LSK v. FYKL

FCMC 8708 / 2014
(consolidated with FCMC 6048 of 2014)

[2020] HKFC 122

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 6048 OF 2014

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BETWEEN

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 8708 OF 2014

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BETWEEN

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(Consolidated Ancillary Relief Applications pursuant to an order dated 24 October 2014)

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J U D G M E N T
(Variation of Maintenance Pending Suit and Litigation Funding)

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Introduction

1.  The petitioner of FCMC 8708 of 2014 (“Madam T”) is seeking an order for variation of maintenance pending suit (“MPS”) and litigation funding against the respondent (“Mr F”) in both her summonses filed on 8 January 2019 and 23 April 2018[1].

Background

2.  Mr F and his wife, the petitioner of FCMC 6048 of 2014  (“Madam L”) were married in Taiwan on 26 January 1989.  They have one son and one daughter who are over eighteen and self-supporting. On 14 May 2014, Madam L filed her petition for divorce on ground of behaviour (FCMC 6048 of 2014) with a decree nisi granted on 15 July 2014.

3.  In 1991, Mr F came to know Madam T two years after he and Madam L had wedded. Despite the marriage with Madam L, on 7 January 1998, Mr F married Madam T in the United States. Madam T gave birth to a daughter in the same year and then returned to Hong Kong. She gave birth to their 2^nd child, a boy, in 1999. At all times in town, Mr F, Madam T and the two children had lived in a property in Mei Foo. Mr F provided for them financially.

4.  Mr F has always been a businessman. Madam T assisted Mr F and his family emigrating to Argentina in 1993. The application was approved in 1995. Mr F recalled in or about that time, he has slept with Madam T in one occasion. On the next day, Madam T begged him to support her financially or she has to work as a prostitute. Out of sympathy, Mr F gave all his cash with him to her. Mr F returned to Hong Kong the following day.

5.  Their relationship somehow continued few years later. Madam T is very good at Spanish. In about 1997, while Mr F went to promote his business in trade shows in North and South America, he asked Madam T to be his interpreter. Mr F identified he has only slept with her for two other occasions. After Mr F returned to Hong Kong, he received a letter from Madam T asking him to marry her. In that letter, Madam T promised not to disclose their relationship to Madam L. Mr F married Madam T in 1998. He supported Madam T and her children financially thereafter.

6.  Mr F and Madam T separated in 2006. Madam T brought her children to the United States in February 2014. Madam T petitioned for divorce on grounds of two-year separation on 3 July 2014 and was subsequently amended on ground of nullity on 29 April 2016 with a decree nisi (nullity) granted on 24 February 2017.

7.  On 24 October 2014, HH Judge Bruno Chan (as he then was) ordered in FCMC 6048 of 2014 that the ancillary relief hearings of both FCMC 6048 of 2014 and FCMC 8708 of 2014 be consolidated.

8.  Madam T sought MPS from Mr F as early as 12 September 2014. She said Mr F has been the sole bread winner of the family. At all times when she and her children were living in Hong Kong, all of them lived in the Mei Foo property at a size of 1,850 square feet with 4 bedrooms and 2 living rooms. She employed a domestic helper to do the household chores until her daughter completed primary 5 in Hong Kong.  Madam T and her children were able to enjoy boat trips and dinners in clubhouses.

9.  After they returned to the United States, Madam T and both her children have been living in a house at a size of 2,500 square feet with 3 bedrooms, 2 living rooms, 2 garages and 1 garden. Mr F bought 2 private cars for Madam T and would usually be replaced with a new model each and every 2 – 3 years. They were able to go for 2 – 3 holiday vacations, mainly to Canada and Europe, with business class tickets every year. The children were provided with means to participate in various extra-curricular activities and private tuitions.  Madam T received HK$74,000 per month (and sometimes HK$105,000) from Mr F to pay for the household expenses.

