PM (formerly known as PJ) v. VM (also known as MV)

FCMC 11058/2018

[2020] HKFC 201

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 11058 OF 2018

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BETWEEN

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J U D G M E N T

(Interim maintenance)

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Introduction

1.  This is an application by a Respondent wife for interim maintenance for the two children of the family pursuant to section 5 of the Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO). The wife seeks no further orders for maintenance pending suit for herself at this stage, a point that has been raised on several occasions by Ms Rattigan for the husband, but despite the adjournment has still not been formally addressed. I shall consider this further below. The wife, who is also legally aided, makes her current application in a summons dated the 22 November 2019. This states as follows:

1. The Order dated 6^th March 2019 whereby the Respondent shall pay interim maintenance to the Petitioner for the two children of the family in the sum of HK$3,750 per child per month from 12^th March 2019 and thereafter to be paid on 12^th day of each month until further order be varied upwards.

2.  The order dated the 6 March 2019 refers to an interim order made by myself at a First Appointment/Children’s Appointment hearing on the 6 March 2020 as follows:

4. The Consent Order contained in the Court Order dated 12^th December 2018 in regard to interim maintenance be discharged and the Respondent shall pay interim maintenance to the Petitioner for the two children of the family in the sum of HK$3,750 per child per month from 12^th March 2019 and thereafter to be paid on the 12^th day of each month until further order.

This followed the original order dated the 12 November 2018, which was made on an urgent basis by my brother judge as follows:

2. The Respondent to pay subject to the Director of Legal Aid’s First Charge the sum of HK$7,500.00 to the Petitioner as interim maintenance pending suit, the first payment to be made on 12^th November 2018 and thereafter on the 12^th day of each month until further order.

3.  In addition, I am also told that the husband had originally agreed, since the 7 December 2018, to contribute HK$15,000 per month towards the wife’s accommodation costs. He also states that he contributed a further HK$47,500 for the rental deposit (HK$30,000), agency fees (HK$7,500) and relocation expenses (HK$10,000) in order to enable her to move into this property. In addition, it is the husband’s case that he pays for the children’s school fees and other related expenses up to a total of just over HK$47,000 per month. Thus, the husband maintains that he has been paying approximately HK$70,000 per month for and on behalf of the wife and the two children. In addition, he has to pay for his own rent and other living expenses and for the children’s expenses when they are in his care.

4.  On the 4 September 2020, the court received a letter from the solicitors for the wife in which they stated that the husband has stopped all payments for and on behalf of the wife and children, pivoting them into an untenable position. To that end it should also be noted that at the hearing on the 23 June, it remained the husband’s position that he was paying HK$69,870 per month for the children’s expenses, as set out above and he said that that he would continue to undertake to pay for their expenses as set out in paragraph’s 36 and 37 of his 3^rd affirmation. This states as follows:  

36. Although the caring arrangement has been changed since 12^th August 2019, I continue to be responsible for most of the children’s expenses as before. For the Court’s easy reference, I would set out a breakdown of the children’s basic expenses currently paid by me as follows: -

Item		Amount
School fees	HK$16,470 for R HK$10,500 for Y	HK$26,970
Extra tuition fees	HK$1,800 for Y HK$5,500 for R	HK$7,300
School books and stationery		HK$500
Transport to school (including school bus) R: HK$2,500 (uber) Y: HK$2,000 (uber)		HK$4,500
Medical/Dental		HK$1,000
Extra-Curricular Activities		HK$0
Entertainment / presents		HK$2,000
Holidays		HK$2,000
Clothing / Shoes		HK$2,000
Insurance premia		HK$0
Lunches and pocket money		HK$500
Other Transport		HK$500
Child- minding fees		HK$0
Uniform		HK$100
Others (specify)		HK$0
Total monthly expenses for children		HK$47,370

37. As the Court can see, I am actually paying at least HK$69,870 each month for the Children, i.e. HK$47,370 being children’s expenses, HK$15,000 being my contribution towards their accommodation with the Petitioner and HK$7,500 being interim maintenance. Given this is just an interim order, I see no reason to change the status quo, such as the extra tuition class currently enrolled by the children. I am prepared to give an undertaking to continue to pay for the children’s expenses on an as it is basis.

