H v. W

FCMC 8332 / 2017

[2024] HKFC 76

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 8332 OF 2017

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J U D G M E N T
(Maintenance pending suit/Interim maintenance)

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Introduction

1.  This is an application by the Husband of 3 March 2023 to vary downwards, the MPS Order dated 24 October 2018 (“the MPS Order). The MPS Order provided that the Husband was to pay the Wife $14,000 per month as maintenance pending suit and interim maintenance of $38,500 for the child of the family, (“B”).  In addition, the MPS Order recorded the Husband’s undertakings to pay for the daughter’s school fees, ECA up to $2,000 and medical and dental insurance for the Wife and B.   

2.  At the hearing, the Husband confirmed that he wished for the variation to reflect a cessation of his 50% contribution towards the Wife’s general expenses, and that the Wife should contribute towards half of B’s expenses.  Furthermore, the Husband wished to be discharged of his undertaking to pay for the Wife’s her medical and dental insurance since the Wife was now employed.

3.  For her part, the Wife confirmed at the hearing that it was her stance that the MPS Order should remained unchanged.

Background

4.  Since the MPS Order was made, the parties have made subsequent applications to vary the MPS Order.  The Wife applied for litigation funding by way of Summons on 17 October 2019 while the Husband applied to vary downwards the MPS Order on 16 December 2019.  These two applications were addressed in the Judgment handed down on 11 June 2020 (“2020 MPS Order”).  The 2020 MPS Order rejected the Wife’s application for litigation funding and denied the Husband’s application to vary the MPS Order downwards.

5.  Following the 2020 MPS Order, the Wife filed an application to vary the MPS Order upwards by way of Summons dated 31 August 2021.  This application has been adjourned sine die as a result of the Wife’s second application for leave to permanent remove B from Hong Kong to live in Singapore, which she filed in November 2023.  The Wife’s second application for permanent relocation has been fixed for trial to be heard in October 2024. 

6.  Shortly after the Wife’s application in August 2021 to vary maintenance upwards, the Husband filed his Summons to vary the MPS Order downwards on 18 October 2021, which was then adjourned. 

7.  This was followed by a Financial Dispute Resolution hearing on 3 January 2022, which was unsuccessful.

8.  The Wife then filed a Judgment Summons dated 2 November 2022 against the Husband for arrears in maintenance in the sum of HK$419,965.64, as it is the Wife’s case that the Husband stopped paying maintenance since October 2022.  

9.  The Husband consequently made the current application on 3 March 2023 to vary the MPS Order downwards.  Pursuant to the Order of 4 January 2024, the Husband’s summons of 18 October 2021 was fixed to be heard at this maintenance pending suit hearing.  Since it is necessary for the variation of a maintenance application to be heard separately and before the Judgment Summons, the Wife’s Judgment Summons has been further adjourned pending this application for variation (See C v H [2012] 3 HKLRD 351). 

10.  The MPS judgment of 2018 has already set out the background facts of the case, which I will not repeat.  What is pertinent is that the Husband is currently 41 years old and the Wife is 44 years old.  It was a short marriage; the parties married in February 2013, separated in January 2016 and B was born in October 2015, shortly before the parties’ separation.

11.  During the marriage, the husband worked in the finance sector prior to setting up his own investment business in 2016, while the Wife owned a recruitment business until it closed down in or around March 2018. At the time of the MPS Order, both parties were not in paid employment and received passive income from some gold investment.

12.  Since the making of the MPS Order and the 2020 MPS Order, both parties have secured paid employment.  At the time of the hearing, the Husband disclosed that his monthly income was approximately HK$105,067.25 consisting of a fixed salary from Payment Asia and a director’s fee from his investment business company. 

13.  Both the Husband and the Wife did not disclose a copy of their employment contracts as per the Form E disclosure requirements, and they were given a chance to do so within seven days of the hearing.  The employment contracts provided by both parties support their evidence regarding their monthly income.  The Husband’s employment contract stipulated that the Husband is entitled to a discretionary bonus, which according to the Husband is paid at the end of each financial year.  It was the Husband’s submission that since he only commenced work with Payment Asia in February 2023, he anticipated a modest bonus of between HK$5,000 – HK$10,000 in or around the end of March 2024.  There was a potential for a more generous bonus going forward if the Husband was able to bring in more long term businesses or projects. 

