AD (aka AT) v. RT

FCMC 1933 / 2020

[2020] HKFC 188

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 1933 OF 2020

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

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Introduction

1.  This is an application by a Petitioner wife for maintenance pending suit for herself pursuant to section 3 of the Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO) and interim maintenance for the only child of the family, a little girl, M, who was born on the XX September 2013, pursuant to section 5 of the same ordinance. The wife also seeks litigation funding. By virtue of an amended summons, made by an order of the court dated the 30 June 2020, the wife seeks as follows:

1.   The Respondent do pay to the Petitioner maintenance pending suit in the sum of HK$107,070 per month to cover the reasonable living expenses of the Petitioner and the child of the family including education related expenses;

2.   The Respondent do pay the Petitioner maintenance pending suit in the sum of HK$250,000 per month being a contribution to the Petitioner’s legal costs in these proceedings until the hearing of the FDR or CDR;

3.   Such other directions as the Court sees fit; and

4.   Costs of and occasioned by this application be paid by the Respondent to the Petitioner, to be assessed if not agreed.

2.  The matter first came before the court, on an urgent basis on the 28 May 2020. On that occasion the court was informed that the wife was seeking the sum of HK$77,000 per month on an interim interim basis. On the 4 June 202 the court handed down a Memo, which stated inter alia, as follows:

The law

Maintenance pending suit

6.   In so far as the law is concerned however, and for the avoidance of doubt, this interim interim determination is nevertheless made in accordance with section 3 of the Matrimonial Proceedings and Property Ordinance Cap192, which 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 always approached on a very broad-brush basis. The issue of interim financial support shall, in this instance, be considered again once the additional evidence is to hand.

Short Discussion

7.   The husband had been paying the wife HK$20,000 per month following the separation and he increased his offer to HK$35,000 per month at the hearing. The wife for her part originally sought HK$107,070 per month for herself and the child of the family, M and a one off payment of HK$250,000 as a contribution to her legal costs up to either the Children’s Dispute Resolution hearing or Financial Dispute Resolution hearing. At the hearing she reduced her claim and asked for just under HK$77,000 per month.

8.   There was some discussion during the hearing concerning the general household expenses and of those which were paid for by the husband’s father and which were paid for by the wife and/or the husband. It was not disputed that the parties had, until recently, lived together in a three generational Indian household and that the husband’s family also received income from the companies that were run and operated primarily by him. However, it is not disputed that the matrimonial home is owned by the husband’s father. It is the wife’s case that she received a salary from the family business in the sum of HK$45,000 per month (less her MPF contribution) and that she had worked in that business. In addition, she said that she received a sum of HK$59,000 per month to cover the household bills and that this was called the “house budget”. It is the wife’s case that both payments stopped in January 2020. During the hearing the husband maintained that there was only one monthly payment and that these two items overlapped. I accept that this is not currently bourne out by the evidence and I await further clarification on this point in due course.

9.   In addition, it is the wife’s case that the husband unilaterally removed the sum of HK$685,000 out of a jointly held bank account. This has meant that, on her case at present, she has no access to funds. The husband refused to return these monies to the joint account or to the wife directly and this money is currently held in a stakeholder account by the husband’s solicitors. Consequently, it is said by the wife that she is currently wholly reliant on the husband for her financial support. It is not clear whether or not she has any other financial resources at her disposal as is suggested by the husband.

10. In so far as the husband’s ability to pay is concerned it is of note that it is the husband’s case that his income has recently deteriorated significantly from HK$240,000 per month to HK$70,000 per month. However, I am not bound by the mere say so of the husband and I have noted that on the wife’s case it appears that he has significant other financial resources at his disposal.

