N v. W

FCMC 5026/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 5026 OF 2015

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JUDGMENT
(Maintenance pending suit/Interim maintenance)

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Introduction

1.  This is an application by the Petitioner wife dated the 13 September 2016 as follows:

1. The Respondent do pay to the Petitioner a monthly sum in maintenance pending suit to be determined by the Court, which will cover the reasonable living costs of the Petitioner and the children, including school fees and the costs of the children’s play therapy with Dr. P.

2. The Respondent do pay the costs of this application.

2.  This application was eventually heard just four days after the 1^st Intervener’s application to transfer up to the High Court, the Respondent husband’s section 17 application dated the 7 April 2016 to set aside the transfer of 490 shares from the Petitioner wife to the 1^st Intervener. Although the subject matter is different I have therefore decided to hand down both the ruling on the transfer up and this judgment on maintenance pending suit, together.

3.  As indicated in the Ruling I have set out the background to this case in my judgment on litigation funding dated the 29 August 2016. In addition, reference can and should also be made to the judgment on the arrangements for the children dated the 28 April 2017. In that judgment I made an order inter alia as follows:

i) There shall be an interim order for joint custody of the two children of the family namely S, a girl born on the XX August 2005 and C a boy born on the XX November 2007 such order to be reviewed in 18 months’ time once the preliminary issues matter has been concluded.

ii) There shall be an order for shared care with the children splitting their time between the two households on a 2/2/5/5 basis during term time.

iii) The school holidays shall be divided between the parties on a 50:50 basis as set out in paragraphs 40 - 44 above.

iv) An updated Social Investigation Report shall be called for in 18 months time.

v) A report from Ms G (or a replacement parental co coordinator) shall also be called for in 18 months time.

vi) There shall be an order nisi to be made absolute in 14 days time that there be no order as to costs. There shall be certificate for counsel.  

IT IS FURTHER DIRECTED that the parties adopt and follow the recommendations made by Dr B as set out in Annex A attached hereto. In particular, it is directed that C have a full psychoeducational assessment and that a copy of that be filed at court within the next 6 months.

4.  In addition, it was recommended that elder child S have ongoing weekly therapy to help her deal with “moderate to severe levels of emotional distress”. I also further commented as follows:

38. I am though particularly concerned about the father’s lack of involvement with choosing a school for S and how he seemed happy for the mother to do all the leg work and to take all of the financial responsibility – when in truth this was an active decision to be taken by both parents. The father does not simply have a right of veto, as with the offer of a place at Island School – if he wants joint custody he has to actively be part of the decision making process. He also has to be financially responsible for any of the decisions made – regardless of the outcome of the preliminary issue hearing. …

5.  It is the wife’s case that she has been responsible for all of the major expenses for the children since 2011. She has produced documentary evidence in support of what she says in exhibit LCN3-2 attached to her 3^rd affidavit dated the 23 January 2017. Although the schedules produced also include other general expenses, such as rent and utilities etc, it is of note that they fully itemize the wife’s payment of school fees and for the cost of the children’s Nanny during the period that she was employed and latterly for payment of play therapy for the children with Dr P. I accept that she was wholly responsible for these costs as indicated.

6.  It is the wife’s case that she has liquidated all of her available assets and that she is currently unemployed, although she has also said that she has recently set up a new business – C Ltd, with funds allegedly borrowed from an independent source in Pasadena USA. She intends to operate her business from home – which is similar to the business model that her brother describes in his affidavits. In any event she anticipates that it will take at least two years to get this new business up and running. Consequently, she has written to the husband’s solicitors in an e-mail dated the 1 August 2017 as follows:

I refer to the hearing of my MPS application on 7 August 2017.

I am writing to see if your client will consider my proposal below so as to avoid further litigation costs relating to the hearing on the 7 August 2017.

As your client is well aware, I have been paying for the family’s, including the children’s, expenses since 2011 and this continued after our separation in January 2015.  Until the hearing in March this year, your client never offered to contribute anything towards the children’s expenses.  To date, he has only contributed 50% towards S’s school fees for the autumn term to commence in August 2017.  He has not paid for any of the major expenses for the children since 2011 and indeed since our separation.

