YS v. TTWD

FCMC 676 / 2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 676 OF 2011

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BETWEEN

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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 Petitioner wife for maintenance pending suit pursuant to s.3 Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO) and for interim maintenance for the only child of the family, a little boy who was born in August 2010. This is made pursuant to s.5 MPPO. The wife has also issued a summons under s.17 MPPO seeking to set aside the disposition of shares made by the husband to his mother.

2.  These applications are made where the forum for the proposed divorce remains in dispute. The wife issued proceedings for divorce in Hong Kong on the 31 December 2010. On the 12 February 2011 the husband issued proceedings for divorce in the Chao Yang People’s Court in Beijing. Although an obvious point it should be noted that this application was second in time. These proceedings were dismissed on the 11 March 2011 seemingly because the husband could not establish that the wife was habitually resident in the relevant district in Beijing. The husband appealed against that decision, which was also dismissed. On the 25 April 2011 the husband issued a fresh set of proceedings in the Haidian/Hai Ting People’s Court, also in Beijing. At the time of writing this judgment the outcome of that application is not known. In 10 days time, on the 8 July this court will hear the husband’s application to dismiss and/or stay the Hong Kong proceedings. 

Background to the Marriage

3.  This is by any definition a very short marriage between two people of Chinese descent from seemingly affluent families. Although both parties were born in Beijing, they were each educated overseas. The husband is 38 years old and was educated at public school in England (a school for boys) followed by University in the States. He obtained his bachelor’s degree from that University.  The wife also went to public school in England (a school for girls) followed by a University in the UK where she obtained her undergraduate degree followed by her master’s. The wife is 29 years old.  Each has connections with Hong Kong and both hold permanent Hong Kong I.D’s. There is almost a suggestion that the marriage was arranged, such was the haste with which the parties met, married, set up home and conceived a child together. The husband says that they met through a marriage agency whereas the wife says that they met through a mutual acquaintance.

4.  In either event it appears to be accepted that they met in Beijing in September 2009 and married in December of the same year, i.e. within a period of three months. The marriage was registered in Hong Kong, but was celebrated at the Grand Hyatt in Beijing. In August 2010 the parties’ son was born in Hong Kong and on the 21 August 2010 the wife left the husband, taking the son with her. In the words of Ms Yip for the husband the parties had been married 8 months and 18 days. On leaving the husband the wife initially lived in a serviced apartment and then returned to Beijing. She presently resides in Beijing with her parents and the child. 

5.  The husband’s mother is a businesswoman and it seems that the husband works in the family business. He is the Director and shareholder of a number of companies. He owns some property in Beijing and Shenzhen. There is an issue in relation to a number of shares that he says he is holding on trust for his mother. The wife’s s.17 application relates to the transfer of some of these shares back to the mother. There is a further issue in relation to a loan of RMB 10 million. The husband says he earns HK$30,000 per month and that he receives other benefits such as free housing, benefits and the provision of a driver from the company.

6.  The wife works for a well known private Club in Hong  Kong. She earns HK$14,320 per month. Whilst living in Hong Kong and prior to marriage and the birth of her son, she was also entitled to accommodation in Hong Kong. It is not clear what accommodation if any she would be entitled to now. The wife’s parents live in Beijing but have had business interests in Hong Kong. The wife says that they ran a car business in Hong Kong during her childhood. There is an issue regarding other financial resources open to the wife and in particular the extent to which she is being supported by her parents.  

7.  Each makes allegations against the other. The husband alleges that the wife told him that she was granddaughter of a well known political figure in the PRC.  The husband also alleges that right from the beginning of their marriage that there were lots of disagreements over money. He also states that the wife and her mother have tried to obtain money from him through illegal means. The wife for her part says that the marriage turned sour when her family refused to use their connections in order to help the husband’s mother in her business. The wife also alleges that the husband was conducting an intimate relationship with a third party. The truth or otherwise of these assertions may need to be dealt with on another occasion. Suffice it to say that each party generally denies the allegations made by the other. 

