SS v. TMW also known as CT

FCMC 15456 / 2015

[2021] HKFC 43

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 15456 OF 2015

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J U D G M E N T
(Variation of the Maintenance Pending Suit, Interim Maintenance and
Litigation funding order dated the 20 October 2017)

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Introduction

1.  This is an application by a Petitioner wife for a variation of an order for interim financial support dated the 20 October 2017. In summary, and as stated by her counsel in his written submission dated the 17 December 2020, the wife seeks as follows:

(1)   An uplift in her MPS from $15,000 to $58,000 per month

(2)   An uplift in litigation funding from $25,000 to $50,000 per month (i.e. the same Order as sought in the existing Summons)

(3)   Discharge of the Husband’s obligation to pay interim maintenance for I, the younger child of the marriage

with the same orders to be made in respect of the SJEs.

2.  This is reiterated in the wife’s amended summons dated the 13 March 2020, which was subsequently amended on the 21 January 2021, pursuant to a court order dated the 19 January 2021. This, further states as follows:

1.  Paragraph 1 of the The Order dated 20th October 2017 providing for maintenance pending suit and interim maintenance for the children of the marriage, (“October 2017 Order”) be varied so that

a.  Paragraph 1 of October 2017 Order the Respondent do pay or cause to be paid to the Petitioner the increased sum of HK$4058,000 per month as maintenance pending suit commencing from 1^st day of the month following the date of this Summons 1^st April 2020 and thereafter payable on the first day of each month until further Order, an increase of $1543,000 per month;

b.  Paragraph 3 of October 2017 Order concerning the payment of interim maintenance for the benefit of the younger child of the family, namely I, a girl born on XX November 2000 in a sum of HK$25,000 be ceased from 1 September 2020;

bc. Paragraph 4 of October 2017 Order concerning litigation funding be varied so that the Respondent do payor cause to be paid to the Petitioner the increased sum of HK$50,000 per month as contribution towards the Petitioner’s legal fees, such payment to be made directly to the Petitioner’s Solicitors commencing from the date of this Summons and 1^st April 2020 thereafter payable on the first day of each month until further Order, an increase of $25,000 per month;

2.  The Respondent do pay the costs of the Single Joint Expert engaged by the parties pursuant to Order dated 15^th May 2019 to value the Respondent’s interest in private companies, such payment to be taken into consideration by the Court in its ultimate determination of the Petitioner’s application for ancillary relief.

3.  The Respondent do pay the costs of the Single Joint Expert valuing properties registered in his sole name, such payment to be taken into consideration by the Court in its ultimate determination of the Petitioner’s application for ancillary relief.

4.  The time for service of this Summons be abridged.

5.  The Respondent do pay the Petitioner’s costs of an incidental to this application.

3.  I should say at the outset that I intend to make an order largely in the terms sought by the wife and for the reasons that have been articulated by her in her 7^th affirmation dated the 14 February 2020 and her updated 8^th affirmation dated the 14 December 2020. Reference should also be made to this court’s first judgment dated the 20 October 2017 and this judgment should be read in conjunction with the first. Although the husband originally complied with the first judgment, he has not made any payments pursuant to that order since early 2020. He has seemingly taken a passive and uncooperative stance. His solicitors also came off the record on the 10 September 2020, which has compounded the difficulty. (It is of note that new solicitors filed Notice of Acting on the 3 February 2021). However, prior to the 10 September, the court was told that the husband was being treated for skin cancer in Taiwan. It seems that his solicitors had considerable difficulty in obtaining instructions from him at that time and that his prognosis might not be good. It is of note, that other court orders, in addition to the orders for payment, have not been complied with. Financial disclosure remains unsatisfactory and other attempts made by the wife to settle the issue of ancillary relief have not been fruitful. There has been no Financial Dispute Resolution hearing and a proposed mediation did not take place.

4.  In the meantime, the wife has been diagnosed with Post-Traumatic Stress disorder, which has seemingly arisen as a direct result of these proceedings. The court was informed that she was attacked outside the court building, has had paint daubed on the outside of the former matrimonial home and suffered the additional ignominy of having her face superimposed on posters/banners and distributed around town. She subsequently retired from her job at X and has returned to Japan to live, at least in the short term. She is currently working as a part time receptionist. Thus, her income has dropped from approximately HK$35,000 per month to HK$11,000 per month and some of her outgoings have increased. In particular, she now has to pay rent in Tokyo. In the meantime, the girls both continue to reside in the former matrimonial home in Hong Kong. The elder one is still studying remotely for her undergraduate degree from Y University, whereas the younger one has finished high school and is not studying at present. Finding work in these challenging times continues to be difficult for her.