Conclusion

11. Having reviewed the wife’s figures as set out in exhibit AD-6 of her affirmation dated the 12 May 2020 I shall order that the husband pay the wife interim interim maintenance pending suit for herself in the sum of HK$24,500 per month and HK$35,500 per month for the child of the family, M with effect from the 1 May 2020 and thereafter such sum to be paid on the 1st day of each succeeding month pending further order. This is based on the following expenses:

Current Monthly Expenses

1.     General

Item	Amount (HK$)
Rent - Govt Rent & Rates	2,660
Utilities (electricity, gas, Internet, telephone & water, laundry)	6,900*
Management fees	3,150
Food- Vegetables, Fruits etc	10,000*
Household expenses (Grocery, Cleaning Supplies)	7,000 5,000*
Car expenses (Service, Maintenance-cleaning)	4,000
Dependent family members (Father in Law and Mother in Law)	10,000
Domestic helper(s)	9,260*
Other (specify) - Repairs, unforeseen, credit card charges	2,000
Total monthly household expenses	HK$54,970 31,160

I have marked with an * those expenses that I have accepted for the time being. It is of note that I have not allowed the estimates for Government Rent and Rates, or Management fees as I accept prima facie that these expenses should be paid by the property owner, although I also accept that in these circumstances this is a somewhat artificial divide. I have allowed the estimates for the utilities, food and HK$5,000 per month for household expenses at this stage. I have also allowed for the domestic helper’s salaries, although it is not clear who they are contracted to. I was told during the hearing that the Indian driver/domestic helper has recently returned to India. Thus in total the general household expenses amount to just over HK$31,000 per month. In so far as the wife’s personal expenses are concerned I shall allow a further HK$9,000 per month in this regard. In so far as M’s expenses are concerned, subject to the husband’s undertaking to continue to pay her school fees in the sum of HK$14,750 per month as marked with a double ** I shall allow a further HK$20,000 per month. This sum shall include an estimated HK$12,000 for the cost of an Uber/taxi to take M and the wife to and from school and a further HK$8,000 per month as follows:

3. Children

Item	Amount (HK$)
School fees (to be paid by the Respondent directly)	14,750**
School Meal	1,400
School Projects / Assignments / stationery	1,000*
Transport to school (by private car)	10,000 12,000*
Medical/Dental required
Extra Curricular Activities (“ECAs”)	4,500  2,000*
Entertainment / Presents / Gifts / Toys (“Entertainment”)	4,000  2,000*
Holidays / Flight Tickets / Stay/ Food / Shopping (“Holidays”)	10,500
Clothing / Shoes / Accessories	2,000*
Insurance premia (Life Insurance)	13,750
Lunches and pocket money	200*
Vaccinations/ Medicines / Sanitizers/ Wipes/ School donations	1,000  600*
Uniform	200*
Others (specify)
Total monthly expenses for children	HK$29,350 HK$20,000

12.  Again I have marked with an * those items that I have accepted or those that have been reduced in some way. In total then the husband shall pay HK$60,000 per month – HK$24,500 per month for the wife (i.e. HK$31,000 divided by 2 = HK$15,500 + HK$9,000 = HK$24,500) and HK$35,500 per month for M (i.e. HK$15,500 + HK$20,000 = HK$35,500) pending the further determination of the matter by way of a paper disposal.

Costs

13. Given the circumstances costs shall be reserved for the time being.

The main issues

3.  It is then against this background that I am now asked to reconsider the issue of maintenance pending suit and interim maintenance and to consider the issue of litigation funding for the first time. In broad terms there are only two issues to be determined, firstly how much maintenance should the husband pay to the wife for herself and M on an interim basis and secondly whether or not the court should make an order with respect to litigation funding and if so in what amount?

4.  Although the wife seeks HK$107,070 per month in her amended summons, in her counsel’s submission she says that the total expected amount of monthly spending comes to HK$127,931 per month – or say rounded up to approximately HK$128,000 per month. In addition, she seeks HK$250,000 per month as litigation funding. The husband for his part proposes that he pay HK$42,000 per month for the wife and M, plus either a lump sum of HK$250,000 per month for the wife’s litigation costs or HK$50,000 per month up to and including the CDR/FDR, whereupon the issue of costs may be considered again. He also offers to undertake to continue to pay for M’s school fees up until the end of the academic year or further order.

