The Hong Kong Court’s jurisdiction over families with homes or businesses both in Hong Kong and the Mainland

Introduction

In JQ v CLH [2022] HKCU 1595, the Court of Appeal dismissed a husband’s appeal against a High Court decision where the Judge dismissed the husband’s challenge to the jurisdiction of the Family Court to entertain the Wife (Petitioner)’s petition for divorce.

Facts

This case concerns a couple who are both Mainland residents. The wife petitioned for divorce and a decree nisi was made on 23 October 2018. The Husband then sought to dismiss the petition on the ground of want of jurisdiction by a summons dated 10 February 2020. Judgment was given on 27 May 2021 dismissing the summons. The husband appealed to the Court of Appeal to contend the Family Court’s jurisdiction on the ground that his own connection with Hong Kong as at the date of petition was insufficient to satisfy the requirement in section 3(c) of the Matrimonial Causes Ordinance (Cap 179) (“MCO”) i.e. no “substantial connexion with Hong Kong”.

Section 3(c) of the MCO

Section 3 of the MCO states as follows:

“The court shall have jurisdiction in proceedings for divorce under this Ordinance if –

(a)   either of the parties to the marriage was domiciled in Hong Kong at the date of the petition or application;

(b)   either of the parties to the marriage was habitually resident in Hong Kong throughout the period of 3 years immediately preceding the date of the petition or application; or

(c)   either of the parties to the marriage had a substantial connexion with Hong Kong at the date of the petition or application.”

In JQ v CLH, there is no dispute that the conditions in subsections (a) and (b) are not met, and the Wife did not have a sufficient connection with Hong Kong to satisfy the jurisdictional requirement under subsection (c). Hence, the Family Court’s jurisdiction to entertain the Wife’s petition hinges solely on whether the Husband had a “substantial” connection with Hong Kong as at the date of the petition within the meaning of subsection (c).

Grounds of Appeal

In summarizing the laws, the High Court Judge held that one of the applicable legal principles is that “It is only in exceptional circumstances that a party who is in Hong Kong without the presence of his family will nonetheless be able to show that he has a substantial connection here” (citing ZC v CN (Divorce: jurisdiction) [2014] 5 HKLRD 43 and LCYP v JEK (Children: Habitual Residence) [2015] 4 HKLRD 798).

The Husband’s appeal is based upon the argument that the Judge was wrong to find that he (without the presence of any family members) fell within the “exceptional” category of cases that his own sole connections with Hong Kong were so substantial that jurisdiction for divorce in Hong Kong ought to be found.

It is submitted that the Husband is “unexceptional” and just one amongst many persons being employed by Hong Kong companies, having economic presence in Hong Kong, remotely controlling Hong Kong companies, business and financial matters, but in fact and reality residing in and working from another jurisdiction and rarely being physically present in Hong Kong, especially as Hong Kong integrates with the Greater Bay Area. On such basis, the Husband contends that he should not be found to have a “substantial” connection with Hong Kong for the purpose of section 3(c) of the MCO.

Legal principles

In determining whether a person has a “substantial” connection with Hong Kong, the principles are well established in the leading Court of Appeal case of ZC v CN:

1.       whether a person has a substantial connection with Hong Kong is a question of fact;

2.       the starting point is to see if that person has connection in Hong Kong and then decide whether that connection is a substantial one; and

3.       there must be physical presence in Hong Kong which cannot be of a transitory nature.

More specific to Hong Kong and Mainland China families who have homes or businesses both in Hong Kong and in the Mainland, the case of LN v SCCM CACV 62/2013 provides further guidance:

1.       the resident status of a party which allows him or her to live in Hong Kong legally is only a factor to be taken into account;

2.       other factors have to be considered such as the party’s past pattern of life, the frequency of his visit to Hong Kong, the length and purpose of the stay, whether the party is engaged in business or work here, whether the rest of the family is here and whether a home has been established here and whether the children are at school here;

3.       since the legislation only requires the party to establish “a” substantial connection in Hong Kong, he or she at the same time may have a substantial connection elsewhere;

4.       a meaning must be given to substantial connection wider than domicile or three years’ ordinary residence but this is not intended to be interpreted so loosely as to encourage residence of passage or divorce of convenience;

5.       it will be unduly restrictive if one confines the connecting factors solely to that of a family context, namely, accommodation in a matrimonial home and presence of spouses and children; and

6.       while in the majority of cases, family context is the focus of the inquiry and a material factor, there may well be situations where a party is in Hong Kong without the presence of his family, but nonetheless is able to show that he has a substantial connection here. It really depends on the circumstances of the case. Such cases, however, must be regarded as exceptional.

Ruling

The Court of Appeal clarified that there is only one statutory test for determining whether the jurisdictional requirement under section 3(c) of the Ordinance is satisfied, namely, whether a party to the marriage had a substantial connection with Hong Kong at the time of the petition. There is not a separate category of parties without the presence of family in Hong Kong who have to satisfy the requirement of “exceptionality” before jurisdiction under section 3(c) of the MCO can be established.

In the present case, the Judge was merely emphasising that while in the majority of cases, the family context is the focus of inquiry, there could be “exceptional” cases where, without the presence of his/her family here, a substantial connection with Hong Kong can be established. Nonetheless, it is wrong to elevate “exceptionality” as the test for determining substantial connection.

As such, the Husband’s submissions that his case is “unexceptional” is off-focus and he is found by the Court of Appeal on the totality of facts that he has a close connection with Hong Kong for the following reasons:

1.       the Husband regularly or frequently came to Hong Kong to conduct business;

2.       he remained closely connected with the Hong Kong listed Company founded by him after ceasing to be a shareholder in 2010 by virtue of his position as its Chairman, Managing Director and Executive Director;

3.       Hong Kong remained the “home base” of his finances and business;

4.       his lucrative income was derived from such business in Hong Kong; and

5.       he had never ceased his presence in Hong Kong after moving back to Dongguan in 2000/2001, but continued to maintain a consistent “economic” and “social” presence here.

Effectively, the Husband’s appeal comes down to a disagreement with the Judge’s finding of fact on the issue of substantial connection, which is not a valid basis to interfere with the Judge’s finding. The appeal is therefore dismissed.

Takeaways

This case sheds light on the position of parties of divorce who has physical and/or economic presence in Hong Kong but without the presence of his family here when deciding whether their connection with Hong Kong is “substantial” enough to satisfy section 3(c) of the MCO. The fact that a party is one of many foreign expatriates or businessmen flying in and out of Hong Kong is not determinative in itself of the question of “substantial connection” and lack of presence of family in Hong Kong does not by default mean that section 3(c) of the MCO cannot be satisfied.

Contributing Advisors