YKCF v. BPM

FCMC 7911 / 2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 7911 OF 2010

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BETWEEN

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JUDGMENT
(Maintenance pending suit)

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Introduction

1.  This is an application by a Petitioner wife for maintenance pending suit pursuant to s. 3 Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO).  The wife also seeks provision for the child of the family, a little boy now aged 8 years old.

2.  The main issue to be determined by the court is whether or not the maintenance pending suit/interim maintenance should be paid by the husband directly or whether part should be deducted from a lump sum paid by the husband to the wife around about the time of the separation. The parties are largely in agreement with respect to the amounts to be paid. The wife also asks that maintenance payments be backdated.

Background

3.  The parties married in February 2002 and separated in September 2009. They have one son A, who is 8 years old and presently studying at a College in Discovery Bay. The husband is a 44 year old businessman of European descent with an interest in a number of small limited companies. The wife is a 45 year old housewife allegedly with a background in film production. She is Asian and is presently not working. 

4.  In June 2010 the wife issued proceedings originally based on the husband’s unreasonable behaviour. I have noted that the original petition contained some unusually aggressive particulars, given the fact that it does not appear to be in dispute that the husband had formed a relationship with a third party. Sensibly this petition was later amended and the matter has since proceeded on the basis of adultery. The decree nisi was pronounced on the 5 November 2010.

5.  It seems that the original divorce petition set the matter on a more litigious path and led to a number of allegations being made by one party against the other.  

6.  This had not always been the case. Immediately post separation and prior to the petition being issued the husband had continued to support the wife and A in much the same manner as he had during the marriage. Some payments were made directly by the husband for and on behalf of the wife and A either by direct debit or by the provision of pre signed cheques. The husband also paid the wife a “salary” of US$3,250 through his company. Since July 2010, although some payments continued to be made direct, the husband reduced the cash payment to the wife to HK$10,000 per month. She no longer received a “salary”. It also seems that payment for holidays became a particular bone of contention. There also appear to have been some difficulties over access.  

7.  Notwithstanding these difficulties the parties entered into fairly extensive negotiations and it was eventually agreed in correspondence that the husband would pay the wife a cash sum of HK$39,700 per month for expenses not covered by his undertakings. Counsel for the husband helpfully prepared a table setting out each party’s respective positions as follows:

Direct Payment	Respondent	Petitioner
Item	Amount (HK$)
Utilities (electricity, gas, rates, telephone & water)	3,600.00	Agreed
Management fees	1,850.00	Agreed
Rental for golf cart	7,600.00	Agreed
Insurance premia	280.00	Agreed
Domestic helper	5,800.00	Cash to P instead
School fees	7,250.00	Agreed
Transport to school (including school bus)*	700.00	Agreed
Total	27,080.00	21,280
Cash (To be deducted from the USD300,000)
Item	Amount (HK$)
Food	7,500.00	Agreed
Household expenses	2,500.00	1.         Additional 1,070 for internet, mobile and TV 2.         Domestic helper 5,800 paid in Cash
Car expenses	600.00	Agreed
Club DB, repair, SCMP	3,800.00	Agreed
For the Petitioner’s personal expenses:
Meals out of home	3,000.00	Agreed
Transport	1,500.00	Agreed
Clothing / Shoes	2,000.00	Agreed
Personal grooming (including haircut and cosmetics)	2,500.00	Agreed
Entertainment / presents	2,000.00	Agreed
Holiday	4,500.00	Agreed
Alternative medical treatments	1,000.00	Agreed
For A:
School books and stationery	700.00	Agreed
Alternative medical treatments	1,000.00	Agreed
Entertainment / presents	1,000.00	Agreed
Holidays	2,500.00	Agreed
Clothing / Shoes	1,000.00	Agreed
Lunches and pocket money	500.00	Agreed
Other Transport	300.00	Agreed
Uniform	300.00	Agreed
Others	1,500.00	Agreed
Total	39,700.00	46,570
Reimbursements
Item	Anticipated Amount (HK$)
Insurance for A	1,720.00	To be settled by pre-signed cheques
Tuition fees and extra curricular activities	10,086.00
Psychologist	5,600.00
Health Insurance (57,862/12)	5,000.00
Total expected monthly reimbursements	22,406.00

8.  As can be seen there were some minor disagreements about how the domestic helpers salary should be paid and payment of an additional HK$1,070 for the internet, mobile and TV costs. The wife also asked that the husband provide pre signed cheques as he had done previously in order to cover some other additional expenses. In the overall scheme of things these disagreements are extraordinarily minor and should have been settled between the parties without the involvement of the court.