Background

5.  The parties married on the XX April 2012 in India and separated in or about February 2020. It is the wife’s case that the husband may have had an affair, something which in turn the husband denies. In any event it is clear that the marriage is now at an end. As indicated above, it seems that M was born about 18 months after the parties’ married. She will be 7 years old at the end of this month. The wife issued a divorce petition on the 15 April 2020 on the grounds of unreasonable behaviour and the decree nisi is pending.

6.  It would be fair to say that the litigation started off with a bit of a “bang” and that it has all of the hallmarks of being both incredibly destructive and expensive. In summary, it is the wife’s case that the husband is the ultimate beneficial owner of a number of different companies that operate over several jurisdictions. The wife says that the husband is the mastermind behind these and that he is a wealthy individual, who is now intent of divesting himself of his wealth and leaving her with very little. She says that he has not been full and frank in his disclosure and that she will need the services of a forensic accountant in order to assist her in unravelling the true situation. The husband for his part says that the wife is mistaken, that the family never enjoyed a very high standard of living and that she is artificially attempting to increase her claim. He says that there is no pot of gold at the end of this particular rainbow and that his company, H & H is now operating at a loss following both the protests last year and the COVID-19 pandemic. He also accuses the wife and her family of financial wrongdoing in India including the misappropriation of funds and forgery.

7.  One of the difficulties in this case, even now after all of the evidence has been filed, is that neither party has set out the undertakings that they are prepared to enter into, in order to move this matter forward. The husband for his part says that his father (i.e. the paternal Grandfather) should fund the majority of the outgoings on the former matrimonial home, as he is the legal owner of the property and he employs the domestic helpers etc. The difficulty with this is that the husband does not proffer any undertakings in this respect. He does not, for example, undertake to continue to fund his father so that all of these basic outgoings can be met, in part for and on behalf of the wife and daughter. Infact, it is the wife’s case that the paternal Grandfather is being deliberately kept short of funds and that he may have no alternative but to return to India. Instead the husband says that he will only undertake to continue to pay for M’s school fees in the short term. Longer term he wishes her to attend a cheaper school. He also makes no concrete proposals with respect to transport for M. The wife for her part continues to assert that regardless of legal ownership, in reality the husband funded all of the expenses for the matrimonial home, for both herself, M and her parents-in-law, and that he should continue to do so. Thus, she wishes the maintenance to be increased so that she is able to pay for these expenses directly, but again she proffers no undertakings in this respect. The husband says that this could lead to the financial arrangements going around in circles. In his affidavit dated the 12 June 2020 he states as follows:

(xvii)    I would suggest, respectfully, that it is more appropriate that the present arrangement continue and that the person who is legally responsible for the payment of the utilities and the maids, etc., continue to pay them, i.e. my father. If my father has any financial difficulties, he can always ask me directly. As noted later in this Affirmation, I have always been accommodating in that respect (see paragraph 25).

(xviii)   I respectfully suggest that this approach is also logical because the household comprises of several people. It is not simply my daughter and the Petitioner for whom these expenses are intended to cover.  I do not disagree with a fair contribution, but that is already and arrangement which exists without an order for interim maintenance payments, or re-routing payments through interim maintenance.  If the Petitioner is paid these sums, that would potentially effectively double count the amount that is already paid to cover these expenses.  If that is done, then I would reduce payments to my father and presume the position would have to be that the Petitioner will then have to take out part of her interim maintenance and pay the maids, pay for utilities, etc.  I do not believe that it was her intention to be responsible for these, nor, as stated, is it logical.

8.  Whilst I would accept that there is some logic in what the husband says, I do not accept that HK$30,000 per month is necessarily sufficient to pay for all of the outgoings on the former matrimonial home and to provide an allowance for both of the husband’s parents. As I have said the husband does not undertake to continue to pay the HK$30,000 per month or indeed any other sum. Thus, I also accept that there may be scope for the husband using this loop hole as a financial lever against both the wife and his parents. This would be unacceptable. However, the alternative would also be equally unacceptable. If I made an order that is closer to that sought by the wife, and if she chose not to pay the outgoings on the former matrimonial home, then that would be an equally unacceptable outcome. To that end it is of note, that just as in the case of the husband, the wife has offered the court no undertakings in this respect.

