CYL also known as YLLC or LC v. STN

FCMC 14253/2023

[2025] HKFC 108

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 14253 OF 2023

________________________

________________________

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Judgment
(Appeal Against Master’s Decision)
(Interim Maintenance for Children)

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1.  In this Judgment, for the ease of reference, I shall refer to the petitioner as “the wife” and the respondent “the husband”.

2.  This is an appeal by the husband against an order made by a Master (“the Master”)  on 9 December 2024 that he has to pay the wife an interim maintenance of $39,000 per month for the benefit of their 2 children, to be backdated to 4 June 2024, the date when the wife made this application (ie a lump sum of $273,000 ($39,000 X 7 months).   I shall refer to this order as “the Master’s Order”.  The Master also ordered that the husband has to pay the wife costs of the application, summarily assessed at $130,000.

3.  The husband is not satisfied with the Master’s order.  By this appeal, he seeks an order that he pays a monthly sum of $20,500 only, with no backdating.  At the time of the hearing, he had already paid this sum that he deemed correct in January and February 2025.  I believe he has been doing so up to this date.

Background

4.  The wife, currently 42 years old, is a local Chinese and the husband, aged 39, English.  They met when both were attending the same university in the United Kingdom.

5.  They married in England in November 2011. They have 2 children, both boys. The elder one is 9 years old (born in October 2015)  and the younger son is aged 7 (born in December 2017.

6.  After the marriage, the parties continued to live in the UK. Both were in gainful employment; the wife worked as an accountant and the husband worked as a programmer.

7.  Both children were born in Hong Kong. The arrangement was they travelled from UK to Hong Kong 2 to 3 months before the baby’s due date, and stayed here until the baby was born.  

8.  After the arrival of the younger son (ie in around December 2017), it was decided that the wife would become a full-time housewife so that the children could be better taken care of and that she and the children would stay in Hong Kong. The husband did not relocate to Hong Kong but was able to work remotely from Hong Kong for most part of the year, save that he would have to return to the UK once in a while for his duties.

9.  The wife said the husband flew back to the UK in February 2020 and did not return until 2 years later in May 2022.  By then, the parties’ relationship was no longer an intimate and romantic one.   The husband denied and said he was prevented by the lockdown during the Pandemic to return to Hong Kong.

10.  It seemed it is not in dispute that the husband moved out from the former matrimonial home in Tai Wai in November 2023.

11.  In December 2023, the wife petitioned for divorce on the ground of 2 years separation, claiming that the parties started to separate from each other as from 18 February 2020.  The date of separation was disputed by the husband; subsequently, the wife amended her ground to one of the husband’s mild unreasonable behaviour.

12.  Decree nisi was issued on 19 June 2024.  The children live with the wife and the husband sees them weekly. A formal order for custody, care and control and/or access is not in place yet. 

The Wife’s Application for Interim Maintenance

13.  By her summons dated 4 June 2024, the wife sought a monthly sum of $62,000 as interim maintenance for the benefit of the 2 children (ie $31,000 each).  At the hearing before the Master, the husband did not agree to pay.  He argued that interim maintenance should start to be payable upon the sale of the property in London (“the London Property”)  that was purchased in the parties’ joint names.   I shall deal with this property in later part of this Judgment.

14.  As mentioned above, the wife was partially successful before the Master in obtaining $39,000 per month, plus backdating it for 7 months. 

Current Situation of the Parties

15.  The wife is the primary carer of the children throughout.  Starting from the birth of the younger son, she started to be a full-time mother.  Before the breakdown of the marriage, the wife remained in Hong Kong and the husband returned to the UK and visited Hong Kong intermittently. 

16.  The wife and the children are living at an apartment in Tai Wai - the former matrimonial home; this is a property provided rent-free by the wife’s father.  This property is over 1,200 ft² large and located in a decent neighbourhood.  She is working as a financial manager.  The children are attending the same International School in the New Territories.

17.  The husband is residing at a serviced apartment in Hong Kong for 10 months for seeing the children.   He is an experienced software engineer and works for a UK company; and hence, subject to UK income tax.  He is able to work remotely. 

The Parties’ Grounds

18.  It is significant to note that by the time of the appeal the husband had a change in his stance by accepting his liability to pay an interim maintenance now, though at a lesser sum of $20,500.

19.  Mr Baker, on behalf of the husband, advanced 4 grounds against the Master’s Ruling, viz, (i)  the husband does not have the ability to pay; (ii)  the children’s expenses do not reasonably exceed $41,000 per month; (iii)  it was wrong to have found the husband should be responsible for 60% of the children’s expenses, the proper proportion should be on 50/50 basis; and (iv)  backdating is unfair and exceed the court’s jurisdiction.

20.  As for the wife for whom Ms Booth appeared, the main ground is that the husband is in breach of his duty to make full and frank disclosure of his cryptocurrencies.

The Husband’s Application to Adduce Further Evidence

21.  A relating matter that needed to be dealt with at the hearing was the husband’s summons dated 4 February 2025 for leave to adduce and rely on his 3^rd Affirmation filed on 17 January 2025 (“the Husband’s 3^rd Affirmation”)  at the appeal.  With the consent of the wife, the husband was allowed to adduce this affirmation.

22.  There were also 2 other summonses fixed to be dealt with by the Master.  The first was the husband’s application for a stay of execution of the Master’s Order; and the second one was the wife’s application to enforce the Master’s Order.  These 2 summonses have since been resolved before the Master.

