TKY v. YSGA

CACV 170/2024 [2024] HKCA 1197

On appeal from [2023] HKFC 181

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 170 OF 2024

(ON APPEAL FROM FCMC 2208 OF 2023 formerly FCMC 903 OF 2022)

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JUDGMENT

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The Court:

A.  INTRODUCTION

1.  This is an interlocutory appeal by a husband against an order that he makes legal costs provision for his wife in their matrimonial proceedings which are ongoing in the Family Court.

2.  The husband (the respondent) and wife (the petitioner) will be referred to herein as “H” and “W”.

3.  On 7 September 2023, His Honour Judge C K Chan (“Judge”), sitting as the Principal Judge of the Family Court, handed down a judgment[1] (“Judgment”) and ordered that:

(1)  H shall pay a monthly sum of HK$28,000 to W as the children’s interim maintenance, i.e. HK$14,000 per child, payable on the 1^st day of every month, starting from 1 December 2022, until further order (“IM Order”); and

(2)  H shall pay maintenance pending suit by way of legal costs provision in the sum of HK$1,200,000 payable by 12 monthly instalments of HK$100,000 each on the 1^st day of every month starting from 1 October 2023 with the last instalment ending on 1 September 2024 (“LCP Order”).

4.  H sought leave to appeal against the LCP Order, but not the IM Order. H’s application was refused by the Judge on 12 December 2023 (the “Leave Decision”)[2].

5.  On 27 December 2023, H renewed his application for leave to appeal before this Court and also applied for a stay of execution of the LCP Order[3]. H further applied for leave to adduce fresh evidence if leave to appeal was to be granted. W did not lodge any statement of opposition to the application. On 26 April 2024, this Court granted H leave to appeal on two of the four grounds of appeal set out in his draft notice of appeal. The LCP Order was ordered to be stayed upon H issuing the notice of appeal and H’s application for fresh evidence was reserved to be determined together with the appeal.

6.  The fresh evidence that H sought leave to adduce consists of:

(1)  A letter dated 25 August 2023 from W’s solicitors to H’s solicitors regarding (i) the ICBC bank account held in W’s name (“ICBC Account”) for servicing payments in relation to a property referred to as the Yik Yum Property in the Judgment, disclosing W had withdrawn a sum of HK$200,000 from it in September/October 2022 to meet her legal costs, and (ii) W’s proposal to sell the Yik Yum Property and that the net sale proceeds be kept by her pending the determination of the ancillary relief proceedings; together with a reply letter dated 29 August 2023 from H’s solicitors enclosing for W’s signature an undertaking of non-disposal/dissipation and/or dilution of the Yik Yum Property and the ICBC Account;

(2)  A letter dated 14 September 2023 from H’s parents to H refusing his request for a loan to pay for W’s legal costs provision.

B.  BRIEF BACKGROUND

7.  The parties were married in January 2018. On 31 January 2022, W issued a petition for divorce based on H’s unreasonable behaviour under FCMC 903/2022. The duration of the marriage was about 4 years.

8.  According to H’s Form E, he moved out from the matrimonial home at Marinella, Wong Chuk Hang (“Marinella Property”) on about 26 April 2022.

9.  Subsequently, a fresh petition was issued by W under FCMC 2208/2023 on 2 March 2023 based on the parties’ separation for one year with H’s consent. On 15 June 2023, a decree nisi of divorce was granted. The parties have two children, both girls, born respectively in November 2018 and March 2020. They are now 6 and 4 respectively and they have continued to live with W at the Marinella Property.

10.  W was born in July 1981 and H was born in February 1982. W is now 43 years old and H is 42 years old.

11.  W is a certified accountant and a partner of a reputable international accountants’ firm where she has worked for over 17 years. As found by the Judge, W’s total monthly income was HK$160,000. According to W’s Form E of 27 May 2022, she had assets of a net value of HK$13,145,000 as at that date, of which HK$ 12,880,000 was the net value of Yik Yum Property which was purchased on 20 March 2019 with a mortgage loan and registered in W’s sole name. W’s latest case is that she owns 60% of the beneficial ownership of Yik Yum Property[4].

