Tan Sri Dr Khoo Peng v Pauline Siew Phin Chai

This appeal arises from the order of Bodey J on 17 October 2014 by which he refused the application of Kay Peng Khoo (“the husband”) to stay the petition for divorce which Pauline Siew Phin Chai (“the wife”) had issued in England. In reality, the arguments in the court below and before this court centre on ground of ‘forum conveniens’, but draw upon contentions of res judicata/issue estoppel and abuse of process in the light of judgments handed down in the husband’s concurrent proceedings in the High Court and Court of Appeal in Malaysia. In summary the husband argues that:

Patently, there is a substantial degree of overlap between these grounds. If successful, the husband asks this court to stay the English proceedings, and order the repayment of monies paid under orders for maintenance pending suit and in respect of the wife’s legal expenses.

Not surprisingly the factual chronology of the marriage in terms of the personal links of the parties to various countries and also the matrimonial litigation history to date has been subject to close analysis in the court below. Nevertheless, for the purposes of this judgment the, largely undisputed, facts can be set out in very short form. This is a long marriage of two Malaysian nationals, the husband now 76 and the wife 68. There are five adult children, two of them born in Australia, where the family resided between 1980 and 1989, before moving to Canada where the wife obtained citizenship in 2004. In 2008 the husband suffered a stroke and he and the wife returned to Malaysia for about six months. In 1995 a large property was purchased in England, replaced subsequently in 2000 by a large estate, Rossway Park, in Berkhamstead, where the wife was found to have been habitually resident since 2012, and with whom the youngest child, who has a disability, resides and is likely to continue to do so. The husband is a successful and immensely wealthy businessman based in Malaysia with international commercial interests, albeit directed from the head office of holding companies in Kuala Lumpur, of which he is essentially the sole shareholder. Significantly, the husband no longer challenges the jurisdiction of the English court to entertain the petition on the basis of what Bodey J found to be the wife’s habitual residence.

The relevant litigation history needs more detailed reference to give context to later parts of this judgment. The wife issued a petition for divorce on 14 February 2013 claiming domicile in England and Wales. On 18 February 2013 she successfully applied ex parte for non molestation and occupation orders in respect of Rossway Park. On 25 February 2013 she amended her petition to claim jurisdiction based on 12 months residence or, alternatively, at least six months residence and domicile. On 27 February 2013 the husband acknowledged service disputing jurisdiction by virtue of the wife’s domicile and on the same day issued an application in Malaysia seeking a waiver of the necessity to embark upon a reconciliation process prior to issuing a divorce petition there. On 28 February 2013, the husband issued an application in England to strike out the wife’s petition for want of jurisdiction and seeking transfer to the High Court, amended on 4 March to dispute not only the wife’s domicile but also her assertion of residence. On 5 March 2013 the wife applied to strike out the husband’s strike out application and on 19 March 2013 for a ‘Hermain’ injunction, (Hermain v Hermain [1988] 2 FLR 388) seeking to prevent the husband litigating his application in Malaysia. On 3 May 2013 the wife applied for a stay of the husband’s proceedings in Malaysia pending the disposal of the English proceedings. On 10 June 2013 the husband issued an application in England for stay of the wife’s petition pursuant to section 5 and Schedule 1, paragraph 9 of the Domicile and Matrimonial Proceedings Act 1973 and under the inherent jurisdiction of the court. On 24 June 2013 the wife applied to issue a further petition, which was listed before Coleridge J on 4 July 2013.

The wife’s application to issue a second petition was adjourned “part heard” with directions given as to the filing of evidence. Specifically, Coleridge J refused the wife’s oral application to restrain the husband from progressing his divorce suit in Malaysia in the interim albeit, in a recital to the order, inviting the Malaysian courts “in the meantime...to consider not taking any steps or make any orders in those proceedings that may prejudice the wife’s application in these proceedings.”