Master’s Appeal

23.  It is trite that an appeal from a master’s decision to a judge in chambers is a de novo hearing, and the judge will deal with the matter in question as if it came before him or her for the first time.  A judge hearing an appeal from a master, however, is entitled, if he thinks fit, to adopt the master’s reasoning in his own judgment without setting out the reasoning himself; by so doing the judge does not fail to exercise the discretion confederated on him: see Hong Kong Civil Procedure (2025) at para 58/1/2. 

Applicable Legal Principles

24.  The wife is seeking interim maintenance for the children only and is not seeking interim maintenance for herself.  Hence, the empowering provision is section 5 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”).  HH Judge Bruno Chan said the following in DX v LN (Maintenance Pending Suit & Costs Provision) (FCMC 7870/2014; 21 September 2015),

27.  As the Wife’s present application is not just for her own reasonable needs but also those of the 2 children of the family whose care and control has earlier been granted to her, it would also be relevant to note that s 5 of MPPO gives the court much wider powers in dealing with financial provision for children both in terms of both the time for making orders which is before (hence maintenance pending suit)  or on granting the decree of divorce, and the range of orders that the court can make including periodical payment, secured periodical payment, as well as a lump sum for the benefit of the children or for the purpose of enabling any liabilities or expenses reasonably incurred by or on behalf of the children before the making of the application, and that the court may exercise such orders from time to time, and to make further orders from time to time.

28.  Furthermore, when considering such application albeit interim on behalf of the children, s 7(2)  of MPPO requires the court to exercise those powers as to place the children, so far as it is practicable and just to do so, in the financial position in which the children would have been if the marriage had not broken down and each of the parties had properly discharged his or her financial obligations and responsibilities towards them. This would in my view be particularly relevant when the court comes to consider the standard of living which the children used to be able to enjoy and the parties’ proposed financial provisions for them.

  (emphasis added)

25.  As to the approach to be adopted, the Court of Appeal in HJFG v KCY [2012] 1 HKLRD 95 summarised the established principles,

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 High Court judge, in TL v ML and Others (Ancillary Relief: Claim against Assets of Extended Family)  [2006] 1 FLR 1263, at 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: i.   The sole criterion to be applied in determining the application is ‘reasonableness’, which is synonymous with ‘fairness’. ii.  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. iii. 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. iv. 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.”  (emphasis added)

26.  Further, Rayden and Jackson on Relationship Breakdown, Finances and Children (Lexis Nexis), said the following,

[11.78] There is no hard and fast rule, and no fixed proportion: each case depends on its own facts. The approach to maintenance pending suit should be empirical, and that 'in the ordinary sort of case the district judges who deal with these applications will have to take a broad view of means on the one hand and income on the other and come to a “rough and ready” conclusion', or take a 'broad brush' approach. The overriding consideration is the actual needs of the parties pending suit. Although the provisions of the MCA 1973, s 25 are expressed to arise only when the court is deciding whether to exercise its powers under s 23, 24 or 24A, the court may nonetheless have regard to the criteria listed in s 25 on an application for maintenance pending suit.

[11.79] In practice, as oral evidence is rarely given, it will be unusual for the court on an application for maintenance pending suit to be in a position to make findings of fact on issues in dispute sufficient, for example, to deal with conduct or allegations of non-disclosure. However, if it is demonstrated that the paying party has not performed his duty to make full and frank disclosure of his financial resources, then the court can take a broad and robust view of his means, and it does not have to accept and proceed on the basis of the assertions of the paying party as to his means and an inability to pay. The court can look at the reality of the situation and take into account voluntary funding from third parties (see TL v ML above).

(emphasis added)

The Issues

27.  Put it in very board terms, both claim they are in dire financial situation and desperately in need of money.  Worse still, for some reasons, the financial support from their respective parents that they used to enjoy ceased recently.

28.  In determining the appropriate interim maintenance payable by the husband, I consider the following issues are relevant: (1)  the living standard of the children; (2)  the financial resources and needs of the husband; and (3)  the financial resources and needs of the wife and the children.  I shall deal with the parties’ grounds when I come to the relevant issues.

Exchange Rate

29.  In this Judgment, for the sake of consistency, I shall adopt an exchange rate of GPB1 to $9.93. This is the exchange rate adopted by the husband in his Form E.

The Living Standard that the Children Used to be able to Enjoy

30.  I shall deal with the standard of living first. This sets the tone for assessing the parties and their children’s financial needs.

31.  On the wife’s version, she became a housewife after the arrival of the younger son in December 2017; and the husband became the sole breadwinner.

32.  In her Form E dated 31 January 2024, the wife described her living standard “was humble yet comfortable”.  This description can be seen as somewhat restrained when compared to her supporting affirmation dated 3 June 2024 where she said the family had a comfortable living standard during the marriage.  She recounted the couple returned to Hong Kong on business class once or twice a year and had overseas trips for holiday at least once every year.  The family employed a domestic helper and lived in an 800 ft²  2-bedroom flat (plus a maid’s room)  in Jordan and rented a car parking space. I gather all these happened before she turned to a housewife.

33.  I am conscious what is ‘comfortable’ or ‘humble’ is very subjective; they carry different feelings/meanings to different persons.   “Figures”, however, are more objective.

34.  Even on W’s terms, the situation before April 2021 was she was given half of the husband’s salaries in around GBP4,780 per month, or roughly at $47,500 per month.  That was so arranged for UK tax-saving. At that time, the elder son was 5 ½ years old and the younger son was aged 3, both were still too young to attend international schooling that was more expensive.  Even taking the husband’s remaining half into account, the household income was $95,000 only (probably before final tax assessment). Out of these were the monies that funded Hong Kong’s household, including $20,000 rental then required to be paid to wife’s parents for accommodation and later $38,000 for a separate apartment in Jordan and the husband’s expenses in the UK.  As a matter of fact, on the wife’s case, GBP4,780 was the maximum amount at any time during the relationship for the Hong Kong household because the husband reduced the monthly contribution to GBP3,400 in April 2021 and further down to GBP3,200 in August 2021.

