C v. L

FCMC 13803 / 2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 13803 of 2003

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R U L I N G

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1. In these proceedings the Petitioner wife seeks maintenance pending suit for herself pursuant to section 3 Matrimonial Proceedings and Property Ordinance Cap 192 and interim maintenance for the two children.  She seeks a global monthly sum from the Respondent husband of $50,000 and applies to have the award back-dated to the date of the divorce petition which was filed in November 2003.

2. The Respondent, whilst in his affirmations and in the course of these proceedings has offered to pay varying sums, his position is that he cannot meet the Petitioner’s claim due to his financial position having been compromised in recent years.

3. To put the matter in context, it is helpful to have regard to some historical facts whilst at the same time taking account of a number of matters that appear to be undisputed between the parties.

4. The parties were married in December 1998 and have two children now aged nearly 5 and 2.  the marriage broke down between the parties sometime around October 2003.  I am unable to say at this stage from the information available to me as to who was responsible for the breakdown of the marriage as the Respondent has filed an answer and cross-petition to the wife’s petition and inevitably that matter has yet to be determined.  What is clear however is that it was at about this time, i.e. October 2003 that the Petitioner was excluded from being involved in any of the family businesses since when she has received no payment of maintenance from the Respondent.

5. Other facts which are undisputed include the lifestyle of the parties which prior to the breakdown appear to be luxurious.  The family lived in a large 2,200 sq. ft. apartment in Kowloon Tong, had the benefit of two domestic helpers and enjoyed the use of four vehicles which included a Lamborgini,  and an “S” class Mencedes Benz.  In addition all the family expenses were met out of the companies and the Petitioner enjoyed a monthly salary of $20,000 as well as the exclusive use of supplementary credit cards.

6. What is not agreed and what appears to be the central issue in this case is the present financial position of the Respondent which in turn relates to the status of two of the family businesses in particular which are car parking businesses, namely HW Car Park Limited and CS Management Enterprises Ltd and in which the Petitioner claims the Respondent is still the majority share holder.

7. I should say at this stage that as is customary in case of this nature I have heard no oral testimony, I have of course read the various affirmations that both parties have made and I have also heard oral submissions from both parties respective counsel.  In addition, in cases of this nature, the court does not embark upon a detailed analysis of the financial position of the parties but rather takes a broad brush approach bearing in mind the needs of the Petitioner and, in this case, the children on the one hand together with the ability of the Respondent to meet those needs on the other.  Whilst there is no positive duty on the court to take account of those matters under section 7 Matrimonial Proceedings and Property Ordinance, inevitably some of those matters such as income, earning capacity, financial needs and obligations of either party and, as in this case, the standard of living enjoyed by the parties prior to the breakdown of the marriage, do become relevant.

8. With regard to the financial position of the Petitioner, since she has been excluded from the running of the family businesses in October 2003, she has received no income, nor has she received any maintenance from the Respondent.  Prior to October 2003 she had been responsible for the internal affairs and management of all four family companies, the two which I have already referred to, and in addition HG Trading Ltd and the HW Taxi Co Ltd which is effectively a property holding company.  In both of these companies (indeed, in all of them) the Petitioner was a director and shareholder.  The Petitioner has affirmed in her first affirmation to having monthly expenses for herself and the two children amounting to $50,000 per month.  I find these expenses to be reasonable save for the provision of $5,000 per month as maintenance for her mother and the provision of $7,000 per month for two domestic helpers.  As the Petitioner is not working, I would consider one domestic helper to be perfectly adequate.  I therefore would propose to reduce the Petitioner’s necessary monthly expenses by $8,500 to reflect these two items, bringing her expenses down to $41,500 per month.

9. The Respondent’s financial position is not so clear cut.  He now claims in his most recent affirmation filed on 16^th November 2004 that he has recently obtained employment as a Manager with SR Holdings Ltd earning $18,000 each month.  He had previously claimed in his first affirmation that he received a salary of $20,000 from one of his companies HW Taxi Ltd, but that since the Petitioner had presented a petition to wind this company up, he no longer receives any income from it.  No documentary evidence of any sort has been produced by the Respondent to establish that he is presently earning only $18,000 per month.

10. The Respondent had claimed in his 1^st affirmation that the two main family businesses, i.e. HW Car Park Ltd and CS Management Enterprises Ltd had ceased trading since 31^st December 2003 and 31^st March 2004.  However, the audited accounts for both those companies for the year ended December 2002 indicate that they together generated a gross income of nearly $7 million.  Miss Lan on behalf of the Petitioner has provided a most helpful table which demonstrates that after expenses have been deducted and after excluding non company expenses the net profits amounted to $2.256 million, which equates to a net profit of nearly $200,000 each month.  The question must be asked therefore, why, if it is correct, should the Respondent see fit to close what on any view would appear to be two extremely lucrative businesses.  The Respondent’s answer to this question appears to be contradictory.  On the one hand the Respondent had said in his first affirmation that the Petitioner had taken away money from the company and as he was being investigated by the police he decided to close the company.  However in a later affirmation he indicated the reason to be that various landowners refused to continue to rent land to land to him as a result of the company being in arrears of rent.

