TWF v. HWKR

FCMC 7615/2019

[2020] HKFC 84

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 7615 OF 2019

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DECISION
(Maintenance Pending Suit & Litigation Funding)

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Application

1.  This is the application of the petitioner wife (“the wife”) for variation of the Order dated 17 November 2017 as amended on 31 January 2018 (to correct a typographical error) (“Consent Order”) for upward adjustment of her maintenance pending suit and provision of litigation funding.

Previous MPS Orders

2.  This is indeed the wife’s third application for maintenance pending suit and legal costs provision.  The first application was made on 31 December 2015 (“First Application”).  Deputy District Judge D. Cheung handed down his Judgment on 3 March 2016 (“First Judgment”).  The learned Judge ordered, inter alia, that: -

(a)  upon the husband’s undertaking to allow the wife to live rent free at their former matrimonial home, a house at the Peak (“Matrimonial Home”), and to be responsible for all utilities, management fees, food at home, household expenses, car expenses, expenses for domestic helper, driver and the children (“Expenses Undertaking”),

(b)  the husband do pay the wife HK$61,000 per month (inclusive of HK$35,000 for payment of her bank loans) until further order of the Court; and

(c)  the husband do pay the wife HK$50,000 per month for legal costs provision until Financial Dispute Resolution hearing or 10 February 2017, whichever is earlier.

(the whole order, the “First Order”).

3.  On 8 March 2017, the wife sought an increase from HK$61,000 to HK$130,000 and for legal costs provision from HK$50,000 to HK$80,000 per month (“Second Application”). In his Judgment dated 7 August 2017 (“Second Judgment”), the learned Judge ordered, inter alia, that :-

(a)  upon the husband’s Expenses Undertaking and his additional undertaking (“Costs Undertaking”) to pay the wife HK$50,000 per month as her ongoing legal costs provision from the sale of a house situated at Sentosa in Singapore (“Sentosa Property”) until Financial Dispute Resolution hearing or not more than 12 months, whichever is earlier;

(b)  the husband do pay the wife HK$99,000 per month (inclusive of HK$35,000 for payment of her bank loans and HK$25,000 for payment of debts owed to her friends and relatives) as maintenance pending suit from 10 July 2017 onwards. 

(the whole order, the “Second Order”). 

(the First Order, the Second Order, collectively, “Previous Orders”)

(the First Judgment, the Second Judgment, collectively, “Previous Judgments”)

4.  Pursuant to an agreement of both parties which was embodied in the Consent Order, the wife’s monthly maintenance pending suit was reduced to HK$64,000 upon the husband’s upfront payment of around HK$965,732.08 (“Upfront Payment”) to settle her bank loans (“Bank Loan Settlement”).  The legal costs provision of the monthly sum of HK$50,000 was paid from the sale of the Sentosa Property in October 2017 to October 2018.

5.  In the present application, the wife seeks an order that the husband do pay her from 10 July 2019 onwards: -  

(a)  monthly maintenance pending suit under §4 of the Consent Order be increased from HK$64,000 to HK$150,000; and

(b)  monthly ongoing legal costs provision of HK$50,000 until the hearing of the Preliminary Issue or further order of the Court

Background

6.  The wife is now aged 58 and the husband 70. They got married in 1990.  Their daughter was born in 1990 and their son was born in 1994.  The children are in gainful employment and self-supporting. At present, the parties live together at the Matrimonial Home.  The Matrimonial Home was acquired under a limited company, which are held by the parties and the husband’s sister. 

7.  The wife petitioned for divorce based on unreasonable behaviour under action FCMC16534/2015 (“Previous Action”) on 30 December 2015.  The husband filed Answer and Cross Petition on 2-year separation subsequently.  With the agreement between the parties, the wife commenced the present action by filing a fresh petition on 2-year separation on 28 June 2019.  The Previous Action will be discontinued upon the grant of Decree Nisi under the present action.

The Preliminary Issue – Sentosa Property

8.  There is a preliminary issue in this action (“Preliminary Issue”): the beneficial ownership of the Sentosa Property.  The wife contends the husband is the sole beneficial owner of it whereas the husband insists its beneficial interests were properly registered and are well-reflected in its legal title with the shareholdings between the husband, his brother, the 1^st Intervener (“Brother”) and his sister, the 2^nd Intervener (his brother and sister collectively, the “Siblings”) at 10%, 40% and 50%.  The proceedings are still at the discovery stage. The wife has been vigorously seeking discovery of documents from the Siblings after the close of pleadings.  A substantive hearing of another discovery summons between the wife and the Siblings was fixed to be heard in June.  There are other applications initiated by the parties.