35.  It should not be forgotten that even on the wife’s version that the husband was earning at least $84,000 post-tax per month at the time of her application in June 2024, the husband was essentially maintaining two households, plus all the outgoings of the London Property.  In my view, the marital living standard claimed by the wife to have enjoyed must be seen in that light.

36.  It is significant to note there were WhatsApp messages exchanged between the parties in about October 2023 where, at one point, the wife offered just GBP3,400 (or $33,800)  per month payable by the husband plus allowing him to stay at the home in Tai Wai for 3 months for seeing the children.  I reckon at that time the elder son was 8 years old and should have already started international schooling and the younger son should have been planned to follow suit soon.  I am conscious that at the relevant time the wife was in receipt of financial assistance from her parents.  Yet, all these figures I referred to above cast light on how much she needed at that time and the standard of living that she expected her children should be able to enjoy.

37.  There is no precise definition for “middle class”.  “Middle class” is a combination of financial resources and lifestyle choices. As such, “middle class living standard” has a very wide spectrum in Hong Kong, as it is in other countries. Judging from the level of income that the husband was able to make and the family really did not have much liquid assets, I consider the family could afford just an above-average middle class living standard in Hong Kong. 

The Husband’s Earning Capacity

The Husband’s Case

38.  The husband is being employed in UK as a software engineer.   He is able to work remotely, spending most of his time in Hong Kong. 

39.  The husband’s employment arrangement is quite different from what we have in Hong Kong.  He is paid on a daily rate which (i)  contractually excludes holidays and sick days; and (ii)  calculated weekly and not monthly.  Add to this is the complicated UK tax system: the husband is subject to 2 rounds of tax. The first is the “Pay As You Earn” system and the second is the “Self-Assessment System” at the end of the year of assessment.

40.  For the year ending April 2022, the husband earned GBP120,959 gross or GBP75,482 ($749,540)  net of tax. 

41.  For the year ending April 2023, the husband earned GBP143,940 gross or GPB7,256 (or $72,050)  net of tax per month.

42.  At the hearing before the Master, the husband said he was earning about $75,000.

43.  On appeal, the husband relied on his latest tax return for the year ending April 2024 (exhibited in the Husband’s 3^rd Affirmation)  where he reported earning $78,000 per month. 

The Wife’s Case

44.  The wife does not accept the husband’s figures; the husband monthly income should be about $85,000 net per month.  I note this is already a lower figure because in her supporting affirmation dated 3 June 2024, the wife believed the husband was earning $159,250 gross, with $65,222 as his tax liability, hence $94,208 net. 

Discussion

45.  There is a dispute as to how the average monthly income net of UK tax is to be calculated.  The only agreement the parties have is this is a complicated exercise.  As such, the last thing I should do is to engage in any meticulous calculation or assessment when at this stage all that is required is a board brush approach.

46.  The husband’s income had increased by 33% since March 2021. In March 2021, his daily wage was GBP565, from January 2023 to December 2023 it was GBP650; it was further increased to GBP750 in January 2024.  Therefore, I agree with Ms Booth that the husband’s tax return for the year ending April 2024 does not accurately reflect the husband’s current take-home pay, as the tax return does not reflect the husband’s daily wage of GBP750; instead it reflects a daily wage of GBP650 – GBP750  across the tax year.   Ms Booth submitted that (and not disputed by Mr Baker)  the husband’s contract ended in December 2024 and it was likely that he had an increase.  Despite there was a new contract taking effect as from January 2025 in which it was likely to have an increase, the husband did not see it convenient to produce it in the Husband’s 3^rd Affirmation in which he produced his tax return for the year ending April 2024 showing the situation up to April 2024 only.   I consider there is no reason why he did not do so.  He should have been advised by his legal advisers that to make full and frank disclosure is a continuing obligation.

47.  In the circumstances, in the absence of the latest figure which the husband could have easily disclosed, what I should do is to make an assessment to the best I can. I would add 5% on the top of $78,000; hence, $81,900 per month. I round it up to $82,000. 

The Husband’s Financial Resources

48.  The husband reported in Form E having bank balances of $24,941 and liquid assets (stocks, bond and other securities)  at $1.39 million of which $1,343 million were cryptocurrency. His credit card liabilities were at a negligible sum of $33,000.  He, however, claimed he owed his parents GBP197,500. 

49.  The husband said in his affirmation dated 31 December 2024 (in support of his application for stay of execution)  that he had already liquidated part of his cryptocurrency in the tone of GBP50,000, out of which GBP35,000 was to repay his debts owed to parents because his parents needed the money to help his sister who had been diagnosed with cancer and his father had had an open heart surgery in September 2023.  The rests were on paying off his debts and on covering expenses of the London Property.

50.  In the same affirmation, the husband said after the sale he still had a balance of just 20 Ethereum (ETH); together with his UK ISA, he only had liquid assets of around GBP60,000.

51.  At the hearing, Mr Baker said (without any supporting evidence)  the value of the cryptocurrency further dropped to USD50,000 due to the volatile market situation.

52.  At this point, I need to digress to say Ms Booth drew my attention to the fact that the husband’s stance before the Master was that his cryptocurrency could not be sold.  That was not denied by Mr Baker.

