RMH v. GY

FCMP 38/2020

[2021] HKFC 215

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS

NO. 38 OF 2020

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R U L I N G

(Leave to Appeal)

(By Paper Disposal)

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The Application

1.  By an ex tempore judgment given on 26 August 2021 (“the Ex tempore Judgment”), upon the application of the respondent father, the interim maintenance for the benefit of the minor “W” was lowered from $463,400 to $260,400 per month over a course of 3 months. 

2.  Dissatisfied with the judgment, the applicant mother applies for leave to appeal.

3.  There were two earlier Judgments prior to the Ex tempore Judgment.  The 1^st is a Judgment dated 30 December 2020 in which W’s interim maintenance was assessed at $463,400 per month.  The 2^nd judgment is dated 11 June 2021 by which the respondent father has been ordered to pay the applicant mother legal costs provision in the sum of $180,000 per month.

4.  In this Ruling, for the ease of reference, I shall refer to: 

(i)  the applicant as “the mother”;

(ii)  the respondent as “the father”;

(iii)  the 1^st Judgment as “Interim Maintenance Judgment”;

(iv)  the 2^nd Judgment as “the LCP Judgment”; and

(v)  the hearing of 26 August 2021 as “the Hearing”.

5.  I shall also adopt the same nomenclature and abbreviations used in the Interim Maintenance Judgment.

Background

6.  W is a boy born by the parties out of the wedlock.  He is just 5 years old.

7.  The mother is an American born and raised there.  When W’s interim needs were assessed at $463,400 per month the mother and W were staying in LA, the United States.  At the same time the mother was keeping the tenancy of the Hong Kong Home and maintaining an establishment in Hong Kong including keeping her foreign domestic helpers.  As claimed by the mother, the US trip was meant to be a vacation but subsequently, due to the worsening of the Covid-19 pandemic the mother and W continued to stay in LA, with the intention of returning to Hong Kong as soon as the situation permitted. For this reason, as can be seen in [92] of the Interim Maintenance Judgment, W’s interim maintenance of $463,400 per month consists of 3 components:

(1)  the costs of living in the United States assessed at $240,000;

(2)  the rental of $157,000 for the Hong Kong Home; and

(3)  a sum of $66,400 for keeping a minimum establishment in Hong Kong.

8.  There was no appeal from either side in respect of the Interim Maintenance Judgment.

The Father’s Application for Downward Variation

9.  The tenancy agreement of the Hong Kong Home contained a break clause allowing the mother to have it terminated at the earliest by August 2021: see [93] of the Interim Maintenance Judgment.  Since the mother and W continued to be stranded in LA without any prospect of return in the foreseeable future, the father applied, on 15 April 2021, for a downward variation of the interim maintenance to the effect that he should not be required to pay the rental of the Hong Kong Home and other expenses in Hong Kong.

10.  While the mother acknowledged that she had exercised her right to have the tenancy terminated by the end of August 2021, she opposed to the father’s application.  She made a lengthy affidavit, supposedly in opposition to the father’s variation, but clearly a very detailed document seeking a massive increase in the maintenance to a staggering figure of $956,103 per month (or about $30,000 a day).

11.  The father’s application came to be heard for argument in the Hearing. It is significant to note that at the beginning of the Hearing the mother, via her counsel Mr Chan, informed the court that she had decided to relocate with W to the United States on a permanent basis, and this had met with the agreement from the father. 

12.  The father’s application for downward variation was allowed. My Ex tempore Judgment is as follows,

“As I said during the hearing, interlocutory application of this nature can be disposed of summarily and expeditiously. Interim maintenance is for the immediate and reasonable needs of the child. Longer-term expenditure should be left for trial.

In this regard, the mother, via her counsel Mr Chan, indicates to the court that -- this morning that the mother is going to relocate permanently to the United States with the child, the place where she and the child are now staying, and I am also told that there would not be any objection from the father. With the arrival of this common ground, a final trial could be fixed, which hopefully will take place in the first half of next year.

