HYM v. LKK

FCMC 7571 / 2022

[2023] HKFC 209

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 7571 OF 2022

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JUDGMENT
(Maintenance Pending Suit)

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Introduction

1.  The petitioner (“the wife”) applies for maintenance pending suit (“MPS”) pursuant to section 3 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“the MPPO”).

Background

2.  The wife and the respondent (“husband”) were married on 12 May 2012, they separated in April 2020 but had continued living under the same roof until mid-2022. They are both in their late thirties with no children. On 16 August 2022, the wife petitioned for divorce on ground of 2-year separation. Decree nisi was granted on 8 May 2023 with section 18 declaration.

3.  The wife currently seeks HK$100,000 MPS from the husband, however, as deposed in her affirmation filed on 9 March 2023, it was her intention to seek HK$30,000 thereof as litigation funding. The husband sees paying MPS to the wife is unnecessary because both of them are having a promising career, they are financially independent and are self-sustainable.

4.  Both parties met each other during their university days studying medicine science in Hong Kong. The wife did not become a doctor after graduation and had chosen to join tutorial business. The husband pathed his way as a doctor now practicing and specializing in accident and emergency medicine in a private hospital in Hong Kong. Generally, it seems that both parties had focused and developed their career throughout their marriage, they were able to enjoy a comfortable, middle-class standard of living.

5.  During marriage, in 2013, the husband purchased a matrimonial home with saleable area of some 500 square feet. It is not in dispute that the wife had contributed initial down-payment to facilitate the purchase. In or about 2017, the husband has repaid the wife down payment completely. Other than the matrimonial home, the husband disclosed he owns 3 other properties in the United Kingdom.

6.  In contrast, the wife portrayed her marriage life very differently. The wife, on her part says the husband forced her to contribute her school fees for studying law after graduation from medical school as down payment for the purchase of matrimonial home. She also accused the husband to have kept her at home, notwithstanding a part-time domestic helper was taken to help out with household chores, she was asked to be a “standby wife” or a “personal secretary” to the husband to take care of all his daily care and well-being. Not only this, the wife further complained the husband who had prevented her to commit full time employment by requesting her to take vacation leave whenever the husband was off duty. Most seriously, the wife said the husband had, more than once, attempted to end her life by plotting gas leakage in the matrimonial home. Finally, the wife described her uneventful marriage life by saying the husband once forced her out from the matrimonial home in mid- 2022 which she was only able to stay in a shelter home.

7.  The husband said the otherwise that the wife has successfully developed and expanded her own career and business during marriage and after separation. The wife owns two companies, she founded IEA in 2014 for carrying business as a tutorial institute (“IEA”). The wife is both a tutor and an administrative manager of IEA. As business flourished, she had employed other tutors to give tutorial classes. In 2021, the wife founded another company, GEIL (“GEIL”) (after their separation in 2020) solely for the purpose of purchasing a landed property to operate her tutorial business. The wife pays for all funds for incorporation the companies and acquisition of the landed property.

8.  The wife demonstrated herself as promising tutor in the industry by displaying various titles and qualifications in her curriculum vitae, to name a few, she was “the Head of International Department in Education Centre and “the Head of Science Department in International School Tutorial Centre”; an instructor in an academy targeting students who are studying IGCSE, GCE and IB examinations. She was also the assistant editor in various educational publications. She also highlighted her academic achievement in obtaining 7As in HKCEE with full marks.

9.  The husband emphasized he and the wife have always kept their finances separate and independent. He did not ask the wife of her income level nor had bothered the wife’s spending. However, during marriage, the husband admitted he has paid the mortgage instalments, expenses of domestic helper and household utilities. Other than these, the husband did not pay the wife living expenses, she spent her self-earned money at her pleasing.

