HSYC v. CLTK

FCMC 4105 / 2018

[2019] HKFC 176

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 4105 OF 2018

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J U D G M E N T
(Maintenance pending suit/Interim maintenance)

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Introduction

1.  This is an application by a Respondent wife for maintenance pending suit for herself pursuant to s.3 Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO) and interim maintenance for the two children of the family; boys aged 10 and 6 years, pursuant to s.5 of the same ordinance.

The main issues

2.  In broad terms there is only one issue to be determined namely how much maintenance should the husband pay to the wife for herself and the two children of the family on an interim basis.

Background 

3.  The parties are both French nationals who have lived and worked in Hong Kong on and off since 2006. They met in Shanghai in 2005 and they both work for French companies – the Petitioner husband as the Sales Director for a French design company and the Respondent wife as cabin crew for an airline.

4.  The parties married in Hong Kong on the XX February 2012 and they separated on the 29 April 2018 when the husband left the former matrimonial home, with the two children of the family and the Maid. It is his case that the wife had formed a new relationship and that the marriage was over. It seems that he moved out of the former matrimonial home and removed the two children without this being agreed between the parties. The husband had issued a divorce petition on the 12 April 2018 based on the wife’s unreasonable behaviour and the decree nisi was pronounced on the 30 August 2018.

5.  Unfortunately matters were further complicated by the mother being diagnosed with breast cancer in December 2018. She is currently having treatment in Paris and since then she has flown back and forth between Hong Kong and Paris on a frequent basis.

6.  Unfortunately the parties have been unable to reach agreement with respect to the children. The mother currently has contact with them when she is in Hong Kong and the parties have sensibly reached an agreement with respect to the school summer holiday. However, longer term it is the mother’s wish that the children should relocate back to France with her and on the 23 April 2019 she issued a summons to that effect. This is opposed by the father.

7.  Given the mother’s illness she is currently on sick leave and thus her earning capacity is severely compromised in the immediate to short term. During the hearing her counsel confirmed that she is currently earning HK$6,375 per month and that she is likely to continue to receive this amount until June 2020.

8.  Despite this the husband makes no proposals to maintain the wife, or the children when they are in her care. He says that he earns enough to support himself and the children and that the children should remain with him and see their mother as frequently as possible. Apart from paying the rent on the former matrimonial home for a month and a further HK$5,000 in October 2018, he has not contributed anything towards the mother’s maintenance.

9.  During the marriage the parties enjoyed a comfortable but not overly lavish lifestyle in Discovery Bay. They lived in smallish units of between 800 – 1037 square feet, enjoyed the club facilities in Discovery Bay and returned home to France on a regular basis. The wife also says that she took the children on holidays in the region. The wife took extended maternity leave until the youngest child was 4 years old and she then returned to work on a part time basis working on a two months on/two months off schedule. The youngest child currently attends an international kindergarten, but he will join his brother in the local education system in September 20019.        

Each party’s respective proposals

10.  The husband makes no proposals. He suggests that the wife has not made full and frank disclosure and that she must be receiving additional income or other remuneration that has not been disclosed.

11.  The wife for her part says that her financial situation is critical. In her affidavit in support she sought between HK$31,802 – HK$38,602 per month. In counsel’s submission he says that she needs HK$32,618 per month and that she has cut down her expenses to the barest minimum.  

The law

Maintenance pending suit and interim maintenance

12.  The law is well known and not in dispute. Section 3 Matrimonial Proceedings and Property Ordinance Cap 192 states that the only governing principle is that the court shall make such order as it considers reasonable in all of the circumstances of the case. Consequently, applications such as these are approached on a broad-brush basis. A detailed examination of the parties’ means may be examined at a later date at a full ancillary relief hearing if there is no agreement in the meantime, when there is then every opportunity to achieve fairness by means of a set off. In other words, if there is any overpayment or underpayment that can normally be rectified at a final ancillary relief hearing. Applications for interim maintenance under section 5 of the same ordinance are approached in the same way. As Rayden points out

…what really matters is the immediate and reasonable requirements of the wife balanced against the ability of the husband to pay for them, assessed using a broad-brush approach. (See paragraph 16.17 of Rayden, 18^th edition).

13.  Further

In practice, as oral evidence is rarely given, it will be unusual for the court on an application for maintenance pending suit to be in a position to make findings of fact on issues in dispute sufficient, for example, to deal with conduct or allegations of non disclosure.  However, if it is demonstrated that the paying party has not performed his duty to make full and frank disclosure of his financial resources, then the court can take a broad and robust view of his means, and it does not have to accept and proceed on the basis of the assertions of the paying party as to his means and an inability to pay.  The court can look at the reality of the situation …… Any under provision or over provision in the order for maintenance pending suit can always be corrected when the account comes to be taken at the substantive hearing when there are every opportunity to do fairness by set off ……” (See paragraphs 16.18 of Rayden, 18^th edition).

14.  Likewise the court may look to the assertions made by the payee and take a similar approach when looking at her means and alleged reasonable requirements.  The court should look to the reality of the situation, in so far as it can, in relation to bare assertions made by either the husband or the wife.