5.  As I have said it was suggested by the husband’s former solicitors that his prognosis might not be good. However, this has not been confirmed and as things stand the court has no up-to-date information concerning the husband’s health condition.              

The law - Maintenance pending suit, interim maintenance and litigation funding

6.  The law on maintenance pending suit, interim maintenance and litigation funding is set out in paragraphs 10 – 15 and 26 and 27 of the first judgment. Reference should be made to those paragraphs as necessary. I do not intend to repeat the same here.  

Variation of maintenance

7.  In addition, the wife refers to the law on variation and in particular to section 11 (7) of the Matrimonial Proceedings and Property Ordinance Cap. 192, which provides that:

“(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates ……”

8.  For the avoidance of doubt I accept that in considering a change of circumstances, the court may look at a case de novo. In other words, the court is not necessarily fettered by the existence of a previous order. The court may look at the situation afresh and make an order based on the parties’ existing financial circumstances. (See Ch 3.131 Jackson’s Matrimonial Finance and Taxation, 7^th edition). It is also true that there would normally be a reason for an application to vary or what some might call a “trigger”. In this instance I accept that the triggers include the wife’s mental health and her relocation, albeit possibly temporary, to Japan and the resulting increase in her outgoings. I also note that the maintenance for the children will decrease by virtue of the fact that the youngest child is not currently in full time education. In addition, it is of note that the wife has had no alternative but to spend increasing amounts of money on legal costs in an attempt to finalize matters, given the husband’s uncooperative attitude.

How much maintenance should the husband now pay to the wife as maintenance pending suit?

9.  As I have said it seems to me that the wife has made out a case for an increase in maintenance from HK$15,000 per month to HK$58,000 per month. I accept that “the wife has been particularly careful to identify her average monthly expenditure, and to do so without exaggeration” and that her monthly expenses are currently as follows:

MPS/IM Budget

	8th Affirmation
Household Expenses
Rent	18,846.00
Utilities	1,206.25
Food	6,585.33
Household expenses	3,893.75
Insurance premia	477
Total monthly household expenses	31,008.33
Personal Expenses
Meals out of home	1,042.00
Transport	302.74
Clothing/Shoes	7,071.48
Personal Grooming	1,798.44
Entertainment	1,073.66
Holiday	1,000 (limited travel due to COVID-19 19)
Medical/Dental	5,492.78
Tax	530.00
Insurance premia	500
Contribution to parents	1,000.00
Dependent family members	(Refer to the monthly expenses for the daughters which calculated separately)
Others (specify) personal hobbies, Gym and other training courses – computer skills	7,349.40
Total monthly personal expenses	27,160.50
Grand Total	58,168.83

10.  These figures seem reasonable and shall not be reduced. Similarly, I accept that the husband’s contribution towards the children’s expenses should be varied to reflect the reality of the current situation and that he should continue to pay HK$25,000 per month for the elder child, until she ceases her full-time education and that his financial obligation towards the younger child shall cease with effect from the 1 September 2020.

Should the amount for litigation funding be increased from HK$25,000 to HK$50,000 per month?      

11.  As before, I accept that the wife has only limited assets, especially when compared to those of the husband, and none that should be deployed for the provision of litigation funding, if at all possible. I also accept that she can provide no security for borrowings and it is unlikely that she would be eligible for legal aid at present. In such circumstances and as before, it seems to me that the wife is entitled to litigation funding. I indicated previously that the wife’s original proposal of HK$25,000 per month, seemed “fairly minimal in the circumstances”. Given the litigation conduct of the husband and the fact that it now seems likely that this matter will proceed to trial, I accept that HK$50,000 per month is much more reasonable.  Consequently, the husband shall pay the sum of HK$50,000 per month such sum to be paid directly to the wife’s solicitors and to be backdated to 1^st April 2020. This sum shall be paid up until the trial.

Can the husband afford to pay these sums?

12.  Although the husband’s financial disclosure continues to be opaque, it is clear that he has significant assets at his disposal, including a number of landed properties. The wife has summarized the situation as best she can in her 7^th affirmation as follows:

Financial Disclosure

20. Despite repeated request for the Respondent to provide information set out in my 2 Questionnaires and in inter-Solicitor correspondence, I am still not satisfied that the Respondent has made full and frank disclosure. In the MPS judgment dated 20^th October 2017, the Court found at paragraph 16 that the Husband has “failed to provide full and frank disclosure in his answers generally.  In particular, he has failed to provide further information about his potential inheritance”.  Despite this comment, and despite my subsequent efforts to obtain information, the Respondent has not fully complied with his obligation and continues to delay and obfuscate, which is both very disappointing and the basis for this application.  That being said even the financial disclosure which has been provided to date demonstrates that the Respondent has very significant assets in his name and within his control.