53.  In any event, the husband said, in his affirmation, that out of the remaining cryptocurrency, around GBP41,000 would need to be spent to meet the backdated payments as well as the costs for this appeal. In other words, the husband would have to liquidate his cryptocurrency further.  In that event, he would have a balance of GBP19,000 in savings only for covering the capital gains tax incurred for selling the cryptocurrency. This would leave him without any asset.  However, how these assets are to be used became somewhat obscure when at the hearing Mr Baker informed the court that the husband intended to pay the $20,500 interim maintenance out of the further sale. 

Husband’s Cryptocurrency Assets

54.  A main thrust of the wife’s argument is the husband failed to make a full and frank disclosure of his cryptocurrency assets.

Duty of Disclosure

55.  It is trite but necessary to emphasise that when it comes to financial matters parties in matrimonial proceedings owe to court a duty to make full and frank disclosure of his/her financial situation, without which the court simply could not be in a position to discharge its duty in a just and fair manner.

56.  The duty of full and frank disclosure is onerous; it is an absolute and continuing one.  Rayden and Jackson on Relationship Breakdown, Finances and Children states at [13.101].

The importance of the duty of both parties to make disclosure of their assets which is full, frank and clear cannot be overemphasised. Unless a court is provided with correct, complete and up-to-date information on the matters to which, under the MCA 1973, s 25, it is required to have regard, it cannot lawfully or properly exercise its discretion in the manner ordained by that section. The duty on each party is absolute, and it must be discharged regardless of whether the application for a financial remedy is adjudicated upon by the court after full evidence has been heard, or settled after an exchange of financial information between the parties leading to a consent order. The duty is also a continuing one: a party must not mislead the other party and the court into assuming that his financial situation is unchanged if in fact it has changed. Any material changes in the financial situation of either party occurring between the filing of their Form Es and the final dispatch of the claims by the court must be brought to the notice of the other party and the court at the earliest opportunity. A party who seeks to negotiate and secure a settlement without informing the other party about a material change in his or her financial circumstances runs the risk that, if a settlement is reached and a consent order is made, the consent order will be set aside by the failure to provide full, frank and timely disclosure. Shortcomings in disclosure will be visited by orders for costs against the offending party, often on the indemnity basis. Furthermore, deviation from the standard of disclosure required may be visited by the court drawing adverse inferences against the party in default.

    (emphasis added)

57.  Disclosure must be given in a timely and orderly manner and bona fide. The material disclosed must be correct, complete, clear, comprehensible, and up to date. A litigant who gives obscure, piecemeal, or superficial disclosure, or one who adopts a “wait and see” approach in the hopes the “right questions” will not be asked, falls afoul of these principles: see L v L [2006] HKFLR 121 (Lam J, as he then was)  at [197] – [200].

58.  On the disclosure of crypto investments, HH Judge Grace Chan said the following at [67] of BC v MSH (Ancillary Relief)  [2024] 1 HKLRD 441,

67. There cannot be any dispute that crypto or virtual currency is a new area of asset or investment, totally unlike traditional paper money or stock trading. It does not exist in physical form. Unlike paper money, crypto currency is not issued or backed by a central authority, such as a national bank, which also means that there is no central authority to manage its value. In my view, the novelty and complexity of crypto currency, in terms of how it operates, trades and values, cannot be underestimated. The case law is clear that when one’s asset or asset structure is complex, that party (and in this case, I mean the husband)  is required to “from the outset” provide “even fuller and franker” exposure and explanation of his assets (See: J v V (supra)).[1]

59.  Judge Grace Chan further expressed her views on how a party should disclose in relation to crypto currency at [77].  In short, the disclosure should be of no difference to traditional paper money that is kept in bank accounts.  Therefore, a party, at the very least, is expected to provide the following in his Form E (and this is a non-exhaustive list):

(1)  state clearly the account number or user ID or any other identification information that would readily relate him to the relevant crypto account and crypto wallet; (2)  provide comprehensible transaction report for the period required by Form E, namely 12 months prior to his/her Form E. The said transaction report shall bear the information stated in (1)  above; (3)  provide a colour photograph of the crypto wallet depicting the balance or current value of each crypto account. The said photograph should be duly dated. A screen shot without a date or any identification information is not sufficient and helpful; and (4)  (as there is no central authority to determine/manage the value of crypto currencies)  explain briefly the basis of valuation of each crypto account.

60.  I agree with Her Honour’s views, which is both reasonable and necessary. These requirements are essential for the court to assess a party’s financial resources.

61.  I now turn to the husband’s disclosure.

62.  The husband’s Form E dated 20 February 2024 reported he had cryptocurrency of $1,342,665 (GBP135,213).  Attached to the Form E was a phone screen shot that the husband said was the position as at 29 January 2024.  However, this screenshot was without a date or any identification.  It stated the total portfolio was GBP 135,213 with ETH, DOT, IOTX, KCS, XNO, FUN as his highest holdings but there was also another cryptocurrency shown in part (not discernible)  at the bottom of the screen shot; so it is clear that the rests were missing.  This is an undated and incomplete snapshot of part of the husband’s ‘holdings’.

63.  The bank statements that the husband disclosed in his Form E (and later in his Answers dated 17 September 2024)  showed numerous transactions of cryptocurrency in Bitcoin and ETH, though I am aware that each individual transaction was of small amount. 

64.  By a letter dated 19 March 2024, the wife’s solicitors complained that the husband had failed to provide proper disclosure, and requested statements for his crypt investments covering the last 12 months as required under the Form E.   No statements were provided.

65.  On 6 December 2024, 3 days before the hearing before the Master, the wife’s solicitors wrote again seeking the following disclosures:

(a)  “The different types of crypto currencies the husband had at the time of his Form E.