9.  The Sentosa Property was sold after the Second Judgment in October 2017 (“Sale”).  The sale proceeds generated from the Sentosa Property has been one of the major subjects of dispute in this action.  The wife criticizes the husband to have undervalued his entitlement to the sale proceeds and took out committal proceedings against him. 

10.  On the other hand, the husband and the Siblings have engaged a professional firm to figure out the sharing of the sale proceeds among them, resulting in the compilation of three reports (the second report dated 26 October 2018 and third report dated 4 April 2019 be respectively named as the “Second Report” and the “Third Report”).  The husband alleges that he received the following amounts from the disposal of the Sentosa Property : -

		(HK$)
(a)	10% of forfeited deposit from an aborted sale (“Forfeited Deposit”)	529,929.60
(b)	10% of the net sale proceeds received from the Sale in 10. 2017, SGD605,852.19 (“First Payment”)	3,461,331.04
(c)	a further sum of SGD502,829.17 from the Brother by 3 installments between 11.2018 to 2. 2019, allegedly to be the loans from the Brother.  It is said that such loans were made in view of the adjustment of the 10% of the net sale proceeds assessed by the Second Report.  The report states the view that the husband’s entitlement should be adjusted upwards after taking into account of 2 term loans which were obtained for the Siblings’ personal use and benefits by placing the Sentosa Property as security. (“Second Payment”)	2,881,661.21
(d)	a further sum of SGD 227,305.01 from the Brother in 4.2019 as a result of further adjustment of the 10% of the net sale proceeds as assessed by the Third Report.  (“Third Payment”)	1,314,732.18

11.  The Forfeited Deposit was applied to satisfy the wife’s maintenance and legal costs provision by an Order by consent dated 14 March 2016. 

12.  The First Payment was spent for the purpose of the Consent Order, including the Upfront Payment, the wife’s maintenance and legal costs, medical expenses for the husband’s heart operation, renovation work for the Matrimonial Home and mediator’s fees. 

13.  The Second Payment was allegedly used for the maintenance and legal costs provisions of the wife according to the Consent Order, mortgage installments of the Matrimonial Home, outgoings and utilities, and overhead costs of a company jointly held by the parties for the period between November 2018 and March 2019, leaving the balance of HK$489,176.16.

14.  By agreement between the parties, the balance of HK$489,176.16 together with the Third Payment, making up a total sum of HK$1,803,908.34 had been stakeheld by the husband’s solicitors who later paid part of it for the wife’s maintenance, leaving the balance of HK$1,355,000 (“Balance”) at the time of this hearing.

15.  The wife looks to the Balance as ready cash for her maintenance pending suit.

Grounds of application

16.  The wife’s positon is that the increments sought have been necessitated as a result of a series of changes in circumstances since the Consent Order, none by her fault, and some contrarily due to the husband’s failure to honour some of the Expenses Undertakings.  Such changes have rendered the Consent Order no longer capable of meeting her reasonable needs.  

17.  She reiterates that she has been unemployed since 2012 (except for a very brief period of time) and relied financially on the husband.  The monthly maintenance of HK$64,000 is the sole source of income for her.  Apart from the sum of HK$25,000 for repayment of personal debts owed to her friends and relatives, she is only left with HK$39,000 for her monthly personal expenses.  Her living standards continue to be eroded.  She indeed needs HK$90,000 per month for her personal expenses to restore her marital standard of living, if her bank loans as well as personal debts owed to her relatives and friends are paid off.  She intends to repay the bank loans and the personal debts by monthly installments at HK$35,000 and HK$25,000 respectively.  She therefore asks for HK$150,000 for monthly maintenance pending suit.

18.  She complains that her litigation funding at a monthly sum of HK$50,000 ceased in October 2018 but the delay tactics of the husband and the Siblings have unnecessarily prolonged the proceedings and escalated her legal costs, hence the present application for litigation funding.

19.  She contends that the husband has ability to pay her for he is still active in his world-wide business and holds substantial hidden assets through nominee companies and nominees all over the world.  His routine of staying overseas for 2 weeks each month is a pointer to his active engagement in business and extravagant lifestyle.  In addition to the substantial cash generated from the Sale, he has been able to increase his borrowings by HK$13.9 million over the past 4 years, that is, an annual income of more than HK$3 million.

Grounds of opposition

20.  The husband disagrees.  He stresses that the learned Judge has already made assessments and determinations (including as to quantum) on the wife’s needs as well as the husband’s financial capacities twice in the Previous Judgments. The wife’s reasonable living expenses were assessed to be HK$39,000 while the husband’s affordability was held to be HK$99,000 per month in the Second Judgment.

