HRT v. RHT

FCMC 5488 / 2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 5488 OF 2006

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Dates of Hearing: 14 and 15 February 2008

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J U D G M E N T

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Introduction

1. This is an application by the petitioner wife for an upward variation of an order for maintenance pending suit.  She makes the application to cover her increased living expenses and she also seeks a contribution towards her litigation costs.

2. I have set out the background to this matter in some considerable detail in my judgments of the 21 June 2007 (Maintenance Pending Suit judgment) and the 4 December 2007 (Validity of Marriage judgment).  I will not repeat the background here.  Suffice it to say that there have been recent developments, which have led the wife to make this application. 

3. The wife is now living in Singapore, she says as a direct result of action taken by the husband.  The husband denies this. She says that she cannot safely return to Indonesia at the present time.  She does not have a valid passport.  Consequently she cannot travel in any event.  The wife also needs to maintain her home in Indonesia.

4. The wife is also faced with the reality of rising legal costs, which vastly exceed original estimates.  

Issues

5. The main issues to be determined then are as follows:

i) Should the husband pay an increased amount as maintenance pending suit for the wife’s own living expenses?

ii) If so how much should the husband pay?

iii) In the event that an increase is ordered what date should the order take effect from?

iv) Should the husband also pay a contribution towards the wife’s litigation costs as maintenance pending suit, notwithstanding the findings/comments made by me in the maintenance pending suit judgment?

v) If so how much should the husband pay?

vi) In the event that an amount is ordered what date should that part of the order take effect from?

Recent events

6. By court order dated the 21 June 2007 the husband was ordered to pay the wife US$3,000 per month as maintenance pending suit that is, US$2,000 per month for her living expenses and US$1,000 per month for her medical expenses.  The wife was living in Jakarta at the time and the order was made on that basis.

7. To recap, the husband renounced his Indonesian nationality on the 30 November 2005.  The wife initially applied for Indonesian nationality in 2002. In early 2006 the wife re-submitted an application for Indonesian nationality, which was granted.  On the 26 April 2007 the wife’s Indonesian citizenship was revoked.  On the 26 October 2007 the wife was granted permission to travel on her previous passport dated the 19 June 2006, pending a final judgment on the matter by the Indonesian court.  The wife subsequently traveled to Hong Kong for the trial on the validity of the marriage, which took place from the 30 October 2007 – 9 November 2007.

8. The wife also complains of an incident, which took place on the 26 October 2007.  This was shortly before she left Indonesia to come to Hong Kong.  On that occasion three Indonesian Police officers and a lady Police doctor came to the former matrimonial home and examined her.  She says that they found that she was in no fit condition medically, to be interrogated and that they tried to have her admitted to a police hospital against her will.

9. On the 30 October 2007, the first day of trial, the Indonesian police issued an arrest warrant for the wife. On the 1 November a request was made to Interpol to search, arrest and deport the wife back to Indonesia.  Reference is made to a report made previously to the Indonesian police by K, the parties’ son-in-law.  He alleged that the wife had falsified documents and made a false declaration in relation to her application for citizenship.  In particular he claims that the wife had made false declaration to the Department of Law and Human Rights, namely that she was married to the husband.  Mr K sides with the husband in these proceedings.

10. Mr. H, the husband’s Indonesian lawyer, filed an affirmation on the 21 November 2007.  In it he confirms that the wife’s application to stay the decision to revoke her citizenship had itself been revoked as at the 8 November 2007.  The wife’s application, in effect, to reinstate her Indonesian citizenship was also refused. Mr. H confirms that the husband intervened in this action.  He is referred to in the affirmation as the “intervenient defendant”.  (See para 7 of Mr. H’s affirmation dated the 21 November 2007).

11. The wife is presently residing in Singapore.  She has no valid travel documents.    

12. On the 19 November, the home in which the wife had been living in, in Indonesia, which for convenience sake I will refer to as the former matrimonial home, was occupied by unknown men.  It is the wife’s case that this was done at the husband’s bequest.  On the 5 December I granted a non-molestation order against the husband, together with an order permitting the wife to enter and remain in the former matrimonial home.  The husband was further restrained from entering it.  A penal notice was endorsed on the order.  The substantive hearing was adjourned.  The husband denies any involvement in this incident. 

13. On the 4 December 2007 I handed down the judgment on validity in which I found that the parties’ were validly married.

14. These recent events form the background to the wife’s present application to vary the maintenance pending suit.

The Law

15. I have referred to the law on maintenance pending suit applications, including the recent developments on applications for provision of litigation costs, in my original maintenance pending suit judgment.  I will not repeat them here. For the avoidance of doubt I rely on the same legal principles and authorities as set out in that judgment.