9.  Faced with these two rather unattractive alternatives, I have decided to make an order that is more in line with that sought by the wife. But this will be conditional on the wife expressly undertaking to pay for all of the general outgoings on the former matrimonial home. This will be discussed in more detail below.

The law

Maintenance pending suit and interim maintenance

10.  As indicated above, the law is well known and not in dispute. Reference should be made to sections 3 and 5 of the Matrimonial Proceedings and Property Ordinance Cap 192 as appropriate and as set out in the Memo in paragraph 2(6) above.

11.  Ultimately, and as Rayden points out

…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 paragraph 16.17 of Rayden, 18^th edition).

12.  Further

In practice, as oral evidence is rarely given, [and here it is of note that the application is being dealt with on paper in any event] 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 ……” (See paragraphs 16.18 of Rayden, 18^th edition).

13.  Likewise, the court may look to the assertions made by the payee and take a similar approach when looking at her means and alleged reasonable requirements.  The court should try to 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.

14.  Although I was not specifically referred to the following authority by either side it seems to me that the following section from Jackson’s Matrimonial Finance 9^th edition (paragraph 3.92) may also be of some assistance:

“When a party applies for an order for maintenance pending suit or for periodical payments, it is not a complete answer to the claim for the potential payer to say: ‘I have no income and no assets’. In one case, a husband with a very small income (in three successive years it was £42, £69, £60) who asserted that he was ‘living on borrowed money and staving off a number of creditors while he [was] developing certain properties’, was nevertheless shown to have maintained by means of bank loans a consistent standard of living over a substantial period: the court in effect held that if he could borrow for himself he must likewise borrow for his wife. The principle was that he was able to touch resources from which payments could be made; he had the ability to obtain the necessary money, albeit bank loans, and it was assumed that his ventures were such as not only to justify the loans but also reasonably to contemplate their repayment in due course ….”

In this instance it is of note that the husband says that he has significant loans and that means, that historically at least, he did have the ability to borrow.

15.  Reference has also been made by each side to the Hong Kong Court of Appeal decision in HJFG v KCY [2012] 1 HKLRD 95 where it was 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.”

What are the wife’s reasonable needs?

16.  Counsel for the husband, Ms Booth, helpfully set out in table form the up to date position with respect to the outgoings and each party’s respective positions in relation to them. In so far as the General Expenses are concerned, she stated as follows:

	Item	Wife’s 1st Affirmation[1]	Interim Court Order	Wife’s 2nd Affirmation/ Form E[2]	Husband’s Proposal
	Rent & Rates	2,660	0	2,660	0
	Utilities	6,900	6,900*	6,900	0
	Management fees	3,150	0	3,150	0
	Food	10,000	10,000*	10,000	8,000
	Household expenses	7,000	5,000*	7,000	2,000
	Car expenses	4000	0	4,000	0
	Dependent Family Members	10,000	0	10,000	0
	Domestic Helpers (1)   Medical expenses (2)   Flight tickets	9,260	9,260*	9,260 200 666	0
	Other (repairs, Unforeseen, credit card charges)	2,000	0	2,000	0
	Total (General)	54,970	31,160 *rounded to 31,000	55,836 (+866)	10,000

Given what I have said, on the premise that the wife, and not the Paternal grandfather shall be responsible for all of the outgoings on the former matrimonial home, I shall allow a further HK$2,660 per month for Government rent and rates, HK$3,150 for management fees and HK$9,260 for the payment of the two domestic helpers salaries. I shall not allow HK$10,000 for the parents in laws pocket money. This really is something that has to be settled between the husband and his parents directly. Nor will I allow HK$2,000 for any other unforeseen expenses. The other figures for food and household expenses shall remain as set out above in the interim interim Ruling. Thus, upon the wife’s express undertaking to pay for the Government rent and rates, utilities and management fees on the former matrimonial home and to pay for the food and other household expenses for the occupants including her parents in law and two domestic helpers together with the salaries of the two domestic helpers employed by her father in law, I shall allow the sum of HK$36,970 or say HK$37,000 for general expenses.

