Aldl v. Ftfc and Another
Read the full judgment text of FCMC 13698/2013 on BabelCite. This Family Court judgment was delivered on 22 November 2019 before District Judge A. Tse.
Matrimonial Causes – Maintenance Pending Suit – Variation – Legal Costs Contribution – Backdating – Medical Expenses – Standard of Living – District Court – ALDL v FTFC – Variation of maintenance pending suit granted – Quantum determined at HK$220,000 per month – Legal costs provision granted at HK$300,000 per month for 12 months – Backdating to date of application – CFS and Cancer considered – Ability to pay established – Currey test satisfied
Legal issues: Variation of Maintenance Pending Suit (Quantum) · Legal Costs Contribution (Jurisdiction and Quantum) · Backdating of Maintenance Order
Outcome: Maintenance pending suit increased to HK$220,000 per month; Legal costs provision HK$300,000 per month for 12 months.
Cited by 2 cases · Cites 7 cases
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FCMC 13698 / 2013 [2019] HKFC 292 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 13698 OF 2013 ________________________ BETWEEN
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________________________ J U D G M E N T ________________________ 1.This is the Petitioner Wife’s application for inter alia:
Issues 2.The 1st Respondent Husband does not dispute that there should be an upward adjustment of the maintenance pending suit or that he has the ability to pay the amount requested. The only issues are quantum and the method of payment. 3.The Husband says that the Wife’s claim for upward variation by more than HK$105,000 per month is manifestly excessive and there has been no material change of circumstances that would justify the significant increase in her purported expenses. The Husband proposed to adjust the sum to HK$126,500 per month, i.e. An upward adjustment of HK$1,500 per month. 4.As for legal costs contribution, the Husband says that the parties had already reached a conclusive and binding agreement for the provision of HK$3.6 million to the Wife by way of a bank loan to be secured against the Wife’s home and only property. The Husband agreed to act as guarantor and he undertook to repay the mortgage loan. In those circumstances, he says that the Wife should not be allowed to unilaterally back out of that agreement. Alternatively, if the Court were to allow the Wife to disregard the agreement, he says that the Wife’s assessment of HK$3.6 million is excessive and unreasonable. He offered HK$600,000 up to the FDR. Background of the Marriage 5.Both parties were born in 1964 and are now 56 years old. The Husband was born in Hong Kong to very humble beginnings. He was educated in Hong Kong until he completed matriculation. Although his matriculation results were not very good, an opportunity arose when he was in Form 6 where he and his elder sister could study high school in Australia. Because of financial constraints, his elder sister had to give up this opportunity. The Husband went to Australia alone to attend high school in 1983. He was subsequently offered a place to study medicine in a university in Australia. He began reading medicine in 1984. At the same time, he had to work part time to subsidize his expenses. 6.The Wife and her family had emigrated to Australia. She met the Husband in 1984, when she was studying for her Honour’s degree in Occupational Therapy. The parties started serious dating in 1986 and the Husband was introduced to the Wife’s family. The Wife’s late father was very fond of the Husband and had great sympathy for him. Although the parties were not yet married, the Wife’s father invited the Husband to move in with them to alleviate the Husband’s financial burden. At the time, the Husband expressed his concerns about the political situation in Hong Kong after 1997. Although the Husband had yet to complete his studies, the Wife’s father suggested that the parties should get married to enable the Husband to become an Australian resident. As a result, the parties were married in October 1987. However, they only held their church wedding in 1990 after the Husband completed his studies. 7.In the meantime, the Wife and her family continued to render assistance to the Husband and his family. The Husband wanted to bring his entire family to Australia under the “family union” category which required no investment. At the time, the requirement for “family reunion” was that there at least two immediate members of the applicant’s family had to be Australian permanent residents or citizens. Upon the Husband’s request, the Wife’s father arranged for the Wife’s younger brother to marry the Husband’s younger sister. However, after the Husband’s family returned to Hong Kong after they obtained citizenship. The marriage between the Wife’s brother and the Husband’s sister also ended in divorce. 