16. In so far as variation is concerned, the wife’s application for a variation is made pursuant to section 11 (7) of the Matrimonial Proceedings and Property Ordinance Cap. 192, which provides that:

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

17. It is accepted that in considering a change of circumstances, I should look at the case de novo.   In other words the court is not fettered by the existence of a previous order.  I must look at the situation afresh and make an order based on the parties’ current circumstances.  (See Ch 3.131 Jackson’s Matrimonial Finance and Taxation, 7th edition).

18. Thus any

           change in any of the matters to which the Court was required to consider when making the original order was one of the circumstances to consider.

(See AEM v VFM Civil Appeal No 261 of 2006, dated 10 January 2008, unreported).

19.  The parties also have a duty to make full and frank disclosure of their means and a failure in that duty can lead the court to draw an adverse inference  (See Baker v Baker [1995] 2FLR 829).

20.  The court has a very wide power, including a power to discharge, suspend and to backdate the original order.  However in

“practice, orders are not usually backdated to a date prior to the notice of the application to vary unless the justice of the case so demands”.

(See AEM v VFM Civil Appeal No 261 of 2006, dated 10 January 2008, unreported).

21.  As Mr. Pilbrow S.C rightly points out however, there is normally a trigger date from which the anticipated variation could rightly be said to flow.

22.  The overall objective is to achieve a fair outcome (see M v M, FCMC 4070 of 1990, dated 12^th May 2006, unreported).

Discussion

23.  I must now turn to consider the issues, the law, and the parties’ evidence as set out in their most recent affirmations together with the submissions made by leading counsel.

(i)      Should the husband pay an increased amount as maintenance pending suit for the wife’s own living expenses?

24.  Mr. Coleman S.C for the husband says that there is nothing to stop the wife returning to Indonesia.  Infact he says that she should return so that she can plead her case directly.  Prima facie, therefore, he does not accept that there is any basis for the wife’s application for an increase of maintenance pending suit to cover increased living costs caused by her residing in Singapore.   

25.  The difficulty with this approach is that it really doesn’t stand up to scrutiny when one looks at the recent events leading up to this application.  Whether the husband was justified in taking the action that he did by intervening in the wife’s application to restore her citizenship is largely immaterial to the decision that I need to make today.  The fact is that partly, at least, as a direct result of his actions, rightly or wrongly taken, the wife now has no passport on which to travel.  She is effectively stateless, although I accept as Mr. Coleman pointed out that in time she may be able to apply for an Indian passport.  However at present she is unable to travel.  I accept that it is not reasonable for her to return to Indonesia where she runs the risk of being arrested and interrogated by the authorities, or possibly to face threats from unknown men.  She is 71 years old and in poor health.  I also accept that not withstanding the fact that there is still to be a substantive hearing on whether or not the husband instigated the occupation of the former matrimonial home by eight unknown men, the fact remains that this incident did take place.  I also accept that this must have been extremely disturbing for her.  Consequently I accept entirely that the wife has no real alternative but to live in Singapore for the time being and that she accordingly needs to be properly provided for.

(ii)     How much should the husband pay?

The wife’s needs

26.  The husband argues, in the first instance, that the wife does not need an increase to cover her living expenses.  In the alternative he queries the wife’s figures.  He says that there has been double accounting and very little evidence provided in support of the figures claimed.

27.  It is true that the wife has provided very little in the way of documentary evidence in support of her increased claim.  This was a matter of some concern to me on the last occasion, when I pointed out that the evidence in support of the wife’s case then was also very limited (See para 44 of the maintenance pending suit judgment).  It was for this reason that I used the maintenance previously paid as a yardstick to determine the correct figure going forward.  The wife had previously received US$2,000 per month.  On that basis I ordered that she receive US$2,000 per month going forward.

28.  The wife now seeks US$2,800 to cover her expenditure in Jakarta, notwithstanding the fact that she is not living there.  In addition she seeks USS$3,650 for her own living expenses in Singapore, plus an additional US$3,000 to cover the cost of a serviced apartment.

29.  While I accept that the wife needs to maintain her property in Jakarta and to continue to pay the wages of her maid and driver, I do not accept, during her absence from the matrimonial home, the need for all the other ongoing expenses listed.  I do however agree, given the events in the recent past, that it is acceptable for her to hire the services of two security guards.  On a broad-brush basis therefore I will allow US$1,750 per month to cover her expenses in Jakarta, notwithstanding the fact that these expenses are unsupported by any documentary evidence.  It seems to me that her expenses should not be quite as high as when she was living there, notwithstanding the need to employ the security guards.  (Maid/Driver – US$550, House maintenance – US$600 and Security Guards – US$600 = US$1,750)

30.  In so far as the wife’s expenses in Singapore are concerned, I accept that she needs a serviced apartment in which to live in the interim.  A quote was provided by the wife for a residence called L.  This will cost US$3,000 per month and includes a twice-weekly maid service and a utility allowance.  Although clearly not ideal this seems to be a sensible solution in the short term.  In addition I will allow the wife US$2,000 per month to cover the cost of her other expenses in Singapore.  Again I do so on the basis that this amount was paid previously and in the absence of any documentary evidence to support the wife’s claim, it provides a useful yardstick going forward.  This will need to cover the wife’s daily expenses, including groceries, (by way of an aside, the estimate provided of US$1,500 per month seems extremely high for an elderly woman on her own), transportation and a top up for any utility and telephone expenses. She will continue to receive US$1,000 per month to cover medical expenses as before.    