21.  In the absence of material change in circumstances and evidence showing the improvement of the husband’s financial situation, there is no basis for the Court to revisit the issues already decided.  The wife is largely repeating her earlier (already rejected) claims and is baldly seeking increases. 

22.  It is said that the husband’s financial conditions are even worse than they were back in 2017.  His earning capacity and business have been deteriorating and the family assets are exhausted.  He therefore has to look to the Balance for funding the maintenance payment as well as his own legal costs.

Legal Principles

23.  The legal principles on awarding maintenance pending suit are well-established which are set out in the Previous Judgments in details and I do not intend to repeat here.  In brief,

(a)  Jurisdiction to award maintenance pending suit to a spouse is governed by section 3 of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“Ordinance”).

(b)  The Court is empowered to order a party to the marriage to make to the other such periodical payments for his or her “maintenance” as the Court thinks “reasonable”, subject to the condition that the duration of any such order is limited to the period up to the final resolution of the ancillary relief dispute and the grant of the decree absolute.

(c)  Maintenance is restricted to the recurring costs of living at whatever standard of living is appropriate to meet the “immediate and reasonable needs” of the other party.

(d)  What really matters is the immediate and reasonable requirements of the applicant balanced against the ability of the payer to pay for them, assessed using a broad-brush approach.

(e)  The amount must be “reasonable”, that it must be fair, having regard to all of the circumstances of the case.  An important factor is determining fairness is a consideration of the marital standard of living.  This is not to say that the exercise is merely to replicate that standard;

(f)  The Court has no jurisdiction to make orders which for all practical purposes result in a form of pre-trial capital re-balancing;

(g)  There should be a specific maintenance pending suit budget which excludes capital or long-term expenditures, more aptly to be considered on a final hearing. That budget should be examined critically in every case to exclude forensic exaggeration.

(h)  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.

(i)  The analysis should be conducted on a broad brush basis for the amount to be paid and for a limited period only.  Not all of the evidence is necessarily before the court, it is not appropriate for the court to conduct a detailed investigation into the finances of the parties.

(j)  If there is any overpayment or underpayment, it can be rectified at a final ancillary relief hearing.

See HJFG v KCY [2012] 1 HKLRD 95

24.  The power of the Court to vary a periodical order is provided by section 11 of the Ordinance.  The applicable principles are: -

(a)  The Court is to consider all the circumstances of the case, and is not required to proceed from the starting point of the original order but approaches the matter as if it were assessing the payments de novo.

(b)  The basis and intended effect of the original order are relevant factors to which the Court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order.

(c)  It follows that the principles governing the assessment will in broad measure apply to applications to vary: the overriding objective is fairness.

See Rayden and Jackson on Divorce and Family Matters, 18^th Edition Chapter 18.21

See AFM v VFM (Variation of Maintenance) [2008] HKFLR 106

(d)  An application to vary an earlier periodical payments order will be brought on the basis that there has been some change in the circumstances since the original order was made, otherwise except in exceptional circumstances, the application will, in effect, be an appeal. If an order is not appealed against, or is made by consent, then the presumption must be that the order was correct when made. If it was correct when made, then there will usually be no justification for varying it unless there has been a material change of circumstances.

(e)   The Court must decide what weight it should attach to the original order and all the surrounding circumstances.  However, once an application to vary is before it, the court is fully entitled to make an order considering all the circumstances afresh, paying such regard to the old order as may be thought appropriate.

(f)  Thus although the jurisdiction to vary is untrammeled, normally the earlier order would not be varied unless there has been a material change in circumstances.

See WNWG v PBF [2012] HKCU 675

(g)   Application for variation should not be persued when in substance the grounds advanced for variation tantamount to re-argument of the same issues that have been argued before the court before the making of the original order. 

See HCTT v TYYC [2008] HKFLR 286.

25.  When there is a dispute as to the means of the paying party, important points to consider are :

(a)  The extent of the compliance by the paying party with his duty to make full and frank disclosure;

(b)  The force of the points made by the applicant in the light of the disclosure made by the paying party and the other evidence as to, for example the lifestyle and spending of that party;

(c)  If a paying party asserts that he does not have the means to meet the maintenance pending suit claimed, he should normally have the ability to provide full and compelling disclosure to demonstrate that this is the case.