Over the last 2.5 years I have depleted my savings in funding the children’s living and education expenses as well as the legal costs in these proceedings.  Therefore, I am struggling financially and find it very difficult to make ends meet, especially in the long term till I hopefully can get my business established.

I have tried to get back on my feet but due to my very specialized work experience, my age and lack of local language skills, my efforts have been unsuccessful so far.  I have therefore in April 2017 started a new business.  My company is called C Limited.  I am currently operating the business from home.

Like any new trading business, C will take time to grow.  I believe it will take at least 2 years for my company to established and be profitable.  As mentioned in my Form E, I have bought 200x20’ standard containers for an investors money.  I am currently in the process of getting the containers moved to saleable locations in USA and Russia.

Therefore, I am writing to see whether your client will be agreeable to pay 100% of the below children’s expenses for the next 2 years.  This will enable me to focus on establishing my company and getting back on my feet financially.  It is also a steep learning curve for me, building a business and this will also take time and focus.

The main children’s expenses for the next two years include the following, not accounting for price increase in schools etc.

1.   Yearly school fees, C HKD155,500.00 S HKD164,000.00 + school trips, camps, school computers etc.

2.   School bus fees for 2 semesters per child, C HKD21,000.00 and S 26,500.00

3.   Medical / dental expenses with Pediatric Dr. T and dentist, S.  The children know both doctors well.

4.   Health insurance, USD24,078.00 was due on March 2017.  Future insurance policies may increase.

5.   Costs of Therapy, Counselling, Assessments etc.; Dr. O, M and any other therapy/therapist require as per our ruling.

Clothes, uniforms, shoes, food, holidays, ECA etc. in our own households we pay ourselves respectively.

After the 2 years, we can revisit sharing the children’s above cost 50/50.

I do hope that W will genuinely consider the above as it will benefit the children in the long run.

7.  The wife remains convinced that the husband has significant undisclosed assets at his disposal and refers to his disclosure to date as being “opaque”. She also refers to the husband’s significant earning capacity. However, on the evidence currently before the court there is no evidence that the husband has any undisclosed assets. On the face of it I would though accept that he has a potentially higher earning capacity than the one that he currently appears to enjoy.   

8.  The husband for his part also repeats his case on the shares and the section 17 application. He also remains convinced that the wife has access to very significant funds and that she has likewise failed to make full and frank disclosure of her means. Again, there is no concrete evidence to support the husband’s contention in this respect. Simply repeating his case on the section 17 application is not sufficient. Needless to say this is vigorously opposed by the wife in any event. In the husband’s updated Form E dated the 13 July 2017 he says this of the allegation that he has not contributed properly to the children’s expenses:

There is no arrangement or order currently in place but I have paid for the children’s expenses when they have been in my care since separation.  I have also paid for the following:

Furnishing the children’s bedrooms with soft furnishings, bedding, carpets, art, toys, games, musical instruments, books, puzzles, drawing materials, learning materials, etc.

Extra curricular activities such as surf camp and adventure camp for both children each year for the past 3 years, 3D printing workshop, mindfulness training, cooking class, trips to Kadouri Farm, Farm Milk, Tai O, Dolphin Watching, Strawberry Picking, etc.

A complete new set of clothes and school uniforms for each child to keep at my house, regularly updated as they grow

Craft materials such as for S, a sewing machine with accompanying tools and materials, also S now has a wide array of her own cooking and baking materials which she loves to use in the kitchen, and for C, woodworking and metalworking tools, wood, and instruction materials to assist with him creating interesting items.

Toys for both children such as nerf guns (firing foam pellets), a Wii home game console, Scalextric car racing set, Lego, Bead making loom, art and craft sets, and games sets such as Chess, Backgammon, Scrabble, Rummikub, Twister, Ludo, etc.

Gardening materials for both children including their own 6’ long planting troughs (which they made) on the roof of our house.

Both children are avid readers and I regularly purchase books and reading materials for them.  Each child has approximately 200 books on their bookshelves.

Each year, both children have birthday parties with many friends attending, all paid for by myself.

Each child attends many birthday parties each year.  I take them to these events, plus buy presents for them.

I paid for S’s C school entrance admission fee, plus multiple other school application fees.

Whenever each child attends an event, I pay their entrance fees.  Examples include Bounce, Ryze, Central Carnival, Art Basel, Ocean Park, etc.

