H v. W
Read the full judgment text of FCMC 8332/2017 on BabelCite. This Family Court judgment was delivered on 24 October 2018 before Her Honour Judge Sharon D. Melloy.
Matrimonial Causes – Maintenance pending suit – Interim maintenance – Reasonableness – Ability to pay – Disclosure – Standard of living – District Court. The court determined the quantum of maintenance pending suit and interim maintenance for the wife and child. The husband's ability to pay was assessed based on the reality of the situation despite disclosure issues. The wife's expenses were reviewed for reasonableness. The husband was ordered to pay HK$14,000 per month for the wife and HK$38,500 per month for the child, plus specific expenses. Costs were awarded to the wife.
Legal issues: Quantum of maintenance pending suit and interim maintenance · Husband's ability to pay · Reasonableness of wife's expenses
Outcome: Maintenance pending suit and interim maintenance orders made.
Cites 3 cases
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FCMC 8332 / 2017 [2018] HKFC 181 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 8332 OF 2017 ----------------------------
---------------------------- Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to public) Date of Hearing: 13 August 2018 Date of receipt of further documentation: 16 and 24 August and 4 September 2018 Date of Judgment: 24 October 2018 ------------------------------------------------------------ J U D G M E N T ------------------------------------------------------------ Introduction 1.This is an application by a Respondent wife for maintenance pending suit for herself pursuant to section 3 Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO) and interim maintenance for child of the family, a little girl, B, who was born on the XX October 2015 and is now 3 years of age, pursuant to section 5 of the same ordinance. The main issues 2.In broad terms there is only one issue to be determined namely how much maintenance should the husband pay to the wife for herself and B on an interim basis. 3.The wife seeks an order in the sum of HK$85,000 per month whereas the husband asks that an order be made that he pay for half of B’s reasonable expenses and that he also make whatever contribution towards the wife’s expenses that are similarly deemed reasonable in the circumstances. 4.The husband also makes reference to the fact that the parties previously reached an agreement that he would pay maintenance pending suit/interim maintenance as follows:
5.Unfortunately the wife ultimately decided that she was unable to accept this proposal and this offer no longer appears to be on the table. The husband is currently paying the wife HK$20,000 per month plus he continues to pay for B’s school fees and ECA’s. 6.This case involves two people of Indian descent, neither of whom is currently in paid employment. The husband also comes from a well-known and wealthy family in Hong Kong. There are many subsidiary issues here, each of which could take some time to unravel and are likely to increase the parties’ legal costs very significantly if they are fully litigated. For example, it is the husband’s case that the parties entered into a binding pre nuptial agreement. This is categorically denied by the wife. There is also an issue concerning the purchase of the former matrimonial home and whether, inter alia, the deposit for its purchase was a gift or a loan from the husband’s father/uncle. This may have to be determined as a separate preliminary issue. In addition, there are significant concerns with respect to the husband’s disclosure to date and the extent to which he is financially supported by his family, if at all. In broad terms it is the wife’s case that she and the husband enjoyed an extremely high standard of living during the marriage and that the husband is now unilaterally attempting to reduce that standard of living. Not so says the husband, pointing instead to what he says is evidence of the wife’s reckless over spending. Background 7.The parties married on the XX February 2013 and separated in or about January 2016. This was then, by anyone’s standard a very short marriage. As I have said B was born shortly before the parties’ separation in October 2015. The husband issued a divorce petition on the 29 June 2017 and although he has applied for the decree nisi it has yet to be granted. Unfortunately, the parties were unable to reach full agreement with respect to B and there is a Pre Trial Review scheduled for the 6 November 2018 in that regard. 8.The husband was originally in paid employment and has worked in the finance sector prior to setting up his own investment business in 2016. The wife for her part ran her own small recruitment business until it finally closed down earlier this year. She now says that she is a full time mother. The law Maintenance pending suit and interim maintenance 9.The law is well known and not in dispute. Section 3 Matrimonial Proceedings and Property Ordinance Cap 192 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 approached on a broad-brush basis. A detailed examination of the parties’ means may be examined at a later date at a full ancillary relief hearing if there is no agreement in the meantime, when there is then every opportunity to achieve fairness by means of a set off. In other words, if there is any overpayment or underpayment that can normally be rectified at a final ancillary relief hearing. Applications for interim maintenance under section 5 of the same ordinance are approached in the same way. As Rayden points out
