KEWS v. NCHC

CACV 75/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 75 OF 2011

(ON APPEAL FROM FCMC 13087/2008)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Cheung CJHC:

1.  On 7 March 2012, we dismissed the Husband’s application for leave to appeal to the Court of Final Appeal from the judgment of this court handed down on 2 December 2011. We also dismissed his application for a stay of execution of this court’s judgment pending the hearing of the proposed appeal. We awarded the costs of the failed applications to the Wife. We now give our reasons.

2.  The facts and the court’s reasons for allowing in part the Wife’s appeal from the judge’s decision below have been fully set out in the judgment which will not be repeated.

3.  Suffice it to say, in awarding the Wife a higher amount of monthly maintenance payment and a lump sum of $1.5 million by way of capital provision, this court has taken into account, amongst other things, the support which the Husband has received from his parents in the past and the likely support he will continue to receive from them in future, as well as the Husband’s under‑utilized earning capacity.  In relation to the former, the court discussed and applied the doctrine of judicious encouragement.

4.  Mr Robin Egerton, for the Husband, therefore argued that the following questions of great, general or public importance within the meaning of section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance (Cap 484) should be certified for appeal to the Court of Final Appeal :

(1)   Whether, or in what circumstances, third party resources which have been available to a party in the past (at the discretion of the third party) can properly be taken into account for the purpose of assessing the financial resources and obligations of that party for the purposes of section 7(1)(a) and (b) of the Matrimonial Proceedings and Property Ordinance (Cap 192) in the application of section 4(1)(b) of that Ordinance and lump sums?

(2)   Whether, or in what circumstances, third party resources which have been available to a party in the past (at the discretion of the third party) can properly be taken into account for the purpose of assessing the financial resources and obligations of that party for the purposes of section 7(1)(a) and (b) of the Ordinance in the application of section 4(1)(a) of the Ordinance and periodical payments?

5.  Counsel argued that until now, there has been limited opportunity and therefore sparing guidance from this court on the application of the notion of judicious encouragement.  He submitted that the extent to which a court may make orders interfering with the resources of persons not party to the proceedings is an issue of great and general public importance, which has until now not received the consideration of the Court of Final Appeal.  When to apply for such judicious encouragement is clearly an important policy decision which ought to receive consideration by the Court of Final Appeal.

6.  Counsel also referred to the facts and evidence before the court and how the court arrived at the figures in issue, and contended that there were many areas of importance which the court did not deal with or dealt with incorrectly in its judgment.  Counsel submitted that guidance was required from the Court of Final Appeal on these areas.

7.  In my view, both overseas and local case law have well established the notion of judicious encouragement.  The present case is not the first case where the notion is applied.  The general principles are not in doubt.  They are fact‑sensitive principles, and the outcome in each case depends heavily on the facts, as the case law has demonstrated.  The present case is no exception.

8.  Many of the matters raised by counsel are matters concerning the facts and evidence peculiar to the present case.  They are not matters that should be brought before the Court of Final Appeal.  In any event, counsel has, in my view, over‑emphasized the role played by judicious encouragement in the present case and its effect on the amounts in issue.  The present case was as concerned with the Husband’s under‑utilized earning capacity as it was with the support he had been receiving from his parents.

9.  As regards the two specific questions formulated by counsel, the answers must depend to a great extent on the facts and evidence.  The applicable principles are clear from the case law (including the judgment of this court in the instance case), and require no further clarification by the Court of Final Appeal.  In short, the questions raised are highly fact‑sensitive.

10.  As for the need for guidance to be given by the Court of Final Appeal on how figures are to be worked out in applying the doctrine of judicious encouragement, again I do not believe valuable or meaningful guidance can be given other than very general statements of principle  already made in the case law.  By the nature of things, to a great extent, everything must depend on the facts.

11.  As for the “or otherwise” ground also relied on by the Husband, all I need say is that it is a very narrow ground : Chao Keh Lung v Don Xia [2004] 3 HKLRD 353, para 9.

12.  In gist, counsel complained that this court had got the facts wrong, had taken into account matters erroneously and had come to a decision unjust not only to the Husband but also to his parents.

13.  Counsel also stressed that the amounts involved exceeded, in all likelihood, the sum of $1 million.

14.  I do not believe all these matters are sufficient to bring the present case within the very narrow “or otherwise” ground.

15.  For these reasons, leave to appeal to the Court of Final Appeal was refused, and so was the application for a stay of execution pending appeal, both with costs to the Wife.

16.  Before parting with this case, one matter must be mentioned.  At the time of trial, the Husband had just completed his Kellogg EMBA degree.  His then salary was $15,000 per month.  He gave evidence at trial that he estimated that by the end of the year, he was expecting to get a pay rise, thereby bringing his salary to $30,000 to $40,000 per month.  According to information now made available by the Husband in connection with his application for a stay pending appeal, he got a promotion starting from 1 November 2011 which came with an increased salary of $54,000 per month with a yearly conditional bonus of $150,000.  However, that piece of information was withheld from this court at the hearing of the appeal on 16 November 2011.  According to Mr Egerton, the Husband’s legal representatives were not aware of the new contract of employment concerning the promotion.

17.  It is highly regrettable that the Husband had chosen not to update the court with his latest financial position at the time of the hearing.  Whilst I agree with Mr Egerton that this court was not seized of a variation application but was only dealing with an appeal from the judge’s order made back in October 2010 based on the evidence then available to the trial court, the issue of maintenance and capital provision in the present case were issues involving not only the past, but also the present as well as the future.  The Husband’s level of income at the time of the appeal was as important to the appeal as his level of earnings at the time of trial.

18.  In future, in this type of appeal, legal representatives should be more vigilant in taking instructions from their clients on their latest personal and financial positions, and any material changes post‑trial should be brought to the attention of the court as well as to the other party.

Hon Cheung JA :

19.  I agree.

Hon Kwan JA :

20.  I agree with the Reasons for Judgment of the Chief Judge.