Nevertheless, directions and case management hearings were held in Malaysia in July and August 2013. The hearing of the husband’s application a for waiver of the preliminary reconciliation process and the wife’s application for a stay was heard by Judge Noraini in the Malaysian High Court on 8 November 2013. The wife was represented throughout. Judgment was handed down on 11 December 2013. In short the wife’s application for a stay was refused. The husband’s application to issue a petition, absent the parties’ participation in a reconciliation process was granted. He issued proceedings immediately. The wife appealed. She was granted a stay of Judge Noraini’s order until 11 March 2014.

On 8 January 2014 the husband applied for an order pursuant to section 49(3) of the Senior Courts Act 1981 that the wife’s petition, as amended be stayed indefinitely or, in the alternative, struck out on the basis of the principle of international comity, supported by considerations of proportionality and the appropriate allocation of court resources. Directions were sought and given in England in the wife’s outstanding application for a ‘Hermain’ injunction.

The wife’s appeal in the Malaysian proceedings was heard in March 2014, and judgment was given on 22 April 2014. She succeeded in part. The Malaysian Court of Appeal (a) set aside the findings made in the High Court that the wife was domiciled in Malaysia and that therefore the Malaysian Courts had jurisdiction in the divorce proceedings; (b) remitted the husband’s originating summons for dispensation of preliminary reconciliation process; but (c) refused her appeal in relation to her application for a stay of the husband’s proceedings in Malaysia. Consequent applications for permission to appeal to the Federal Court of Malaysia by both husband and wife have been refused.

On 1 May 2014 after a contested hearing Holman J ordered, amongst other things, that upon the wife’s undertaking to issue a fresh petition, the petition dated February 2013 be dismissed without any adjudication on the merits or jurisdiction. The fresh petition was issued on 7 May on the basis of habitual residence for 12 months prior to issue of the petition or residence of six months and domicile. The husband acknowledged service on 15 May, repeating his challenge to the jurisdiction. The ‘jurisdiction’ hearing took place over ten days and culminated in the order of Bodey J now under appeal. The husband appeared by video link. Both husband and wife gave evidence and were each represented by leading and two junior counsel. Bodey J gave two judgments (now reported at [2014] EWHC 3518 and 3519 (Fam)): the first after a preliminary argument concerning res judicata and abuse of process; the second in relation to arguments on forum.

Notice of Appeal was served on 7 November 2014 against the order refusing the husband’s application for stay and/or debar as indicated above. Permission to appeal was granted by the single judge on 6 January 2015. A Respondent’s Notice was served on 21 January 2015 seeking to uphold the judgment on different or additional grounds, “namely the arguments advanced on behalf of the respondent wife but which were rejected by Mr Justice Bodey”. Those grounds asserted issue estoppel on the basis of the hearing before Holman J, challenged the competent jurisdiction of the Malaysian courts, contended that the husband’s Malaysian petition was a nullity and that Bodey J had erred in law in his restricted interpretation of the exercise of his discretion pursuant to the relevant parts of the Domicile and Matrimonial Proceedings Act 1973. On 9 March 2015 the wife applied for conditions to be applied to the grant of permission so as to ensure her continued maintenance and funding of the ongoing litigation.

I have not made reference to all the applications that have been made and all the court hearings that have taken place in the course of the concurrent matrimonial proceedings in two jurisdictions, but the number and nature of those indicated above will found the distinct and proper conclusion that all have been fervently pursued and defended. Regrettably, the lengthy skeleton arguments filed on behalf of the appellant and respondent in this appeal continue in this fashion in that they contain unnecessary expansive and emotive adjectives, presumably in recognition of the husband and wife’s sense of indignation. In those circumstances, and noting the number of members of the legal profession involved, it is hardly surprising that the combined legal costs now exceed £5 million; the largest part of them incurred in relation to the English proceedings, albeit that the Malaysian court proceedings have taken twice the number of court days. Predictably, the husband prays in aid the comparative cost of the legal proceedings in this jurisdiction as a factor pointing towards Malaysia having sole jurisdiction in the matrimonial suit.

The competing arguments advanced by the appellant and respondent in relation to res judicata and issue estoppel have called for a clear understanding of the actual applications before the Malaysian courts and English courts and a careful examination of the respective judgments on which the parties’ rely in each jurisdiction.

