WPL v. WMH

HCMC 3/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MATRIMONIAL CAUSES NO. 3 OF 2004

(Transferred from the District Court: FCMC 4361/2004)

____________

____________

_______________

J U D G M E N T

_______________

Introduction

1.  This is the wife Petitioner’s application for maintenance pending suit.  I will refer to the parties as the husband and the wife.  The parties are wealthy, having made a great success of things in a variety of businesses over the past 30 years or so.  This is one of those cases where marriage and business have merged with the result that the parties’ high standard of living has been financed out of their companies which have paid for their expenses.  I will need to go into some detail presently but it is sufficient to observe at this stage that both are, for all intents and purposes, equal shareholders in the companies through which they have conducted their business affairs and they are the only two directors of these companies.

Chronology

2.  A brief history of the marriage will be helpful.  The wife is 53 and the husband is in his mid-60’s.  They went through a marriage ceremony in Hong Kong in November 1975 which took place at a restaurant.  In fact that ceremony was invalid because the husband was then still married to another woman, although in the process of getting divorced.  On 30 August 1976, their first child, a daughter was born.  She is therefore now, 28 years old.  It was only during her pregnancy that the wife learnt, for the first time, that the marriage ceremony of the previous year had been invalid.  Their relationship was regularised on the 10 January 1977 when the parties were lawfully married, the husband by then having obtained a divorced from his previous wife.  On 3 January 1983, their son was born.  He is therefore now aged 22.

3.  The daughter and the son both live in Melbourne.  Both were sent there to further their education.  The daughter is now independent and she does not figure in this application.  The son in still at university and is wholly maintained by the husband.  The wife has made an application for interim maintenance for him but in view of the indication that the husband looks after him financially she asks me to adjourn this part of her summons generally, with liberty to apply to restore it should that prove necessary and this I am content to do and I so order.

4.  By 1998, both children were well established in Melbourne and a spacious home was purchased in the daughter’s name which has now been sold and the proceeds kept by her.  The son lives in rented accommodation paid for by the husband.

5.  One of the wife’s complaints, which appears in her Petition for divorce, is that the husband has repeatedly been unfaithful to her.  Unable to put up with this any longer she left the matrimonial home in September 2003 and at first went to Melbourne to be with the children.  She has since returned to Hong Kong.

6.  On 29^th April 2004, she filed her petition for divorce alleging unreasonable behaviour.  The husband has filed an answer which he did on 7^th July 2004.  At present the suit remains a defended one.  I have already referred in a previous ruling in this matter to the relatively ‘painless’ way out for the parties having regard to the availability of a consent decree where they have been separated for more than a year.

History of the marriage

7.  I propose to take this rather broadly.  The parties started with nothing and have between them built up a very prosperous business.  This is centred on a travel agency which takes people to Japan and other parts of Asia.  They also own property investment companies and a garment manufacturing business which owns a factory on the Mainland.  Both have, in their own way, played a significant part in their successes.  The husband has largely gone out and travelled to bring in the business by making contacts and attracting clientele.  The wife has done the accounting and administrative work in the office without which no successful company can expect to prosper.

8.  The profitability of their businesses has translated itself into an enviable way of life.  The matrimonial home in a luxurious block of flats in Ho Man Tin comprises 4 flats on 2 floors which have been re-modelled into a single residence.  They employ three domestic servants and two chauffeurs who drive the two Rolls Royces’ and, until recently, a Mercedes Benz now replaced with a 7-seater estate car.  The wife has expensive watches and jewellery and she has been able to purchase all the expensive designer clothing that she requires.  Equally the husband is well-suited and owns expensive watches.  I have no doubt this is well-earned and richly deserved.  They are both members of various boards and chambers, here and on the mainland.  They were, before their separation, required to attend charity balls together and other social functions, where it would be expected that they would be well attired.

9.  Before the separation, the wife has affirmed and this is not challenged and so I accept, that much of her spending would be on corporate credit cards paid out of the company accounts and of course all the domestic spending was paid for in this way as well.  Both drew what one can properly describe as nominal director’s fees of $50,000 for the husband and $20,000 for the wife.  This income is almost nominal when compared to what the companies would pay on their behalf to fund their way of life.

10.  The picture therefore is of rich people living up to their wealth.  At this stage, it is not possible nor necessary to calculate their capital worth nor is it possible to be precise as to what each costs the companies in funding their lifestyle.

What happens now?

