Jake Richards, 9 Gough ChambersThis article argues that the suspension on prison visits during this period and the deficiency of measures to mitigate the impact of this on family life and to protect...
Chai v Peng  EWHC 1519 (Fam): a tale of two petitions
Sep 29, 2018, 21:54 PM
The wife was granted permission to withdraw her current divorce petition and issue a fresh one in order to anchor the date for domicile and habitual residence and further orders for maintenance pending suit were made.
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May 29, 2014, 05:29 AM
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The judgment of Mr Justice Holman in Chai v Peng (No 2)  EWHC 1519 (Fam),  2 FLR (forthcoming) permitting the wife to issue a replacement second petition upon the dismissal of her first, has important repercussions for the ongoing jurisdictional dispute between Khoo Kay Peng (74), the Malaysian business tycoon with interests in the Laura Ashley and Corus Hotel chains, and his wife Pauline Chai (68), a former Miss Malaysia.
The parties had a 42-year marriage and have five adult children together. The wife had, Holman J noted, been 'living in Hertfordshire, surrounded apparently by 1,000 acres, in a property worth something of the order of £30 million'. After the wife petitioned for divorce in England in February 2013, the husband issued competing proceedings in Malaysia, where an application for waiver of the reconciliation process was sought, this being a necessary requirement before a Malaysian divorce petition may be issued. A number of interim applications have been made by both sides in the Malaysian and English courts.
The Malaysian Court of Appeal on 22 April 2014 overturned a finding of the Malaysian High Court that the wife was domiciled in Malaysia at the relevant time, along with the resultant findings as to jurisdiction and forum conveniens. The finding as to domicile stemmed from an archaic domicile of dependence rule, long removed from English law, whereby a wife’s domicile necessarily followed that of her husband. It was argued on behalf of the wife that this was discriminatory and contrary to Malaysia’s own anti-discrimination laws.
It was found that the High Court judge had erred in making such a finding purely on the basis of an examination of statements and documents and, as argued by the wife, oral evidence would be required before a decision as to domicile could be reached. The court quoted the description by Lord Denning of the domicile of dependence rule as 'the last barbarous relic of a wife's servitude' (Gray v Formosa  P 259, 267). The issue was sent back to the High Court to be re-heard, thereby removing the basis for a prior order granting the husband leave to file his Malaysian petition.
As a result of the litigation race that exists between the parties, the Malaysian decision inevitably had a direct impact on this English hearing, at which the wife’s application for a Hemain injunction to prevent the husband stealing a march in Malaysia was due to be heard. Given that the husband’s suit had suffered such a major setback in the Malaysian proceedings with no remaining Malaysian decision as to jurisdiction, the wife’s application was not pursued and was adjourned to the 10-day hearing in October. In this context, it should be noted that, similarly, the Malaysian Court of Appeal dismissed the wife’s appeal from the High Court’s refusal to grant a discretionary stay of the Malaysian proceedings.
Mr Justice Holman was asked over the course of the 2-day hearing to adjudge the two remaining applications before the court, being the wife’s application for permission to issue a second petition, and the wife’s further application for maintenance pending suit.
The judge had previously heard an application by the wife for maintenance pending suit on 13 March 2014, at which he had granted her £100,000 in respect of legal fees and £35,000 in maintenance to last her the 7 weeks until the present hearing. This judgment, reported at  EWHC 750 (Fam),  2 FLR (forthcoming and reported at June  Fam Law 809) provides a far more detailed background of the case, and Holman J stressed that 'the judgment which I now give should be treated as a second or subsequent chapter of the same evolving account'.
Holman J considered developments since the last hearing to be 'some positive, others less positive if not downright negative'. He was troubled by the fact that both parties showed dissatisfaction with the Malaysian Court of Appeal’s judgment, the wife having indicated that she would seek an appeal to the Federal Court of Malaysia as to the refusal of her stay and the husband confirming his intention to seek the reinstatement of the High Court’s decision as to domicile through his own appeal. Both parties require leave to appeal to the Federal Court of Malaysia.
Having strongly urged both parties to negotiate in his previous judgment, Holman J said he was 'deeply grateful and pleased' to learn that the parties had, with their representatives Vardags for the wife and Payne Hicks Beach for the husband, attended a round table meeting in Paris earlier that week with a view to such negotiations. Richard Todd QC for the wife and Timothy Bishop QC for the husband both indicated that the meeting had been 'positive', with 'constructive discussion and negotiation', although 'not final or conclusive'. The court was advised of a settled mutual intention” to hold further negotiations in the near future.
