YSG (YX) v. LYAG

FCMC 15288/2015

[2021] HKFC 209

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 15288 OF 2015

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DECISION

( Maintenance Pending Suit/ Interim Maintenance )

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Introduction

1.  This is an application filed on 17 November 2020 by the Petitioner Wife (“W”) for Maintenance Pending Suit (and Interim Maintenance) for herself and 2 children of the family.

2.  W and the Respondent Husband (“H”) were married on 12 November 2000 and have 2 sons, N (aged 18) and C (aged 13).  H and W separated in August 2014.

3.  W was granted sole custody, care and control of N.  Joint custody of C was granted to W and H with care and control of C to W.

4.  W applies for the sum of HK$437,280 for herself and the Children.   According to W, H had all along been providing for W and the Children through their joint account but he unilaterally closed the joint account and started paying only HK$240,000 per month from 1 October 2019.  The amount was further reduced to HK$180,000 by 1 October 2020.

5.  H’s case is that the maintenance provided by him is reasonable and W had been put on notice to cut down on expenses including moving to a more economical accommodation but W unilaterally renewed the lease on 30 June 2020.   H even offered a Charman payment of HK$5 million but was unreasonably turned down by W.

6.  H invites to this Court to make an order of maintenance pending suit in the sum of HK$180,000 or in the event R volunteers a lump sum of HK$5 million, then the amount of maintenance pending suit shall be varied to $1 per annum. 

General Background

7.  H is 48 years old and now employed as a fund manager at an investment management firm (“the Firm”) at US$50,000 per annum (about HK$32,333 per month) plus bonus. 

8.  W is 49 years old, she used to work as a banker in Singapore and retired in September 2004 to be a full-time homemaker. 

9.  H grew up in Malaysia and has worked in investment management business since October 1994.  He had previously worked at several well-known investment management institutions in Singapore, Japan and Hong Kong. 

10.  Before joining the Firm in February 2014, H left his last employer due to his performance.  H’s bonus dropped significantly in January 2013 and his former employer put pressure on H for him to move on by offering him managerial role he was inexperienced in as opposed to the more lucrative trading role, H eventually left his last employment in September 2013.

11.  During his last employment, H earned approximately HK$160 million (comprising basic salary and bonus) over 7 years, his  remuneration package then was basic salary of US$950,000 per annum (about HK$615,000 per month) plus bonus.

12.  H started off with the remuneration of US$200,000 per annum (about HK$129,589 per month) plus bonus at the Firm.  However, H generated trading losses for 3 consecutive years from 2016 to 2018 and received no bonus for the last 4 years.  H’s position at the Firm became extremely difficult in mid-2019 and he had to accept a significant salary cut to US$50,000 per annum (HK$32,333 per month) since July 2019 to keep his job.  H even bought buy back some of his trading losses at a significant discount to keep a better trading record.

13.  In this application, there is no express challenge by W of the remuneration or salary cut of H with the Firm.  W also does not rely on any allegation of material non-disclosure in her submissions despite allegations in her affirmation evidence.  For avoidance of doubt, I consider there is little material before me to substantiate such a claim at this stage.

14.  It is also common ground that this Court does not have jurisdiction to award Charman payment in this application.

The Law

15.  Section 3 of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”) for maintenance pending suit provides that the court may make an order for such periodical payments for maintenance and for such term it thinks reasonable.

16.  It is trite law that such applications are approached on a broad-brush basis.  A detailed examination of the parties’ means may be examined at a full ancillary relief hearing when there is then the opportunity to achieve fairness by means of set off. If there is any overpayment or underpayment, it can be rectified at a final ancillary relief hearing.

17.  W’s present application covers maintenance for the Children, section 5 of the MPPO should be applicable and the factors set out in section 7(2) are to be considered.  Again, a broad-brush approach should be adopted. (LAML v TCCY, (unrep.; CACV 75/2004, 13 September 2004))

18.  The following principles were set out in the Court of Appeal decision in HJFG v KCY [2012] 1 HKLRD 95 with respect to maintenance pending suit/interim maintenance applications:

a.   The sole criteria to be applied in determining the application is “reasonable” which is synonymous with “fairness”.

b.   A very important factor in determining fairness is the marital standard of living.

