L, AP v. P, GG

FCMC 9358 / 2018

[2021] HKFC 20

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 9358 OF 2018

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J U D G M E N T
(Maintenance Pending Suit/litigation funding)

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Introduction

1.  This is an application by a Petitioner wife for maintenance pending suit/litigation funding pursuant to section 3 of the Matrimonial Proceedings and Property Ordinance Cap 192.

2.  The wife’s summons is dated the 11 October 2019 and was originally listed for a substantive hearing on the 21 February 2020. Unfortunately, this hearing was caught by the “GAP” and as a result, on the 9 March 2020, the following memo was sent to both sides respective solicitors:    

The aforementioned case was listed for a Maintenance Pending Suit/Litigation Funding hearing at 11:00 am on the 21 February 2020 and was adjourned due to the general adjournment of the court proceedings [“GAP”] which was announced by the Judiciary because of public health considerations arising out of Covid-19.

On reviewing the matter, it seems that it should be possible to deal with this matter by means of a paper disposal.

With this is mind the court shall make the following order nisi, to be made absolute on the 16 March 2020, in the event that no valid objections to the following course of action is received.

It should also be noted that if objections are raised and are then found to be without merit that the court may take this account when exercising its discretion on costs.

Please note that any objections and submissions may be filed at court by using the no reply e-mail address (fcj02@judicairy.hk).

 Order nisi

1) The Petitioner’s summons dated the 11 October 2019 shall be determined on paper;

2) Leave be granted to the Petitioner to file and serve an affidavit in response to the Respondent’s 4^th affidavit dated the 10 January 2020 within 14 days of the uplifting of the GAP (anticipated date 6 April);  

3) The Petitioner shall file and serve short submissions in relation to the same within 14 days thereafter (20 April);

4) The Respondent shall file and serve a submissions in reply within 14 days thereafter (4 May);

5) Both submissions to be no longer than 7 A4 pages in length and typed in 14 font and double spaced. 

3.  Neither side objected to these directions and an order absolute was made on the 16 March 2020. Unfortunately, however, the husband did not comply with these directions leading to a flurry of correspondence between the parties, which the court was also copied in on. Eventually the court wrote a subsequent Memo dated the 2 April 2020 in the following terms:

The court writes further to its Memo dated the 9 March 2020, when clear directions were given for the filing of submissions. The reasons for this are simple. The Family Court is coming under increasing pressure to deal with as many cases as possible on paper because of the Coronavirus pandemic. HH Judge Melloy currently has 16 such matters to deal with on paper. It will only be possible to do this if all parties comply with the directions given – no exceptions.

Consequently, either the offending submission that is longer in length is removed from the court file and replaced by one that is in compliance with the direction given, or HH Judge Melloy will choose not determine this matter on paper. Instead the MPS/litigation funding application will be adjourned to a date to be fixed after the uplifting of the GAP and will be determined in the normal way.

The court will not respond to any letters sent to the court about this or otherwise enter into the fray.     

Please therefore confirm by return that paragraphs 2 – 4 of the order contained in the Memo dated the 9 March 2020, as set out below, have been complied with. Leave is given for any Reply submissions not in compliance with paragraph 5 to be withdrawn and a fresh submission to be filed within the next 7 days. In the event that this order is not complied with then HH Judge Melloy shall further direct that this matter shall be set down for hearing after the uplifting of the GAP with ½ day reserved, when both sides will have ample opportunity to make whatever submissions they deem appropriate in the circumstances.     

Order nisi

1) The Petitioner’s summons dated the 11 October 2019 shall be determined on paper;

2) Leave be granted to the Petitioner to file and serve an affidavit in response to the Respondent’s 4^th affidavit dated the 10 January 2020 within 14 days of the uplifting of the GAP (anticipated date 6 April);

3) The Petitioner shall file and serve short written submissions in relation to the same within 14 days thereafter (20 April); 

4) The Respondent do file and serve a submission in reply within 14 days thereafter (4 May).

5) Both submission to be no longer than 7 A4 pages in length and typed in 14 font and double spaced. 

4.  Notwithstanding this Memo, the husband still chose not to comply with the court’s clear directions with respect to the length of his written submissions. This led, in turn, to a further Memo from the court dated the 22 April 2020:

Further to the Memo from the court dated the 2 April 2020 and in view of the fact that counsel’s submission dated the 31 March 2020 has not been withdrawn, please note that paragraphs 1, 3 – 5 of the order nisi dated the 2 March 2020, as reiterated in the second order nisi dated the 2 April 2020, shall be discharged. It is further ordered that the Petitioner’s summons dated the 11 October 2019 shall be relisted for hearing with 2 hours reserved. This hearing shall not be listed in accordance with counsel’s diaries. Further please note that the court may take the parties litigation conduct into account when determining the issue of costs.  

