WWYC v. AM

FCMC 13739/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 13739 OF 2015

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

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Introduction

1.  This is an application by a Respondent wife, dated the 3 January 2017, for maintenance pending suit pursuant to s 3 Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO).  The wife also originally sought provision for her legal costs. In total she initially asked for HK$80,000 per month i.e. HK$40,000 per month for her maintenance and HK$40,000 per month for her litigation funding. It is of note that the written submissions from both sides were prepared on that premise. However, at the hearing she reduced her claim and said that she was only seeking HK$30,000 per month for her maintenance pending suit. Further she had decided not pursue any claim for litigation funding at this time. 

The central issue

2.  There is only one issue to be determined namely how much should the husband now pay to the wife as maintenance pending suit, bearing in mind his ability to pay and the reasonable needs of both parties.

3.  As indicated above the wife seeks HK$30,000 per month as maintenance pending suit. The husband for his part argues that the interim order made on the 17 October 2016 for HK$10,000 per month should continue to stand. He says that he cannot afford to pay more.

Background

4.  The parties married on the XX April 2011. The wife who is ethnically Chinese was living and working in Japan when the parties met. She then relocated to Hong Kong to be with the husband. There is some dispute about the date of separation although both parties put the 25 June 2015 as the date of separation in their respective Form E’s. It is the wife’s case that the husband was unfaithful to her on a number of occasions during the course of the marriage which led to her having a major depressive episode. The husband for his part also accuses the wife of having an affair. There are no children of the marriage.    

Maintenance pending suit

5.  The ordinance 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.  (See s 3 MPPO Cap 192). 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.

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 also paragraphs 16.17 of Rayden, 18^th edition)

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 and 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 ……”

(Ref paragraphs 16.18 of Rayden, 18^th edition).

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

7.  The solicitor for the husband also referred me to the Court of Appeal decision in HJFG v KCY (CACV 127/2011, 28 October 2011, where the following principles were reiterated with respect to maintenance pending suit 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.

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.

8.  In so far as this particular case is concerned the reference to the marital standard of living previously enjoyed by the parties and the ability of the husband to pay are both particularly pertinent, together with the husband’s disclosure to date. 

The Evidence

9.  I must now turn to consider the issues, the law, and the parties’ evidence as set out in the affirmations filed together with their Form E’s and the submissions made by their respective lawyers.

Discussion

How much should the husband now pay to the wife as maintenance pending suit, bearing in mind his ability to pay and the reasonable needs of the parties?

The Husband’s ability to pay  

10.  The husband says simply that he cannot afford to pay the wife more than HK$10,000 per month. Although he was originally employed as a stock broker, he says that he suffered significant losses in 2015 and that he has had to borrow from his mother and take out a bank loan as a result. He says that he is now working as Sales Director earning HK$45,000 per month and that he is living with his mother in order to “save rent”.

11.  The husband maintains that he needs approximately HK$44,000 per month for himself made up as follows:

Item	Amount (HK$)
Loan Repayment to Hang Seng Bank	20,000.00
Interim Interim Maintenance to Respondent	10,000.00
Contribution to the Petitioner’s mother	5,000.00
Personal Expenses (including meals out of home, transport, clothing/shoes, personal grooming, entertainment and holidays)	7,000.00
Medical Insurance Premia	2,000.00
Total:	44,000.00

12.  The difficulty in part is that the documents produced by the husband relating to the period of time when he was a stock broker are not complete. However, from the documents that have been produced it seems that in July 2015 the husband’s account went down to just under negative HK$18.5 million. It is not clear how much stock he was holding at that time. However, in the monthly income reports for the following year he was holding stock of HK$32,928,500 as at April 2016 which went down to HK$13,793,654 in June 2016. In his affirmation dated the 15 February 2017 he explains the situation thus:

Change in My Financial Conditions after Mid of 2015

8. The reason why I stopped paying the Respondent HK$20,000.00 per month as her pocket money because of the stock market downturn in or about mid of 2015.  I recalled that in the mid of 2015, the stock market began to a sharp downward and as a result, there has been a significant decrease in my monthly earnings inclusive of my commissions for the period from July 2015 up to July 2016.  I was later terminated by B in or about July 2016.  There is now produced and shown to me marked “WWYC-1” a schedule for my monthly earnings from July 2015 to July 2016.