10.  The wife claimed her business plunged in 2022, she was unable to operate IEA, triggered by her marital and financial conditions, she starts suffering from mental disorder (mixed anxiety disorder). The wife has once asked the husband to fund her HK$3,000,000 to cover the debts incurred. The husband refused. Because of the alleged loss, the wife claimed she has now a monthly earnings as low as HK$2,000. For reason of the loss of business and low income, she asks the husband to pay a monthly MPS of HK100,000 per month.

11.  The husband disagreed, he says the wife did not utilize her earning capacity, with what is contained in her curriculum vitae, with her experience, a monthly earning of HK$2,000 is blatantly on the low side.

12.  In terms of husband’s ability to pay, the wife argues the husband is earning over HK$200,000 per month, including rental income from his UK properties. Nonetheless, the husband made clear his current income is only HK$154,680 with HK$30,000 special allowance per month. He has HK$155,389.99 monthly expenses. The wife’s request of HK$100,000 per month is beyond his ability to pay.

13.  Be that as it may, when the husband is seeking an order to dismiss the MPS application, he has sensibly offered the wife either (i) to stay in the matrimonial home and undertakes to pay monthly mortgage repayments in the meantime, together with HK$4,000 MPS or (ii) to pay the wife HK$14,000 MPS per month.

14.  Both proposals were rejected by the wife.

The issues

15.  The following issues on MPS now fall to be determined, at this stage, are:

(i)  Whether the parties had a general and consistent pattern of financial independence during marriage or one party financially depending on the other?

(ii)  The wife currently earns HK$2,000 per month, whether the wife has utilized her earning capacity?

(iii)  If an order of MPS is justified, what is the amount of MPS to be paid by the husband to the wife.

(iv)  Does the husband have the ability to pay HK$100,000 MPS per month?

(v)  Is the wife entitled to litigation funding?

The law

16.  The law is trite. In this MPS application, the wife has the burden to prove her financial needs which must be immediate, reasonable, and of a recurring nature. Secondly, she has the onus to prove the husband’s ability to pay what she has asked for. The Court is to take a broad brush approach, not be required to look into the detailed finances of the parties.

17.  The relevant legislation is stipulated in section 3 of the MPPO,

".... the court may order either party to the marriage to make to the other such periodical payments for his or her maintenance and for such term, being a term beginning not earlier than the date of presentation of the petition or making of the application and ending on the date of the determination of the suit, as the court thinks reasonable."

18.  The factors to be considered by the Court in respect of a MPS application has been summarized by HHJ B Chan in C v F [2006] HKFLR 41 at para 14:

“Although the sole statutory guideline in considering maintenance pending suit is that the award shall be “reasonable”, the Court will nevertheless bear in mind all the factors drawn to its attention relating to the marriage and the parties to it, and perhaps the two most outstanding matters in every case, as in this one, are the standard of living of the parties, and the ability of the husband to pay.”

19.  The proper approach to decide MPS is set out in HJFG v KCY [2012] 1 HKLRD 95, Hartmann JA stated 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. ”

My view

20.  In this judgment, I pay minimal weight to sentimental elements that the wife has put forward but to focus on the issues above.

21.  When a broad brush approach is adopted, the Court would consider what is reasonable and fair in the circumstance and not to embark on detailed investigation on the parties’ financial means. It is understandable that the husband opposed this application by analyzing the financial statements of IEA (and GEIL) purposefully to demonstrate the wife’s earnings. In deciding MPS, I can only take a brief and general view of the financial statements / audited accounts without detail investigation. I bear in mind I am allowed to err in favor of the payee.

(i)  Is the wife self-sustainable or depending on the husband financially?

22.  It is indisputable that the wife owns two private companies, even if she suffered loss in her business, she is a person with a career, not a housewife, not wholly dependent on the husband.

23.  I also accept the husband’s evidence that he has in fact repaid the down-payment of the matrimonial home fully to the wife by instalments in 2017. Save and except accommodation and some utilities payments, both of them have autonomy of their own finances. I accept the parties’ financial relationship are kept separate and not intertwined.

