CMM v. CHWK

FCMC 2113 /2018

[2019] HKFC 257

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 2113 OF 2018

________________________

________________________

________________________

J U D G M E N T

(Maintenance pending suit)

________________________

The Application

1.  This is the application taken out by the petitioner wife (“Wife”) against the respondent husband (“Husband”) for maintenance pending suit for the two children of the family (“Children”) in the monthly sum of HK$60,000.

2.  The Husband opposed to the application.  He offered to continue paying HK$5,000 per month as maintenance pending suit for the Children.

3.  The Wife later clarified in her submissions that the maintenance pending suit for the Children she claimed be reduced to HK$49,592 per month.  Further submissions were filed by the parties.

Background

4.  The Wife is now 35 years old.  She now works as an administrative assistant.  As stated in her Form E, she is now earning a monthly salary of about HK$22,000.

5.  The Husband is now 43 years old.  He is a businessman.  As stated in his Form E, he is now earning a monthly income of about HK$45,000.  As stated in Part 3.4 of his Form E, he also has income by way of bonus from his business in the sum of HK$240,000 for the past 12 months (ie. in average HK$20,000 per month).

6.  The parties were married in February 2009.  There are 2 Children born in their wedlock, namely the elder son (“Son”), born in 2010 and is now 8 years old and the younger daughter (“Daughter”) born in 2012 and is now 7 years old.

7.  During the marriage, the family used to live at a property in Yuen Long (“Former Matrimonial Home”), which is in the joint names of the parties.  The Wife had been a housewife during the marriage.

8.  In February 2018, the parties started separation.  Since then, the Husband has no longer lived at the Former Matrimonial Home, while the Wife and the Children remain residing at the Former Matrimonial Home.  The Husband has been residing and working mainly in the mainland.

9.  The Wife filed the Petition for divorce on 23 February 2018 relying on the ground of unreasonable behaviour of the Husband.  

10.  The Husband defended the main suit.  He filed the Answer and Cross Petition on 9 April 2018, relying on the ground of unreasonable behaviour of the Wife. 

11.  By consent, it was ordered on 13 February 2019 that joint custody of the Children be granted to the parties, with interim care and control be granted to the Wife and interim defined access be granted to the Husband.

The legal principles

12.  Under section 3 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”), the court may order either party to the marriage to make to the other such periodical payments for his or her maintenance and for such term, being a term beginning not earlier than the date of presentation of the petition or the making of the application and ending on the date of the determination of the suit, as the court thinks reasonable. 

13.  The legal principles governing any maintenance pending suit application require the court to balance the reasonable needs of the applicant spouse (and the concerning children where applicable) against the paying spouse’s ability to pay by using a broad brush approach.  In HJFG v KCY [2012] 1 HKLRD 95, the Court of Appeal has summarised the established principles as follows:-

“33. Jurisdiction to award maintenance pending suit to a spouse is statutory, being governed by the provisions of s.3 of the Matrimonial Proceedings and Property Ordinance, Cap. 192. By that section the court is given a discretion to make an order requiring either 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 of what may broadly be called the divorce litigation.

34. By definition, therefore, maintenance pending suit is restricted to payments which constitute ‘maintenance’, which are reasonable in the circumstances and which will endure for no longer than it takes to determine the divorce litigation. ‘Maintenance’ is a broad concept. I do not seek to define its exact meaning but it seems to me that it must be restricted to those payments necessary to meet the recurring costs of living at whatever standard of living is appropriate. That being the case, no matter how great the wealth of the parties and how unevenly distributed that wealth may be at the time an application for interim maintenance is made, the court has no jurisdiction to make orders which for all practical purposes result in a form of pre-trial capital rebalancing. In the present case, the Judge recognised the long-established approach of looking to the ‘immediate and reasonable needs’ of the wife and son.

35. As to the amount of maintenance pending suit that may be paid, the Ordinance provides only that it must be ‘reasonable’, that is, having regard to the circumstances of the case, that it must be fair.

36. An important factor in determining fairness is a consideration of the martial standard of living. In this regard, each case must be considered according to its own circumstances. It is not simply to be assumed that great wealth equates to great extravagance. Some married couples who enjoy great wealth spend with comparative modesty and with a discipline born of discretion, others enjoy consumption on a grand scale.