Landed properties

21. From the disclosure so far, the vast bulk of the Respondent’s asset holdings is in landed properties, both in Hong Kong and overseas, in which the Respondent has either a direct legal interest or a beneficial interest through his shareholding in family companies.

22. There has been some progress in valuing properties. Single Joint Experts were appointed in accordance with paragraph 5 and 6 of the Order dated 18 January 2018. Some of the properties in which the Respondent has an interest have, therefore, been valued. I set out below these valuations and the Respondent’s nett financial interest:

Property	Registered Owners	Ownership	Valued by	Date	Value
ABC West Vancouver, Canada	CMWT (100%)	100%	Cunningham & Rivard	3 June 2019	HK$36,050,109 (CAD$6,000,000) Subject to Mortgage HK$5.7m as per Form E 4 June 2018:
DEF (“Former Matrimonial Home”	THY Investment Company Limited (“THY”)	Life Interest plus 20.4% shareholding through THY	Vigers	11 June 2019	HK$41,080,000
New Territories Properties Lot No. GH	TMK (Executor) TSMS (Executor) TMW (Executor) TMC (Executor)	100% beneficial Owner bequeathed through Will	Vigers	11 June 2019	HK$77,000,000
				Total	HK$154,130,109

23. I am prepared to agree these values for the purposes of present discussions, and for the purpose of the FDR, if the FDR proceeds. It may, of course, be necessary to obtain updated valuations if the case is to proceed to trial.

24. In addition to these properties, there are other properties in the New Territories in the Respondent’s sole name and which were included in his Form E dated 10th January 2017, namely, IJ, Yuen Long, New Territories. The Respondent has provide a combined value of these at HK$200,000 in his Form E.

25. My Solicitors wrote to the Respondent’s Solicitors on 21^st June 2019 seeking agreement to appoint Vigers to value these properties and followed up on 2 September 2019 together with a detailed request for further information. There is now produced and shown to me and marked “SS7-2” a true copy of the letter from CRB dated 21^st June 2019 and 2 September 2019.

26. Some 3 months later, by letter dated 23 September 2019, the Respondent has finally agreed to have these properties valued by Vigers. There is now produced and shown to me and marked “SS7-3” a true copy of the letter from Stevenson, Wong & Co (“SWC”) dated 23 September 2019. Vigers provide a quotation on 28 October 2019 of HK$65,000 but no work has yet been undertaken as this was put on hold when the Respondent agreed to participate in mediation which has now been postponed indefinitely. There is now produced and shown to me and marked “SS7-4” a true copy of the quotation from Vigers dated 28 October 2019.

27. In addition to these properties, there is a very significant number of properties in which the Respondent has an interest through his shareholding in Family Companies. Even though I have very limited information on the assets of THY Investments Company Limited, in which the Respondent has a 20.4% shareholding, I understand that this company owns at least four AG properties, which have a combined value in excess of HK$160 million. This is in addition to other properties referenced herein.

28. To date the Respondent has not provided a full set of financial statements for any of the family companies sufficient for valuation purposes and I have no confidence that this will be forthcoming in the absence of an Order compelling the Respondent to provide the necessary information to value the companies as stated in MDD’s letter.

29. Furthermore, I do not accept that the Respondent has disclosed “all sources of income” nor has he identified “advances by family members, loans, share dividends, rental, proceeds of sale or otherwise” in a comprehensive manner and am left with no option but to incur the costs of seeking further disclosure.

I accept what the wife says in this respect. I am strongly of the view that the husband should have no difficulty in complying with the terms of this court order.

Other orders      

13.  The wife also asks for an order in terms of paragraph 2 and 3 of her summons, with respect to the costs of the Single Joint experts. I shall allow these orders in the first instance, but I shall also stay those orders for the time being, pending the Pre-Trial Review, when these matters may be discussed further. 

Costs

14.  Given that the wife had no alternative but to make this application I shall make an order nisi to be made absolute in 14 days’ time that the husband do pay the costs of and occasioned by the wife’s application, such costs to be taxed on a party and party basis if not agreed. There shall be certificate for counsel.                                            

Final orders and directions

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

i) There shall be an order in terms of paragraphs 1 (a) – (c) of the amended summons dated the 13 March 2020.

ii) There shall be an order in terms of paragraphs 2 and 3 of the amended summons dated the 13 March 2020, such order to be stayed pending the PTR referred to below.

iii) There shall be an order nisi to be made absolute in 14 days’ time that the Respondent do pay the Petitioner’s costs of and incidental to the amended summons dated the 13 March 2020 such costs to be taxed on a party and party basis if not agreed. There shall be certificate for counsel.

iv) There shall be a Pre-Trial Review on the 2 June 2021 at 9:30 am.   

v) Both parties shall personally attend that hearing by Video Conferencing Facility if necessary.