RKL v. WL AND ANOTHER

CACV 9/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 9 OF 2016

(ON APPEAL FROM FCMC NO. 14906 OF 2014)

_______________

_______________

________________________

REASONS FOR JUDGMENT

________________________

Hon Chu JA (giving the Reasons for Judgment of the Court):

Introduction

1.  This is the 1^st respondent’s appeal against the judgment of Deputy District Judge A N Tse Ching (“the Judge”) given on 17 September 2015 holding that the 1^st respondent had submitted to the jurisdiction of Hong Kong.  Leave to appeal was given by this Court on 14 January 2016.[1]

2.  In the judgment, the Judge also held that both the petitioner and the 1^st respondent have substantial connection with Hong Kong at the date of the Petition. Leave to appeal against this part of the judgment was refused both by the Judge and this court.

3.  At the hearing of the leave to appeal application, in view of the stay on the proceedings in the Family Court pending the appeal, we gave directions expediting the appeal. We also indicated that after reading the written submissions and subject to request for an oral hearing by either party, we might dispense with oral hearing and dispose of the appeal on paper.

4.  After reading the written submissions on the appeal, we informed the parties that we did not require to hear counsel orally. Neither party had requested for an oral hearing.  On 1 March 2016, we gave our decision dismissing the appeal with costs to the petitioner, including the costs of the application for leave to appeal. Our reasons appear below.

The facts

5.  The background of the parties and the circumstances leading to the Petition in the Family Court had been set out in details in the Judge’s judgment of 17 September 2015 (“the Judgment”).  We need only highlight the facts and events directly relevant to this appeal, which are set out below.

6.  Both the petitioner and the 1^st respondent were born in Hong Kong and hold Hong Kong Permanent Identity Card. They have dual US and Hong Kong citizenship.

7.  The petitioner and the 1^st respondent married on 1 January 1993 in California, USA. After their marriage, they lived and worked in California, returning frequently to Hong Kong to visit family and friends. They have no children.

8.  On 24 June 2013, the petitioner issued divorce proceedings in California. Subsequently on 31 October 2014, she applied to dismiss the US proceedings.

9.  On 10 November 2014, the petitioner issued the Petition in the divorce proceedings below. In paragraph 3 of the Petition, she averred that she has a substantial connection with Hong Kong.

10.  The Petition was served on the 1^st and 2^nd respondents in Hong Kong on 10 November 2014. On 15 November 2014, both respondents, acting in person, filed their Acknowledgement of Service (Form 4, “1^st Form 4”).

11.  In the 1^st respondent’s Form 4, he answered “No” to question 4 which asks “Do you intend to defend the case?”  Further, in respect of question 8 which asks “… do you wish to be heard on the claim[s] in the petition”, he answered “Yes” to seven of the eight items of relief listed under the question[2].

12.  On 17 November 2014, the 1^st respondent filed a Certificate as to Family Mediation.

13.  Then on 11 December 2014, the 1^st respondent, who had by then become legally represented, filed another Form 4 (“2^nd Form 4”), in which the answer to question 4 (i.e. whether he intends to defend the proceedings) was changed to “Yes, the Petitioner did not have a substantial connection with Hong Kong at the date of Petition and there is lack of jurisdiction.” The 1^st respondent has given no explanation for the change. The answers to the other questions remain unchanged.

14.  On 16 December 2014, the 1^st respondent filed an Answer to the Petition. In paragraph 2 of the Answer, the 1^st Respondent denies that the petitioner has substantial connection with Hong Kong. It goes on to aver: (a) the Court has no jurisdiction under s.3 of the Matrimonial Causes Ordinance, Cap. 179 and Part II of the Matrimonial Proceedings and Property Ordinance, Cap. 192; and (b) even if the petitioner establishes substantial connection with Hong Kong, the proceedings should be stayed in that Hong Kong Court is not the natural or appropriate forum and there is another available forum which is clearly or distinctly more appropriate than the Hong Kong forum.

15.  On 9 January 2015, the 1^st respondent applied by summons to dismiss the proceedings on the basis that the petitioner does not have substantial connection with Hong Kong and alternatively Hong Kong is not the forum in which the proceedings should be heard.