37. The principles that have emerged over time to guide judges in matters of interim maintenance have been fashioned in the main to ensure fairness. This is well illustrated in the judgment of Nicholas Mostyn QC, sitting then as a Deputy Judge, in TL v ML [2006] 1 FLR 1263, 1289, in which, having looked at earlier authorities, he derived the following principles that speak specifically to fairness or are based on the need to ensure it. For present purposes, it is sufficient to cite the relevant principles without citing the Judge’s reference to the source of those principles:

(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. This 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 bedget 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.

38. Finally, it is to be noted that in applications for interim maintenance, when the amount to be paid is for a limited period only and not all of the evidence is necessarily before the court, it is not appropriate, nor indeed in most cases possible, for the court to conduct a detailed investigation into the finances of the parties.  While, in order to determine what is or is not reasonable, some analysis is always required, that analysis can be conducted on a ‘broad-brush’ basis.”

The wife’s case

14.  It is the Wife’s case that the Husband has always been a successful businessman.  During the marriage, the Husband is the one maintaining the family financially, while the Wife took care of the household and the Children.  The standard of living during the marriage is high.  The Former Matrimonial Home is about 1,138 square feet in size.  Besides, the family used to have a maid, with holiday about once every 3 years and has joined the club at the estate of the Former Matrimonial Home.

15.  According to the Wife, the financial documents the Husband has provided do not reflect his true financial status.  She emphasised that as the Husband is the director and shareholder of 5 Hong Kong companies, and also the controller / true beneficial owner of two mainland companies, the Husband has the ability to pay for the amount the Wife now claims for.

16.  According to the Wife, since about the time when the Husband no longer lived at the Former Matrimonial Home, as the Husband has been paying maintenance in the amount which is falling far short of the family expenses incurred, the Wife has paid around HK$997,000 for the maintenance of the family and for the Children. Almost all the funds are provided by the Wife’s father and the Wife is now hugely indebted to her father. 

17.  Without sufficient financial means, the Wife has obtained legal aid for these divorce proceedings. 

18.  The Wife further explains that as she has a job now, working as an administrative assistant, she is not asking for maintenance from the Husband at the moment.

19.  As shown in the Wife’s Form E, apart from the Former Matrimonial Home that the Wife owns jointly with the Husband, the other assets or valuables she has include:- (a) total bank balance of HK$25,095; (b) value of insurance of about USD 201; and (c) a car (mainland) with the estimated value of HK$3,000.  She has debts with credit card in the sum of HK$18,000.  In her affirmation, the Wife states that she is now hugely indebted to her father.

The husband’s case    

20.  The Husband’s case, in essence, is that the amount of expenses as claimed by the Wife is excessive.  Besides, the Husband does not have the ability to pay for the amount claimed by the Wife. 

21.  According to the Husband, unlike the Wife receiving a stable income from her work, the Husband’s income is unstable.  The income he states in his Form E is not sufficient to cover his monthly expenses.  It is the Husband’s case that he has been paying the mortgage of the Former Matrimonial Home in the monthly sum of HK$12,000 and maintenance to the Children in the monthly sum of HK$5,000. 

22.  Because of the lack of financial resources, the Husband has applied for legal aid and is now legally aided in the proceedings. 

23.  It is the Husband’s case that he has been paying HK$5,000 as maintenance for the Children and that is the amount he can afford. 

24.  As shown in the Husband’s Form E, apart from the Former Matrimonial Home that he owns jointly with the Wife, the other assets or valuables he has include:- (a) total bank balance of HK$15,912; (b) value of 3 limited companies, which he estimated value to be zero; (c) two cars  with the total estimated value of HK$330,000; and (d) mandatory provident funds in the total estimated value of HK$100,071.  The Husband has debts in the total sum of HK$1,625,444 (including personal loan from family of HK$987,000, unfinished mortgage payment of one of the vehicle of HK$305,122 and the remaining amounts of HK$333,322 are loans from bank). 