The wife’s application before the Malaysian High Court for a stay of all proceedings, pending disposal of her own extant petition in England, was filed in response to the husband’s application which sought that he be “exempted from the requirement for reference to a conciliatory body under section 106(1) of the Law Reform (Marriage and Divorce) Act 1976” and “be at liberty to petition for a divorce...without first having to refer the matrimonial difficulty to a conciliatory body”.

In her judgment dated December 2013, Judge Noraini, having recited the background facts in some detail, indicated that she had heard oral submissions based on counsel’s written submissions and determined that the Malaysian Courts were competent to entertain the husband’s divorce proceedings and hence the husband’s current application for an exemption from preliminary conciliation process, on the basis of the wife’s Malaysian ‘domicile of dependency’. In the light of the quite clear indications that each party sought to divorce the other, Judge Noraini concluded that there was no point in requiring the parties to make further attempts at reconciliation and exempted the husband from the necessity to pursue the preliminary conciliatory process.

She rejected the argument that comity required her to desist from continuing with the application whilst the English courts were seized of the wife’s petition and decided that “Malaysia is irrefutably the most appropriate forum to hear the divorce and litigate the ancillary issues of maintenance and property division.” She made clear that she had adopted the ‘Spiliada’ approach (Spiliada Maritime Corp v Cansulax Ltd (The Spiliada) [1987] 1 AC 460) as adopted by the Malaysian Supreme Court in American Express Berhad Ltd v Mohamed Taufic Al Ozeir & Anor (1995) 1MLJ 160. She considered that, “there is no necessity to have a full hearing with witnesses as argued by counsel for the wife.” Her findings were subsequently set aside, as indicated above.

In the course of its judgment, the Malaysian Court of Appeal first determined and dismissed the wife’s appeal in relation to the stay. However, in addressing the competing arguments of the parties between the English (‘Spiliada’) and Australian approach to forum conveniens, the Court preferred and applied the Australian judicial approach in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 as explained and differentiated from the ‘Spiliada’ test in the judgment of Brenan CJ in Henry v Henry (1996) 185 CLR 571; thus the wife had the onus of establishing that “the local court in which the proceedings have been instituted...is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious” to her. In short form, the Malaysian Court of Appeal applied the “clearly inappropriate test” as opposed to the “more appropriate forum test”. They did so on the basis that: “The ‘forum non convenience’ [sic] test is more appropriate when we are dealing with a situation when the two competing forum have undoubted jurisdiction over the litigation...which in our case is not the case. The question of which is the most appropriate forum does not arise when one forum is not seized of jurisdiction. That we think is just plain common sense.”

As Mr Scott QC, on behalf of the husband reminds us, Bodey J found for the husband on all submissions made on his behalf in relation to issue estoppel, save one; namely Bodey J decided that the Malaysian Court of Appeal’s decision that Malaysia was clearly not an inappropriate forum did not thereby render England an inappropriate forum. In this respect, Mr Scott QC argues that Bodey J misunderstood what the Malaysian Court of Appeal had decided.

Mr Scott QC relies on the speech of Lord Wilberforce in Carl Zeiss Stiftung v Rayner and Keeler (No 2) [1967] 1 AC 853 as authority for the proposition that a foreign court need not proceed in the same fashion as an English court in order to establish an issue estoppel. Matters of evidence and procedure are governed by the lex fori and should not distract attention from identifying the specific issue being determined and adjudicated upon in another jurisdiction. He cites the case of The Sennar (No 2) [1985] 1 WLR 490 as authority for his argument that the different tests established by Voth and Spiliada, as they undoubtedly are, do not a different issue make. I readily accept the principle that they may not, but the necessity for him to place reliance upon the factual distinction explored by the House of Lords as to whether a claim framed in contract or tort made a difference as to whether an exclusive jurisdiction clause in a bill of lading applied, does not take the matter any further in this appeal.