5.  It is then against this back drop that the matter was eventually set down for hearing on the 2 November 2020. The court will come to the issue that arises out of this, namely the deliberate non-compliance with a court order by the husband and those who advise him at the end of this judgment.    

The litigation generally

6.  There are several other more substantive issues that will need ultimately to be determined by the court, (if common sense does not intervene in the meantime) including inter alia, the disputed date of separation (the wife says 2011 and the husband says 2008), the approach to be taken to the numerous attempts to dissolve the marriage previously and the weight to be attached to an agreement allegedly entered into by the parties previously with respect to their finances. There are also claims that the wife entered into a subsequent marriage bigamously. It is trite but worth repeating for the record, that in such circumstances it is only possible for the court to approach this application on a very broad-brush basis. There can be no findings of fact at this juncture.

The current issue

7.  The current issue to be determined then is how much should the husband pay to the wife as maintenance pending suit, if anything at all? Further should the husband also pay a contribution towards the wife’s legal costs as litigation funding?    

Background 

8.  The parties, who are both Filipinos, met in Hong Kong in or around April 2000 and they married in a civil ceremony in Hong Kong on the XX March 2003. This was followed by a religious ceremony in Manila in September of the same year. The husband had recently started working as a trader for a well-known bank in Hong Kong and the wife worked as a general news editor for a TV news channel.

9.  It does not appear to be disputed that difficulties arose in the marriage quite quickly and that the wife spent increasingly significant amounts of time away from Hong Kong to train inter alia, in the culinary arts and to take up other business opportunities overseas. Both parties give a very different account of the breakdown of their marriage and there is a great deal of “he said”, “she said” evidence in the papers. However, it is clear that the husband first initiated proceedings for divorce in Hong Kong in 2009. However, those proceedings were not served on the wife and he did not take the matter any further, attempting instead to obtain an annulment in the Philippines. The annulment proceedings were issued in 2012. Unfortunately, the husband was not successful in this respect either and he was not able to obtain an annulment. He subsequently issued a second set of divorce proceedings in Hong Kong in 2016 and he had the first set of proceedings dismissed in the process. The wife also issued her own set of divorce proceedings in Hong Kong in the same year. The parties then seemingly agreed to file for a joint divorce in Nevada, USA and a divorce was finally granted on the 4 August 2016. The parties then withdrew both sets of proceedings in Hong Kong by consent. Subsequently an informal agreement was reached between the parties with respect to finances dated October 2016. On the husband’s case he agreed to pay the wife US$200,000 in tranches. It is also his case that he only paid the sum of US$71,000. The wife for her part produced a letter which stated as follows:

October 2016

Dear M [the wife]

I am committing to do the following:

1. M will have full custody rights to S, our pet golden retriever.  M will advise on the reasonable timing to get him.

2. G [the husband] to pay M’s debt in California valued at around USD 30,000.  G will pay M’s creditor directly. (ready in August 2016) – FINISHED & COMPLETED

Additionally, will the divorce is already finalized and concluded and as previously discussed, I have committed to undertake the following:

•  Jewelry – G to turn over all of M’s jewelry that is still in Hong Kong.

•  G will provide M with not more than USD 20,000 cash within the first year of the divorce to pay for: (a) legal bills in the USA, around $800; (b) other bills; (c) assistance for car purchase; (d) flight to the Philippines and (e) insurance and other expenses including items for her business.

•  G will pay for M’s Hong Kong fees (this sentence was drafted in July but as this potential obligation no longer exists, it is now irrelevant).

•  G will pay M a monthly allowance of USD 500.  This monthly allowance will continue until such time as when G can create an account and/or investment fund for M with a total value of USD 150,000.00 (one hundred fifty thousand American dollars).  This account and or fund must be created within five years of the divorce or sooner.  The account or fund will be created in the Philippines and the purpose of the account is to invest money for M’s future benefit.  The account and proceeds of the account will be fully owned by M.

It seems clear that this letter of intent was never fully complied with.

10.  At some point it seems that the wife then married a Mr M and that they had a son together called B. B was born on the XX March 2015. On the XX January 2018 that marriage was subsequently annulled and it seems likely that the relationship was originally bigamous. In any event the wife says that she receives financial support for B only but she has not as yet provided any of the court orders or other documents relating to this subsequent relationship, for this court’s consideration. She says that Mr M does not consent to the same and that as in Hong Kong she is subject to an implied undertaking not to produce such documents, save with the leave of the court in Nevada. 