11. In fact, the Petitioner’s case is that these businesses have not closed at all but indeed are still operating.  The Petitioner herself has caused enquiries and searches to be made of the two car parks and this indeed appears to be the case.  With regard to CS in particular nothing has changed at all save that the company is being operated by an ex-employee of the company.  The Petitioner believes this to be a sham and a vain attempt by the Respondent to distance himself from the running of these companies, in order to avoid paying maintenance.

12. In short, the point Miss Lan makes with regard to the two car parking businesses is that prior to the Petitioner being excluded from their operation in October 2003, they were extremely profitable, in fact they have not ceased operation but continue to trade with the Respondent continuing to be very much involved in their operation.

13. One major complaint that the Petitioner makes of the Respondent is that there has been material non disclosure in relation to a number of matters not the least of which relates to withdrawals of large amounts of money from his Bank of China account and his Hang Seng Bank.  A cursory glance at the Respondent’s Bank of China account indicates that on 22^nd April 2004 a sum of $630,000 was transferred out of this account.  However the Respondent has produced no other accounts to show where this money has gone, his only explanation appearing in his third affirmation filed on the day of the hearing when he explains that the money represented an accumulation of rent paid into his account and received by himself on behalf of his sister.  The transfer out of $630,000 was made at the direction of his sister and paid into a company account operated by her.  However, there is a complete lack of documentary evidence to support this.

14. Similarly with regard to his Hang Seng Bank, this account shows an overall net credit balance of over $800,000 in October 2003.  By June 2004 that balance had been reduced down to approximately $52,000.  Once again the Respondent’s explanation for the disappearance of this substantial amount of money is to be found in his latest affirmation filed on the day of the hearing and amounts to a simple assertion that the money went into paying off debts due to his cousin.  No documentary evidence was produced to support this.

15. The Respondent’s monthly expenses are to be found in his 1^st affirmation and amount to $19,000.  At that time the Respondent indicated he had monthly earnings of $20,000.  By the time the Respondent filed his 2^nd affirmation in September of this year he was prepared to offer to pay the Petitioner $15,000 per month.  But his income and expenditure had not changed, so that out of earnings of $20,000 he would be left with a monthly shortfall of $14,000 each month.

16. As I understand the Respondent’s present position, he affirms that he now earns $18,000 each month, his monthly expenditure remains the same at $19,000 per month and he has increased his offer for maintenance pending suit to $25,000.  If these figures are correct, and they are the Respondent’s figures, this would leave him with a recurring monthly shortfall of $16,000.  These figures simply do not add up.

17. Whilst I understand that it is unusual for the court to come to findings of fact on disputed issues in the absence of oral testimony, it seems to me that, from the complete lack of disclosure on significant matters, the elementary contradictions on the face of the Respondent’s own affirmations together with the inherent unlikelihood of the Respondent going from being a successful businessman to a person having financial difficulties in a matter of months, his assertion that he only earns $18,000 each month is unworthy of belief.

18. I am unable to say precisely how much the Respondent earns on a monthly basis, but he is most certainly a resourceful and successful businessman with access to substantial funds.

19. I am satisfied that the reality of the matter is that the Respondent can go a long way to meet the financial needs of the Petitioner being in mind the standard of living she was used to prior to the breakdown of the marriage.

20. Taking a broadbrush approach as I do and having taken account of the matters that I have referred to, I order the Respondent to pay maintenance pending suit to the Petitioner in the sum of $20,000 and interim maintenance to the children in the sum of $15,000, being $7,500 for each child, 1^st payment on 1^st December 2004 and subsequent payments 1^st day of each succeeding month until further order.

21. With regard to the Petitioner’s application to have this order back-dated to the date of the petition, I decline to make such an order.  Whilst I am aware that the Respondent has paid nothing to the Petitioner and children for their support since approximately October 2003, I am also aware that the Petitioner has sold a property in Tung Choi Street for $660,000.  I understand that the Petitioner has been utilising the proceeds of sale toward her living expenses.  There is a dispute between the parties with regard to this property which I am unable to resolve at this stage, but if in the event there were to be a finding that the Respondent did have a beneficial interest in this property and that it was sold without his consent, it would seem to be unfair to backdate any award.  If on the other hand there is a determination in the final ancillary relief proceedings that this property was indeed a gift from the Respondent to the Petitioner, then any award can be adjusted at that time to take account of the Petitioner’s loss.

22. There will be an order that the Respondent do pay the Petitioner’s costs of this application; such costs to be taxed on a party and party basis if not agreed.