25.  In the Husband’s affirmation, he clarified that he had sold the vehicle which he owned to repay for loans.

Discussion

26.  The first issue the Court has to consider is what the reasonable expenses are.  The Wife’s expenses are stated in her Form E, with the total expenses being HK$79,959 (HK$39,097 general expenses + HK$15,890 personal expenses + HK$24,972 Children expenses), which is now summarised below :-

     For general expenses:-   

Items	Amount HK$
Mortgage payment	11,300
Utilities	5,200
Management fees	1,217
Food expenses	10,000
Miscellaneous household expenses	1,000
Car expenses	4,240
Insurance	1,340
Maid	4,800
Total:	39,097

For personal expenses:-

Items	Amount HK$
Meals out of home	3,000
Transport	1,500
Clothing / Shoes	2,000
Personal grooming, haircut and cosmetics	2,000
Entertainment / present	2,000
Holiday	2,000
Insurance	1,390
Others (going for trips)	2,000
Total:	15,890

For Children expenses :-
Items	Amount HK$
Extra tuition fees	1,300
School books and stationery	600
Medical / dental	1,000
Extra-curricular activities	7,690
Entertainment / present	2,000
Holiday	2,000
Clothing/ shoes	4,000
Insurance premia	1,982
Lunches and pocket money	1,500
Other transportation	500
Uniform	400
Others (going for trips)	2,000
Total:	24,972

27.  The Husband criticised the expenses as claimed by the Wife.  I have to make it clear that at this stage, the Court has to balance the reasonable needs of the Wife and the Children, and also the ability of the Husband to pay on an interim basis.  I have to emphasise that it is not the case that any amount claimed without receipts or supporting documents cannot be considered.  At the same time, any amount claimed with receipts does not automatically mean they are justifiable and reasonable.  Some analysis will be conducted by the Court on a broad brush approach.

28.  In undertaking this balancing exercise, the Court will adopt a broad brush approach and not a detailed investigation of the financial positions of the parties, and at the same time, bearing in mind the marital standard of living of the parties.

29.  Regarding the marital standard of living, from the evidence before me, I am of the view that the family had enjoyed an average or slightly above average standard of living during the marriage.

30.  In relation to the general expenses claimed by the Wife, I accept management fees of HK$1,217, miscellaneous household expenses of HK$1,000, insurance of HK$1,340 and domestic helper of HK$4,800. 

31.  The mortgage payment has all along been paid by the Husband, and therefore the sum of HK$11,300 should not be double-counted.  I have reservation as to the amount of utilities of HK$5,200 and food of HK$10,000. 

32.  Since about the time the Husband no longer lived at the Former Matrimonial Home, the Wife’s mother has been living with her and the Children.  I have accepted that a maid be employed to look after the Children and the family.  I am of the view that the Husband should not be responsible for the expenses of the Wife’s mother.  Looking at the amounts claimed by the Wife under general expenses, excluding anything amount to be provided for the Wife’s mother, I am of the view that the amounts of utilities and food are excessive.  With a broad brush approach, I rule that the reasonable amounts for utilities and food are HK$2,000 and HK$4,000 respectively. 

33.  In relation to car expenses, with the background of the case and financial circumstances of the parties, and also in view of the evidence before the Court, I do not accept that car expenses are immediate and reasonable at this interim stage.

34.  With my analysis above, I accept, at this interim stage, that the general expenses be HK$14,357 (utilities of HK$2,000 + management fees of HK$1,217 + food of HK$4,000 + miscellaneous household expenses of HK$1,000 + insurance of HK$1,340 and maid of HK$4,800).  I am of the view that the Children should share about half of the general expenses, making it HK$7,178 (HK$14,357 / 2).

35.  In relation to personal expenses of the Wife, as she is not claiming maintenance pending suit for herself, I will not go into detail those items.  But there is one observation that I wish to make here.  With a broad brush approach, I do have reservation in the total amount of personal expenses stated by the Wife.  I am of the view, with the current salary of the Wife, that she has the ability to pay for her personal expenses, as well as some of the general expenses and Children expenses. 

36.  In relation to the Children expenses claimed by the Wife, the Husband criticised generally that the amounts claimed are excessive, especially in view of the young age of the Children and yet they have to attend that many extra-curricular activities.  But I notice that in the Husband’s Form E, the amount of extra-curricular activities is HK$7,390 per month. 

37.  In the Wife’s written submissions, she further claims that the total updated expenses for extra-curricular activities are HK$10,000 (HK$8,500 + piano lesson of HK$1,500).  The Wife emphasised that she could provide receipts for the Court’s consideration.

38.  I repeat my analysis in paragraph 27 above.  It is not the case that expenses with receipt will be automatically accepted.  The Court has to consider what are the reasonable expenses in view of the circumstances of the case, with reference to the marital standard of living.  In view of the ages of the Children and all the circumstances of the case, I am of the view that spending HK$10,000 per month for extra-curricular activities is excessive.  With a broad brush approach, I accept the amount of HK$7,390 as stated in the Husband’s Form E.