8.  What does appear to be accepted however is that shortly after the marriage each party deposited HK$500,000 into a joint bank account for their general expenses. It seems that the maternity expenses were paid for from this account. The wife also alleges that these funds were used to pay for renovation work on a property owned in the husband’s mother’s name in Hong Kong which has recently been sold. In either event, when the wife left the husband she withdrew HK$240,000 which she then used to pay for her immediate expenses at that time (e.g. rent for a serviced apartment etc).

The main issues

9.  The only issue to be determined now is how much should the husband pay to the wife for her interim provision and that of the child? The husband has offered RMB 20,000 per month, to be backdated to April 2011, without prejudice to his primary position that the proceedings be dismissed/stayed. The wife seeks HK$50,000 per month for herself and the child and an as yet undisclosed sum for litigation funding.  

The law

Maintenance pending suit

10.  The law is well known and not in dispute. Reference has been made to the case of HRT v RHT, FCMC no 1969 of 2007, 3 October 2007, unreported. In that case I made reference to the appropriate section of Rayden which deals with the issue of maintenance pending suit in a situation, such as this, i.e. where there is a jurisdictional challenge. Rayden states as follows:

“Orders can be made if validity of marriage is challenged

16.14. The court may in its discretion award maintenance pending suit to a wife notwithstanding that the husband is raising a question as to the court’s jurisdiction to entertain the suit, or where there is an issue as to whether there was ever a valid marriage, or that the marriage was bigamous or void. Once the court decides, if it does, that it has no jurisdiction to hear a particular suit, any prior order as to maintenance pending suit will forthwith cease to be of effect and no order for maintenance pending suit may thereafter be made in respect of that suit which itself has ceased to be of effect” (Rayden 18^th edition Ch 16.4)

11.  Section 3 MPPO Cap 192, states that the only governing principle is that the court shall make such order, as it considers reasonable in all 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, where 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 hearing.

The appropriate approach to maintenance pending suit where there is a forum dispute

12.  Ms Yip for the husband advances the argument that the court should be extra cautious in a situation like this. She refers to the case of Moses-Taiga v Taiga [2006] 1 FLR 1074 and makes the point that given that there is a possibility that the court will find for the husband on his stay application and that any maintenance ordered would then be “irrecoverable in law”, that there is then a duty on the court to proceed with even extra care. Quoting from Thorpe LJ in Moses-Taiga at p 1078 she “warned of the risk of injustice arising from irrecoverable MPS”.

“… where there is a challenge to jurisdiction, it is imperative that that challenge be swiftly listed and determined to avoid the extenuation of the pending suit period, an extenuation that inevitably risks injustice to the payer should he succeed in his challenge to jurisdiction.” [emphasis added]

“In any future case, it is of great importance that the trial of the preliminary issue should be prioritized so that, if it is preceded by a maintenance pending suit order, the duration of that order is kept to a minimum to ensure that the payer is not put at risk of having to advance irrecoverable and unmerited moneys.” [emphasis added]

13.  I accept that to be the case and that it is important to be more cautious than might otherwise be the case. I accept that

... in particular, any attempt to err on the generous side should be guarded by the potential absence of adjustment powers at the final ancillary relief hearing.

14.  To that end it should be noted that the husband’s summons to strike out or dismiss the wife’s petition will be heard on the 8 July – i.e. in just 10 days time. In my view, this quite rightly limits the possibility of any potential injustice from the husband’s perspective. In the event that the wife is successful and the matter is dealt with in Hong Kong, I also accept that it would then be possible (although I put it no higher than that), for her to seek to adjust the maintenance pending suit/interim maintenance upwards.

How much maintenance should the husband pay to the wife as maintenance pending suit for herself and interim maintenance for the son?

15.  The main thrust of the wife’s argument is that she needs funds in order to relocate from Beijing to Hong Kong. In particular she seeks the sum of HK$30,000 per month for rent. As I pointed out during the hearing it is really a matter for the wife where she chooses to live. The difficulty is that the present application has possible ramifications with respect to the jurisdictional challenge. It is the husband’s case that Beijing is both parties’ permanent home. The wife denies this and says that it was always the plan to live, work and raise their son in Hong Kong.