10.  Madam T complained Mr F ceased paying her money since June 2014 (one month prior to her petition). At that time, she has been a full time housewife with no income and savings. Be it her children could entitle to free education in the United States, she resorted to advance loans from banks to meet the daily expenses. Due to high medical costs in the United States, Madam T was equipped with an insurance policy to claim medical expenses. Nonetheless, her daughter has been suffering from visual impairment, she was in need of a special kind of spectacles which costed Madam T an average of HK$6,000 per year. Madam T was also in need of airfare to travel between Hong Kong and the United States.  Since then, Madam T was indebted in sum of HK$260,270.

11.  Mr F insisted he did not cohabit with Madam T in Hong Kong save he visited her and her children at Mei Foo property occasionally. Mr F did not see Madam T and her children after they had left town. Mr F has no idea whether Madam T has any gainful employment in the United States. Mr F disagreed with the living standards Madam T has said in her affirmation.

12.  Prior to the petition, Mr F used to pay Madam T HK$34,000 per month as housekeeping money. During the period from December 2013 until July 2014, Mr F has paid Madam T no less than HK$1,149,547[2].

Madam T’s history of MPS and litigation funding applications

13.  On 12 September 2014, Madam T took out her 1^st MPS application for both herself and her children for a total sum of HK$108,009 per month.  On 29 January 2015, Madam T applied for HK$80,000 per month litigation funding. Whilst both summonses were to be adjourned for argument, on 18 March 2015, HH Judge Bruno Chan (as he then was) ordered Mr F to pay Madam T (and her children) HK$100,000 interim interim maintenance. Mr F paid such sum from April 2015 to July 2015.

14.  Thereafter, Mr F to pay at a reduced rate of HK$80,000 per month on condition that Mr F to pay Madam T HK$1 million MPS and another HK$1 million for litigation funding, the same amount to be offset against any final reward received by Madam T in this suit. Madam T confirmed she has duly received the said HK$1,000,000 on 23 February 2016 and settlement of her legal costs in sum of HK$930,000 by Mr F to her solicitors on 15 March 2016 directly[3].

15.  Whilst Mr F is still paying HK$80,000 interim maintenance, in less than one year, on 28 February 2017, Madam T took out her 2^nd MPS application in sum of HK$104,385 per month. On 12 September 2017, by way of a consent order, Mr F agreed to sell a property in town (the Carmel Property) and to pay Madam T HK$508,378.69 being 1/3 of the proceeds of the sale.  The MPS was further reduced to HK$60,000 commencing from 1 October 2017.  Both sums are to be offset by final reward received by Madam T in this suit.

16.  Having an idea of the previous applications taken out by  Madam T, Mr F had in fact provided her and her children over HK$6.5 million  since December 2013, for a period over 5 years and 6 months.

Madam T’s current MPS and litigation funding application

17.  In 7-months’ time from the previous consent order, on 23 April 2018, Madam T applied for litigation funding again. She originally asked for HK$250,000 and further amended to HK$3,244,000 on 11 December 2018. On 8 January 2019, she further applied for the current MPS totalling HK$158,665 per month.

18.  Madam T said she is a housewife without much savings. She has been spending most of the HK$60,000 on the children in the United States with a small amount left in her bank in Hong Kong. The existing HK$60,000 was unable to meet her current needs on daily expenditure and education of her daughter. She is now asking for a sum of HK$158,665 per month with effect from 1 October 2017.  

19.  Madam T said Mr F has means to pay her HK$158,665 per month because (i) Mr F has a regular income of HK$32,000 per month from his company; (ii) he has 50% shareholding of the same with an equity value of HK$107,309,176 as at 8 August 2016; (iii) Mr F is able to maintain a monthly expenses of HK$175,688.40 on top of the HK$60,000 paid to her; (iv) Mr F has various properties within and outside the jurisdiction; and (v) his unexplained substantial loss in investment in the amount of HK$18,900,000.

20.  Mr F opposed both applications because he has paid Madam T and her children with a surplus to their needs. The existing MPS provision was made by consent, there is no material change of circumstance to justify an elevation of MPS. He believed the sum he has paid throughout the years since petition is more than sufficient for Madam T to meet her expenditures, including her daughter’s education and to seek legal advice or representation. Mr F also argued Madam T had failed to disclose frankly of her monthly necessary expenditures which made her suspicious of not disclosing her true financial position.

