Recognition of Overseas Divorces -Forum Non Conveniens

Part IIA of the Matrimonial Proceedings and Property Ordinance Cap. 192

Part IX was added to MCO in 1972 which follows the United Kingdom statute, the Recognition of Divorces and Legal Separations Act 1971 to give effect to the Hague Convention of the same name.

‘Overseas divorces and legal separations’ are decrees obtained by means of judicial or other proceedings in any country outside Hong Kong and are effective under the law of that country. (see s. 55(2))

Cross-Border Cases  – judicial or other proceedings in any country outside Hong Kong” 

Is PRC a country outside Hong Kong for the purpose of Part IX?

Section 56 provides that the conditions for its recognition are that at the date of institution of the proceedings,

(1) either spouse was habitually resident in that country; or
(2) domiciled in or was a national of that country.

Section56(3) of the MCO provides:   “(3) In relation to a country comprising territories in which different systems of law are in force in matters of divorce or legal separation, the provisions of subsections (1) and (2)(except those relating to nationality) shall have effect as if each territory were a separate country”.

ML v YJ FACV No. 20 of 2009 

Mr. Justice Henry Litton NPJ in his judgment said, “The separation of Hong Kong’s legal system from that of the Mainland, as entrenched in Article 2 of the Basic Law, is fundamental to the concept of “one country, two systems”, as referred to in the Preamble to the Basic Law. Seen in this light the words in s.55(2)(a) “judicial or other proceedings in any country outside Hong Kong” must be wide enough to include judicial proceedings in a jurisdiction outside Hong Kong, at least in so far as the jurisdiction of the Mainland courts is concerned.” (paras.114 – 115)

Mr. Justice Patrick Chan PJ, said in his judgment that “s.56(3) which emphasizes the different systems of law rather than different political entities: territories within a country but with different systems of law are treated as separate “countries”. (para. 62(3))

Section 58(1) provides: “Any finding of fact made (whether expressly or by implication) in the proceedings by means of which the divorce or legal separation was obtained and on the basis of which jurisdiction was assumed in those proceedings shall:

(a)  if both spouses took part in the proceedings, be conclusive evidence of the fact found; and
(b)  in any other case, be sufficient proof of that fact unless the contrary is shown.”

Section 61 of the MCO provides that no recognition of the foreign decree if,

(1) there was no subsisting marriage; or
(2) the decree was obtained without reasonable steps take to give notice of the proceedings to the other spouse; or
(3) the other spouse has not been given the reasonable opportunity to take part in the proceedings; or
(4) its recognition would manifestly be contrary to public policy.

ML v YJ (No 3) (Forum Dispute) – [2009] HKFLR 1

Facts: “In this case, there were parallel proceedings for divorce in Hong Kong and in Shenzhen. The parties were married in Shenzhen in 1992, they had two children born in 1992 and 1999 and the family came to Hong Kong in the mid 1990’s. The husband had businesses both in Hong Kong and the mainland. There were also matrimonial homes in both jurisdictions. Since 2003, the husband spent more time on the mainland than in Hong Kong, whilst the wife and children mostly lived in Hong Kong returning to Shenzhen each weekend. The marriage broke down in 2006. There were substantial assets both in Hong Kong and in Shenzhen.

In May 2006, the wife presented a petition for divorce in Hong Kong. The husband did not challenge the jurisdiction of the Hong Kong court and filed a Form 4 indicating his intention to defend. The petition was subsequently amended and the husband filed a further Form 4 indicating he would not defend the amended petition. In August, the wife filed her notice of application for ancillary relief and in September 2006, Deputy Judge Remedios granted interim custody of the younger child to the wife and a maintenance pending suit order was made. In November 2006, a decree nisi of divorce was granted in Hong Kong. In October 2006, the husband issued divorce proceedings in Shenzhen. He sought financial relief regarding assets in Shenzhen of approximately RMB14.6m, which represented a small portion of the total matrimonial assets in dispute.

The wife only learned of the divorce proceedings in Shenzhen in November 2006. She attempted to stop those proceedings both in Hong Kong and in Shenzhen and applied for a stay of the proceedings in Shenzhen that failed in March 2007. She appealed and the appeal was dismissed by the Shenzhen Court.