15.  In addition, Mr Barnes, for the wife, referred me to the following section from Jackson’s Matrimonial Finance 9^th edition (paragraph 3.92) which states as follows:

“When a party applies for an order for maintenance pending suit or for periodical payments, it is not a complete answer to the claim for the potential payer to say: ‘I have no income and no assets’. In one case, a husband with a very small income (in three successive years it was £42, £69, £60) who asserted that he was ‘living on borrowed money and staving off a number of creditors while he [was] developing certain properties’, was nevertheless shown to have maintained by means of bank loans a consistent standard of living over a substantial period: the court in effect held that if he could borrow for himself he must likewise borrow for his wife. The principle was that he was able to touch resources from which payments could be made; he had the ability to obtain the necessary money, albeit bank loans, and it was assumed that his ventures were such as not only to justify the loans but also reasonably to contemplate their repayment in due course ….”

16.  Mr Barnes also referred me to the leading Hong Kong Court of Appeal decision HJFG v KCY [2012] 1 HKLRD 95 where it was held that:

“(a) The sole criterion to be applied in determining the application is ‘reasonableness’, which is synonymous with ‘fairness’.

(b) A very important factor in determining fairness is the marital standard of living. That is not to say that the exercise is merely to replicate that standard.

(c) In every maintenance pending suit application there should be a specific maintenance pending suit budget which excludes capital or long-term expenditure, more aptly to be considered on a final hearing. That budget should be examined critically in every case to exclude forensic exaggeration.

(d) Where the affidavit or Form E disclosure by the payer is obviously deficient, the court should not hesitate to make robust assumptions about his ability to pay. The court is not confined to the mere say-so of the payer as to the extent of his income or resources.  In such a situation the court should err in favour of the payee.”

What are the wife’s reasonable needs?

17.  The wife says that she has now cut down her expenses to the bare minimum and that she has survived to date by relying on her savings, having a garage sale of old family items including old toys and a painting and with the additional support/loans from friends. In her written submission Mr Barnes, sets out her current expenses and compares those with the expenses of the husband, which were also updated by the husband prior to the hearing as follows:

General

Item	Amount HK$	H’s Amount (Form E unless otherwise stated)
Rent	$12,000	$32,000*
Mortgage instalments	Nil	Nil
Utilities (electricity, gas, rates, telephone, internet & water)	(Internet)$188 (Gas) $89 (Electricity)$400	$2,000
Management Fees	Nil	Nil
Food	$3,500	8,000*
Household expenses cleaning supplies, home materials etc	$500	$1,000
Car expenses	Nil	Nil
Insurance premia	$299	$452
Other – Domestic helper	Nil	$6,200
Other – X Club DB Membership	Nil	$800
Total	$16,976	$50,452

Personal

Item	Amount HK$	H’s Amount
Meals out of home	$1,300	$2,000
Transport (Ferries and buses to DB)	$650	$1,500
Clothing/Shoes	$400	$200
Personal grooming	$400	$250
Entertainment/presents	$1,000*	0
Holiday	$1,500*	$1,650*
Medical/Dental	Nil	Nil
Tax	Nil	923
Insurance premia (medical	Nil	$1,500
Others	$6,000 (Flight tickets)	$1,500 (MPF)
Total	$11,250	$9,523

Children

Item	Amount HK$	H’s Amount
School Fees	Paid by Petitioner	$10,000 (for A)
Extra tuition fees	Paid by Petitioner	$150
School books and stationery	Paid by Petitioner	$200
Transport to school (including ferries and buses in DB)	$392	$2,100
Medical/dental	Paid by Petitioner	Nil
Extra-curricular activities	Nil	$350
Entertainment/presents	$1,500*	$1,500*
Holidays	$1,500*	$1,500*
Insurance premia	Paid by Petitioner	$900
Lunches and pocket money	$500	Nil
Other transport – MTR/Taxi	$500	Nil
Child-minding fees	Nil	Nil
Uniform	Paid by Petitioner	$100
Others	Nil	$500
Total	$4,392	$17,300

Total

For W:$32,618

For H:$77,263

I accept that some of these expenses, particularly the updates from the husband do not appear to have been substantiated at all.

18.  I further agree that most of the wife’s expenses are very reasonable. She is currently renting a one bedroomed apartment in Discovery Bay and I accept that this is a short term measure only. She pays for this in cash. It is of note that the husband cancelled her dependant’s visa and that she does not have permanent Hong Kong ID. It has been suggested by the husband that the wife could have had medical treatment in Hong Kong and that he had not cancelled her medical insurance. However, when he was pushed on this during the hearing he was unable to show conclusively that this was the case. I tend therefore to accept that the wife really had no alternative but to return to France for treatment given that and the fact that she is not entitled to treatment through the Hong Kong Government system. Consequently, the flight costs are really an essential expense at present, if she is to continue to see the boys regularly. I also note that the wife is entitled to discounted tickets because she is cabin crew and that the estimate of HK$6,000 per month for flights would be much higher otherwise.