The applicable legal principles

Maintenance pending suit

21.  Applications for variation of a MPS/ interim maintenance order are governed by section 11(7) of the Matrimonial Proceedings and Property Ordinance, Cap 192.

“11(7). In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates …”

22.  In HCTT v TYYC, CACV 380/2007 (2/7/2008), Tang VP held at paragraphs 15 to 16 previous MPS agreed should carry some weight:-

“15. … as Garner v Garner [1992] 1 FLR 573 shows that does not mean that the earlier order, whether made by consent or not, carries no weight. How much weight should be given to the earlier order must depend on the circumstances…

16. Thus, although the jurisdiction to vary is untrammelled, normally the earlier order would not be varied unless there has been a material change of circumstances.” 

23.  It is trite law that the proper approach to MPS is set out in by Hartmann JA in HJFG v KCY [2012] 1 HKLRD 95 at paragraphs 37 and 38:

“37. The principles that have emerged over time to guide judges in matters of interim maintenance have been fashioned in the main to ensure fairness. This is well illustrated in the judgment of Nicholas Mostyn QC, sitting then as a deputy High Court judge, in TL v ML and Others (Ancillary Relief: Claim against Assets of Extended Family) [2006] 1 FLR 1263, at 1289, in which, having looked at earlier authorities, he derived the following principles that speak specifically to fairness or are based on the need to ensure it.

For present purposes, it is sufficient to cite the relevant principles without citing the judge's reference to the source of those principles:

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. This 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 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.

38. Finally, it is to be noted that in applications for interim maintenance, when the amount to be paid is for a limited period only and not all of the evidence is necessarily before the court, it is not appropriate, nor indeed in most cases possible, for the court to conduct a detailed investigation into the finances of the parties.  While, in order to determine what is or is not reasonable, some analysis is always required, that analysis can be conducted on a 'broad brush' basis. ”

Litigation funding

24.  I cite the principles on MPS including litigation funding in LCYP v JEK [2018] HKCFI 1907, B Chu J stated in the judgment at paragraphs 26 onwards,

“26. The Court’s power to order MPS (including element for legal costs provision) is stated in section 3 of the Matrimonial Proceedings and Property Ordinance, Cap 192. The sole criterion stipulated by that section is “reasonableness”, which has been said to be synonymous with “fairness”.

27. Wilson LJ had said in Currey v Currey (No 2) [2007] 1 FLR 946:-

“In my view the initial, overarching inquiry is into whether the applicant for a costs allowance can demonstrate that she cannot reasonably procure legal advice and representation by any other means.  Thus, to the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, whether directly or as the means of raising a loan, in funding legal services.  Furthermore, not to forget the third of Thorpe LJ’s three features, she has also to demonstrate that she cannot reasonably procure legal services by the offer of a charge upon ultimate capital recovery.  I would add, fourthly, that the court needs also to be satisfied that there is no such public funding available to the applicant as would furnish her with legal advice and representation at a level of expertise apt to the proceedings, ie that the applicant does indeed in that regard fall within the unserved constituency…”

28. In short, the overarching inquiry is into whether the applicant for a costs allowance can demonstrate that she cannot reasonably procure legal advice and representation by any other means and that:

(i) To the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, whether directly or as the means of raising a loan, in funding legal services.

(ii) She has also to demonstrate that she cannot reasonably procure legal services by the offer of a charge upon ultimate capital recovery;

(iii) The court needs also to be satisfied that there is no such public funding available to the applicant as would furnish him/her with legal advice and representation at a level of expertise apt to the proceedings.

29. What was said by Wilson LJ in Currey was endorsed by Cheung JA and Hartman JA in HJFG v KCY [2012] 1 HKLRD 95[4] who held that the Currey principles should in future be adopted as providing prudent guidance to both judges and practitioners in this jurisdiction.”