16.  Before the summons was determined, on 19 January 2015, the petitioner obtained leave to amend the Petition to add in paragraph 3 the plea that the 1^st respondent also has a substantial connection with Hong Kong at the date of the Petition.

17.  On 23 January 2015, in response to the Amended Petition, the 1^st respondent filed another Form 4 (“3^rd Form 4”), in which the answer to question 4 was changed to “Yes, the Petitioner and the 1^st Respondent did not have a substantial connection with Hong Kong at the date of Petition and there is lack of jurisdiction. Hong Kong is also not the forum in which these proceedings should be heard.” (changes underlined)  The answer to question 8 was also changed to “N/A”.

18.  On 13 February 2015, the 1^st respondent issued a second summons to dismiss the Amended Petition based also on the alternative grounds of substantial connection and forum.

The Judge’s decision

19.  At the hearing of the two summonses before the Judge, the petitioner took the point that the 1^st respondent has by the filing of the 1^st Form 4 submitted to the jurisdiction of Hong Kong Court and it was no longer open to him to challenge the jurisdiction of the Family Court.

20.  The Judge held that both the petitioner and the 1^st respondent have substantial connection with Hong Kong. On the issue of forum, the Judge concluded that the 1^st respondent has submitted to the jurisdiction of the Hong Kong Court. She gave her reasons in §§37 and 38 of the Judgment:

“37. The Husband’s first Form 4 was clear and unequivocal. He indicated an intention NOT to defend. He then went on to file a Certificate as to Family Mediation 2 days later. The filing of these documents were wholly inconsistent with any intention to challenge jurisdiction or forum. The Wife raised the question that the Respondents have submitted to jurisdiction in her 2^nd Affirmation filed on 9 February 2015. The Form 4 indicating that he was not contesting the claim and the Certificate as to Family Mediation could not in any sense be regarded as necessary or useful for some purpose other than acceptance of jurisdiction. The Husband has not even attempted to put forward any explanation. In his 2^nd Affirmation, he merely argued that he was entitled to file another Form 4 under the Matrimonial Causes Rules and that his second Form 4 was within time. Even if his summonses were within time (which is disputed), it was incumbent on the Husband to explain the purpose of filing his first Form 4 and the Certificate as to Family Mediation if he says that he has not submitted to jurisdiction. This was never done.

38. In my judgment, there could be no purpose in filing the first Form 4 and the Certificate as to Family Mediation other than submitting to the Court’s jurisdiction in the present case. The Husband has submitted to jurisdiction and it is no longer open to him to challenge jurisdiction or forum.”

Ground of appeal

21.  The sole ground on which the 1^st respondent has been given leave to appeal is whether the Judge was correct in law in finding that the 1^st respondent, having filed his 1^st Form 4 indicating that he would not defend the proceedings, was no longer able to challenge jurisdiction or forum. The point was not academic since notwithstanding the refusal of leave to appeal the Judge’s finding on substantial connection, the 1^st respondent may proceed with an application for stay on the ground of forum non conveniens if he has not submitted to the jurisdiction. 

22.  Three arguments were articulated by Mr Egerton for the 1^st respondent. They are: (1) The Judge failed to properly consider the judgment in SJH v. RJH (Forum) [2012] HKFLR 235, at §9(13)[3]; (2) The Judge erred in ruling that the filing of the 1^st Form 4 served no purpose other than submission to the jurisdiction of the court; and (3) The Judge failed to recognise that filing of a Form 4 indicating intention not to defend does not bar the filing of a further Form 4 indicating the opposite.