W’s personal expenses

17.  In so far as the wife’s personal expenses are concerned, Ms Booth sets out the different permeations as follows:

	Item	Wife’s 1st Affirmation[3]	Interim Court Order	Wife’s 2nd Affirmation/ Form E[4]	Husband’s Proposal
	Meals out of home	2,000		2,000	2,000
	Transport	3,000		3,000	2,000
	Clothing/shoes/ accessories	2,000		2,000	2,000
	Personal grooming (haircut and cosmetics)	4,000		4,000	2,000
	Entertainment “Movies/Local Outing/Gifts/ Lai see)	3,000		3,000	1,000
	Holiday	10,500		10,500	0
	Medical/Dental	0		5,500	1,000
	(3)   Tax (Property Tax incurred in India for Landed Property 3)	500		5,500	0
	Insurance Premia	0		0	0
	Personal	8,000		8,015[5]	0
	Safety Deposit Box	250		250	0
	Others	0		0	1,000
	Total (Personal)	22,750[6]	9,000	33,265[7]	11,000

It is of note that I allowed HK$9,000 per month previously, without going through each item of expense and on a very broad-brush basis. The husband now offers HK$11,000 per month and the wife seeks HK$33,265 per month, excluding holidays. This, on the wife’s case, is an increase of about HK$10,500 per month, from her original estimate and includes an increased amount for tax and medical insurance. On the premise that the husband is not challenging a number of the expenses, I will allow HK$15,000 per month. In particular, I have not allowed the estimates for “personal” and accept that there is most likely some double accounting here. This is not an additional category in the Form E. Further, I will not allow HK$5,500 per month for tax. Even according to the wife’s own documents, she only paid HK$25,225 for the tax year 2018/19. Given that she only received a salary up until December 2019 and she has not worked since, this sum is likely to be lower going forward. I also did not understand the document produced by her with respect to the so called land tax in India. I will allow HK$3,000 for tax and HK$2,000 for Medical/Dental. It is accepted that this will not be sufficient for private medical cover in the short term.

M’s expenses

18.  I originally allowed HK$20,000 per month for M’s monthly expenses, in addition to payment of the school fees. The wife now seeks an increased amount for her expenses as set out below. The husband offers HK$21,000 per month. I will allow HK$22,500. I will not allow the increased sum for the child’s travel, nor as with the mother will I accept HK$3,500 for Medical/Dental. I will though increase this sum to HK$2,000 per month in total. I will also allow HK$1,400 for school lunches. Thus, I will allow the following:

	Item	Wife’s 1st Affirmation[8]	Interim Court Order	Wife’s 2nd Affirmation/ Form E[9]	Husband’s Proposal
	School fees (to be paid by the Husband directly	14,750	14,750	14,750	14,750
	School meals	1,400	0	1,400	0
	School projects/ assignments/ stationary	1,000	1,000	1,000	1,000
	Transport to school (private car)	10,000	12,000	24,000	12,000
	Medical/Dental	0	0	3,500	1,000
	Extra-Curricular Activities	4,500	2,000	2,280	2,000
	Entertainment (W adds “presents/gifts/toys”)	4,000	2,000	4,000	2,000
	Holidays	10,500	0	10,500	0
	Clothing/shoes/ accessories	2,000	2,000	2,000	2,000
	Insurance premia	13,750	0	0	0
	Lunches/pocket money	200	200	200	200
	Vaccinations/Medicines /Sanitizers/Wipes/School donations	1,000	600	1,000	600
	Uniform	200	200	200	200
	Others	0	0	3,250[10]	0
	Total (Children)	29,350[11]	20,000	42,830[12]	21,000

In addition, the husband has undertaken to pay for M’s school fees. I will hold him to this undertaking.