24.  The husband invited me to consider the wife’s financial ability since the establishment of IEA in 2014, the wife is able to acquire a landed property from her self-earned funds in 2021 (2 years after separation) at a price of HK$2.3 million. The wife is also able to inject funds to her business considerably. I read from the unaudited accounts of IEA in years 2020, 2021 and 2022, the amount due to directors increased from HK$284,808 to HK$800,679 and then to HK$1,172,220. I tend to accept the husband’s view.

25.  However, living as husband and wife, it is not surprising that the husband will pay for utilities bills and other expenses of the family. Prior to the wife leaving the matrimonial home, the husband has paid for the mortgage payments and household utilities. It is in the evidence that the husband has paid HK$4,000 to the wife from 24 March 2020 to 31 August 2022.

26.  As a result, I do not accept the wife has been a housewife during marriage who had been wholly dependent on the husband. However, it is fair for me to say regardless whether the wife’s business is profitable or suffering from a loss, she is depending on the husband on accommodation and utilities expenses.

(ii)  Whether the wife now earns HK$2,000 per month only?

27.  I do not accept the wife is earning HK$2,000 per month currently, I failed to see the wife has given sufficient evidence to prove this amount. She had only exhibited the employment contract of IEA signed in 2014 as evidence, she stated therein that she was employed as a teacher; salary being 50% of tuition fee as scheduled for the lessons taught. There are no other proofs from the wife.

28.  The wife, has promoted herself in her curriculum vitae with various titles in tutorship; she has other areas of experience in educational publications. From her high education level and credentials, I have no hesitation that she did not make full use of her earning capacity.

29.  Even if the wife was correct to say her business is not profitable, the monthly earning of HK$2,000 is grossly improbable to be her reasonable monthly income. The wife, stated she is able to rent a service apartment at HK$15,000 since February 2023. To be fair to the wife, I am unable to estimate or decide on the exact amount she has earned from her business, the true figure shall be subjected to evidence elicited during trial and perhaps from the evidence of an accounting professional.

30.  Broadly, I find the wife is able to make an income higher than HK$2,000, nonetheless, at this stage, no findings on the exact figure can be made.

(iii)  If MPS is justified, what is the amount of MPS paid to the wife?

31.  To complete the picture, I shall decide on the wife’s monthly reasonable needs. The wife stated in her affirmation in support as follows:

Item	Amount
Rent	$15,000
Mortgage instalment of property held by GEIL	$13,375
Utilities	$1,500
Management fees of property held by GEIL	$1,120
Food	$5,000
Household expenses	$2,500
Meals out of home	$3,500
Fitness centre	$688
Transport	$1,500
Clothing / shoes	$1,500
Personal grooming	$3,500
Entertainment / presents	$2,500
Holiday	$2,500
Medical / dental	$11,500
Contribution to parents	$10,000
Total monthly household expenses:	$75,683

32.  The wife has unfairly included the mortgage payments and management fees of GEIL as her monthly expenses. Deducting those from her monthly expenses, her best case of monthly expenditure is HK$61,188 only[1].

33.  The wife is suffering from adjustment disorder, she claims medical expenses of HK$11,500. However, I see from her affirmation that she has scheduled follow up treatment with public hospital, I see fit she can continue to attend such treatments.

34.  When I am unable to conclude how much the wife is earning, I shall leave this issue (i.e. whether her expenses are reasonable) at time of ancillary trial when further evidence to be elicited from the wife.

35.  However, in the interim, I accept the reasonable needs of the wife on accommodation and utility shall be (HK$15,000 + HK$1,500) = HK$16,500.

(iv)  Husband’s ability to pay

36.  The wife says the husband is earning over HK$200,000 per month. To rebut this, the husband produced his employment contract with the hospital stating his salary is only $154,680 plus HK$30,000 special allowance. The wife further says the husband did not include other income, for instance, rent from his UK property. At this stage, it is not necessary for me decide on the exact figure of his gross income but in any event, I find, the husband, as a doctor, has the ability to pay the sum ordered in this judgment.