Reasons for judgment on the appeal

23.  By reason of rule 3 of the Matrimonial Causes Rules (MRC), Cap.179A, the Rules of the High Court (RHC), Cap. 4A apply with necessary modifications to the practice and procedure of matrimonial proceedings. Order 12 rule 8 of the RHC prescribes the procedure for disputing jurisdiction. The relevant part of rule 8 provides:

“(1) A defendant who wishes to dispute the jurisdiction of the court in the proceedings by reason of any such irregularity as is mentioned in rule 7 or on any other ground shall give notice of intention to defend the proceedings and shall, within the time limited for service of a defence, apply to the Court for-

 

…

(g) a declaration that in the circumstances of the case the court has no jurisdiction over the defendant in respect of the subject-matter of the claim or the relief or remedy sought in the action,

…

(2) A defendant who wishes to argue that the Court should not exercise its jurisdiction in the proceedings on one or more of the grounds specified in paragraph (2A) or on any other ground shall also give notice of intention to defend the proceedings and shall, within the time limited for service of a defence, apply to the Court for-

(a) a declaration that in the circumstances of the case the Court should not exercise any jurisdiction it may have, or

(b) an order staying the proceedings, or

(c) such other relief as may be appropriate, including the relief specified in paragraph (1)(e) or (f).

(2A) The grounds specified for the purposes of paragraph (2) are that-

(a) considering the best interests and convenience of the parties to the proceedings and the witnesses in the proceedings, the proceedings should be conducted in another court,

…

(6) A defendant who makes an application under paragraph (1) or (2) shall not be treated as having submitted to the jurisdiction of the court by reason of his having given notice of intention to defend the action; but if the Court makes no order on the application or dismisses it, the notice shall stand unless otherwise directed by the Court and the defendant shall be treated as having given notice of intention to defend the action.

(7) Except where the defendant makes an application in accordance with paragraph (1) or (2), the acknowledgment by a defendant of service of a writ shall, unless the acknowledgment is withdrawn by leave of the Court under Order 21, rule 1, be treated as a submission by the defendant to the jurisdiction of the Court in the proceedings.”

24.  On the giving of notice of intention to defend, rule 15(1) of the MCR provides that a party intending to defend the proceedings should return to the registry an acknowledgment of service in Form 4 containing a statement to the effect that he intends to defend the proceedings[4].

25.  Reading Order 12 rule 8 of the RHC together with rule 15(1) of the MCR, a respondent who wishes to dispute the jurisdiction of the Hong Kong Court over matrimonial proceedings must firstly, file a Form 4 containing a statement to the effect that he intends to defend the proceedings, and secondly, make an application to contest jurisdiction within the time limited for filing an Answer to the Petition.

26.  In SJH v. RJH, the respondent filed a Form 4 indicating intention to defend and an Answer denying the marriage had irretrievably broken down before issuing a summons to stay the Petition on the ground of forum non conveniens. The Family Court dismissed the summons as being out of time. The Court of Appeal dismissed the respondent’s appeal, holding that under Order 12 rule 8(2) of the RHC as modified by rule 3 of the MCR, if the respondent wished to raise the challenge that the Hong Kong Court is not the proper forum, he must do so before filing his Answer; and that having filed the Answer, it was too late to challenge the jurisdiction of the Hong Kong Court (at §9(5) to (7)).

27.  In the present case, the 1^st respondent, after being served with the Petition, had filed the 1^st Form 4, followed by an application to dispute jurisdiction made some eight weeks later.  The 1^st Form 4, however, did not state an intention to defend the proceedings. Instead, it stated unequivocally that the 1^st respondent did not intend to defend the proceedings.  It further indicated that the 1^st respondent wished to be heard on the ancillary relief to be ordered. The 1^st Form 4 is not a notice of an intention to defend within the meaning, and for the purpose of, Order 12 rule 8 of the RHC.

28.  This brings us to the first argument of Mr Egerton that the Judge erred in failing to consider and apply SJH v. RJH. In that case, one of the arguments of the petitioner was that the respondent had submitted to the jurisdiction of the Hong Kong by taking steps in the proceedings, including filing a Form 4 and an Answer. Cheung JA addressed this argument at §9(13), and said:

“In my view the filing of Form 4 cannot be construed as a submission to jurisdiction or a waiver of the husband’s right to challenge jurisdiction because under Order 12, Rule 8(2) he must file his Form 4, which is the equivalent of the notice of intention to defend under the RHC, in order to invoke the jurisdictional challenge. On the other hand the filing of the answer must be construed as a submission to jurisdiction. However, in light of my decision on Order 12, Rule 8(2) of the RHC it is not necessary to deal with this issue further.” [Emphasis added]