Meanwhile, the question of custody was heard in Hong Kong. In May 2007, Recorder Yuen granted custody of both children to the wife with reasonable access to the husband (see [2008] HKFLR 88).

In Shenzhen, the divorce case was heard on three days between June and September 2007. The wife took part in the proceedings and was legally represented by a mainland lawyer. The Shenzhen court came to a decision in November 2007. The decision included an order for divorce dissolving the marriage. It distributed the properties which were the subject of the Shenzhen proceedings, (including two Hong Kong properties) and rejected the husband’s claim for custody of the two children.

In May 2006, the husband also issued a writ in the High Court against the wife. In that action, he claimed the wife held the assets and shares in several companies on trust for him. Although the husband did not file any statement of claim in the action, some of the assets were sold and the proceeds paid into court by consent. Further, by consent a monthly sum of HK$450,000 was paid out from the money in court to the wife. This figure matched the maintenance pending suit figure provided for in the consent order of September 2006.

On 3 December 2007, the husband took out a summons placing reliance on the PRC judgment dissolving the marriage and sought:

(a) A stay of the Hong Kong proceedings permanently;
(b) Striking out or dismissal of the Hong Kong proceedings;
(c) Rescission, withdrawal or annulment of the decree nisi;
(d) Declaration that the decree nisi shall not be made absolute.”

Lam J. in considering whether to exercise the court’s discretion not to recognize the PRC decree because of contrary to public policy, he approved the principles H v H [2007] (1) FLR 1318 namely:

(a) the power to refuse recognition should be exercised sparingly;
(b) the principle of comity is a relevant consideration;
(c) the sub-section confers a residual discretion;
(d) the conduct of the parties leading up to the divorce may be a relevant factor;
(e) motivation may be relevant;
(f) the consequences to the parties of a refusal of recognition may also be considered.”

ML v YJ – [2009] HKCU 876, the H appealed against Lam J. decision and the Court of Appeal overturned the decision by two to one and concluded that Hong Kong should recognize the decree granted by Shenzhen Intermediate People’s Court made on 14 November 2007 and stayed the Hong Kong proceedings.

In overturning the decision of Lam J., P Cheung JA also approved the principles set out in H v H [2007] (1) FLR 1318 and he added one more factor that is “the consequence of recognizing an overseas divorce”. (paras. 125 – 126)

In the Court of Appeal, Le Pichon JA in her dissenting judgment, referred to two leading cases on the subject which are relevant to the consideration of recognition of overseas decree, namely the House of Lords’ decision in Quazi v Quazi [1980] AC 744 and the judgment of the Court of Appeal in Chaudhary v Chaudhary [1985] Fam 19.

The Wife appealed against the Court of Appeal decision and the judgment of the Court of Final Appeal was delivered on 13 December 2010, the judgment of the Court of Appeal was confirmed by three to two with Mr. Bokhary and Mr. Patrick Chan PJJ dissented.

In the CFA, Patrick Chan PJ said, “Construing s.61(2)(b) purposively and in context, the following points can be made:

(1) … there is an obligation on the part of the court to recognize an overseas divorce unless to do so is manifestly contrary to public policy and the court’s power should be exercised only sparingly and in truly exceptional cases. …

(2) The court would only refuse recognition of an overseas divorce if to do so would cause substantial injustice. … In this connection, the word “manifestly” in s.61(2)(b) would, in my view, mean no more than “plainly” or “obviously”.

(3) Obviously all relevant circumstances should be considered and this must include the conduct of the parties and the consequences of recognition or refusal to them. Thus recognition would be refused where one party is taking unfair tactical advantage over the other with the result that the other party is deprived of his or her legitimate financial relief upon divorce.

(4) That the court will consider the conduct of the parties and the consequences of recognition or non-recognition on them can be illustrated by cases such as Joyce v Joyce and another [1979] Fam 93 (husband obtained foreign divorce to minimize wife’s entitlement to financial relief); Newmarch v Newmarch [1978] Fam 79 ; Wheeler v Wheeler [1997] CILR 362 (parallel proceedings and recognition would have adverse financial effect on wife); Chaudhary v Chaudhary [1985] Fam 19 (recognition would deprive wife of right to obtain financial relief) and Golubovich v Golubovich [2010] EWCA Civ 810 (wife not deprived of financial relief). (para. 69)