5.  By way of background it should also be noted that there have been ongoing disputes regarding the two children of the family. Without wishing to comment on this unduly, it is though pertinent to these discussions to note that following the separation, the children were originally in the primary care of the husband. This was vigorously opposed by the wife and following a Children’s Dispute Resolution hearing on the 12 August 2019, a shared care arrangement was put in place on a 2:2:5:5 basis.  This arrangement was suspended on the 16 June 2020, in so far as it related to the eldest daughter R, following an incident between the husband and R at the husband’s home. It is still in place for the younger son Y. There is a Pre-Trial Review scheduled for the 13 January 2021 and in the absence of any agreement between the parties it is anticipated that the children’s matter shall then be set down for trial. In the meantime, R remains in the full time care of the mother and Y’s care continues to be shared.

6.  The other concern, as indicated above, is that the wife seeks no maintenance for herself, even though it is clear that ultimately it is her case that she has very limited earning capacity and that she is wholly reliant on the husband and his family from a financial perspective. This only serves to highlight the difficulties sometimes faced by women (generally) who are in receipt of Legal Aid and who often, quite rightly, fear losing it. Going hand in hand with this is the fact that even now the wife has not produced a very reliable budget. This was the primary reason why the case was initially adjourned and even now the only budget that has been produced is as set out in her second affirmation. This has more of a feel of a “wish list” and is certainly not reflective of her current outgoings. 

The main issues

7.  It is then against this background that I am now asked to consider the issue of interim maintenance for the two children of the family and to that end it is of note that to date this issue has never been fully and properly considered by the court. Although technically an application to vary, this application is considered in that light.

Background

8.  The parties married on the XX May 2005 in India and separated on the 30 July 2018, when the wife moved out of the former matrimonial home. As is customary the marriage was an arranged one. There are two children of the family, R, a girl, who was born on the XX October 2006 and is now almost 14 years of age and Y, the younger son who was born on the XX January 2014 and is now 6 ¾ years old. The wife issued a divorce petition on the 28 August 2018 and this was initially defended. Thankfully this part of the litigation was resolved and, on the 16 January 2020, a second petition was issued based on one-year separation with consent. The decree nisi is currently pending.   

The law on interim financial support

Interim maintenance

9.  The law is well known and not in dispute. Section 5 of the Matrimonial Proceedings and Property Ordinance, Cap 192 states that maintenance for children can be ordered either before or after the granting of the decree for divorce. In the event that an application is made for interim maintenance, the court shall adopt the same approach as when considering an application for maintenance pending suit under section 3 of the same ordinance. Thus the only governing principle is that the court shall make such order as it considers reasonable in all of the circumstances of the case. Consequently, applications such as these are approached on a broad-brush basis. This is because there has been no opportunity to hear the parties in the witness box or to make findings of fact with respect to the issues in dispute. The court needs to look to the needs of the children and the ability of the parents (here primarily the husband) to pay for them from a general perspective only. As far as possible the court should try to look at the reality of the situation, as opposed to the bare assertions made by one or other of the parties. A detailed examination of the parties’ means and their ability to pay maintenance for their children will only be examined in full at a later date at an ancillary relief trial, if there is no agreement in the meantime. If there is found to be any over or indeed any under payment, that can normally be rectified at a later stage.

10.  Although I was not specifically referred to the following authority by either side it seems to me that the following section from Jackson’s Matrimonial Finance 9^th edition (paragraph 3.92) may also be of some assistance:

“When a party applies for an order for maintenance pending suit or for periodical payments, it is not a complete answer to the claim for the potential payer to say: ‘I have no income and no assets’. In one case, a husband with a very small income (in three successive years it was £42, £69, £60) who asserted that he was ‘living on borrowed money and staving off a number of creditors while he [was] developing certain properties’, was nevertheless shown to have maintained by means of bank loans a consistent standard of living over a substantial period: the court in effect held that if he could borrow for himself he must likewise borrow for his wife. The principle was that he was able to touch resources from which payments could be made; he had the ability to obtain the necessary money, albeit bank loans, and it was assumed that his ventures were such as not only to justify the loans but also reasonably to contemplate their repayment in due course ….”

11.  Reference has also been made by each side to the Hong Kong Court of Appeal decision in HJFG v KCY [2012] 1 HKLRD 95 where it was held inter alia that:

“(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. That 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 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.”