Variation of MPS

(i) Payment of interim maintenance is continuing

25.  Mr Yim, counsel for Mr F, submitted this is not a case where Mr F has failed to pay MPS to Madam T and her children but a situation that Madam T and her children have been well maintained before and after the commencement of the petition. Madam T is asking for what is unnecessary, and is outside the ambit of reasonableness and fairness. I am asked to consider the long history of payment Mr F had paid to Madam T and her children.

26.  It is indisputable that prior to the petition, Mr F has paid HK$34,000 and additional funds on special needs to Madam T and her children when they were living in Hong Kong. Mr F provided them with Mei Foo accommodation when they were in town. Mr F continued to pay Madam T and her children after they had relocated to the United States in February 2014.

27.  Not to repeat the payment history which appeared above, Mr Yim submitted, Mr F has provided Madam T and her children no less than HK$5,397,925.69 since December 2013[5]. Together with the HK$60,000 MPS for 9 months from October 2018 to date of this hearing, he has paid Madam T more than HK$6 million. During this period, Mr F received no complaint from Madam T. On the facts itself, Madam T has received a lucrative sum from Mr F throughout the years and Mr F is still paying HK$60,000 per month.

28.  I accept this is the indisputable situation.

(ii) Reasonable needs of Madam T and her children

29.  The reasonable needs of Madam T and her children will be considered in light of the living standards during the relationship. It is indisputable that Madam T and her children lived in a premise provided by Mr F and a monthly living expense of HK$34,000 in 2014 and then an accommodation in the United States with use of private cars. Madam T’s daughter has some additional education needs where she may apply for college in near future with an extra sum of HK$41,000.

30.  Mr. F has been paying continuously at HK$60,000 per month. Taking into account the lump sum amount paid to Madam T ($1 million and HK$508,378.69), Madam T has been enjoying more or less HK$100,000 per month which is not far from what HH Judge Bruno Chan has ordered on 18 March 2015. To attain a fair calculation, the sum of HK$100,000 should include the amount Madam T has spent on litigation funding. Roughly, I estimate the monthly expenses for her and her children would be around HK$70,000 per month. This is a good pointer to the Madam T and her children’s living standard.

31.  The next question turns to whether there are any change of circumstance renders Madam T to increase the amount of MPS.

32.  Madam T protested Mr F did not pay her and her children sufficiently after they have settled in the United States. She has to apply the funds initially intended to purchase a vehicle to pay for the living expenses.

33.  In deciding the needs of Madam T and her children, I rely on the following table where the difference between Madam T and Mr F are at a clear glance:

	Madam T’s claim (HK$)	Mr F’s proposal (HK$)
General expenses
Utilities	8,000	2,500
Food expenses	3,000	3,000
Household expenses	3,000	1,000
Car expenses	6,000	1,690
Car insurance premia	2,840	2,525
Household insurance premia	125	125
Domestic helper	1,700	0
Sub-total:	24,665	10,840
Personal expenses
Meals out of home	5,000	2,000
Transport	1,500	500
Clothing/shoes	4,000	2,000
Personal grooming	3,000	2,000
Entertainment/presents	4,000	1,000
Holiday	4,000	1,000
Medical/dental	3,000	500
Insurance premia	2,000	0
Air tickets	3,000	1,832
Sub-total:	29,500	10,832
Children expenses
School fees	13,000 + increase of HK$41,000	0
Transport	4,000	1,000
Medical/dental	3,000	800
Extra-curricular activities	4,000	500
Entertainment/presents	4,000	500
Holidays	4,000	500
Clothing/shoes	4,000	1,000
Insurance premia	2,000	0
Lunch/pocket money	15,000	3,000
Eyeglasses	500	500
Air tickets	2,000	2,000
Rent for the US home	19,000	19,000
Sub-total:	115,500	28,800
Grand total:	169,665[6]	50,472