The father seeks a downward adjustment of the interim maintenance arising from the fact that the tenancy of the Hong Kong accommodation has been surrendered, hence saving a monthly rental of 157,000 per month. The sum of $66,400 for maintaining a presence in Hong Kong would also have been reduced substantially or even become non-existent.

I agree that there is a material change in the circumstances, but that arises only from the surrender of the tenancy. In fact, this change was well anticipated in my judgment handed down in December 2020. It should be noted in paragraph 20 -- sorry, paragraph 92 of my judgment that the total sum of the interim maintenance consists of three components: one, the cost of living in the United States; two, the rental for the Hong Kong accommodation; and, three, the sum for keeping a minimum establishment in Hong Kong.

It is to be noted that the change is in respect of the tenancy in Hong Kong. There has not been a change in the United States. There is no appeal from my judgment from either side. In (the Interim Maintenance)  judgment, I set a budget for the mother for the living in the United States. I am referred to the expenditure of the mother and the child in page 2009 of bundle C9. It seems clear to me that the mother chose to live beyond the budget. Further, some of the items concerning -- such as those concerning accommodation and education are capital in nature or on longer-term basis.

Mr Chan’s argument that when there is an application for variation, the court has to look the matter afresh. I am aware of the Court of Appeal judgment. However, in the present case, there has not been any material change in the circumstances in the United States and particularly, given the short period of time since the handing down of the (Interim Maintenance)  judgment, for the purpose of the father’s application, I do not consider that I need to take Mr Chan’s invitation -- to accept Mr Chan’s invitation to look at all these figures afresh. In any event, the trial is well on its way.

For these reasons, I agree that the interim maintenance has to be reduced to reflect the reduction of the expenditure in Hong Kong…”

13.  With the longer term arrangement of W having been agreed, I took the opportunity at the Hearing to fix the trial of the mother’s main application for maintenance to take place on 3 May 2022, with 17 January 2022 fixed for the Pre-trial Review.  It was specifically pointed out to Mr Chan that, provided that the arrangement is satisfactory, the mother’s evidence could be dealt with by way of remote hearing. 

Development After the Ex Tempore Judgment

14.  By a separate application taken out on 17 August 2021 and reliance upon the same affidavit referred to at [10] above, the mother sought to have the interim maintenance to be increased to $956,103 (not including the $180,000 legal costs provision).  At the call-over hearing of 20 September 2021, I made the point that this case is not one where W is without any maintenance, there is already an interim order of substantial sum in place.  The time and costs have to be used proportionately.  This is in line with the current approach to case management and litigation excess should not be encouraged. With the trial having been fixed and given the rather proximity in time to the trial, I directed that the mother’s application for variation to be dealt with at trial.

The Applicable Legal Principles

15.  The applicable legal principles under which leave to appeal is to be granted pursuant to section 63A(2)  of the District Court Ordinance (Cap 336)  is well settled.  In brief, leave should not be given unless the court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.  A reasonable prospect of success means an appeal with prospects that are more than “fanciful” (eg KNM v HTF [2011] HKCFI 602).

The Mother’s Grounds of Appeal

16.  The mother’s 5 grounds of appeal could be grouped into 2 main grounds.  I will deal with them on that basis. 

Grounds 1 and 5

17.  Mr Chan submits that I ought to have acceded to considering the interim maintenance afresh by considering the evidence in relation to W’s current expenses in LA and upon so considering ought to have found as to W’s true and proper reasonable expenses for interim purpose pending trial.

18.  These two grounds are the same as those advanced by Mr Chan at the Hearing where he referred to the well-established legal principles that 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: HCTT v TYYC [2008] HKFLR 286.  The modern approach, as required by section 11(7)  of the Matrimonial Proceedings and Property Ordinance (Cap 192), is for the court to consider all the circumstances of the case.  The court is not required to proceed from the starting point of the original order but look at the matter afresh: AEM v VFM [2008] HKFLR 106.

19.  The guidance given by the Court of Appeal in AEM v VFM, supra, is in respect of an application for variation under the Matrimonial Proceedings and Property Ordinance (Cap 192).  Though the present case is one commenced under a different statutory regime, namely, the Guardianship of Minors Ordinance (Cap 13), I am of the view that the same guidance that the court may consider all the circumstances afresh should also apply.  