I have also paid for holidays for the children (including flights, accommodation, travel, food, and activity costs) including a cultural trip to Thailand, and two trips to the UK to visit family.

9.  In other words, it is accepted by the husband that he has provided for the children when they are in his care, but implicit in that acknowledgment is the fact that historically he has not paid for the children’s school fees or for their other major expenses.

10.  He also maintains his view that the wife is still working for her brother. He further says that he has no money and that he is significantly in debt. He adds that he had been wholly responsible for all of the household expenses, including the expenses for the children, in the earlier part of the marriage. Whilst that may be true, the court is now concerned with how the children are going to be provided for going forward.   

11.  As before, and as I pointed out in the judgment on litigation funding dated the 29 August 2016, I am in no position to form a definitive view with respect to the many allegations and counter allegations that exist in this case. I am though able to form a view with respect to how the children’s expenses should be funded going forward, and this is regardless of what has happened historically. In a nut shell I am of the view that the parties shall be jointly and severally liable for those expenses.  

The law   

12.  I set out the law on Maintenance pending suit and litigation funding in my previous judgment, but for the avoidance of doubt I repeat that the law is well known and not in dispute. Section 3 MPPO Cap 192 states that the only governing principle is that the court shall make such order as it considers reasonable in all of the circumstances of the case. Consequently, applications such as these are approached on a broad-brush basis. A detailed examination of the parties’ means may be examined at a later date at a full ancillary relief hearing if there is no agreement in the meantime, when there is then every opportunity to achieve fairness by means of set off. In other words, if there is any overpayment or underpayment that can normally be rectified at a final ancillary relief hearing. This is particularly pertinent given the circumstances of this particular case.

13.  Reference has been made inter alia to the Court of Appeal decision in HJFG v KCY (CACV 127/2011, 28 October 2011, where the following principles were reiterated with respect to maintenance pending suit/interim maintenance applications:

a. The sole criteria to be applied in determining the application is “reasonable” which is synonymous with “fairness”.

b. A very important factor in determining fairness is the marital standard of living.

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.

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 situation, the Court should err in favour of the payee.

Discussion   

14.  At the hearing the husband offered to pay for half of C’s school fees. He also confirmed that he had paid for half of S’s school fees up to the 1 January 2018. Ms Rattigan confirmed that her client would continue to pay for half of the children’s school fees going forward and that he was prepared to give an undertaking to this effect. Consequently this shall be included as an undertaking in the preamble of the order. The husband did not agree to pay for half of the school bus fees, or for medical and dental expenses, save that he agreed that he would pay for the children’s expenses when they are in his care. He did not agree to pay for half of the medical insurance policy or for the cost of therapy/counselling save for half of the cost of the therapy with M. I subsequently queried the situation further and the matter was further clarified in the letter from Withers dated the 4 September 2017, when they stated on behalf of the husband as follows:

1. M, MA, Specialising in Children & Adolescents, MA in Counselling Post Grad Cert in Education, BA Hons

M is a counsellor who works at the Southside Family Health Centre of the Central Health Medical Practice Group.  C attended the Superflex program with Ms M. The fee for the Superflex Course was HK$7,000.  The Respondent has paid HK$3,500 (and not HK$3,000 as stated in Robertsons’ letter), representing 50% of the fees.  Contrary to what was stated in Robertsons’ letter, this was not the only sum that “the Respondent has paid towards the children’s therapy costs to-date”.  So far in these proceedings, the Respondent has also contributed towards the following children’s therapy costs:

•   HK$44,250 for Dr B’s fees (which included therapy sessions) and HK$9,750 for her court appearance;

•   The intake session fee of HK$2,000 for C’s assessment with Dr O.

The Respondent will also pay half of the fees for C’s second Superflex program (i.e. $3,500) due to start on 6 September 2017.  The Respondent sent an e-mail to the Petitioner at 7:10 am on 30 August 2017 (before Robertsons’ letter was sent) and agreed to enrol C in the second Superflex program (relevant correspondence at Attachment A). It is therefore wrong and clearly intentionally misleading of the Petitioner to say in Robertsons’ letter that the Respondent ‘has not responded nor agreed to pay for this course’.  He had responded and he had agreed to pay his 50% share of this course.

