LSF v. WLC

FCMC 8213/2015

[2020] HKFC 205

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 8213 OF 2015

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J U D G M E N T

( Maintenance Pending Suit )

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1.  By a Summons dated 23 November 2018 (the Summons), the Petitioner Husband (the Husband) is applying for maintenance pending suit.  Instead of the HK$24,000 stated in the Summons, he is now seeking a monthly sum of HK$22,125.10.

Background

2.  The Husband is 43 and the Respondent Wife (the Wife) is 39.  They were married in Hong Kong on 13 December 2009.  There are no children of the family.  The parties separated under the same roof in the former matrimonial home in Lam Tin (the FMH) in about May 2013.

3.  On 29 June 2015, the Husband petitioned for divorce on the basis of 2 years separation.

4.  On 22 July 2015 and by consent, the FMH was sold for a consideration of HK$5,830,000.  The net sale proceeds (after discharge of the outstanding mortgage and other outgoings) in the amount of HK$3,420,509.55 (the Net Proceeds) was kept by the Husband’s former solicitors as stakeholders [B1/107/§§5-6].

5.  On 14 April 2016, the Husband former solicitors made an application for maintenance pending suit, seeking to withdraw a sum of HK$15,000 per month from the Net Proceeds and an order that the Husband be allowed to withdraw a lump sum of HK$100,000 out of the Net Proceeds [B1/68-70].

6.  By an order dated 25 April 2016 and by consent, each party withdrew a sum of HK$300,000 respectively from the Net Proceeds.  The Husband withdrew his summons for maintenance pending suit [B1/84-85].

7.  By a summons filed on 29 November 2016, the Husband sought leave to withdraw a lump sum of HK$300,000 from the Net Proceeds [B1/87-89].  He promised that he would not withdraw any further sums before 15 October 2017.  By an order dated 16 January 2017 and by consent, each party was granted leave to withdraw a further HK$300,000 from the Net Proceeds [B1/87-88].

8.  On 21 November 2017, upon the joint application of the parties and by consent, each party was allowed to withdraw a further lump sum of HK$490,000 each from the Net Proceeds, out of which $400,000 was to be released to the Husband and the remaining $90,000 to his solicitors on account for his costs and disbursements in these proceedings.  After deduction of $5,000 to Messrs. Yung Yu, Yuen for keeping the money as stakeholders, the balance of the Net Proceeds was paid into court pending the determination of the ancillary relief claims.

9.  The Husband took out the present summons on 23 November 2018. On 7 January 2019.  The Wife was ordered to pay interim maintenance pending suit in the sum of $10,000 per month to the Husband commencing from 15 January 2019.

Issues

10.  The Husband says that he was injured at work and has been unemployed since September 2011.  He alleged that he has very little to live on and is staying in a warehouse rented by a friend which has there is no drinking water, cooking or washing facilities.  On the other hand, the Wife asserts that the Husband is guilty of non-disclosure and the evidence clearly shows that he has been lying.  It is also the Wife’s case that she is unable to pay the amount requested.

11.  The issues are:

(1)  Whether the Husband has made full and frank disclosure;

(2)  Whether the Husband is in need, and if so, what is the reasonable the amount; and

(3)  The Wife’s ability to pay.

Applicable Legal Principles

12.  Applications for maintenance pending suit are governed by section 3 of the Matrimonial Proceedings and Property Ordinance Cap. 192 (MPPO), which provides as follows:-

“3. Maintenance appending suit in case of divorce, etc.

On a –

(a) Petition or joint application for divorce; or

(b) Petition for nullity of marriage or judicial separation,

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 the presentation of the petition or making of the application and ending on the date of the determination of the suit, as the court thinks reasonable.”

13.  The only statutory guidance as to the award of maintenance pending suit is that the Court has a wide discretion in the matter, subject to the result being “reasonable”: C v F (FCMC 170/2000, unrep., 20 September 2004 at §12.

14.  In TL v ML & Ors (Ancillary Relief: Claim Against Assets of Extended Family) [2006] 1 FLR 1263, Nicholas Mostyn QC, sitting as a Deputy Judge stated at 1289:

“The sole criterion to be applied in determining the application is ‘reasonableness’ (s 22 of the Matrimonial Causes Act 1973), which, to my mind, is synonymous with ‘fairness’.”

15.  The principles set out in TL v ML (supra) were adopted by Hartmann J in HJFG v KCY [2012] 1 HKLRD 95 at §§37-38:

“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 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.

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.”

16.  The purpose of making maintenance pending suit orders was explained by Coleridge J in Moore v Moore [2010] 1 FLR 1413 at §22:

“…an order for maintenance pending suit is, as Bodey J observed “a creature different in form and substance from substantive orders made upon the making of a decree nisi”. It is designed to deal with short-term cash flow problems, which arise during divorce proceedings.”