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 situation, the Court should err in favour of the payee.

Marital Standard of Living

19.  It is W’s case that the family enjoyed high standard of living which was met solely from H’s income since they moved to Hong Kong in 2007.

20.  The family first rented a 3,400 square foot town house with 4 rooms, 2 helpers’ rooms and 2 car parking spaces in Southside for HK$190,000 between 2007 and 2011.  Between 2011 and 2013, the family moved to Admiralty’s Pacific Place at the rent of HK$203,000 for a 2,650 square foot service apartment with 3 rooms, 2 car parking spaces.

21.  The family later moved in 2013 to the accommodation in question in Mid-Level’s which is a duplex of 5,400 square foot (gross area) with 6 rooms and helper’s room and 2 car parking spaces.  Its current rent is HK$160,000 per month.

22.  H has owned many cars in the past, including sports cars like Ferrari, Porsche, Aston Martin, Jaguar and Nissan GTR and sedans/7 seater cars like BMW 7 Series, Mercedes Benz S Class, Toyota Alphard/ Vellfire. 

23.  In relation to standard of living.  H submits that the present application should not focus on the alleged standard of living 7 years ago, not only was the more lucrative employment was gone, H has suffered from a significant drop in income.  H also has to maintain 2 households now.  According to H, he stopped buying new cars for 4 years and he had to cut down on expenses.

24.  Despite H’s salary cut, H and W still own substantial assets.  From H’s Form E filed on 18 September 2019 and 2 February 2015, H’s net worth was HK$153,466,278 and $165,697,311.86 respectively.  From W’s Form E filed on 21 February 2020, her net asset was HK$44,388,259.11. W’s net worth in her Form E filed on 6 February 2015 was HK$40,553,190.

25.  From the evidence before me, I find that the parties did enjoy a very comfortable standard of living funded by H before separation.

Forensic Accountant’s Report

26.  H instructed a forensic accountant firm to analyse the expenditure of W. The forensic accountant’s report dated 27 October 2020 suggested that W’s average monthly personal expenses (excluding rent valued at HK$170,000) was only HK$53,775 in 2019 and HK$55,617 during COVID-19 between January and August 2020.

27.  The forensic accountant engaged by H is not a single joint expert appointed for the parties, W submits that the forensic accountant’s report will be challenged at the final ancillary relief.  In these circumstances, my view is that little weight should be attached to the forensic accountant’s report at this stage.

General Expenses

Rent

28.  This item represents the most significant portion of the maintenance in dispute.  H submits that W and the Children simply do not need an accommodation as big as 5,400 square feet (gross area).  H already by letter dated 19 September 2019 put W on notice that she should move to a more economical accommodation after the lease was supposed to expire by the end of September 2020. 

29.  Without H’s knowledge or consent, re-signed the current lease on 30 June 2020.  H considers the reasonable rent to be HK$100,000 by reference to a simplex half the size in the same building of the this rent as advertised. 

30.  W submits that this is the accommodation that the family has occupied before the divorce proceedings, a status quo should be maintained.

31.  It is true that the H’s his income has dropped to US$50,000 per annum with no bonus in the past few years.  However, judging from  H’s expenditure from his Form Es filed in 2015 and 2019, H maintained the same level of spending as before on his general and personal expenditure even after the salary cut.

32.  H’s general expenses and personal expenses in 2015 were HK$305,985.76 per month and HK$139,333 per month respectively.  H’s general expenses and personal expenses in 2019 were HK$128,200 and HK$243,900 per month respectively.  The major differences between 2015 and 2019 on general expenses come from the rent of HK$49,151.21 per month in Singapore and mortgage instalments of HK$137,834,55 for the Singapore property.  After deducting these sums, the general expenses in 2015 was HK$119,000. Even counting the expenses on wine ($50,000) as investment, the general expenses and personal expenses in 2019 were still higher, after the salary reduction, than in 2015.