12.  As for H, according to his Form E of 26 May 2022, he was actively involved in a company owned by his parents (“RCL”) until around 2015 and thereafter, he had minimal personal involvement and was only receiving a monthly income of HK$ 19,570 from RCL. H set up a real estate consultancy company (“AREC”) on about 1 April 2022. AREC is 100% owned by H who has been the sole director since. H also disclosed his shareholding of 22.5% in another company (“AUE”) and his directorship in a corporate consultants company (“BTCC”). The only shareholder of BTCC is a BVI company (“AGL”), which together with H have been the only two directors of BTCC.

13.  In his Form E, H disclosed he has net assets of HK$2,866,382.70 plus the value of his pensions to be confirmed. Of this, according to H, his beneficial interest in the Yik Yum Property was 30% and the net value was HK$1,721,400. H’s case is that W had no beneficial interests in Yik Yum Property and the rest of the 70% was owned by four other unrelated individuals.

14.  On 28 November 2022, W issued a summons for maintenance pending suit/interim maintenance (“W’s Summons”). She sought: (i) interim maintenance for the children in the sum of HK$164,800 per month; and (ii) legal costs provision (“LCP”) for herself in the amount of HK$158,800 per month from 31 January 2022 to 31 October 2022, HK$163,893 per month from 1 November 2022 until the Financial Dispute Resolution (“FDR”) hearing or further order, and thereafter an amount to be determined by the Court for the remaining period of the proceedings[5].

15.  W later revised the amount of LCP sought to HK$158,000 per month from January 2022 to October 2022, and HK$203,733 or HK$173,200 per month (depending on whether senior counsel was to be engaged) from November 2022 to January 2024, which was then the estimated date of FDR[6].

16.  W’s Summons eventually led to the Judgment, the IM Order and the LPC Order.

C.  THE PROPER APPROACH

17.  The court’s power to order periodical payments for maintenance for children, including interim maintenance, is under section 5 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”) whereas the court’s power to order maintenance pending suit for a spouse is under section 3 of the MPPO.

18.  Section 7 of MPPO sets out those matters which the court is obliged to have regard to in exercising its powers to make orders under sections 4, 5 and 6, with section 7(2) applies in particular to section 5. However, section 7 does not apply to section 3, which provides that the court may make such order for maintenance pending suit for a party to the marriage as the court thinks reasonable, subject only to the term which will end on the determination of the suit, namely upon the making of a decree absolute in the case of a divorce, and thereafter, the power of the court to order periodical payments for a party to the marriage under section 4 of MPPO.

19.  The guiding legal principles in relation to maintenance pending suit for a spouse under section 3 of MPPO have been set out in HJFG v KCY (Maintenance Pending Suit) [2012] HKFLR 27. It is not necessary to repeat them here, save to highlight Hartmann JA’s observation that the principles that have emerged over time to guide judges in matters of interim maintenance have been fashioned in the main to ensure fairness[7]. His Lordship also referred to TL v ML & Ors (Ancillary Relief: Claim against Assets of Extended Family)[8], which held that where the affidavit or Form E disclosure by the payer was obviously deficient, the court should not hesitate to make robust assumptions about the payer’s ability to pay, and the court would not be confined to the mere say-so of the payer as to the extent of his income or resources and in such a situation, the court should err in favour of the payee. Further, in determining what is or is not reasonable, some analysis is always required, which can be conducted on a “broad-brush” basis.

20.  As seen in HJFG, it is no longer disputed that section 3 of MPPO is wide enough to empower the Court to include an element towards a party’s legal costs in an order for maintenance pending suit[9]. It was also pointed out that the principles articulated by Wilson LJ in Currey v Currey [2007] 1 FLR 946 should in future be adopted as providing prudent guidance to both judges and practitioners in Hong Kong, although section 3 still requires the court to be satisfied that any contribution towards the applicant’s on-going legal costs is reasonable[10]. It was further held that any provision for legal fees should initially be made until the FDR in the interests of finding a settlement at that hearing.[11] We will return to the principles in Currey v Currey in the latter part of this judgment.

21.  Suffice to say at this stage, although the considerations for an application for legal costs provision may be different from those for an interim maintenance application for children, they are both interim in nature and in determining what is reasonable or fair on a “broad brush” basis, the court should adopt a holistic approach that have regard to all the circumstances of the case , particularly where the interim maintenance order for the children will have an impact on a spouse’s available cash and his/her ability to meet his/her own legal costs.