16.  The difficulty with the wife’s position is that even on her own case she has only lived and worked in Hong Kong since 2007. She is presently employed by the Club referred to above. She is now based she says by force of circumstances in Beijing and is living at her parent’s apartment. They appear to be financially supporting her, at least in part. At paragraph 31 and 32 of her affidavit dated the 11 April 2011 the wife puts her case as follows:  

31.   During marriage, the Respondent and I enjoyed a luxurious lifestyle.  He would pay for the expenses of the child and myself and at times, he had paid me allowance in cash of around HK$100,000.  Of course, upon our marriage turning sour, I had no choice but to utilize the funds in our joint bank account.  My average monthly income is around HK$14,320 and I am living off savings.  I cannot afford to live in Hong Kong with A as I would have to pay a very expensive rent with financial support from the Respondent.  I have also requested the Club to provide a suitable housing for A, myself and my mother understand the chances of obtaining this are slim.

32.   My intention is to be able to stay to Hong Kong with A, I therefore set out my proposed expenses below based on what we used to incur in Hong Kong:

Expenses Required living in Hong Kong:

General (Myself)

Item	Amount
Rent	30,000
Food	5000
Household expenses	2000
Transport Expenses	3000
Domestic helpers	2000
Clothing / Shoes	4000
Personal Grooming	2000
Medical	1000
Holidays	3000
Total Monthly expenses	HK$52,000

General (Child)

Item	Amount
Food	3000
Medical	2000
Household expenses	1000
Domestic helpers	2000
Clothing / Shoes	2000
Personal Grooming	1000
Holidays	2000
Total Monthly expenses	HK$12,000

17.  The difficulty with the wife’s case at first flush is that there is no evidence in support of her assertion that she received HK$100,000. The suggestion is that she received that amount monthly, although nowhere is that expressly stated. I accept that although she may have once received the sum of HK$100,000 that that was by no means a regular occurrence.

18.  The figures set out above were adjusted in her Form E. In that document she sought HK$76,000 per month. To be frank those figures do not bare close scrutiny and given that Mr Clough has put the wife’s case at HK$50,000 per month, (i.e. HK$64,000 as set out above, less her income of c HK$14,000 = HK$50,000), I intend to rely on the original figures.  

19.  In her latest affidavit the wife encloses copies of receipts in support of her case that the cost of bringing up a child is similar in Hong Kong and Beijing, a point that is not accepted by the husband. In that affidavit she also exhibits copies of credit card statements and a bank account with China Merchant Bank. She says that

The source of the funds of this bank account is from my parents.

20.  As I have said the extent of the financial support from her parents is not clear. This account was not disclosed until her second affidavit.

21.  The wife also has over HK$500,000 in savings and c HK$78,000 in her mpf fund. The amount is her savings account appears quite static. She does not on the face of it appear to be in financial need, although it is of course accepted that the husband should be paying a reasonable amount towards her expenses and those of the child pending final resolution of this matter.

Material non disclosure

22.  Each side accuses the other of material non disclosure. The wife maintains that the husband has other financial resources at his disposal and in particular points to unexplained deposits in his bank accounts. She says that he has other credit cards that he has not disclosed. She points to the fact that he had purchased a Cartier watch for her and an expensive engagement ring. It is not clear how this was afforded given his financial disclosure. All in all the wife says simply that it just doesn’t add up. From his disclosure we can see a reference to the payment of HK$30,300 to Louis Vuitton and HK$20,408 to Philip Wain Int’l in the month of March 2011 alone. Clearly then there are some funds available to the husband other than his income of RM30,000 per month. 

23.  The husband for his part maintained during the hearing that the wife had another account in her name and that she also owned a car in Beijing plus real estate. The issue of the bank account was pursued further after the hearing and I gave both parties leave to file affidavit evidence in relation to the same. It now seems that the wife does have a further bank account held in her name. This is a UK account holding in the region of c. GBP46, 000 (i.e. c HK$585,000). The wife has said that this was an account set up for her by her parents, whilst she was studying in the UK and that the money belongs to them. Although this is quite plausible there is no doubt that this account should have been disclosed earlier. The wife has also admitted to holding a securities account with China Merchant Bank. Again she says that this is not her account but is operated in her name by her mother.  Again this has only been disclosed very late in the day.

