CSY v. CPK

FCMC 7235 /2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 7235 OF 2015

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JUDGMENT

(Maintenance pending suit/interim maintenance;
Legal costs provision)

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The application

1. By her summons dated 30 March 2016, the petitioner (“wife”) applies for (i) maintenance pending suit/interim maintenance for herself and 3 young daughters of the family, aged between 2 and 5 (collectively “MPS”) in the total and most updated sum of $110,342 per month, to be back-dated to the date of petition; and (ii) legal costs provision up to the CDR in the total sum of $350,000.

2. The respondent (“husband”) opposes her application on the major ground that he has no ability to pay and that she has grossly inflated her/daughters’ expenses. Originally, he seeks to reduce the amount that he has undertaken to pay to the wife/daughters in the hearing of 30 December 2015 from an average of no less than $25,000 per month to $15,000 per month. His latest proposal is to continue paying $25,000 per month for the wife/daughters. On top of this, he will continue to pay the children’s school fees, school bus expenses and the extra-curricular activities/tutorial classes (collectively “ECAs”) with a caveat that the ECAs expenses be capped at $3,000 per month. He makes no offer to the wife’s legal costs provision.

3. The huge gulf between the proposal of the receptive parties is mainly due to their disputes over what exactly is the husband’s financial resources and whether the wife has exaggerated her expenses, in particularly after she has changed to her current legal team, from $69,335 per month in her Form E to $133,731 in her 2^nd affirmation within 6 months of time.   

Background

4. The parties first met in 2009. They got married in May 2010 after the wife found herself pregnant. Three daughters were born within their wedlock in 2010, 2012 and 2104 respectively. They are now respectively 5, 3 and 2 years old. It is not in dispute that the wife is their main carer.

5. The wife, local born, is now 32 years old. She worked as a kindergarten teacher until 2011 (shortly after the 1^st daughter was born). Since 2013, she started working again from time to time but on a part time basis, first in selling household cleaning products and later as an insurance agent. She claims that she has ceased working since mid 2015.

6. The husband is now 37 years old. He emigrated to Canada with his family when he was 12 years old and received education there. In 2001, he graduated from business studies in the university and later moved back to Hong Kong. His father founded and ran a company specialising in import and export of plastic flowers (“A Ltd”). The husband joined A Ltd in 2004 and subsequently took over the family business in/about 2005. He is now one of the equal shareholders (the other 50% shareholder is his mother) of A Ltd. He was also a director, but claims that he has resigned from the post since or about December 2015 on his father’s request.

7. Marital discord started to take shape after the birth of their 1^st daughter in late 2010. Despite that, the 2^nd and 3^rd daughters were born in mid 2012 and early 2014 respectively. The separation took place on/about 31 May 2015 when the wife moved out of the matrimonial home with the 3 daughters to live with her parents. By then, the marriage has lasted for only 5 years.  On 10 June 2015, the wife issued her petition on the ground of “unreasonable behaviour”, which was undefended. Decree nisi was made on 1^st April 2016. 

8. The parties have basically agreed that daughters will continue to be under the care and control of the wife. A CDR (children dispute resolution) has been fixed to take place in coming October for solving the issues of custody and access.

9. In so far as ancillary matters are concerned, the husband has given an undertaking to this court on 30 December 2015 that he will pay the wife no less than $300,000 per year (ie $25,000 per month) to support her/daughters until further order of this court, and to continue to pay for the daughters’ school fees, interest classes, tutorial classes and school bus fees (“Undertaking”). No questionnaire has been filed by either party, despite an order was already made on 30 December 2015. 

The wife’s case

10. It is basically the case of the wife that she has been a housewife and carer of the daughters during the marriage, completely and financially dependent on the husband whose financial means should not be confined to his monthly salaries, as he has access to the financial resources of A Ltd. Yet he has failed to fully and frankly disclose his and A Ltd’s financial means, including various premium bank accounts with HSBC. He also has made unexplained withdrawals from his HSBC accounts between November 2014 and September 2015 in the total sum of at least $3 million within 11 months. In any event, he has the ability to borrow, as his bank statements show that overdraft facility is available to him.