The law on variation 

12.  The wife’s application to vary is also made pursuant to section 11 (7) of the Matrimonial Proceedings and Property Ordinance Cap 192, which provides that:

“(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates ……”

13.  It is accepted that in considering a change of circumstances, I may look at the case de novo. In other words, the court is not necessarily fettered by the existence of a previous order. I may look at the situation afresh and make an order based on the parties’ existing financial circumstances. (See Ch 3.131 Jackson’s Matrimonial Finance and Taxation, 7^th edition). However, it is also true that there would normally be a reason for the application to vary or what some might call a “trigger”. In this instance however, it is accepted that given that this matter has not been fully considered before, that it is appropriate to look at the case de novo.      

Each party’s case

The wife’s case

14.  It is the wife’s case that she and the children enjoyed a very high standard of living when the marriage was intact. She and the husband lived with the children in a very large property in Kowloon Tong, which was approximately 6,000 square feet in size and was shared with the husband’s brother and his family. They had significant domestic help (four helpers and a driver) and there was no limit on her spending. They enjoyed overseas holidays, including access to what the wife describes as the husband’s family’s mansion in India. The children went to good international schools, they attended ECA’s and they had access to social clubs etc. There was never any question that the wife should work and her role was that of a wife and mother. She does not accept the husband’s stance as set out below. She believes that he is still working within the family companies and that he has access to the family wealth, much as he always has. She says that the husband’s current financial circumstances have been manufactured for strategic litigation purposes only and are not reflective of the true situation. The wife is currently living in a small flat in Homantin and was struggling to make ends meet, even before the husband allegedly cut off all financial support. She says that she has had no option but to borrow from family and friends in the short term.

The husband’s case

15.  In contrast it is the husband’s case that because of the deterioration in the relationship between him and the wife, and the shame that this has caused his family, he was asked to leave the family jewellery/gem business in 2018. However, he was provided with HK$14 million worth of gems, in order that he might set up on his own. It is not disputed that he continues to receive some financial support from his family, although on his case these are “loans”. It goes, almost without saying, that this is disputed by the wife. The husband’s standard of living has reduced significantly since the separation and he is now living in a small flat in Whampoa.      

What are the reasonable needs of the children?

16.  There was some confusion about what the wife was seeking at the initial hearing (see the transcript of the hearing on the 7 January 2020) and there remains some confusion about her current position. Mr Clough for the wife attached a schedule to his updated supplemental note, which can also be found in the wife’s 5th affirmation dated the 29 November 2019, where she sets out her expenses and those of the children as follows:

General

Item	Amount
Rent based on suitable accommodation (far less than former matrimonial home)	HK$60,000
Utilities (electricity, gas, rates, telephone & water)	HK$4,000
Management fees	HK$1,000
Food	HK$10,000
Household expenses	HK$2,500
Insurance premia	HK$l,000
Domestic helper	HK$5,750
Others (emergency expenses)	HK$3,200
Total monthly household expenses	HK$87,450

Personal

Item	Amount
Meals out of home	HK$4,000
Transport	HK$6,000
Clothing / Shoes (reduced from previous lifestyle)	HK$5,000
Personal grooming (including haircut and cosmetics) (reduced from previous lifestyle)	HK$5,000
Entertainment / presents	HK$2,000
Holiday	HK$3,000
Medical/ Dental	HK$3,000
Total monthly personal expenses	HK$28,000

Children

Item	Amount
School fees R-HK$16,470+2,800 (Annual Capital Levy) Y-HK$10,206+2,800 (Annual Capital Levy)	HK$32,276
Extra tuition fees and Extra Curricular Activities R-HK$5,200 Y-HK$4,230	HK$9,430
School sports/extra-curricular camps during holidays	HK$2,000
School books and stationery	HK$l,OOO
Transport to school (including school bus) R – HK$2,300(school bus-is one way   – HK$1,000 (uber-is one way) Y – HK$3,060 (school bus)	HK$6,360
Medical/Dental R wears glasses and will also require braces in future	HK$3,000
Entertainment / presents(inclusive of birthday parties which used to cost HK$5,000 each)	HK$10,OOO
Eating out	HK$2,OOO
Holidays	HK$5,OOO
Clothing / Shoes	HK$3,000
Lunches and pocket money	HK$2,000
Uniform	HK$300
Others (cell phone, grooming- haircuts)	HK$2,000
Total monthly personal expenses	HK$78,366

Total monthly expenses

HK$193,816

Mr Clough reiterated this this is what the wife is currently seeking – i.e. the total sum of HK$193,816 per month. The difficulty in part, is that this schedule is not based on the wife’s current expenses, but on what she believes would be appropriate going forward, based on her previous standard of living. She also makes no allowance for the fact that she is not seeking maintenance for herself.