The husband’s failure to attend both the present and previous hearing before Mr Justice Holman was a source of great displeasure to the judge, who noted that FPR 2010, r 27.3 provides that: 'Unless the court directs otherwise, a party shall attend a hearing or directions appointment of which that party has been given notice'. No such direction had been made by the court and indeed no application for dispensation of this requirement had been sought, despite Holman J having already indicated his displeasure at the husband’s non-attendance at the March hearing.
Holman J emphasised that the purpose of the rule was to ensure that the parties attended hearings in person to allow the court to proceed in line with the overriding objective. He rejected the suggestion by Timothy Bishop QC on behalf of the husband that the requirements of FPR 2010, r 27.3 could be discharged through the attendance of a party’s legal representative.
It transpired that the husband had not advised his English legal team that he would not be attending the hearing until 2 days before the hearing began. His non-attendance was due to the husband’s understanding, following a discussion with a retired Malaysian judge, that his attendance at the English hearing could result in a material risk of prejudice to his Malaysian case through appearing to submit to the jurisdiction of the English courts. No supporting evidence was adduced in relation to this assertion.
Holman J colourfully described as 'rubbish' the idea that 'under any civilised legal system, applying the principles broadly of the common law and Western societies, it could be supposed that a person who protests the jurisdiction of a court can somehow be said to have submitted to it by personally attending a hearing under protest; the more so if his attendance is mandated by a rule of court'.
In support of this position, he highlighted the fact that the husband had, in any case, participated in the proceedings through the instruction of and attendance at the hearing by his legal representatives, and that he could not be perceived as having submitted to the jurisdiction by having done so. Any distinction between engaging with the proceedings through instructing legal representatives to attend and engaging through attending in person in obedience to a rule of the court was incomprehensible. He warned it would result in a rich/poor divide whereby those who could afford to attend through lawyers alone would be at a substantial advantage.
The judge therefore rejected any implication that it was a proposition of Malaysian law that his attendance could be deemed by a Malaysian court to constitute submission to English jurisdiction. He expressed his deep regret at the husband’s non-attendance and his resultant inability to obtain information from the husband through his legal representatives, which he characterised as a breach of the express purpose of FPR 2010, r 27.3. He emphasised that the attendance of the parties themselves as highly important and without such attendance the chances of settlement were greatly reduced.
W’s application for leave to file a second petition
The first divorce petition in these proceedings was the English petition issued by the wife on 14 February 2013, within which she identified the following grounds of jurisdiction:
that the court had jurisdiction under Article 3(1) of the Council Regulation (EC) No. 2201/2003 of 27 November 2003;
under the heading 'Other', that 'The petitioner has resided in England and Wales for at least a year, or the petitioner has resided in England and Wales for at least 6 months and is domiciled in England and Wales'; and
yhat the court 'has jurisdiction other than under the Council Regulation on the basis that no court of a contracting state has jurisdiction under the Council Regulation and the petitioner is domiciled in England and Wales on the date when this application is issued'.
The husband challenged each ground of jurisdiction identified by the wife within his Acknowledgement of Service (itself headed 'without prejudice as to jurisdiction'), in which he stated that: 'The petitioner was not domiciled in England and Wales on the date of her petition or habitually resident for 6 months (or 12 months) prior to the date of the petition, and therefore the court does not have jurisdiction'.
A 10-day hearing is listed in England in October 2014 to establish the factual and legal questions as to whether the English courts have jurisdiction on the grounds relied upon in the wife’s first petition. It was confirmed at the present hearing that the husband intends, at the October hearing, to seek the referral of the matter to the CJEU for rulings as to the correct interpretation of the indents to Art 3.1 of Council Regulation EC 2201/2003. It is the wife’s case that this is unnecessary and would simply cause an unwarranted delay (to the husband’s advantage) and increase in costs. The hearing will also concern the husband’s application for a discretionary stay of the English proceedings, mirroring that sought by the wife in Malaysia.
