NAV v. JTMW

FCMC 4191 / 2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 4191 OF 2012

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JUDGMENT

(Maintenance Pending Suit)

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1.  This the petitioner wife’s application for maintenance pending suit for her and for interim maintenance for the 2 children of the family.

Background

2.  The petitioner is XXXXX and the respondent XXXX.  After having cohabited since June, 2002, they married in February 2008 in XXXX and they moved to Hong Kong in June, 2008 when the respondent obtained a job as a XXXX here.

3.  There are two children of the family, both boys.  The first was born in April 2007, now aged 7 and the second was born in Hong Kong in February 2010, now 4 years old.

4.  It is unfortunate that marital discord developed.  They separated in November, 2011.   On 26 March 2012 the petitioner petitioned for divorce on the ground of the respondent’s unreasonable behaviour.

5.  At the initial stage, the parties were apparently able to come to terms through mediation by entering into an agreement dated 28 April 2012 dealing with all the ancillary relief and children matters.   However, sadly it turns out that the parties are now arguing on essentially all issues arising from the present proceedings, big or small.

6.  Meanwhile, the matrimonial home was sold in early January, 2013 and the proceeds were placed in escrow with the solicitors for the transaction.    By a consent order dated 4 June, 2013, $500,000 was released to each of the parties.  Currently the balance remains at about $4,465,997, which, I believe, is the only substantial asset available for division in the ancillary relief trial if by then the same has not been eroded by their legal costs.

7.  Since separation the 2 children of the family have been taken care of by the parties on essentially equal-split basis.

8.  During the marriage, the petitioner was a full-time home maker.  She then engaged in some fit modeling work and face-painting business since early 2012 earning, according to her own version, about $4,000 to $10,000 per month.   As from April, 2014 she has been employed as a Business Development Executive by a company.  According to the employment contract that she has produced, it is a full-time job with a salary of $15,000 per month.

9.  As for the respondent, he recently got a promotion to the rank of XXXXXXX.   However, he has been on sick-leave since 7 March, 2014 due to the chronic stress that he has been suffering arising from the protracted divorce proceedings.

10.  Up to about April, 2014 the respondent was paying the petitioner $12,000 per month as the children’s maintenance.  I am told (and this is not disputed) that the respondent has unilaterally reduced this amount to $10,000 and has not paid at all this month, ie July, 2014.

11.  The petitioner’s immigration status was as a dependent of the respondent.  That was the situation until 27 April, 2014 when the respondent withdrew his sponsorship. There is some ambiguity over her current status since from the affirmations filed by the petitioner it is not apparent what her status has been after 27 April, 2014.  At the beginning of the hearing, Mr Marwah, counsel for the petitioner, informed the court that in order for her to continue to stay in Hong Kong, the petitioner has applied for residence on her own merits which, if granted, will allow her to continue to work and live in Hong Kong as before.  Further, she has been given an oral assurance from the Immigration Department that she could continue to work in the meantime pending the final outcome of her application.

12.  Both are now living in their respective rented-flats in the same locality: XXXXXX.

The Law

13.  Under section 3 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“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 the making of the application and ending on the date of the determination of the suit, as the court thinks reasonable.

14.  The court has unfettered discretion to award such sum as it thinks fair and reasonable. There is no hard and fast rule, and no fixed proportion:  each case depends on its own facts.  The court should take a ‘broad brush’ approach.  The means of the parties, the needs of the parties and their previous standard of living are relevant but the overriding consideration is the actual needs of the parties pending suit.

15.  In respect of interim maintenance for the children, the court is guided by the factors set out in section 7(2) of MPPO, ie

a.	The financial needs of the child;
b.	The income, earning capacity (if any), property and other financial resources of the child;
c.	Any physical or mental disability of the child;
d.	The standard of living enjoyed by the family before the breakdown of the marriage; and
e.	The manner in which the child was being and in which the parties expected him to be educated.

The Petitioner’s Application

16.  Initially, the petitioner was seeking a total sum of $38,300 per month for her and the 2 children.  That was on the basis that she was without a visa to work.   Now given that the petitioner is allowed to continue to work in the meantime, Mr Marwah conceded that a sum of $9,300, being the petitioner’s estimated earnings, should be taken into account and therefore he is seeking, on behalf of the petitioner, a sum of $29,000 only ($38,300 - $9,300), with each of the petitioner and the children given 1/3 of the sum.

