P,SYR v. Y,WY

FCMC 9191/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 9191 OF 2015

________________________

________________________

---------------------------------------

JUDGMENT
(Maintenance Pending Suit and interim maintenance)

---------------------------------------

Introduction

1.  This is an application by a respondent wife for maintenance pending suit for herself, pursuant to section 3 of the Matrimonial Proceedings and Property Ordinance, Cap 192 and for interim maintenance for the two children of the family, a girl aged 6 and a boy who is nearly 4 years old, pursuant to section 5 of the same ordinance.

Background to the marriage and the litigation generally

2.  By way of background, the parties married on XX July 2006 and the divorce petition was issued on the 20 July 2015.  This is then a marriage of approximately 9 years duration. The husband is a psychiatrist with the Hospital Authority and the wife for her part is a full time mother and housewife.  She has not worked outside of the home since December 2005, which is before the parties married. The parties separated on the 22 May 2015. The husband says that this was by agreement and the wife says that she was forced to leave with the children. The wife is presently living with the children with her family in South Horizons. It is her case that the living conditions are very cramped and that she is being financially supported by her parents. The husband initially continued to live in the matrimonial home – which is a property allegedly owned by his parents. It is his position that this is no longer an option for either side. He has recently moved to a much smaller apartment in Tsing Yi. The matrimonial home was a sizeable property of 1,600 square feet. The family dog initially stayed at this property. There is also an issue with respect to the dog.

3.  The husband was originally reluctant to pay the wife any direct maintenance seemingly because shortly after the separation on the 17 June 2015 the wife transferred HK$250,000 from the parties’ joint account to her sole named account. In any event this money has now been spent.  When the matter was first before me on the 14 October 2015 I consequently made an interim interim order that the husband do pay the wife a total of HK$18,000 per month – HK$6,000 per month for herself and HK$6,000 per month for each of the two children.  In view of the husband’s open offer at this hearing I further varied the order of the 14 October 2015 by consent so that the husband now pays the wife a total of HK$44,000 per month – HK$16,000 per month for the wife and HK$14,000 per month per child, with effect from the 1 February 2016.  I also indicated that the husband should consider allowing the wife the use of the Audi car. The parties had two cars during the marriage, a Land Rover and an Audi. They also had domestic help. They enjoyed a good standard of living. It seems that the husband’s parents also made a significant financial contribution to the family. I should add that there have also been issues concerning access and that matters concerning the arrangements for the children are due to come back before the court for a Children’s Dispute Resolution hearing in May.      

Issue

4.  There are then two main issues to be determined in this judgment namely:

a) How much maintenance should be paid by the husband to the wife for her own maintenance and that of the children on an interim basis going forward?

b) Should provision be made for litigation funding and if so in what amount?

The Law

Maintenance pending suit/interim maintenance

5.   Applications of this nature are governed, as I have said, by section 3 and section 5 of the Matrimonial Proceedings and Property Ordinance, Cap 192, which states that the only governing principle is that the court will make such order as it considers reasonable in all of the circumstances of the case.  Consequently, maintenance pending suit applications and similarly interim maintenance applications are approached on a broad-brush basis.  A detailed examination of the party’s means will be considered at a later date at a full ancillary relief hearing if agreement is not reached in the meantime.  Any overpayment or underpayment may be dealt with then.  

6.  Generally speaking the court is concerned on an application such as this with the needs of the wife and the children, the standard of living enjoyed by the parties previously and the ability of the husband to pay (see C v F [2006] HKFLR 4).

Litigation funding

7.  In so far as the law on the funding of litigation costs is concerned, reference should be made to Currey v Currey [2006] EWCA Civ 1338. This case is now routinely applied in Hong Kong and should therefore be relied upon in this instance.

In Currey v Currey [2006] EWCA Civ 1338,

“the conditions for a ‘costs allowance’ are as follows:

(1) That the applicant spouse has no assets, or none that can reasonably be deployed (at para [19], [20]).

(2) That she can provide no security for borrowing, or none which can reasonably be offered (at paras [19], [20]).

(3) That she cannot reasonably obtain legal services by offering a charge on the outcome of the litigation (at para [20] and see Sears Tooth, per Wilson J).

