KJB nee KJI v. SALB

FCMC 11888 / 2017

[2018] HKFC 72

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 11888 OF 2017

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J U D G M E N T
(Maintenance Pending Suit/Interim maintenance)

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Introduction

1.  This is an application by a Petitioner wife for maintenance pending suit pursuant to section 3 of the Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO) and for interim maintenance for the two children of the family, both girls aged 8 and 6 years old under section 5 of the same ordinance.

2.  This is a difficult case where, on the face of it, there is simply insufficient money to go around, at least in the short term. Although the husband has a good job as a pilot (a senior First Officer), for a well-known airline in Hong Kong, it is not disputed that he is currently on sick leave. Consequently, he is only receiving half pay at present. At the time of the hearing it was anticipated that he should be able to return to work at the end of May, with a view to receiving his full pay with effect from the end of June. He continues to receive his other employment benefits in full including the housing and educational allowance.

3.  The mother has returned to Australia, by agreement, with the two children of the family. However, she does not work and has not done so since the children were born, save for some part time endeavours such as working as a part time teaching assistant and swimming instructor. There is no doubt that if the mother wishes to increase her standard of living and that of the children in the long run, that she will need to maximize her earning capacity and return to work either in a full time or part time capacity.

The main issues

4.  The main issue to be determined then is how much should the husband pay to the wife for her interim provision and that of the children? The husband has offered to undertake to continue to pay for the children’s school fees in Australia and to keep the children covered under his employer’s health insurance policy. This will also extend to the wife pending the receipt of the decree absolute.

5.  Under the terms of the court order dated the 15 January 2018 the husband consented at that time to pay a total of HK$36,000 per month. I was told at this hearing that the husband simply cannot afford to pay this sum going forward. The wife for her part now seeks a figure of just over HK$78,000 per month in total for herself and the children, in addition to the undertakings set out above, plus provision for her legal costs and other items. This is despite the fact that it was originally acknowledged by both parties that the cost of living in rural Australia was likely to be much cheaper than the Hong Kong equivalent. In her affidavit dated the 5 December 2017 the wife estimated that she would need HK$50,000 per month to cover her expenses in Australia which included provision for housing. She now says that she miscalculated and that she will need a significantly higher sum if she is to maintain the same or a similar standard of living to that enjoyed by her and the children in Hong Kong.          

Background to the litigation 

6.  The parties married on the XX September 2007 in Queensland, Australia and separated on the 26 April 2017 in Hong Kong following a failed attempt at marriage counselling. The divorce petition was issued by the wife on the 12 September 2017. It is the husband’s case that the main cause of the breakdown of the marriage was the wife’s continued over spending, which only got worse post separation. The husband also accuses the wife of stalking like behaviour and maintains that she has on occasion been physically violent towards him. It seems that the husband has since entered into a new relationship, which may also have exacerbated tensions between the parties. The wife for her part maintains that the husband was violent towards her, especially during the last five years of the marriage, something that he strenuously denies. In turn she denies his allegations concerning overspending.

7.  Initially the parties sensibly attempted to resolve matters through mediation and interim agreements in relation to both the parties’ interim finances and the arrangements for the children were entered into on the 4 September 2017. Unfortunately, those agreements did not hold and on the 5 December 2017 the wife made an urgent application to the court for emergency interim maintenance. An order was made on the 13 December 2018 which basically echoed the interim mediation agreement as follows:

8.   The Respondent shall pay maintenance pending suit/interim maintenance to the Petitioner for herself and the two children of the family in the sum of HK$24,200 per month on the 5^th day of each month, until further order.

9.   Costs be reserved.

      FURTHER IT IS DIERCTED that:-

10. Pursuant to paragraph 5 of the Mediated Heads of Short-Term Interim Agreement on finances dated the 4^th September 2017 the Respondent shall continue to pay for the following items:

(a)   The Respondent’s Tax – estimated at HK$15,000 per month;

(b)   The Respondent’s HSBC personal loan – estimated at HK$6,400 per month;

(c)   Salary of the domestic helper – estimated at HK$6,000 per month;

(d)   Utilities (including mobile phone) – estimated at HK$3,300 per month;

(e)   The Respondent’s Union Fees – estimated at HK$1,000;

(f)   School fees not covered by education allowance – HK$8,400 per month;

(g)   Insurance (household and domestic helper) – estimated at HK$450;

(h)   Golf Club fees – estimated at HK$4,800;

(i)   Costs of the Golf Cart including maintenance and petrol – estimated at HK$660;

(j)   Discovery Bay Residence Club Fees – HK$1,000;

(k)   Monthly fees for JW Marriott Vacation Club – HK$650;

(l)   Costs of the Children’s extra-curricular activities/travel expenses incurred by the Petitioner for the purpose of taking the children to counselling – HK$5,600. 

