CPS v. WMK

FCMC 2080 / 2018

[2019] HKFC 148

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 2080 OF 2018

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

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

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

J U D G M E N T

(Maintenance pending suit/Interim maintenance)

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

Introduction

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

The main issues

2.  In broad terms there is only one issue to be determined namely how much maintenance should the husband pay to the wife for herself and the girls on an interim basis.

3.  The wife seeks an order in the sum of HK$48,000 per month i.e. HK$10,000 per month for herself and HK$38,000 per month (or HK$14,000 per month per child) for the girls. At present the husband is contributing HK$30,000 per month as interim support (up from HK$25,000 per month last year) and he asks that that continue. Thus in reality the parties are only arguing over HK$18,000 per month. I asked for an indication during the hearing of the amount that the parties had spent on this application and the wife’s solicitors undertook to file a Form H, although I have not had sight of that to date. According to the husband’s Form H, the cost for this hearing alone comes to just under HK$75,000. It is likely that the wife’s costs will not be less than that. Thus the parties have most probably spent in the region of at least HK$150,000, which could have been spent on the girls. This equates to over 8 month’s worth of maintenance at the level requested by the wife. Suffice it to say that it seems to me that this is a matter than can and should have been compromised.      

Background 

4.  The parties married on the XX September 2010 and separated in or about June 2015, although they initially continued to live under the same roof but in different bedrooms. The husband, who is Australian, is now 45 years of age and he works as senior actuary. The wife, for her part, has worked both as an administrator in a hospital and as a piano teacher, but she is not working at present. She is 41 years of age and is of Chinese descent. The wife issued a divorce petition on the 15 February 2018 on the basis of two year’s separation and the decree nisi was pronounced on the 19 September 2018. Unfortunately, the parties were unable to reach full agreement with respect to the girls, although joint custody was agreed. The husband is seeking an order for shared care, whereas the wife wishes to have a more traditional arrangement, with care and control being granted to her and reasonable access to the husband. A trial is now scheduled for September in that respect. In the interim the husband enjoys access to the girls on Tuesday and Thursday’s and on alternate weekends. The school holidays are split equally between the parties.   

The law

Maintenance pending suit and interim maintenance

5.  The law is well known and not in dispute. Section 3 Matrimonial Proceedings and Property Ordinance Cap 192 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 then every opportunity to achieve fairness by means of a set off. In other words, if there is any overpayment or underpayment that can normally be rectified at a final ancillary relief hearing. Applications for interim maintenance under section 5 of the same ordinance are approached in the same way. As Rayden points out

…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 paragraph 16.17 of Rayden, 18^th edition).

6.  Reference has also been made by each side to the Court of Appeal decision in HJFG v KCY [2012] 1 HKLRD 95 where it was held inter alia that:

“(a) The sole criterion to be applied in determining the application is ‘reasonableness’, which is synonymous with ‘fairness’.

(b) A very important factor in determining fairness is the marital standard of living. That is not to say that the exercise is merely to replicate that standard.

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

(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 a situation the court should err in favour of the payee.”

The husband’s ability to pay 

7.  In this instance, although the husband says that he is now spending more than he is earning, in broad terms there is no dispute that he has the ability to pay. He is currently earning over HK$200,000 per month (inclusive of a discretionary bonus and a small dividend payment) and he has significant liquid assets at his disposal (i.e. over HK$5.6 million as at the 12 April 2019 – the date of his second Form E, which is an increase from c HK$5.335 million as at the 9 April 2018, which is the date of his first Form E).