22.  In the present case, under the IM Order, H would be paying less for the interim maintenance for the children, as compared to what was paying prior to the IM Order. Under an earlier order made on 5 December 2022, H had undertaken to continue paying for the educational expenses of the children and he was ordered to pay interim maintenance of HK$31,000 per month from January 2023 onwards. According to H’s 7^th Affirmation, he had been paying the sum of HK$31,000 per month to W since 1 January 2023 onwards plus various expenses of HK$22,600 per month. H also stated[12] that he agreed to pay half of the children’s share of monthly rent in the sum of HK$15,500, their monthly school fees of HK$35,000, together with other monthly expenses of about HK$22,600, making a monthly total of HK$73,100.

23.  Yet, under the IM Order, H was only ordered to pay HK$28,000 as monthly interim maintenance for the children in addition to his undertaking to continue paying for their educational expenses, which was less than what was ordered under the 5 December 2022 order and some HK$10,000 less than what he was paying per month prior to the IM Order. We appreciate that W’s Summons was dealt with on papers, and that H was seeking a dismissal of W’s Summons[13] without perhaps making it quite clear as to what exactly he was agreeing to pay. Notwithstanding this, H ought to have been asked to clarify on this in light of what he had been paying prior to maintain the children. Further, the Judge’s reason for varying the earlier order was not apparent from the Judgment.

D.  DRAFT GROUNDS (1) AND (2) IN H’S RENEWED APPLICATION FOR LEAVE TO APPEAL

26.  In his renewed application for leave made to this Court, H had put forward four draft grounds of appeal. The first two grounds were in relation to (1) financial assistance from H’s family, and (2) H’ ability to pay. We did not grant leave for these grounds to be argued in the appeal as they are unarguable.

27.  On the issue of financial assistance from his family, H relied on KEWS v NCHC[14] and argued that the concept of “judicious encouragement” of third parties to satisfy a spouse’s liability under section 3 of MPPO had been explicitly rejected. However, CJ Ma had reiterated[15] that in assessing the financial resources of the parties to a marriage for the purposes of considering an application for ancillary relief under section 4 of the MPPO, the court was only guided by section 7(1), and in particular sub-paragraph (a). In fact, the Court of Final Appeal dismissed the husband’s appeal in KEWS and held, amongst other things, that the width and wording of section 7 (1)(a) included financial assistance made by third parties to the parties of a marriage and accordingly this could be taken into account in the computation of that party’s overall financial resources. In every case where financial assistance from third party was involved, the two critical evidential question for the court were: (1) the extent of the financial assistance provided by the third party to the husband or wife; and (2) the likelihood of such assistance continuing in the foreseeable future. It was further held that the court had 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. As to what might occur in the foreseeable future, it was pointed out that past conduct was often a useful guide.

28.  In KEWS, the court was concerned with an application by the wife for ancillary relief under section 4 of MPPO and the orders made thereunder. In MCYP v CWYW[16], a renewed application for leave to appeal against a decision on a maintenance pending suit application, this Court referred to Jackson’s Matrimonial Finance (10^th ed) at §3.103, and held that the ability to touch resources from which payments could be made was a relevant consideration.

29.  We do not see KEWS as deciding or indicating that availability of financial assistance from third parties is not a relevant consideration in 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.

30.  The Judge came to the view at that interim stage that H had received and was still receiving financial support[17] as he was provided with luxurious accommodation rent free and had in the past received loans from his mother. The Judge’s view of H’s ability to pay and his financial resources was based on past financial assistance that H had received from his parents and/or financial resources that he had. It was W’s evidence that the financial assistance given by H’s parents since 2018 amounted to HK$19.5m[18]. In our view, the Judge was entitled to make the assumptions and analyses on a “broad–brush basis”.

31.  In relation to H’s complaint that the Judge, in assessing his ability to pay the legal costs provision, had erred by concluding that he had HK$3,100,000 cash in bank when his evidence was that this was exhausted by the time of the Judgment. However, all H said at [25] of his 7^th affirmation was he had outstanding debts of over HK$3 million and that he understood running a new business had its risk and he anticipated the HK$ 3.5m from the sale of the Greenview Property (which, on his case, he had a 30% beneficial share) would be able to cover the family expenses for some 2 to 3 years but unfortunately this sum had already run out as a result of these proceedings. H had produced no supporting evidence as to how the sum of HKD 3.1m had run out over a period of some 11 months. His complaint is not made out on the evidence.