17.  Further, since the petitioner is going to take the children back to XXXX for summer vacation (fortunately this been agreed to by the respondent on the date of the substantive hearing on the basis that he can also take the children back to XXXXX for part of the summer), the petitioner is also seeking payment of the costs of flights from Hong Kong to XXXXXXXX for her and the children.  Mr Marwah informed the court that the full-fare tickets would cost $10,400 for the petitioner and $8,300 for each of the children, totalling $27,000. Alternatively, the respondent could provide the petitioner and the children with XXXXXX  / XXX, a benefit provided by the respondent’s employer.  Mr Marwah estimated that this would cost the respondent much less, in the region of $4,500 to $5,000 only.  Though these information are not in any affirmations filed by the parties, since there is no objection from Ms Irving, counsel for the respondent, I take these as unchallenged evidence.

The Petitioner’s Case 

18.  Mr Marwah submitted that the petitioner’s application is on her “needs” basis and she is seeking a reasonable amount only.   She is not seeking to return to the previous high standard of living during the marriage.  She was compelled to bring this application by the respondent’s sudden threat of withdrawal of support of the children and the loss of her visa.

19.  Even before the loss of her visa, the petitioner’s earning capacity was severely limited.  She has no qualifications.  As a full-time mother without a domestic helper, it is impossible for her to commit to working full-time.   Therefore she has only been able to find irregular work as a face-painter and “fit model”.   To cover the shortfall in her income, she has had to rely upon loans and gifts from family and friends.  Her present job that she started sometime in April, 2014 as a Business Development Executive, which is in the nature of telemarketing, is still on probation.  Fortunately, with the understanding of her employer, she has been able to work not on a full-time basis so that she may take care of the children and to return to XXX in the summer.  Hence, she is able to get about $9,300 per month only.  However, it should be noted that there is nothing to show that she was earning $9,300 per month.  As a matter of fact, the latest bank statement shows she received $11,000 for the month of April, 2014.

20.  Mr Marwah further submitted that the petitioner has economized substantially while still prioritizing the children.  Contrary to what the respondent has, she has no car and does not have the help of a domestic helper.  She has moved to a cheaper apartment for a monthly rental of $10,000 only.

21.  He argued that the respondent’s sick-leave is self-inflicted and he should be capable of returning to XXX duties.  He relied on a letter dated 24 April, 2014 by the employer’s psychologist Dr SL where it is stated that the respondent has “not been diagnosed nor has he shown symptoms of any kind of mental illness/disorder”.

22.  The parties’ financial means are dramatically different.  The respondent has a career and an existing salary that is many multiples of that of the petitioner.

23.  The petitioner’s estimate of legal fees as per her Form H is approximately $1,500,000 including fees paid to date of $431,445.   She intends to rely on the funds held in her bank account of $324,857 and any additional borrowings from her family if available to meet her ongoing legal fees.  She reserves her right to apply for contribution to legal fees from the respondent in the event that the parties cannot resolve the matters amicably and when her savings are depleted and she cannot borrow any further funds.

24.  Mr Marwah also ensured that his client would try to earn some extra money by doing modelling and face-painting on part-time basis whenever there is an opportunity presented to her.

The Respondent’s Case

25.  Ms Irving, for the respondent, opposed the application.   First, she submitted that the petitioner has not shown she has a need that she cannot meet herself from her own resources.

26.  Secondly, the petitioner has not been open about her own financial situation.  She has not presented clear and documented evidence of her financial status.  She clearly has income or resources that are not disclosed.   There are numerous transactions in her bank account that are unaccounted for with deposits amounting to more than $14,000 a month over the last 12 months.   Contrary to the respondent who is in deficit, she presently has a bank balance of about $324,857.   In other words, the petitioner has failed to give a full and frank disclosure of her financial situation.

27.  Thirdly, the petitioner has not shown that the respondent can afford to meet her claim for the reason that the respondent is being placed on sick-leave he has no means to pay.  He has been placed on sick-leave since 7 March, 2014, due to chronic stress.  He was on full pay for the first 126 days, which was up to 2July, 2014 (the date of hearing). Thereafter, he will be on half pay of $36,740 for a further 126 days, if he is not terminated, which is an option available to his employer.   As of now and up to October, 2014 the respondent is still receiving $36,740, housing allowance of $24,000 and the employer’s contribution to education $6,000, being a total of $66,740.   There will be an assessment in mid of July, 2014 by XXXX XXXXXX XXXXX XXXXXX of the respondent’s employer to determine whether he will be granted extended sick leave and remain in employment, or have his employment terminated.  Quite apart from this, he has to undergo regular assessment, currently by Dr SL, and his general practitioner, and can only resume XXX duties when the doctor certifies that he is fit to XX.   These procedural matters are not disputed by Mr Marwah.

