TWS v. LWC

FCMC 8308/2020

[2021] HKFC 123

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 8308 OF 2020

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J U D G M E N T

(Maintenance Pending Suit)

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1.  This is a hearing of the petitioner wife (“the wife”)’s application for maintenance pending suit (“MPS”) against the respondent husband (“the husband”).

Parties’ Respective Position

2.  In her summons dated 5 February 2021, the wife asked for $52,000 per month as interim maintenance with an additional $55,000 per month for litigation funding, totalling $107,000 per month for her as MPS.

3.  At the call over hearing on 10 February 2021, I ordered the husband to pay an interim interim maintenance at the rate of $20,000 per month pending the court’s decision on the MPS application.

4.  As can be seen from counsel submissions, the husband now asks for the wife’s MPS application to be dismissed on the basis that she has sufficient financial resources, or alternatively, if the court is really minded to grant MPS at this interim stage, the court should err on the safe side and not to allow over-provision.

Background

5.  The wife is now aged 42 and the husband aged 46.  The parties were married in 2013 and they have no children from this marriage.

6.  In 2014, the former matrimonial home at Kennedy Town (“FMH”) was purchased and registered under the names of the husband and his mother.  But the parties only moved into the FMH in 2016.  Before that, the husband would stay with his parents at the Baguio Villa, whilst the wife would stay at a flat in Sheung Wan, which was and still is registered under the joint names of the wife, her father and brother (“the Hongway Garden Property”).

7.  According to the wife, after the parties returned from a trip to Jordan and Lebanon in February 2020, the husband suggested that due to the Covid-19 pandemic, the wife should move back temporarily to her former residence at the Hongway Garden Property.  After the move, the wife believed that the marriage was still harmonious as they still met regularly and had meals together.  As before, the husband would pay for the meals and provide funds for her living expenses.

8.  However, in August 2020, the husband suddenly told the wife that he intended to buy a yacht so that he could fulfil his long-time dream of sailing around the world. This came as a total surprise and while they entered into some discussion on the husband’s plan, the husband suddenly suggested a divorce.  When the wife suggested moving back to the FMH, the husband refused and even stopped providing any further financial support to the wife. 

9.  On 11 September 2020, the wife issued her petition for divorce based on behaviour, which was not defended.  On 5 February 2021, the wife issued her summons for MPS which was rigorously defended by the husband.  At the call over hearing, I adjourned the matter for paper disposal and at the same time, granted an interim maintenance order of $20,000 per month in favour of the wife.

The Law on MPS

10.  The Court’s power to grant a MPS order in favour of a spouse is governed by s.3 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”):

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

…..

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 may think reasonable.”

11.  In HJFG v KCY[1], Hartmann JA (as he then was), at paragraphs 37 and 38 of the judgment, gave a succinct summary of the law in this area by referring to the judgment of Mostyn QC, sitting then as a Deputy Judge of the High Court in England, in TL v ML [2006] 1 FLR 1263, 1289:

“37. The principles that have been 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 assumption 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 application for interim maintenance, when the amount to be paid is for a limited period only and not all 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.”

12.  Therefore, the overriding considerations for such applications are reasonableness and fairness.   In order to achieve these objectives, the Court has to balance the reasonable needs of the applicant and the ability to pay of the respondent on an interim basis: LJ v LWHH [2003] 3 HKC 455 at 461D.

13.  In undertaking this balancing exercise, the Court will adopt a broad brush approach, and not a detailed investigation of the financial positions of the parties.

14.  I do not think the above general principles are in dispute.

Issues

15.  As I see it, there are presently 3 distinct issues for the court’s consideration:

(1)  The reasonable needs of the wife.

(2)  The financial circumstances of the husband.

(3)  The financial circumstances of the wife.