11. During their marriage, he paid for all major household expenses including mortgage repayment of the matrimonial home and the daughters’ education fees. On top of that, he paid her a lump sum to cover the food, her own expenses and other miscellaneous expenses. For example, in 2014, he paid her a lump sum of $600,000 averaging $50,000 per month, He also provided her with a credit card of credit limit of $50,000, of which she would spend about $12,500 solely on buying essential oils for the daughters.  However, since their separation, he has unilaterally cut her credit card and medical insurance. He has also cut his financial support to her/daughters to merely $25,000 per month, despite the Undertaking is to provide her with not less than $300,000 a year. Since she has taken out her MPS application, he becomes very strict and resistant in paying the daughters’ ECAs. Her urgent need is to house herself and the 3 daughters, who are now cramped in her parents’ self-owned public housing estate unit in Ma On Shan of about 400 sq feet, a significant downgrade of what they used to enjoy before the separation, which is an almost 1,000 sq feet matrimonial home in Cheung Sha Wan, with the service of at least a maid and usage of private car.

12. In her latest proposal, the wife says that she needs $110,342 per month in order to replicate the living standard that she and the daughters used to enjoy prior to the separation, with breakdown as follows:

	Items	$ per month
(1)	General expenses (including renting a private flat in Ma On Shan of comparable size to the matrimonial home and hiring a maid)	$57,110
(2)	Wife’s personal expenses	$10,835
(3)	Children’s expenses (but excluding school fees which shall continue to be borne by the husband)	$42,397
		$110,342

13. Due to lack of fund, she now has to rely on legal aid but is of the view that the husband is rich enough to finance her litigation fees. It would not be fair that any ancillary relief award to her in the future has to be subject to the first charge of the Director of Legal Aid.

The husband’s case

14. The husband agrees that he is the main breadwinner of the family. It is his case that on top of mortgage repayment and family expenses that were paid directly by him, he also paid the wife an annual lump sum of $300,000 (or $25,000 per month) to cover food, her own and other household expenses. He does not challenge the various lump sums that the wife claims she received from him between 2011 and 2015 (to be elaborated further below), but disputes the nature of the payment. For example, he paid a lump sum of $600,000 to the wife in 2014, but insists that only $300,000 (averaging to $25,000 per month) was to cover household expenses; the other $300,000 was a one-off payment made on her insistence for her pregnancy costs (借肚費).

15. Since his major source of income is his salary of about $59,000-$60,000 per month and dividends of A Ltd that is unlikely to be any for 2015 due to bad business, the husband says that he has been using his own savings to subsidise the expenses of the family, as well as the education/interest classes of the daughters which according to his own calculation amounts to $17,302 per month.[1] As a result, his savings at bank has been depleted significantly from almost $1,299,432 in February 2015 to $25,276 in May 2016.

16. According to him, the wife has grossly inflated her/children’s monthly expenses, almost doubling the expenses over a short period of 6 month like this:

	Wife’s Form E (1/12/2015)	Wife’s 1st MPS affirmation (30/3/2016)	Wife’s 2nd MPS affirmation (28/6/2016)
General	$27,300	$55,110	$57,110
Personal	$22,535	$22,535	$22,835
Children	$19,500	$68,334	$53,786
TOTAL:	$69,335	$104,334	$133,731

17. Although she has, by her latest proposal, tuned down the total expenses to $110,342 per month, it is still beyond his ability to pay. He is unable to sustain anymore with his limited salaries and savings. Hence, he asks the wife to secure a full-time job and if so, he would offer to pay the maid’s salary. His other proposal is already set out at §[2] above.