19.  Thus the only area where some adjustment might be possible is in the estimates for entertainment/presents/holidays for both herself and the boys which total HK$5,500 per month. I have marked those expenses with an *. In the context of this case that total amount is quite high and is probably capable of some adjustment. I will therefore allow an overall figure of approximately HK$30,000 per month. In addition, the wife is currently earning just under HK$6,000 per month. In broad terms therefore she is seeking somewhere in the region of HK$24,000/25,000 per month from the husband.

The husband’s ability to pay 

20.  Does then the husband have the ability to pay that sum? Counsel for the wife makes a number of points in support of the wife’s basic contention that the husband does have the capacity to pay. He says inter alia that the husband has failed to make full and frank disclosure of his means and that he may also in a position to meet the wife’s reasonable needs in the short term – by borrowing on his credit card if need be.

Full and frank disclosure

21.  The husband is said to earn approximately HK$80,000 per month, but he has not produced copies of the bank statements, where his salary is said to paid, despite being asked for these in a questionnaire. Further he has only produced a copy of his original contract of employment. Thus the figure for his salary cannot be substantiated from the evidence produced. There were also questions surrounding his business expenses. His credit cards showed regular and high expenditure on entertainment i.e. restaurants, bars etc, totalling approximately HK$35,000 per month. The husband said during the hearing that these were business expenses that he reclaimed on a monthly basis, but again he was not able to point to any evidence to show the reimbursement of these expenses, because the bank statements had not been produced. It is the wife’s case that the husband may be paid more than he has claimed and that although some of the entertainment expenses may be in relation to his business, that there is no evidence of that.

22.  It is also clear that the husband moved into more expensive accommodation after he moved out of the former matrimonial home with the children, and by so doing he increased both his monthly expenses and his standard of living. This seems somewhat contrived in the circumstances. When the parties were living together they were paying just under HK$20,000 per month on rent. After the move the husband increased his rental to HK$32,000 per month – an increase of over 1/2. The husband first moved to a boat in the marina and then to another apartment. This is unacceptable. I accept that he did not need to do this and that there is a sense of litigation window dressing in the way in which he went about it. As I indicated during the hearing the court is not and should not be bound by litigation manoeuvres of this type. 

How much then can the husband realistically afford to pay?

23.  The younger child of the family completes kindergarten this summer. The husband acknowledged during the hearing that the sum of approximately HK$10,000 per month would then become available from that source. Further, even on the husband’s own case there is approximately HK$3,000 per month surplus on a monthly basis from his income. In addition, I accept that some of his estimates are a little on the high side. In particular, his estimate on food of HK$8,000/10,000 per month seems high and should be capable of some reduction. It also seems to me that he should be able to make some other economies, especially in relation to meals out of the home and entertainment/presents/holidays. Again I have marked the expenses that I believe are capable of some reduction with an *.

24.  Some of the remaining funds may need to come either from the husband borrowing the same or by breaking his current lease and moving into cheaper accommodation. As indicated above, it seems to me that there is no justification for him paying more than HK$20,000 per month on rent, as had been the case originally.

Conclusion

25.  In conclusion then and on a broad brush basis, I shall make an order that the husband do pay the wife HK$25,000 per month made up of HK$16,000 per month for herself and HK$4,500 per month per child.

Backdating

26.  The wife asks, unusually, that the maintenance be backdated to June 2018, when she started to rent her small one bedroomed apartment in Discovery Bay. However, she did not issue her summons until April of this year. I have considered whether this would be appropriate and I think not. Although the husband was unable to show proof of payment, it is his case that he has spent approximately HK$448,000 on legal and mediation fees and that he has no savings left. Although, as stated above, I do have some concerns with respect to the husband’s litigation conduct, nonetheless I do not think there is a pot of gold at the end of this particular rainbow and it seems to me that to order backdating of the amount and length of time suggested could place an intolerable financial burden on him. Similarly, I will not backdate the maintenance to April, when the application was made.

Costs

27.  However, although neither party can be said to have entirely won nor entirely lost, given the husband’s general approach including the concerns that I have noted about his litigation conduct, and the fact that the wife really had no alternative but to seek the assistance of the court, I will make an order nisi to be made absolute in 14 days time that the Respondent do pay the wife’s costs of this application on a party and party basis to be taxed if not agreed, such payment to be made at the end of the litigation.

Order

28.  Consequently I shall make an order as follows:

1)  The Petitioner shall pay maintenance pending suit to the Respondent for herself in the sum of HK$16,000 per month and interim maintenance to the Respondent for the two children of the family in the sum of HK$4,500 per month per child, the first payment to be made on the 1 July 2019 and thereafter to be paid on the 1^st day of each succeeding month until further order.

2)  The First Appointment hearing and the call over of the Children Dispute Resolution hearing shall be adjourned to the 17 September 2019 at 9:30 a.m.

3)  Both parties do personally attend that hearing.

4)  There shall be an order nisi to be made absolute in 14 days time that the Petitioner shall pay the Respondent’s costs of and occasioned by this application on a party and party basis to be taxed if not agreed.