The reasonable needs of the wife

16.  In her Form E, the wife set out her monthly expenses as follows:

My views

17.  For the rental payment of $17,000 per month, it is now the case of the wife that the Hongway Garden Property, though jointly registered under her name, is in fact owned beneficially by her father, who now requires her to pay a reasonable rent for its occupation.  There was even a home-made tenancy agreement signed to that effect.  However, I note that the parties’ relationship finally broke down sometime in late August 2020, and this tenancy suddenly came into effect on 1 September 2020.   The wife was and still is a joint owner of the property. Before and even during the marriage, the wife has lived in that property for quite some time and there was no need for her to pay any rent.  On these facts, I agree with the husband’s view that this so called tenancy appears to be artificial and disingenuous.  Hence, I am not minded to grant any rental provision, at least not at this interim stage.

18.  As for food and meals out of home, the wife is now claiming a total sum of $10,500 ($5,000 + $5,500 = $10,500) whilst the husband suggested $4,000 ($2,000 + $2,000 = $4,000).  Although I accept that the parties have not really lived an extravagant life during marriage, the sum for food as suggested by the husband is not realistic.  I think for an adult and by reference to the life style of the parties, the total food costs of the wife should be set at $9,000 per month ($4,500 + $4,500), averaging $300 per day.

19.  There was a dispute on the reasonable amount of household expenses incurred by the wife.  The wife asked for $5,750 whilst the husband only agreed to $2,000.  In this regard, I note that the wife is now residing alone.  I am of the view that a monthly sum of $3,000 is reasonable.

20.  There was also a dispute on the wife’s claim of $950 for sanitisers and masks.  I would allow a sum of $500.

21.  As for personal grooming, the wife asked for $4,500 whilst the husband only agreed to $300.  I think $4,500 is a bit on the high side and I would allow $3,000.

22.  As for holidays, the wife asked for $12,750.  It is quite clear that going for overseas holidays is quite unlikely in the near future due to the Covid-19 pandemic.  I am not prepared to allow any sum for holidays at this moment.

23.  The wife asked for $7,728 as insurance premia and $2,750 for hobby classes.  I think the wife has paid for the insurance for quite some time, and I am minded to allow that sum in full.   As to hobby classes, the claim of $2,750 is not unreasonable and I would allow them in full.

24.  Based on the above calculation, I would deduct a sum of $35,950 from the wife’s monthly budget.  In other words, I am of the view that the wife’s interim reasonable needs amount to $29,028 ($64,978 - $35,950 = $29,028), rounding up to $29,000 per month.

The financial circumstances of the husband

25.  The husband is aged 46.  According to him, he has been unemployed since 2007.  He is currently residing with his parents at the Baguio Villa.  As far as his assets are concerned, he stated in his Form E that he owned the following assets:

Landed Properties

Bank Accounts

Stocks and Bonds

MPF

Others

26.  As far as his income was concerned, the husband stated that his monthly income amounted to $16,115.20, comprising:

27.  As for his monthly expenses, he stated in his Form E that his monthly expenses amounted to $10,569.71:

Discussion

28.  If what the husband stated above were true, there is no doubt that he has to be living a rather frugal life.  Monthly outgoings at $10,569.71 per month (which has already included maintaining a car at $1,141.14) is just slightly better than someone on public assistance.  But that suggestion does not sit well with the life style of a person who would go for multiple leisure trips in a year with his spouse (just like the parties in this case), to exotic places like Jordan and Lebanon. That also does not sit well with the life style of a person who had planned a cruise in the US and a holidays at the Yellowstone National Park in the year of 2021, which was only cancelled due to the Covid pandemic.  Certainly, it would not be the life style of a person venturing to sail around the world in a catamaran (just like what the husband had proposed to do).  Therefore, the husband’s monthly expenses of $10,569.71, even if true, must only represents his lifestyle during the past year under the current public health crisis, but not representative of the parties’ life style during marriage. 

29.  In this regard, I note that the wife’s case is that the parties have actually lived, though not extravagantly, but a comfortable life style during marriage.  In assessing the parties’ living standard during marriage objectively, I note that the parties did live in a self-owned flat (though jointly with the husband’s mother), i.e. the FMH, without the need to pay any rent.  Each of them did have his/her own residence to stay when they were not living together at the FMH.  They ate out almost daily and went for multiple overseas trips either together or on their own annually.  Under these circumstances, I am prepared to accept that the parties must have lived at least a very reasonable life style during marriage as compared to most people in Hong Kong.  