The present hearing dealt with the wife’s application to file a new petition to put the issues of jurisdiction beyond dispute. Counsel for the wife confirmed that she in no way whatsoever resiled from the position that she was already domiciled in England and Wales on 14 February 2013, nor that, at that date, she met the qualifying periods for habitual residence. Rather the new petition reflected the fact that it would be 'more economical of time and expense to eliminate a sterile and unnecessary argument and fact-finding with regard to the situation as it was on and before 14th February 2013, and focus instead on the position as it is, and has been for the year preceding early May 2014'. This, it was suggested, would eliminate considerable areas of dispute from the October hearing, given that the husband had accepted in his Malaysian evidence that the wife had been living in England and Wales since October 2012.
The wife had originally sought permission for the second petition to be filed and counted alongside the original petition, both thereby remaining live within the proceedings. As a result of Holman J’s firm indication that he would not exercise his discretion to allow two concurrent petitions, the wife instead sought a dismissal of her existing petition on the basis that a fresh petition could immediately be presented in its place.
The judge noted that it was not open to a petitioner to withdraw a petition, and that this constituted an 'absolute embargo' unless it was dismissed by the court itself. Counsel for the husband had, at the 13 March 2014 hearing, appeared to accept and agree that there was little obstacle to a fresh petition being presented upon the dismissal of the first (although he opposed concurrent petitions being permitted). However, at the present hearing, counsel for the husband had proposed that any exercise by the judge of his discretion to dismiss the current petition should be exercised on the basis that the new petition be stayed until the final determination in the Malaysian proceedings, whereby either a Malaysian divorce would be granted or a finding would be made that a Malaysian court did not have jurisdiction.
The husband had also proposed that the concept of a replacement petition brought into play compelling public policy considerations and compared the wife’s application to 'laying one's towel at dawn upon the sun lounger of the English court and returning at high noon to bask in the warmth of the law of England and Wales on divorce and financial remedies'.
Allowing such an application, it was submitted, would open the floodgates to a torrent of 'forum shopping' divorce petitions. Reference was also made to the law of estoppel. It was submitted, but strongly denied by the wife, that she had used her first petition to obtain 'collateral advantages' through her previous awards of maintenance pending suit and her applications for Hemain injunctions, which it would be unjust to retain if she terminated the present proceedings and brought them afresh.
Holman J noted that all previous maintenance pending suit payments received by the wife had been made on a clear recorded basis that the payments were 'on account of [her] claims for financial provision arising from the breakdown of this marriage'. Given the length of the marriage and the extreme wealth (believed by the wife to be in excess of £400 million), Holman J held that 'on any conceivable view [the wife’s claim] measured in several or many tens of millions of pounds', and thus she would ultimately receive an award far in excess of the circa £2 million received in maintenance thus far, which was a 'very modest amount relative to the sort of sums that this man must inevitably sooner or later pay to her'. She had therefore received no undue benefits or advantages in this respect.
The husband also cited the expenditure of legal costs in relation to the numerous hearings that have taken place on the premise of a petition that he claimed the wife now wished to 'disavow'. Holman J rejected the suggestion that the wife was disavowing her petition, noting instead that 'Mr Todd has made crystal clear that she and her advisers remain confidently of the view that her existing original petition is well-grounded', and that it was precisely to try to reduce the wastage of legal costs and avoid unnecessary legal argument around the jurisdictional basis of the petition that the new petition was being issued.
In permitting the fresh petition to be issued and dismissing the first petition, Holman J emphasised that his decision was entirely fact-specific, noting that any finding of bad faith on the part of the wife or her legal representatives upon issuing the first petition would have resulted in his taking a different view. He therefore dismissed the first petition and confirmed that he did so without any adjudication as to jurisdiction or unreasonable behaviour. As argued for on behalf of the wife, the costs were reserved to the October hearing.
Maintenance pending suit and legal services order
Holman J then considered the wife’s application for further maintenance pending suit and legal funding provision, his previous order having been expressly made to last until the conclusion of the present hearing. He noted that, having dismissed the first petition, he did not have jurisdiction to make further orders, since there were no current proceedings. He therefore proposed to make orders as to maintenance pending suit upon the express undertaking by the wife that she issue a fresh petition forthwith, upon which the following orders would take effect.
An order was made for interim maintenance pending suit for the benefit of the wife of £35,000 a month for the 5 months to the 10-day October hearing.
He further held, despite strong opposition from the husband who argued that no further provision for legal fees should be made, that further provision was necessary to avoid injustice to the wife. In order to facilitate further negotiation between the parties, he required an immediate payment of £60,000 to be made to finance such negotiations. Further legal funding payments were ordered in the sum of £60,000 per month until the October hearing.