field, the claim for ancillary relief is properly to be regarded as falling within the first limb of paragraph (a) only.

14.  Such an approach would not result in any injustice. In a case that falls within the first limb but where leave is not as of right, this court as well as the Appeal Committee has a discretion to grant leave to appeal where there is a clear need to do so.

15.  Accordingly, I do not consider that the respondent’s appeal lies as of right for the reasons set out above.

Questions of great general or public importance

16.  Questions of great general or public importance were said to arise that merit the grant of leave under section 22(1)(b). While no fewer than five questions have been formulated in the amended notice of appeal, Mr Yu’s submissions focused on the following three:

“  (a)  for the purpose of determining the duration of the marriage within the meaning of s. 7(1)(d) of the Matrimonial Proceedings and Property Ordinance, can the Court properly have regard to the period when the parties had an unstable, turbulent and tumultuous relationship as boy friend and girl friend,

(b)  Whether the giving up of an aspiration or chance to pursue a career, in the absence of a proven track record of career and earnings, could justify invoking the compensation principle,

…

(e)  Whether unarticulated third party resources and uncertain inheritance prospect which may or may not be available to one party can properly be taken into account for the purpose of assessing the financial resources and obligations of that party for the purposes of sections 7(1)(a) and (b) of the MPPO.”

17.  These questions are not readily intelligible in the absence of the factual matrix. In other words, they arise from the rather unique facts of the case and, undoubtedly, are fact sensitive. They do not state any principle of law that is susceptible of general application. For example, as regards the first, namely, the duration of the marriage, while the question whether periods prior to the actual date of the marriage can never be taken into account conceivably could amount to a matter of great general or public importance, that is not the question posed. Rather, it is framed as the “period when the parties had an unstable, turbulent and tumultuous relationship as boy friend and girl friend” which is amorphous and imprecise, entirely fact-sensitive and from which no firm principle can be extracted. The same observations may be made as regards the other questions posed.

18.  The fact that the questions posed arise from the facts of this case does not render them questions of great general or public importance and I would not grant leave under that head.

“Or otherwise”

19.  Finally, it was said that in reckoning the assets of the husband, this court erroneously adopted the sum of $115.675 million instead of $94.403 million. Whether or not there was any mathematical error, plainly it had no impact on the award made since it is clear from §201 of the judgment that the court never made the award based on the husband’s assets being $115 million.

20.  On the face of the judgment, no injustice can be discerned that would warrant this court granting leave under the “or otherwise” ground. In any event, whether leave is to be granted under the “or otherwise” ground is normally a matter for the Court of Final Appeal itself.

Hon Stone J:

21.  I agree.