34.  Bearing in mind Madam T has the burden to prove of her needs, the disparity of the sum suggested or proposed can be resolved by documentary proofs. Mr Yim submitted (i) meals out of home; (ii) clothing / shoes; (iii) entertainment / presents; (iv) holidays; and (v) insurance premia were not supported by documentary evidence. Madam T exaggerated the figures on children’s school fees for an additional HK$41,000 per month. Not to mention an absence of school offer, the daughter has merely planned to apply for a college without substantive application. I agree with Mr Yim, it would be unfair for Mr F to pay MPS including the daughter’s future school fee at a rate when she has not attempted to apply. The sum should be deducted from HK$169,665 that Madam T has put forward. The monthly MPS shall be reduced to (HK$169,665 – HK$41,000) HK$128,665.

35.  Mr Yim submitted, Madam T did not disclose she has credit cards, evidence on her spending pattern should be those recorded in her bank statements. Madam T disclosed three accounts, namely, (i) Bank of the West Checking Account; (ii) Chase Bank Checking Account; and (iii) Dah Sing Bank Account. Mr Yim carefully computed Madam T’s spending pattern in the past in his skeleton submissions that the average monthly spending is far less than HK$128,665.  Mr Lee, counsel for Madam T did not oppose the sums were incorrectly calculated at the hearing. I accept the spending pattern is true in reflecting Madam T’s monthly expenditure.

36.  As I have opted for a sum of HK$70,000 as a pointer of the living standard of Madam T and her children. Madam T has put forward a sum of HK$128,665 which is almost more than 80% of HK$70,000. I shall then decide whether this sum is necessary and reasonable.

37.  A broad-brush approach should be adopted in deciding MPS.  The burden rests with Madam T to prove her current needs. Madam T is unable to explain to my satisfaction on the revised quantum of monthly needs. Madam T did not demonstrate adequately there has be a change of circumstance to justify an elevation of monthly interim maintenance. Madam T has exaggerated on her needs without proofs. I fail to see Madam T had tendered sufficient evidence on this part when her expenses are estimates.

38.  Having said that, I do not agree with Mr Yim’s estimation that Madam T can run a household as low as HK$50,472. The reasonable needs of Madam T and her children should be maintained at HK$70,000 per month. Yet, to be fair with Madam T, Mr F shall provide interim maintenance to the daughter for paying her school fees when she has been admitted to an educational institution with proofs.

(iii) Madam T’s financial position

39.  Mr Yim criticized Madam T failed to disclose she had received HK$508,378.69 from Mr F on September 2017 at the first instance when she took out this application. She did not explain the whereabout of HK$508,378.69 proceeds of sale. Madam T said it was spent on her living expenses.

40.  Madam T is also suspicious of not fully disclosed all of her bank accounts. At this stage, she has disclosed 3 bank accounts, namely (i) Bank of the West Checking Account; (ii) Chase Bank Checking Account; and (iii) Dah Sing Bank Account in her Form Es, the 8^th and 10^th affirmation dated 23 April 2018 and 8 January 2019. Nevertheless, Mr F discovered the existence of an unknown bank account with JP Morgan Chase Savings (No. 3623XXXXXX) in the Answer filed by Madam T’s 2^nd answer filed on 2 November 2018. As seen in the transaction records, an aggregate sum of USD43,350 was transferred to this new account between the period 5 October 2017 and 7 February 2018. Besides, there was a record USD30,812.54 transferred from this new account back to the Chase Bank Checking Account. Furthermore, an amount in sum of USD16,100 was transferred to her son’s account. The three transactions (USD43,350 - USD30,812.54 + USD16,100) USD28,637.46 (around HK$230,000) was unaccounted for. Mr F asked for the bank statements of this new account but Madam T stated in her affirmation that the new account was closed in April 2018 and she was not in possession of the bank statements.

41.  Without ample answer of the whereabouts of the proceeds of sale of Carmel Property and bank statements of the new account, I can only draw inference that at least HK$230,000 and HK$508,378.69 were unaccounted for. Madam T did not frankly disclose her bank accounts, i.e. the new account with JP Morgan Chase Savings where substantive sums of transfer were noted. I conclude Madam T has with her some funds that has not been disclosed.