9. Moreover, I have also suffered great loss in the stock market.  I used to buying stocks on margin, i.e. I borrowed money to purchase stock.  Margin can be profitable when the stock price(s) is/are going up.  However, when the price of the stock(s) go(es) down, I have to immediately deposit more cash into my stock account to meet the minimum equity requirement for my margin loan.  Due to the stock market downturn in or about mid of 2015, I suffered great loss in the stock market and therefore I had to borrow money from my mother, Madam HMM and Hang Seng Bank from time to time to deposit into my stock account to meet the minimum equity requirement for my margin loan.  There is now produced and shown to me marked “WWYC-2” the copy of Annex A showing my borrowings from my mother, Madam HMM (see highlight in yellow) attached to the Answer to the Respondent’s Request for Further and Better Particulars of the Petitioner’s Financial Statement (Form E) affirmed on 20^th July 2016 filed on 8^th December 2016 and a copy of extracted page of the Statement of Integrated Account issued by Hang Seng Bank dated 10^th October 2015 showing my personal loan in the sum of HK$710,000.00 from Hang Seng Bank made on 2^nd October 2015.

13.  During the hearing I queried the husband’s case, which at that point amounted to little more than a bare assertion, that he had used the bank loan of HK$710,000 to bolster his account at the securities firm, B. I stood the matter down so that his solicitor was able to take further instructions. Having done so the husband’s solicitor was able to explain how, on the husband’s case, the money had passed though the accounts. Likewise, she also explained how the monies received from his mother were also similarly transferred.

14.  It is accepted that during the period of the marriage the parties enjoyed a comfortable standard of living. The husband was responsible for the rent and for all of the outgoings on the property. He also gave the wife an allowance of HK$20,000 per month and in addition she had the use of a supplementary credit card. The wife says, and this does not appear to be disputed, that the husband would pay for the charges on this supplementary card in the sum of approximately an additional HK$5,000 per month.     

15.  It is further accepted that during the marriage the husband earned at least HK$75,000 per month from his primary position as a stockbroker. In addition, he made investments in gold, which provided another lucrative source of income. The wife for her part has worked intermittently during the marriage generally in an administrative capacity.

16.  The wife argues that the husband is not to be believed when he says that he has fallen on hard times. In particular Counsel says that it belies belief that the husband is paying his mother HK$5,000 per month on the one hand, whereas on the other she has given him at least HK$1.7 million perhaps more and that the repayment of that sum appears haphazard at best. He also says that the manner in which the HK$710,000 bank loan was drip fed into the securities account makes no logical sense. There are also complaints about the level of disclosure to date.  

The wife’s reasonable needs

17.  The wife sets out her reasonable needs in her affirmation in support of her summons dated the 3 January 2017, where she states as follows:

8.  I have the following average monthly expenses:-

Current monthly expenses:	Form E
General:
Rent	$11,200
Utilities (electricity, telephone and water)	$1,152
Food	$8,190
Household expenses	$1,000
Personal:
Meals out of home	$4,000
Transport	$1,200
Clothing / Shoes	$6,500
Personal grooming (including haircut and cosmetics)	$5,300
Entertainment / presents	$3,000
Holiday	$5,000
Medical / Dental	$500
Tax	$552.50
Insurance premia	$2,272.30
TOTAL MONTHLY EXPENSES	$49,866.80

18.  The wife is currently working and earning HK$23,500 per month. Therefore, on her case she has a short fall of HK$26,366.80 per month gross – or HK$16,366.80 per month net once the existing interim maintenance pending suit of HK$10,000 per month is taken into account. The husband says that some of her expenses are inflated. Although I would accept that there is a valid standard of living argument here, on the premise that the husband is not earning as much as he was previously, I would accept that each party’s standard of living will of necessity need to come down a little at this point in time. If later it is found that the husband has artificially decreased his income and that in any event his earning capacity is far greater than his present income of HK$45,000 per month, then this issue may be revisited. For the time being though I accept that he has an income of HK$45,000 per month and that the wife has an income of HK$23,500 per month.