See G v G (Maintenance Pending Suit : Costs) [2003] 2 FLR 71

26.  With these principles in mind, I now turn to consider the arguments of the parties.

MPS Payment

Previous Applications

27.  To understand the parties’ arguments, it is necessary to set out a brief table summarizing the wife’s previous applications for maintenance pending suit and the determination of the Court as follows: -

Items	First application	First Judgment	Second application	Second Judgment	Present increment application
Food	3,000	0	10,000	3,000	10,000	+7,000
Meal out of home	7,000	7,000	9,000	9,000	9,000
Transport	1,000	1,000	2,000	2,000	6,000	+4,000
Personal grooming	7,000	7,000	7,000	7,000	13,500	+6,500
Holiday China (China-weekend hotel)	5,000	1,000		1,000	18,000	+17,000
Entertainment			3,000	3,000	3,000
Medical	1,000	1,000	4,000	4,000	8,000	+4,000
Parents	3,000	0
Contact lens	1,000	1,000	1,000	1,000	1,500	+500
Massage	3,000	3,000	3,000	3,000	7,200	+4,200
Facial	5,000	5,000	5,000	5,000	11,300	+6,300
Health club			1,000	1,000	1,500	+500
Telephone bills					1,000	+1,000
Personal Expenses	36,000	26,000	45,000	39,000	90,000	+51,000
Bank Loans	35,000	35,000	35,000	35,000	35,000
Personal Debts from friends			50,000	25,000	25,000
	71,000	61,000	130,000	99,000	150,000	+51,000
Plus legal costs	50,000	50,000	80,000	50,000	50,000
Total	121,000	111,000	210,000	149,000	200,000

28.  In the First Judgment, the learned Judge allowed the wife a monthly sum of HK$61,000 as maintenance pending suit, in that HK$26,000 for her personal expenses and HK$35,000 for monthly repayment for her bank loans. 

29.  In the Second Judgment, the learned Judge allowed the wife a monthly sum of HK$99,000 as maintenance pending suit, in that HK$39,000 for her personal expenses together with HK$35,000 and HK$25,000 for monthly repayment respectively for her bank loans and personal debts.

30.  All those payments were allowed in addition to the legal costs provision of a sum of HK$50,000 and the Expenses Undertaking.

31.  The wife did not appeal against the Previous Judgments.  Instead, she consented to the Consent Order and started to receive the monthly sum of HK$64,000 for her maintenance pending suit after all her bank loans were paid off by the Upfront Payment.

32.  The wife explains that her consent to the Consent Order was not an admission of the sufficiency of the amount of HK$39,000 for her personal expenses but was given in expectation that the ancillary relief issue would be resolved in 1-2 years.  The change in circumstances since the Second Judgement gives rise to the present application.

Change in Circumstances

33.  Before I proceed to consider each and every single item of the wife’s claim, it is necessary to state at the outset that the living pattern of the parties appears to be similar to that when the Second Application was made: the husband stayed in Hong Kong for two weeks each month and the wife mainly stayed out of Hong Kong during weekends and occasionally, 1 to 2 weeks in a particular month, and that she chose not to stay at the Matrimonial Home when the husband was there. (§§48, 55 of the Second Judgment).  She supplements that since around 2 years ago, she has been travelling out of Hong Kong for around 2 weeks each month to “escape from” the husband when he stays at home.  

Food

34.  Her first complaint is the husband’s failure to honour the Expenses Undertakings to provide her sufficient food at home.  In fact, she made similar complaint in the Second Application but on different footing.  She says that from September 2018 to March 2019, the two domestic helpers were on leave and the husband did not provide her food or money for food.  The last domestic helper ceased employment in May and the new domestic helper only reported to duty in June. Still, she has not been provided with food at home because the husband told the domestic helper not to buy her food and the domestic helper has no longer been provided with supermarket card or money for food when the husband was away as before.  When he is in Hong Kong, he purchases food for everyone at home except her.  She therefore needs to buy food for herself all the time and for her mother, the maid, and sometimes for the son for half of the month.

35.  The husband denies her allegation and stresses that there has always been a maid undertaking the duties in buying food, daily necessities and household items.  He has never been notified by the wife of any request for food or need for her to make such purchases.  He also regards the wife’s claim as excessive which was rejected by the Court before, in particular, she needs not be responsible for the children who are self-supporting now.  

36.  Despite the wife is claiming the same amount which was rejected by the learned judge in the Second Application, her reason for application is somewhat different from that in the last application.  She is now complaining that she has not been provided with sufficient food due to lack of service of domestic helpers and the unwillingness of the husband after the Second Judgment.    

37.  For the present purpose, I should be slow to make a ruling on whose version is true without the parties giving evidence in Court.  Suffice it to say that, in light of the fact that the husband is used to stay overseas on a half-monthly basis and his reliance on the domestic helpers to supply food to the wife will be affected by the performance or the cessation of employment of the domestic helpers even without the fault of the husband, I take the view that it is more appropriate to discharge the husband’s undertaking to supply food by putting a monetary order in place so as to secure the wife with constant and sufficient supply of food without interruption.   