There really can be no dispute as to the tenet of law to be derived from Carl Zeiss Stiftung, and it does not appear to me that Bodey J failed to apply it in the case before him. At paragraph 38 of his first judgment he reminded himself that

“it is necessary to look beneath the headline label of forum conveniens so as to discern the precise issue which the Malaysian court determined.”

Having done so he considered that the decision of the Malaysian court, based upon the Voth “not inappropriate” test, as opposed to the Spiliada “more appropriate” test did not determine that Malaysia was the clearly more appropriate forum, as was being submitted on behalf of the husband:

I agree with Bodey J. The differential in the tests applied is distinct and consequently the issue actually to be determined was different. The decision reached by the Malaysian Court of Appeal that the wife had failed to establish that Malaysia was “so inappropriate a forum” so as to render continuation of proceedings “oppressive and vexatious” does not equate to Malaysia being the “more appropriate” forum. Consequently, the Voth test specifically admits of the possibility that the issue that was determined in favour of the husband in Malaysia is capable of producing exactly the same determination in favour of the wife before Bodey J, albeit that the factual context is the same. I do not consider it is possible to read the Malaysian Court of Appeal decision implicitly to assert supremacy over all matters relating to the marriage. To the contrary, it recognises that there is an outstanding application to be determined by the English courts relating to jurisdiction; that is whether the wife could establish residence or domicile as necessary in order to found jurisdiction in the English courts. I see no merit in this aspect of the appellant’s arguments. There is no issue estoppel on the question of forum conveniens.

The “wider abuse of process issue”, that is the ability of the court to prevent the re-litigation of an issue previously decided if the same would be manifestly unfair to a party in the litigation or otherwise bring the administration of justice into disrepute among right-thinking people, is described by Bodey J as the husband’s “fail safe argument”. Citing Lord Diplock’s speech in The Abidin Daver [1984] 1 AC 398 @ 411E, Mr Scott QC relies on the potential for the concurrent proceedings in two jurisdictions to result in different outcomes, quite apart from the “additional inconvenience and expense” as reflecting a strong public policy against allowing the parties to pursue each other in different jurisdictions where the same facts will be in issue and the testimony of the same witnesses required. He relies upon the judgment of Thorpe LJ in Golubovich v Golubovich [2010] 2FLR 1614 at paragraph 95 which refers to the “judicial responsibility to curtail wasteful and competitive proceedings on foot simultaneously in two jurisdictions” and the decision of Stuart Smith LJ in The House of Spring Garden Ltd v Waite [1991] 1 QB 241 which makes clear that abuse of process is “untrammelled by the technicalities of estoppel. The categories of abuse of process are not closed...”

That the husband’s application to stay the wife’s petition failed, for reasons of issue estoppel, does not prevent an abuse of process argument being advanced and considered on its discrete merits. Mr Scott QC argues that Bodey J wrongly elided the two arguments and consequently has fallen into an error of law.

Mr Scott QC highlights those matters which Bodey J did not take into account in considering the abuse argument in its own right. He relies on the findings of Judge Noraini despite the fact that they were set aside by the Malaysian Court of Appeal as being reached without due process. These included the domicile, citizenship, personal, family and strong business connections with Malaysia, and, Malaysia being the operational hub of the parties vast wealth, the location of relevant witnesses. Additionally he cites the lower costs that would be incurred in Malaysia and the necessity to avoid the disproportionate demands of the wealthy upon the pressed resources of the English High Court, Family Division. He points to the inequity of the wife’s ‘second bite at the cherry’, having failed in her application to stay the husband’s prospective divorce proceedings in Malaysia, even on the more favourable test that her own advocates successfully proposed.

Mr Scott QC argues that Bodey J appears to have unduly restricted his consideration of the husband’s abuse of process argument, and so fell into error. That is, whilst recognising the entirely unfortunate consequences of concurrent litigation, Bodey J in paragraph 39 of his first judgment described the abuse of process argument as contingent upon the decision in the issue estoppel dispute, saying that “[i]f ...the underlying issue decided in Malaysia is not the same as the underlying issue as it would fall to be decided in this jurisdiction, then I cannot see that it would be manifestly unfair to the husband for the wife to be able to continue in this jurisdiction in her attempt to establish that this court has jurisdiction”.