19.  The husband argues in his written submission as follows:

18.  Out of the Respondent’s alleged monthly expenses stated above, the Petitioner submits that the following expenses incurred by the Respondent are grossly excessive:-

Item	Amount (HK$)	Petitioner’s View on the Reasonable Amount to be Incurred by the Respondent
General
Food	8,190.00	6,000.00
Personal
Meals out of home	4,000.00
Clothing/Shoes	6,500.00	1,000.00
Personal Grooming (including haircut and cosmetics)	5,300.00	1,000.00
Entertainment/presents	3,000.00	500.00
Holiday	5,000.00	2,000.00
Total:	31,990.00	10,500.00

20.  Conversely HK$10,500 per month as suggested by the husband for the wife’s expenses, less rent, seems very much on the low side.

Decision

21.  On a broad brush basis, I will order maintenance pending suit of HK$16,000 per month. I am satisfied that even on the husband’s stated case that he should be able to pay this sum. In particular, I do not accept that the husband’s contribution towards his mother of HK$5,000 per month should take precedence over his obligations towards his wife. Further even on his own case he has a surplus of HK$1,000 per month. Thus he should be able to pay this sum in the short term. It seems to me that with a little economizing the wife should be able to live quite comfortably on this amount. In particular, I accept that the figures given by the wife for clothes/shoes, personal grooming and entertainment are capable of reduction. I will allow approximately HK$8,000 per month for these items. I have also reduced some of the other expenses. Thus the following will be permitted:                       

Current monthly expenses:	Form E
General:
Rent	$11,200
Utilities (electricity, telephone and water)	$1,152
Food	$6,000
Household expenses	$1,000
Personal:
Meals out of home	$3,000
Transport	$1,200
Clothing / Shoes	$2,000
Personal grooming (including haircut and cosmetics)	$4,000
Entertainment / presents	$2,000
Holiday	$5,000
Medical / Dental	$500
Tax	$552.50
Insurance premia	$2,272.30
TOTAL MONTHLY EXPENSES	$39,876.80

Costs

22.  There are a couple of points here which are relevant when it comes to the issue of costs. It seems that the wife’s case had altered significantly by the time that the matter came on for hearing. It does not seem that this was relayed to the solicitors for the husband beforehand. The wife complains that the husband did not make any counter proposal to her request for HK$80,000 per month. With respect, had the wife relayed her actual position to the husband well before the hearing, it may have been that this case could have been compromised. The wife also alleges that the husband has not made full and frank disclosure of his means and I accept that there are some issues here, especially with respect to his time at the securities firm B, that require further clarification. Certainly these issues will need to be further explored before the FDR hearing.

23.  Bearing in mind all of the above I will make an order nisi to be made absolute in 14 day’s time that the husband do contribute towards 50% of the wife’s party and party costs to be taxed if not agreed. There shall be certificate for counsel.

Order

24.  Consequently I shall make an order as follows:                     

a) The Petitioner shall pay maintenance pending suit to the Respondent for herself in the sum of HK$16,000 per month, the first payment to be made on the 1 April 2017 and thereafter to be paid on the 1st day of each succeeding month until further order.

b) The First Appointment hearing shall be adjourned to the 12 May 2017 at 9:30 a.m.

c) Both parties do personally attend that hearing.

d) There shall be an order nisi to be made absolute in 14 days time that the Petitioner do pay half of the Respondent’s costs of and occasioned by paragraph 1 of her summon dated the 3 January 2017 on a party and party basis to be taxed if not agreed. There shall be certificate for counsel.