24.  Given this rather sorry state of affairs I have to say that I do not find either side wholly credible.          

The husband’s ability to pay

25.  The husband says that he can only afford RMB20,000 per month. Mr Clough argues that he clearly has the financial resources at his disposal to pay more. I tend to accept that that is likely. I am also of the view that the wife is likely to have more resources at her disposal than she has initially disclosed.

26.  I also though intend in the short term to err on the side of caution. I will therefore make an order that the husband pay the wife slightly more than he has offered – at RMB30,000 per month to be back dated to April 2011 – i.e. RMB 15,000 per month for the wife and RMB15,000 per month for the child of the family. I am not convinced that the wife has made out a case for more pending the hearing on the 8 July. In the event that the wife is successful in her jurisdictional claim then she may return to court in order to seek to vary the maintenance to allow more for accommodation. It goes without saying I think that in those circumstances I would expect to be addressed fully on the availability of accommodation from the Club. Further in the event that the wife’s mother is going to live in Hong Kong with the wife, I would also wish to know how much she will contribute towards the rent and household expenses generally.  

The law

Litigation costs

27.  The wife also seeks a contribution towards the funding of her litigation costs. Both sides accepted that maintenance pending suit could include an element for legal costs. Ms Yip complained however (and with some justification it seems to me) that the wife was not K v K compliant in that there was no skeleton bill of costs or any real indication of what she was seeking or why. Instead the wife complained in general terms about the husband’s litigation conduct and the fact that he was still proceeding with his application in Beijing. As at the date of the hearing the wife estimated her costs at just under HK$245,000. The husband’s stood at HK$285,000, although he said that this rose to HK$500,000 if the Chinese costs were also included. That was an oral estimate and I have seen nothing to substantiate it.  In K v K, CACV No 80, 31 August 2010 unreported, Rogers VP said

“It seems to me that the appropriate course would be for a court to be told what the foreseeable anticipated costs are likely to be. That can be done in much the same way as the detail in which a court is told when security for costs is asked for. In other words, not an elaborate bill of costs, but a simple back of the envelop type bill of costs itemizing out what counsel’s fees are likely to be and what solicitor’s expenses are likely to be. That can be done in a very simply sort of way but not in a complicated sort of way. Then the court should try and make the appropriate order. If it is to be on a monthly basis, the order should come to an end when it is foreseen that the expenses would be fully covered.” [emphasis added]

28.  With respect I agree. The wife has not even said how much she is seeking by way of litigation funding, making it extremely difficult, if not impossible, for the court to accurately determine.   

29.  Of late Hong Kong has adopted the test set out in Currey v Currey [2006] EWCA Civ 1338, namely that in order for litigation funding to be approved it has to be shown  

(1)   That the applicant spouse has no assets, or none that can reasonably be deployed

(2)   That she can provide no security for borrowing, or none which can reasonably be offered

(3)   That she cannot reasonably obtain legal services by offering a charge on the outcome of the litigation.

(4)   That she cannot secure publicly funded legal help ‘at a level of expertise apt to the proceedings

30.  The situation is then looked at overall – by way of an overarching enquiry.

31.  In this case it seems to me that the wife falls at the first hurdle in that she does appear to have some financial resources at her disposal which she may deploy in the short term towards legal costs. Mr Clough has underlined the word “reasonable” and has said that the wife cannot be expected to rely on her own financial resources in a situation where the husband is embarking on litigation in Beijing as well as Hong Kong.  He says that that would not be reasonable. With respect I do not agree. I am also conscious of the fact that it is not entirely clear the extent to which the wife is assisted by her family. (I accept that the same can be said of the husband). In these circumstances I am of the view that the wife probably does have the ability to procure legal advice and certainly in the short term.

Costs

32.  Given that neither side has been wholly successful I will make an order nisi to be made absolute in 14 days time that there be no order as to costs.