32.  He also sought to rely on his parents’ letter dated 14 September 2023 as fresh evidence, contending that the letter only came into existence after the Judgment. The financial assistance from H’s family including loans from H’s family was all along one of the major issues in dispute. W’s Summons was issued on 28 November 2022. The evidence does not show that despite reasonable efforts H would not be able to ascertain his parents’ intention when opposing W’s Summons. H’s parents’ letter plainly fails at the first condition of the Ladd v Marshall rule.

33.  For these reasons, we had declined to grant leave to appeal on the first two grounds in the draft notice of appeal. For the reasons set out above, we also refuse leave to H to adduce his parents’ letter of 14 September 2023 as fresh evidence in the appeal.

E.  OUR REASONS FOR DECISION IN THE APPEAL

E.1  The grounds of appeal

34.  The grounds of appeal which H is given leave to argue are:

(1)  The Judge erred in awarding litigation funding to W in circumstances where W had financial resources of her own to meet her legal costs and W’s non-disclosure as to her means and ability to pay her legal fees were not satisfactorily addressed (“Ground (1)”).

(2)  The liability for and quantum of the LCP Order was disproportionate in view of (i) this being a short marriage of four years; (ii) the insubstantial joint marital acquests, this not being a “big money” case; and (iii) H’s earning capacity even in his good years being substantially less than W’s, W’s being HK$160,000 and H’s being HK$85,000 per month (“Ground (2)”).

E.2   The Currey principles

35.  As mentioned earlier, the guiding principles on legal costs provisions are those laid down in Currey v Currey, which have been approved and adopted by this Court in HJFG. The burden is on the applicant payee to satisfy the court that the payer should be ordered to pay a legal costs provision by way of maintenance pending suit to the payee.

36.  The initial overarching inquiry is whether the applicant can demonstrate that he/she cannot reasonably procure legal advice and representation by any means. The applicant has to demonstrate to the satisfaction of the Court that[19]:

(1)  Any assets that the applicant has cannot reasonably be deployed, whether directly or as the means of raising a loan, for funding legal services;

(2)  The applicant cannot reasonably procure legal services by the offer of a charge upon ultimate capital recovered;

(3)  There is no such public funding available to the applicant as would furnish him/her with legal advice and representation at a level of expertise appropriate to the proceedings.

37.  The Judge had cited[20] H v H (Interim Maintenance)[21], in which HH Judge Bruno Chan when referring to Currey v Currey seemed to suggest that it had laid down “fairly stringent conditions”. However, it is important not to lose sight of what was also said by Wilson LJ at [21], in particular,

“Although in making a costs allowance the court has a discretion, I cannot imagine that it would be reasonable to exercise it unless the applicant had thus duly demonstrated that [the applicant] could not reasonably procure legal advice and representation by any other means. That, I venture to suggest, is, in effect and as a matter of common sense, a necessary condition of making an allowance. But I certainly do not consider that it will always be a sufficient condition…”

38.  The three matters identified (see [36] above) are clearly not exhaustive. The subject-matter of the proceedings is always a relevant consideration; insofar as it can safely be assessed at the junction of the application, the reasonableness of the applicant’s stance in the proceedings will also be relevant, and so also will a variety of other features[22]. With these principles in mind, we turn to consider the Judges’ decision and H’s grounds of appeal.

E.3  The Judge’s reasons

39.  W’s Summons sought LCP in the amount of HK$158,800 per month from 31 January 2022 to 31 October 2022, HK$163,894 per month from 1 November 2022 until the FDR hearing or further order. In her counsel’s skeleton submissions before the Judge, W’s claim was revised to:

(1)  HK$158,000 from January 2022 to October 2022; and

(2)  HK$203,733 (if senior counsel was to be engaged) or HK$173,200 (if only junior counsel was engaged) per month from November 2022 to January 2024 (which was the estimated date of the FDR hearing).

