LTCEF v. MM MBMW by her guardian ad litem CCCJ

FCMC 3414/2020

[2020] HKFC 179

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIALCAUSES NO. 3414 OF 2020

(FORMERLY AS FCMC 14598 of 2018)

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Decision

(Maintenance Pending Suit)

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1.  This is the Respondent/Wife’s (“W”) application by Summons dated 5 December 2019for maintenance pending suit (“MPS”).

2.  Having abandoned her claim for legal costs provision of HK$20,000 per month, W now claimsa monthly sum of HK$38,000.

Background

3.  The Respondent/Husband (“H”) was born in August 1969,now aged 51. W was born in May 1973, now aged 47. They got married in May 1998.

4.  There are 2children of the family born in November 1998 and June 2000, now aged respectively 21 and 20. The younger daughter attends university in London, she would be at Year 3 starting September 2020. The elder daughter studies in the University of Hong Kong, she should have graduated by now.

5.  H issued the Separation Notice in August 2018 and filed the Petition for divorce in November 2018 on unreasonable behavior under FCMC 14598/2018. Pursuant to leave granted on 21 November 2019 to file and serve a new petition on one year’s separation with consent, this Petition was filed on 20 May 2020.

6.  Due to W’s persistent mood disorder, she was certified in February 2019 as a mentally incapacitated person. The guardian ad litem was appointed for W in June 2019 but discharged in August 2020.

7.  H is working as a superintendent of the Hong Kong Police. W used to work as a police inspector but has resigned in 2006 due to her mental illness. W subsequently acquired in 2011 the professional qualification to practice as a barrister-at-law. According to W, she has ceased her legal practice in January 2019. 

8.  W says since separation in August 2018, H has left her financially on her own. She has nil income; as at 31 January 2020 she only had cash savings of about $280,000. W has been facing short-term cash flow problem pending the trial on ancillary relief.

The Law

9.  There is no dispute as to the applicable legal principles under  section 3 of Matrimonial Proceedings and Property Ordinance (Cap 192), as outlined under §§12-15 of WW v LLN [2019] HKFC 188 (23 July 2019).

“12.  The Court’s power to grant a MPS order in favour of a spouse is governed by s.3 of MPPO:

“3. Maintenance pending suit in case of divorce, etc.

…..

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 the presentation of the petition or making of the application and ending on the date of the determination of the suit, as the court may think reasonable.”

13.  In HJFG v KCY, Hartmann JA, at paragraphs 37 and 38 of the judgment, gave a succinct summary of the law in this area by referring to the judgment of Mostyn QC, sitting then as a Deputy Judge of the High Court in England, in TL v ML [2006] 1 FLR 1263, 1289:

“37. The principles that have been 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 Judge, in TL v ML [2006] 1 FLR 1263, 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 pending suit 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 assumption 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 application for interim maintenance, when the amount to be paid is for a limited period only and not all 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.”

14.  Therefore, the overriding considerations for such applications are reasonableness and fairness.   In order to achieve these objectives, the Court has to balance the reasonable needs of the applicant and the ability to pay of the respondent on an interim basis: LJ v LWHH [2003] 3 HKC 455 at 461D.

15.  In undertaking this balancing exercise, the Court will adopt a broad brush approach, and not a detailed investigation of the financial positions of the parties.”

Issues in serious disputes

10.  H says W has different sources of income including, inter alia salary from the employment in her mother’s employment agency, and dividend payments from her hotel investments.

11.  H also disputes the 3 loans alleged by W, in the total sum of HK$11,490,500.

W’s employment in her mother’s employment agency

12.  H says W has been under the employ of her mother’s employment agency and earns a monthly salary of $32,000. H relies on the following evidence, namely

(i)  report of H’s private investigator which showed that on two occasions in January 2019, W at the employment agency held herself out as the manager and provided services to the private investigator;

(ii)  text message between W and H which showed that W had travelled to the Philippines from time to time for business purposes;

(iii)  text message between W and H where W said she was busy working at the employment agency; and

(iv)  text message between W and her parents on 8^th June 2018 after an argument where W told her parents “唔須要出糧” (no need to pay salary), hence inferring W has been receiving salary payment.

13.  In opposition to the above,

(i)  W says she has from time to time helped her mother in her business, but it was done out of filial affection and not as an employee. W exhibits the payroll records of the employment agency for 2015/2016 & 2016/2017 to show that she was not an employee. W says she has not received any payment for the service; the sum of HK$32,000 is the monthly loan from her parents to support her living.

(ii)  W says there were a few occasions she volunteered to travel to the Philippines to interview potential domestic workers in order to help her mother out. On other occasions, the travels were for leisure.

(iii)  W explains thatbecause she was only a door tenant at her chambers in Central, she was provided a workplace at the employment agency to do her legal work.She was not there as an employee.