9.  During the hearing counsel for the husband confirmed that the husband was willing to undertake as follows:

The Respondent will undertake upon presentation of the relevant bills to pay the reimbursable amounts for A’s insurance, tuition fees and extracurricular activities, psychologists fees and medical bills within 7 days of presentation.

Further he will undertake to pay directly the utility bills (on the former matrimonial home) i.e. electricity, gas, rates telephone and water, management fees, rental for the golf cart, insurance premia, school fees and school bus fees.   

10.  The husband however now insists that the cash payment of HK$39,700 be deducted from the sum of US$300,000 that he transferred to the wife in two tranches, i.e. US$100,000 in August 2009 and US$200,000 in September 2009. The wife maintains that this is capital and as such should be included in the schedule of assets to be divided between the parties either by agreement or court order on a final determination of ancillary relief.

The law   

Maintenance pending suit

11.  The ordinance states that the only governing principle is that the court shall make such order, as it considers reasonable in all the circumstances of the case. (See s. 3 MPPO Cap. 192). 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.

what really matters is the immediate and reasonable requirements of the wife balanced against the ability of the husband to pay for them, assessed using a broad-brush approach. (See also paragraphs 16.17 of Rayden, 18^th edition).

Further

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 …… Any under provision or over provision in the order for maintenance pending suit can always be corrected when the account comes to be taken at the substantive hearing when there are every opportunity to do fairness by set off ……”

(Ref paragraphs 16.18 of Rayden, 18^th edition).

The Evidence

12.  I must now turn to consider the issues, the law, and the parties’ evidence as set out in their Form E’s and the affirmations filed together with the submissions made by their lawyers.

Discussion

How should the issue of the domestic helper’s salary, the additional monies for the household expenses, payment for holidays and the provision of cheques be resolved?

Domestic helper’s salary

13.  As I have said these are minor issues that should have been resolved by the parties themselves without recourse to the courts. The husband has been paying the wife’s domestic helper direct in cash. He proposes that this continue. The wife complains that payment is often late. She also wishes to have some control and to reimburse herself in the event that she advances cash to the domestic helper or the helper takes unpaid leave.

14.  In the circumstances it seems to me that given that there have been difficulties that common sense would dictate that payment be made to the wife as part of her cash payment and that she be responsible for paying the domestic helper. An undertaking by the wife to pay the domestic helper should be included in the court order.

Household expenses

15.  The wife seeks an additional HK$1,070 per month being the cost of the telephone, mobile and the internet. In the scheme of things this is a very small amount. I will include an additional HK$500 in the cash sum to cover these items.

Holidays

16.  Mrs Casewell submits that the offer on maintenance does not include provision for holidays. However it is clear from the letters that have passed between the parties that provision for holidays is included. (Please see the schedule above).  In total HK$7,000 per month is allowed for holidays. It seems to me that this should be sufficient especially as going forward it is likely that school holidays will be shared between the parties in some way. 

Cheques

17.  I should add that the wife was also asking that the husband provide her with pre signed cheques, as he had done in the past, in order to cover some of the expenses. The husband was unwilling to provide the cheques and in the absence of an agreement it seemed to me that I am not in a position to make such an order. These items are referred to above under the heading of ‘Reimbursements”. Given the husband’s undertaking in relation to these items it seems to me that they have been satisfactorily dealt with. I do not intend to take that matter any further.

Should the husband pay the wife the cash sum directly or should it be deducted from the US$300,000?

18.  The husband argues that there has been a change of circumstance since June 2010 and that consequently it would now be appropriate for the wife to utilize the funds that he transferred to her around about the time of the separation  in order to help support both herself and A in the short term. He says that the monies were transferred to the wife in order

“to ensure that the Petitioner and A would not lack for anything in the short term...” (Counsel’s skeleton submission)

19.  In particular the husband relies on the fact that his sister had lent him a large sum of money in May 2002 in order to assist him in business. In December 2010 the sister issued a writ claiming inter alia the return of HK$21 million. The husband proposes to deal with this by paying his sister an initial sum of HK$5 million followed by monthly repayments of HK$180,000 per month. Consequently he claims not to be able to afford to pay the wife the maintenance that she now seeks, although he acknowledges that these sums are reasonable and in keeping with the standard of living previously enjoyed by the parties and perhaps more importantly the standard of living previously enjoyed by A. 

20.  The difficulty with the husband’s case is that it appears contrived.  I have now had an opportunity to peruse the open correspondence between the parties, which began over 6 months ago on the 20 September 2010. In the letter of the 15 October 2010 the husband sets out his proposals on maintenance. Other correspondence follows. It is not until the 5 November, when matters had to a large extent been agreed, that the husband states for the first time that the cash payments are to be deducted from the US$300,000.