40.  In his Judgment, the Judge had regard to the relevant legal principles. He had in the context of discussing the children’s interim maintenance application, set out W’s assets as disclosed in her Form E[23]. Apart from the beneficial interest that she claimed to have in the Yik Yum Property, W’s assets consisted of: (i) cash of HK$260,000, (ii) stocks valued at HK$330,000. At the same time, she had liabilities in the amount of HK$960,000. The Judge pointed out that W’s Form E was filed more than a year ago, and there was no update in her supporting affirmations, except the reference to loans owed to her cousin in the amount of HK$350,000 which she said was inadvertently omitted from the Form E. The Judge concluded that at this interim stage, he was satisfied that W did not have any immediately realisable assets that she could deploy to cover her monthly expenses and legal costs in the interim.

41.  The Judge had also discussed H’s ability to pay and his financial resources and the quantum. He considered H’s main objection was that the amount of the LCP claimed by W was totally out of proportion, and pointed out that while W’s total costs was HK$4,030,400, H’s costs was in the region of HK$3,400,000, and that both parties’ costs were disproportionate[24]. He went on to say[25]:

“The husband also contended that the wife should have sufficient assets or borrowing powers to cover her future legal costs. But by looking at the rather uncompromising approach adopted by the parties in this litigation, I am not surprised that much of the wife’s available financial resources have already be spent on legal fees.”

In the Leave Decision, in refusing leave to H to appeal on this ground, the Judge had reiterated that W had exhausted her means to pay for future legal costs.

42.  As to H’s complaint of non-disclosure by W with regard to (i) her shares of HK$300,000 and (ii) her personal valuable of HK$956,654, the Judge took the view that this involved disputes of facts that could not be resolved in a maintenance pending suit hearing.

43.  In conclusion, the Judge held that HK$1,200,000 was a more reasonable figure for LCP covering a period of 12 months by which time a FDR would be expected to be ready.

E.4  Ground (1)

44.  Ground (1) complains that the Judge failed to take into account that (i) W had financial resources of her own, and (ii) there was material non-disclosure on W’s part.

45.  On (i), in counsel’s written submissions before the Judge[26], apart from the quantum, H also argued that W had assets and resources that could be reasonably deployed, which included her stocks and her undisclosed personal valuables. Before us, Ms Booth, who appeared for H, pointed out that the Judge had assumed that that W’s disclosed cash of HK$260,000 and her shares of HK$330,000 had been spent when there was no evidence produced by W, the bank statements since August 2022 had not been produced, and even though W’s Summons was issued in November 2022, no up-to-date bank statements were produced despite H’s repeatedly requests. In support of her submission, Ms Booth referred to W’s Form Hs and the correspondences between solicitors (W was then legally represented) between July and September 2022 in which H sought documentary evidence and bank statements that could substantiate the amount of legal costs claimed to have been incurred or paid in W’s Form H.

46.  Suffice to say, W’s Form E was filed on 27 May 2022 and the bank statements produced by her were up to mid-May 2022. W’s Summons (dated 17 November 2022) was filed on 28 November 2022. Her 5^th affirmation in reply to H’s opposing 7^th affirmation was filed on 24 February 2023. We were told by counsel that apart from one statement for August 2022, W did not provide any further bank statements. Subsequent to her 7^th affirmation, W had by letter dated 25 August 2023 provided statements of the ICBC Account from 1 March to August 2023 and also informed H of her withdrawal of HK$200,000 in September/October 2022 for her legal costs. This letter was not brought to the Judge’s attention, and is now part of the fresh evidence that H is seeking leave to adduce (see [6(1)] above).

47.  W’s financial information was thus at least some 12 months out of date when the matter went before the Judge and the Judge was aware of this. In our view, W should have been directed to produce updated bank statements and documentary evidence as to the source of funds with which she had been paying for her legal costs set out in her Form Hs.

48.  W had produced (i) a Notice of Assessment and Refund of Tax for 2019/2020 and Notice of Provisional Tax for 2020/2021(issued on 21 December 2020) and (ii) a Notice of Revised Assessment and Refund of Tax for 2020/2021 (issued on 28 March 2022). The notice in (i) showed her final tax payable for 2019/2020 to be “0” and net provisional tax for 2019/2020 as HK$49,497, with a net refund of tax of HK$42,097. As for the notice in (ii), her final tax payable for 2020/2021 was HK$4,417 and the net refund of tax was HK$8,160. In light of these 2 notices, the monthly amount of HK$27,000 being her tax expenses in her Form E under Part 4.2 appeared to be over-stated, and the monthly amount of her tax liability should only be about HK$368 if based on her final tax position for 2020/2021 (HK$4,417).