11.  On the 2 July 2018 the wife was granted an order to set aside the Nevada divorce, seemingly for want of jurisdiction. This application was not done with the consent of the husband, who was served but chose not to participate in the process.

12.  On the 23 July 2018 the wife then issued the current proceedings for a divorce in Hong Kong. The husband defended those proceedings and a decree nisi was eventually granted on the 3 July 2019 based on the husband’s cross petition. A section 18 declaration was granted on the same date, but it seems that the decree absolute is still pending. It is then against this factual matrix that the court is asked to consider the issue of interim financial support.        

The law

Maintenance pending suit

13.  The law is well known and not in dispute. Section 3 of the Matrimonial Proceedings and Property Ordinance Cap192 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. As I have said above, in this instance the court will approach the matter on a very 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 set off. In other words, if there is any overpayment or underpayment that can normally be rectified at a final ancillary relief hearing. In so far as it is possible the court will also endeavour to try to look at the reality of the situation and will try not to simply accept the bare assertions made by one or other of the parties.

How much maintenance should the husband pay to the wife as maintenance pending suit, if anything at all?

14.  In essence the wife’s case is that the husband should pay her just under HK$30,000 per month. She says that she has fallen on hard times, that she cannot work because she is in the United States on an investment visa only, that leaving the US is not an option and that she has nowhere permanent to live. She says that Mr M only pays maintenance for the son and that any payments are now made directly to third parties. She claims to have no other means of support.

15.  This is not accepted by the husband who points out that the parties always maintained separate finances during the marriage and that the wife also received additional financial support from her family. He also alleges (although these allegations are not proven) that the wife is still in a relationship with Mr M and that this application is simply a ruse. He does not accept that he should be financially responsible for the wife, especially given the length of separation and the fact that she has had a child with another man. He argues that as a matter of public policy this court should not entertain the wife’s application. For the avoidance of doubt, this is not accepted, especially in circumstances where the issue of finances was never properly considered by any of the three jurisdictions involved and even on the husband’s own case, he has not fully complied with the party’s original informal agreement on finances in any event. Although the wife could have issued a Part IIA application, that was clearly not the only option open to her. Both parties are probably also to blame for the debacle in Nevada, but, in any event, I further accept that the husband should provide the wife with some form of interim support.

16.  At the hearing the husband offered the wife HK$10,000 per month for 6 months on a Charman like basis – i.e., on the premise that it should be taken into account when considering the issue of final ancillary relief. This was not accepted by the wife who sought approximately HK$30,000 per month (i.e. HK$29,400) as follows:

ANNEXURE 1

EXTRACTS FROM THE PARTIES’ FORM E’S

Table A – General Monthly Expenses (all sums in HKD)

Item	Petitioner’s Expenses [B/118]	Respondent’s Expenses [B/95]
Rent	$12,000	Nil
Mortgage instalments	Nil	$21,000
Utilities	$2,500	$3,766[1]
Management Fees	Nil	$1,933
Food	$4,000	$8,000
Household expenses	$1,200	$2,636
Car expenses	Nil	$1,900
Insurance premia	Nil	$360
Domestic helper	Nil	$6,666
Other	Nil	N/A
Total	$19,700	$46,261

Table B – Personal Monthly Expenses (all sums in HKD)

Item	Petitioner’s Expenses [B/118]	Respondent’s Expenses [B/95]
Meals out of home	$3,200	$22,000
Transport	$500	$3,000
Clothing/Shoes	$1,000	$1,000
Personal grooming	$1,000	$500
Entertainment/presents	$500	$5,000
Holiday	($1,000)	$40,000
Medical/Dental	$3,500	$1,000
Tax	Nil	$36,668.92[2]
Insurance premia	Nil	$5,743[3]
Contribution to parents	Nil	$30,000
Others	Nil	$5,500[4]
Total	$10,700	$150,411.92

C – Total (HKD)

Total	Petitioner	Respondent
	$30,400/29,400	$196,672.9

17.  It is of note that many of the wife’s expenses were not substantiated in any way, with the husband complaining in particular about the proposed rental and utilities (the wife is allegedly living with her Aunt and Uncle at present) and medical and dental expenses at HK$3,500 per month. The husband was also concerned that he should not be contributing towards any of the costs for B. However, that said, none of these expenses were particularly high and although some could be pruned a little, they certainly fall into the more reasonable category. Ms Booth also accepted on behalf of the wife, that it would not be appropriate to claim any provision for holidays at the present time given the travel restrictions imposed by the Covid 19 pandemic.    