18. On the wife’s application for legal costs contribution, the husband makes no offer. His stance is that the wife does not need his financial support as she is receiving legal aid now. In any event, he does not have the ability to pay her.

Legal principles on MPS/interim maintenance

19. The power for this court to make a maintenance pending suit for a spouse and interim maintenance order for the children of the family is set out in sections 3 and 5 of the Matrimonial Proceedings and Property Ordinance (“MPPO” or “Ordinance”) respectively.

20. The governing principles in any MPS application require the court to balance the reasonable needs of the applicant spouse (and the children where applicable) against the paying spouse’s ability to pay by using a broad brush approach.  The overall and sole criterion is one of “fairness”.  The relevant principles are propounded by Hartmann JA (as he then was) in HJFG v KCY [2012] 1HKLRD 95 as follows:

  “34.  By definition, therefore, maintenance pending suit is restricted to payments which constitute ‘maintenance’, which are reasonable in the circumstances and which will endure for no longer than it takes to determine the divorce litigation.  ‘Maintenance’ is a broad concept.  I do not seek to define its exact meaning but it seems to me that it must be restricted to those payments necessary to meet the recurringcosts of living at whatever standard of living is appropriate. That being the case, no matter how great the wealth of the parties and how unevenly distributed that wealth may be at the time an application for interim maintenance is made, the court has no jurisdiction to make orders which for all practical purposes result in a form of pre-trial capital re-balancing.  In the present case, the judge recognised the long-established approach of looking to the “immediate and reasonable needs” of the wife and son.

   35.   As to the amount of maintenance pending suit that may be paid, the Ordinance provides only that it must be ‘reasonable’, that is, having regard to the circumstances of the case, that it must be fair.

   36.   An important factor in determining fairness is a consideration of the marital standard of living.  In this regard, each case must be considered according to its own circumstances.  It is not simply to be assumed that great wealth equates to great extravagance.  Some married couples who enjoy great wealth spend with comparative modesty and with a discipline born of discretion, others enjoy consumption on a grand scale.

   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:

i.   The sole criterion to be applied in determining the application is ‘reasonableness’, whichis synonymous with ‘fairness’.

ii.  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.

iii.   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.

iv.   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.”

21. It is also well established that in the ancillary relief proceedings, including MPS, there is a duty on both parties to make full and frank disclosure of all relevant materials to enable the court to exercise its discretion in making the order. If the court is of the view that the evidence disclosed by a party is deficient, adverse inferences may be drawn against that party (See: C v F (Maintenance Pending Suit) [2006] HKLFLR 41at §28). 

The husband’s ability to pay

22. The husband’s ability to pay is actually in the centre place of dispute in this hearing. It is the fundamental ground of his objection to the wife’s application for MPS and/or to finance her litigation costs. Therefore, the following analysis applies equally to the wife’s application for MPS and legal costs provisions.

23. According to the husband, his financial means are limited to his monthly income, which is on average about $59,167 per month before tax for the year of 2014-2015. [2]  He is unlikely to receive any dividends from A Ltd for 2105 this year, though he received dividend of $300,000 for 2014 in 2015. Pursuant to the Undertaking, he has been paying $42,302 per month to the wife (including $25,000 per month for her/daughter’s maintenance; $17,302 for the daughters’ school fees and ECAs). He has also to pay the mortgage and other necessary expenses of the matrimonial home, carpark rental, his various insurance premiums and the education fund of the eldest daughter, totalling $23,228. Disregarding his own personal needs, he has to pay a total sum of $65,530 a month, which already exceeds his income of $59,167. There is a shortfall of $6,363 per month. As such, he has to rely on his savings at bank which has been depleted significantly from almost $1,299,432 in February 2015 to $25,276 in May 2016. He also has to re-budget his monthly expenses from $90,045 per month (per his Form E dated 23 December 2015) to $49,414 per month (per his 1^st affirmation dated 14 June 2016).  Yet, he still needs at least $15,247 per month in order to make up the shortfall between his salary and his expenses and various sums that he has been paying pursuant to the Undertaking. He is unable to ends meet, let alone to satisfy the excessive MPS demand of the wife.