Wife’s earning capacity

17.  I accept that the wife is not currently working, that she did not work during the marriage and that her earning capacity is very limited. Even on the husband’s own case, he assesses her earning capacity at HK$15,000 per month. Thus, for present purposes I accept that the husband should be wholly responsible for the wife’s general expenses and that, as things stand these shall be regarded as expenses for and on behalf of the children.

The General Expenses

18.  The husband estimates that the wife needs HK$24,500 per month to cover her general expenses as follows:

General Expenses

Item	Amount Proposed by the Petitioner (HK$)	My Proposal (HK$)
Rent	60,000	18,000
Utilities (electricity, gas and water)	4,000	2,000
Management fees	1,000	0
Food	10,000	3,000
Household expenses	2,500	1,500
Insurance premia	1,000	0
Domestic helper(s)	5,750	0
Other (emergency expenses)	3,200	0
Total monthly household expenses	87,450	24,500

19.  On the premise that the wife’s current rental is in the region of HK$23,000 per month, I shall allow the wife HK$41,500 per month for the general expenses of the household as follows:

Item	Amount permitted (HK$)
Rent	23,000
Utilities (electricity, gas and water)	3,000
Management fees	1,000
Food	8,000
Household expenses	1,500
Insurance premia	0
Domestic helper(s)	5,000
Other (emergency expenses)	0
Total monthly household expenses	41,500

20.  I accept that the wife should have access to some form of domestic help, but consider that it may be difficult for her to hire a full time domestic helper at present, given the current circumstances. However, the allowance of HK$5,000 per month should enable her to hire some part time help on a needs must basis.

Personal expenses

21.  As I have said, the wife does not actually seek maintenance for herself, but I shall exercise my discretion, in accordance with the wife’s original Form A dated the 19 September 2018, and I shall make an order nisi to be made absolute in 14 days’ time, that the husband do pay the wife HK$4,800 per month to cover her own expenses.

Children’s expenses

22.  The husband proposes paying the wife an additional HK$5,500 per month for the two children, subject to his undertaking to continue to settle the majority of the children’s expenses directly as follows:

Children’s Expenses

Item	Amount Proposed by the Petitioner (HK$)	My Proposal (HK$)
School fees	32,276	Settled by me on as it is basis
Extra tuition fees	9,430	Settled by me on as it is basis
School sports/extra-curricular camps during holidays	2,000	Settled by me on as it is basis
School books and stationery	1,000	Settled by me on as it is basis
Transport to school (including school bus)	6,360	Settled by me on as it is basis
Medical / Dental	3,000	1,000
Entertainment / presents	10,000	1,000
Eating out	2,000	1,500
Holidays	5,000	1,000
Clothing / Shoes	3,000	1,000
Lunches and pocket money	2,000	Settled by me on as it is basis
Uniform	300	Settled by me on as it is basis
Others (cell phone, grooming- haircuts)	2,000	Settled by me on as it is basis
Total monthly expenses for children	78,366	5,500

23.  I will accept the husband’s undertaking to continue to pay for the children’s school fees and their transport to school including the school bus fees and Uber costs directly. In addition, I accept that the following expenses are reasonable in the circumstances:

Children’s Expenses

Item	Amount Permitted	Comment
School fees	(32,276)	Husband’s undertaking
Extra tuition fees	5,000
Extra-curricular activities	2,000
School books and stationery	1,000
Transport to school (including school bus)	(6,360)	Husband’s undertaking
Medical / Dental	1,000
Entertainment / presents	1,500
Eating out	2,000
Holidays	N/A
Clothing / Shoes	1,500
Lunches and pocket money	2,000
Uniform	300
Others (cell phone, grooming- haircuts)	2,000
Total monthly expenses for children	18,300

24.  In total then I shall order that the husband pay the wife HK$64,800 per month i.e. HK$4,800 per month for the wife and HK$30,000 per month per child for the two children of the family (i.e. HK$41,500 + HK$18,300 = HK$59,800 rounded up to HK$60,000). Together with the undertakings referred to above the husband’s total monthly outlay is likely to be just over HK$100,000 per month.