14.  The Wife was originally employed as temporary staff with her current employer from around 1 April 2023, and was then promoted to full time staff member effective from 1 August 2023.  The Wife’s base salary is HK$66,000 per month and there is no bonus element for the Wife provided for in her employment contract.

Legal principles

15.  The law on variation of maintenance pending suit and interim maintenance is well established. Section 3 Matrimonial Proceedings and Property Ordinance,Cap 192 (“MPPO”) 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.

16.  Sections 11(1) MPPO, further grants the Court power to vary, discharge or suspend any maintenance order previously made:

“11. Variation, discharge, etc. of orders for financial provisions

(1)  Where the court has made an order to which this section applies, then, subject to the provisions of this section, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.”

17.  While Section 11(7) of the MPPO stipulates how the court should exercise this power:

“11(7)  In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates and, where the party against whom that order was made has died, the changed circumstances resulting from his or her death.” (emphasis added)

18.  In the case of AEM v VFM [2008] 3 HKLRD 36 , Cheung JA explained the modern approach in dealing with an application for variation of maintenance at para 14 of the Judgment, in particular the following sub-paragraphs:

“3. The traditional approach to variation was not to re-fix afresh the amount of maintenance but to consider the amount of change in the actual means of the parties so that the new order should merely be increased or decreased roughly in proportion to the change in the means : Foster v. Foster [1964] 3 All ER 541, Jackson's Matrimonial Finance and Taxation 7th Ed. Ch. 3. 131.

4. The modern approach, as required by section 11(7), is for the Court to consider all the circumstances of the cases. The Court is not required to proceed from the starting point of the original order but look at the matter afresh: Flavell v. Flavell [1997] 1 FLR 353 at 357B following Lewis v. Lewis [1977] 1 WLR 409 and Garner v. Garner [1992] 1 FLR 573.

5. Any change in any of the matters to which the Court was required to consider when making the original order was one of the circumstances to be considered.

…

8. At the same time the basis and intended effect of the original order are relevant factors to which the Court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order: Boylan v. Boylan [1988] FLR 282.”

19.  Based on the established legal principles, the court is to approach the matter de novo, having regard to the current circumstances of the case as is reasonable, and to make an Order applying fairness as the yardstick.

20.  In HJFG v KCY [2012] 1 HKLRD 95, the Court of Appeal held inter alia that:

“(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. That 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 assumptions about his ability to pay. The court is not confined to the mere say-so of the payer as to the extent of his income or resources.  In such a situation the court should err in favour of the payee.”

21.  Therefore, as this is an assessment of interim maintenance, the proper approach is on a broad brush basis of the immediate and reasonable requirements of the payee balanced against the ability of the payor. (see Hartmann JA in HJFG v KCY [2012] 1 HKLRD 95 at paragraph 38)

22.  In reaching a conclusion on the assessment of maintenance on a broad brush basis, the court is to take a broad and robust view of the payor’s means and does not need to accept or proceed on the payor’s assertions as to his or her means and inability to pay. Similarly, the Court may look to the assertions made by the payee and take a similar approach when looking at his or her means and alleged reasonable requirements.  The court should look to the reality of the situation, in so far as it can, in relation to the bare assertions made by either the husband or the wife.  Any over or underpayment for maintenance pending suit can be taken into account and corrected at the financial ancillary relief hearing.

The husband’s ability to pay

23.  The major argument of the Husband’s variation application is that believes the MPS Order to be excessive and based on misconceptions about his wealth.  In support of his application, the Husband relies on the fact that the Wife’s earning capacity has improved since the MPS Order, that he has lost out on three specific earning opportunities due to the Wife’s criminal allegations brought against the Husband, that there has been overpayment of several items within the MPS Order and that the Court is erroneously considered his family’s wealth to automatically equate to him being personally wealthy.