The husband’s ability to pay 

19.  In this instance the husband maintains that he has limited financial resources and that he is finding it harder and harder to make ends meet. To that end it is of note that the audited financial statements for the husband’s parent company X & X have only been provided for the year ended 2018. This shows a revenue of nearly HK$50 million and a net profit of over HK$6 million. A copy of a Profit and Loss ledger only has been produced for the year ended 2019, indicating that the company made a net profit of just under HK$1 million. A similar ledger for the first half of this year shows the company making a significant loss. The court awaits sight of the audited financial statements to see whether or not the reasons for this dramatic downturn in business, are, as is suggested by the husband, because of the protests and COVID 19, or whether or not there are any other reasons for this. In any event the court notes that significant profits were made in the past and that the husband has other financial resources at his disposal, including some cash assets and monies owed to him. He also has the ability to borrow. In such circumstances it seems to me that the husband should be able to make suitable financial provision for his wife and child together with his other family members, as he has done in the past.

The wife’s financial resources

20.  I accept that the wife’s own financial resources are somewhat limited at present, given that she is not currently working. Previously she worked in the husband’s company. Although the wife owns a small property in India, other than that it seems that she is currently totally reliant on the husband from a financial perspective.

Standard living

21.  Often where there are claims of financial non-disclosure and hidden wealth, the court looks to the standard of living enjoyed by the parties prior to the break-up of the marriage. In this instance it seems that the parties enjoyed a comfortable but not an overly lavish lifestyle. They lived as a three generational unit, in a house of approximately 3,000 square feet in the New Territories. They had domestic help and the husband and wife would travel from time to time, sometimes business class, but this is not on the face of it a couple who lived a very expensive lifestyle. Further, although it is trite, for the record it is worth repeating that when a marriage breaks down and the parties begin to live in two separate households it is not possible, generally speaking, to maintain the same standard of living as before. There has to be, of necessity, some form of adjustment. This case is no exception.       

Conclusion

22.  In conclusion then I will make an order that the husband do pay the wife HK$34,000 per month as maintenance for herself (i.e. HK$37,000 divided by 2 = HK$18,500 + HK$15,000 = HK$33,500 rounded up to HK$34,000) and HK$41,000 per month for M (i.e. HK$18,500 + HK$22,500 = HK$41,000), plus he will undertake to continue to pay for M’s school fees. As indicated above this will also be upon the wife’s undertaking to pay for the Government rent and rates, utilities and management fees on the former matrimonial home and to pay for the food and other household expenses for the occupants including her parents in law and two domestic helpers together with the salaries of the two domestic helpers employed by her father in law. These undertaking shall be provided to the court within the next 7 days.  

Litigation funding 

23.  Ms booth helpfully summarized the updated position on the law on litigation funding in her submission as follows:

VII.     LITIGATION FUNDING -LEGAL PRINCIPLES

48. As to the law on the funding of litigation costs, as recently set out by the Court of Appeal in WW v LLN Formerly Known as LSM [2020] HKCU 609 following HJFG v KCY (supra) and Currey v Currey [2006] EWHC Civ 1338 (at §§20-21):

“(1) In order to obtain litigation funding, the burden is on an applicant to demonstrate that she cannot reasonably procure legal representation by any other means. This includes showing that she cannot secure publicly funded legal help at a level of expertise apt to the proceedings. To the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, either directly or as the means of raising a loan to fund legal services ...

(2) The subject matter of the proceedings and the reasonableness of the applicant’s stance in the proceedings will always be relevant.

(3) The period over which costs allowance is to be paid is also relevant. If the application was made before the FDR hearing, it may well be wise to order that the costs allowance should fund the applicant only up that hearing. If the FDR fails, it would be for the new judge, on the basis of the materials properly before him, to determine whether a new allowance for legal costs should be granted and if so, in what amount: HJFG v KCY [2012] 1 HKLRD 95, § §80-83; Currey v Currey [2006] EWCA Civ 1338.