49.  Further, Part 4.2 of W’s Form E stated her insurance premia as HK$17,000 per month. This was in fact the annual amount and W had amended this entry to HK$1,600 per month in her 1^st Answers[27].

50.  In the circumstances, the Judge had erred in his findings on W’s personal expenses: see [20] and [21] of the Judgment. W’s reasonable monthly expenses would be around HK$28,968. With a monthly income of HK$160,000 as found by the Judge, W would have some HK$ 131,000 at her disposal. After contributing HK$89,000 towards the general and children’s expenses (see [27] of the Judgment), W should have a balance of some HK$42,000 per month. This is a relevant consideration that the Judge should have taken into account.

51.  In [102] to [112] of W’s 2^nd affirmation of 16 November 2022 in support of W’s Summons, W explained that her income level and her sole legal ownership of Yik Yum Property would disqualify her from applying for legal aid. However, there was no evidence from W that she was not able to procure legal services by the offer of a charge upon her ultimate capital recovery, or by payment by instalments out of her income. She had only deposed that her then solicitors would not agree to render a bill only at the end of the ancillary trial, that they would issue monthly bills and they were serious about ceasing to act for her should she not receive LCP. There was no evidence whether W had made attempts to instruct another firm, who wold accept, say, payment by instalments out of her salary or by her offer of a charge upon her ultimate capital recovery.

52.  W had said she did not have any suitable disposable asset to sell and/or offer as security for borrowings to fund the litigation, given the dispute over the beneficial ownership of the Yik Yum Property. However, W had not provided documentary evidence to show what happened to her stocks and shares of about HK$300,000.

53.  W had also said in her 2^nd affirmation that she was not in a position to borrow more substantial loans from friends and family. Earlier in her affirmation, she disclosed a HK$100,000 loan from her cousin on 11 March 2022 and a further HK$250,000 loan in around October 2022[28]. According to her, her cousin had indicated he was not in the position to lend her further sums, and he expected her to repay the HK$350,000 loans by the end of 2022. No supporting evidence was provided by W. It also transpired at the hearing that no repayment had been made by W.

54.  It is also of note that on 11 March 2022, when W received the HK$100,000 loan from her cousin to ease her financial stress due to H failing to provide interim maintenance and her legal costs, W paid HK$50,000 to Yat Sing Decoration to settle her mother’s renovation fees.

55.  W had also said nothing as to whether she was able to borrow further from her credit card accounts. W had disclosed in Part 2.13 of her Form E that as at 27 May 2022 she had indebtedness of HK$960,000 in her four credit card accounts. In her 5^th affirmation of 24 February 2023, W stated that her then liabilities from credit card loans were similar to that stated in her Form E, i.e. around HK$960,000. It appeared from section 2.13 under Part 2 of her Form E and her 1^st Answers to H’s 1^st Questionnaire, out of the HK$960,000, about HK$ 200,000 from Citibank and HK$660,000 from DBS were short term cash instalment loans drawn from her credit card accounts.

56.  As can be seen in W’s HSBC Premier bank statements referred to in her 7^th affirmation, (for instance, the one dated 19 August 2022), her HSBC Master card had a credit limit of HK$574,000 and her indebtedness was only about HK$43,000. At the same time, it was not clear what was the credit limit of her American Express card.

57.  As for those short term cash instalment loans from her DBS and Citibank credit cards, they were repaid by autopay monthly instalments. According to W, she would “occasionally”[29] incur such short term cash instalment loans. In fact, W disclosed that on 7 June 2021, she obtained HK$190,000 from her DBS credit card and HK$160,000 from her Citibank credit card[30], giving a total of HK$350,000; then on 8 June 2021 she paid HK$300,000 to settle the renovation expenses of her mother’s apartment. It would thus appear that W had been borrowing short term instalment loans even prior to the parties’ separation and the loans borrowed in June 2021 had nothing to do with her own or her children’s expenses or her legal costs.