(4) That she cannot secure publicly funded legal help ‘at a level of expertise apt to the proceedings’ (at para [20])”

There is also a requirement to undertake an overarching enquiry

8.  In addition, in the context of this case, reference can be made to the following general principles:

(i) The sole criterion to be applied in determining the application is ‘reasonableness’ (s 22 of the Matrimonial Causes Act 1973), which, to my mind, is synonymous with ‘fairness’.

(ii) A very important factor in determining fairness is the marital standard of living (F v F).  This is not to say that the exercise is merely to replicate that standard (M v M).

(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 (F v F).  That budget should be examined critically in every case to exclude forensic exaggeration (F v F).

(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 (G v G, M v M).  In such a situation, the court should err in favour of the payee.

(v) Where the paying party has historically been supported through the bounty of an outsider, and where the payer is asserting that the bounty had been curtailed, but where the position of the outsider is ambiguous or unclear, then the court is justified in assuming that the third party will continue to supply the bounty, at least until final trial (M v M).

9.  In this instance the position of the husband’s parents does not appear to be unambiguous in that they have apparently stated that neither side is now permitted to use the former matrimonial home. This is a matter of some regret as it seems to me that it would have been far better for the children had they been allowed to remain in familiar surroundings with their mother.  I am told that the husband continues to exercise his right of access to the children at the former matrimonial home – so to an extent it appears that his parents allow him some use of the property. No doubt further submissions will be made on this in due course. In so far as the present application is concerned I am therefore proceeding on the premise that this property is no longer available to either party and that both parties housing needs will need to provided for from the financial resources of the husband.  In so far as the contents of the matrimonial home are concerned I have already indicated during the hearing that the furniture and other items should now be divided by agreement between the parties.

Discussion

10.  In the wife’s original summons dated the 25 September 2015 she seeks HK$87,500 per month in total as maintenance pending suit for herself and interim maintenance for the children, plus a one off payment of HK$250,000 and a further HK$50,000 per month for litigation funding. However in her affirmation in support this sum was increased to just over HK$97,000 per month. The husband now offers to pay a total of HK$44,198 per month. This offer is contained in his affidavit dated the 9 November 2015. I am told that no offer was made prior to this date. He initially made no proposal for set up costs but at the hearing said that he was prepared to pay HK$100,000 for that purpose. He also made no offer in relation to litigation funding and did not agree that the wife should have the use of the Audi car.

How much maintenance should be paid by the husband to the wife for her own maintenance and that of the children on an interim basis going forward?

The financial resources of the husband

11.  It is not in dispute that the husband’s total income is HK$163,408.50 per month. It was also accepted during the hearing that there had been some double accounting of the husband’s tax in his solicitor’s submission and that even on the husband’s own figures he has a current surplus of just over HK$62,000 per month and not HK$44,000 per month as suggested. In addition it seems to me that the husband has the ability to reduce some of his expenses. He also has liquid assets of approximately HK$6.5 million which is another financial resource that is available to him – although I accept that it is not advisable longer term to rely on the parties assets for interim financial assistance. The husband’s personal expenses however amount to approximately HK$35,000 per month inclusive of tax of c HK$19,000 per month leaving a balance of HK$16,000.  I would suggest that these could be reduced to say HK$8,000 per month. It was accepted during the hearing that the allowance for holidays for both sides should be removed in its entirety for the time being. This accounts for some of the reduction. Other savings can be made in the area of say meals out of the home, clothing/shoes, entertainment etc  In so far as the children’s expenses are concerned these are generally accepted – although where there is some overlap with the mother’s estimate.