Patrick Chan PJ concluded, “However, having regard to all the circumstances of this case, I am more than satisfied that recognition of the Shenzhen Divorce would cause substantial injustice to the Wife and that the power of the court under s.61(2)(b) should be exercised by refusing recognition. I would uphold the decision of the judge (which has the support of Le Pichon JA) in refusing recognition. I would allow appeal … .” (para.89)

Henry Litton NPJ said: “The first point to be made about the cases is that there are few of them in which the public policy discretion has been exercised. Indeed, according to the 2006 (14th) edition of Dicey, Morris and Collins on the Conflict of Laws, Vol. 2 at p.909, Kendall v. Kendall [1977] Fam. 208, to be discussed in more detail later, was by 2006 only one of two English cases in which a foreign divorce had been refused recognition solely on the ground of public policy.

The second point to be made is that a decree will not be refused recognition on the basis of the public policy exception simply because better financial provision will be made for the wife in our courts than will be made for her in the courts of the jurisdiction the recognition of whose decree is in question. Something substantially more than a mere comparison of financial provisions available in the two jurisdictions is clearly required in order to trigger the discretion.” (paras. 118 -119)

Henry Litton PJ together with Sir Anthony Mason NPJ and Mr Justice Ribeiro PJ uphold the judgment of the majority of the Court of Appeal and dismiss the Wife’s appeal.

Le Pichon JA in her dissenting judgment in the Court of Appeal by way of a postscript, said, “Serious injustice could arise from this jurisdictional limitation. For example, where the marriage is terminated by foreign proceedings in which no financial order is made, the Hong Kong courts would have no power to grant financial relief even where there are matrimonial assets within the jurisdiction. This deficiency in the law was addressed by way of legislative reform in the United Kingdom, by the introduction of Part III of the Matrimonial and Family Proceedings Act 1984 conferring jurisdiction on the English courts to grant ancillary relief based on an overseas divorce provided that leave is obtained. In his reasons for judgment, the judge (i.e. Lam J.) highlighted the need for legislative reform in this regard in Hong Kong. See §§ 63-64 and 80-81 of his judgment. I fully endorse his plea for urgent legislative attention.” (paras. 86 -87)

Problems from Recognition of Foreign Decrees

Recognition of an foreign decree of divorce will have the effect of barring the court’s jurisdiction to make ancillary relief orders.

In Torok v Torok [1973] 1 WLR 1066, Ormrod J stated: “… And so if this marriage is dissolved by the Hungarian court, there will be no court which has jurisdiction to deal with the house…and there will be no court which has any effective jurisdiction to order maintenance for the wife…” (p. 1068)

Henry Litton NPJ said in his judgment, “It is therefore doubtful whether, in the circumstances of this case, even if the United Kingdom reforms under the 1984 Act had been effective in Hong Kong, the wife would necessarily have obtained relief here. Nevertheless, it is desirable that the equivalent of those reforms should be introduced to enable the Hong Kong court to provide ancillary relief after dissolution of a marriage pursuant to a foreign decree in appropriate cases.” (para. 148) 

Application for Financial Relief after Overseas Court Orders (Part IIA of the MPPO)

In response to the calls by the courts in ML v YJ for urgent legislative reform to give the court jurisdiction to grant ancillary relief despite an overseas divorce decree in an appropriate case, Part IIA of the Matrimonial Proceedings and Properties Ordinance, Cap 192 (“MPPO”) was introduced.  It enables a spouse to apply for financial relief after the marriage had been dissolved or annulled in a foreign jurisdiction.

In June 2010, the Department of Justice introduced a Bill to the Legislative Council “to empower the High Court and the District Court to order financial relief for a former spouse whose marriage has been dissolved or annulled, or who has been legally separated, in judicial or other proceedings outside Hong Kong.” (LP 5060/1C 17 June 2010)

The Bill is modelled on Part III of the English Matrimonial and Family Proceedings Act 1984 by adding a new Part IIA to the Hong Kong Matrimonial Proceedings and Property Ordinance Cap. 192.

This new Part IIA came into force on the 1 March 2011.

Part II A  Section 29AB(1) empowers the court to grant financial relief after a marriage had been dissolved or annulled in a place outside Hong Kong and such divorce and annulment is recognized as valid by the law of Hong Kong.

This covers divorce or annulment granted in the PRC.