24. The wife’s case on the husband’s financial ability is 2-folds. Firstly, she says that his financial means should not be limited to his monthly income as stated in his tax returns, because he is in absolute control of the finances and money of A Ltd, his family company. Secondly, she insists that the husband has not fully and frankly disclosed the financial condition of himself and of A Ltd, thereby inviting this court to draw an adverse inference on him.

25. Upon considering all Form Es, relevant affirmations and the submission of both parties, I am of the view that the husband does have the ability to pay for the MPS that I am going to order for this interim period on the following major grounds.

26. First, it is indisputable that during the marriage, the husband was the main breadwinner of the family. Here is how he describes his financial responsibility during the marriage in his affirmation in opposition to the MPS application:

“9. Throughout the marriage, I have been paying for the mortgage, management fees, government rates and rent and utilities for the former matrimonial home. I have also been paying for the children’s school fees, school bus expenses and interest class fees, which amount to approximately HK$3,000 a month, as well as their medical insurance policies. On top of that, I pay to the Petitioner a lump sum to cover all other expenses, including food, household expenses, the Petitioner’s personal expenses and the children’s other expenses.”

27. As said above, the husband agrees that he has paid the various lump sums to the wife between 2011 and 2015, but he disputes the purpose of the lump sum payment for 2014 and 2015. The different cases of the parties can be summarised in the following table:

Year	$ paid to the wife	Wife’s case	Husband’s case
2011	$250,000 per year ($20,833/month)	Household expenses	Agree
2012	$250,000 + $50,000 for hiring a maid per year ($25,000/month)	Household expenses	Agree
2013	$350,000 + $50,000 for hiring a maid per year ($33,333/month)	Household expenses	Agree
2014	$600,000 + $60,000 for hiring a maid per year ($55,000/month)	Household expenses	- Only $300,000 are household expenses; the other $300,000 is costs of pregnancy (借肚費) made at the wife’s requested. - The costs of hiring the maid was paid directly by him to the maid.
2015	$200,000 for January - May 2015 ($40,000 per month)	Household expenses	- $400,000 was paid to the wife between January-May 2015, of which $300,000 was for the usual household expenses and $100,000 was to cover her moving out and staying at her parent’s place.

28. Since a MPS application is argued on affirmation evidence without taking oral evidence, it is impossible for me to pass any firmed view on the above factual dispute as to the nature/purpose of the lump sum payment. Such factual dispute should be decided in the final ancillary relief trial by the trial judge. But in my judgment, irrespective of the nature/purpose of such lump sum payment, it certainly sheds light on the husband’s ability to pay.

29. Second, it is the husband’s case that he has “only one bank account in Hong Kong”,[3] and he has so far disclosed the bank records of his HSBC premier bank account (“Main HSBC Premier Account”).[4] A closer look into the monthly statements of this Main HSBC Premier Account, however, will show that what he alleges is plainly untrue, because the said monthly statements reveal that he has/had at least 4 other premier accounts, a SmartVantgae account, an Advance account, a FCY current account, a SEC margin settlement accounts, all held with HSBC (“Undisclosed Accounts”). He has failed to provide the monthly statements of these accounts. Ms Lam, his solicitors, attempts to argue that the Undisclosed Accounts have been disclosed in the bank statements of the Main HSBC Premier Account. This submission is erroneous, as only the balance of the Undisclosed Accounts is shown, but not each and every transactions that may have taken place within the required period of the Form E (if any).  I am thus of the view that the husband has failed to make full and frank disclosure for the purpose of this hearing. The case law is clear that I 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 (See: HJFG v KCY (supra) at §37).  