12.  The husband agreed during the hearing that he would undertake to continue to pay for the children’s school fees in the sum of HK$20,000 and the extracurricular activities in the sum of approximately HK$4,000. He offered to reimburse the wife for the cost of the school bus, school stationery, medical and dental expenses and the cost of the children’s school uniform and the elder child’s school lunches within two days of the receipts being received. These sums are included in the husband’s schedule of outgoings as follows:    

4.3 Children

Item	Amount (HK$)
School fees	20,000*
Extra tuition fees	4,000*
School books and stationery	200*
Transport to school (including school bus )	945*
Medical / dental	1,000*
Entertainment / presents	1,000
Holidays	0
Clothing / shoes	1,000
Insurance premia (see Part 2.8)	0
Lunches and pocket money	Paid by Petitioner*
Other Transport	0
Child-minding fees	0
Uniform (including PE uniform)	200*
Others (specify)
Total monthly expenses for children	HK$28,345

13.  Thus on the face of it I accept that the husband could have a surplus of approximately HK$70,000 per month if he manages his expenses carefully. This is because he has general household expenses of HK$35,900 + estimated personal expenses of HK$8,000 + tax provision of HK$18,909 + children’s expenses of HK$28,345. This totals HK$91,154. HK$163,408.50 – HK$91,154 =HK$72, 254.50.

The wife’s needs

14.  In the wife’s latest affidavit dated the 14 December 2015 she sets out her proposed expenses as follows:

4.1  General

Item	Amount (HK$)
Rent	35,000
Mortgage instalments	N/A
Utilities (electricity, gas, rates, telephone, water)	2,500
Management fees	0
Food	3,000
Household expenses	1,000
Car expenses	13,000
Insurance premia	0
Domestic helper(s)	4,110
Other Storage	0
Total monthly household expenses	HK$59,610

4.2  Personal

Item	Amount (HK$)
Meals out of home	2,000
Transport	Included in car
Clothing / shoes	1,000
Personal grooming (including haircut and cosmetics)	500
Entertainment / presents	2,000
Holiday	4,000
Medical / dental	1,000
Tax	0
Insurance premia	0
Interim maintenance	0
Contribution to parents	0
Dependent family members	0
Others (specify)Mobile phone Legal costs	318 50,000
Total monthly personal expenses	HK$60,818

4.3  Children

Item	Amount (HK$)
School fees	Paid by Petitioner
Extra tuition fees	Paid by Petitioner
School books and stationery	200
Transport to school (including school bus )	Included in car
Medical / dental	1,000
Extra Curricular Activities	Paid by Petitioner
Entertainment / presents	3,000
Holidays	4,000
Clothing / shoes	2,000
Insurance premia (see Part 2.8)	0
Lunches and pocket money	Paid by Petitioner
Other Transport	0
Child-minding fees	0
Uniform (including PE uniform)	200
Others (specify) Personal grooming School miscellaneous Meals out of home	300 270 3,000
Total monthly expenses for children	HK$13,970
Total Monthly Expenses (4.1 + 4.2 + 4.3)	HK$134,398

General expenses   

15.  The biggest point of contention relates to the wife’s proposed rent. The wife seeks HK$35,000 per month and the husband offers HK$20,000 per month. I accept that some difficult choices will need to be made in relation to where the wife chooses to live and it may not be possible for her to rent a three bed roomed apartment (which would be her preference) or to remain living in close proximity to her family (which would also be her preference). All in all it seems to me that on a broad brush basis HK$25,000 would be a reasonable figure for rent. The other figure that has been a cause for concern is the cost of transportation. The wife would like the return of the Audi. In that event she says that it would cost her approximately HK$13,000 per month for petrol and general running costs. In the alternative she seeks HK$10,000 per month for taxis and other costs. I would suggest in the first instance that the husband makes the Audi available for the wife’s use. In that event I will allow HK$8,000 per month for petrol and other related expenses. If the husband refuses then I will allow HK$10,000 for general transportation costs. The wife’s proposed expenses are therefore accepted as follows:    

4.1  General

Item	Amount (HK$)
Rent	25,000
Mortgage instalments	N/A
Utilities (electricity, gas, rates, telephone, water)	2,500
Management fees	0
Food	3,000
Household expenses	1,000
Car expenses	8,000/10,000
Insurance premia	0
Domestic helper(s)	4,110
Other Storage	0
Total monthly household expenses	HK$43,610/45,610

Personal

16.  The wife’s personal expenses are put at just over HK$60,000 per month, which includes the litigation funding of HK$50,000 per month. Putting that to one side for a moment, the wife seeks approximately HK$11,000 per month for her own personal expenses. As with the husband I will reduce this on a broad brush basis to HK$5,000 per month, which includes, as with the husband, the deletion of the provision for holidays. Thus I will also make an order that allows for a contribution of HK$5,000 per month towards the wife’s personal expenses.