(v)  Litigation funding

37.  The legal principles on litigation funding are well settled. Currey v. Currey [2006] EWCA 1338 is still good law today. This was recently applied in WW v. LNN formerly known as LSM (CACV 524 of 2019, [2020] HKCA 178), the relevant paragraphs of the judgment appeared as follows:

“20. The principles for granting litigation funding are well-established:

(1) In order to obtain litigation funding, the burden is on an applicant to demonstrate that she cannot reasonably procure legal representation by any other means. This includes showing that she cannot secure publicly funded legal help at a level of expertise apt to the proceedings. To the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, either directly or as the means of raising a loan to fund legal services….

(2) The subject matter of the proceedings and the reasonableness of the applicant’s stance in the proceedings will always be relevant.

(3) The period over which costs allowance is to be paid is also relevant. If the application was made before the FDR hearing, it may well be wise to order that the costs allowance should fund the applicant only up to that hearing. If the FDR fails, it would be for the new judge, on the basis of the materials properly before him, to determine whether a new allowance for legal costs should be granted and if so, in what amount.

HJFG v KCY [2012] 1 HKLRD 95, §§80-83; Currey v Currey [2006] EWCA Civ 1338.

21. The court should be alert to the risk of injustice arising from irrecoverable and/or unmerited sums paid for litigation funding, which would call for extra caution in the balancing exercise. As stated by Thorpe LJ in Moses-Taiga v Taiga [2005] EWCA Civ 1013, at §20:

“… the whole purpose of alimony pending suit is to sustain the petitioner pending the court’s determination. There is manifestly a risk of unjustified and irrecoverable payments, but that has to be balanced against the risk of a denial of access to justice for the petitioner, if she has not the means to sustain herself and the litigation pending its determination.”

38.  The burden is on the wife to demonstrate she cannot procure legal representation by any other means. I failed to see she has touch upon the requirements of the Currey test in her supporting affirmation. The wife was unable to obtain legal aid. She then simply rounded up by saying she is in need of funds for legal representation. I have no evidence of whether her assets could be deployed or any means to raise a loan.

39.  I am not satisfied the wife can prove the above limbs, her application on litigation funding is refused.

Conclusion

40.  In the premises, I find the husband shall pay the wife her accommodation and utility needs as MPS, being (HK$15,000 + HK$1,500) HK$16,500, until further order.

Costs

41.  I observe the parties have lodged 15 bundles totaling 3,680 pages for this MPS application, the wife spent extensive time and effort to say how unfortunate she has been during marriage; the husband, inevitably, responded at considerable length. In fact, the evidence submitted in their affirmations have diverted tangentially from focusing on the gist of the matter. I believe this volume are already disproportionate to costs incurred in this application and a large proportion of family wealth were drained. (See LLC v. LMWA & another [2019] 2 HKLRD 529 of para 30 – 37)

42.  I decide the amount of MPS on a broad-brush manner, without canvassing the details of the wife’s business and the real earnings of both parties. I shall make a costs order nisi that the costs of the wife’s summons be reserved. The costs order nisi is to be made absolute within 14 days in absence of application to vary by way of inter parte summons.

Orders

43.  With reason of the foregoing, I make the following orders:

(i)  The husband do pay the wife maintenance pending suit in sum of HK$16,500 commencing from the 1^st day of November 2023 and subsequent payments on the 1^st day of each succeeding month, until further order of this Court.

(ii)  Such sum shall be deposited to the wife’s designated bank account.

(iii)  There be a costs order nisi that the costs of the wife’s summons be reserved.

(iv)  The costs order nisi shall be made absolute in absence of application to vary by way of inter parte summons within 14 days from the date of this judgment.