30.  In maintaining this very reasonable life style, I think it is fair to say that both of them must have made their respective financial contribution.  There is little dispute that the husband might have contributed a little more financially, as he admitted that when they dined out together, usually it was him who would pay the bills.  The same applied to the FMH.  In other words, in order to keep this very reasonable life style, a heavier financial burden has fallen on the shoulders of the husband.  But it was equally true that the wife has also paid a not insubstantial part of the expenses.  For example, she was responsible for the upkeep of the Hongway Garden Property.  She paid for her own insurance premia, amounting to $7,728 per month.  She paid for her solo trips and even certain costs of the joint trips.  There is no evidence from her that the husband has paid her any regular maintenance, by cash or bank transfer.  In other words, she has to bear all those expenses by herself and there was no explanation on how she could have paid those expenses with her own meagre income of about $3,000 odd per month.  Therefore, I am satisfied that the wife must have received financial assistance from her family, most likely from her father.

31.  I think the same could be said of the husband.  It was the husband’s case that he had been unemployed since 2007.  That aspect of the husband’s evidence was not seriously challenged.  From the wife’s affidavit evidence, she accepted that the husband’s “effective retirement” was in January 2009.  And since “his retirement”, the husband has been involved in managing his parents’ financial affairs.  All these point to the conclusion that the husband did not have a high regular income, and might have to live on, at least to a certain extent, the generous support of his parents.   This is something that I have to bear in mind when I come to decide on the husband’s ability to pay the wife’s interim needs, pending a full investigation of the parties’ finances at the ancillary relief trial.

The financial circumstances of the wife

32.  The wife is now aged 42, but has been unemployed since 2012.  In her Form E, she stated that her only sources of income include monthly car park rental of $2,995 and ad hoc income from mystery shopper assignments at $459 per month.  Apart from these, she only received the following irregular income:

33.  As far as the wife’s assets were concerned, apart from her claim that she was entitled to 50% of the FMH (the value of which was stated to be assessed), she stated that she had:

34.  The financial circumstances of the wife were challenged by the husband on 2 main areas, firstly that she must have received financial support from her maiden family, and secondly that she must have understated her financial resources.

Financial support from the wife’s maiden family

35.  According to the husband, the wife came from a wealthy family.  Her father was an executive director and shareholder of a Hong Kong listed company.  Despite the fact that the wife has not had a regular job for quite some time, she was able to maintain a high level of financial independence.   It was submitted that the wife must have received substantial financial assistance from her father or otherwise, she would not be able to afford all those expenses.  It was alleged that during the parties’ marriage, the father would even provide cars and chauffeurs for the wife’s personal use.

36.  I have discussed this topic in paragraph 30 above and I have already come to the conclusion that the wife must have received financial assistance from her family, most likely from her father.  Up to now, I do not see any credible evidence on why such financial assistance should be suddenly withdrawn, except merely on the wife’s own words about her father’s other financial responsibilities.  Just like the father’s sudden demand for the wife’s payment of rent at $17,000 per month shortly after the parties’ separation, I think this is more likely to be a tactical move in trying to boost up the case of the wife’s MPS application.

Has the wife understated her financial resources?

37.  Ms. Choy for the husband has pointed out in her written submissions that they were at least 6 landed properties now registered under the name of the wife.  Apart from the CB Carpark which she admits to be beneficially owned by her (estimated value being $2,000,000), there were 5 other properties which she said were being held on trust for her father:

38.  As the registered owner of the above properties, the wife is presumed to be the beneficial owner and the burden is on her to prove otherwise.  The wife has so far put forward a case of trust (for her father) but it is still too early to see any concrete evidence to prove one way or the other.  Therefore, I am prepared, for the purpose of this MPS application, to proceed on the basis that she is the beneficial owner of the above properties.  Furthermore, even if I am wrong on this assumption (that the wife is the beneficial owner of the properties in paragraph 37 above) when further evidence surface later during the course of the proceedings, I am still satisfied of the following facts:

(1)     The wife’s father is a person of means.