How much does the husband earn and what are his other financial resources?

18.  In contrast it is not disputed that the husband has a good income of over HK$250,000 per month (inclusive of a bonus), which enables him to spend (in pre COVID times) approximately HK$40,000 per month on holidays and HK$30,000 per month on food. He also has some savings, a pension and other stocks and shares. He owns a property in Discovery Bay in his sole name and two other properties in the Philippines. He seemingly enjoys a very comfortable lifestyle.   

How much can the husband afford to pay?

19.  I accept that the husband can afford to pay the wife what she seeks. It is simply that he does not consider that he should be obliged to pay given the circumstances of this particular case. Although I accept that the factual situation here is somewhat out of the ordinary, it is also clear, as indicated above, that the wife’s financial claim on divorce has never been properly considered. This is not an acceptable state of affairs. She is also still married to the husband. In such circumstances I shall order that the husband do pay the wife the sum of HK$25,000 per month as maintenance for herself, such sum to be backdated to the first day of the month following the date of the summons. In making this order I am also cognizant of the fact that the wife should not be put in a worse position caused by the litigation behaviour of the husband and his legal team, which effectively led to a significant delay in this application being determined. I have though trimmed the wife’s claim as I am not convinced that she is currently paying the sums that she seeks particularly for medical/dental/meals out of the home and holidays. I accept that she will need somewhere to live with B and that the husband should contribute towards her share of the rental and other related expenses for herself in that regard pending final determination of this matter.       

Litigation funding

20.  The parties have agreed that the husband shall contribute the sum of HK$95,000 towards the wife’s litigation costs in order to enable her to be appropriately represented at the Financial Dispute Resolution (FDR) hearing on the 2 February 2021. This is accepted. In the event that the parties do not settle matters at the FDR hearing or shortly thereafter, it is also accepted that the issue of litigation funding will need to be further considered in the context of a trial. The sum of HK$95,000 shall be paid to the solicitors for the wife prior to the FDR hearing.    

Costs

21.  In my Memo dated the 22 April 2020, I stated that the court might take the parties’ litigation conduct into account when determining the issue of costs. As indicated above the husband’s litigation behaviour led to this matter having to be dealt with in court as opposed to by way of a paper disposal. The court’s original directions were clear and in no way unusual. Had either side had any difficulty with them then they had the opportunity of raising this with the court, and the otherside, ahead of time and in any event before the 16 March 2020. They chose not to do so. The ensuing fuss was completely avoidable and unnecessary and simply led to an increase in costs and a delay in the matter being dealt with. Given the calibre of those involved, the court was extremely disappointed with the way in which the matter was dealt with. In any event the wife should not be penalised in any way for this.

22.  From a more general perspective the wife has been successful in her application. The husband offered to pay her only HK$10,000 per month for a six-month period prior to the hearing and there was no provision for backdating. Although the court did not order that the husband pay the full amount of HK$30,000 per month claimed, it is clear that the wife has been more successful than the husband. Consequently, it follows that costs shall follow the event. I shall also order that the husband shall pay those costs on an indemnity basis with effect from the 16 March 2020, which is when the directions order was made absolute. He shall also pay the costs forthwith and on a summary assessment basis.          

Order

23.  Thus, I shall make an order as follows:

1) The Respondent do pay maintenance pending suit to the Petitioner for herself in the sum of HK$25,000 per month, the first payment to be backdated to the 1 November 2019 (shortly after the application for MPS) and thereafter to be paid on the 1st day of each succeeding month until further order. For the avoidance of doubt the sum of HK$350,000, being the backdated maintenance from the 1 November 2019 to the 1 January 2021, shall be paid within the next 7 days and in any event before the FDR hearing on the 2 February 2021. Thereafter and with effect from the 1 February 2021, the Respondent do pay the sum of HK$25,000 per month as set out above.

2) The Respondent do pay the Petitioner the costs of and arising out of the summons dated the 11 October 2019 on a party and party basis from the 1 October 2019 to the 16 March 2020 and thereafter on an indemnity basis from the 17 March 2020 to date, such costs to be summarily assessed and paid forthwith.    

IT IS FURTHER ORDERED BY CONSENT THAT

3) The Respondent shall pay the sum of HK$95,000 to the solicitors for the Petitioner being a contribution towards her legal costs, such sum to be paid prior to the FDR hearing.

IT IS FURTHER DIRECTED THAT

4) The Petitioner shall seek permission from the appropriate court in Nevada to provide all appropriate court orders in relation to the dissolution of her marriage to Mr M and other related orders concerning the financial support of their son B, for consideration by the Family Court in Hong Kong and the Respondent.