(b)  The different types of crypto currencies the husband currently held and where they were kept.

(c)  The updated value of the husband’s current crypto currency investments.

(d)  Details of any crypto assets that he sold since February 2022 (two years prior to his Form E), including the amount and where such sums were subsequently deposited.

(e)  Account IDs, email addresses and or other identifying particulars of (1)  all the cryptocurrency, token or digital asset trading platform accounts, and (2)  digital wallets that the husband had used, held and or had access to from February 2022 to the date of the letter, including those which had been closed during this period.”

66.  The husband’s solicitors replied on the same date that the request came too late and argued, in any event, the wife’s assertion that crypto currency balance would inevitably be relevant to the maintenance pending suit determination is flawed as maintenance is a function of income and there is no jurisdiction to order sale of assets to the purpose of provision of maintenance.  That said, the husband’s solicitors said the husband would use his best endeavours to consider the wife’s requests and provide the appropriate information.  Yet, no disclosure was provided.

Disclosure after the Master’s Order

67.  In his 2^nd affirmation in support of a stay of execution of the Master’s Order, as mentioned above, the husband affirmed that he had liquidated part of his cryptocurrency for the purpose of repaying part of the loans owed to his parents.  He exhibited a “copy of a screen shot from Koinly confirming the Respondent’s crypto sales this year amount to GBP76,734.22” .  

68.  As pointed out by Ms Booth, if the husband had sold GBP76,734.22 out of which he had repaid his parents GBP35,000, the husband should have disclosed the particulars (with proof)  on when and how much he had liquidated, together with the particulars of repayment and the whereabouts of the balance.  

69.  In the same affirmation, the husband exhibited what he said to be a true copy of his wallet showing the total value of all the crypto currency holdings after the sale.  Again, this is a one sheet undated document without any ID linking and did not show who issued it; and on the face of it, it is on ETH only (20 units)  with the value of USD70,243.

70.  It is clear that when measured against the yardstick set out above, the husband’s disclosure fell far short of giving a clear picture of his cryptocurrency investments.  How much he actually held as at the date of his disclosure was fragmented, incomprehensible and indecipherable.  The court simply is not in a position to assess if the husband’s assertions were truthful or not.   Given that the husband was legally represented, I find it hard to believe that he could not have provided a more intelligible and meaningful disclosure in a timely and orderly manner. 

71.  In response to these criticism, Mr Baker advanced an argument that the husband’s crypto currency was not relevant to the interim maintenance issue.  In my view, Mr Baker’s argument is flawed.  It does not absolve the husband’s duty to give a full and frank disclosure in a timely manner.  As I shall explain below, how much liquid assets he has is relevant to the wife’s present application.

72.  Where appropriate, even at this interim stage, the court is entitled to draw adverse inference against a party’s financial situation.  I, however, for the reasons that I will explain at [123] below, do not find it necessary to do so.

The London Property

73.  The husband owns the London Property jointly with the wife.  It was purchased in October 2013 and has a value of GBP600,000, subject to a mortgage of about GBP280,000.  I was told the mandatory building works to the common parts required under the Building Order had been completed.  If the parties agree to do so, the London Property could be sold in open market anytime.

Financial Assistance from Parents

74.  The down payment of GBP100,000 for the purchase of the London Property was paid by the husband’s father.  The husband reported in his Form E dated 20 February 2024 that apart from this loan, his parents had also provided him with loans to settle mortgage payments after interest rate increased, and also about $700,000 for the mandatory building works for the London Property.  The husband claimed in his Answers dated 17 September 2024 that he owed his parents GBP197,500.

75.  As can often be found in divorce cases, the wife says the money for the down payment was a marriage gift.  At this stage for the purpose of the present application, it is not necessary for this court to come to a conclusion in one way or the other.

76.  The wife referred to the fact that the husband has been in regular receipts of financial support from his parents since 2017. She reckoned from the bank statements and emails that as of December 2024 the husband had received at least GBP250,000 or $2,482,500 and not $1,961,120 as alleged by the husband. 

77.  In TKY v YSGA [2025] 1 HKLRD 977, the Court of Appeal rejected the husband in that case’s argument that financial assistance from third parties under KEWS v NCHC (2013)  16 HKCFAR 1, [2013] 2 HKLRD 314 was not applicable to the court’s “broad-brush” approach to a maintenance pending suit application when considering the ability to pay and the financial resources of the payer.  In every case where this issue is involved, there must still be (i)  sufficient evidence to satisfy the court of the level of that financial support; and (ii)  the likelihood of such financial assistance continuing in the foreseeable future.  The court has to look at the reality of the situation and have regard to matters of substance and not just form.  In looking at the reality, the court could take into account not only what a party actually had, but what might reasonably be made available to him or her if a request for assistance were to be made. 

78.  Mr Baker sought to argue that none of these loans was expressed by either party for the purpose of meeting children’s expenses.  The parents had loaned the husband money for the London Property but had never loaned him money to meet the children’s needs. With respect, this is a bad point.  These monies were a source of the husband’s financial resources which allowed him to make use of his own hard-earned monies for the children.

79.  There is no evidence of terms of the alleged loans, nor formal expectation of repayment from his parents.  Except the alleged GBP35,000 that the husband alleged to have returned to his parents, he had never made any repayments before. Additionally, the parents have also set up a trust for the husband and his siblings.  

80.  It is worthy to note the husband’s assertion that he had to repay GBP35,000 because his parents needed money was not raised in the husband’s affirmation in opposition nor was it mentioned in Mr Baker’s submissions before the Master.  This assertion only appeared belatedly after the Master’s Order.  In the circumstances, I consider the husband’s assertion is a mere say-so.

