Tmy v. Lch
Read the full judgment text of FCMC 13687/2016 on BabelCite. This Family Court judgment was delivered on 27 March 2017 before HH Judge C.K. Chan.
Matrimonial Causes – Maintenance Pending Suit – Reasonableness – Ability to Pay – MPPO s.3 – MPPO s.5 – Wife claimed $34,000 monthly MPS – Husband claimed $10,000 – Court found family received generous support from husband's family company W – Court inferred husband receives financial assistance – MPS Order granted for $31,000 for wife and $3,000 for son – Costs to follow event
Legal issues: Reasonableness of MPS claim · Husband's ability to pay and family support
Outcome: MPS Order granted in favour of wife
Cites 3 cases
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FCMC 13687/2016 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 13687 OF 2016 ------------------------
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----------------------- J U D G M E N T ------------------------ 1.This is a hearing of the petitioner wife (“the wife”)’s application for maintenance pending suit (“MPS”) against the respondent husband (“the husband”). Parties’ Respective Position 2.The wife now asks for $34,000 monthly MPS ($31,000 for herself and $3,000 for the son) against the husband. The husband is only willing to pay a monthly sum of $10,000. Background 3.The parties were married in 2002. 4.Within wedlock, they have a son, who was born on 17 March 2004 and is therefore 13 years of age as at the day of this hearing. The son is now studying at a local boarding school and will only stay with the parties alternately on weekends. 5.The wife issued a petition for divorce on 25 October 2016 but a decree nisi of divorce is yet to be granted. 6.As for the son’s custody, a Children Appointment has already been fixed on 15 June 2017 and a social investigation report has been called for. 7.On 9 January 2017, the wife issued her present summons for MPS. At the 1st Appointment hearing on 10 January 2017, the said summons was adjourned to today for argument and at the same time, an interim maintenance order of $10,000 was made. The Law on MPS 8.The Court’s power to grant a MPS order in favour of a spouse is governed by s.3 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”):
9.As for interim maintenance for children, they are governed by s. 5 of MPPO with the relevant sub-sections at (1) (a) and (2) (a) which are as follows:
10.In HJFG v KCY[1], Hartmann JA (as he then was), at paragraphs 37 and 38 of the judgment, gave a succinct summary of the law in this area by referring to the judgment of Mostyn QC, sitting then as a Deputy Judge of the High Court in England, in TL v ML [2006] 1 FLR 1263, 1289:
38. Finally, it is to be noted that in application for interim maintenance, when the amount to be paid is for a limited period only and not all the evidence is necessarily before the court, it is not appropriate, nor indeed in most cases possible, for the court to conduct a detailed investigation into the finances of the parties. While, in order to determine what is or is not reasonable, some analysis is always required, that analysis can be conducted on a “broad-brush” basis.” 11.Therefore, the overriding considerations for such applications are reasonableness and fairness. In order to achieve these objectives, the Court has to balance the reasonable needs of the applicant and the ability to pay of the respondent on an interim basis: LJ v LWHH [2003] 3 HKC 455 at 461D. 12.In undertaking this balancing exercise, the Court will adopt a broad brush approach, and not a detailed investigation of the financial positions of the parties. 13.I do not think the above general principles are in dispute. The wife’s financial circumstances 14.The wife is now 40 years of age. She used to run a boutique (“GB”) which was owned by a company called WEL (“W”). W is a family business whose majority shareholder was the husband’s father, who passed away sometime in late 2015. According to the wife, after she has taken out the present proceedings for divorce, she was locked out from GB and also the former matrimonial home at Shiu Fai Terrace which was again a flat provided by W. The cash allowance of $15,000 which she used to receive from the husband has also stopped. Facing with such dire financial circumstances, the wife had no alternative but to look for employment. From November to December 2016, she was able to secure a part time job with a monthly income of $9,800. However, since she had to take time off to apply for legal aid and prepare the paper work for these proceedings, she had to resign as from 24 December 2016 and remain unemployed since that date. 15.Since she was thrown out of the former matrimonial home, the wife has rented a 2-room flat at Hung Hom at the monthly rent of $16,000. As she could not produce any income proof, she was required to pay 6 months’ rent ($96,000) in advance. In order to make such payment, the wife had to borrow the sum from her aunt. 16.As to the other expenses, the wife has listed them out in her supporting affirmation (p.6-7 of the Hearing Bundle) as follows:
17.As to the expenses of the son, the wife explained that most of the son’s expenses are now directly paid by the husband or his mother and since she only stays with the son on alternate weekends, her direct payment of the son’s expenses are only as follows:
18.Therefore, the present needs of the wife are:
19.As the wife has no employment and only has about $65,000 (as at 9 January 2017) in her bank accounts, she now asks for a MPS Order in the sum of $34,000 per month, with $31,000 for herself and $3,000 for the son. The husband’s objections 20.The first objection raised by the husband was on the wife’s earning capacity. He argued that it was unreasonable for her to stop working since she was able to secure an income of $9,800 in late 2016. 21.The husband was also of the view that the wife had overstated her needs. He said the wife’s needs should only be about $8,730 (§31 of written submissions for the husband). My views 22.The wife is claiming that she has no employment and thus no income. Although the wife is only aged 40 and should therefore have at least some earning capacity, one must not lose sight of the fact that this family has all along been well provided for by the husband or his extended family. It is common ground that the husband’ family has provided the former matrimonial home which was located in a well off area on the Hong Kong Island. A car was provided for the husband and the family’s use. The wife was provided with a business (GB) to run and from which she could draw money. According to the wife, she was given monthly cash in the sum of $15,000 for family expenses. It is very clear that this family has received generous financial support from either the husband or his family. With this background in mind, and since we are only at the very early stages of the litigation, I do not think the wife can be blamed for not getting an employment at this stage. 