17.  Both parties have a duty to make full and frank disclosure.  The Court is entitled to draw adverse inferences against a party who has not done so in accordance with the principles enunciated in F v F (Divorce: Insolvency: Annulment of Bankruptcy Order) [1994] 1 FLR 359, where Thorpe J observed at 367, citing the case of J v J [1955] p. 215:

“The obligation of the husband in the maintenance proceedings is to be full, frank and clear in his disclosure of his means to the court, and any shortcomings in this respect can and normally should be visited at least by the court drawing inferences against him on matters the subject of shortcomings.

So, if he has conducted his affairs throughout the marriage in such a covert fashion as to relieve him of the ordinary obligations of citizenship to support the State through tax contribution, if he has conducted these proceedings in a vain endeavor to maintain that camouflage, if in consequence the obscurity of my final version results in an order that is unfair to him it is better than that I should be drawn into making an order that is unfair to the wife. If at the end of this case he feels that the lump sum that I order is unfair in reflection of his present retrenchment then he should remember that he has brought that consequences upon himself by the fashion in which he has chosen to arrange his affairs over the course of the last decade, coupled with the fashion in which he has chosen to conduct these proceedings.

The Evidence

The Husband’s Needs

18.  The Husband used to be a driver.  He says that he sustained personal injuries on 9 and 30 September 2011 and has been unemployed ever since.  He says that he cannot walk without a stick, could not find work and could only move with great difficulty.

19.  The Wife, on the other hand, asserts that the Husband has been malingering.  She observed that the Husband had no physical impediment at all but pretended to walk with difficulties outside of their home.  She produced photographs dated 10 September 2011 and 5 November 2011 which showed that the Husband was trying out a sofa during a shopping trip for new furniture [A/192/§75] and unpacking [A/193/§77.1].

20.  At this stage of the proceedings, in the absence of cross-examination, the Court is not in a position to make any findings of facts as to the Husband’s alleged disabilities.  However, the Husband’s evidence as to his alleged unemployment is wholly self-contradictory.  It is his case that he has been unemployed since 2011.  However, in his job application form [B2/350], the Husband declared that he stopped work in December 2013.  In his Form E at paragraph 1.4.1, the Husband stated that he has been unemployed only since February 2014.

21.  When this was pointed out by the Wife, the Husband produced a termination letter dated 14 February 2014 [3/891].  There was no explanation as to why the Husband says that he has been unemployed since December 2013 in his job application form. 

22.  The Husband says that he has no income.  However, his HSBC bank statements showed that he received between $9,000 to $16,000 cash each month (except May 2015 and January 2015 when he only received $6,000 per month in cash).  Taking into account his EPS, cash and ATM, the average deposit into this account per calendar month was $14,792.31.

23.  The Husband explained that most of these deposits were loans from his friend, Mr. Kong.  However, this was inconsistent with his previous evidence that Kong had lent him two loans in lump sums of cash, namely, $500,000 in 2012 and $300,000 in 2014 [B3/1331-1332/§7(a)].

24.  There is also no dispute that the Husband has failed to disclose his HKJC account.  The Husband admits that despite claiming to have no income, he transferred sums to his HKJC account between July 2014 and July 2015 “to kill time” [B1/184/ §46]. It was apparent from the HSBC account statements that the transfers to the HKJC account each month were substantial (just under $15,000) [B2/216-238].

25.  According to his HSBC statements, shortly after cash was deposited into his HSBC account, the Husband would transfer smaller sums into his HKJC account by EPS.  The Husband explained that these transfers were for his mortgage and insurance.  However, his mortgage and insurance totalled $6,052 per month and not close to $15,000 per month.  The transfers were clearly not used to pay for the Husband’s insurance, as the payments were made out of his HSBC account.

26.  The Husband also consistently transferred his social security benefits into his HKJC account.  According to the Husband, his financial situation is so dire that he has had to apply for help from the food bank.  However, it appears that his social security benefits were not used for his living expenses, but “to kill time” via his HKJC account.

27.  The Husband admits that he was involved in litigation in respect of his alleged injuries at work.  However, he alleged that he had forgotten the name of his lawyer and refused to disclose any details of those proceedings or the awards that he received for each case [B1/159/§44]. This was ridiculous.  He could have obtained the case numbers of the proceedings with his Identity Card number for a nominal fee, after which, his solicitors would be able to search the court files.

28.  The Husband is relying on a total of 5 Affirmations in support of this application.  At no point has he even mentioned the nature or extent of his injuries.  Pursuant to PD 18.1 paragraph 53, a medical report (s) within the meaning of RHC Order 18, rule 12 (1C) shall be filed and served at the same time as the Statement of Claim.  If liability has been admitted and no Statement of Claim is filed, then such medical report(s) should be filed and served at the same time as the Statement of Damages.  The Husband clearly has medical reports in his possession, power and/or custody.  Despite that, the Husband has not disclosed a single medical report in these proceedings.