The husband’s ability to pay

31.  The husband’s ability to pay was not seriously questioned.  In general my observations remain as set out in the maintenance pending suit judgment (para 55).  I was also helpfully referred to a report prepared by the H Limited, dated the 12 February 2008, which was filed on behalf of the wife.  The report says that it is highly likely that the husband has not made full and frank disclosure of his means, including off shore companies and a Credit Suisse bank account in Zurich.  He may also have attempted to dissipate assets.  Reference is made to large amounts of money being held off shore in corporate structures in which the husband allegedly has a beneficial interest.  (c. HK$43 million as at December 2006).  Infact it is the wife’s case that the husband is the sole proprietor/beneficial owner of the whole corporate structure identified in the Form E’s and pleadings.  This is supported by the fact that maintenance payments have been paid from a variety of different accounts held by different people and companies.  I was also referred to a valuation based on comparable sales of properties, held again in the names of various companies and corporate structures in which the husband either has a direct or beneficial interest.  The total value was HK$115 million.

(iii)    In the event that an increase is ordered what date should the order take effect from?

32.  The trigger for the increase is clearly the wife’s move to Singapore.  She asks that the increase in the living costs be effective from the 12 November 2007.  However on a broad-brush basis and in order to make the accounting simpler, I will order that this amount be backdated to the 1 November 2007.  In so far as rental is concerned she asks for US$3,000 per month to be paid from the 15 February 2008.  I do not know if the wife is presently living in a serviced apartment.  On the basis that she is still living with her family and that it is likely to take her a little time to arrange the move, I will order that the husband pay this amount from the 1 March 2008.

(iv)    Should the husband also pay a contribution towards the wife’s litigation costs as maintenance pending suit, notwithstanding the findings/ comments made by me in the maintenance pending suit judgment?

Background

33.  During the original maintenance pending suit hearing the wife said that she had spent HK$624,000 up to that date on legal costs.  She estimated that it would cost just under HK$1 million to take the issue of the validity of the marriage to trial.  Infact the bill prepared by her bill costs draftsman puts her legal costs in relation to validity at approximately HK$7 million.

34.  Mr. Coleman queries the bill and in particular whether or not other costs have been included in it, i.e. costs other than those relating strictly to the issue of the validity of the marriage.  That is really a matter for taxation. However if the bill has been correctly drafted then costs in relation to these proceedings generally may be even higher than the HK$7 million identified.

35.  These issues have still to be argued.  In the meantime what is clear is that the costs have vastly exceeded all estimates.  This is likely to continue.  The husband intends to apply to a single Judge in the Court of Appeal for leave to appeal.  There is a multiplicity of other outstanding matters to be dealt with, not to mention the wife’s application for ancillary relief.

Maintenance Pending Suit Judgment

36.  In the original maintenance pending suit judgment I identified a number of difficulties with the wife’s original application, notwithstanding the fact that applications such as these are made on a broad-brush basis.

a)        I found that it was impossible to determine whether the wife’s 75% in P was income producing or if the income was produced through another corporate vehicle.  It was also impossible to determine whether or not this was a financial resource at the wife’s disposal, either directly or through the parties’ sons, T and/or M.  (See paragraph 16).

37.  Mr. Pilbrow, in clarifying this point, argued that it was now clear that this was not a resource as the company was wound up by the District/Commercial Court of Central Jakarta on the 23 July 2007.  The fixed asset book value of the company is shown as US$260 and the profit and loss account shows no trading income for the years ended 2006 and 2007.

38.  Mr. Coleman, pointed out the flaws with this approach.  In particular he was able to show that there was a large unexplained change in the book asset value of the company and that this occurred within a short space of time.  Although there was no income recorded there were nevertheless high rates of expenditure.  Funds appear to have been removed from the company at a high rate, roughly US$100,000 per quarter.  Further buildings that were on the books on the 31 December 2006 were no longer on the books as at the 15 September 2007.  Mr. Coleman submitted that large sums of money had been taken from P and that on the face of it the wife as a 75% shareholder of that company may have been a recipient of those sums.  I agree with Mr. Coleman that this is of particular importance when looking at the issue of litigation costs and the potential for backdating those costs.