Section 29AB(3) provides: “(3) The court may grant leave under this section despite the fact that an order has been made by a competent authority outside Hong Kong requiring the other party to the marriage to make any payment or transfer any property to, or for the benefit of, the applicant or a child of the family.”

Section 29AA defines, “competent authority outside Hong Kong” (境外主管當局) means any court or public body outside Hong Kong;

Furthermore, section 29AB(2) provides: “If after a marriage has been dissolved or annulled in a place outside Hong Kong, one of the parties to the marriage remarries, that party is not entitled to make an application in relation to that marriage.”

A filter mechanism is established in section 29AC.

(1) Leave of the court is required and the court must not grant leave unless it considers that there is substantial ground for the making of an application for an order for financial relief.

(2) Leave may be granted subject to any conditions the court thinks fit.

Section 29AE sets out the formal jurisdictional requirements,

(a) either of the parties to the marriage was domiciled in Hong Kong
(b) either of the parties to the marriage was habitually resident in Hong Kong
(c) either of the parties to the marriage had a substantial connection with Hong Kong

Section 29AF imposes a duty on the court to consider whether Hong Kong is the appropriate venue for the application.

Section 29AF (1) provides, “Before making an order for financial relief, the court must consider whether in all the circumstances of the case it would be appropriate for the order to be made by a court in Hong Kong, and if the court is not satisfied that it would be appropriate, the court must dismiss the application.”

(2) The court must in particular have regard to the following matters –

(a) the connection that the parties to the marriage have with Hong Kong;
(b) the connection that those parties have with the place where the marriage was dissolved or annulled or where they were legally separated;
(c) the connection that those parties have with any other place outside Hong Kong;
(d) any financial benefit that the applicant or a child of the family has received, or is likely to receive, in consequence of the divorce, annulment or legal separation, by virtue of any agreement or the operation of the law of a place outside Hong Kong;
(e) if an order has been made by a competent authority outside Hong Kong requiring the other party to the marriage to make any payment or transfer any property to, or for the benefit of, the applicant or a child of the family –

(i) the financial relief given by the order; and
(ii) the extent to which the order has been complied with or is likely to be complied

with;

(f) any right that the applicant has, or has had, to apply for financial relief from the other party to the marriage under the law of any place outside Hong Kong and, if the applicant has not exercised that right, the reason for that;

(g) the availability of any property in Hong Kong in respect of which an order for financial relief in favour of the applicant may be made;

(h) the extent to which any order for financial relief is likely to be enforceable;

(i) the length of time that has elapsed since the date of the divorce, annulment or legal separation.

At the substantive hearing, the court has the power under section 29AG(1) to make any one or more of the orders that it could make under section 4, 5 or 6 of the MPPO if a decree of divorce had been granted in Hong Kong. It may also under section 29AG(2) make an order for sale of property pursuant to section 6A(1).

– ensure that the general power of the High Court to grant interlocutory injunction (Section 29AL)

In C (formerly known as C) v H, HCMC 3/2011 (10 May 2012) Poon J said:  Part IIA is modeled on Part III of the English Matrimonial and Family Proceedings Act 1984 (“the 1984 Act”) … Valuable judicial guidance can therefore be derived from the English case law to inform our approach to Part IIA generally and on its interpretation and operation specifically.”

Poon continued to say: “To obtain leave under section 29AC(2), the applicant must pass the threshold of satisfying the court that there is substantial ground for the making of the substantive application.  Lord Collins explained the threshold in Agbaje v Agbaje thus :

‘33. In the present context the principal object of the filter mechanism [that is, section 13 of Part III of the 1984 Act] is to prevent wholly unmeritorious claims being pursued to oppress or blackmail a former spouse. The threshold is not high, but is higher than ‘serious issue to be tried’ or ‘good arguable case’ found in other contexts. It is perhaps best expressed by saying that in this context ‘substantial’ means ‘solid’ …’

I hold that the same threshold applies to section 29AC of Part IIA.” (para. 28)

Poon J said that the court will consider all the circumstances of the case to see if the burden is discharged.  In this connection, he mentioned three points.

(1) the applicant must satisfy one of the three formal jurisdictional requirements in section 29AE.  This is obvious.  If none of those formal requirements is satisfied, the court simply does not have jurisdiction to entertain the substantive application for financial relief.  It would be clearly wrong for the court to grant leave.

