TOCG AKA CTOCG v. CKKD

FCMC 14183/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

SUIT NO. 14183 OF 2013

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DECISION

(Variation of Undertaking)

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1.  Upon the Petitioner Wife instituting these divorce proceedings on 7^th October 2013 for the dissolution of her marriage which had lasted some 30 years and for general ancillary relief, the Respondent Husband at the FDR 1^st Appointment hearing on 16^th December 2013 gave an undertaking through his counsel to this Court and the Wife to maintain her financial status quo by continuing payment to her of monthly maintenance of HK$50,000 and reimbursements of all her household and other expenses and unlimited access and use of all credit cards that were then available to her pending determination of her ancillary relief application. The Husband now seeks to vary this undertaking as to one of those credit cards, namely an American Express Centurion Card of which he is the principal card holder but which he claims he no longer wants to maintain as its annual fee has just been doubled from HK$19,800 to HK$38,800.      

2.  While that may seem a hefty increase to most people, it is relevant to note that notwithstanding the parties are still at the stage of making discovery over the true extent of their respective financial wealth, of which if I may add has been quite intensive and at times highly contentious, and has so far been the parties’ major conflict in these proceedings, it would be fair even at this juncture to regard this as a possible “big-money” case, or at least one which involves very substantial wealth preliminarily assessed well in excess of HK$128 million by the Wife’s forensic expert even before the final assessment of various companies shareholdings, with the Wife disclosing in her Form E of having cash in the bank of well over HK$10 million, jewellery and watches worth more than HK$15 million, and 3 luxurious cars including a Ferrari and a Mercedes with a combined value of more than HK$5 million just to name a few examples, as well as a regular personal spending in excess of HK$1 million per month mainly on restaurant meals, clothing, grooming, entertainment and holidays, most of which must have been paid for with her many credit cards.

3.  As for the Husband, even his then very sparse and wholly inadequate Form E, to which not a single document not even any bank statement of his disclosed 7 bank accounts was exhibited but in which he described himself as an entrepreneur and directors of several companies, reveals an income of more than HK$1.6 million per month with an equally substantive monthly expenditure, and while he was then unable to confirm his net worth, the Wife believes it to be many times more than hers.       

4.  With such wealth involved, surely the mere doubling of the annual fee of that credit card to what must be a paltry sum to the parties by HK$19,800 for the year, or just over HK$1,600 per month, is blatantly clear that it cannot and should never have been a proper reason to bring the matter to court as it is grossly disproportionate and simply pales in comparison with the combined resultant legal costs, of which I understand to be in excess of HK$250,000 including brief for experienced counsel on both sides for the hearing, with Ms Francis Irving for the Husband and Mr Jeremy Chan for the Wife.  

5.  Indeed the Husband in his supportive affirmation has proffered another reason : That the Wife has rarely utilized the services and benefits provided by the card when he said in paragraph 7 :

“Due to the substantial increase in the annual fee and the fact that I, the Petitioner and (eldest daughter) rarely, if not never, utilize the specialized services provided by the Centurion Card and each of us has numerous other credit cards, I have come to a decision that it is not necessary to renew the Centurion Card, which would also result in the proposed cancellation of the subsidiary cards of the Petitioner (Card #) and that of (the eldest daughter). In other words, the Petitioner, (the eldest daughter) and I would no longer have the use of the Centurion Card.”

6.  He then went on to justify his proposal in that the Wife would still have 11 other credit cards for her use of which he will continue to be responsible and with a total credit limit in excess of HK$960,000 available to cover all her spending, which he contends should be more than adequate considering the fact that her spending with the Centurion Card over the past 3 months averaged no more than HK$175,000 per month, and hence Ms Irving argues on his behalf that unless the Wife intends to abuse the use of that card, she sees no reason why the Husband should not be allowed not to renew the Centurion Card which he finds does not provide any additional value to them when its annual fee has now been doubled.

7.  The Wife as expected does not agree to the Husband’s application, citing various reasons in her opposing affirmation which can be summarised as follows:

(a) that the increase in annual fee of some HK$19,000 is insignificant given the parties’ wealth and income;

(b) that the card has been used by the family since 2000 and that its elite status and prestige have formed an integral part of their financial status quo;

(c) that the Husband expressly promised her in 2008 that he would not cancel her credit cards again especially the Centurion Card;

(d) that the Husband should have been aware of the increase in annual fee since July or August 2013 when the annual fee is usually paid, and hence he already knew about the increase when he gave his undertaking to maintain her financial status quo in December 2013, and in any event she believes that he has already paid the new increased annual fee in June 2014 and hence his present application is pointless;

(e) that the Centurion Card comes with exclusive privileges and benefits not available in her other cards such as dedicated personal concierge, travel agents, limousine and hotel booking services, and special discount for renting luxurious yacht just to name a few examples, and that almost half of her credit card spending were with this card which is the only one she has with no credit limit and which she can and has used to pay for her substantial medical and hospital expenses;

(f) that it is unfair and unjust that she should be forced to cease having such a card when she is not yet in a position to apply one for her own;

(g) and that there is no valid or logical reason behind his intended cancellation except to further manipulate and undermine her and to impose financial restraints on her in these proceedings.            

8.  In his affirmation in reply filed after the hearing the Husband confirmed that the increased annual fee has in fact not been paid as American Express has agreed to defer charging of the annual fee pending the outcome of this application. He also takes issue with many of the reasons given by the Wife such as his promise not to cancel her credit cards which he insists he has never made, and also citing various examples of what he claims to be the Wife’s under-utilization of the benefits or services provided by the Centurion Card in the past to refute her contention that she needed that card, such as the facts that it has always been his travel agent who handled her travel arrangements including air-tickets and hotels, that she had rented the yacht with the Centurion Card only once, and that as she had split payments of her spending amongst her credit cards in the past, he sees no reason why she cannot do the same with her medical expenses if needed.

9.  There can however be no dispute that the parties have been using this card for some 14 years since 2000, that it has become part of the very fabric of their luxurious lifestyle over that period, and that at least in the Wife’s case that it has been the main credit card used by her for as much as half of all her regular spending including her substantial medical expenses as it is the only card with no credit limits that she has with which to cover those payments.  

10.  Above all, as submitted by Mr Chan for the Wife and described in details in her affirmation, the Centurion Card or according to him otherwise known as “Black Gold” is an invitation-only charge card issued by American Express to cater to more affluent customers, and comes with exclusive privileges and benefits such as automatic worldwide travel insurance, discounts and services at many of the most luxurious shops, restaurants, hotels and hospitals as well as all sorts of exclusive concierge services which she, and no doubt the Husband too, must have enjoyed during their marriage, which is also probably the reason why he had this card in the first place, and which exemplifies their luxurious lifestyle and high standard of living. As such I have great difficulty believing that the Wife somehow no longer utilizes those services upon the breakdown of their marriage.  

11.  It is plain from the terms of the undertaking that what the Husband had agreed to maintain was not just the amount or quantum of the financial provisions for the Wife but also her financial status quo which must include all the privileges and benefits that come with being his wife and which she has been able to enjoy, and that also mean all those privileges and benefits that come with being a holder of the Centurion Card, and which the Husband now wants to take away with no valid reasons other than those lame excuses referred to above, ones which I am unable to fathom how those advising him, with due respect, would believe that they could even get off the ground in court.               

12.  Which brings me to the obvious question of why would someone like the Husband with all his financial resources be bother with such a triviality in the first place, one which can only be described as making a mountain out of a mole hill, and well knowing that it would cost him many times more dearly in legal costs? As a matter of fact, if it were indeed his true reason to cancel the card because it no longer provides any value for the annual fee, it should be blatantly clear to him that the trouble and costs of his application would have provided absolutely no value at all whichever way the court’s decision goes.

13.  I should also note that the Husband, if he was indeed so concerned about the increase, could have easily proposed to the Wife for her to pay for it instead if she were so keen to keep the card, or for that matter for her to propose to pay for it herself, but obviously neither had seen the good and common sense of it, or rather that they would simply not be bother.

14.  I am therefore unable to think of any logical explanation for the Husband’s action save for what the Wife has alleged in her affirmation, that it was to put financial restrains on her in these proceedings, perhaps even to stop her from pursuing her discovery process against him. I accept this was just her allegation in affirmation which was denied by the Husband nor tested by cross-examination, but the fact is that shortly before the Husband’s present application, the Wife was still coming to court to seek yet another round of specific discovery against him when her solicitor Ms Ku complained in her supportive affirmation of 11^th July 2014 about the Husband’s unsatisfactory financial disclosure as follows:

“3. These proceedings were initiated by the Petitioner on 7th October 2013. The parties’ Form Es were exchanged on 5 December 2013. The Respondent has caused a considerable delay in these proceedings by the unsatisfactory financial disclosure thus far…

4. The Petitioner filed her Questionnaire on 24 February 2014, and despite the Order dated 16 December 2013, some delays were caused by the respondent. The Questionnaire was eventually in the Respondent’s first batch of Answer dated 10 April 2014 and later again on 9 June 2014 in his Second Answer, where he provided a more detailed Answer.

5. Unfortunately, the Respondent’s Second Answer, though a more comprehensive version than his First Answer, is still unhelpful and far from satisfactory in understanding the assets and income available to the parties. The Respondent has only provided limited information with regards to his companies and major source of income.”

15.  Given the factual background and track record of the litigation between the parties in these proceedings and that this application was taken out right in the middle of the Wife’s discovery application against the Husband, I agree that the Wife does have a strong point when she concluded in her affirmation that the Husband is simply unable to provide any valid or logical reasons to justify the need to cancel the Centurion Card other than to put financial pressure on her, which if true would certainly not be tolerated by any court.

16.  In the premises I see no reason why the Husband should be allowed to vary his said undertaking, and accordingly his application is dismissed with costs to the Wife and certificate for counsel. Not that I think that matters much to the Husband in his circumstances, which leads me to note that such “cost no object” and “what I want, I get, legal advice be damned” applications are sadly and alarmingly increasing in our courts, whilst squeezing out the many needy and financially much less fortunate litigants who need precious court time to seek the urgent return of their children or for urgent financial relief to put food on the table for their children, or other such issues.

17.  On this I find it necessary to remind practitioners of what Lam VP recently said when he gave judgment for the Court of Appeal on 22^nd September 2014 in the case of IDC v SSA, CACV 91/2013 :

“7. The applicant said she had incurred costs in the sum of $1,458,703 for the purpose of this appeal. This is on top of her own costs of $4,220,355 at the court below. We do not have the details of those costs. However, we are of the firm view that these are exorbitant figures and someone must have failed to have proper regard to the underlying objects in Order 1A Rule 1 in bringing about such a sorry state of affairs. Matrimonial and family is a growing industry in Hong Kong. There is nothing wrong in lawyers providing good legal services demanding proper fees for their services. However, lawyers in this field, like lawyers practising in other fields, also have duties to their clients as well as to the court to instil a sense of proportionality in the conduct of litigation.”

18.  To that last sentence if I may humbly add “regardless the wealth of their clients”. Perhaps it is also time for the Judiciary to consider other more effective measures to deter such practices and to penalize the guilty parties and those advising them accordingly and proportionately.