20.  At the Hearing Mr Chan referred to the changes in the circumstances in LA where the mother incurred some unexpected expenses including moving homes 4 times.  As I commented at the hearing, there would bound to be some changes.  What should be looking for is whether there is any material change in W’s circumstances in LA.  I was not convinced that there had been.

21.  In any event, I have no doubt that a distinction has to be made between an order that was made after a trial proper and an interlocutory order that was made on an interim basis; as is the interim order in the present case. 

22.  The award of $240,000 was the result of an assessment made by me after having heard the full argument advanced by counsel.  At this juncture, I need to refer to how I came to the assessment. I first observed that the mother was not able to articulate in any manner the reasonable expenses that W needed in LA.  Following this, I said at [78] to [92] of the Interim Maintenance Judgment,

78.  The conundrum which faces me is, how after all these comments and criticisms, to contrive an interim raft of arrangements that cater for the immediate and reasonable needs of W.  I would approach this issue as follows.

79.  First, I agree with the father’s criticism over some of the mother’s items. 

80.  In the mother’s Form E, W’s medical and dental treatment is as high as $28,560 per month when the mother said her son is in good health.

81.  The mother even put $4,166 in her Form E as Charity/Donations under W’s personal expenses. Apparently, this cannot be for the immediate and reasonable needs of W.

82.  The father also raised the point that the contracted sums payable to helpers and chauffeur are inflated. 

83.  The mother described in some details about the lavish holidays they had, bringing the nanny along with them.  I agree with Mrs Irving that with the existing lockdown situation, holidays and travel are not happening now.  This is not a matter that needs to be taken account of on an interim basis.

84.  Further, there are some merits in Mrs Irving’s challenge that the mother’s figures are not borne out by the evidence.

85.  Secondly, as regards W’s current private education in LA that costs $138,500 per month, its reasonableness is yet to be tested.

86.  Thirdly, I take note of the point made by Mrs Irving that the father will be unable to recover any excess payments from the mother.

87.  Fourthly, the parties are unmarried couple; the mother has no claim on her own right.  Whether the relationship was one of carnal or one of romantic, it is history now.  Apart from being one of the parents of W, she is not in any relationship with the father. That said, I recognise that the mother has her own financial needs as W’s carer.

88.  Fifthly, another factor that has to be borne in mind is the mother’s relationship with GB, who is a member of a very wealthy family in Hong Kong.  I am well aware that the mother said she is no longer in a romantic relationship with this gentleman.  I will come to this when I deal with the Litigation Funding issue.

89.  Sixthly, there is some evidence from the mother that the costs of living in LA are much lower than those in Hong Kong.  As can be seen in the WhatsApp messages exchanged between the parties on 18 February 2020, it was mentioned by the mother that there could be better standard of living with nice house and nice car for half of the price.  In her own words, “it’s time to think about moving W out of Hong Kong”.  She was “unsure about the future there (ie Hong Kong)”. She found some places to rent, almost half price of (the home in Hong Kong)”. She “can save a lot of money and may be get a mortgage on a house in a few years”. 

90.  Seventhly, at the same time, I bear in mind that, at least in the few months’ to come, some monies would have to be incurred in maintaining a presence in Hong Kong pending W’s return. 

91.  Finally, consideration should also be given to the fact that the father continued to make payments up until March 2020.

92.  Considering all the above in the round and doing the best I can, I would give $240,000 (being 60% of $400,000)  for W’s maintenance in LA; this includes the cost of the LA vacation home.  I would give another $66,400 (being about 40% of the net-of-rental general expenses set out in the 1^st affirmation)  for keeping a minimum establishment in Hong Kong. On the top of these is the rental of $157,000.  The total sum is therefore $463,400.  …”             (emphasis added)

23.  Mr Chan made it clear at the Hearing that he had no complaint about the assessment. Yet, it was stressed by him that at the time of the mother’s application, the mother and W had been living in LA for just a few months with very temporary measures in mind.  Having now spent considerable time in LA, the mother has a much better idea as to W’s reasonable expenses.