8.  Under the terms of a previous court order the husband undertook to pay for the costs of a Parental Co ordinator and also for the therapy costs of the children. He says that this has increased his expenditure by just under HK$50,000 per month. However, on a closer examination of the invoices provided to the court under cover of a letter dated the 8 May 2019, it seems that the costs are somewhat lower than that. On average the costs for the Parental Co ordinator amount to just over HK$31,600 per month. The play therapy for the children has also been temporarily suspended, on the recommendation of the Play therapist herself and the husband’s own therapy is HK$2,800 per session. Although I accept that the children will require some support going forward, it seems to me that even on these figures the husband should not be required to pay more than HK$40,000 per month. I am also concerned that the Parental Co ordinator’s fees seem very high. It seems to me that attempts should be made to reduce these to a more manageable level. In addition, the husband includes HK$60,000 per month for legal costs (while the wife is not claiming any provision for herself). If the legal costs provision is put to one side for a minute (on the premise that if necessary it can come out of savings) and the costs for the litigation support are reduced, even on the husband’s own figures, the husband would clearly be able to live well within his means. To that end please see the schedule of expenses for the husband below, taken from his most recent Form E. The court has placed in parenthesis those items which have been placed to one side for a minute and has also marked with an * those items which have been reduced or are, in the view of the court quite clearly capable of reduction. This will be discussed further below.   

4.1 General

Item	Amount
Rent	29,000
Mortgage repayments	N/A
Utilities (electricity, gas & water)	2,000
Management fees & Government Taxes	962
Food	5,500
Household expenses	2,000
Car expenses	Nil
Insurance premia	Nil
Domestic helper	5,210
Total monthly household expenses	HK$44,672

4.2 Personal

Item	Amount
Meals out of home	6,200*
Taxi fares and other transport (mainly to facilitate the access arrangements)	4,000
Clothing & Shoes	900
Personal grooming	100
Entertainment and presents	1,195
Holidays	3,000*
Medical and dental costs (mainly to cover the costs of Dr C)	5,000
Tax	30,000
Club membership	165
Mobile phone	600
Legal costs (average amount over the last 6 months)	(60,000)
Costs of W (parenting coordinator), Dr L (child therapy), Dr Z (individual therapy) and SJE	40,000*
Interim maintenance	(30,000)
Total monthly personal expenses	HK$91,160

4.3 Children

Item	Amount
School fees	12,000
School uniforms	167
Extra Tuition fees	(1,750)
Extra-curricular activities	(1,560)
Transport to school	195
Medical and dental	0
Entertainment & Presents	803
Books & stationery	400
Clothing & Shoes	500
Haircuts	0
Meals out/ lunches and pocket money	500
Holidays	2,250
Total monthly expenses for children	HK$16,815

Total Monthly Expenses (4.1+4.2+4.3)

HK$152,647

The marital standard of living

9.  In this case I accept that the parties maintained a relatively frugal standard of living during the marriage. They purchased a 520 square foot apartment, in which the wife and girls currently live (and which is now mortgage free). The girls attend good local schools and enjoy some Extra Curricular activities (ECA’s), but generally speaking expenditure was fairly modest. The husband says that this was deliberate and was motivated in part by concerns with respect to his own mental health and his ability to maintain his current level of remuneration longer term. According to the husband’s original Form E the household expenditure whilst the parties were living together amounted to under HK$80,000 per month, which included savings for tax. The husband’s stated earnings were just under HK$200,000 at the time, inclusive of a discretionary bonus. Therefore, it seems that historically he was able to make significant savings on a monthly basis.

The wife’s financial resources and earning capacity       

10.  It is also the husband’s case that the wife has access to other financial resources that have not been fully disclosed and he maintains that her family have assisted her, particularly in so far as holidays are concerned. Whilst the wife does not dispute that both her mother and brother have paid for family holidays and other trips that she and the girls have been invited on, she says that this is not something that can or should be relied upon going forward. She also maintains that some money has been lent to her by her family.

11.  The husband also argues that the wife has an earning capacity and that she is deliberately not maximizing that earning capacity at present. Whilst I would accept that the wife does have an earning capacity of sorts, in the grand scheme of things it seems to me that this is quite limited, especially when compared to that of the husbands. I also accept that with a trial just around the corner that it is probably not feasible for the wife to return to paid employment at present. I accept that longer term that she will need to maximize her earning potential to its fullest. Similarly, the husband will also need to take steps to maintain his higher earning capacity.      

What are the wife’s reasonable needs and what is the husband’s position with respect to the wife’s claims?