29.  Mr Egerton relied on the part underlined and submitted that the Judge erred as a matter of law in holding that the 1^st respondent had by the filing of the 1^st Form 4 submitted to the jurisdiction of the Hong Kong Court.  We do not agree.  Importantly in SJH v. RJH, the respondent stated in his Form 4 that he intended to defend the proceedings. The Form 4 was a notice of intention to defend contemplated by Order 12 rule 8(2) of the RHC. Cheung JA’s statement that the filing of Form 4 cannot be construed as submission to jurisdiction or a waiver of the right to challenge jurisdiction has to be read in context, and in the light of the factual matrix of the case. It is clear from the passage quoted above that Cheung JA was dealing with a Form 4 that stated an intention to defend. SJH v. RJH does not establish a general principle of law that in no circumstances will the filing of a Form 4 amount to submission to jurisdiction or waiver of the right to challenge jurisdiction. Accordingly, although the Judge did not make reference to this part of the judgment of SJH v. RJH, this does not give rise to any error of law.

30.  Mr Egerton’s second argument is that the Judge erred in ruling that the filing of the 1^st Form 4 served no purpose other than submission to the jurisdiction of the Court because the filing of From 4 is necessary for acknowledging service of the Petition and rule 15(2) of the MCR requires it to be filed within eight days after service.  Therefore, Mr Egerton argued, the filing of the 1^st Form 4 is a step which could be explained and was necessary or useful for some purpose other than acceptance of the jurisdiction.

31.  Whether any particular matter amounts to a voluntary submission to jurisdiction must depend on the circumstances of the particular case.  In Miruvor Ltd v. Panama-Globe Steamer Lines SA [2007] 1 HKLRD 804, 809 at §9 and 812 at §6, Rogers VP had observed that the circumstances should be looked at sensibly, realistically and fairly to see whether the step taken by the defendant constituted a submission to jurisdiction.

32.  Similar observation was made in Global Multimedia International Limited v. ARA Media Services & Others [2006] EWHC 3612(Ch); [2007] 1 All ER (Comm) 1160 at §28, which held that the test to be applied is an objective one and what must be determined is whether the only possible explanation for the conduct relied on is an intention on the part of the defendant to have the case tried in this jurisdiction.

33.  The point was explained by Colman J in Spargos Mining NL v Atlantic Capital Corp (1995) The Times, 11 December, quoted in SMAY Investments Ltd v Sachdev [2003] EWHC 474 (Ch), [2003] 1 WLR 1973 at §41[5]:

“In Sage v Double A Hydraulics Ltd [1992] The Times, 2 April 1992, TLR 165, Farquharson LJ said (and this is a report of the judgment which is not reported in oratio recta): ‘A useful test was whether a disinterested bystander with knowledge of the case would have regarded the acts of the defendant, or his solicitors, as inconsistent with the making and maintaining of his challenge.’

In arriving at the view to be imputed to the disinterested bystander, it seems to me that one has to bear in mind that there will be an effective waiver, or a submission to the jurisdiction, only where the step relied upon as a waiver, or a submission to the jurisdiction, cannot be explained, except on the assumption that the party in question accepts that the court should be given jurisdiction. If the step relied upon, although consistent with the acceptance of jurisdiction, is a step which can be explained also because it was necessary or useful for some purpose other than acceptance of the jurisdiction, there will, on the authorities, be no submission ... If the well-informed bystander had been left in doubt because what the defendants had done was equivocal, in the sense that it was explicable on other grounds in addition to agreement to accept the jurisdiction of the court, then the conclusion must be, on the authorities, that there would have been no submission to the jurisdiction. The representation derived from the conduct of the party said to have submitted must be capable of only one meaning.”

34.  The Judge was aware and had considered these authorities and legal propositions.[6] She had additionally referred to ABN Amro Bank NV v. Fortgang [2008] 2 HKLRD 349, which applied Miruvor Ltd v. Panama-Globe Steamer Lines SA and Global Multimedia International Limited v. ARA Media Services & Others. 