(2)     The father has put a lot of trust on the wife, who has in return looked after many of his properties situated in various parts of the world.

(3)     Being such a filial daughter, there is no reason to believe that the father will suddenly cut off all his financial assistance to the wife.

Wife’s bank accounts

39.  Ms. Choy also submitted that the wife must have other sources of income than she is prepared to disclose.  In her submissions, the following questionable bank deposits were listed out:

Date	Deposit amount	Source
Wife’s Citic Bank
18.4.2020	HK$500,000	HSBC joint account with brother
20.4.2020	HK$100,000	HSBC joint account with brother
21.5.2020	HK$220,000	HSBC joint account with brother
22.5.2020	HK$170,000	Unknown
23.5.2020	HK$300,000	HSBC joint account with brother
17.6.2020	HK$314,080.57	Unknown
20.7.2020	HK$503,488.11	Unknown
24.7.2020	HK$99,943.04	Unknown
Wife’s Dah Sing Bank
24.7.2020	HK$500,000	Unknown
Total questionable deposits	HK$2,707,511.72

40.  According to Ms. Choy, there were a total of HK$1,120,000 deposits transferred from the HSBC account into her sole Citic Bank account.  If what she claimed was right, namely, that the HSBC account belonged to her father beneficially, then it only reinforced the husband’s case that the father had provided actual financial assistance to the wife.  As to the other unexplained deposits, they indicated that the wife might even have other undisclosed financial resources.

41.  On the other hand, there were also various questionable withdrawals:

Date	Withdrawal amount	Description
Wife’s Citic Bank
20.5.2020	HK$50,000	Local bank transfer
22.5.2020	HK$50,000	Local bank transfer
22.5.2020	HK$170,000	Remittance debit
22.5.2020	HK$170,000	Remittance debit
17.6.2020	HK$314,080.57	Remittance debit
21.7.2020	HK$50,000	Local bank debit
21.7.2020	HK$450,000	Remittance debit
22.7.2020	HK$50,000	Local bank transfer
23.7.2020	HK$53,430.15	Remittance debit
Total questionable withdrawals	HK$1,357,510.72

42.  Although Ms. Choy has labelled the above withdrawals as “unexplained withdrawals”, I think it is quite clear that at least one or two of those transactions are not totally “unexplained” in the sense that they could at least be traced back to the previous deposit entries.  For example, the remittance out of HK$314,080.57 on 17 June 2020 could be traced back to a deposit of a similar amount on the same date.  Obviously, what happened was that a sum of HK$314,080.57 was deposited into the wife’s Citic Bank account on 17 June 2020, and on the same date, she remitted the said sum out of her account.  However, the source of that first deposit was not readily apparent in any of the wife’s affirmations or Form E.    

43.  I think it is fair to say that there were no clear explanations on the sources of the above deposits, nor the destinations of the withdrawals and remittances.  In considering those bank account entries, I have to take into account that within a relatively short period of time (for about 3 months from April to July 2020), which was a time shortly before the wife issued her petition for divorce (on 11 September 2020), quite a number of deposits and withdrawals were transacted in the wife’s bank accounts. During that short period, a total sum of HK$2,707,511.72 was deposited into the wife’s bank accounts and HK$1,357,510.72 was transferred or remitted out.  On 29 April 2020, there was still a sum of HK$1,391,100.76 in the wife’s Citic Bank account.  But by 31 July 2020, that was about 6 weeks before she issued her petition for divorce, the sum has dwindled to HK$7,973.62.  There was no explanation on the depletion of that HK$1.39 million from her Citic Bank account.  In the absence of a reasonable explanation, the inference to be drawn is that she must have transferred the sum somewhere, either locally or overseas, the whereabouts of which have not been properly disclosed.  Under these circumstances, I am afraid that I could only proceed on the basis that the wife is still in possession of that sum of HK$1.39 million. 