38.  On the other hand, the husband will not be prejudiced by such payment for he would be discharged from his undertaking to provide food for the wife.  Further, I agree with him that the payment should not be extended to cover the needs of the wife’s mother and the self-supporting children.  Taking into account of the wife’s claim for an increment of HK$7,000 to cover her mother, her son, the maid and herself, I would allow an increment of HK$2,000 for her food at home, making a total of HK$5,000 for food at home.  I also discharge the husband from his undertaking on this front.  

Transport

39.  Of the claim for transport expenses, I however find no basis for upward adjustment. Her reasons for application continue to be the husband’s priority to the use of the car and the driver when he is in Hong Kong and her need to travel out of Hong Kong to avoid the husband when he stays at the Matrimonial Home for 2 weeks every month, which were considered by the learned judge when granting her HK$2,000 for her transportation in the Second Judgment.  At present, the husband continues to stay in Hong Kong for 2 weeks each month as he did in the Second Application.  The triggering factor of her transportation expenses remains unchanged.  Absent any material change of circumstances, I find no valid basis for upward adjustment.

40.  In fact, her chances of being deprived of the use of the car and the driver should be flimsy because of her alleged long-standing practice of staying overseas while the husband staying at the Matrimonial Home.

41.  The lack of service of driver between March and 20 June 2019 would not have added much burden on her.  She has the flexibility of using the various modes of public transports available at the Peak.  Her non-employment should provide her with more flexibility for public transport arrangement.  I find no solid basis for variation of the amount allowed by the learned Judge under this head. 

Holiday and Telephone Bills

42.  Similarly, her claim for additional holiday expenses is premised on the same triggering factor: “escape” from the husband for two weeks each month. 

43.  I do not take the view that her preference for staying in South East Asia over Zhuhai (as she did in the past), is a valid reason for drastic increment of HK$17,000 per month for holiday expenses.  The current maintenance payment for transport (HK$2,000) and Holiday (for China-weekend hotel HK$1,000) was allowed by the learned Judge after due consideration of the wife’s allegation that she mainly stayed in the mainland during weekends and occasionally for 1-2 weeks in a particular month so as to avoid staying at the matrimonial home when the husband was there for 2 weeks each month.

44.  Her present request is not arisen from change in circumstances but simply a change of her choice of travelling destination to her liking.  I do not regard such change as immediate and reasonable needs of the wife. As pointed out by Mr Chan, Counsel for the husband, there are various options open to her.  She could either continue her practice of staying at Zhuhai as she did in the past or staying at the Matrimonial Home, a large four-storey house with 7 rooms, which has been renovated to cater for the parties living separately under the same roof. 

45.  I would however allow some flexibility for the fluctuation of the accommodation costs in order to address her concern of the occasional increments of accommodation costs which are common in the market nowadays.  Coupled with her new claim for telephone call plan which is viewed as daily necessity in the modern society, I would adjust the holiday expenses from HK$1,000 to HK$3,000 to cover payments for her holidays and telephone bills.  Such adjustment is made in my opinion that her claim for HK$1,000 for the telephone bill is on the high side, in light of the availability of free-service of overseas telephone call and the competitive telecommunication market nowadays.  She will have the flexibility to apportion her expenses for overseas trips.

Personal Care

46.  I should deal with her claim for personal grooming, massage, facial, health club together. Such items of claim have been assessed and determined by the learned Judge in the Previous Judgment. In the absence of any solid evidence as to any material change in circumstances regarding her needs and expenses in such items, I find no valid reasons for any adjustments in this regard.

Medical

47.  Medical expenses of HK$4,000 were allowed by the learned Judge to cover the costs of her annual medical check-up.  Such arrangement was to avoid the trouble of the wife asking the husband for  reimbursement after his claim from the insurance company under the medical insurance policy.  Even though the husband stopped paying for her medical insurance premium in November 2017 and she has to pay for it at HK$2,300 per month by herself, the present payment of HK$4,000 should be sufficient to cover such payment as well as her medical expenses which were not covered by the medical insurance (which were reported to be HK$1,000 in her Form E).  There is no record of significant deterioration of health condition in recent years.

Contact Lens

48.  I agree with the husband that the wife’s claim for a 50% increase under this head is unjustified.  Her explanation that she needs eye drops to cure her dry eyes and she paid HK$3,000 for her eye check-up in November 2019 does not advance her position any further.  The costs for eye drops does not justify an increment of 50% and the eye check-up costs should be covered by the medical expenses.