(2)  the applicant must also satisfy the court that provisionally it would be appropriate for the order to be made by a court in Hong Kong under section 29AF

(3)  while Part IIA aims at remitting the presence of a failure in a foreign jurisdiction to afford appropriate financial relief, the statutory test does not require the applicant to prove hardship, injustice or exceptionality as a pre-condition in order to obtain leave : Jordan v Jordan [2000] 1 WLR 210; approved in Agbaje v Agbaje, per Lord Collins at paras.60-64.  for granting leave.  Their absence is however not fatal. Such factors, if present, are cogently relevant to the court’s consideration.

The court is empowered by section 29AG to make orders for financial provision and property adjustment after leave to apply has been given and it is satisfied that it is appropriate to make such an order, having regard to the matters set out in the proposed section 29AH.

Sections 29AJ and 29AK contain anti-avoidance provisions to deal with dispositions and transactions that are intended to defeat or prevent applications for financial relief or which reduce such a relief, or in any way interfere with the enforcement of orders for relief.

Forum Non Conveniens

ZC v CN [2014] HKCA 389; [2014] 5 HKLRD 43; CACV 255/2013 (11 August 2014) – The issue raised in this appeal is whether the petitioner wife is substantially connected with Hong Kong for the purpose of invoking the divorce jurisdiction of the Family Court. A subsidiary question is whether, in any event, the wife’s divorce petition should be stayed on the ground of forum non conveniens. H H Judge Melloy refused the respondent husband’s jurisdictional challenge to the wife’s petition. The husbands appeal was successful.

The principles governing stay of a proceeding by reason of forum non conveniens have been well established by the House of Lords in the cases of The Abidin Daver [1984] AC 398, Spiliada Maritime Corp v Cansulex Ltd (The Spiliada) [1987] AC 460, and de Dampierre v de Dampierre [1988] AC 92, which have been applied by our Court of Appeal in The Adhiguna Meranti [1987] HKLR 904] and Louvet v Louvet and Another [1990] 1 HKLR 670, and more recently in DGC v SLCneeC, CACV 37/2005 [2005] when Cheung JA summarised them as follows :

“1. The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action i.e. in which the action may be tried more suitably for the interests of all parties and the ends of justice?

2. In order to answer this question, the applicant for the stay has to establish that first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action) and second, there is another available forum which is clearly or distinctly more appropriate than Hong Kong. Failure by the applicant to establish these two matters at this stage is fatal.

3. If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceeding has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.

4. If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer. Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.”

LM v SCCM CACV 62/2013

Case involves a dispute of whether Hong Kong or Singapore is the appropriate forum for a relocation applicationThe leading authority on jurisdictional challenge by reason of inappropriate forum or forum non conveniens is The Spiliada [1987] 1 AC 460.  The principle is applicable to matrimonial proceedings : Louvet v. Louvet [1990] 1 HKLR 670, DGC v. SLC nee C (Stay of Proceedings: Forum non conveniens) [2008] HKFLR 160, RI v SSH [2010] 4 HKC 588, SA v SPH [2013] 2 HKC 130. In this case there were already pending foreign proceedings (in Singapore) – Where proceedings have already commenced in a foreign jurisdiction, the earlier House of Lord’s judgment which predated Spiliada, namely, The Abidin Daver [1984] AC 398 provides guidelines on how this is to be approached.  Lord Diplock at 411-412 stated that :

‘ Where a suit about a particular subject matter between a plaintiff and a defendant is already pending in a foreign court which is a natural and appropriate forum for the resolution of the dispute between them, and the defendant in the foreign suit seeks to institute as plaintiff an action in England about the same matter to which the person who is plaintiff in the foreign suit is made defendant, then the additional inconvenience and expense which must result from allowing two sets of legal proceedings to be pursued concurrently in two different countries where the same facts will be in issue and the testimony of the same witnesses required, can only be justified if the would-be plaintiff can establish objectively by cogent evidence that there is some personal or judicial advantage that would be available to him only in the English action that is of such importance that it would cause injustice to him to deprive him of it.’ This is commonly described as the ‘lis alibi pendens’ (dispute elsewhere pending) principle.’

See LS v AD FCMC 34/2012  HHJ Bruno Chan

FCMC 2950/2013 LLTJ v SRJ HHJ Bruno Chan