44.  To be fair to the wife, I think a constant theme in her evidence is that a large chunk of the assets under her name actually belongs to her father beneficially.   Therefore, there may be an argument that even if there is really a balance of HK$1.39 million with the wife, that is also her father’s money.  Be that as it may, I have already ruled that the father was a man of means and there was no reason why he would not continue his financial support to the wife in the near future. Therefore, even if that balance of HK$1.39 million really belongs to the father (on which I still fail to see the evidence), I am satisfied that such financial resource is still available to the wife, at least to cover some of her immediate needs, including the needs of legal representation, pending the final resolution of the parties’ financial dispute in these proceedings.  Therefore, the wife’s application for legal costs provision must fail and I will say no more on that.

Summary of findings

45.  Based on the above discussion, I am satisfied with the following facts at this interim stage:

(1)   The wife has a small income of about HK$3,000 per month, mainly from the rental of the CB Carpark.

(2)   The interim reasonable needs of the wife amount to HK$29,000 per month.

(3)   The wife has received financial assistance from her father in the past to support her very reasonable standard of living and there is no reason for that assistance to be discontinued.

(4)   Prima facie, the wife owns at least 6 properties with total value of over HK$9,000,000.

(5)   There is at least HK$1.39 million, in addition to the sum of HK$485,311 (HK$ 388,452 + HK$96,859 = HK$485,311) in the wife’s possession.

(6)   The husband has a monthly income of about HK$16,000.

(7)   The husband’s total monthly expenses amount to about HK$11,000, but this only reflects the present standard of living under the Covid pandemic.

(8)   The husband owns various assets at HK$8,400,000 out of which about HK$4,200,000 is in the form of cash, shares and bonds.

(9)   The parties have lived a very reasonable standard of living during marriage in which they lived in a privately owned FMH; each of them had their own private accommodation if not living in the FMH; they would dine out frequently though not daily; they would go for multiple leisure trips in a year, either jointly or on their own.

(10)   During the marriage, the husband has paid a bigger share of the family expenses and overseas trips expenses.  He would also pay most of the dining out costs.

Conclusions and Orders

46.  Based on the above findings, I am satisfied that the application for legal costs provision has to be dismissed as I am satisfied that the wife is holding substantial amount of assets, including cash in bank, and there is no reason to believe the past financial assistance given by her father is likely to be discontinued.  I have thought of dismissing her application for interim maintenance as well but at the end of the day, I have decided to exercise my discretion to continue the present interim maintenance order of HK$20,000 per month.  I come to this decision because:

(1)   Although at this interim stage, I am satisfied that the wife is holding valuable assets and is still receiving financial support from her father, whether she is holding those properties on trust for her father is still subject to dispute.

(2)   An interim maintenance of HK$20,000 per month, though could not fully cover the wife’s interim reasonable expenses, would at least cater for most of her interim needs, especially with the fact that she could live in the Hongway Garden Property rent free.

(3)   The husband is holding liquid or easily convertible assets in the sum of HK$4,200,000.  A monthly sum of HK$20,000 is easily affordable to him.  Any overpayment could be easily adjusted in the final ancillary relief order.

(4)   There is ample evidence to suggest that the husband must have maintained the wife financially at least to a certain extent during marriage. There is no dispute that he had paid the bigger share of the family expenses and overseas trips. He had paid most, if not all of their dining out costs. All these point to the ordering of a small sum of maintenance to the wife, at least at this interim stage, to be a reasonable measure pending the final resolution of the parties’ ancillary relief claims.   

47.  I hereby order the husband to continue to pay MPS to the wife at the rate of HK$20,000 per month on the 1^st day of every month starting from 1 July 2021 until further order of the court.

Costs

48.  Although a MPS order was granted in favour of the wife, I have reservation on whether she could be regarded as the winner of this application.  I note that many of her claims were not accepted by this court and it did occur to me that I might have to consider an adverse costs order against her.  However, I note that there might still be a lot of factual disputes, especially on the beneficial ownership of certain properties, which could only be resolved later in the litigation. This, coupled with the fact that I have decided to continue the interim maintenance order at HK$20,000, I think a fair order to be made is that the costs of the MPS application, including costs reserved, to be in the cause of the ancillary relief applications.  This will be in the form of an order nisi, to be made absolute after the expiry of 14 days from the handing down of this judgment.

Representation:

[1] [2012] 1 HKLRD 95