28.  As for his monthly expenses, they come up to $85,390.  This includes the portion of education not covered by the employer’s allowance, his tax, repayment for bank loans and also payment of his legal costs by instalments.  Thus, the respondent is running at a deficit.

29.  Finally, the petitioner has inflated her expenses.

Discussion

30.  I will deal with Ms Irving’s 1^st and 2^nd grounds in one go.

The Petitioner’s Resources and Non-Disclosure

31.  Rayden and Jackson on Divorce and Family Matters, (18^th Edn), Vol 1(1), para. 16.18 says as follows,

“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 on inability to pay.  The court can look at the reality of the situation and take into account voluntary funding from third parties…”

32.  Notwithstanding that the above citations refer to payer, I see no reason why the duty does not equally apply to payee.

33.  Further, as stated in C v F, FCMC 1701/2000 (date of judgment:  20 September, 2004) at para 28,

It is well established that in ancillary relief proceedings, which include maintenance pending suit, there is a duty on both parties to make full and frank disclosure of the relevant materials to enable the Court to exercise its discretion to make the order, and if it is of the view that the evidence disclosed by a party is deficient, inferences may be drawn by the Court from such defective disclosure against that party when making the appropriate order.

34.  I agree with Ms Irving’s submissions that the petitioner has not provided any particulars of her face-painting business and fit modelling work.   Whilst she might have a small business only and thus did not prepare any balance sheet or profit-and-loss account of that sort, I consider that at least she should have kept some work contracts or orders, schedules, list of customers, invoices and receipts and some rough calculations of profit and loss but nothing of that sort has been put forward.   Similarly, there are no work schedules, list of employers or particulars on how much she earned as a model.

35.  Ms Irving pointed out that for the period between 31 May, 2012 and 19 August, 2013 and based on the bank statements disclosed by the petitioner, her monthly income amounts to a monthly sum of $13,596 on average and $14,327 over the last 12 months and these apart, there should also be receipts in cash from her face-painting business.

36.  The petitioner accepted that there were such deposits but she argued in her affirmation dated 17 June, 2014 that the respondent “does not differentiate between ones which constitute ‘earning and income’, versus those which are from selling things I own or receiving money from my mother and grandmother to help me pay my bills/expenses.”    She explained that some of the increases in her overall balance can be attributed to gifts and loans from her family as well as disbursements from her parents’ family trust.    In her affirmation dated 19 May, 2014, the petitioner said that the loans needed to be ultimately repaid so she estimated that her current cash assets once her debts are deducted are $150,000 to $180,000.  She added that she maintains a decent amount of liquid assets in her name for proof of her ability in order to support her visa application.  Finally, she has made some money by ‘up-selling’ items from time to time such as buying a stroller for $200 which she can then sell for $500.

37.  The petitioner also explained in her affirmation that she was not able to renew her business registration for the face-painting business because she did not have a visa.  With respect, this reason is unheard of.   To me, it is a matter of commonsense that anyone should be able to register a business in Hong Kong.

38.  I agree with Ms Irving that the petitioner does not give any information on the sums received from third parties.  She gives no details and identifies no sums of money that are gifts, loans or disbursements of her parents’ family trust.  She has produced no evidence whatsoever of any debts that she alleges exist, and no details at all of her earnings.   She has not referred to a single transaction where she earned some money from ‘up-selling’ as alleged.  The ability to borrow is also a financial resource but there is a dearth of particulars and supporting evidence.  To me, all these explanations are mere say-so on her part.  I agree with Ms Irving’s submissions that the petitioner’s alleged earnings are inconsistent with her financial position.

39.  Faced with the deposits, Mr Marwah accepted that the petitioner’s monthly receipts inclusive of gifts and loans from family and friends are about $14,000.  In my view, it still does not clarify the picture.   A simple calculation illustrates my point.  Of $38,300 monthly expenses, Mr Marwah agreed that $8,000 is prospective expenses.  The actual expenses thus should be about $30,300 per month.  The petitioner has been legally represented in the present proceedings for about 10 months.  So far she has paid legal costs of $431,445, meaning on average $43,145 per month.  Hence, her monthly expenses, on a broad brush basis, should be $73,445 ($30,300 + $43,145) but her alleged monthly receipts were 26,000 only (ie $14,000 + $12,000 maintenance from the respondent).   It follows that on average she should have a deficit of $47,445 per month.