33.  In H’s Affirmation filed on 15 December 2020, H said he had taken steps to reduce his spending by eating out less and no longer providing his parents with monthly support but just an annual red packet and limiting his spending where possible.  He would also try to negotiate his monthly rent of HK$85,000 per month to HK$80,000 per month.  However, there is no particulars or actual figures provided by H about his reduction in expenses, I do not consider the efforts he described improve his case much.

34.  H had been providing maintenance to W and the Children including the rent for the present accommodation that was occupied by the family before divorce, while H now says that his salary has gone down and W should move to a more economical accommodation, I don’t consider it reasonable when H, to say the least, has maintained his level of spending.

35.  My view is W should be allowed to keep renting the present accommodation.  I therefore allow the sum of HK$164,000 as rent.

Utilities

36.  W claims HK$7,700, under this item.  H argues that even HK$6,000 is absurdly high.  I accept HK$6,000 to be the reasonable amount for W.

Food and Car Expenses

37.  W claims HK$26,000 and HK$10,230 respectively.  H argues that these figures are exaggerated especially during COVID-19.  I agree and consider HK$4,000 and HK$1,000 to be reasonable for them respectively.

Household Expenses (ParknShop, L’ occitane, Dog Food and Grooming)

38.  H complains that there is no justification or explanation by W as to why the amount jumped from HK$5,000 in Form E in 2015 to HK$16,730 in W’s Affirmation.  I am prepared to allow only the sum of HK$5,000.

Domestic Helper

39.  H has no complaint about this item.  I allow HK$7,500 as claimed.

Others (Heath Foods and Supplements), Toiletries, Electronics, Subscriptions, Storage)

40.  W’s claim is HK$23,300, H argues they are excessive and not supported by evidence.  From W’s 2019 Form E, health supplements and bird’s nest amounted already to HK$16,360.  I agree with H’s complaint, in particular, I do not see evidence of why W and the Children should need such amount.  I will only allow HK$3,000 for this item.

Personal Expenses

Meals Out (including Children) and Personal Grooming

41.  HK$18,800 and HK$16,930 are claimed respectively, H submits that they are excessive and not supported by evidence.  I am with H, and accept the sums of HK$4,000 and HK$4,000 to be reasonable.

Clothing’s, Bags, Shoes, Accessories

42.  This item is not challenged by H, the sum of HK$3,150 is therefore allowed.

Entertainment/Presents

43.  H has no specific complaint about the claimed figure, I accordingly allow the sum of HK$8,120.

Holidays

44.  W claims HK$11,670, H argues that it is not possible during COVID-19.  Staycation during COVID-19 is not uncommon, I consider HK$2,000 to be reasonable.

Children Expenses

School Fees

45.  The claim is HK$43,000, the amount is not in dispute, H just claims it is paid by him direct.  I allow this amount, whether it is to be included in the maintenance or paid by H direct will be discussed later.

Extra Tuition Fees

46.  H argues that this is excessive and unclear why this sum should jump to HK$25,200 now from HK$11,700 as claimed in the 2020 Form E.  The particulars given by W is that each child should have 4.5 hours per week at HK$700 per hour.  I understand from W’s 2020 Form E that the old figure was for the elder son.  Now the younger child is also to start but he should need a lower amount.  I accept HK$15,000 to be reasonable.

School (Uniforms, Stationaries, Books and etc.) and Clothing, Bags, Shoes, Accessories

47.  There being no complaint about these items, I allow the sums of HK$1,000 and HK$3,000 respectively as claimed.

Transport to Schools (School Buses)

48.  H says this item should be included in general expenses.  As this relates to school buses, I accept it to be under Children’s Expenses at the amount of HK$5,800 as claimed.

Extra-Curricular Activities

49.  W’s calculation is 3 hours per week at HK$800 per hour, H questions the increase from HK$6,000 to HK$9,600 from last Form E.  I consider this amount claimed reasonable and would allow it.