29.  The Husband admitted that he received $52,423 [B2/249] and $123,406 [B2/250] as compensation for his injuries.  If that were the total extent of his compensation, then his injuries must have been very minor and there is no reason why he is unable to work.  He has produced a whole bundle of job applications (which he alleged were unsuccessful).  It is noted that he only applied for employment after the present application. Some of the job advertisements required language skills.  Despite the Husband’s allegation that he has completed language courses, he gave no such information in his job applications.  His purported job applications are the most cursory indication of interest in the job to give the appearance that he has tried to obtain employment.

30.  The alleged compensation were paid into his Hang Seng Bank account.  However, these sums were all withdrawn in cash.

31.  The Husband explained that $120,000 from the compensation was used to repay Kong on 3 August 2014 [B3/1332/ §(7)(b), B3/1336/§(12)(a)-(g)].  He produced a purported receipt from Kong in support [B2/259].  The Wife pointed out that the $120,000 was not withdrawn in a lump sum but in many small sums by ATM.  The last withdrawal was by ATM on 4 August 2014 for $15,000.  The date of the last withdrawal was after the alleged date of repayment.

32.  In his Form E, the Husband claimed that his mother lent him $220,000 on 21 October 2011 and repayments were $3,000.  He produced a signed agreement with his mother [B2/260]. The Husband’s version of events then changed in his Answer to the Wife’s Questionnaire, where he stated that the loan was given to him in 2009, before the marriage to pay for the wedding expenses [B3/1332§7(a)].

33.  He has been staying in a warehouse rented by a sympathetic friend, Mr. Leung, for a monthly sum of $2,000.  Although no leave has been granted for non-disclosure of his address and despite the Court’s repeated comments, the Husband has persistently failed or refused to apply for leave or disclose the address of this warehouse.  He has also redacted the address from the documents he produced in support of this application.

34.  Initially, the Husband claimed that his rented accommodation “will be closed in February 2019 so I will have no place to stay soon” [B1/ 134/§12].  However, in his 8^th Affirmation, the alleged imminent closure of the warehouse became “my friend recently renewed the tenancy of the said warehouse” [B1/148/§12].

35.  Although the Husband has tried to redact the address in each and every document produced, he missed some out by mistake.  It appears that he provided an address in Mongkok in his job applications, but the utility receipts he produced related to an address in Shatin.

36.  The Husband alleged that a Mr. Leung provided him with a loan and the accommodation.  He produced 2 loan repayment receipts [B2/391] and a rental receipt [B2/395], both supposedly signed by Leung.  The Wife pointed out that the signatures were completely different.

37.  The Husband’s case on the financial arrangement prior to separation also changed as the proceedings progressed.  His case swung from (1) the Wife paid for everything and he relied on the Wife for financial support to (2) the Wife paid for nothing and ignored the Husband.

38.  This is the Husband’s application.  He bears the burden of proving his case.  By reason of the above mentioned matters, the Husband is clearly guilty of non-disclosure.  His evidence is inconsistent and self-contradictory.  The Court fully entitled to draw adverse inferences against his credibility, his claimed lack of resources and needs.  The Husband has failed to discharge the burden of proving his needs.

The Wife’s Ability to Pay

39.  In the light of the above findings, any discussion of the Wife’s ability to pay is academic.

40.  Despite the Wife’s worsening health, she has continued to work and is now earning $30,800 per month.  She lives with her younger brother and contributes to household expenses and her parents.  Her largest item of expense is insurance as she was suspected to have cancer.  Although she does not have cancer, the risk of her having cancer is increased.  That was the reason for her insurance.  That was heavily criticized by the Husband.  In fact, prior to the cancer scare, and even without the insurance, the Wife’s monthly expenses were $23,308.  The Husband’s claim of over $22,000 per month is wholly unrealistic.

41.  The Husband pointed out that the Wife is the registered owner of some properties. These were in fact disclosed as early as 2015.  The Wife says that these properties are held on trust for her mother.  These properties are the subject matters of a preliminary issue trial.  In the meantime, the Wife has been able to produce deposit slips showing the payment of rental of these properties to her mother [B1/53/§(b)(ii); B4/1113-1125].  There is no evidence at all that the Wife derives any income from these properties.  

I THEREFORE MAKE THE FOLLOWING ORDERS:

(1)  The Husband’s Summons dated 23 November 2018 for Maintenance Pending Suit is dismissed;

(2)  The costs of and occasioned by this application to be borne by the Husband, to be taxed if not agreed. There be certificate for Counsel;

(3)  The Order for interim maintenance pending suit is discharged.