(iv)  W says on one occasion after a row with her parents, she told her parents “唔須要出糧” to mean she would not borrow money from them anymore. She used the words “出糧” as she did not want her elder brother and sister-in-law in the same chat group to know that her parents had been lending her money over the years.

Dividend payments from W’shotel investments

14.  H says W has been receiving dividend payments from her hotel investments. He relies on the following evidence, namely

(i)  a copy extract of the board minutes of the hotels in question in which there was a list of shareholders including W and a table stating that W’s investment amounted to HK$2 million odd; and

(ii)  various dividend payments were deposited into the joint account of W and her mother with Bank of China; it was handwritten on the relevant bank statement “此戶口是給 [W] 用的” (this account is for the use of [W]).

15.  In response to the above,

(i)  W says she only held the hotel investments on behalf of her parents. At her mother’s request, she has already transferred the shares in the hotel investments back to her mother in February 2018. She has not received any dividend payments from the hotel investments.

(ii)  W relies on the Affidavit of the President of the hotels deposing that W’s mother paid the purchase price of the shares in question and has been the true owner.

(iii)  Regarding the said handwritten words“此戶口是給 [W] 用的” on the bank statement, W says it was her father who wrote them to record the monthly loans to W. 

W’s alleged loans from her parents

16.  According to W, there are altogether 3 batches of loan from her parents, in the respective sum of HK$4,666,500, HK$2,760,000 and HK$4,064,000. The total amount is HK$11,490,500.

The 1st batch of loans from December 2006 to July 2009 in the sum of HK$4,666,500

17.  W says she naively thought that if she could prove to H that she had been affluent, H would treat her better and that might salvage the marriage. Therefore, she borrowed the 1^stbatch of loans from her parents primarily to invest in securities including equity-linked notes (“ELNs”).

18.  W refers to her father’s bankdocuments where her father marked those paymentsas loans to W. W gives details regarding how ELNs work and the circumstances leading to her investments in ELNs of an aggregate sum of $3,850,000 at late November 2007.W also adduces documentary evidence including various contract notes on ELNs.

The 2^nd batch of loans in October 2014 in the sum of HK$2,760,000

19.  There is no dispute that W’s parents lent $2,760,000 to the parties to purchase the matrimonial home in about October 2014. However, H alleges that W’s parents have waived the repayment of the loan and treated it as a gift to the parties.

The 3^rd batch of loans from January 2008 to July 2018 in the sum of HK$4,064,000

20.  W says since H had refused to maintain her adequately throughout the marriage, she had no alternative but to ask her mother to lend her a monthly sum of $32,000 to sustain her living.

Repayment of the loans in August 2018

21.  W says upon being served the separation notice in August 2018, she anticipated that the marriage would come to an end. Hence, she decided to repay her parents all the loans.

22.  H highlights the extraordinary features of this case that W has withdrawn almost all the parties’ money from their joint account and W’s personal account; and the manner and timing of the alleged repayments of the alleged loans are extremely sensitive. Within days after H issued the Separation Notice, W has already withdrawn HK$13,600,000. She paid her parents HK$11,500,000 purportedly as repayment of the alleged loans; and keeping HK$2,100,000 for her living expenses.

23.  H asserts that W’s withdrawals were litigation driven; the alleged repayments are dispositions made with the intention of defeating his claim in ancillary relief. Further, it was W’s deliberate attempt to strip off herself all the money owned by the parties, purported to be in grave financial hardship and then claims MPS.

The approach to factual disputes

24.  From what are being set out in paragraphs 10 – 23 above, it is plain and obvious that the factual disputes cannot be fairly resolved on affidavit evidence in this application for MPS. The issues on the long-term income and/or financial resources have to be dealt with at the final hearing of the ancillary relief application when the parties’ evidence would be thoroughly cross-examined.

25.  In opposing the present application, H has made detailed analysis of W’s evidence to attack her credibility. Apparently H is asking the Court to find against W on the factual disputes and to dismiss her application. However, on the relevant legal principles, this is not the correct approach in dealing with a MPS application involving serious factual disputes.  

26.   In the present case, there is no direct evidence to show that W has obvious short-term income and/or financial resources. Therefore, in dealing with W’s application for MPS, the Court would determine on a broad-brush basisW’s immediate and reasonable needs and H’s ability to pay.

27.   Interim maintenance is a temporary measure pending the final outcome of the ancillary relief application; fairness can be achieved by adjustment and rectification of any overpayment.

W’s immediate and reasonable needs

28.   W’s monthly expenses set out in her Form E dated 17 December 2018 is updated in her 2^nd Affirmation dated 5 December 2019.