[21] The court should be alert to the risk of injustice arising from irrecoverable and/or unmerited sums paid for litigation funding which would call for extra caution in the balancing exercise. As stated by Thorpe LJ in Moses-Taiga v Taiga [2005] EWCA Civ 1013, at §20:

‘ … the whole purpose of alimony pending suit is to sustain the petitioner pending the court’s determination. There is manifestly a risk of unjustified and irrecoverable payments, but that has to be balanced against the risk of a denial of access to justice for the petitioner, if she has not the means to sustain herself and the litigation pending its determination.’”

49. There should be some breakdown of the anticipated costs to support an application for litigation funding: HJFG v KCY (supra) at §§78-79. The rationale for this requirement was explained by Hartmann J A at §78 as follows:

“Section 3 of the Ordinance, of course, still required the Judge to be satisfied that any contribution towards the wife’s ongoing legal costs was reasonable. That meant that he had to be able to conduct some analysis of the nature and extent and purpose of the contributions sought. On the part of the wife, that required some breakdown of her anticipated costs.”

Discussion

24.  In this instance the wife seeks a staggering HK$250,000 per month for litigation funding. She justifies this by reference to the money spent on the legal proceedings to date and her breakdown of costs attached to her first affirmation in which she estimates that she will need HK$662,100 for a s.17 application and HK$282,700 for this application. It is of note that to date no section 17 application has been issued. In addition, she reiterates her need for a forensic accountant. With respect this seems excessive. I am also concerned by the overly litigious way in which these proceedings have been started.

25.  Thus, although I accept that the wife has limited financial resources of her own and that even if she were able to re mortgage her Indian property, that that would still leave her with the problem of repaying that mortgage (and in any event this property is not worth a great deal), it seems to me that it would not be appropriate for litigation funding to be set at such a high level. It is also accepted that she is unlikely to be eligible for legal aid – although it seems to me that she should make an application in any event. In such circumstances I shall make an order in line with the husband’s proposal, namely that the husband do pay the wife’s lawyers HK$50,000 per month for the next 6 months or until the FDR hearing, whichever comes first.   

Costs

26.  The wife has been more successful than the husband when it comes to the issue of maintenance pending suit for herself and interim maintenance for M, but the husband has been more successful than the wife when it comes to the issue of litigation funding. In such circumstances I intend to exercise my discretion and make an order nisi to be made absolute in 14 days’ time, that the Respondent shall pay half of the Petitioner’s costs of and occasioned by this application, including the interim interim application, on a party and party basis to be taxed if not agreed. There shall be certificate for counsel and I thank them for their assistance with this matter.

Order

27.  Consequently, I shall make an order as follows:

UPON the Respondent’s undertaking to continue to pay for M’s school fees.

AND UPON the Petitioner’s undertaking to be provided to the court within the next 7 days as set out in paragraphs 16 and 22 above.

IT IS ORDERED THAT: 

1)    Order 1 contained in the court order dated the 4 June 2020 shall be varied in that the Respondent do pay maintenance pending suit to the Petitioner for herself in the sum of HK$34,000 per month and interim maintenance to the Petitioner for the child of the family, M, in the sum of HK$41,000 per month, the first payment to be made on the 1 October 2020 and thereafter to be paid on the 1^st day of each succeeding month until further order.

2)   The Respondent do pay litigation funding as maintenance pending suit to the Petitioner’s lawyers, in the sum of HK$50,000 per month, the first payment to be made on the 1 October 2020 and thereafter to be paid on the 1^st day of each succeeding month for the next 6 months or until the FDR hearing, whichever comes first.

3)   There shall be an order nisi to be made absolute in 14 days’ time that the Respondent shall pay half of the Petitioner’s costs of and occasioned by this application, including the interim interim application, on a party and party basis to be taxed if not agreed. There shall be certificate for counsel.