24.  Since the MPS Order, the Husband’s financial resources have altered somewhat.  In terms of his income, as per Part 3 of his Form E dated 18 January 2024 (“Husband’s Form E”), the Husband currently earns:

Income	HK$
Payment Asia	60,000.00
Director’s Fee from his advisory company	45,067.35
Total	105,067.25

25.  The Husband also included passive income from the gold fund investment of HK$97,125.00 (equivalent to US$12,500 per month) as part of his monthly income.  However, in reality, the Husband has not been paid in full from the gold fund investment since July 2019. At the hearing, the Husband further confirmed that since July 2019 he has only received partial payment for three or four months.  Accordingly, for the purposes of this MPS application, I do not propose to include the gold fund investment as a source of the Husband’s current income. Rather, I consider that the unpaid debt should be better described as a “debt due to the Husband” under Part 2.9 of the Form E, which has in fact been disclosed by the Husband in his Form E to amount to HK$4,856,250.

26.  The Husband expressed frustration that due to the Wife bringing criminal complaints against him to the police, that he missed out on three separate income generating opportunities which could have earned him a higher income.  Of the three opportunities, the Husband has been successful in securing one, which is his current employment, albeit I accept that the employment relationship commenced months later than it was originally anticipated.  The Husband’s evidence was that he was still working on one of these business opportunities but at the moment, he could only secure work on a deal by deal basis without any long term relationship guarantee.  I accept the Husband’s explanation that he had to disclose the criminal investigations by the police against him, in the midst of negotiations with the three potential businesses due to the potential reputational damage that would have arisen, if the Husband had hidden this information from the businesses.  The Husband submitted that his business reputation was very important to him and his decision to not harm his business reputation cannot be faulted.

27.  That said, it is evident that the Husband has a higher earning potential which will hopefully continue to flourish over time, and in any event, the Husband is earning more than the Wife at present.

28.  Turning then to the Husband’s current level of income, there is a significant shortfall between his earned income and monthly outgoings.  It is the Husband’s evidence that he has had to borrow money to meet these monthly outgoings, and that for this reason his liabilities have increased since the MPS Order.  There has not been any evidence to show with precision how much the Husband has borrowed specifically to meet his ongoing monthly expenses, but the nature of the Husband’s liabilities, many of them being personal loans, demonstrate that he does have the ability to borrow. 

29.  The Wife does not accept that the Husband’s income is only HK$105,067.25 each month, since according to her, the Husband’s lifestyle has remained unchanged despite the parties’ separation which, to her is a clear indicator that he has additional sources of funds.  One example that Wife provided was that the Husband could rent out his carpark space to rental income of approximately HK$4,500 per month.  This proposal however, ignores the fact that the Husband requires a parking space to park his car.  The Wife’s assertions as to the Husband’s income were entirely unsupported by any evidence which the court could directly rely upon or to draw an adverse inference against the Husband. 

30.  In terms of the Husband’s ability to borrow, it is apparent from the credit card statements that the Husband’s credit cards are no repaid in full every month.  He has however, managed to negotiate with many of his creditors, changes in the repayment terms and interests due on his personal loans to the extent that the figures in Part 4.2 of the Husband’s Form E relating to “loan repayments” and “interest payments” are not actual monthly expenditure made by the Husband.  The fact that many of the Husband’s loans are personal loans given by family or friends, with flexible repayment terms, leads me to believe that he does have the ability to borrow further to meet his maintenance obligations.

31.  I am further of the view that in addition to having the ability to borrow, the Husband can also make adjustment to his expenditure, such as remortgaging his property to reduce the monthly mortgage instalments.  Accordingly, I find that the Husband has the ability to meet the maintenance pending suit and interim maintenance payments set out in this judgment.

The wife’s financial resources

32.  Since the MPS Order, the Wife’s income has increased and is currently HK$66,000 per month.  The Wife expressed her concern that her current employment status is tenuous in the long term although her employment contract is an open ended one and not for a fixed term.

33.  In addition, the MPS Order provides her with a total of HK$52,500 per month.

34.  Like the Husband, the Wife’s investment in the gold fund was meant to provide a passive income.  According to the Wife’s Form E dated 18 January 2024, she was meant to receive HK$37,440 per month (equivalent to US$4,800 per month).  Like the Husband, the Wife has also not received any income from the gold fund albeit, the Wife ceased receiving this payment from October 2021 onwards.  This amount, therefore, will not be included in the calculation of the Wife’s current income but should be properly considered as a debt owed to the Wife.  Under Part 2.9, the Wife has calculated the sum of HK$1,594,018 due to her from the gold investment income.