We are further instructed that being a responsible husband and father, our client had paid your client a total sum of USD300,000.00 shortly before and after the separation (HSD100,000.00 on 4^th August 2009 and USD200,000.00 on 24^th September 2009) to ensure that your client and A would not lack anything.  Upon your client’s acceptance of our client’s revised proposal, a monthly sum of HK$39,100.00 (being HK$13,800.00 for household expenses, HK$16,500.00 for your client’s personal spending and HK$8,800.00 for A) should be deducted from the said USD300,000.00, on top of which our client will settle other payments and reimbursements direct as set out above.

21.  There is no reference in that letter to a loan. This position is restated on the 10 December 2010 as follows:

We reiterate that upon your client’s acceptance of our client’s proposal, a monthly sum of HK$39,100.00 should be deducted from the sum of USD300,000.00 paid by our client to yours shortly before and after separation, on top of which our client will settle other payments and reimbursements direct.  As the said sum of USD300,000.00 is apparently still far from being exhausted, we fail to see any imminent need to your client to claim interim maintenance at this stage.

And again on the 11 February 2011:

In respect of the “HK$300,000.00” referred to in your said letter, which we presume should be a reference to the USD300,000.00 paid by our client to yours shortly before and after the parties’ separation, we are instructed to reiterate that the sum was paid by our client to yours to cater the needs of A and your client after our client moved out.

22.  Again there is no reference to the loan. It seems rather that the husband is relying simply on the fact that he paid the sum of US$300,000 to the wife and that because of that he sees no imminent need for the wife to claim interim maintenance. He seems to arguing that the US$300,000 is a form of advance maintenance payment.

23.  The difficulty with that is that there is no evidence that the husband conveyed this to the wife at the time. Infact in an email on the 3 September 2010 the wife asks what the US$100,000 is for and why. The husband simply replies

For you J. 

24.  Given that I do not accept that it is appropriate for the cash payments to be deducted at source from the sum of US$300,000 on the basis that this was somehow some form of an advance maintenance payment as I do not accept that this is infact what the money was intended for. Even if the husband has intended that to be the case, he did not communicate this adequately to the wife.   

25.  In so far as the husband’s “change of circumstance argument” is concerned, it has to be said that this has come about very late in the day. The husband filed an affidavit on the morning of the hearing in which he claimed for the first time that he was not in a position to pay the maintenance claimed because he could not afford to do so. He refers to a loan taken out on the 7 May 2002 for EUR10 million. This is the sum that he says he initially borrowed from his sister. He produces an undated and unsigned document as evidence of that loan. This is wholly unacceptable. A properly attested document will need to be produced in due course. For the avoidance of doubt I do not accept that document as evidence of the loan. In addition he refers to a second amount in the sum of US1 million which his sister apparently gifted to him.

26.  The husband then refers to a writ issued by his sister and the repayment schedule that he has allegedly entered into. At the time that the husband did this, he was aware of his financial obligations to his wife and his son. Any agreement that he entered into should have been done with this in mind.  During the hearing counsel for the husband produced copies of other letters as evidence that the wife was aware of the loan and the demand for repayment. In particular I was referred to a letter dated the 17 December 2010 in which the husband’s solicitors informed the wife that the sum of HK$30,486,301.64 had been repaid by the husband to his sister. It is worth noting that at no point is there any suggestion made in this correspondence, or indeed any other, that the husband would not be able to fulfil his maintenance obligations because of the loan.

27.  All in all I accept that historically maintenance was never really an issue and to put it at its lowest, it now seems very odd indeed and strangely coincidental that the husband is allegedly unable to pay. Clearly the husband has some financial resources at his disposal, including on his case HK$1 million that he has put aside for legal fees. Given that I will order that he make the payments directly to the wife.

Conclusion

28.  On the basis that the husband has entered into undertakings as set out above, I will order that the husband to pay the wife HK$46,000 per month in total – HK$26,850 per month for the wife commencing on the 1 April 2011 and HK$19,150 per month for A commencing on the 1 April 2011. 

Back payment of maintenance

29.  The wife asks that the maintenance be backdated to July 2010. She also asks that the US$300,000 be taken into account on final ancillary relief. It is not clear what funds she has utilized in the short term in order to support herself and A. The husband complains of overspending on credit cards and there have been other ad hoc payments for holidays and other items. These matters will all need to be looked at by the court if agreement cannot be reached in the meantime. In the circumstances I am not minded to order that the maintenance be backdated.

Costs

30.  Given that the wife really had no option but to make this application, notwithstanding the fact that I have not made an order precisely in the terms sought by the wife, I will nevertheless make an order nisi that the husband shall pay 50% of the wife’s cost on a party and party basis to be taxed if not agreed, such order to be made absolute in 14 days time. There shall be certificate for counsel.