24.  I disagree.  The mother chose to present her case in the way she did by setting out both the Hong Kong and the LA expenses without any distinction: see [70] to [71] of the Interim Maintenance Judgment.  The mother could have itemized her LA expenses but had chosen not to do so.  It should be noted that in arriving at the figure which I did in the Interim Maintenance Order, I had not taken the assistance given by GH into account.  Given the short lapse of time between the Interim Maintenance Order and the Hearing, to accede to the mother’s request to revisit the matter afresh would be tantamount to allow her to have an appeal through the backdoor.  I have already said in the LCP Judgment that the father’s application for variation should not be a venue for the parties to re-litigate on issues that have been determined; otherwise the application would, in effect, be an appeal: see [32].  Hence, I do not think the mother is entitled to ride on the father’s application.  I shall return to this point when I come to the other grounds below.

25.  The present case is not one where the father failed to make any provision for W.  The father has been paying a substantial sum of $240,000 per month (or about USD 30,800)  for W’s living in LA.  W’s immediate and reasonable needs have been catered for pending trial which is just a couple of months away.  Some of the issues in dispute could only be dealt with at trial when the parties’ evidence on W’s “reasonable expenses” will be heard.  It has been repeatedly emphasized by the Court of Appeal that due regard has to be given to the underlying objectives as set out in Order 1A, Rules of the High Court (“RHC”).  The relevant ones being to ensure that a case is dealt with as expeditiously as is reasonably practicable and to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings:  Order 1A, rule 1(b)  and (c), RHC; see: LLC v LMWA [2019] 2 HKLRD 529 at [37] and WW v LLN formerly known as LSM [2020] HKCA 178, CACV 524/2019 (date of judgment: 25 March 2020)  at [34].  It has to be emphasized that time and costs have to be used proportionately and litigation excess should not be encouraged.

26.  For the above reasons, I do not think there is any prospect of success on these grounds.

Grounds 2, 3 and 4

27.  Mr Chan submits that the $240,000 assessed was not premised upon concrete evidence nor any real appreciation of W’s standard of living and arrangements in LA.  The court ought to have assessed a reasonable monthly budget on broad brushed basis in light of the evidence now available.

28.  I have already set out how I came to the assessment at [22] above.  On her own evidence, the mother said she could “save a lot of money” and “have a better standard of living” and she required a lot less maintenance in LA. It should not be forgotten that the reasonableness of her claims, whether in respect of those in Hong Kong or LA, has yet to be tested at trial.

29.  Ms Irving draws my attention to a very recent Court of Appeal judgment in S v C [2021] HKCA 1372, CAMP 243/2021 (date of Judgment: 21 September 2021)  where Hon G Lam JA said,

6.  The proper approach of the appellate court in an appeal from an order for MPS is well established by the authorities, as summarised by Judge A Tse in ALDL v FTFC [2020] HKFC 180 as follows:

“ 5. The granting of maintenance pending suit is a discretionary remedy. On appeal, the Court of Appeal will not exercise the discretion afresh. Instead, it will only interfere with the decision when the discretion was wrongly exercised, such as being contrary to the principle or the primary judge had wrongly taken into account irrelevant matters or ignored relevant matters [see MWY v HWM HCMP 120/2017, 16 May 2017; WW v LLN [2019] HKCA 1278 at §§ 15-17.]

6. In CHWA v LNLAI [2019] HKCA 1017 at § 3.1, the Court of Appeal, in refusing leave to appeal, stressed ‘the interim nature of [maintenance pending suit] which generally requires the Court to adopt a broad brush approach in deciding the amount to be awarded. It is also for a limited duration until the final resolution of the issue of financial relief of the parties. Inevitably there will be adjustment to the final order to be made in the event of overpayment or underpayment of [maintenance pending suit].’

7.   The threshold for appealing against an order for maintenance pending suit is a high one.  The court is inclined to leave factual questions of expenses and income for determination at the ancillary relief hearing.  The Court of Appeal also stated that appeals against maintenance pending suit orders are ‘rare’ and the ‘powers of interference [of an appeal court] are strictly limited’: K v K [2011] 1 HKC 66 at §§ 1, 3; Hewitt, Family Law and Practice in Hong Kong (3^rd ed. 2018), § 6.076.”