58.  W also explained that she considered the terms of the Citibank and DBS short-term credit card instalment loans reasonable, and she therefore decided to use this form of borrowing to fund the renovations fees of her mother’s property. She disclosed that she had paid HK$300,000 on 8 June 2021, HK$20,000 on 10 March 2022, HK$50,000 on 11 March 2022 and HK$ 29,441 on 15 March 2022 to settle part of the renovation fees. H had pointed out that the Yat Sing Decoration receipt produced by W on 5 January 2022 showed that the total renovation fees were HK$1,041,883, of which (as per her Form E of 27 May 2022) HK$860,000 was outstanding on her two short term credit card loans. In any event, W did not indicate whether there was any ceiling to these short term instalment loans.

59.  W claimed in her 2^nd affirmation that it was unprecedented for her to turn to her parents for financial help since she had started working and the parents’ financial means were equally limited given that they were both retired and had been living off W’s allowances for many years. On the other hand, W disclosed that her mother/parents live in a self-owned property at Baguio Villas and she had been paying for its renovation.

60.  In W’s 1^st Answers to H’s 1^st Questionnaire, she disclosed a transfer of HK$250,000 on 9 July 2021, upon her receipt of her annual bonus on the same day of HK$430,000, to the account she held jointly with her mother by way of providing financial assistance to her mother[31]. W further disclosed a payment of HK$80,000 on 12 July 2021 and HK$70,000 on 16 November 2021 to her grandmother in Taiwan said to be remitted on behalf of her mother as financial support to her grandmother[32].

61.  The evidence thus shows that W had the ability to withdraw short term cash loans which she repaid by regular instalments. As the outstanding amounts had remained more or less the same, this suggests there had been recurring short term borrowings but no supporting documentations had been provided by W as to their use. As said, there was also no information on the credit limit in relation to these borrowings or W’s other credit cards. Given these gaps in the evidence, W cannot be regarded to have discharged her burden of demonstrating that she had exhausted all her sources of loans or ability to borrow.

62.  H also complains about W’s undisclosed personal valuable of HK$956.654. In the Leave Decision[33], the Judge dealt with this by referring to [49] of the Judgment and said that, on a broad-brush basis, he accepted that W had already exhausted her means to pay for future legal costs, and that the non-disclosure complained of was a dispute of facts that could not be resolved at this interim stage.

63.  In Section 2.10 of Part 2 “Assets” of her Form E, W had put “N/A” for valuable personal items and “nil” against the value. In her 2^nd affirmation at [118], W then disclosed her possession of handbags and wine, which she claimed were for her own use with very little resale value. These items were kept at the Pokfulam Residence and H had taken a catalogue of her items. These were set out in a letter from his solicitors to W’s solicitors of 11 April 2023, in which it was asserted that W’s belongings at the Pokfulam Residence had a market value of HK$956,654. There were also photographs showing some designer handbags and various bottles of wine. This letter was attached to H’s written submissions to the Judge. While we accept that the market value may be a matter of dispute, the existence of these personal effects should have been disclosed in W’s Form E. We also note that the Judge did not appear to have addressed other aspects of H’s complaint of non-disclosure by W of her means, such as the whereabouts of her stocks.

64.  As Hartmann JA observed in HJFG, while an application under section 3 of MPPO is to be approached on a broad-brush basis, in order to determine what is or is not reasonable, some analysis of the evidence is always required. Further, in Currey v Currey, an appeal concerning a costs provision as part of a maintenance pending suit order, despite it was an interim application being considered on a broad-brush basis, the applicant was required has to satisfy the court of the necessary condition that she could not reasonably procure legal advice and representation by any other means.

65.  Having regard to the above discussions, including the errors in the finding on W’s monthly personal expenses and the absence of the complete updated bank statements and supporting documentary evidence on W’s financial resources, we are of the view that the Judge’s LCP Order cannot be supported and should be set aside.

E.5   Ground (2)

66.  Ground (2) concerns the quantum of the LCP order. At the outset, we note that H’s parents’ wealth appeared to have assumed such importance and have been, what H described, a “recurring theme” in these proceedings. W’s 2^nd affirmation, for example, had devoted quite some paragraphs (see [9] to [18]) to describing the financial means of H’s parents, their shareholdings in various companies and their interests in certain landed properties. However, no matter how wealthy H’s parents are, and whether H is the intended successor of his parents and their businesses (H and his sister being the only children of their parents), there has to be sufficient evidence to satisfy the court that the wealth will come to H in the foreseeable future, and/or that H will be entitled to a share of the parents’ assets and businesses in the foreseeable future. W has complained that H has concealed his directorship and shareholding in the parents’ companies and sought specific discovery of audited financial statements of the companies in which H has shareholding and/or directorship, and also third party discovery.