39.  Considering the different items claimed under Children expenses, the Husband’s stance, parties’ submissions, the evidence before me and circumstances of the case, I accept extra tuition fees of HK$1,300, school books and stationery of HK$600, medical / dental of HK$1,000, insurance of HK$1,982, lunches and pocket money of HK$1,500, other transportation of HK$500 and uniform of HK$400.

40.  In relation to the monthly expenses of entertainment / present of HK$2,000, holiday of HK$2,000, clothing / shoes of HK$4,000 and others (going for trips) of HK$2,000 claimed by the Wife, I am of the view that they are excessive. With a broad brush approach, I rule that the reasonable expenses are HK$1,000 for entertainment / present, HK$1,000 for holiday, HK$1,000 for clothing / shoes and none for others.

41.  With my analysis above, I accept, at this interim stage, that the Children expenses be HK$17,672 (extra tuition fees of HK$1,300 + school books and stationery of HK$600 + medical / dental of HK$1,000 + extra-curricular activities of HK$7,390 + entertainment / present of HK$1,000 + holiday of HK$1,000 and clothing / shoes of HK$1,000 + insurance of HK$1,982 + lunches and pocket money of HK$1,500 + other transportation of HK$500 + uniform of HK$400).

42.  At this interim stage, I rule that the reasonable expenses of the Children being about HK$24,850 (HK$7,178+ HK$17,672).

43.  The second issue the Court has to consider is the Husband’s ability to pay.  When considering the ability to pay, it is necessary to consider the Husband’s financial background, which is summarised in paragraphs 20 to 25 above. 

44.  As stated in the Husband’s Form E, he is now earning a monthly income of about HK$45,000.  As stated in Part 3.4 of his Form E, he also has income by way of bonus from his business in the sum of HK$240,000 for the past 12 months (ie. in average HK$20,000 per month).  But the Husband has also explained in his affirmation that the business with income deriving has been at a loss.  He further explains in his affirmation that although it might appear that there are huge amounts of transactions in the bank statements, those transactions do not reflect the profit of the company.

45.  The Husband’s expenses are stated in his Form E, with the total expenses being HK$65,124 (HK$40,252 general expenses + HK$12,000 personal expenses + HK$12,872 Children expenses), which is now summarised below :-

For general expenses:-    

Items	Amount HK$
Rent	11,000
Mortgage payment	12,000
Utilities	3,200
Car expenses	12,682
Insurance	500
Others (rent and rates)	870
Total:	40,252

For personal expenses:- 

Items	Amount HK$
Meals out of home	5,000
Transport	2,000
Clothing / Shoes	400
Personal grooming, haircut and cosmetics	400
Entertainment / present	1,000
Holiday	1,000
Insurance	2,200
Total:	12,000

For Children expenses :-

Items	Amount HK$
School books and stationery	1,000
Extra-curricular activities	7,390
Entertainment / present	1,000
Clothing/ shoes	1,000
Insurance premia	1,982
Uniform	500
Total:	12,872

46.  In relation to the general expenses of the Husband, I accept mortgage payment of HK$12,000, insurance premia of HK$500 and others payments of rent and rates of HK$870. 

47.  As the Husband is working in the mainland, it is understandable that he has to reside and rent a place to live in the mainland.  However, in relation to the rental expenses, the Husband has produced one receipt for rental for the month of March 2018.  I have reservation of the amount of rent and utilities.  As he claims to be living alone in the mainland, with a broad brush approach, I am of the view that the total amount of rent and utilities be HK$12,000. 

48.  In relation to car expenses, in the Husband’s affirmation, he stated that had sold the vehicle which he owned to repay for loans.  I notice that there are 2 vehicles stated in the Husband’s Form E, but it is not clearly stated which vehicle or in fact both vehicles had been sold.  In the Husband’s affirmation, he did not explained clearly and did not update his expenses.  With a broad brush approach, I take it that no car expenses are considered at the moment.

49.  With my analysis, I rule, at this interim stage, that the general expenses of the Husband be HK$25,300 (rent and utilities of HK$12,000 + mortgage payment of HK$12,000 + insurance of HK$500 + others of HK$800)

50.  In relation to the personal expenses of the Husband, with reference to the amount claimed by the Wife, the marital standard of living and all the circumstances of the case, I accept that the total amount of HK$12,000 is reasonable.