35.  The Wife does have other financial resources available to her.  I have had regard to the parties’ respective evidence regarding the part settlement of the outstanding interest to the Wife from the gold investment fund.  The Wife explained at paragraphs 9 - 10 of her 14^th Affirmation that she was due to receive the sum of US$50,000 in cash, by way of part settlement in or around April 2021.  According to the Wife, she was preparing for a hearing before the Court of Appeal Vand was unable to collect the cash on 28 April 2021.  This explanation is at odds with the contemporaneous text messages exchanged between the Wife and the Husband’s cousin, who is the responsible person for paying the parties from the gold investment fund on between 4 and 5 March 2021 and 4 May 2021.[1]  The delay and the lack of urgency by the Wife in collecting the US$50,000 in cash which she states is owed to her, leads me to believe that the Wife does have financial resources to draw upon to meet her expenses.

What are the wife’s reasonable needs?

36.  The Wife has set out her most up to date expenses at paragraph 20 of her 46^th Affirmation dated 5 February 2024 as follows:

General

Item	Amount (HK$)
Rent	31,000.00
Utilities (electricity, gas, rates, telephone and water)	8,800.00
Food	7,700.00
Household expenses	5,000.00
Domestic helper and related	6,300.00
	HK$58,800.00

Personal

Item	Amount (HK$)
Meals out of home	5,500.00
Transport	3,000.00
Clothing / Shoes	6,000.00
Personal grooming (incl. haircut, facials, treatments, cosmetics, gym etc.)	4,400.00
Entertainment / presents	2,200.00
Holiday	6,500.00
Medical / Dental	1,000.00
Legal Fees	5,500.00
Tax	9,900.00
Insurance premia	Paid by Petitioner
Contribution to parents	Nil
Others (specify) Mobile phone Club expenses	331.50 Nil
	HK$44,331.50

B

Item	Amount (HK$)
School fees	Paid by Petitioner
Extra-Curricular Activities (Petitioner pays up to HK$2,000 per month)	760.00
General transport	2,500.00
School books and stationery	1,300.00
Medical / Dental	1,000.00
Clothing, accessories and utensils	4,000.00
Toiletries	1,000.00
Meals out of home	2,000.00
Entertainment	3,000.00
Holidays	5,500.00
Insurance premia	Paid by Petitioner
School bus fees	1,416.00
Birthday party gifts/ birthday party	1,000.00
	HK23,476.00
TOTAL (excluding expenses those paid by the Petitioner	HK$126,607.50

37.  The Wife submitted that she required the Husband to continue to meet the cost of her medical insurance because her employment only provided the most basic medical insurance plan, and she could not afford to purchase her own medical insurance.

38.  According to the Wife, her total expenses amount to approximately HK$126,607.50 per month.  Based on her income and MPS Order, the Wife’s shortfall every month between her income and declared expenses should be approximately HK$8,607.50.  The Wife submitted that her fiancé contributes towards her expenses when they are together and / or when they travel, which explained how she met her monthly shortfall without the need of incurring further liabilities.

Discussion

39.  Both parties are currently in paid employment which is the most significant change since the making of the MPS Order and the 2020 MPS Order.  Although the Wife is also now engaged to her boyfriend who resides in Singapore, I do not agree with the Husband’s suggestion that this should mean the Wife should rely on this financial resource instead of receiving maintenance pending suit.  Although I accept the Wife’s evidence that the fiancé does provide some financial assistance when they travel or are together, I do not think it is appropriate to attribute any contribution by the fiancé towards B’s expenses which remains the responsibility of both the Husband and the Wife. 

General expenses

40.  In so far as the Wife’s general expenses are concerned, I accept the Husband’s contention that the Wife’s utility expenses of HK$8,800 are on the high side and do not properly reflect the size of the Wife’s accommodation.  The Wife was given the opportunity to provide a breakdown of the utilities, and even then, she was only able to account for utility expenses up to HK$5,100 per month, which I accept is a more realistic amount. 