New Bank Loans

49.  The wife says that the insufficiency of the maintenance pending suit entails new loans, to cover her monthly maintenance shortfall of HK$51,000 (her actual personal expenses HK$90,000 – personal expenses provided by the Second Order HK$39,000). Those bank loans include: HK$200,000 in March 2018, HK$300,000 in November 2018, revolving credit facility of HK$300,000 and HK$40,000 from credit cards in 2018.  From June to July 2019, she incurred an additional loan of HK$241,703 from a bank.  In December 2019, the bank loans amounted to HK$834,850 and the monthly minimum payment is HK$48,590.

50.  In summary, from the Bank Loan Settlement in November 2017 to December 2019, she obtained new bank loans of around HK$1,081,703 (HK$840,000 as of June 2019 + HK$241,703) (“New Bank Loans”) plus new personal debts owed to a friend of HK$300,000, making a total of HK$1,381,703.  

51.  She explains that she consented to have her maintenance reduced to HK$64,000 after the Bank Loan Settlement not because the amount of HK$39,000 per month (apart from the provision of HK$25,000 for repayment of personal debts owed to friends and relatives) is sufficient for her living expenses but because of her wish to resolve the ancillary relief issue in one to two years.  Her plan was however upset by the delay tactics of the husband and the present action is still at the discovery stage.

52.  Given she needs HK$90,000 to maintain her marital standard of living, she has therefore incurred a total of loans of HK$1,275,000 from November 2017 to December 2019 through 25-month period (HK$90,000- HK$39,000 = shortfall of HK$51,000 x 25 months).   She is however unable to give details about her use of such loans allegedly because there were always ad hoc expenses. 

53.  Apart from the HK$25,000 which is provided to her to repay her debts owed to her friends and relatives (and she has the liberty to use a portion of it to pay for her legal costs as provided in §132 of the Second Judgment) which was adopted in the Consent Order, she prays for an additional monthly payment of HK$35,000 for repayment of the New Bank Loans.

54.  The husband strenuously objects to such claim.  He reiterates that in an attempt to reduce the wife’s expenses in paying interests to the banks, he offered and actually effected the Bank Loan Settlement, resulting in the complete settlement of all her credit cards debts and bank loans on 16 November 2017.  Together with his continuous payments of maintenance pursuant to the Second Order and subsequently, the Consent Order, she should not have accumulated yet another set of New Bank Loans.  In the absence of detailed information about the flow and usage of such loans, he has reason to argue that the New Bank Loans were simply the wife’s method in obtaining quick cash.

55.  I am impressed by Mr Chan’s argument.  Different from the old bank loans which were incurred as a result of the husband’s non-payment of maintenance in the past as considered by the learned Judge in the Second Application, the New Bank Loans were obtained shortly after the Bank Loan Settlement.  A total of HK$1,081,703 from November 2017 to July 2019 was outrageous.  The wife however chose not to offer any detailed justification or account for the flow, whereabouts and the use of the funds in details, still less of any solid evidence in support.

56.  I remind myself that for consideration of the wife’s application for variation, the basis and intended effect of the Second Order and the Consent Order are relevant factors to which this Court should pay regard and there should not be a radical departure from the approach taken by the Court or the parties themselves when they had entered into an agreement embodied in a consent order.

57.  Given her reasonable needs and maintenance pending suit have been assessed and determined by the learned Judge in the Second Judgment and there has been no material change in circumstances as elaborated in my findings above (other than just turning the husband’s undertaking to a monetary order to avoid dispute in future and an allowance of HK$2,000 to provide for fluctuation of accommodation costs and her new claim for the telephone bill), she should have controlled her spending within the budget assessed by the learned Judge and should not have incurred further loans and debts. 

58.  Her substantial spending over the budget allowed in the Second Order and subsequently, the Consent Order, in the past few years could not be regard as reasonable recurring costs of living.  She should not be allowed to stretch her claim for maintenance through the back door of bank loans.  She is not entitled to ask for “restoration of her marital standard of living” at the monthly amount of HK$90,000 for her personal expenses (by way of loans) soon after the Second Judgment without appeal against it.   

59.  There is indeed no solid evidence before me to prove that the New Bank Loans were actually used for her living expenses.  The New Bank Loans do not satisfy the requirement of maintenance or reasonableness for the purpose of maintenance pending suit under the Ordinance.  In the premises, her claim for provision for repayment of the New Bank Loans is refused.

