LQ v SF (Ancillary Relief: Crossley Application and Filing of Form E) [2025] 5 HKLRD 322, [2025] HKFC 123 (Eugene Yim)

Eugene Yim represented the petitioner LQ v SF (Ancillary Relief: Crossley Application and Filing of Form E) [2025] 5 HKLRD 322, [2025] HKFC 123.

W petitioned for divorce from H. The marriage had lasted about 18 years with three children and this was a “big money” case. A decree nisi was granted. Thereafter, H took out an application for W to show cause as to why she should not be bound by a separation agreement made by the parties (the CSA) prior to W’s filing of the divorce petition (the Crossley Application). At the First Appointment, W (who had already filed her Form E with supporting documents) sought a direction from the court that H should file and serve his Form E pursuant to the First Appointment Procedure in Practice Direction 15.11. H resisted on the basis that, since he has already made the Crossley Application, the First Appointment procedure was inapplicable. Nevertheless, the Master made an order enjoining H to file and serve his Form E (the Form E Order). H appealed against the Form E Order on two substantive grounds. First, H argued that the Form E Order was wrong in principle and practice because it defied the express terms and purpose of the CSA, ran against the law on the “magnetic importance” of a settlement agreement and defeated the whole point of the Crossley Application procedure. Second, H contended that the Form E Order amounted to an outright dismissal of the order sought by H in the Crossley Application for dispensing with or limiting the scope of his financial disclosure without the application having been heard. W argued, inter alia, that the CSA was signed under grossly unfair circumstances; and that there was no room for a Crossley Application in Hong Kong as r.6 of the Matrimonial Causes Rules (Cap.179A, Sub.Leg.) (the MCR) relied upon by H could not found the basis for such application.

Held, dismissing the appeal, that:

(1) In an application under r.6 of the MCR, the Judge may express an opinion, should he think it desirable to do so, as to the reasonableness of an agreement or arrangement made or proposed to be made between the parties in contemplation of divorce or judicial separation (r.6(7)). Rule 6 did not compel any party to “show cause” in respect of a nuptial agreement. Nor did it provide the basis for a “show cause” regime (CKP v SYK [2021] HKFC 14 applied). (See paras.13-21.)

(2) The Judge in Crossley v Crossley relied on the case management powers under r.2.51D of the Family Proceedings Rules 1991 to make the limited Form E order; the Hong Kong-equivalents were O.1A and O.1B of the Rules of the High Court (Cap.4A, Sub.Leg.) (the RHC). Hence, a Crossley Application was simply an application for case management directions as to how an ancillary relief claim was to be dealt with when there was a nuptial agreement and one party sought to resile from it. The case management directions to be given were a matter of the court’s discretion dependent on the facts of each case. In an appropriate case, such directions may include a direction for the other party to “show cause” (Crossley v Crossley [2008] 1 FLR 1467 applied). (See paras.25-30.)

(3) Since L v F (Crossley Application, Preliminary Issue), there was a tendency by practitioners to take out an application to “show cause” once the other side evinced an intention to resile from a nuptial agreement, regardless of the factual matrix of their case and the issues in dispute. The relevant authorities demonstrated that it was against the factual matrix of each case that made the nuptial agreement the “magnetic” factor that dominated the discretionary process of the court in s.7 of the Matrimonial Proceedings and Property Ordinance (Cap.192) (the MPPO) (the Section 7 Exercise). Even where the “show cause” procedure was allowed, the court must still conduct the Section 7 Exercise by reference to all the statutory criteria. A valid nuptial agreement could not oust the court’s jurisdiction and power under s.7 of the MPPO (FHM v KYM (FCMC 13457/2013, [2015] HKEC 626), L v F (Crossley Application, Preliminary Issue) [2023] 5 HKC 83 applied; S v S (Ancillary Relief) [2009] 1 FLR 254 considered). (See paras.31-38.)

(4) Before making a “show cause” application and to give effect to the underlying objectives in O.1A of the RHC, parties faced with a nuptial agreement must be astute in giving careful consideration of whether the facts of the case may make the nuptial agreement a magnetic factor. If the parties proposed to have the nuptial agreement tried as a preliminary issue (instead of rolled up in the ancillary relief trial), they should give proper regard to the principles for ordering a split trial and bear in mind that it could be very expensive and time-consuming. Therefore, while there was room for a Crossley Application in Hong Kong, it should not be lightly invoked (FN v AC [2019] EWHC 3806 (Fam) considered). (See paras.39-41.)

(5) Here, both of H’s grounds were rejected. The First Appointment procedure must be followed unless there were good reasons justifying its departure and allowed by the court. W alleged (with some supporting evidence) that there was no financial disclosure by H. Having considered, inter alia, various matters deposed by H and W surrounding the CSA, the terms of the CSA and in particular how it had not been shown, as at the present time, that the CSA was of “magnetic importance”, the Judge who would hear the Crossley Application would need to have a good understanding of the size and nature of the family assets and how they were currently being held in order to make an informed decision on the application. Hence, H was ordered to comply with the Form E Order (L v C [2007] 3 HKLRD 819, Granatino v Radmacher (formerly Granatino) [2011] 1 AC 534 considered). (See paras.49-73.)

Appeal

This was an appeal by the respondent husband in ancillary relief proceedings between the parties against a Master’s order enjoining him to file and serve his Form E.

[The above is excerpted from the headnote to the report in HKLRD.]