81.  On this analysis, I agree with Ms Booth that the husband’s parents are financial resources available to him to which the court can have regard.  The current level of financial support is not clear.  Both TKY v YSGA and KEWS v NCHC said the past conduct is often a useful guide as to what might occur in the foreseeable future. See TKY v YSGA at [25] – [27] and KEWS v NCHC at [38].  Even on the husband’s own version, the financial support from his parents in the last 7 to 8 years were as much as $1,961,120.  This means on average $20,430 per month ($1,961,120 ÷ 96 months).  I round it down to $20,000.

82.  With the conclusions that I have come to, I would make robust assumptions about his ability to pay.  Leaving the cryptocurrencies aside, I assess that the husband should have a monthly receipt of about $102,000 ($82,000 + $20,000).

The Wife’s Earning Capacity

83.  The wife said as the husband had reduced his contribution to living expenses, she was forced to return to full-time work in August 2022.  She first worked as an Analysis Manager and is currently working as a Finance Manager.  She is earning $46,500 net monthly plus year-end discretionary bonus.

The Wife’s Financial Resources

84.  In her Form E dated 31 January 2024, she reported she had bank balances of about $1,327,000 plus stocks about $140,000, totalling $1,467,000.  Since the wife had to meet the shortfall of living expenses and her legal costs, at the time of the appeal her monies in banks dwindled to $660,000.

85.  The husband said the wife in fact had cash totalling $2,400,000.  Briefly put, he referred to the monies that the wife had in all her bank accounts.  

86.  In response, the wife’s explanation was there was double counting.  Ms Booth took me to the relevant bank statements on the flows of monies within the accounts which seemingly support the wife’s explanation.  Taking a board brush approach, the wife should have liquid assets of around $800,000 (ie $660,000 cash + $140,000 stocks).

Financial Assistance from Parents

87.  The husband claims the wife can rely on her father to provide financial support.

88.  The wife accepts she was in receipt of a monthly sum of $26,000 from her father for the children’s benefit from around late 2018.  When the wife got a new job with her salary increased from $33,000 to $44,000 in November 2023, her father decided to stop the money gifts as he had been drawing down on his pensions and savings to make these payments and could no longer afford to do so. [2]

89.  I have already discussed the applicable legal principles in this regard when I dealt with the husband’s parents.  The undisputed fact is the wife had been in receipt of financial support for 5 years, totalling $1,560,000 ($26,000 X 5 years).  On the wife’s case, this financial support stopped altogether one month before her petition for divorce.  As far as the timing is concerned, perhaps it was a mere coincidence; it could also be a calculated move, too. On my part, it is difficult to understand why an increase of $11,000 in salary would have led to a cut of $26,000.  In the absence of any concrete evidence or plausible explanation, I would not accept the wife’s assertion lightly. To me, same as what I have said about the husband, this is a mere say-so.   Again, the past conduct is a useful guide.  I have come to the view that, leaving her bank balances aside, the money that is available for the wife’s disposal should be more than her monthly salary.  I estimate that she should have a monthly receipt of about $72,500 ($46,500 + $26,000).

The Wife and the Children’s Financial Needs

90.  Thorpe LJ commented at [47] of Re P (Child: Financial Provision) [2003] EWCA Civ 837, [2003] 2 FLR 865 that specialist family lawyers are adept at producing rival budgets.  Invariably the applicant’s budge hovers somewhere between the generous and the extravagant; and invariably the respondent’s budget expresses parsimony. Time and again, this happens in the Family Court. I am afraid unfortunately this happens in this case, too.  

91.  The wife reported in her Form E of 31 January 2024 that her expenses were as follows:

General expenses (including the children’s share and the domestic helper	$24,329
Her personal expenses	$16,394
Children’s expenses (including school fees $23,893)	$50,544
Total:	$91,267 Round up to $91,300

92.  If the children took up 2/3 of the general expenses (ie $16,219 ($24,329 ÷ 3 X 2)), their monthly expenses would be $66,763 ($16,219 + $50,544).  I round it up to $66,800.

93.  It follows that if the wife had an income of $46,500 only, she would have a shortfall of $44,767 ($91,267 - $46,500).  This does not include her legal costs in the proceedings.

94.  The wife’s supporting affirmation dated 3 June 2024 revised her general expenses and the children’s expenses. Assuming the wife’s personal expenses remained unchanged, I reckon her total household expenses per month would be:

General expenses	$21,935
The wife’s personal expenses	$16,394
The children’s expenses	$78,292
Total:	$116,621 Round up to $116,700

95.  Again, if the wife’s income stood at $46,500, she would have a shortfall of $70,121, or about 1.5 times of her monthly income. Again, this did not include her legal costs in the proceedings.

96.  Considering these figures objectively, I cannot fathom why the wife would have allowed her expenses to have blown up from $91,300 to $116,700 (an increase of 27.82%)  in just 4 to 5 months’ time.  This simply does not make good sense to me even when she had over $1 million in her bank accounts. It should be remembered that at the relevant time she did not have any contributions from the husband and she alleged she did not have any financial assistance from her parents.   Absent any convincing reasons or explanations justifying the increase, I believe there is a degree of exaggeration, duplication and/or double counting on the part of the wife.   This is also the view taken by the Master.  To that extent, the wife failed to give a full and frank disclosure of her financial situation. 

