T v. S

FCMC 14325 / 2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 14325 of 2006

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RULING

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1. In these proceedings the Petitioner wife (“W”) seeks maintenance pending suit for herself and interim maintenance for the child of the family (“the Child”) pursuant to sections 3 and 5 Matrimonial Proceedings and Property Ordinance Cap 192.  The summons was issued on.  In her Form A filed on 18 December 2006, in her affirmations, she asks for HK$96,240 as monthly maintenance for herself and for the Child until final determination on matters of ancillary relief.

2. The Respondent husband (“H”)’s position is that he could not afford to pay what W has asked for.  He is of the view that the reasonable expenditure for W and the Child should be around HK$50,000 to HK$55,000.  He is prepared to pay HK$15,000 and the balance be paid out from savings.

3. The background of the marriage in gist is this.

4. H is now 38, a businessman running a company named OA with a partner.  W is 45, was made redundant in April 2007 and is still looking for an employment, otherwise she has been in the rank of senior management earning about HK$100,000 per month.  The parties were married in July 2001, the Child was born in February 2002.  W filed a petition for divorce on 14^th November 2006 alleging unreasonable behaviour of H.  By consent, the Petition was later amended on 29^th December 2006 to the effect that the particulars of the alleged unreasonable behaviour of H was toned down.  H filed an Answer and Cross Petition on 2^nd January 2007 alleging that W’s unreasonable behaviour has caused the irretrievable breakdown of the marriage.  Decree Nisi was issued on 12^th February 2007 on parties’ unreasonable behaviour.  By an order on even date all matters in relation to custody and ancillary relief were adjourned for hearing.  Parties only commenced staying in separate households since 17^th April 2007.

5. In fact there are two children from the previous marriage of W.  Both are not in Hong Kong but could not be said to be self-supporting.  There is dispute as to whether they should be maintained by H, however such dispute is not relevant here in this hearing.

6. Parties filed their Form E and 3 affirmations each on ancillary relief matters including this hearing.  Mr. S, the business partner of H also filed an affirmation on the income of H and the operation and financial position of OA.  I am asked to make a ruling on the affirmations and submissions made on behalf of parties as usually no oral testimony would be heard at this stage.  I agree that it is trite law that the court would take a broad brush approach when deciding the matter on interim maintenance.

Income of Parties

7. Since she came in Hong Kong, she has been in the senior management level.  Her specialties is Information Technology.  She was made redundant by her first employer in August 2002.  She joined A in December 2002 but left her employment in August 2004 for time to take care of the Child.  She started with some employment later in mid 2006 but was asked to work on part-time basis in January 2007.  Her income from the part-time work was about $20,000 per month.  She was however made redundant again in March 2007.  She remains unemployed until now.  She says she might have difficulties getting a job because she has left the trade for some time and her age is another disadvantage for her in the course of job seeking.

8. H alleges that he is now making $32,000 a month.  Apart from that, H says that OA has been paying his rental of $40,500 per month.

9. Parties have great dispute on the income of H.  W says that the company has always been paying a substantial part of the family outgoings, and that although such payments were booked as debt, H has never been asked to repay such loans, and in those circumstances, there is no reason why such practice should not continue until the final determination on ancillary relief.  Mr. S filed an affirmation saying that whatever being paid by OA for the family had been booked as debt.

Assets and other resources of parties

10. W has a property in Israel, value of which, according to her Form E dated 29^th January 2007 about $1.287m (US$165,000) with net worth of HK$202, 800 (US$26,000).  There was cash in her bank accounts amounting to $0.57m then.  She was also holding stocks at the worth $8.2m and some valuable items at the worth of $80,000.  After setting off her liabilities in the region of $200,000, her net assets as disclosed in the said Form E was around $8.95m.

11. Such position has been updated by W by way of affirmations filed and served.  The value of the Property has been adjusted to US$220,000, about HK$1.71m.  She has withdrawn HK$300,000 from her Credit Suisse account for rent and expenses in March 2007.  She has also realised a portion of her investment for US$96,732 from her Smith Barney account as she was in need of funds to pay off part of her legal fees which had accumulated to HK$817,625 by June 2007.

12. H’s case is that he is holding 50% shareholdings in 3 companies including OA Ltd, and 100% of another company.  According to his Form E, only OA Ltd is active whilst the other 3 are dormant.  He could not give an estimate on the current value of OA Ltd.  He is holding some investment in stock and shares amounting to $6.6m.  He says he has liabilities of $6.2m which include a loan owed to a Mr. S, being the outstanding loan for buying 50% of OA Ltd from the latter.

13. He holds the position that the cash in the joint account with Credit Suisse is about $5m.  The worth of total family assets is less than $10m.

Expenses

14. H says his expenses together with some expenses for the Child are about HK$88,577 whilst W says that her expenses for herself and the Child amount to HK$96,240 (HK$100,240 – HK$4,000 for the two said children from W’s previous marriage).  H says that W’s expenses have been inflated.  His calculation for reasonable expenses for the whole family as set out in the schedule exhibited in NS – 6 was about HK$70,397.  Such calculation was made on the basis of HK$40,600 as rental.

Legal Principles

15. On behalf of W, Miss Yip draws my attention to a line of authorities establishing the principles that

a.	What is reasonable in the circumstances of the case must be gauged by reference to the living standards enjoyed by the family prior to the Petition.
b.	Although broad brush, the court is entitled to form a view of the disclosure of a party and draw adverse inferences as to his ability to pay.
c.	Maintenance Pending Suit is only an interim measure to address the immediate needs of the applicant.  Adjustment can be made at the final ancillary relief hearing when all the evidence has been ventilated before the court.

16. Miss Yip emphasises that the standard of living remained the same even when W was not employed for 21 months from August 2004 to May 2006.  Miss Yip further submits that it is not disputed that W is unemployed for the moment, and if there is no evidence that a suitable job is available, it would be wrong to make an order assuming an earning capacity.  She relies on LJ v LWHH (Maintenance Pending Suit) [2003] 3 HKC 455.

Conclusion

17. I agree that earning capacity is not a factor to be given weight at this stage as I am to consider the needs of parties so immediate that one should not wait until the final determination of the matter.  In the present case, although both parties made allegations against the other for non–disclosure, I take the view that parties have made applications on further discovery and such process has yet come to a conclusion as it is to be heard on 11^th August 2007, I would not draw adverse inference against either of them at this stage.

18. Further, I do not agree with W’s assertion that the living standard should not be compromised and she would look to that standard when asking for maintenance pending suit.  I must say that the high and comfortable standard of living in the past could not be maintained for two reasons.  First she has lost her job which used to be a good source of income for the family.  As she has said in her affirmation she had put into the joint account her salary amounted to about $100,000 per month.  There had been other fringe benefits offered by her ex-employers also.  Secondly, H’s income, even taken at the same rate as prior to the Petition would now have to be stretched by two separate households.

19. After reading the estimate set out by W in p1279-1280, I find that the reasonable expenditure in the circumstances as at present to be around $70,000 which include $20,000 as the expenses for the Child.

20. I find that there is insufficient evidence before me to make a finding on whether H would continue to receive payments from OA Ltd to cover his family expenses apart from rental and utilities.  Such dispute on fact should be dealt with at the substantive hearing when witnesses are to be cross-examined.  I take the view that any under provision or otherwise by my order could be corrected at the time of final determination by set-off.  I take a broad view that H should pay $20,000 to W per month from his income and $50,000 from parties’ joint account with Credit Suisse.

Costs

21. Costs of W’s summons should be reserved to the final determination of ancillary relief.  It is agreed that there be counsel certificate.