35.  The complaint of Mr Egerton is that the Judge overlooked the fact that 1^st respondent was obliged to file a Form 4 to acknowledge service of the Petition. This is, however, based on a misreading of the effect of Order 12 rule 8(1) and (2) of the RHC and rule 15(1) of the MCR.  As mentioned above, in order to raise a jurisdictional challenge, what a respondent is required to do is to give notice of intention to defend by returning to the registry a Form 4 acknowledging service and containing a statement to the effect that he intended to defend the proceedings to which the acknowledgement relates.  The 1^st Form 4 that the 1^st respondent had filed in this case was not a notice of intention to defend.  The 1^st respondent had taken a step which could not be explained by reference to Order 12 rule 8(1) or (2) of the RHC or rule 15(1) of the MCR.  Neither was it a step necessary for some purpose other than acceptance of jurisdiction.  It was open to the Judge to find that the 1^st Form 4, objectively viewed, indicated that the 1^st respondent accepted the action may proceed in the Hong Kong Court, and that it is consistent with an acceptance and submission to the jurisdiction.

36.  Mr Egerton’s third argument is that notwithstanding the filing of the 1^st Form 4 indicating an intention not to defend, it remained open to him to file a fresh Form 4 giving a different indication.  Reliance is placed on Order 20 rule 2(2) and (3) of the RHC and rule 15(3) and (4) of the MCR.

37.  Under Order 20 rule 2(2) and (3) of the RHC,

“(2) A party whose acknowledgment of service contains a statement to the effect that-

(a) he does, or

(b) he does not

intend to contest the proceedings to which the acknowledgement relates may, without the leave of the Court, amend the acknowledgment by substituting for that statement a statement to the opposite effect, provided that in a case falling under sub-paragraph (b) the amendment is made before judgment has been obtained in the proceedings.

(3) Where an acknowledgment of service is authorized to be amended under this rule, a fresh acknowledgment, amended as so authorized, must be handed in at or sent by post to the Registry, and Order 12, rule 4, shall apply.”

38.  As for rule 15(3) and (4) of the MCR, it provides:

“(3) Notice of intention to defend a cause begun by petition may be given at any time before directions for trial are given, notwithstanding that the time limited for giving the notice has expired.

(4) Subject to paragraphs (2) and (3), a person may give notice of intention to defend notwithstanding that he has already returned to the registry an acknowledgement of service not constituting such a notice.”

39.  Mr Egerton submitted that Order 12 rule 8(2) of the RHC only requires the giving of a notice of intention to defend, but does not preclude the 1^st respondent from first filing a Form 4 indicating intention not to defend. It was further said that the procedural avenues provided in rule 15 of the MCR and Order 20 rule 2 of the RHC indicate that the filing of a Form 4 stating an intention not to defend before directions for trial are given does not constitute submission to jurisdiction. Hence, reading Order 12 rule 8(2) subject to rule 15(3) and (4) of the MCR, the 1^st respondent was entitled to change his position and file the 2^nd Form 4 and the Answer disputing jurisdiction before the court gave directions for trial.

40.  These submissions effectively suggest that a party may take one or more steps in the proceedings, which objectively viewed amount to acceptance of jurisdiction of the court, and thereafter change his mind and mount a jurisdictional challenge without having to obtain leave of the court or to give reasons. As Mr Chan for the petitioner correctly pointed out, such a suggestion is directly at odds with the basic principles of law that there is a public interest in finality in litigation, and that a party should be bound by representations he made in litigation unless there are good reasons to allow him to depart from them. It is also incompatible with the rationale and policy under Order 12 rule 8.