97.  On this theme, it may further be pointed out that when the wife was still in receipt of her father’s monthly $26,000 and when she did not have or had reduced contributions from the husband, she had made use of her father’s monies on purchasing some insurance policies for the children, including a life insurance policy and a medical insurance policy for each of them.  On top, she also purchased a medical insurance policy for herself.  The rest went to the children’s expenses.  This, as I see it, is significant.  This shows the wife did not have to exhaust the entire $26,000 for meeting her daily or immediate expenses. 

98.  I am helpfully assisted by a Table prepared by Ms Booth that sets out parties’ respective position on the items.  I must make it clear that I am not bound by the figures agreed by the parties. 

99.  I consider there are overlaps.  There are car expenses of $2,235 but there are transport expenses for the wife and the children.

100.  The wife said the children need $8,900 for their extra tuition and $8,693 for extra-curricular activities, totalling $17,593.  Her explanation is the children always receive extra tuition. I do not think this is the answer.  I am not told if the children have any special needs, I assume not. There must be some limits to the budget for this item.  The wife is not entitled to enrol the children to these activities simply on the ground that, as she claimed, they always receive extra tuition. Receipts are not cheques.  The fees must be reasonable and commensurate with their parents’ income and living standard.  If the wife had actually incurred a staggering sum of nearly $17,600 per month with a monthly receipt of $46,500 only, with respect, I must say there is a measure of indiscretion on her part.

101.  I am given to understand the parties now agree there should not be any counselling fees that the wife originally claimed for $6,000.  In any event, I would not allow this sum even if there was no agreement.

102.  The issue over the children’s medical insurance is a long term arrangement and should be left at the determination of the ancillary relief.

103.  For the reasons that there are still assistance from the parents, I disallow the contribution to parents.

104.  I assess the wife and the children’s expenses as follows

The Wife’s Monthly Expenses

General

Item	Amount (HK$)
Utilities (electricity, gas, rates, telephone & water)	4,000
Management fees	3,500
Food	5,000
Household expenses	2,500
Car expenses	2,235
Insurance premia	200
Domestic helper(s)	5,745
Other (specify)  Emergency	500
Total monthly household expenses	HK$ 23,680

Personal

Item	Amount (HK$)
Meals out of home	2,000
Transport	1,300
Clothing / Shoes	1,000
Personal grooming (including haircut and cosmetics)	2,000
Entertainment / presents	500
Holiday	2,000
Medical / Dental	200
Insurance premia	567
Total monthly personal expenses	HK$ 9,567

Children

Item	Amount (HK$)
School fees	25,380
Extra tuition fees	4,000
School books and stationery	200
Transport to school (including school bus)	3,600
Medical / Dental	3,000
Extra Curricular Activities	3,700
Entertainment / presents	2,000
Holidays	2,000
Clothing / Shoes	1,200
Lunches and pocket money	300
Other Transport	300
Uniform	300
Others (specify)  School Events	1,000
Total monthly expenses for children	HK$ 46,980
Total Monthly Expenses	HK$ 80,277

105.  The wife’s total monthly expenditure is estimated at $80,227. The children’s monthly expenses are therefore $62,766 ((General expenses $23,680 X 2/3)  + $46,980).  I round it up to $63,000. 

The Husband’s Financial Needs

106.  The husband reported in his Form E of 20 February 2024 that his general expenses are $62,132, personal expenses are $65,140 (inclusive of tax liability $60,672), totalling $127,272.  The general expenses include those incurred in respect of the London Property, the largest sum being the mortgage repayment, totalling approximately $24,000 per month.  As said, the London Property was purchased in the joint names of the parties, but it seems quite clear that all along the husband has been responsible for these expenses.  The husband claims the wife refused to share.

107.  At the hearing before the Master, the husband conceded that his total monthly expenses (excluding tax liability)  should be around $72,000.[3]

108.  The wife said in her supporting affirmation that the husband’s reasonable monthly expenses should not be more than $118,000 per month, so the husband would have at least $41,250 excess for supporting their children. It might have been the case but it is worthy to note that even on the wife’s case, the excess would still not be sufficient to cover the wife’s claim for $62,000 per month.

109.  Again, taking a board brush approach and doing the best I can on an interim basis, I assess the husband’s financial needs as follows.  At this point, my view is the sums claimed by the husband are more reasonable that those of the wife’s. 

The Husband’s Monthly Expenses

General

Item	Amount (HK$)
Rent	14,200
Mortgage instalments (the London Property)	22,000
Utilities (electricity, gas, rates, telephone & water)	500
Management fees and Council tax	4,800
Food	4,000
Household expenses	1,000
Storage	3,000
Other (specify)  Loan Repayment	4,380
Total monthly household expenses	HK$ 53,880

Personal

Item	Amount (HK$)
Meals out of home	500
Transport	500
Clothing / Shoes	1,000
Personal grooming (including haircut and cosmetics)	200
Entertainment / presents	200
Holiday	100
Flights to UK	1,700
Insurance premia	2,000
Others (specify)  Access to Children	3,000
Total monthly personal expenses	HK$ 9,200
Total Monthly Expenses	HK$ 63,080

110.  Hence, the husband’s monthly expenses are estimated at $63,080.  I round it up to $63,100.

What is the Interim Maintenance Payable by the Husband for the Benefit of the Children?

111.  I have estimated the children’s monthly needs at $63,000.

112.  I have also come to the view that:

(i)  both have to some extent failed to give a full and frank disclosure of his/her financial situation;

(ii)  both have financial assistance from their respective parents;

(iii)  the husband has monthly receipts of about $102,000; and

(iv)  the wife has monthly receipts of about $72,000.