Entertainment/Presents

50.  The claimed amount of HK$2,410 is allowed as not being challenged.

Holidays

51.  W claims HK$23,340, H argues that it is not possible during COVID-19.  Again, staycation during COVID-19 is not uncommon, I consider HK$4,000 to be reasonable for the Children.

Allowances (School, Outings, Other transport)

52.  H complains about the increase from HK$2,200 in 2015 Form E to HK$4,340 in 2020 Form E then to HK$5,700 now.  I see that the figure was actually HK$5,640 in 2020 Form E.  I accept as the Children have grown older, the amount should be adjusted upwards.  I consider $3,000 to be reasonable.

Others (Haircuts, Facials, Dermatologist excludes Endocrinologist)

53.  H complains about the increase from since 2015 from HK$2,400 to HK$4,100.  Having considered that the Children have grown older, I accept the sum of $3,000 to be reasonable.

54.  For ease of reference, the items I have allowed are summarised as follows:

General Expenses
Rent	HK$164,000
Utilities	HK$6,000
Food	HK$4,000
Household	HK$5,000
Car Expenses	HK$1,000
Domestic Helper	HK$7,500
Others	HK$3,000
Total	HK$190,500
Personal Expenses
Meals out of home	HK$4,000
Clothing etc.	HK$3,150
Personal Grooming	HK$4,000
Entertainment/Presents	HK$8,120
Holidays	HK$2,000
Total	HK$21,270
Children’s Expenses
Schools Fees	HK$43,000
Extra Tuition Fees	HK$15,000
School	HK$1,000
Transport to School	HK$5,800
Extra-Curricular Activities	HK$9,600
Entertainment/ Presents	HK$2,410
Holidays	HK$4,000
Clothing	HK$3,000
Allowances	HK$3,000
Others	HK$3,000
Total	HK$89,810

55.  On a broad-brush approach, I apportion one-third of the General Expenses to W and two-thirds to the Children.  For W, her share of the General Expenses allowed is HK$63,500 and the Children’s share should be HK$127,000.

56.  The Maintenance Pending Suit for W should therefore be  HK$84,770 (ie. HK$63,500+HK$21,270) to be round up to HK$85,000.

57.  The Interim Maintenance for the Children should be HK$216,810 (ie. HK$127,000+HK$89,810) to be round up to HK$217,000 to be equally shared by the 2 Children.

H’s Ability to Pay

58.  H has over HK$3.6 million in his bank accounts and H has maintained his level of living even after the salary cut since July 2019.  H had made the offer of HK$240,000 per month (plus school fees) as W’s maintenance pending suit.  The amount I allow now is not much higher.   Given the above, there is little reason for me to doubt H’s ability to pay.

Order

59.  The only outstanding question is whether the school fees should be paid to the schools direct by H or be included in the Interim maintenance for the Children.

60.  I note H’s strong preference to pay the school fees by him direct for avoidance of trouble that may be caused by W.  However, H has not offered to give an undertaking to pay the schools fees direct. 

61.  I am not satisfied that school fees should be left out of the Order I am about to make.  I do not share the H’s concern over payment of the school fees by W in any event.  I shall include the amount allowed for school fees to be part of the Children’s Interim Maintenance.

62.  In the present application, neither party is considered successful as their respective offers were not accepted by me.  By reason of the foregoing, I make the following orders:

(a)   The Respondent shall pay maintenance pending suit to the Petitioner in the sum of HK$85,000 per month and Interim Maintenance to the Petitioner for the Children of the Family in the sum of HK$217,000 per month (to be equally shared by the Children) to be backdated to 17 November 2020 and thereafter to be paid on the 1^st day of each succeeding month until further order;

(b)   Credit be given to any sums that the Respondent has paid to the Petitioner from 17 November 2020 onwards; the difference (if any) shall be paid within 14 days from the day of this Order;

(c)   There shall be an order nisi to be made absolute in 14 days that there be no order as to costs.