12.  In the husband’s affidavit dated the 2 May 2019 he stated as follows:

30.   I will illustrate herein below that the Petitioner’s and the Children’s alleged expenses in paragraph 21 are grossly inflated, and that the interim monthly maintenance of HK$30,000 that I have been paying the Petitioner is more than sufficient to cover her and the Children’s expenses covered by her.  I also note that the Petitioner has failed to substantiate most expenses with supporting documents.

Item	Amount claimed by the Peitioner in her updated Form E (HKD)	Amount which I see as reasonable  (HKD)
GENERAL
Utilities	3,175	2,000
Management Fees	1,015	1,015
Food (for the Petitioner, the Children and the helper)	3,400	5,500
Household Expenses	4,000	2,000
Domestic helper	6,500	4,700
TOTAL	HK$18,090	HK$15,215
PERSONAL
Meals out of home	3,000	1,000
Transport	1,200	1,200
Clothing/Shoes	1,000	1,000
Personal Grooming	2,000	1,000
Entertainment/Presents	1,000	1,000
Holidays	2,000	0
Medical	500	0
Dental		100
Legal costs	15,000	0
TOTAL	HK$25,700	HK$5,300
CHILDREN
School Fees	Paid by me	Paid by me
Extra Tuition Fees	4,046	Paid by me
School Books and Stationery	250	250
Transport to School (Bus)	1,500	820
Medical	500	Covered by the insurance provided by my employer
Dental		100
Extra Curricular Activities	3,005	780
Entertainment/Presents	3,500	1,500
Holidays	3,500	0
Clothing/Schools	500	500
Uniform	250	167
TOTAL	HK$17,051	HK$4,117
TOTAL MONTHLY EXPENSES	HK$60,841	HK$24,632

Discussion

General expenses

13.  In so far as the wife’s general expenses are concerned, it seems to me that most of these are reasonable and are in the same ball park as the husband’s schedule of general expenses. In so far as the utilities are concerned the husband maintains that the figure of HK$3,175 per month is exaggerated. He has claimed HK$2,000 per month for his own utilities I will also allow the wife the same figure. In doing so I accept that there is little in the way of documentary evidence to support the wife’s case on these sums, although the difference is, in reality, quite slight at only HK$1,175 per month. Likewise, for food, the husband offers an increased figure of HK$5,500 per month, which seems reasonable in the circumstances and is in keeping with his own estimate for food within his household. However, I do not fully accept the reduced figures for the wife’s estimate for household expenses and the domestic helper’s costs. I will allow a compromised figure of HK$3,000 per month for the household expenses and I will allow the domestic helper’s costs in full as I accept what the wife has said in that respect. In total then I accept that the wife has general expenses in the region of HK$18,000 per month, which is in keeping with her original estimate, although the figures are differently constituted.

Wife’s personal expenses

14.  In so far as the wife’s personal expenses are concerned, generally speaking I do not accept the very much reduced figures put forward by the husband. With respect to the estimate for litigation costs, it is of note that the wife makes no application in that regard and that the estimate of HK$15,000 per month is not sought at present. The wife seeks a round figure of HK$10,000 per month and the husband offers just over half of that sum. In particular, I do not accept the husband’s suggestion that the allowance for personal grooming should only be HK$1,000 per month or that there should be no allowance at all for holidays given that the wife’s family have seemingly assisted her in the past. I have noted that the husband allows HK$3,000 per month for holidays for himself. Medical and dental of only HK$500 per month also seems reasonable, notwithstanding the husband’s offer of an undertaking with respect to his current medical and dental insurance. Thus I will allow the wife HK$10,000 per month for her own expenses broken down as follows:

4.2 Personal

Item	Amount
Meals out of home	HK$2,300
Transport	HK$1,200
Clothing & Shoes	HK$1,000
Personal grooming(including haircut and cosmetics)	HK$2,000
Entertainment /Presents	HK$1,000
Holidays	HK$2,000
Medical/Dental	HK$500
Tax	HK$0
Insurance premia	HK$0
Interim maintenance	HK$0
Contribution to parents	HK$0
Dependent family members	HK$0
Others (specify) – Legal Costs for this divorce suit	(HK$15,000)
Total monthly personal expenses	HK$10,000

The children’s expenses

15.  The husband has undertaken to pay for the girls’ school fees, their agreed ECA’s/tuition fees and for their medical and dental insurance coverage. I will hold him to his undertakings with respect to the girls’ school fees and the provision of the medical and dental insurance coverage.