51.  In relation to the Children expenses, the Husband has included the total amount of HK$12,872 in his Form E.  I take it that it is the amount that the Husband deems reasonable, has been paying and is affordable to pay all along. 

52.  When taking into account the Husband’s income of HK$45,000 plus bonus of HK$20,000 per month in average (as stated in his Form E), making it a total sum of HK$65,000 per month, and in view of my analysis above of general expenses of HK$25,300 and personal expenses of HK$12,000, the Husband has the ability to pay for the maintenance pending suit in the amount the Court rules reasonable.

53.  I have considered the submissions of the Husband that the business deriving income has been running at a loss, and I understand that the income of the Husband is unstable comparing to the salary of the Wife, which is relatively more stable.

54.  I have also considered the Husband’s allegation that the Wife has been concealing information about a bank account in her name, which the Husband believes that the Wife has financial resources non-disclosed.  The Wife later explained in her affirmation in reply that the beneficial owners of that account are her parents.  Besides, the Husband also alleged that the Wife had various involvement in his company, including criminal acts of dissipating money in the company, which the Husband had been advised by the accountant to report to the police.  

55.  On the other hand, in the submissions of the Wife, detailed submissions had been made in relation to the Husband’s finance, such as huge amounts withdrawn previously, the Husband’s failure to answer why his companies are doing worse and no sufficient financial documents (with some documents provided not properly signed) had been provided by the Husband. 

56.  Moreover, the Wife also points out that in the social investigation report, it was stated therein that the Husband said to the Social Investigation Officer that he used to pay at least around HK$80,000 per month for the family in the past.

57.  I have considered all the submissions and the evidence before me.  I have to reiterate that, at this stage, the Court will adopt a broad brush approach.  Detailed investigation of the finance of the parties are not to be conducted.  Although some analysis has to be made by the Court, without cross-examination of witnesses, factual determination in relation to the allegations of the parties should be canvassed at the ancillary relief trial. 

58.  I notice that the Husband is now legally aided, which means that the Husband has passed the means test in order that legal aid be granted to him. 

59.  I accept that the Husband has made some disclosure of documents.  Whether the disclosure is sufficient and adequate, which is disputed by the Wife, will have to be investigated further.  However, it is noted that form the Husband’s Form E, he has disclosed only 3 limited companies which he has 100% shareholding, and he has provided some financial documents.  But in relation to the 2 other limited companies which he holds 50% shareholding together with his sister, no sufficient financial documents have been provided.  At this interim stage, I am of the view that the Husband’s disclosure is obviously deficient and the Court should err in favour of the payee. 

60.  I also notice that it is both the Husband’s and the Wife’s case that each of them has been borrowing money from their families.  It is trite law that ability to borrow can be viewed as financial resources. 

61.  Having considered the background, standard of living and financial resources of the parties and all the circumstances of the case, including the principle of fairness and reasonableness, and also the evidence before the Court and parties’ submissions, I am of the view that HK$25,000, should be ordered as maintenance pending suit for the Children.     

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

63.  Another point of observation is that I have great concern about the costs for this case.  Both parties are legally aided, and there is only one landed property with mortgage, which is the Former Matrimonial Home.  I notice that the main suit is disputed, with the parties alleging unreasonable behaviour against each other.  Custody matters are disputed and parties are now arguing the maintenance pending suit. 

64.  In view of the parties’ financial resources and income, this is the type of case that the parties should seriously consider mediation in order to save costs for both parties, and which will be in the interests of the parties and the Children.

Orders

65.  I make the following orders :-

(1)  The Husband do pay the Wife maintenance pending suit for the Children in the sum of HK$25,000 per month, with the 1^st payment to be made on or before 1^st day of November 2019 and thereafter on the 1^st day of each and every month and until further order of the court.

(2)  The above payments are to be deposited into the Wife’s designated bank account.

Costs

66.  The general legal principle for costs is costs to follow the event.  Although the Wife has to come to court before she could get the amount of maintenance pending suit as now ordered by the Court, the amount the Court now orders falls far short of the amount the Wife asks for.  I have also considered how the parties have conducted the case.  In the circumstances, I am of the view that it is fair to order no order as to costs for the application of maintenance pending suit, including all costs reserved, with both parties’ own costs be taxed in accordance with Legal Aids Regulations.  This is a cost order nisi, which shall be made absolute after the expiry of 14 days from the handing down of this judgment.