67.  W set out in [120] of her 2^nd affirmation her budget for legal costs. An updated table was subsequently provided in [44] of her 5^th affirmation which gave an estimate of HK$3,216,000 for the costs from CDR to FDR. This amount was further revised to HK$3,056,000 in her counsel’s written submissions to the Judge (at [44]). By then, the CDR had taken place and the narrative affirmation on custody had been filed and the parties seemed to be incurring costs for the purpose of the 3-day trial on custody. W had also incurred HK$57,000 for item 4 in relation to her 3^rd Questionnaire and Answers, and HK$308,400 for W’s Summons.

68.  At the hearing of the appeal, upon our enquiry, we were informed by H’s counsel of the following development in the case:

(1)  In relation to custody:

(i)  The trial had concluded and the Judge had delivered a judgment ordering joint custody, with W having sole care and control and defined access for H. H’s application for leave to appeal was dismissed by the Judge, and he had made a renewed application to the Court of Appeal, the result of which was pending at the time of the hearing of the appeal; and

(ii)  There was a pending application on the children’s schooling matter.

(2)  In relation to ancillary relief:

(i)  H had been complying with the IM Order;

(ii)  As for the LCP Order, H had only paid three instalments, totalling HK$300,000, prior to the stay granted by this Court;

(iii)  The 1^st appointment hearing had taken place and directions had been given, which included a deadline for interlocutory applications to be issued. By the time of the hearing of the appeal, the deadline (i.e. 29 March 2024) had passed and W had not taken out any further interlocutory applications, such as specific discovery, discovery against third parties, joinder of third parties and/or section 17 applications. There has also been no communication to H that she is reserving her position with regard to the making of further interlocutory applications pending the result of the present appeal;

(iv)  W had, prior to the order for stay of the LCP order, issued garnishee proceedings for the outstanding instalments under the LCP Order, and also for the outstanding costs which H was ordered to pay. The outcome of the application was pending at the time of the appeal; and

(v)  The ancillary relief application was ready for the FDR hearing.

69.  It would appear from the above that W no longer pursues her previous intention to issue interlocutory application(s) which underlined her LCP application and she had indicated that she was ready to proceed to the FDR hearing. In these circumstances, the amount of HK$1,200,000 ordered by the Judge for the costs up to the stage of the FDR is no longer an appropriate sum.

E.6  Conclusion

70.  In light of the progress and the present stage of the proceedings already reaching FDR, and with the parties’ financial information more than two years out of date, we are in no position to reconsider the LCP application and/or to exercise our discretion afresh upon the LCP Order being set aside. In the circumstances, the more appropriate course is to remit W’s application for LCP to the Family Court for a rehearing before another judge.

71.  We give leave for H to adduce the letter of 25 August 2023 from W’s solicitors to H’s solicitors regarding the ICBC Account and the Yik Yum Property and the letter in reply of 29 August 2023 from H’s solicitors by way of fresh evidence. The letter came about after the hearing before the Judge. It is directly relevant to W’s LCP application and in turn this appeal.

E.7  Costs

72.  In respect of the leave to appeal applications before the Judge and to this court, since H ultimately only succeeded on obtaining leave on two out of four of the Draft Grounds, and W did not lodge any submissions to oppose, we will make no order as to their costs.

73.  In respect of the costs of H’s application to adduce fresh evidence, we consider that H could have brought the 25 August 2023 letter to the Judge’s attention before the Judgment was handed down, and he did not succeed on his application to adduce fresh evidence on Draft Grounds (1) and (2). We will make no order as to the costs of the application.

74.  As to the costs of the appeal, we consider it should be costs in the cause of the rehearing of W’s LCP application.

F.  DISPOSITION

75.  Accordingly, we make the following orders:

(1)  H’s appeal is allowed.

(2)  The LCP Order and the related costs order are set aside.

(3)  W’s application for LCP is remitted to the Family Court for rehearing before another judge.

(4)  There is an order nisi that:

(a)  There is no order as to the costs of the application for leave to appeal made to the Judge and in CAMP 379/2023, and H’s application to adduce fresh evidence; and

(b)  The costs of this appeal be costs in the cause of the rehearing of W’s LCP application.