23.As this family had received generous support from the husband’s family in the past, I do not accept that the current level of expenses as claimed by the wife are in any way excessive. The husband’s financial circumstances 24.I think the more controversial issue is the husband’s ability to pay. 25.According to the husband, he has been employed by a securities brokerage firm for over 10 years. His monthly income used to be $26,000 but as from 1 December 2016, his salary was reduced and he is now only earning a monthly income of $20,684. He said in his Form E that his monthly outgoings amount to $34,518, out of which $22,030 are expenses for the son. 26.There is no dispute that the husband is holding 220,000 shares (10% of the shareholding) in W but he claims that he is only holding the same as trustee for his late father. At the same time, according to his tax return for the year 2015/2016, he reported to have received $400,000 from W as director’s remuneration. However, he stated that he did not actually receive this sum of money from W 27.Despite the fact that there had been various sums of money being deposited into the husband’s joint account with his late father, and later into his sole account, he explained that those moneys were reimbursement for the sums he paid for his other family members. 28.In short, it is the husband’s case that he has very little income of about $20,000 per month and he does not have any substantial assets. He said after W has taken back the former home at Shiu Fai Terrace, he could not afford to find his own accommodation and therefore, has to stay with his mother and younger sister at his mother’s place at Mei Foo. Under these circumstances, the husband claims that he can only afford to pay a monthly MPS of $10,000. My views 29.Despite the sudden reduction of the husband’s salary shortly after the institution of the present proceedings by the wife, overall speaking, I accept the present salary of the husband is around the monthly sum of $20,000. 30.However, it is quite clear from the evidence that despite the small income of the husband (be it $20,000 or $26,000), this family has been living on very generous support from the husband’s family, through the family company W. 31.It is noted that W had provided the parties with the former matrimonial home situated at Shiu Fai Terrace, which was taken back right after the wife had instituted the present proceedings. W had provided a boutique for the wife to run, but again was taken back right after the beginning of the divorce proceedings. W had also provided a company car for the parties’ use. 32.It is further noted that the husband had stated in his tax return of 2015/2016 that he had received $400,000 as director’s remuneration from W. His explanation of there being no actual receipt of that payment is not very convincing. 33.According to his credit card records, the husband’s average monthly spending (from November 2015 to December 2016) was in the sum of about $42,000. The husband explained that most of those spending was made on behalf of his parents and siblings and he would be reimbursed later for those payments. By looking at some of the items of expenditure, I accept that some of them were made on behalf of the husband’s family members. For example, there were payments at the St. Teresa Hospital. I accept that those payments were made on behalf of the husband’s father who was hospitalised during that period of time. But there were also quite a large number of items covering food, wine and other expenses. I do not accept that they were purely for the husband’s other family members. Moreover, it is undisputed that W or other family members had made various payments into the husband’s joint or sole account but no evidence was produced to prove the causal link between the husband’s credit card spending and these so called reimbursements from W or other family members. Faced with these circumstances, I am prepared to infer that the finances of the husband and W were actually mixed, at least prior to the present proceedings, in that the husband would pay for some of the expenses of W, his parents and siblings, but at the same time, W would deposit money into the husband’s account so as to finance him in his daily expenditures. This must be the case because with the husband’s monthly salary of $26,000 (which he used to earn prior to December 2016), there was no way for him to support his then life style and the conclusion that he had to have received financial assistance from his family is really inevitable. 34.As to the amount of financial support that the husband had received, I am prepared to infer such amount to be $400,000 per year or otherwise such figure would not have been used by the husband in his tax return. Although no evidence was led on the financial statements of W, I trust that the same figure must have appeared somewhere in W’s books as well. 35.It is also my ruling that such financial assistance is in fact still continuing as there is no dispute that the husband’s mother is still paying for all the expenses of the son and providing free accommodation for the husband. Under these circumstances, the husband’s argument that he was not receiving financial assistance from his family or such assistance has stopped is really hard to believe. 36.Based on these facts, I have no difficulty to find that the family has provided generous financial support to the husband both in the past and will continue to do so in the near future. 37.Having ruled that the quantum of the MPS claimed is reasonable and that the husband will have continuous financial support from his family, I am prepared to make a MPS Order in the amount of $34,000 as claimed. Orders 38.Based on the above reasons, I now make the following orders:
Costs 39.Costs to follow event. The wife has to come to court before she could get the above orders and therefore, she should also get the costs of this application, including all costs reserved, such costs to be taxed if not agreed. This will be in the form of a costs order nisi to be made absolute after the expiry of 14 days from the handing down of this judgment. The wife’s own costs to be taxed in accordance with Legal Aid Regulations.
Representation: Ms J Lam of Messrs Adrian Yeung & Cheng, solicitors for the Petitioner Mr Au of Messrs Li, Chow & Company, solicitors for the Respondent | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMC 13687/2016