60.  For reasons aforesaid, I would vary the Consent Order to allow an upward adjustment of HK$4,000.  Such adjustment has also taken into account the general inflation which has been insignificant since the Second Judgment.  Such adjustment is allowed upon the Expenses Undertakings except the undertaking to provide food. I take the view that HK$68,000 would be sufficient to cover the wife’s immediate and reasonable needs as follows: -

Description	Amount allowed (HK$)
Food	$5,000  (increment of $2,000)
Meals out of home	$9,000
Transport	$2,000
Personal grooming	$7,000
Holiday and telephone bills	$3,000  (increment of $2,000)
Entertainment/presents	$3,000
Medical	$4,000
Contact lens	$1,000
Massage	$3,000
Facial	$5,000
Health club	$1,000
Payments to friends and relatives	$25,000
Grand Total:	$68,000

Legal Costs Provision

61.  Of the application for litigation funding, there is no disagreement that the Currey principles apply.  In the Previous Judgments, the learned Judge found that this is an appropriate case for litigation funding to be paid out of the husband’s fund.  The wife seeks to restore the legal costs provision provided under the Second Order which was adopted in the Consent Order but ceased in October 2018.  The husband has paid a total of HK$1,200,000 to the wife for her legal costs provision so far.  The wife says that she still owes her lawyers more than a million.  She gives a rough estimate of costs to be incurred up to the Preliminary Issue proceedings at HK$1,900,000.

62.  The husband does not dispute the quantum.  He further accepts further legal costs will be incurred for the Preliminary Issue proceedings and a monthly payment of HK$50,000 can be provided for the wife out of the Balance.  He however proposes to have it paid out of the Balance in the manner that after deducting HK$188,360 for the special management fee of the Matrimonial Home, HK$164,000 will be paid out of the Balance each month for payment of the wife’s existing maintenance of HK$64,000 and both parties’ legal costs of HK$50,000 each party for 7 months until the Balance be fully utilized because of his limited resources.  I will now proceed to assess his ability to pay.

Ability to pay

63.  The husband complains that the Second Order was made beyond his affordability, ending up with his non-payment of maintenance until he received the First Payment from the Sale.  He reiterates that he is now severely short in cash and is on the verge of defaulting payment.  He seeks support from the learned Judge’s view in the Second Judgment that the husband was beyond the retirement age and was no longer in active and gainful employment or business for many years.  The learned Judge found no other concrete source of fund for maintenance payment other than the income generated or to be generated from the Sentosa Property.  

64.  I am not convinced.  While I accept that the husband is beyond the retirement age, recently having undergone major heart operation, and the wife has produced no concrete evidence for proof of the husband’s active business engagements, substantial income or realizable liquid equities (his insignificant tax payment to the Singapore government could not be regard as solid proof of extensive income or earnings), I could not ignore the fact that he had the means and resources to secure comfortable lifestyle for himself after the Second Judgment. 

65.  Notwithstanding his alleged dire financial condition (alleged unpaid legal costs of more than HK$2,000,000, substantial debts of HK$15,900,000, monthly expenses of HK$350,698 (inclusive of mortgage installment of HK$201,485 and payments pursuant to the Consent Order), he continues to routinely stay overseas, mainly Singapore, for 2 weeks each month, logically incurring costs of air-flight, accommodation, transportation, food, entertainment and related travelling expenses.  Such expenses are apparently neither accounted for in his Form E nor affirmations despite the wife’s challenges.  His transportation expenses were reported to be HK$2,000 and none for holiday expenses.

66.  Even though I decline the invitation to consider the husband actively engaging himself in extensive business and income-generating for lack of solid evidence at this stage, I share the view with Mr Clough, Counsel for the wife that the husband has constant resources at least to afford himself monthly travel between Hong Kong and Singapore as well as overseas-stay for half of each month, if not for business should be for pleasure. 

67.  I also share the view of the learned Judge in §83 of the First Judgment that notwithstanding there was no identifiable source of fund of the husband, he has the ability to discharge his undertakings.  He is undoubtedly aware that his undertakings are commitments to the Court that he must be able to provide such funds, otherwise, he made empty promise to the Court.

68.  It is fair to say that his allegation of the sharp expansion of his personal debts from HK$2,000,000 in February 2016 to HK$4,900,000 in April 2017 and further to HK$15,900,000 in December 2019, among which HK$13,000,000 were loans from the Siblings, might explain the sources of his funding in the past few years.  This nevertheless signifies his strong borrowing power to maintain his current lifestyle of routine overseas trips.

69.  I should add that when he continued the Expenses Undertaking and gave the Costs Undertaking in the Second Application, he would not have predicted the occurrence of the Second Payment and the Third Payment, which were the products of the Second Report and the Third Report. Such payments were all made after the cessation of the legal costs provision in October 2018.  They doubled his projected income generated from the Sale which are extra fund to his original budget by the time he gave those undertakings in the Second Application and later, in the Consent Order.  It is clear to me that the Second Payment and the Third Payment is additional fund to his original budget which has substantially enhanced his ability to pay the maintenance of the wife.  Those payments were not before the Court when the learned Judge determined the Second Application.