Children

17.  The wife acknowledges that the husband is paying for the school fees and extracurricular activities for the children directly. Historically however there has been difficulty with reimbursement for other things. I will though give the husband one last chance in this respect. He has said that he will undertake to reimburse the wife for those items set out in paragraph 12 above within 2 days of receipt of the invoices. For the avoidance of doubt this is the invoices for the elder child’s school bus, school stationery, medical and dental expenses, school uniform and the cost of the elder child’s school lunches. On the premise that the husband agrees to continue to pay for the school fees and the school bus fees direct as indicated during the hearing plus these other expenses, I will then allow a further HK$7,300 per month for the children’s other expenses. As agreed I have deleted the reference to holidays. I have also reduced the figure for entertainment and clothing. Thus the children’s expenses are as follows:

4.3  Children

Item	Amount (HK$)
School fees	Paid by Petitioner
Extra tuition fees	Paid by Petitioner
School books and stationery	Paid by Petitioner
Transport to school (including school bus )	Paid by Petitioner
Medical / dental	Paid by Petitioner
Extra Curricular Activities	Paid by Petitioner
Entertainment / presents	2,000
Holidays	0
Clothing / shoes	2,000
Insurance premia (see Part 2.8)	0
Lunches and pocket money	Paid by Petitioner
Other Transport	0
Child-minding fees	0
Uniform (including PE uniform)
Others (specify) Personal grooming School miscellaneous Meals out of home	300   3,000
Total monthly expenses for children	HK$7,300

Total maintenance to be paid

18.  In total then the provision for maintenance shall be in the sum of HK$55,910 per month (say rounded up to HK$60,000 per month) if the Audi is made available to the wife and HK$62,000 per month otherwise.  This shall be divided as to HK$20,000/HK$22,000 per month for the wife and HK$20,000 per month per child, with effect from the 1 March 2016.

Should this sum be backdated?

19.  It has been clear throughout that the wife had no immediate financial resources of her own save for the HK$250,000 taken from the parties joint account and that the husband has always had a continuing obligation to maintain both her and the children. Notwithstanding that it is not disputed that the husband stopped all financial support from the 1 July 2015 until the interim interim order for HK$18,000 per month on the 14 October 2015 – i.e. there was a period of 3 ½ months when the wife was without any financial support at all. There was only limited financial support prior to that. This is really unacceptable. Thus this order shall be backdated to the date of the petition ie from say the 1 August 2015 - a period of some 6 months – credit to be given for any actual payments made (and not for the reimbursement of expenses).  On my calculation this will give the wife the sum of approximately HK$300,000 – which should be sufficient to enable her to pay for a deposit on a new flat and to meet other related expenses with respect to setting up a new home etc 

Should provision be made for litigation funding and if so in what amount?

20.  It is not in dispute that the wife has no assets and none that can reasonably be deployed by her for litigation costs. It follows that she can provide no security for borrowings and that she cannot obtain legal services by offering a charge on the outcome. Although in theory she could have applied for legal aid previously, given this order she will no longer be eligible for legal aid. In so far as an overarching enquiry is concerned I accept on the face of it that there is no reason why she should not be entitled to assistance with her litigation costs.

21.  The husband is able to instruct lawyers, the wife should likewise be entitled to instruct a lawyer of her choosing. I have no doubt that the husband may have no alternative but to rely on his savings in order to do so. The wife has also suggested that his family may be helping him in this respect. In any event it seems to me that the wife is entitled to litigation costs. I will therefore make the order that she seeks. The husband shall pay the wife HK$50,000 per month for her litigation funding with effect from the 1 March 2016 until the Financial Dispute Resolution hearing. This money shall be paid directly to the wife’s solicitors in the first instance. In making this order I accept that there may be no alternative but for some of these funds to come from the husband’s savings.    

Costs

22.  Given that the wife had no alternative but to make this application and given that she has been generally successful I will make an order nisi to be made absolute in 14 days time that the husband do pay the wife’s costs of and occasioned by this application on a party and party basis to be taxed if not agreed.