30. Third, as I have pointed to Ms Lam for the husband during the hearing, despite his claim for limited financial resources to meet all the family expenses as described in his affirmation, it is noted that the portfolio assets at the Main HSBC Premier Account (consisting of cash in HKD, foreign currencies, stock and gold) has significantly increased during the last 6 months before the petition was issued in June 2015, despite his allegation that he had limited income to meet his ends. The portfolio assets have increased from about $881,667 in December 2014 to about $2,042,279 in May 2015, but suddenly and coincidently dropped by about $1 million to about $1,020,000 after the petition was issued in June 2015. The husband has yet to offer an explanation to this, which I am sure he would do in the final ancillary relief trial. But for the purpose of this application, the aforesaid increase in the Main HSBC Premier Account tends to show that he may have other financial means apart from his monthly salary which he has yet to disclose/explain, thereby enabling him to accumulate his wealth between December 2014 and May 2015 despite all his liabilities and expenses.

31. Fourth, it is submitted by the wife and conceded by the husband through his solicitors that he has the ability to borrow. It is trite law that an ability to borrow can be regarded as one of financial resources of the paying party.

32. Fifth, it is indisputable that the husband has through his solicitors made an offer to increase the MPS to $28,000 per month in the court hearing of 6 April 2016, but was not acceptable to the wife. Subsequent to that hearing, the whatsapp messages between the parties show that the husband had invited the wife to view accommodation in Ma On Shan area. These undeniable facts and arrangement do not sit well with the husband’s suggestion that he does not have the ability to pay.

33. In passing, I take note that Mr Wong for the wife points out that the husband has made numerous withdrawals of a total sum of $3 million between November 2014 and September 2015 from the Main HSBC Premier Account.[5] He also refers me to some deposits, in particularly those foreign currencies deposits via western union, into the Main HSBC Premier Account. Since this is merely a MPS application and that the court only needs to take a broad brush approach, I find it unnecessary to make any specific findings on this submission, other than what I have already observed and set out above. That should be left for the trial judge of the final ancillary relief upon receiving oral evidence. 

34. Submission is also made by Mr Wong that since the wife’s MPS summons, the husband has recently claimed that he has resigned as a director of A Ltd on his father’s request. The wife says that it is a sham arrangement. The husband is still de facto in charge of A Ltd.  It is noted that according to an employer’s return for 1 April 2015 to 31 March 2016 which is disclosed by the husband himself, he is still described as the “director” of A Ltd. This document does not sit well at all with his own allegation that he was told to resign and has in fact already resigned in/about December 2015. I hold the preliminary impression that the husband has not fully explained his current and true relationship with A Ltd.

35. Upon considering the above and all the circumstances, I conclude that the husband has not made full and frank disclosure of his financial means, in particularly his various accounts held with HSBC. He has yet to explain this. With his alleged family expenses far exceeding his monthly income, how and why his portfolio assets at the Main HSBC Premier Account was on the rise for at least 6 months before the petition was filed in June 2015, after which his bank reserves coincidently start to drain by at least $1 million after the petition was issued. For the purpose of this application and until he has offered an explanation, it is my preliminary view that he may have other undisclosed financial means and thus has the ability to pay any amount that I am going to order in this judgment.

Reasonable needs of the wife/daughters

36. The reasonable needs of the wife and the daughters would have to be considered against the living standard of the family during the marriage. There cannot be of dispute that before the separation, the family lived together in the matrimonial home measuring 978 sq feet, with 3 bedrooms and 2 toilets. It was purchased in the sole name of the husband in 2012. It is also not in dispute that the daughters were all born in private hospitals and the wife received medical attention with private doctors for her health problems. Since/about 2012 after the birth of the 2^nd daughter, the husband hired a maid to assist the wife in taking care of the children, and for a short period of about 3 months after the 3^rd daughter was born, another maid was employed. The family had private car(s) and enjoyed outings to Ocean Park/Disneyland.[6] They had overseas trip(s) every year, such as to the USA and Mexico in 2012. 