11.  Since the separation the husband has not paid the wife anything.  The company paid her director’s fees of $20,000 a month until June 2004 but this has now been cut-off.  She has therefore had to live off her own resources, being savings in various bank accounts.  The husband’s attitude has been that all she needs to do is to return to the office, carry on with her work, and then she can draw on the company.  He goes as far as to say that she could be living in one of the 2 floors that comprises the duplex matrimonial flat.  Failing her doing that he says that she has more than enough money of her own to look after herself until the court finally decides on the application for ancillary relief.

12.  Faced with this she has taken out this summons for maintenance pending suit which is dated 19^th November 2004.

13.  The husband’s approach is, in my judgment, misconceived.  She is entitled to apply for maintenance pending suit qua wife.  Whilst I appreciate that they were also business partners and the complexities of this will need to be unravelled in due course, now that the marriage has broken down and she has withdrawn from employment in the family business proper provision will need to be made for her until there is a final resolution of their financial affairs.

14.  He has complained that she is rather sabotaging the business by not carrying out even formal duties as a director and an application to the companies court has had to be made about that.  In this regard, I would urge her to take a sensible approach because, she is, after all appealing to the business and its success for the substantial order that she now asks me to make in her favour.

The Law

15.  Under section 3 of the Matrimonial Proceedings and Property Ordinance I am empowered to order maintenance pending suit, making such order as I consider reasonable in all the circumstances.  It is usually impossible at this stage for the court to do more than to take a broad brush approach to the evidence.  Clearly the parties respective means and outgoings are of fundamental importance, with their standard of living at the time of separation serving to provide a useful yardstick as to what is reasonable in their situation.

The Order

16.  A good place to start is at page 46 of the bundle of affirmations where the wife sets out her requirements.  This is her affirmation of 19^th November 2004.  Paragraph 53 relates to a claim of $79,000 a month for the children.  Because the husband is paying for the son, the only relevant child, this has now fallen away.

17.  From this I go to the claim for herself which is in the order of $220,000 a month.  The husband has agreed to provide her with a car and driver and pay for her insurance premiums which removes a total of $40,000 from the expenses.  At present, she is living in a small 600 square foot flat which she rents for $10,000 per month.  She would like to rent a flat at Homantin, which is an area she knows well having been lived there for many years, for $30,000 a month, which would get her a 1,500 square foot property with I presume 3 bedrooms, 2 bathrooms and servant’s quarters.  That is perfectly reasonable in her circumstances and I will allow for that and the $5,000 a month management fees which go with a flat like that.  As to other matters she asks for a maid’s salary of $4,200 a month which is also entirely reasonable for her.  She also needs $37,000 a month to pay mortgages on properties which she owns and that is also something which must be included for the time being.  As to her other claimed expenses it is clear that she is not proposing to deprive herself, with $80,000 claimed for clothes, cosmetics, holidays and entertainment excluding a further $10,000 for meals out of the home.  This may appear unduly extravagant but I should remind myself that this broadly reflects her spending pattern before the separation.  She also has a need for $35,000 a month to fund legal expenses which she will undoubtedly need.

18.  Its impossible for the court to get to a mathematically precise figure.  I need to do this broadly and I would have thought that on the basis that the husband will pay, through the company, for the insurance premiums of $30,000 a month and provide a suitable car (to be run at his expense) through the company, no doubt, and a driver, that $150,000 a month is a reasonable amount for maintenance pending suit.

19.  Mr Kwong for the husband quite rightly says that I should take into account her income from her own resources.  I have given this careful consideration but it would appear that save for a sum of $9,500 a month rental income, the rest of the “income” into her bank accounts is being drawn down from her savings.  So I have only had regard to this $9,500 a month in my computation of what is the appropriate order.

20.  For his part the husband, whilst taking points of principle as to why maintenance pending suit should not be ordered, has not sought to take any real issue on the wife’s outgoings although he makes the point that when she was spending these amounts she was working in the business and thereby “earning” her keep, which is a fair point but one that perhaps is better left for the final hearing of the ancillary relief application.

Conclusion

21.  I will therefore order maintenance pending suit at $150,000 a month.  Miss Lam says I should back-date to the date of petition or at worst I suppose (although she does not argue it in this way) to the date of the summons in November 2004.  Of course, I have discretion in a matter such as this.  I would have thought there should be some element of back dating where the wife has had to come to get this order which represents a considerable improvement on the position before she applied for it.  I propose to back-date this to just after the date of the summons which is to 1^st December 2004.  The order will run from this date and be payable on the first day of each month until decree absolute or further order.  It will be paid by direct debit into the wife’s nominated bank account.