40.  However, the objective facts are that the petitioner has been able to pay all the legal costs to date and she still has about $324,857 in the bank.   I accept that this sum would not be sufficient for her legal costs if the present proceedings continue to drag on to CDR and trial on permanent removal of the 2 children as applied for by the petitioner and ancillary relief but this is beside the point for the present purpose.   

41.  On the evidence before me, I am able to come to a conclusion that the petitioner has other sources of income which are much more substantial than she has chosen to disclose.   She has failed to give a full and frank disclosure of her financial situation.

The Respondent’s Ability to Pay

42.  Mr Marwah argued that the respondent’s sick leave is self-inflicted.  As oral evidence was not heard in the present application, I am not in a position to make a finding of fact as to whether or not the respondent’s sick leave is self-inflicted.  The petitioner is essentially accusing the respondent of malingering.  This is a very serious allegation and could be a criminal offence.   As Ms Irving rightly pointed out, if he is a malinger, he will get fired immediately.  In any event, I consider that Mr Marwah is reading too much into Dr. SL’s letter.  In the same letter, Dr SL also wrote, “Whether and when (the respondent) will resume to XXX duty will be a decision made by his company based on the strictest industrial standard and internal guidelines.  Understandably, the nature of the job as XXX determined that they are being held at the highest standard.”  In my view, given the high standard and level of skill required of by the nature of his job, the fact that the respondent has not been diagnosed nor has he shown symptoms of any kind of mental illness/disorder does not necessarily mean that he does not need the sick leave that he is having and will be automatically put back to his job.  

43.  Since the respondent is going to have an assessment by the Board in mid of July at which time it will be known whether his sick leave would be continued or his employment would be terminated, I enquired with Mr Marwah whether the petitioner would like to wait for the outcome of the assessment but I was told she was prepared to press on with the application.   In the circumstances, I would have to make a decision on the basis of the materials before me. 

44.  That said, Mr Marwah accepted that the respondent is now on sick-leave and that as from 3^rd July, 2014 his salary will be cut by half and he will be getting $66,740 per month only. 

45.  I agree with Ms Irving that it is unhelpful to calculate the respondent’s income excluding his legal fees, taxes, loan repayments and the costs of children’s education from his salary as these are all expenses that have to be paid.  Inclusive of these expenses, his monthly expenses are $85,390 and they are not challenged.

46.  The respondent’s debts are presently $129,515 and $23,249 with HSBC and $132,405 with DBS.  He owes legal fees of $277,222.   These give a total of $561,500.   He has already depleted the $500,000 released from the proceeds of sale.  These are not challenged.  On the other hand, apart from the fees payable to the mediator, it appears that the petitioner does not any outstanding legal fees and she has not depleted her $500,000 yet and still has $324,857 in the bank.

47.  In the circumstances, it seems clear to me that the respondent is in deficit and he is not able to pay the maintenance pending suit.

Inflated Expenses

48.  With the conclusion that I have reached above, it is not necessary for me to consider whether or not the petitioner has inflated her expenses.  Suffice for me to say is that some of the items such as clothing/shoes at $1,200 and entertainment at $2,000 appear to be on the high side.

Travel Tickets

49.  The respondent does not agree to provide the petitioner with XXXXXX / XXX for the trip to XXXXXXX for the reasons that previously she failed to repay the tickets to him for which he is personally liable and further that this type of tickets provides no guarantee on the dates of travel and no guarantee that the petitioner could sit together with the children.  Considering that the time in question is a peak season and that it seems there was at least one occasion when the petitioner was sitting separately with the children that gave rise to grave concern on the part of the respondent, I do find some force in the respondent’s reasons for refusal.  Further, the petitioner clearly has the means to pay.

Order

50.  For the above reasons, I have come to the conclusion that the petitioner has other sources of income, that she failed to give a full and frank disclosure of her financial situation and that the respondent does not have the means to pay.  In the circumstances, I have to dismiss the petitioner’s application and I so order.

51.  Before I end I must emphasize that I should not be taken to have ignored the needs of the children in dismissing the application.  I have been living with this case for a great deal of time.  My observation is that both parties are loving and caring parents.  I have no doubt that both of them have been doing their utmost and will be so doing in the future to cater for the needs of the children.

Costs   

52.  I see no reason why costs should not follow the event.  I give an order nisi that the petitioner do pay the respondent costs of this application, including costs reserved and counsel certificate, to be taxed if not agreed.