16.  I understand that there is a disagreement between the parties with respect to the girls’ ECA’s and their extra tuition costs, with the husband refusing to pay for items that have not been specifically agreed. He also refuses to pay for items that are scheduled in his time. I accept that the children may need extra tuition for Chinese and possibly English, as has been suggested by the mother and that other activities such as swimming lessons, are in my view, very much on the ‘necessary’ side of the spectrum, when it comes to ECA’s. The mother seeks just over HK$7,000 per month or HK$3,500 per month per child for these items. I will allow this. In doing so I have taken into account the receipts attached to her affidavit evidence. It will then be her responsibility to pay for these expenses when the children are in her care. It is a matter for the husband whether or not he chooses to continue with the other tuition and the ECA’s when the children are in his care. I will also allow the mother’s estimates for holiday costs, medical/dental costs and transport. I will reduce the estimate for Entertainment and presents down to HK$2,000 per month i.e. HK$1,000 per child per month. In total this amounts to HK$15,500 per month as follows:

4.3 Children

Item	Amount
School fees	HK$0
Extra Tuition fees	HK$4,000
School books and stationery	HK$250
Transport to school (including school bus)	HK$1,500
Medical / Dental	HK$500
Extra Curricular Activites	HK$3,000
Entertainment / Presents	HK$2,000
Holidays	HK$3,500
Clothing / Shoes	HK$500
Insurance premia	HK$0
Lunches and pocket money	HK$0
Other Transport	HK$0
Child-minding fees	HK$0
Uniform	HK$250
Others (specify)	N/A
Total monthly expenses for children	HK$15,500

Buffer

17.  In addition, the wife seeks a buffer of HK$3,000 per month – I will allow half of that sum and will as a consequence round up the figures as set out below.   

Conclusion

18.  In conclusion then I will make an order that in total the husband pay the wife a total sum of HK$45,000 per month - HK$20,000 per month, as maintenance for herself (i.e. HK$9,000 as her share of the general expenses, HK$10,000 as her personal expenses and a further HK$1,000 as a buffer) plus HK$25,000 per month as maintenance for the girls (i.e. HK$9,000 as their share of the general expenses, HK$15,500 as their actual expenses and a further HK$500 as a buffer) plus I will hold him to his undertakings to continue to pay for the girls’ school fees and to provide medical/dental insurance coverage for them and the wife via his work insurance policy. He will also continue to be bound by the previous undertakings given in these proceedings. It seems to me that the husband should be able to pay these sums primarily from his income (see paragraph 8 above) and in the alternative from his other liquid assets in the short term.

Costs

19.  It seems to me that the wife has been largely successful in her application and that although I stand by my comments at the beginning of this judgment namely that the parties should really have compromised this matter, nevertheless it seems that the wife may have had no alternative but to seek the assistance of the court, given the husband’s stance. I will therefore make an order nisi to be made absolute in 14 days time that the husband do pay the wife’s costs of and arising out of this application on a party and party basis to be taxed if not agreed.

Order

20.  Consequently I shall make an order as follows:

UPON the Respondent undertaking to continue to pay for any school fees for the children directly to the educational establishment concerned.

AND UPON the Respondent undertaking to continue to provide medical and dental insurance coverage for the Petitioner and children through his employer.   

IT IS ORDERED THAT: 

1.   The Respondent shall pay maintenance pending suit to the Petitioner for herself in the sum of HK$20,000 per month and interim maintenance to the Petitioner for the two children of the family in the sum of HK$12,500 per month per child, the first payment to be made on the 1 June 2019 and thereafter to be paid on the 1^st day of each succeeding month until further order.

2.   The First Appointment hearing shall be adjourned until after the conclusion of the children’s trial.

3.   There shall be an order nisi to be made absolute in 14 days time that the Respondent shall pay the Petitioner’s costs of and occasioned by this application on a party and party basis to be taxed if not agreed.