EBS v. NTC, D

FCMC 2128/2013

[2021] HKFC 16

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER FCMC 2128 of 2013

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R U L I N G
(Leave to appeal)

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Introduction

1.  This is the Respondent wife’s application for leave to appeal and a stay of execution with respect to the orders arising out of the judgment on final ancillary relief dated the 23 November 2020.  

The law

Leave to appeal

2.  The law is as set out in section 63A of the District Court Ordinance and this states as follows:

“Leave to appeal shall not be granted unless the judge hearing the application for leave is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.”

3.  It is generally accepted that there needs to be an arguable case in respect of an intended appeal, and that it has a reasonable chance of succeeding.  The Court of Appeal is unlikely to interfere with the exercise of the Court’s discretion unless it can be shown that it has clearly exercised that discretion incorrectly.  Alternatively, it will be necessary to show that the Judge was wrong on the law or in relation to a certain legal principle.

Stay of execution pending appeal

4.  It is further accepted that given the global pandemic and the fact that the Family Court is only 50% operable at present, and considering the dicta by Mr Justice Lam VP in CSFK v HWH [2020] HKCA 207 at para 13, that it would be appropriate to deal with both the application for leave to appeal and a stay of proceedings by way of a paper disposal.

5.  As the wife’s new counsel points out in her written submissions, reference should also be made to the principles applicable to a stay of execution as set out in Star Play Development Limited v Bess fashion Management Co Limited [2007] 5 HKC 84 as necessary. I will not however repeat the same here save but to reiterate that an application for leave to appeal does not operate as a stay per se. It is further accepted that good reasons must exist for a stay and that relevant factors include whether or not a stay would render an appeal nugatory  

Discussion

6.  In the wife’s Draft Notice of Appeal, she refers to a number of points that were not even argued before the court at trial. To that end reference should be made to both the wife’s former counsel’s opening submissions and his closings.

7.  In any event, I should say at the outset that I do not accept that the wife has made out a case for leave to appeal or correspondingly for a stay of execution. In particular, it should be noted as follows:

Ground 1 - Compensation

8.  It is of note that the wife did not particularly raise any issue with respect to compensation, save in passing and that it did not form part of her open proposal at trial. Further Miller/McFarlane [2006] 2 AC 618 was not produced for the court’s consideration and no reference was made to it in the written or oral opening, or indeed in the written closings. The wife did reference the fact that she had given up a lucrative career in order to care for B and she did argue that the parties had entered into an agreement whereby it was understood that she would retain all of the assets held in her sole name. (This point was not accepted by the husband or by the court). It is, with respect, very difficult for the court to consider an issue if it has not been fully argued before it at first instance. In any event HH Judge Melloy does not consider that on the facts of this particular case and on the findings made, that the issue of compensation is properly engaged. The court is also very aware that arguments of this nature can lead to the possibility of double-counting, as is suggested by counsel for the husband, in his written note or to an inequality in approach. In this case the court found as a matter of fact that the wife held significant assets in her sole name and that she also enjoyed a considerable passive income as a result. Thus, the arguments advanced by the wife in this respect are not accepted.

Ground 2 – No order for sale

9.  The former matrimonial home in Bel Air is held in the husband’s sole name. He wishes to sell that property. The wife and the child of the family currently live in that property. In such circumstances the court did not believe that an order for sale was necessary. The husband may sell that property if he should so wish. He does not require an order for sale in order to do so. The fact that the husband requested an order for sale is neither here nor there.

10.  The court ordered that certain payments be made into court inter alia as security against a possible US Capital Gains Tax (CGT) liability in the event that such tax becomes payable on the sale of the Bel Air property. It was expressly acknowledged that this sum or part of it would be released back to the wife in the event that the CGT was of a lesser amount than that calculated by the husband. Liberty to apply generally was also included in the order. For the avoidance of doubt, this order was a form of secured payment and was made in order to ensure that the court’s order was complied with. It is not accepted that the court has no jurisdiction to make this order or that an order for sale is a necessary pre requisite of the same.

Ground 3 - Payment into court

11.  The wife had argued, in her affidavit evidence and at trial that funds should be set aside in particular for B’s future education. Generally, she argued for a greater share of the assets on the premise that the husband could not be trusted to meet his obligations for his son in a situation where he was likely to be spending much of his time outside of Hong Kong. This was not accepted by the court. But the court did ask the husband at the end of his evidence if he would be willing to accept some form of limited trust for B and he answered in the affirmative. Hence the order for a settlement of funds for B’s future education. It is not accepted that the court has no jurisdiction to make an order for funds to be secured by a payment into court for that purpose. As can be seen the hope was that the parties would infact choose to set up an independent trust of some kind and that the role of the court would be limited in this respect. Further, the court did not accept that it would be appropriate for these funds to come from the husband only for the reasons that are set out in the judgment.

Ground 4 – B’s maintenance    

12.  The court found that the wife was in receipt of a significant passive income and made orders that meant that she was also in receipt of slightly more of the capital than the husband. It such circumstances it is not accepted that the court erred in determining that the parties should be equally responsible for their son’s maintenance.

Ground 5 and 6 – Living standard

13.  Similarly, the wife’s arguments in this respect are also not accepted.

Ground 7 – Singapore property tax

14.  Again, this issue was not considered, because this issue was not raised at trial.

Decision

15.  In such circumstances it seems to the court that there is no reasonable prospect of this case succeeding on appeal, nor is there any other reason, in the interests of justice why this appeal should be heard. Consequently, the wife’s application for leave to appeal shall be dismissed. Further and for the avoidance of doubt her application for a stay of the execution pending appeal shall likewise be dismissed.

Costs

16.  This is a discrete application. Costs shall follow the event in the normal way. Therefore, the wife shall pay the husband the costs of and occasioned by this application for leave to appeal/stay of execution on a party and party basis to be taxed if not agreed.