8.  On the 15 January 2018 the parties agreed by consent that there should be joint custody of the children with care and control to the wife and reasonable access to the husband, that was defined to the following extent:

J.   AND UPON the Petitioner [the wife] and the Respondent [the husband] acknowledge shall have reasonable access to the children in the following manner: -

(i)   On the 20^th of each month, the Respondent will provide to the Petitioner his flight roster and the dates he wishes to have access to the children

(ii)   The petitioner will ensure that the Respondent’s access to the children is a priority and will use her best endeavours to make the children available on the dates requested by the Petitioner

(iii)   The Petitioner and the Respondent acknowledge that the children have extracurricular activities and other events such as birthday parties and if such activities or events falls on the Respondent’s access, he will use his best endeavours to facilitate the children’s activities and events

(iv)   Notwithstanding the above, the Respondent shall spend time with the children as mutually agreed.

9.  It was also agreed that the wife would relocate back to Australia by the end of January 2018 so that the children could begin the new school year in Australia. Other financial agreements were reached and the father agreed inter alia to pay the wife a total of HK$36,000 per month as interim interim maintenance pending this hearing i.e. HK$12,000 per month for the wife and HK$12,000 per month for each of the children. It would be fair to say that the husband had some concerns about his ability to pay even at that stage. 

The law

Maintenance pending suit

10.  The law is well known and not in dispute. Section 3 MPPO Cap192 states that the only governing principle is that the court shall make such order as it considers reasonable in all of the circumstances of the case. Consequently, applications such as these are approached on a broad-brush basis. A detailed examination of the parties’ means may be examined at a later date at a full ancillary relief hearing if there is no agreement in the meantime, when there is hopefully some opportunity to achieve fairness by means of set off. In other words, if there is any overpayment or underpayment that can normally be rectified at a final ancillary relief hearing.

11.  It is of note that in the circumstances of this case the husband’s solicitors query whether that would be possible. In their concluding remarks to their court note they make the following observations:

81. In theory, if there is any overpayment or underpayment of MPS, that can be rectified at a final ancillary relief hearing.  However, in the present case where capital assets are minimal and the family is dependent on the sole income of H, it may not be possible for any overpayment to be corrected at the end of the day.  If H is ordered to “overpay” in MPS, he will sink deeper and deeper into debt.  He will face bankruptcy and in turn lose his job, which will be most detrimental to this family.  He urges the Court to exercise extreme caution in determining an appropriate order for MPS because his future – and the family’s future – hangs in the balance.

12.  In addition to the black letter law reference can also be made to the Court of Appeal decision namely HJFG v KCY (CACV 127/2011, 28 October 2011, where the following principles were reiterated with respect to maintenance pending suit/interim maintenance applications:

a.   The sole criteria to be applied in determining the application is “reasonable” which is synonymous with “fairness”.

b.   A very important factor in determining fairness is the marital standard of living.

c.   In every maintenance pending suit application there should be a specific maintenance pending suit budget which excludes capital or long term expenditure, more aptly to be considered on a final hearing.

d.   Where the affidavit or form E disclosure by the payer is obviously deficient, the Court should not hesitate to make robust assumptions about his ability to pay.  The Court is not confined to the mere say-so of the payer as to the extent of his income or resources.  In such situation, the Court should err in favour of the payee.

13.  In the circumstance of this case we are also very much concerned with the husband’s ability to pay. To quote from Rayden

what really matters is the immediate and reasonable requirements of the wife balanced against the ability of the husband to pay for them, assessed using a broad-brush approach. (See paragraphs 16.17 of Rayden, 18^th edition).

How much maintenance should the husband pay to the wife as maintenance pending suit for herself and interim maintenance for the two girls?

The husband’s ability to pay

14.  The husband produced at Annex D of his written submission, a schedule which set out in table form a) what he says he can afford to pay now, whilst he is on half pay of just under HK$46,000 per month and b) what he says he should be able to afford when he is on full pay of HK$100,455 per month. In a nut shell he proposes paying the wife a total figure of HK$15,000 whilst he is on half pay and HK$30,000 when he is on full pay. I attach a copy of Annex D to this judgment.

Maintenance whilst the husband is on half pay

15.  Annex D sets out in detail what the husband terms as his essential expenses (to keep his job) and his personal loan and tax. I accept that he has essential expenses of just over HK$4,000 per month plus a loan with Citibank which is being repaid at a rate of HK$17,905 per month. It is of note that the husband has made no provision for tax whilst he is on half pay, nor is he envisaging exercising his right to access in Australia in the short term. Thus I accept that he has a balance of approximately HK$24,000 per month. He proposes paying HK$15,000 to the wife for herself and the children and retaining the balance of HK$9,000 per month for himself. I accept that this is minimal for both sides. In addition, the husband will receive either his housing allowance or a cash equivalent of HK$24,000 per month. Thus his housing will be taken care of. Under this proposal the husband will have HK$9,000 per month to cover all of his other expenses. I accept that this will be very tight. Similarly, it will be very difficult indeed for the wife to survive on HK$15,000 per month.