General expenses:

Mortgage repayment		$12,849
Management fee	($4,760 + $99)	$4,859
Food		$5,000
Household expenses		$5,000
Car expenses	(nil + $1,500)	$ 1,500
Domestic helper		$ 6,200
		$35,408

Personal expenses:

Meals out of home		$5,000
Transport	($3,000 - $1,000)	$2,000
Clothing / Shoes	($5,000 - $2,000)	$3,000
Personal grooming	($5,000 - $2,000)	$3,000
Entertainment/presents	(nil + $1,000)	$ 1,000
Holiday	($2,000 - $1,000)	$1,000
Medical / Dental	($4,000 + $1,000)	$5,000
Others - mobile plan	(nil + $200)	$    200
		$20,200
Total :	($57,809 - $2,201)	$55,608

29.  During the marriage, the parties had a decent and comfortable standard of living. The former matrimonial home is a house of 2,500 square feet with a garden and a garage. They have a domestic helper. They have two club memberships including the full membership of the Hong Kong Jockey Club. H drives a BMW and a Porsche. The parties had leisure trips to Japan and to Macau frequently. W was provided with two subsidiary credit cards by H.     

30.  W now resides at the former matrimonial home with the elder daughter and a live-in domestic helper.The younger daughter would only stay with W when she returns from London during the summer vacation.

31.  Taking into account the parties’ marital standard of living and the fact that W has been consulting private psychiatrists, I do not thinkW’s monthly expenses of HK$55,608 is unreasonable. W claims part thereof for HK$38,000.

H’s financial situation and ability to pay

32.  H’s monthly expenses set out in his Form E dated 18 January 2019 is updated in his 1st Affirmation dated 10 January 2020.

General expenses:

Rent		$14,000
Utilities		$ 4,935
Car expenses		$ 4,000
Insurance Premium		$  908
		$23,843

Personal expenses:

Meals out of home		$ 6,000
Transport		$  500
Clothing / Shoes		$ 2,000
Personal grooming		$ 1,000
Entertainment/presents		$ 4,000
Holiday		$ 2,000
Tax	($7,647 + $4,417)	$12,064
Contribution to parents		$10,000
Legal fee		$30,000
		$67,564

Children’s expenses

School fee		$17,000
Extra tuition fee		$ 5,000
Transport to school		$ 1,666
Medical/dental		$ 2,000
Lunch and pocket money		$10,000
Elder daughter’s exchange program		$10,000
		$45,666
	Total:	$137,073

33.  W takes issue with the average legal fee of HK$30,000 per month. According to H’s latest Form H filed on 11 August 2020, estimated costs after the 6^th First Appointment hearing on 12 August 2020 up to and including ancillary relief trial is HK$1,687,000. Averaging this sum over the periods of time before trial, HK$30,000 per month is more than reasonable.

34.  I find that H’s monthly expenses is largely reasonable save for the following 4 items. Although W did not take issue with items (i) and (iii), the Court retains the discretion to assess the reasonableness in order to achieve an overall fairness.

(i)  Entertainment/presents

HK$4,000 is excessive; HK$2,000 is a reasonable sum.

(ii)  Contribution to parents

If affordable, this filial act is no doubt a good gesture to be encouraged. However, when one cannot even make ends meet, such contribution inevitably has to be dispensed with.  As H said, he would make ends meet if he ceased the contribution to his mother.

(iii)  Extra tuition fee $5,000

The younger daughter in London should be at Year 3 in September 2020.  I do not see the basis of how and why a Year 3 university student would require extra tuition. This item of expense will be deducted.

(iv)  Elder daughter’s exchange program $10,000

The said exchange program is one-off and has already taken place in January to May 2020. It is no longer an on-going obligation.

35.  By reason of the aforesaid, a total sum of HK$27,000 (HK$2,000 + HK$10,000 + HK$5,000 + HK$10,000) should be deducted. H’s reasonable monthly expenses is adjusted downwards to HK$110,073.

36.  H has a net monthly income of $125,515. After deducting his monthly expenses of HK$110,073, he can afford to pay MPS in the sum of about HK$15,442.

37.  Although such sum is significantly less than her claim, this is the extent to which H can afford for the time being. H would be financially relaxed (say by HK$25,666) when the younger daughter completes her university studies; as of now H should not be pushed beyond his limit.

38.  On the part of W, the background and history of how W’s parents have been ever ready to support W financially (whether by loans or by gifts) showed that W should be able to obtain the necessary assistance to cover the deficit and sustain herself in the interim. This is of course not the parents’ obligation, but it is W’s fortune to have such backup.

Conclusion

39.  It is hereby ordered that :

(a)  the Petitioner (Husband) do pay the Respondent (Wife) maintenance pending suit in the sum of HK$15,000 per month; the first payment to be made on 5 September 2020 and thereafter on the 5^thday of each succeeding month until further order;

(b)  there be an order nisi that costs of this application be in the cause of the ancillary relief proceedings.

40.  Unless there is an application within 14 days to vary, the nisi order on costs shall become absolute.