7.  It is important to note that MPS is an interim measure, intended to be temporary, and subject to adjustments in the final orders to be made in the determination of ancillary relief.  Overall fairness can be achieved at that point by giving credit and set-off if there is found to have been any overpayment or underpayment in the interim.  In other words, an order for MPS does not finally determine the rights and obligations of the parties, and since it involves simply the payment of money, its effects may in general be redressed by monetary relief at the end.  This explains why in relation to MPS the courts “take a broad view” of the parties’ finances rather than engage in any detailed investigation, adopt a “broad brush” approach, and seek to arrive at “rough and ready” conclusions (see Rayden and Jackson on Relationship Breakdown, Finances and Children at §11.78; HJFG v KCY [2012] 1 HKLRD 95, §§32-38).  Appeals should be rare and the parties should be encouraged instead to focus on, and bring about as early as practicable, the final resolution of their dispute.  As has been said in Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 at §30 (albeit not specifically with regard to MPS), even if the threshold of reasonable prospects is met, the court may nonetheless in its discretion refuse leave to appeal in the interests of procedural economy and proportionality.  For my part, I consider that leave to appeal from MPS orders should generally not be granted unless there is some special reason why the matter cannot or should not be left to the ancillary relief stage such as serious hardship caused by the order to a party.  I can see none here based on the admissible materials, and on this ground alone I would dismiss the application.

30.  Ms Irving has helpfully summarized Hon G Lam’s opinion as follows,

•  The granting of MPS is a discretionary remedy and the Court of Appeal will only interfere where discretion was wrongly exercised;

•  The interim nature of MPS requires the court to adopt a broad brush approach;

•  MPS is for limited duration and adjustments to the final order can be made after the resolution of the final ancillary relief; 

•  The threshold for appealing against MPS is a high one;

•  Factual questions of income and expenses are best determined at the final ancillary relief;

•  The powers of interference (of an Appeal Court)  are strictly limited;

•  Appeals should be rare with parties encouraged to focus on final resolution of their disputes;

•  Even if the threshold of reasonable prospects is met, leave to appeal may nevertheless be refused "in the interests of procedural economy and proportionality"; and

•  Leave to appeal from MPS Orders should generally not be granted unless there is some special reason why the, matter cannot or should not be left to the ancillary relief stage, such as serious hardship caused by the order.

31.  I accept these principles apply equally to an order for interim maintenance under the Guardianship of Minors Ordinance (Cap 13), save that in the present case, there would be no opportunity for any overpayment to be recouped by the father, since the application is for the maintenance for W, with no capital settlement between the parties.

32.  In my view, the approach taken in the Ex tempore Judgment is consistent with the authorities that the interim maintenance order is an interim measure only and unless the court has exercised discretion wrongly, the Court of Appeal will not interfere. 

33.  The mother appeared to be arguing that I should not have decreased her maintenance, but should have increased it instead.  As rightly pointed out by Ms Irving, the net effect of the Ex tempore Judgment is that, as far as W’s living in the United States is concerned, the maintenance has increased from $240,000 to $260,400; the reason being that part of the Hong Kong expenses in the sum of $20,400 (out of the original sum of $66,400: see [7] above)  has been allotted to the living expenses in LA; so in real terms the mother has had $20,400 more per month at her disposal.  The mother has been unable to identify any area in which discretion has been exercised contrary to the legal principles.  The interim order is for a short duration only, with trial dates have already been set when the reasonableness of the mother’s claims could be tested.  The order that she receives $260,400 a month for a 5-year old child cannot by any yardstick be said to be an order that causes serious hardship.  There is no reason why the matter cannot or should not be left for trial.

34.  Lastly, I do not find there is any interests of justice ground so that the appeal should be heard.

Order

35.  For the above reasons, the mother’s application ought to be dismissed and I so order.

Costs

36.  The mother failed in her application. I make an order nisi that the mother is to pay the father costs of this application, with counsel certificate.