37. However, it is pertinent to point out that according to the wife’s Form E, the matrimonial home is worth about $10.5 million but subject to a mortgage of almost $4.8 million. It is not situated in the traditional prime and expensive districts, such as Kowloon Tong. It used to house at least 4 adults (including a maid and the wife’s mother) and 3 young children before the separation of the parties.[7] On the face of it, the living condition of this family cannot be regarded as spacious and luxurious. Besides, the family did not enjoy any private club service. The private car they used, in the wife’s best case, is just a Lexus or an Alphard. They are not those high-end and expensive cars. After a long haul flight back from the USA/Mexico, they took a bus home instead of by more expensive transport such as taxi.[8]

38. Having considered the Form Es and the relevant affirmations, I have an overall impression that the family enjoyed a living standard comparable to an average middle class during their marriage, but not of a luxurious and wealthy style.  As such and given a broad brush approach is adopted in any MPS application, I have the following preliminary view.

39. Firstly, as a general observation, the wife has failed to explain to my satisfaction why there is such a sudden and drastic increase of the monthly expenses by almost a double from $69,335 per month in her Form E to $133,731 per month in her 2^nd MPS affirmation within a brief period of 6 months, which is further revised to $134,062 in her opening submission. Mr Wong acting for the wife attempts to submit that the alleged increase in expenses would cover renting a flat (at $22,000 per month); hiring a maid (at $4,110 per month) and those increased expenses including ECAs of the daughters. However, this line of submission does not sit well with what the wife has originally sought for in her 1^st Appointment Bundle filed for the hearing of 30 December 2015. In that 1^st Appointment Bundle, she seeks MPS for herself and the daughters in the total sum of $70,000 only.  Also, if Mr Wong’s submission is accepted, it would mean that for merely over a short period of 6 months, the increased expenses and the ECAs of the 3 daughters alone (now aged 5, 3 and 2 only) would cost about $38,286 per month (if the total expenses are $133,731 per month). This, in my view and for the purpose of this application, is excessive and not in line with the living standard of this family. 

40. Secondly, the wife asks the husband to cover the expenses of hiring a maid. However, the affirmation evidence and exhibits thereof show that for the majority of the time when they did enjoy the service of a maid, the wife was at least working part time. Since it is now her case for the purpose of this application that she has ceased working in order to take care of the daughters, and with the continued assistance of her parents especially her mother, I am not inclined to allow the wife to have the maid’s expenses for this interim period.

41. Thirdly, the wife claims a sum of $22,000 per month in order to rent a flat in Ma On Shan of similar size of the matrimonial home to house her, the daughters and a maid. During the hearing, I have tried to explore the possibility of the wife’s moving back to the matrimonial home with the daughters while the husband moves out of the matrimonial home. The wife rejects this alternative and submits that moving back to the matrimonial home would bring back to her bad memories of the past. In any event, the husband claims that he has no alternative accommodation. Pausing here, I must comment that it is rather unwise of the parties to reject the aforesaid possibility, in particularly their daughters are still very young and would be in need of financial support in the years to come. Resources can surely be saved if the wife and the daughters would move back to the matrimonial home while the husband would move to stay with his parents.  But with the aforesaid stance of the parties, some interim measure has to be put in place to house the wife and the daughters in a comparable accommodation. I take the initial view that they should be entitled to rent a flat of about 600-odd sq feet during this interim period, given what I have said above on the living standard and on the rejection of hiring a maid. According to the wife’s research, the rental of a flat in Ma On Shan of about 600-odd sq feet would fall within the range of $12,000 - $15,000.[9] I would err on the safe side and allow $15,000 per month to cover the rental.