113.  Considering all the above in the round, I agree with the Master that it is fair that the parties have to share the children’s expenses as between the wife and the husband on 40/60 basis. It follows that the interim maintenance payable by the husband is $37,800 per month.

Should the Interim Maintenance be Back-dated?

114.  Mr Baker argued that the Backdating Order is unfair and exceeds the court’s jurisdiction.  It is unfair because the husband has been solely meeting the costs of the London Property.  These total some $350,000 since the wife’s petition for divorce in December 2023. 

115.  I do not agree it is unfair to have the interim maintenance to be backdated simply on this ground. Much of the costs for the London Property are in the form of mortgage repayments. They are capital in nature while interim maintenance is to meet the children’s immediate and reasonable needs for which both the wife and the husband as their parents have a legal obligation. 

116.  The court is entitled, if it thinks it just to do so, to apportion the due share that the wife ought to pay back the husband on the outgoings of the London Property.  Likewise, the court is entitled to make an adjustment if there is underpayment or overpayment of the maintenance.  However, the nature of adjustment is different; it is prudent not to mix these items together.

117.  It is also Mr Baker’s argument that backdating is unfair and in excess of the maintenance jurisdiction since the husband will have to liquidate the majority of his capital assets in order to pay the interim maintenance.  Mr Baker relied on HJFG v KCY[2012] 1 HKLRD 95 where the Court of Appeal said at [34],

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 re-balancing.  In the present case, the judge recognised the long-established approach of looking to the “immediate and reasonable needs” of the wife and son.

118.  With respect, I do not see how this paragraph supports Mr Baker’s proposition.  My reasons are as follows.

119.  First, the wife is seeking interim maintenance for the children under section 5 of MPPO.  As I have referred to DX v LN (Maintenance Pending Suit & Cross Provision) at [24] above, section 5 of MPPO gives the court much wider powers in dealing with financial provision for children.  The orders that the court can make include a lump sum for the benefit of the children or for the purpose of enabling any liabilities or expenses reasonably incurred by or on behalf of the children.

120.  Second, cryptocurrency is no different from cash in bank, securities or stocks.  As I said above, it is the legal obligation of the husband, as a parent, to maintain his children.  It is absurd to say when his children are running out of money or even starving, his liquid asset can be ring-fenced from meeting their “immediate and reasonable” needs.  As a matter of fact, the husband has already liquidated a greater portion of his cryptocurrency to meet his own needs. 

121.  For these reasons, there is simply no merit in Mr Baker’s arguments.

122.  I think I should take the following into the consideration.  First, the fact that the husband stopped his contribution since October 2023.  Second, it was only on appeal that he conceded to pay a sum that he saw “reasonable”.   For these reasons, I agree with the Master that, in all fairness, the interim maintenance should be backdated. This should be backdated to 1 July 2024, the month following the wife’s application.  I take into account the $50,000 school fees that the husband paid subsequent to the wife’s application.  The monthly $20,500 (from January to June 2025 totalling $123,000)  that the husband has already paid should also be taken into account.  I have to make it clear that in the interest of costs and time, the court will be slow to entertain any application for further deductions even if the husband has paid more than these sums during the period.  As I said, all these could be adjusted at the final hearing. Parties should proceed with the ancillary relief proceedings without being further embroiled in satellite litigations. 

123.  From July 2024 to June 2025 are 12 months. I reckon the back-payment payable by the husband should be $280,600 ($37,800 X 12 months – ($50,000 + $123,000)).  The husband has the ability to pay even on his own evidence. This is the reason why I said it is not necessary to draw an adverse inference against his financial situation at this stage. This sum has to be paid within 21 days of this order.

Costs

124.  I am conscious that the wife has to some extent failed to give a full and frank disclosure of her financial situation. However, I am largely in agreement with the Master.  The sum assessed by me is only slightly less than that assessed by the Master.  On that view, the husband has failed in his appeal.  Hartmann J (as he then was)  mentioned in F v F (No 2) [2003] 3 HKLRD 976 at [22] that “the long-established principle that costs are determined not by dividing litigation into quantifiable subjects and figures, like a profit and loss account, but rather by way of overall impression”.  Taking a broad-brush approach, I consider it is appropriate for the husband to pay the costs of this appeal; and I so order.

125.  I wish to add one more point on costs.  The court was given 9 bundles with over 2,000 pages of documents.  However, only a small portion of these documents were referred to or relied upon by the parties.  This is a waste of costs.  It is not difficult to understand why that was the case.  The relief sought by the wife is interim by its nature and would only be determined by the court on a so-called “broad brush” basis.  The court would not be able to resolve factual issues in dispute (many of which may not even be relevant to the application before the court)  without vica voce evidence at this stage.  Only those documents that are likely to be referred to should be included.  Parties’ legal representatives should not prepare hearing bundles in a mechanical fashion without giving thought to what should be included, failing which they may meet with adverse costs consequences.  See also HH Judge G Own’s judgment in CFC v HYS, [2025] HKFC 87 at [4], [12] – [14].

126.  The costs are to be assessed by way of summary assessment.  I make the following directions:

(1)  The wife do lodge and serve a Statement of Costs within 14 days. 

(2)  The husband do lodge and serve his List of Oppositions/Objections within a further 14 days.

(3)  No further submissions shall be allowed unless with the leave of the court.

(4)  The summary assessment is to be dealt with by way of paper disposal.

127.  Lastly, I would remind the parties that they have modest assets only.   Apparently, they do not have much resources in fuelling their litigation. They still have a long way to go in raising their children.  They should, for the sake of their children, refrain from fighting this proceeding as if it were a big money case.  Parties should aim at achieving a closure of this litigation as soon as possible.