The difficulty in Mr Scott QC’s argument carrying the appeal on this basis is threefold: first, Bodey J’s pronouncement on this point does not appear to me to be a proposition of general law, absent the context of the facts of the case before him; second, the same issues upon which he would seek to rely on this “abuse of process” point were actually considered by Bodey J in the course of a ten day hearing during which evidence was heard and counter submissions made in relation to the husband’s application for a stay of the wife’s proceedings; third, Mr Scott QC’s arguments have tended to view the question of manifest unfairness entirely from the husband’s perspective and do not recognise the unfortunate consequences of concurrent jurisdictions from both parties’ perspectives and the necessity to evaluate the claim of “manifest unfairness” overall. It is difficult to envisage a case, other than in cases of fraud, blatant disregard for due process or where similar proceedings are already well advanced in one jurisdiction, where an abuse of process argument to stay proceedings in another valid jurisdiction would succeed.

In reality, Mr Scott QC’s arguments on the alleged abuse of process were tantamount to seeking to establish that Malaysia is “clearly or distinctly more appropriate” than the English forum despite his disavowing this approach before Bodey J in support of the husband’s application for a stay.

Mr Scott QC fails to persuade me that Bodey J’s decision on the issue of the wife’s alleged abuse of process was wrong.

In any event, the husband argued that the correct exercise of judicial discretion in applying the provisions of the Domicile and Matrimonial Proceedings Act 1973, section 5(6) and Schedule 1, paragraph 9 supported the application to stay the wife’s proceedings, In this last respect, Mr Scott QC and Mr Todd QC advanced contrary arguments before Bodey J as to the impact of the judgments in Butler v Butler (Nos 1 and 2) [1997] 2 FLR 311 upon the guidance expressed by the House of Lords in de Dampierre v de Dampierre [1988] 1AC 92 concerning the exercise of judicial statutory discretion in such stay applications .

In short, Mr Scott QC argued that the statutory terms, which require a court considering an application for a discretionary stay in matrimonial proceedings in cases where proceedings are continuing in another jurisdiction, other than those governed by the Council Regulation, to evaluate whether the “...balance of fairness...as between the parties is such that it is appropriate for the proceedings” to be stayed, should be read literally and without the gloss which de Dampierre appeared to apply. Mr Todd QC argued that de Dampierre was not diluted by Butler.

I do not read any of the majority judgments in Butler (Nos 1 and 2) to do other than adopt and rephrase the guidance given in the speeches in de Dampierre as to the “most real and substantial connection” or “natural jurisdiction” (Thorpe LJ); a connection “so overwhelming that it is the most convenient and appropriate court (Sir Stephen Brown, President); “The expression ‘balance of fairness’ effectively reflects the same consideration as ‘appropriate’ forum ...what factors connect a dispute with a particular forum” (Hobhouse LJ); “the question is more appropriately but generally addressed in these terms: with which jurisdiction are these proceedings more closely connected?” (Ward LJ). Roch LJ, in the minority, referred to a “clearly or distinctly more appropriate” forum, apparently in reliance of Balcombe LJ’s judgment in the unreported case of Chatelard v Chatelard on 24 October 1988. Hobhouse LJ considered that this was a phrase extrapolated from a different context in which Lord Goff in The Spiliada made reference to a “ clearly or distinctly more appropriate” forum to ensure “proper regard is paid to fact that jurisdiction has been founded in England as of right.” Roch LJ’s real point of difference with the majority view of the Court of Appeal in Butler related to the factors that governed appropriateness of the forum which he considered related only to “appropriateness for trial”, not connection in general with the jurisdiction under consideration.