The husband’s ability to pay 

25.  It seems to me that the husband should be able to pay this sum notwithstanding the fact that on his case he cannot afford to pay more than he has offered and that his financial circumstances are very tight. But, even putting his case at his lowest, it is clear that he does have some financial resources at his disposal (e.g. HK$14 million in gem stones) and he does have the ability to borrow (from his mother and brother). He has a moral and legal obligation to provide for the Petitioner and the children and he needs to ensure that this is now done.

The family business

26.  There are ongoing disputes concerning the family business and these centre in part on a Mutual Agreement Deed dated the 30 September 2013 and a Family Agreement dated the 10 March 2015. I am also told that it is the husband’s parents’ intention to take out a TL v ML application with respect to the beneficial ownership of a number of properties held in part legally by the husband, including the former matrimonial home in Kowloon Tong. Consequently, it seems likely that this litigation may be set to continue for a considerable period of time, unless common sense intervenes in the meantime and settlement is achieved. It is therefore imperative that the wife and children are suitably provided for in the interim.

Standard of living

27.  Often, where there are claims of financial non-disclosure (as here), the court looks to the standard of living enjoyed by the parties prior to the break-up of the marriage. In this instance it seems that the parties enjoyed an affluent life style. The issue will be the extent to which this has been provided by the husband’s family and whether the wife now has a valid claim against it. Further, although it is trite, for the record it is worth repeating that when a marriage breaks down and the parties begin to live in two separate households it is not possible, generally speaking, to maintain the same standard of living as before. There has to be, by necessity, some form of adjustment. The wife says that the husband’s adjustments are just for show and are not reflective of the reality. Time will tell whether this is true or not. In the meantime, the proposed order will ensure that she is able to live, albeit at a much-reduced level than the one that she claims, but one that is also currently in keeping with the husband’s own alleged reduced standard of living.

Conclusion

28.  In conclusion then I shall make an order as set out in paragraph 24 above. In addition, I shall hold the husband to his undertaking to continue to pay for both children’s school fees and school transport costs. He shall also continue to be responsible for Y’s expenses when Y is in his care.

Costs

29.  The wife has been more successful than the husband and she really had no alternative but to issue the current summons. She is also legally aided. In such circumstances I intend to exercise my discretion and make an order nisi to be made absolute in 14 days’ time, that the Respondent shall pay the Petitioner’s costs of and occasioned by this application on a party and party basis to be taxed if not agreed. There shall be certificate for counsel. The Petitioner’s own costs shall be taxed in accordance with Legal Aid Regulations.

Order

30.  Consequently, I shall make an order as follows:

UPON the Respondent’s undertaking to continue to pay for R and Y’s school fees and their school transport costs including school bus fees and Uber/taxi costs.

IT IS ORDERED THAT: 

1) Order 4 contained in the court order dated the 6 March 2019 shall be varied in that the Respondent do pay interim maintenance for the two children of the family in the sum of HK$30,000 per month per child, such sum to be backdated to the 12 August 2020 and thereafter to be paid on the 12th day of each succeeding month until further order.

2) There shall be an order nisi to be made absolute in 14 days’ time that the Respondent do pay maintenance pending suit to the Petitioner for herself in the sum of HK$4,800 per month, the first payment to be made on the 12 October 2020 and thereafter to be paid on the 12th day of each succeeding month until further order.

3) The First Appointment hearing shall be adjourned to the 14 October 2020 at 9:30am.

4) Both parties do personally attend that hearing.

5) There shall be an order nisi to be made absolute in 14 days’ time that the Respondent shall pay the Petitioner’s costs of and occasioned by this application, on a party and party basis to be taxed if not agreed. There shall be certificate for counsel. The Petitioner’s own costs shall be taxed in accordance with Legal Aid Regulations.