42. Fourthly, I tend to agree with the husband that the wife has overstated the expenses of the daughters. She claims a sum of $12,527 per month to cover the ECAs of the daughters. It is on the high side given their living standard and the relatively young age of the daughters. I also notice that some of the expenses relate to summer classes which should not be recurring except during the summer holidays. The children’s school bus and books can be paid by the husband. The daughters are too young to receive any pocket money. On the other hand, the wife has failed to explain why the medical/dental expenses of the daughters (including creams and essential oils)[10] would increase from $8,000 per month (in her Form E) to $15,000 per month (in her 2^nd MPS affirmation), or $13,000 per month as per her latest proposal. I have the same observation in respect of the increase of the daughters’ entertainment/presents which is increased from $2,000 per month (in her Form E) to $5,000 per month (in her 2^nd MPS affirmation), or $4,000 per month as per her latest proposal. Finally, for this interim period, I am not prepared to allow any expenses relating to the daughter’s education fund, which surely will be further considered at the final ancillary relief trial.

43. Taken into account of all the circumstances and by adopting a broad brush approach, I conclude that for this interim period, the reasonable needs of the wife and the daughters would be as follows:

	Items	per month
(1)	General expenses (including renting a flat in Ma On Shan at $15,000)	$32,000
(2)	Wife’s personal expenses	$10,000
(3)	Children’s expenses including ECAs but excluding school fees, school bus and school books)	$18,000
		$60,000

44. For clarity, the above sums would be apportioned as to $18,000 for the wife and $42,000 for the daughters.

45. I remind both parties that any over-provision or under-provision at the stage of the MPS application can be adjusted at the final hearing of the ancillary relief (See: F v F (Ancillary Relief: Substantial Assets) [1996] 2 FCR 397).

Applicable law on legal costs provision

46. There should not be any dispute between the parties that as a matter of general principles, this court has the power to include an element for the contribution towards the Wife’s legal costs in an order for maintenance pending suit under section 3 of MPPO (See: KGL v CKY & Anor [2003] 2 HKC 512). Family judges in Hong Kong have constantly referred and adopted the guiding principles set out in the English Court of Appeal case of Currey v Currey (No 2) [2007] Costs LR 227 (adopted by the Hong Kong Court of Appeal in HJFG v KCY [2012] 1 HKLRD 95 per Hartmann JA (as he then was); H v H, FCMC 1969/2007 per HH Judge Bruno Chan) which provides the following conditions:

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

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

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

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

Discussion on legal costs provision

47. At the time when the wife took out this summons, she had applied for, but not yet granted legal aid. She has obtained legal aid since 12 April 2016, but still wishes the husband to provide for her legal costs. It is her case that she has spent all her resources on daily spending of her and the daughters. Her main bank account with Hang Seng Bank is now overdrawn.  The husband is in control of the family assets which he can apply to subsidize his own legal costs, whereas any final distribution of family assets to her will have to be subject to the first charge of legal aid. This is not fair to her. She estimates that she would need $350,000 to cover her costs going forward up to the stage of CDR as follows:

(1)	Discovery including specific discovery against A Ltd:	$250,000
(2)	Accounting expenses and property valuation:	$20,000
(3)	Preparation and attendance of CRD:	$80,000
	TOTAL:	$350,000

48. In opposition, the husband says that he does not have the financial means to subsidise the wife’s legal costs. More importantly, she has yet to account for the following:

(a)  How she has spent her savings and loans of $200,000 within 6 months between her Form E and her 2^nd MPS affirmation;

(b) her salary working as insurance agent of $159,583;

(c)  her bank withdrawals in the total sum of $400,866 from her Hang Seng Bank account between January 2015 and October 2015 (ie $40,086.60 per month);

(d) her bank withdrawals in the total sum of $639,500 from her HSBC Advance account between December 2014 and September 2015 (ie $63,950 per month).