In my judgment, Mr Todd QC was wrong to suggest that the Court of Appeal in Butler failed to apply the guidance given by the House of Lords, by which the Court of Appeal was bound. The majority of the Court of Appeal articulated the test in slightly different fashion each from the other but in my view consistent with the ratio in de Dampierre. In applying the approach in Butler which he saw “as the most recent authoritative pronouncement”, Bodey J in fact applied the “gloss” derived from de Dampierre. It follows that, in my view, his approach was unimpeachable.

Bodey J made clear that he took “a broad view of all the facts and circumstances...not limited to the factors directly relating to the litigation.” Mr Scott QC does not dispute this to be the correct test but argues that “he erred in applying the law to the facts and misdirected himself by posing the wrong question about the parties’ respective connections with England and Malaysia. These errors led him to a conclusion which was plainly wrong, namely that neither England nor Malaysia was a more appropriate forum.” In addition he says, Bodey J failed to take certain factors into account and accorded inappropriate weight to other factors. What he does not contend is that Bodey J made findings that were against the weight of the evidence although he does indicate disagreement as to the decisions made.

Mr Scott QC acknowledges that Bodey J “made a wide-ranging survey of the evidence”. The only factor which he can demonstrate objectively to this Court to have been left out of account, which he argues favours the husband and should have featured in the balance, is “priority in time”. I do not agree with his submission that the wife’s first petition in time should be disregarded, but the husband’s petition, effectively determined by the Malaysian Court of Appeal to have been served without necessary dispensation, should not. Each relevant court decision, which is not overturned on appeal, has acknowledged the ostensible jurisdiction of the other court and has specifically rejected any attempt to assert supremacy. I do not accept that the “priority in time” argument advances the husband’s case.

In challenging the judicial discretion afforded by the 1973 Act he reiterates the points he made in the court below. Save for the issue of timing, Bodey J demonstrably weighs each factor, identified in this appeal by Mr Scott QC, in the balance.

The weight to be attached to any one factor will be dependent upon a judge’s evaluation of the specific circumstances in the case. To make good the argument that excessive or insufficient weighting was given to any particular established factor presupposes that the answer informed by the tally is already established, unless it can be shown that the judge was irrational in his expressed emphasis or otherwise. As Aikens LJ made plain in Tan, there is a high hurdle to surmount in order to successfully challenge Bodey J’s exercise of judicial discretion. Mr Scott QC does not come close to doing so. His criticism that, all in all, the judgment failed to provide “an overview of the Malaysianness of the case as compared to the Englishness” amounts to no more than a disagreement with the conclusions of the judge on the material before him.

I have not understood Mr Scott QC’s arguments to seek to distinguish between the two stage test required by the 1973 Act and as reviewed by the Court of Appeal in Butler. That is, Bodey J was required to consider whether the husband had demonstrated that the forum with the “most real and substantial connection” to the suit was Malaysia. If so, he then had to decide whether nevertheless, the wife could point to matters which established that the stay should be refused. He did so. That is, he found on the first point that “the connecting factors to each jurisdiction pan out fairly equally, with a small bias in the wife’s favour”. This indicates a close run race, but not a dead heat in favour of England being the more appropriate forum, by however slight a margin. Bodey J’s reference to either jurisdiction being “‘appropriate’ for dealing with the divorce and...family finances” were related to his assessment that “modern technology” eliminated difficulties in conducting the hearing in England if the husband elected to remain in Malaysia. But even if the decision had been that neither was a more appropriate forum, the husband had therefore failed to show that there was a greater connection with Malaysia than with England. On this basis Bodey J was entitled to find against the husband’s application for a stay whether he applied the “clearly and distinctly more appropriate” or the simple “balance of fairness” test. In these circumstances the wife did not have the burden of establishing why the stay should be refused.

For the reasons I have given I would dismiss this appeal. The judgment of Bodey J needs no extraneous support and I consider it to be unnecessary to consider the Respondent’s Notice in so far as it re-argues the case as presented below and which arguments Bodey J did not accept. The wife does not need to argue that Bodey J should have taken into account her ability to claim financial relief after an overseas divorce; an assessment by the Court of the likelihood of her succeeding in do doing, is not warranted.

I agree.

I also agree.