70.  In the premises, the Balance, being an unforeseen income additional to his original budget, is readily available cash to the husband and there is no reason why it should not be used to meet the wife’s maintenance and legal costs provision.  While the husband has the privilege of continuing his current lifestyle of frequent travel without accounting for the source and the flow of his funds and his alleged loans in details, I can see the source of the wife’s grievances against his proposal to use part of Balance for his own legal costs which has an effect of exhausting the Balance within 7 months.

71.  In view of the husband’s strong borrowing power, of his ability to maintain his lifestyle of routine overseas trips for a long period of time, and of his receipt of substantial payments from the Sale, which were not available for consideration of the learned Judge in the Second Application, I have valid basis to depart my observation from that of the learned Judge in the Second Judgment.  There is new evidence to suggest that the husband has ability to pay the wife’s maintenance and legal cost provision.  

72.  As to the husband’s argument that it is not fair for the wife’s legal team to receive more payments than his own legal team.  I am cautious to avoid the wife being better off than the husband on making payment of legal costs to their respective legal team.  I nevertheless hold the view that the wife’s legal costs provision should not be dictated by the husband’s preference for allocating his resources on continuing his current lifestyle and frequent travel over paying his legal team.  It is apparently a matter of choice for the husband on how to use his fund.

73.  Further, the renovation of the Matrimonial Home which costs more than HK$830,000 was completed in around February 2018 and both parties express their eagerness to sell it as soon as possible.  Their disagreement on the selling price can be sensibly resolved by expert valuation. Taking into account of the value of the Matrimonial Home is said to be tens of millions or even a hundred of millions (as contended by the wife) and the husband’s obligation to repay the mortgage installment at the monthly rate of around HK$201,500 would cease upon sale, the Matrimonial Home is undoubtedly one of the valuable resources the husband and the wife could resort to.

74.  For reasons aforesaid, I am of the opinion that the husband has ability to pay the wife maintenance pending suit to cover her immediate and reasonable needs assessed at HK$118,000 (HK$68,000 plus legal costs provision of HK$50,000), bearing in mind the adjustment of the living expenses is mainly to turn one of the husband’s undertaking to provide food into a monetary order at HK$2,000 and the only item for increment is limited to HK$2,000 only.

75.  Given the variation is mainly to realize the husband’s undertaking to provide food by a monetary order from now on and to provide provision for fluctuation of accommodation costs as well as ongoing legal costs which are proactive measures, I find no room to backdate the effective date of this Order to the date of application.

76.  I have to emphasize that the maintenance pending suit order is only an interim measure pending substantive ancillary relief hearing, and that the amounts awarded could be reviewed retrospectively, so that any over or under-provision as a result of this order could always be rectified at the substantive ancillary relief trial.

Conclusion

77.  Taking into account of all the circumstances in this case, I conclude on a broad brush approach that it is fair to order the husband to pay the interim maintenance to meet the wife’s recurring costs of living and legal costs provision. I am satisfied that, pending a final determination of the ancillary relief dispute, this will enable the wife to maintain more or less the standard of living which she enjoyed before the breakdown of the marriage.

78.  Having considered all the evidence before me and the submissions of both parties, I order that: -

(a)  Paragraph 4 of the Consent Order be varied such that the husband shall pay the wife the sum of HK$68,000 per month as maintenance pending suit from the 10^th of May 2020 and thereafter on or before the 10^th day of each succeeding month until further order of the Court;

(b)  The husband shall pay the wife the sum of HK$50,000 per month as maintenance pending suit in respect of her ongoing legal costs provision from the 10^th of May 2020 and thereafter on or before the 10^th day of each succeeding month until the hearing of the Preliminary Issue but shall not be more than 12 months, unless otherwise order by the Court.  

79.  I should hold the husband to his continued Expenses Undertaking save that his undertaking to provide the wife with food shall be discharged.

80.  All payments aforesaid will be paid on account of any sum eventually received by the parties when the ancillary relief proceedings are determined unless otherwise ordered by the Court.

Costs

81.  The wife has not been entirely successful in this application. In consideration of the issue of hidden assets and the determination of the Preliminary Issue is relevant to the consideration of the husband’s ability to pay, and all the maintenance pending suit payment will be paid on account of any sum eventually received by the wife and/or the husband when the ancillary relief is determined unless the Court orders otherwise, and having considered all the relevant circumstances in this case, I make an order nisi that the costs of the present application be reserved.

82.  This Order Nisi shall be made absolute upon the expiration of 14 days from the date of this decision unless either party applies to vary the same by way of Summons.

83.  I thank all counsel for their assistance.

Representation: