LHP v. HWCD

FCMC 1538 /2020

[2020] HKFC 231

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 1538 OF 2020

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BETWEEN

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D E C I S I O N

( Maintenance Pending Suit )

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1.  This is the petitioner’s (“Wife”) application by way Summons dated 21 July 2020 against the respondent (“Husband”) for maintenance pending suit for herself and for the 3 children of the family in the total sum of $148,000 per month.  Such sum is revised to $142,000 per month as stated in the Wife’s submissions dated 5 October 2020.

2.  Pursuant to the Order dated 7 August 2020 by HHJ Pang, the Wife has been receiving interim interim maintenance in the amount of $50,000 per month and this application be disposed of on paper without oral hearing.

Background

3.  The Wife and the Husband are presently 41 years old and 54 years old respectively. 

4.  They were married in Hong Kong on 29 December 2007.  By the time of their separation in February 2019, they had been married for over 11 years.

5.  From this marriage, 3 children were born namely Candace, a girl who is now 11 years old, Charis, a girl who is now 7 years old and Brayden, a boy who is now 4 years old (unless otherwise stated, the 3 children shall be collectively referred to as “the Children”).

6.  Candace is currently studying Form 1.  Charis is studying P2 and Brayden is studying K3.

7.  During the marriage, the Wife took on the dual role of looking after the Children and running her own practice as a dentist.  The Husband has been a civil servant as a Structural Engineer for the past 10 years.  He is and was the major breadwinner of the family and contributed most of the family expenses during the marriage.

8.  The family had last cohabited at an apartment in Hung Hom, Kowloon, Hong Kong which was a rented apartment measuring approximately 1,100 sq. ft. 

9.  Further pursuant to the Order of HHJ Pang dated 7 August 2020, interim custody, care and control of the Children were granted to the Wife with supervised access to the Husband.

The Law

10.  The Court’s jurisdiction to make an order for MPS for parties to a marriage and interim maintenance for the Children is pursuant to Section 3 and 5 of the Matrimonial Proceedings and Property Ordinance Cap. 192 (“MPPO”) which provide that the Court shall make such order as it considers “reasonable”. 

11.  In determining an application for MPS, the overriding considerations are the immediate and reasonable needs of the parties and the Court has to balance the reasonable needs of the applicant and the ability to pay of the other side on an interim basis (see LJ v LWHH [2003] 3 HKC 455 (CA) at §35).

12.  In undertaking this balancing exercise, the Court will adopt a broad brush approach, without a detailed investigation of the financial positions of the parties which will be examined at a later date at a full ancillary relief hearing if agreement cannot be reached in the meantime.

13.  In the decision in HJFG v KCY (unreported, CACV 127/2011, 28 October 2011), the Court of Appeal set out the principles to be applied to applications for maintenance pending suit at §37 :-

(1) The sole criterion to be applied in determining the application is “reasonableness”, which is synonymous with “fairness”.

(2) A very important factor in determining fairness is the marital standard of living.  This is not to say that the exercise is merely to replicate that standard.

(3) 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.

(4) 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.

14.  It is also well established that in ancillary relief proceedings, which include applications for maintenance pending suit, there is a duty on both parties to make full and frank disclosure of the relevant materials to enable the Court to exercise its discretion to make the order, and if it is of the view that the evidence disclosed by a party is deficient, adverse inferences may be drawn against that party (see C v F) (unreported, FCMC 1701/2000, 20 September 2004 at §28).

Standard of Living

15.  According to the Wife, the standard of living enjoyed by the family can be described as typical Hong Kong upper middle class.  Prior to their separation, the family was living in a flat measuring around 1,100 sq. ft in Laguna Verde.  The flat was rented under the Wife’s name for $39,500 per month which was paid for by the Husband.

16.  During the marriage, the Husband was also responsible for the utility bills, the school fees for the Children and approximately half of the fees for the Children’s extra-curricular activities (“ECA”).

17.  The parties invested in private property including a flat and carpark in Kornhill presently worth about $11.75 million and $1.6 million which are both rented out, a flat in Shenzhen in the name of the Husband worth about $6.8 million which is currently used by the Husband as personal storage, and an office premises at Progress Commercial Building, No. 9 Irving Street worth about $4.5 million.

18.  Between December 2013 and October 2014, the parties also rented an additional flat at Mid-Levels at around $150,000 for the sole purpose of helping Candace’s primary school application for the Central and Western District. 

19.  The family employed two domestic helpers to take care of the Children.  Between 2017 to 2018, the parties had also hired a private driver to shuttle the Children from school to their ECA.  The Wife said that the family would go on at least one overseas trip each year whilst the Husband said that they only spent substantial expenses on overseas trip once in a few years during the marriage.

20.  The Children all study at private and direct subsidized schools and have benefited from the numerous ECA including Chinese, English and Mathematics Class for Candace and Charis and Chinese, Mathematics and Create Reading for Brayden.  They have also been able to pursue their interests in musical instruments and sports including the Flute, Music Theory, Orchestra, Drawing and Table Tennis for Candace; Violin, Piano and Fencing for Charis; and English, Violin and Fencing for Brayden.

21.  The Husband said in his 2^nd Affidavit that he has incurred about $2.62 million across the years after marriage, including organizing a grand ceremony in a 5-star hotel costing around $500,000 in 2010, birth of the Children in private hospitals costing about $300,000, etc.  He further alleged that he has to borrow money from banks for fulfilling the expectation of the Wife and her family members.  In any event, I consider that the parties’ standard of living before separation is very comfortable.

22.  According to the Husband, the parties had some previous discussions regarding the amount of interim maintenance to be paid.  The Husband says that the agreement between parties as to fixing interim maintenance at $50,000 plus the Children’s school fees is apparent from the WhatsApp conversations between the parties in March 2020 to May 2020.

23.  In my view, even if there is an agreement between the parties regarding the interim maintenance, the court still has jurisdiction to make a fresh order for MPS or interim maintenance especially when there is a change of circumstances.

The Wife and Children’s Reasonable Needs

24.  Based on the updated figures at §36 of the Wife’s 1^st Affidavit, her contention is that she requires $206,310 per month to maintain herself and the Children.  After having forgone $15,000 being contribution to her parents, she estimates her and the Children’s reasonable needs are $191,310 per month.

25.  The Husband challenges most of the items of the Wife’s estimated expense and suggests that her and the Children’s reasonable needs are $113,226.91 per month according to the submission of Mr Yan for the Husband.  As the Court will not engage in “a detailed investigation into the finances of the parties” and even though analysis is needed, such analysis only needs to be on a “broad brush” basis. 

26.  In line with the legal principles as mentioned above, I will only assess those items disputed by the Husband that may have a significant impact on the sum of maintenance pending suit as follows:

a) Transport (including car expenses and personal transport)

27.  In relation to transport, the difference between the parties appear to be whether the use of a private car is necessary and whether such expenses have already been claimed by the Wife as business expenses.  The Husband claims that the Wife’s personal transport expenses, including expenses incurred for her private car, have already been covered under the business expenses of her dental company.  Hence there should not be a double claim for the private car under the Wife’s personal expenses.  Further, the Husband considers that the amount of $6,200 for transportation under other heads, including $4,700 of school buses fees for the 3 Children and $1,500 as general transportation expenses, should already be sufficient.  The Wife disagrees and claims expenses for both travelling by private car and by Uber, taxi and other public transportation, rendering the total amount for transportation to be $19,200 per month.

28.  I accept that the financial statements of the Wife’s dental company, produced as Exhibit “HWCD-17” of the Husband 2^nd Affidavit, seem to support that her dental company is indeed the registered owner of the motor vehicle that she is using.  Nonetheless, the Wife has included all of the motor vehicle’s expenses, from license expenses, insurance, garage expenses, monthly and hourly carpark expenses, petrol expenses and Autotoll expenses under her personal expenses and at the same time, she claims for “motor vehicle expenses” in her dental company’s financial statements.  In my view, the Wife’s double counting of business expenses into personal expenses is untenable and the Wife should have used this private car for both business and personal purposes.  However, in view of the living standard of the parties before separation and the fail that they did hire a driver during marriage, I consider that it is justified for the Wife to maintain a private car.  Based on the broad brush approach, I apportion half of the car expenses for the Wife’s and the Children’s uses and the amount is assessed at $5,750 per month (ie $11,500÷2).  I also accept that sometimes, the Wife, the Children and the domestic helper may need to take public transport and therefore allow $500 for the Wife’s personal transport, $4,700 school bus fees and $500 for the Children’s and the domestic helper’s other transport.

b) Meals, entertainment and holiday (including personal meals out of home, personal entertainment, personal holiday, entertainment and holiday expenses for Children)

29.  The total claim by the Wife in this category amounts to $10,000, which, according to the Wife, accounts for overseas trips during school holidays after the Covid-19 epidemic.

30.  The Husband submits that a monthly sum of $3,000 under this head is sufficient, considering the impact of the epidemic.

31.  Although the Wife may not be able to have holiday with the Children outside Hong Kong in the meantime, I still think that since the Children are still young, they can have short holiday inside Hong Kong eg Ocean Park or Disney.  Based on the broad brush approach, I assess that for a 4 people family, $6,000 (ie $4,000 for meal out of home, $1,000 for the Children’s entertainment and $1,000 for the Children’s holiday) is reasonable in the circumstances.

Other Children’s expenses (including school fees, extra tuition fees, books and stationery, ECA, clothing/shoes)

32.  Although the Children’s school fees have been fully paid for by the Husband in the meantime, he has not expressly given an undertaking to the court to continue to pay the fees. Hence, I will include the school fees in the assessment and if the Husband complies with the MPS order to be made, the Husband is entitled to stop payment of such fees.

33.  The Husband expects extra tuition fees and ECA for the Children to be reduced in view of the Covid-19 epidemic and complains that more than doubled in merely a few months’ time from $15,080 as claimed by the Wife in her WhatsApp message in late March 2020 to $34,823.

34.  The Wife gives her explanations in her 2^nd Affidavit as to why some addition or new tuition and ECA are arranged for the Children which I do not think to state here.  For the purpose of this application, since the Wife has the interim custody, I accept such explanations and reasons which are for the interest of the Children.  I fully allow these expenses as claimed (ie $34,823 and $15,120) subject to the condition that the Wife has to provide the Husband with the relevant official receipts on the first day of each and every month after the making of this Maintenance Pending Suit Order.

35.  For books and stationary expenses, the Husband contends that $2,000 per month is excessive. He suggests that a more reasonable sum is $500 per month which amounts to $167 per child per month.  According to the Wife, textbooks alone already costs $3,000 per child per year ie $750 per month per child, which has not yet taken into account of purchase books online.  Based on the broad brush approach, I assess $1,500 is reasonable in the circumstances.

36.  For clothing/shoes for the Children (total $3,000), the Wife claims $1,000 per month per child which does not take into account that the Children are growing especially Candace who is about to hit puberty.  The Husband proposes $1,500 per month (ie $500 per child per month).  Based on the broad brush approach, I assess $2,400 (ie $800 per child per month) is reasonable in the circumstances.

Insurance premium

37.  The insurance premium payable for the Children is $4,667, which is not disputed by the Husband.  The Wife claims that the insurance premium payable for her own policies (Nos. 38-04XXX82-1 and 28-90XXX84-9) (the “Policies”) now stands at $7,700 + $1,142 = $8,842.  The Wife herself produced a copy of the Policies as Exhibit “LHP-16” of her 4^th Affidavit, which shows that the insurance premium payable is US$7,770.44 and HK$13,709 per year (rather than per month as claimed by the Wife).  Adopting an exchange rate of US$1=HK$7.75, the monthly premium payable is only HK$5,018[1] and HK$1,142[2], the total of which amounts to HK$6,160. I consider that the Wife’s claim of HK$8,842 is an exaggeration of her expenses under this head. I assess that the total sum for insurance of the Wife and the Children would amount to HK$6,160 + HK$4,667 = HK$10,827 per month.

38.  To sum up, I allow the reasonable needs for the Wife and the Children for the purpose of this application as follows:

Item	Amount (HK$)
Rent	24,000
Mortgage instalment	11,963.91
Utilities	2,500
Management fees	826
Food	20,000
Household expenses	3,000
Car expenses	5,750
Domestic helper	5,410
Meals out of home	4,000
Personal Transport	500
Personal clothes/shoes	1,000
Personal grooming	1,000
Personal entertainment	1,000
Personal holiday	1,000
Personal medical/dental expenses	1,000
Tax	2,500
Insurance premium (for the Wife and Children)	10,827
School fees	10,605
School bus fees	4,700
Children’s transport	500
Children’s medical/dental expenses	1,000
Extra tuition fees	15,120
Books and stationery for Children	1,500
Extra-curricular activities for the Children	34,823
Entertainment for Children	1,000
Holiday expenses for Children	1,000
Clothing/shoes for the Children	2,400
Children’s uniform, lunches/pocket money	1,000
total	169,924.91

The Wife’s Income and Assets

39.  According to the Wife’s 2^nd Affidavit filed 22 July 2020, her services income received by her dental company was $405,450 for the first 5 months of 2020.  That amounts to $81,090 per month.  But she said that it is likely to receive total income of $49,000 per month from her dental business due to the COVID-19 pandemic. Apart from the dental income, she accepts that she receives rental income from her Causeway Bay Office Premises of $12,500 per month and dividend payments from stocks and shares in the amount of $2,656 per month.  The Wife also accepts that she receives dividends from Manulife of approximately $3,100 per month.

40.  The Wife therefore accepts that her total income including her salary, quarter allowance, rental income and dividends is approximately $67,256 per month.

41.  However, the Wife later stated in her Form J dated 20 August 2020 that her income has increased to $77,656.50 which consists of $25,000 salary, $37,500 allowances, $12,500 rental and $2,656.5 dividend but excludes $3,100 Manulife dividends.  No explanation is given by her as to what the allowances of $37,500 means.

42.  For her appointment by the University of Hong Kong as Honorary Assistant Professor in her Form E and her 2^nd Affidavit, I accept that for the purpose of this application, her appointment as such is pro bono

43.  Without conducting a detailed investigation into her finances, I consider that for the purpose of this application, she has the income at least $80,756.50 (ie $77,656.50 + $3,100) every month.

44.  The Husband further argues that the Wife should use her assets including $1 million in her bank accounts, securities worth $1.8 million and $300,000 in her Haitong securities account.  I note that the Wife has not made any application for legal cost provisions and accept that she will need to use her remaining assets and financial resources to meet the legal expenses in this litigation[3].

45.  I find that the net reasonable needs of the Wife and the Children is $89,168.41 (ie $169,924.91 - $80,756.50) per month.

the Husband’s ability to pay taking into account his reasonable monthly expenses

46.  The Husband has employed as a structural engineer for around 10 years and his present income is not in dispute which is $156,420 per month.

47.  What is in dispute is the Husband’s reasonable monthly expenses.  The Wife contends that the Husband’s reasonable monthly expenses should stand at a mere total of $40,150 (excluding the interim interim maintenance at $50,000 currently payable, etc), while the Husband puts the figure at $305,650 (including the interim interim maintenance plus school fees at $15,000, etc).

48.  The Wife challenges certain items of the Husband’s expenses.  First of all, she contends that the Husband’s credit card loan repayments of $60,000 per month as said in the Husband’s 2^nd Affidavit. 

49.  According to his Form E, he claims to repay credit card loan for $100,000 per month in his personal expenses since he owes over $610,000 to each of Dah Sing Credit Card and Citibank Credit Card.  The Husband submits that it is appropriate to consider it as recurring monthly expenses rather than liabilities and that this item was incurred because of family obligations as opposed to for his own sake, as particularised his 2^nd Affidavit.