49. On the face of it, the wife has withdrawn more than $1 million from her Hang Seng Bank and HSBC Advance accounts between December 2014 and October 2015. For the purpose of this application, I do not accept the wife’s oversimplified explanation by way of her 2^nd MPS affirmation that “the withdrawals of sums from the bank accounts were for the daily spending of our daughters and me”. A cursory reading of her HSBC Advance account records would reveal that there are at least 3 large sum of withdrawal in the total sum of $320,000 as follows:

(1) A sum of $100,000 withdrawn on 13 May 2015;

(2) A sum of $100,000 withdrawn on 15 May 2015; and

(3) A sum of $120,000 withdrawn on 29 July 2015.

50. In my preliminary view, the proximity in time of such withdrawal (ie immediately before or shortly after she issued the petition in June 2015) begs an explanation. It also begs her explanation as to why $200,000 by way of 2 lump sums of $100,000 each within 3 days was required to finance daily expenses. According to her best case stated in her 2^nd MPS affirmation, her total monthly expenses are $133,731 only. Until and unless further explanation is offered by the wife as to the use/whereabout of these money, I find myself unable to accept the submission made by Mr Wong on the legal costs provisions. In any event, the wife is able to secure, through legal aid, the legal advice from a legal team specialising in family law and thus her rights are protected. I conclude that her request for costs provision should be rejected upon reviewing all the circumstances.

Conclusion

51. Due to the matters aforesaid, I shall allow the MPS application of the wife for herself and the daughters in the total sum of $60,000 per month. It is fair that this sum shall be back-dated to the filing date of her summons (30 March 2016), but not the date of petition.

52. Both parties have agreed that costs should follow the event. The wife wins in her MPS application but loses in the legal costs provision request. Given the affirmation evidence and oral submission focus mainly on the MPS application, I shall exercise my discretion that the husband should bear 75% of the wife’s costs of and incidental to this application.

53. On the continued undertaking of the husband that (i) he will pay for the school fees, school bus and school books of the daughters within 14 days upon issuance of such invoices/receipts until further directions/orders from this court and (ii) he will continue to punctually pay the mortgage, management fees, rates and government rent of the matrimonial home until further directions/orders from this court, I shall make the following order:

(1)   the husband shall pay to the wife for her maintenance pending suit in the sum of $18,000 per month to be back-dated to 30 March 2016 and thereafter on the last calendar day of each and every succeeding month until further order of the court;

(2)   the husband shall pay to the wife for the interim maintenance of the 3 daughters of the family in the sum of $42,000 per month to be back-dated to 30 March 2016 and thereafter on the last calendar day of each and every succeeding month until further order of the court;

(3)   Credit be given to any sums that the husband has paid to the wife from 30 March 2016 onwards; the difference (if any) shall be paid within 14 days from today;

(4)   The husband shall bear 75% of the wife’s costs of and occasional by this application to be taxed if not agreed. This is a costs nisi which will be made absolute within 14 days from the date of this judgment unless either party applies to vary the same;

(5)   The wife’s own costs shall be taxed in accordance with legal aid regulation.

54. For completeness and avoidance of doubt, the husband’s undertaking given on 30 December 2015 in respect of payment of no less than $300,000 per annum and the ECAs should be discharged, but his undertaking not to further mortgage and/or cause further encumbrances to the matrimonial home shall continue.

55. The order should be drawn up by the wife for approval.

[1] Husband’s affirmation [294-295/§17]

[2] Husband’s affirmation [291/§7] and tax return for 2014-2015 [250]

[3] Husband’s affirmation [293/§13]

[4] [155] – [205]

[5] Wife’s written submission at §26.

[6] See Form J of the husband.

[7] According to the wife’s Form E, her mother started to live with them since 11/2014 to assist in taking care of the newly-born 3^rd daughter [38].

[8] [56]

[9] [281-282]

[10] According to the wife, the eldest daughter is suffering from eczema problem, food and dust allergies since birth, and thus requires creams, essential oils and Chinese medicine to control her problems. The youngest daughter has neonatal respiratory distress, which is now under control but needs essential oil and supplements to relieve her symptoms.