2. Psycho-educational assessment with Dr O

C attended his first psycho-educational assessment sessions with Dr O on 17 and 23 August 2017.  The Respondent took C to his first session on 17 August 2017 and the Petitioner took him to the second session on 23 August (and not on 24 August as stated in Robertsons’ letter).

The Respondent was notified by C on 23 August that Dr O wanted to see C again.  However, to date, Dr O has not contacted the Respondent and to his knowledge, no appointment is currently being scheduled.  The Petitioner has said in Robertsons’ letter that a final session is currently being scheduled.  If this is correct then the Petitioner must be discussing the scheduling of this appointment with Dr O without involving the Respondent.  Further, Dr O has also not confirmed to the Respondent (either verbally or in writing) when her report could be made ready.  If she has confirmed to the Petitioner that it will be ready in October 2017 as stated in Robertsons letter, the Petitioner has not informed the Respondent of this, leaving him very much in the dark.

The Respondent has not delayed in providing his agreement to the Petitioner to engage Dr O.  In fact, the Respondent has contacted and made enquiries with other psychologists (such as Dr V) for C’s assessment for comparison purposes, particularly given Dr O’s high fees which are unaffordable to the Respondent.  The Respondent understood that Dr O’s fees were more costly than other similar experts.  Unfortunately, the Petitioner was opposed to the idea of finding other psychologists for comparison purposes and proceeded to appoint Dr O without the Respondent’s agreement and input. Going forward, the Respondent agrees to the appointment of Dr O for the best interests of C, as the appointment had already been made by the Petitioner, but the Respondent objects to the Petitioner making unilateral decisions in relation to the children without his input (relevant correspondence at Attachment B).

As the Court will aware, the Respondent is in a very dire financial position at present and is not financially able to pay for Dr O’s assessment fees.  However he has paid the fees for his own intake parent session (HK$2,000) with Dr O.

3. Dr H and Dr S

To the Respondent’s understanding, the children have not seen Dr H for play therapy for at least 3 months because the children found the sessions ineffective and refused to see Dr H anymore. Although the Respondent has no objections for C to see Dr S in place of Dr H, he wishes to point out that Dr S is a child psychologist and does not conduct play therapy sessions.

The Petitioner has again reached out to Dr S without first discussing with the Respondent.  Having been made aware that Dr S had been contacted by the Petitioner, the Respondent has now contacted Dr S directly to discuss his engagement.

Consequently, and for the avoidance of doubt there shall also be an acknowledgment in the preamble to the order to the effect that both parties have paid for half of the costs associated with C’s second Superflex program.

15.  It is further directed that the parties shall be jointly and severally responsible for any fees associated with the psycho assessment of C with Dr O. I also accept that the cost of medical/dental expenses with Dr T and S shall be divided equally. Given the alleged financial position of each party I accept that it may not be feasible for the parties to have health insurance for the children. This is a matter of significant regret and some concern. However, given the fact that both children have been struggling significantly, as set out in the children’s judgment, it seems to me that it is imperative that S in particular receives ongoing therapeutic support regardless and that the cost for this shall also be split equally between the parties.  

16.  Going forward it seems to me that both parties shall be equally responsible for the children’s other major expenses which shall include the cost of school trips, school camps and any major items such as a computer for school purposes. In so far as the school bus is concerned, as I understand it when the children are with the husband he arranges for their transport to and from school and he is responsible for the cost associated with that. Likewise, the wife shall also be responsible for the cost of transporting the children to and from school when they are in her care.

17.  Given that both parties are caring for the children more or less on a 50:50 basis it follows that they should be more or less equally responsible for the children’s expenses. The wife’s arguments with respect to her historical contribution will need to be dealt with at trial, in the event that the parties are unable to reach agreement in the meantime. Both parties have an earning capacity of sorts. I accept that on the face of it the husband’s earning capacity is greater than that of the wife’s.  Notwithstanding that it is incumbent upon both parties to maximize their earning capacity so that they are each able to properly provide for their children from a financial perspective pending the final outcome of this litigation.

Order

18.  Other than as set out above I will therefore dismiss the mother’s summons dated the 13 September 2016. There shall be an order nisi to be made absolute in 14 days’ time that there be no order as to costs.