10.Further
11.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 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. 12.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 9th edition (paragraph 3.92) may also be of some assistance:
13.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:
14.Ms Rattigan for the wife has also referred me in particular to the Court of Final Appeal’s decision in KEWS v NCHC [2013] 2 HKLRD 314 and argues that the same principles should be applied to the present case. In her written submission she said as follows:
Although I would accept that in the final analysis KEWS v NCHC may be of some relevance on final ancillary relief, it is hard to apply these same principles to a maintenance pending suit/interim maintenance application, which is by its very nature broad brush in approach and where there can be no findings of fact made in relation to some of the issues in dispute. Although I would of course accept that the court is charged with trying to ascertain the “reality of the situation” nonetheless. The husband’s ability to pay 15.In this instance the husband maintains that he has limited financial resources and that he is finding it hard to make ends meet. In his affirmation of the 5 January 2018 he said as follows:
16.It is the husband’s case that the second amount of approximately HK$15,000 per month has now gone and that his monthly income is now in the region of HK$137,000 per month. The difficulty however is that this is not entirely borne out by the evidence. As pointed out by Ms Rattigan the husband’s true financial position remains as “clear as mud” notwithstanding two rounds of questionnaires. This difficulty was compounded by the fact that the husband’s disclosure had seemingly stopped at June 2017 with no updated bank and credit card statements being produced prior to the hearing. The reasons for this were unclear and were, in my view, entirely unsupportable in any event. Updated statements were finally produced by both sides after the hearing. 17.Ms Rattigan attempted to analyse the bank statements that had been produced by the husband for the period from July 2016 – June 2017, in a speaking note produced for the hearing. She identified for example one bank account where there is a significant movement of money both in terms of deposits and withdrawals. In total she says that over HK$14 million was deposited into this account in a 12-month period. In addition, there is reference to online business payments and what the husband has termed as “on line commission income”. It seems that a similar pattern of deposits and withdrawals can be found in the updated bank statements produced post hearing. The husband says that he earns HK$40,000 per month from “online commission income”, whereas Ms Rattigan says that the difference between income and withdrawals amounts to some HK$238,861 per month. Needless to say all of this will require significant and cogent explanation going forward. As things stand I do not accept that the husband’s income is necessarily as low as HK$137,000 per month as claimed. In addition, it seems to me that he does have the ability to borrow. 18.On a brief review of the updated bank and credit card statements, it seems that the husband continues to enjoy a comfortable middle class lifestyle. I do not necessarily agree with the wife however, that there is any evidence here of a very very high standard of living. I will though expect that in time there will be a full analysis undertaken of the husband’s credit card expenditure etc. It seems that generally speaking all of the husband’s credit cards are paid off in full at the end of each month. The wife’s financial resources 19.It is the husband’s case that the wife has more significant financial resources than himself, including cash savings in her own name and funds held in the name of her company. The wife for her part says that her income has recently reduced by approximately HK$30,000 per month, following the closing down of her business earlier in the year. Like the husband she has an investment in a gold fund which produces a passive income, in her case of HK$37, 440 per month. In addition, she receives the husband’s interim interim maintenance of HK$20,000 per month. But it is the wife’s case that she is in a precarious financial situation and that her savings are reducing at an alarming rate. Her most recent bank statements show cash savings of just over HK$1.6 million in her own name and cash held in her company account of just over HK$2 million, down from just over HK$2.9 million and HK$2.3 million respectively, in October 2017. Largely I accept that the wife’s position is not sustainable in the longer term. What are the wife’s reasonable needs? 20.The wife’s most updated schedule can be found in a letter from her solicitors to the solicitors for the husband dated the 8 August 2018 in which she sets out her most up to date expenses as follows:
21.Although the wife’s total expenses amount to approximately HK$170,000 per month (without those items that the husband has agreed to pay for directly) she reiterated during the hearing that she is infact only seeking HK$85,000 per month – HK$51,500 for herself and the remainder for the child. She also says that her up to date moving costs and expenses amounted to just under HK$230,000. Discussion 22.I should say at the outset that although in some cases it may be appropriate to split the costs for a child 50:50, that is generally where the parties are earning a similar amount or they have similar financial resources otherwise. Although the wife has some cash assets, she is not earning an income at present, save for the passive income from the gold investment. In contrast most of the husband’s assets are illiquid. Consequently, it seems to me that at this stage it would be more appropriate for the husband to be responsible for the majority of B’s expenses. This may alter over time. 23.I should add that given that both parties are relatively young, (36 and 38 years old respectively) and that they each have an earning capacity; I will expect both parties to do whatever is necessary to maximize their earning capacity in the short to medium term. General expenses 24.In so far as the wife’s general expenses are concerned, it seems to me that most of these are reasonable and are in the same ball park as the husband’s schedule of general expenses. The only category that may be capable of some sort of reduction are the household expenses, which I will reduce to HK$5,000 per month. In total then I accept that the wife has general expenses in the region of HK$56,000 per month. Half of this sum will be attributable to B – at HK$28,000 per month. The husband will be responsible for HK$28,000 for B, being her share of the general expenses and for half of the wife’s share at HK$14,000 per month. 25.In so far as the wife’s personal expenses are concerned, she shall be wholly responsible for these. Some seem very high in any event and are clearly capable of reduction. There has also been a lot of debate concerning the wife’s alleged financial support for her parents. It is a matter for the wife if she wishes to financially support them. I accept that the husband should not be expected to contribute towards this. Further the wife’s financial responsibility for herself and B must take precedence over any financial responsibility that she feels that she has towards her parents. B’s expenses 26.The husband has undertaken to pay for B’s school fees, ECA’s and her medical and dental insurance. I will hold him to those undertakings which shall be included in the preamble of the order. Some of the remaining expenses seem very much on the high side. I will allow as follows:
Of the HK$18,500 per month, each side will be responsible for their own entertainment and holiday costs with B. The husband shall be responsible for the remainder of the expenses for B in the sum of HK$10,500 per month. Standard living 27.In allowing these sums I have recognised 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, by necessity, some form of adjustment. This case is no exception. Conclusion 28.In conclusion then I will make an order that in total the husband do pay the wife HK$14,000 per month, as maintenance for herself plus HK$38,500 per month as maintenance for B plus he will undertake to continue to pay for B’s school fees, ECA’s up to a maximum of HK$2,000 per month and her medical/dental insurance and the medical insurance for the wife. It seems to me that the husband should be able to pay this sum and that the wife will be able to support herself in the immediate to short term by relying on this together with her small passive income and her other savings. Longer term however the wife will need to return to work in some capacity and as I have said the husband will also need to maximize his earning capacity. Costs 29.I have several concerns when it comes to the issue of costs. Firstly, I am concerned that the husband offered to pay the wife HK$45,000 per month, but then reduced that sum to HK$20,000 per month, leaving very little room for sensible compromise. In those circumstances the wife had little option but to proceed with her application. In such circumstances I shall make an order nisi to be made absolute in 14 days’ time that the husband do pay the wife’s costs of this restored application on a party and party basis to be taxed if not agreed. Backdating 30.In a similar vein it seems to me that the husband must have known that the wife would struggle to survive on HK$20,000 per month once she had moved into her own apartment. I accept that she had little option but to do so given the fact that the husband refused to move out of the former matrimonial home and that it was untenable for the pair to continue to live under the same room on a longer term basis. Although the wife had some savings this does not excuse the husband’s stance. Given that I will backdate this order to the month that the wife moved out of the former matrimonial home, credit to be given for any sums paid by the husband as maintenance. Order 31.Consequently I shall make an order as follows:
IT IS ORDERED THAT:
Mr Jeremy Chan instructed by Withers for the Petitioner Ms Mairead Rattigan instructed by Boase Cohen & Collins for the Respondent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMC 8332/2017