50.  Nonetheless, the Husband only chooses to disclose just a few statements of his Hang Seng Bank in 2010 in his 2^nd Affidavit but fails to disclose the relevant credit cards statements in order to show the expenses incurred by him are all related to the alleged family obligations.  I have great reservation as to why over $1,200,000 is due to the 2 credit cards by him.  As the affidavit or Form E disclosure by him 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 Husband.  In such a situation, I am of the view that I am entitled to draw adverse inference against him and should err in favour of the Wife. For the purpose of this application, I reject his explanation that he needs to owe to or borrow money from the 2 credit cards companies for the family obligations and that no reasonable explanation is given by him as to why such a huge amount of liabilities has to be incurred bearing in mind that he has got a substantial and steady income of $156,420 per month.  In the circumstances, I disallow his credit card loan repayments of $60,000 per month for the purpose of this application.

51.  As the Husband is now residing at his mother’s property and shall bear his share of the food and other reasonable household expenses, I therefore accept his payment of $10,000 per month to his mother but I make no comment as to his allegation of borrowing money from his mother in order to purchase the matrimonial home.  It is unnecessary for the court to make any finding at this stage.

52.  I allow the storage is necessary due to the Husband’s current accommodation at his mother’s place, and the amount of $3,000 is reasonable.

53.  In his Form E filed 3 July 2020, the Husband claims only $1,000 for medical/dental.  But suddenly in his 2^nd Affidavit filed 16 September 2020, about 2 months later, he provides an account of various medical conditions that he is currently suffering from, ranging from hypertension, diabetes, heart diseases and stress, all of which he claims to require specialist treatment in the private sector. Although the Husband as a civil servant enjoying free medical benefits from the government, I consider that he is still entitled to seek private medical treatments.  Nonetheless, his purported medical costs for $9,310 per month seem highly excessive in view of the fact that he has over 12 insurance policies, of which he is paying the premium of $13,000 every month.  I only allow $1,000 as claimed in his Form E.

54.  For the alleged legal costs of $90,000 per month, I note from his Form E that he has about $280,000 cash in his bank accounts, stock and securities valued around $240,000, various insurances with surrender values about $1.5 million, excluding the value of his MPF around $1.8 million (subject to further discovery, some of the MPF may be able to be realised).  I consider that he has sufficient assets to pay such legal costs.

55.  After the exclusion of the repayment of credit card loan, interim maintenance and the Children’s expenses, I consider that on a broad brush approach, his reasonable personal expenses are $67,337 per month, breakdown of which is set out as follows:

Item	Amount (HK$)
Mortgage instalment	13,657
Utilities	1,000
Management fees	1,680
Food	3,000
Storage rental	3,000
Meals out of home	3,000
Transport	1,000
clothes/shoes	1,000
Personal grooming	1,000
entertainment	1,000
holiday	1,000
medical/dental expenses	1,000
Tax	13,000
Insurance premium	13,000
Contribution to parents	10,000
total	67,337

56.  I find that he has the ability to pay the sum of $89,083 (ie $156,420 - $67,337) and I round down to $89,000 for convenience.

Backdating

57.  Mr Leung for the Wife in his written submission asks for backdating the payment to the date of the Summons ie 12 July 2020.  As the court has make an interim interim maintenance order for $50,000 on 7 August 2020 and the Husband voluntarily makes the direct payment for the Children’s school fees all along, I exercise my discretion to disallow the Wife’s request for backdating.

Conclusion

58.  I now order that:

i. the Husband do pay the Wife the maintenance pending suit for herself and interim maintenance for the 3 children of the family in the total sum of $89,000 per month from 1 December 2020 and thereafter on the 1^st day of the succeeding months, into the Wife’s designated bank account, until further order;

ii. the Wife shall provide the Husband with the relevant official receipts of the Children’s tuition and extra-curricular activities on the 1^st day of each and every month from 1 December 2020 until further order.

59.  For the avoidance of doubt, the Husband is allowed to stop payment of the Children’s school fees direct from 1 December 2020 onward.

60.  Regarding the question of costs, since the application is determined on a broad brush approach without going into detailed investigation of the finances of the parties as any under or over payment can be adjusted at the final trial for ancillary relief, I make a cost order that costs of this application be reserved to be determined after the ancillary relief trial.