16.  It is suggested by the wife that the husband has other financial resources available to him. The difficulty however, is that whilst I acknowledge that this is a very difficult situation and that the sum offered is not really sufficient, I also accept that the husband has no ability to borrow further and that he has no other assets or financial resources that are open to him. Further I accept that the HK$620,000 borrowed from Citibank has been fully and properly accounted for. It is clear that the husband cannot borrow more money at present. In so far as the other benefits are concerned, the housing allowance attaches to the husband. Either the husband takes the cash allowance of HK$24,000 or he takes the housing allowance and he lives in the accommodation provided. In either event he needs somewhere to live in Hong Kong. It may be possible for the wife to be given a little of the cash allowance, if the husband were to take that option, but either way I accept that it is also reasonable for the husband to rent a two bedroomed property in Hong Kong. In so far as the other benefits are concerned, these already benefit the children (i.e. the education allowance and the medical benefits).

Maintenance in the longer term

17.  Longer term I accept that the husband should, if he is well, maximize his earning capacity, which could include overtime etc. According to the husband’s Form E dated the 3 January 2018 his income at that time was as follows:

My present basic/average * income per month is :-	90,617.00
In addition I receive :-
Overtime (average per month-based on the last 12 months)	5,002.08
Double pay (average per month)	Nil
Bonus (average per month)	2,917.00
Commission (average per month-based on the last 12 months)	Nil
Tips (average per month-based on the last 12 months)	Nil
Housing allowance (average per month)	67,300.00
Travel/Transport * allowance (average per month)	Nil
Education allowance (average per month)	12,112.92
Entertainment allowance (average per month)	Nil
Other allowances (specify) (average per month) EO Adjustment Hourly Pay Qualification Pay	227.00             5,916.00                623.00
The total average per month	HK$184,716.00

18.  Consequently, in the longer term one would expect the husband’s income to increase a little. In the second part of Annex D he sets out his anticipated expenses in the longer term. I accept the essential expenses of approximately HK$5,550 and the repayment of the loan and tax savings in the sum of just under HK$33,000. However, it seems to me that the husband can make some adjustment to the costs of access and that on a broad brush basis he should continue to pay the HK$36,000 per month as originally ordered.

The wife’s claim

19.  In the wife’s revised budget attached to her 5th affidavit dated the 26 March 2018 she sets out her revised Australia budget of AU$13,024.17 or HK$78,145 per month. This is almost double what the husband currently earns and would be approximately 80% of his full base salary. Even if the husband was able to earn a little more, this claim is clearly excessive and outside of his ability to pay. The parties will need to cut their clothe according to the husband’s salary. This will inevitably mean that the standard of living of both sides will of necessity come down. To that end the wife will need to consider living in a town house or something similar and she will also need to make sensible adjustments to other outgoings. As indicated above she will also need to consider returning to work on either a full time or part time basis.

Decision     

20.  In such circumstances and on a broad brush basis I will order that the husband do pay maintenance pending suit to the wife in the sum of HK$4,800 per month and interim maintenance of HK$5,100 per month for each of the two children of the family for the months of May and June 2018. Thereafter and on the premise that the husband is hopefully then working I will increase the total sum to HK$36,000 per month. Although tight it seems to me that the husband should be able to pay a little more than offered especially if he is able to increase his income in line with paragraph 18 above. Thus with effect from the 1 July 2018 the husband shall pay the wife HK$4,800 per month and the two children the sum of HK$15,600 per month per child.       

Litigation funding                                       

21.  The wife makes reference to litigation funding. Given however that she is currently on legal aid and the husband has no ability to pay her anything in addition for her legal costs I do not intend to take this matter further for the time being.

Costs

22.  Costs shall be reserved. The wife’s own costs shall be taxed in accordance with legal Aid Regulations.

Order

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

1)   Order 1 contained in the court order dated the 15 January 2018 shall be varied to the extent that the Respondent shall pay maintenance pending suit to the Petitioner for herself in the sum of HK$4,800 per month, the first payment to be made on the 1 May 2018 and thereafter to be paid on the 1st day of each succeeding month until further order.

2)   Order 1 contained in the court order dated the 15 January 2018 shall be varied to the extent that the Respondent shall pay interim maintenance to the Petitioner for the two children of the family in the sum of HK$5,100 per month for the months of May and June 2018 the first payment to be made on the 1 May 2018. Thereafter the Respondent shall pay interim maintenance in the sum of HK$15,600 per month per child the first payment to be made on the 1 July 2018 and thereafter to be paid on the 1^st day of each succeeding month until further order.

3)   Costs shall be reserved. The Petitioner’s own costs to be taxed in accordance with Legal Aid Regulations.

4)   Each party’s respective applications in relation to ancillary relief shall be set down for a Financial Dispute Resolution hearing on the 25 October 2018 at 10:30 a.m. with one day reserved.

5)   Both parties do personally attend that hearing.

6)   The parties do file and serve their amended Questionnaires as attached on the otherside within 7 days from today.

7)   Each side do file and serve their Answers to the said Questionnaires within 28 days thereafter.

8)   No further affirmations or questionnaires to be filed without leave of the court.