39.  Mr. Pilbrow says that it is wrong to imply that the wife has improperly funneled off these funds.  I accept this, but without further evidence it is not possible for me to make any definitive findings concerning this company and whether or not the wife has been in receipt of funds properly, or otherwise.  I am however cognizant of the fact that during the first hearing reference was made to three properties held by P, which may or may not have formed part of the asset base identified in the companies books and may or may not have been utilized to pay inter alia, ongoing litigation costs.

40.  Nevertheless I would accept, in the words of Mr Pilbrow,

it would appear that the sums of money are not available to the wife at the present time, any more 

41.  Mr. Pilbrow confirmed that that the wife’s legal costs have been paid up to date, although she has had to borrow from other family members.

b)        I also queried the extent to which the wife has been and continues to be supported by the sons and whether this is a financial resource to which I can have proper regard, especially given the fact that this is essentially a family dispute, of which the present proceedings appear to form just one part.  (Paragraph 41 and 52).   

42.  This query was not addressed in any depth.  The wife claims that she has had to borrow, in part, from the sons to pay the litigation costs.

The Currey test

43.  Mr. Coleman says that the wife does not satisfy the test identified 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])”

(Interim Costs Provision out of Costs Allowance.  (reference p.427).

44.  Mr. Pilbrow does not agree.  I will deal with these points one by one.

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

45.  Mr Coleman says the wife may have assets at her disposal through P, whereas Mr Pilbrow says that it is clear that this is not the case. Ultimately I may need to hear from the liquidator on this point.

46.  However, whatever assets the wife may or may not have had at her disposal, in comparison the husband appears to have a far more substantial asset base.  It also seems fair to assume that whatever assets were at the wife’s disposal previously might already have been utilized to pay costs.   On the face of it I accept that she has no available assets or none that can reasonably be deployed to pay costs going forward. 

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

47.  I accept that the wife on the face of it cannot provide security for borrowings.  She is a 72-year-old woman, with no earning capacity and no assets that can provide any form of security.  The former matrimonial home continues to be held by the Indonesian government.

(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)

48.  I also accept that it is unlikely that she would be able to obtain legal services on this basis in Hong Kong.

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

49.  Mr Coleman says that the wife should be able to apply for legal aid.  Mr Pilbrow says that she applied previously but was turned down because she resides outside of the jurisdiction.

50.  Whilst I accept that this should not have been a reason to refuse the wife legal aid, I also accept that even if the wife were able to secure legal aid, it is unlikely that she would be able to secure the level of expertise that is clearly required for these proceedings on a legal aid basis.    

51.  What is also clear is that costs have vastly exceeded original estimates and that in part this is due to action taken by the husband.  (For example the husband raised the issue of the Hindu Marriage Act and expert evidence was called within the Validity hearing at short notice, although it was clear that the act did not apply to the parties.  This lengthened the time of trial).

52.  Given the above, it seems to me that the wife must be put in a position where she is able to properly argue her case with the appropriate level of legal expertise available.

Overarching enquiry

53.  I am also conscious of the way in which these proceedings have developed, and the wife’s position within those proceedings.  By anyone’s analysis the present litigation is extremely hostile.  It is both destructive and aggressive.

54.  Whereas initially it seemed to me that the wife’s action might be considered hostile, since then the husband appears to have engaged in equally questionable tactics.  I am certain that the stakes are high and the extent to which that is a matter for this court to determine remains to be seen.  However in a situation such as this it is important that as far as possible there is a level playing field and that the wife should not be prevented from arguing her case effectively simply because she has run out of funds. 

55.  Consequently, I am satisfied that the husband should now pay a contribution towards the wife’s litigation costs.  

(v)     If so, how much should the husband pay?

56.  The wife asks for US$15,000 per month effective from the 12 November 2008.

57.  I will allow the wife the US$15,000 per month claimed. 

(vi)    In the event that an amount is ordered what date should that part of the order take effect from?

58.  During the hearing Mr Pilbrow asked that the litigation costs be backdated to the date of the petition.  He said that the justice of the situation demanded it.

59.  The wife applied to vary the maintenance on the 8 January 2008.  Applications to vary are often backdated to the date of the application, although as I have said it is accepted that it is possible to backdate them further.

60.  In this instance bearing in mind that the wife has paid the legal costs to date, that the issue of costs inter alia on validity have still to be argued and that the issue of the resources originally available to her is still not clear, I will make the order effective from the 8 January 2008.     

Costs

61.  Although I have reserved costs throughout these proceedings, I will on this occasion make a costs order.  Costs shall follow the event.  I will make a decree nisi that costs of this summons shall be to the wife to be taxed if not agreed, such order to be made absolute upon the expiration of 14 days.  There shall be a certificate for all counsel involved.  

62.  Finally I would ask that counsel address me on the ramifications of this judgment on my order of the 28 June 2007, at the call over hearing on the 3 March 2008.