(iv) all circumstance of the case

42.  The next question to be decided is whether Madam T is entitled to a raise from HK$60,000 to HK$70,000. Mr Yim submitted Mr F should not pay any sum higher than HK60,000 because Madam T is suspicious of not fully disclosing her financial ability.

43.  In revisiting the principles on MPS, the Court do have the power to look into the all circumstance afresh and to decide a fair and reasonable sum. In the present case, the martial standing of living, i.e. prior to February 2014 when both Madam T and the children were in town, Mr F was merely paying HK$34,000 with an accommodation. The monthly expenses inflated after Madam T and her children went to the United States. As at now, the current reasonable sum is HK$70,000 which is two-fold of the sum already.  I note a trend of ever-increasing spending of Madam T throughout the years. Mr F attempted to satisfy Madam T’s demand by increasing the MPS to large extent by realising properties. Her needs were also met by sharing sale proceeds of the Carmel Property. Nevertheless, in turn, Madam T failed to account for such sums but only complains the current HK$60,000 was insufficient. Madam T has no answer to the careful analysis of her spending pattern. I do not see Madam T can satisfy the requirement in providing a specific maintenance budget or at all.  She did not disclose the whereabouts of such sums. Her financial position is simply unclear. I find Madam T should have with her some funds able to be disposed of.

44.  I have difficulty to see there is change of circumstance on the part of Madam T in light of her MPS variation application. I recognise Mr F’s monthly maintenance at HK$60,000 is sufficient to meet with Madam T and her children’s monthly needs, save and except an additional interim maintenance for the daughter’s future school fees when such fees are not covered by the government. I accept this is a reasonable and fair amount.

45.  Madam T has failed to discharge her burden in this application, no variation of MPS should be warranted, the sum should be maintained at HK$60,000.

Legal costs provision

The Currey test

46.  Mr F submitted he has paid Madam T interim maintenance with surplus, coupled with Madam T’s spending pattern, I am with Mr Yim that Madam T has failed to pass the Currey test with the following reasons.

47.  In LCYP v. JEK, supra, adopting the Currey test, Madam T has to prove she cannot reasonably procure legal advice and representation by other means. This is unlikely with the vast sums previously provided to her by Mr F, she could fund her litigation.

48.  Secondly, Madam T failed to prove she has no assets or no assets that she can reasonably deploy by other means. This is not believable when evidence revealed there had been substantive sums of transfers between banks, both between her own accounts and her children’s accounts. Or on the other hand, she could have utilized HK1 million and HK$508,378.69 advanced to her previously.

49.  Thirdly, it is unknown whether Madam T could borrow monies from friends or from financial institutions.

50.  Madam T’s conduct fell short of exhausting other alternatives to fund her litigation.

Quantum sought by Madam T

51.  Madam T stated in her 9^th affirmation filed on 10 December 2018 the particulars of quantum are as follows:

	Duration	Amount estimated
1.	From commencement of proceedings in 2014 until December 2018	HK$1,678,000
2.	Up to and include FDR hearing	HK$800,000
3.	UP to and include ancillary relief trial	HK$1,766,000
	TOTAL:	HK$4,244,000

52.  Madam T incurred HK$930,000 from 2 July 2014 (commencement of proceedings) until 30 December 2015; a further sum of HK$250,000 from 1 January 2016 until 13 March 2018; another sum of HK$498,000 from March 2018 up till December 2018[7]. No breakdown in draft bill was provided to account for this sum of HK$498,000.

53.  Madam T estimated legal costs at HK$800,000 up to and including the FDR hearing. The breakdown of HK$800,000 was compiled of (i) HK$500,000 being preparation of FDR up to 110 hours of work at HK4,500 per hour; (ii) engaging an accountant to do valuation of Mr F’s company; and (iii) counsel advice HK$200,000.

54.  Madam T further estimated legal costs at HK$1,766,000 being (i) 100 hours of work HK$666,000; (ii) disbursement HK$100,000; and (iii) counsel fees HK$1,000,000.