41.  More fundamentally, this contention of Mr Egerton is inconsistent with the concept of submission to jurisdiction: once a person has submitted to jurisdiction, he cannot retract from it without leave of the court.  By the time the 1^st respondent filed his 2^nd Form 4, he had already filed the 1^st Form 4, the effect of which cannot be simply put to one side as if it had no legal effect whatsoever. The Judge held, and we agree, that in indicating in the 1^st Form 4 an intention not to defend the proceedings and asking to be heard on ancillary reliefs, the 1^st respondent had taken a step in the proceedings that indicates to an objective bystander he accepted the jurisdiction of the Hong Kong Court. The effect of this is that he is precluded thereafter from objecting to the Court exercising its jurisdiction in respect of the claim: see The Messiniaki Tolmi [1984] 1 Lloyds Reports 266 at 270, cited in Miruvor Ltd v. Panama-Globe Lines SA at 808H, §7. The submission that Order 12 rule 8(2) only requires the giving of a notice of intention to defend, but does not preclude the 1^st respondent from filing the 2^nd Form 4 after he had filed the 1^st Form 4 is to take a blinkered view of the rule.

42.  We also do not accept it is apt to refer to Order 20 rule 2(2) and (3) of the RHC and rule 15(3) and (4) of the MCR. These provisions govern the general situation in litigation, but are irrelevant to the determination of whether a party has by his acknowledgement of service or Form 4 submitted to the jurisdiction of the Court. There is no basis for the submission that because of these provisions, the filing of a Form 4 indicating an intention not to defend does not constitute submission to jurisdiction and that Order 12 rule 8(2) should be read subject to these provisions.   

43.  In Re Resource 1 (2000) 3 HKCFAR 187, the Court of Final Appeal held that Order 12 rule 8 of the RHC prescribes a procedure for determining disputes as to jurisdiction and is a comprehensive and exclusive code for the taking of jurisdictional objections. Sir Anthony Mason NPJ pointed out (at 211D-F) that rule 8(7) is the critical element in the procedure, namely, except where the defendant makes an application to the court as prescribed in rule 8(1) and (2), the acknowledgement of service by a defendant shall, unless the acknowledgement is withdrawn by leave of the Court, be treated as a submission by the defendant to the jurisdiction of the Court in the proceedings. Withdrawal of acknowledgment is governed by Order 21 rule 1 of the RHC which requires leave of the court.

44.  In our view, Order 12 rule 8(7) highlights the fallacy in the submission that a party seeking to dispute jurisdiction may first file an acknowledgement of service or Form 4 indicating no intention to defend (and in the present case, even asking to be heard on the reliefs to be ordered), and thereafter, relying on Order 20 rule 2 of the RHC or rule 15 of the MCR, amend the acknowledgement or file a fresh Form 4 to state the contrary and then to raise a jurisdictional challenge.

45.  Another reason for rejecting the submission is to be found in the judgment of Sir Anthony Mason NPJ when discussing the vires of Order 12 rule 8 in prescribing a time and method by which jurisdictional objection is to be taken (at 213G-I):

“Indeed, in the case of jurisdictional objections, there are powerful reasons for thinking that they should be resolved, as far as possible, at an early stage of an action. It is not right that a court should be venturing upon the merits or substance of an action without determining at the threshold of the action, if it can conveniently do so, that there is jurisdiction to proceed. The prospect of a defendant raising a jurisdictional objection at a very late stage of an action, perhaps after a lengthy hearing and just before the delivery of judgment, is one not readily to be contemplated.

46.  For the reasons set out above, we have dismissed the 1^st respondent’s appeal with costs to the petitioner, including the costs in HCMP3387/2015, to be taxed if not agreed.                        

47.  Before leaving this judgment, we would briefly deal with Mr Chan’s point that the 1^st respondent’s first summons to challenge jurisdiction was out of time in that by the time it was filed, the 21 days for filing an Answer to the Petition had expired. In the Judgment at §§39 to 45, the Judge held that the 1^st respondent’s summons being out of time was not an application in accordance with Order 12 rule 8; consequently, by reason of Order 12 rule 8(7), he was deemed to have submitted to the jurisdiction of the Hong Kong Court. As held in Re Resource 1 at 203C-D and Global Multimedia International Limited v. ARA Media Services & Others at §26, there is power in the court to extend the time for making a challenge to the jurisdiction which would have displaced the seemed submission to jurisdiction under rule 8(7). The out of time argument is therefore not determinative of this appeal. In our view, the more pertinent question is whether the 1^st respondent has by conduct submitted to the jurisdiction. Since we have upheld the Judge’s decision on the submission of jurisdiction issue, there is no need to consider this point further.