41.  When asked to explain her monthly household costs of HK$5,000, the Wife submitted that this included moving costs and furniture / fittings of new apartments since she had to move frequently.  MPS expenses are meant to cover “immediate and reasonable” requirements and not long term expenditure.  I would reduce household expenses to HK$3,000 per month. 

42.  In total then, I accept that the Wife has general expenses in the region of HK$53,100 per month.  As part of his application, the Husband seeks that he should no longer be responsible for half of the Wife’s general expenses, although he does not dispute responsibility for B’s share of the general household expenses which amounts to HK$26,550 per month. 

43.  Taking into account that the Wife’s current income of HK$66,000 per month and has her own financial resources, on a broadbrush basis, I believe that the Husband’s contribution towards the Wife’s share of general expenses can be reduced to HK$10,000 per month. The Wife signed her full time employment contract on 1 August 2023.  This reduction should be backdated to one month after this date, that is from 1 September 2023.  At the same time, the Husband is to continue meeting the costs of the Wife’s medical and dental insurance until further order.

44.  The Husband did not challenge the Wife’s personal expenses, since the Wife is wholly responsible for these expenses.

B’s expenses

45.  The Husband’s undertaking to pay for B’s school fees, ECA’s and her medical and dental insurance will continue.  The breakdown of these expenses are HK$15,933.33 for B’s school fees, HK$2,000 contribution towards B’s ECA and HK$10,400 per month for the Wife’s and B’s medical and dental insurance.  This is a total sum of HK$28,333.33 which the Husband has undertaken to pay over and above the MPS Order.  This does not include the expenses the Husband incurs himself, when B is in his care during access.

46.  The Husband complained that some of the remaining expenses are on the high side for an eight year old child, which I tend to agree.  I will allow B’s expenses as follows:

B

Item	Amount (HK$)
School fees	(Paid by Petitioner)
Extra-Curricular Activities Petitioner pays up to HK$2,000 per month	760.00
General transport	2,500.00
School books and stationery	1,000.00
Medical / Dental	1,000.00
Clothing, accessories and utensils	2,500.00
Toiletries	1,000.00
Meals out of home	2,000.00
Entertainment	3,000.00*
Holidays	5,000.00*
School bus fees	1,416.00
Birthday party gifts / birthday party	1,000.00*
Total	HK$21,176

* Items the Wife is to pay

47.  Of the HK$21,176.00 each month, the Wife will be responsible for the entertainment, holidays and birthday party gifts / birthday party costs of B.  The Wife’s contribution towards these items for B is fair and proportion in the circumstances.

48.  This leaves a balance of HK$12,176 of B’s personal expenses which the Husband will be responsible for.  Adding B’s share of the Wife’s general expenses, this comes up to a total of HK$38,726 for B’s interim monthly maintenance.  I will round this up to a sum of HK$39,000 per month.

Conclusion

49.  In conclusion, I will make an order that the MPS Order be varied such that the Husband do pay the wife HK$10,000 per month, as maintenance pending suit plus HK$39,000 per month as interim maintenance for B. Both these payments will be backdated to 1 September 2023.  These payments will be in addition to the Husband’s continuing undertakings to pay for B’s school fees, ECA’s up to a maximum of HK$2,000 per month and her medical/dental insurance and the medical/dental insurance for the Wife.

Costs

50.  Since neither party has been wholly successful in respect of this application, I make an order nisi for no costs which will be made absolute upon 14 days.  

Order

51.  I make an order as follows:

UPON the Petitioner undertaking to continue to pay for B’s school fees, ECA’s (up to HK$2,000 per month) and for B’s and the Wife’s medical and dental insurance directly.

IT IS ORDERED THAT: 

1)  Paragraph 1 of the Order dated 24 October 2018 to be varied such that the Petitioner do pay to the Respondent by way of maintenance pending suit for herself in the sum of HK$10,000 per month and interim maintenance for the child of the family, in the sum of HK$39,000 per month.  The variation of Paragraph 1 of the Order dated 24 October 2018 to be backdated to 1 September 2023 until further Order.

2)  There shall be an order nisi to be made absolute in 14 days’ time that there be no order as to costs.