55.  I agree with Mr Yim that it is more probably than not Madam T overstated the sum required for litigation funding. The reason being, in HJFG v KCY, supra, at paragraph 79, it is fundamental for the party seeking legal funding to provide a breakdown of the anticipated costs. The only information provided by Madam T is the hourly rate of the handling solicitor and vague description of works expected to be covered in the period up to and including FDR. The breakdown is grossly inadequate.

56.  Madam T stated she is minded to apply for specific discovery and to compile an updated valuation report of Mr F’s companies. Without justifying the necessity of doing so, I do not see these items should be included.

57.  I also fail to see the necessity of incurring 110 hours of work prior to the FDR hearing.

58.  In HJFG v KCY, supra, the Court of Appeal stated litigation funding should be sought up to FDR stage, the new judge after the FDR stage should decide whether new allowance on legal allowance should be given upon material before him and in what amount. (See paragraphs 82 & 83 of HJFG v KCY) The principle is well settled and for this reason, I do not see it is appropriate for Madam T to seek litigation funding for ancillary relief trial, namely HK$1,766,000, at this stage.

Mr F’s ability to pay

59.  Mr Yim submitted Mr F does not have unlimited means to pay. Mr F has a monthly income of HK$32,000 per month. He is given the use of the director’s accommodation, a company vehicle and credit card allowances. He received dividends from shares in the past year and has been receiving monthly rental income of HK$18,000. Mr F submitted, his private company has some value but could not be easily liquidated. Madam L (the wife/petitioner of FCMC 6048 of 2014) kept the proceeds of sale of a landed property in the United States at HKD1,215,000 without returning the same to him. Mr F’s securities account was used for margin trading. The value of the same decreased drastically due to poor performance of the stock market in recent years. It turned out he owed HK$1.3 million to the security company. Mr F is unable to afford the amount of litigation funding sought by Madam T.  I accept there are chances that Mr F may not have the ability to satisfy any sum higher than the current MPS.

Case management

60.  Legal representatives of all parties, including Madam L’s should be alerted to a recent Court of Appeal case, WW v LLN formerly known as LSM (CACV 524 of 2019, [2020] HKCA 178). The Court of Appeal stated at the very end of the judgment that mediation and FDR should take place after stage of questionnaires and discovery. The Court of Appeal criticized too much time and costs have been spent on peripheral skirmishes which did not contribute much to the resolution of overall disputes. As far as I understand, Madam L’s application for discovery was withdrawn on 17 September 2019 and there is no outstanding interlocutory application in this consolidated ancillary relief hearing.  This case should proceed to FDR immediately after the handing down of this judgment.

Conclusion

61.  I make the following orders:

(i) The interim maintenance order dated 12 September 2017 be maintained. Mr F (the respondent) do pay interim maintenance to Madam T (the petitioner) for both herself and her two children in sum of HK$60,000 per month until further order.

(ii) Mr F (the respondent) undertakes to pay the daughter’s school fees upon provision of relevant invoice or school demand notices and such sum shall be paid by Mr F (the respondent) to the educational institution direct.   

(iii) The costs of Madam T’s (the petitioner’s) summons filed on 23 April 2018 for variation of interim maintenance be reserved.

(iv) Madam T’s (the petitioner’s) summons filed on 8 January 2019 for litigation funding be dismissed.

(v) Madam T (the petitioner) do pay costs of summons filed on 8 January 2019 to Mr F (the respondent), with certificate for one counsel, to be taxed if not agreed. Such costs are to be offset by the final reward received by Madam T (the petitioner) in the ancillary relief hearing.

(vi) A direction hearing for ancillary relief be fixed on 14 October 2020 at 12:00 noon in Court 11 with 30 minutes reserved for both FCMC 6048 of 2014 and FCMC 8708 of 2014.

(vii) All parties of both FCMC 6048 of 2014 and FCMC 8708 of 2014 do attend the next hearing personally.