8.The Wife graduated from university in mid-1988. She immediately started working. She became the sole bread winner and was responsible for the parties’ expenses, including mortgage repayments of their property in Australia. Although the Husband’s mother gave the parties a gift of AUD $120,000 as a down payment for their property in Australia, the parties continued to live with the Wife’s parents and used their own property for rental income. 9.In 1991, upon the Husband’s request, the parties came back to Hong Kong to enable the Husband to receive specialist training and further his career. He obtained his qualification as a specialist in Anaesthesia in 1998. 10.On the other hand, because of the move, the Wife gave up her place in a 3-year full time PhD programme with full scholarship assistance in Australia. She got an academic position in one of the Universities in Hong Kong. She enrolled in the PhD programme in Hong Kong in 1994 and received her PhD in 2000. She was promoted to Assistant Professor in 1995. Their income was deposited into their joint account. 11.After their arrival in Hong Kong, the parties initially lived with the Husband’s mother. They later rented and bought a flat in the same estate. In 1992, the parties moved into quarters provided by the University which was 1,400 sq.ft. Their initial property was sold and the proceeds were used to purchase the former matrimonial home in their joint names in 1995. In 1997, they purchased a car park at the former matrimonial home in their joint names. Between 1993 and 1996, the parties also purchased 2 properties in Australia. These properties were soon sold. 12.In about April 2006, the Husband left the employment of the Hospital Authority and received superannuation of over HK$2.3 million. At about the same time, he began to stay away from the former matrimonial home with increasing frequency. However, he would still return about once a week. They continued to sleep in the same bed and the Wife continued to cook and do laundry for him. The Wife says that she confronted the Husband about this and he admitted to having an extra-marital affair. This was denied by the Husband. Instead of paying his entire earnings into their joint account, the Husband began to pay HK$150,000 (which he alleged to be half of his income) into the joint account as maintenance for the Wife. The Wife says that the Husband was in fact earning a lot more than HK$300,000 per month at the time. 13.The Wife says that in about 2007 or 2008, she contracted a chronic medical condition called “Myalgic Encephalomyelitis”, more commonly known as “Chronic Fatigue Syndrome” (CFS). The Husband accepts that this illness or condition exists but denies that the Wife is suffering from it. In June 2009, the Wife resigned from the University and basically became financially dependent on the Husband. 14.In July 2012, the Husband ceased to return to the former matrimonial home. He alleges that the parties reached a full and final agreement on the distribution of assets. This is denied by the Wife. The former matrimonial home was sold to the Husband’s mother for HK$6.3 million (which the Wife alleges to be at an under value). The proceeds of sale of the former matrimonial home and other family properties were paid to the Wife. This was used by the Wife to purchase her present home in September 2012 for a consideration of HK$12,500,000. The purchase was completed on 2 January 2013. These Proceedings 15.In about March 2013, the Husband ceased to make any further payments into the joint account. The Wife petitioned for divorce on 10 April 2013. Although the Husband was informed of the intention to take out these proceedings by both the Wife and her solicitors, and arrangements were made with the Husband for service, service was initially unsuccessful. The Husband was finally served on 23 April 2013. 16.The Husband filed his Form E on 18 June 2013 where he failed to provide the requisite information and documents. From then on, the Wife was put through a protracted and arduous process of discovery. The Husband also denied that he has ever had an extra-marital relationship with the 2nd Respondent. His relationship was only admitted a year after the commencement of these proceedings. 17.It is now known that the Husband has been having an affair with the 2nd Respondent at the latest by 2002 and that he has been giving her substantial amounts of money over the years and those funds have been used to purchase a number of properties:
18.On 10 June 2013, the Wife’s solicitors wrote to the Husband’s solicitors to arrange for the exchange their Forms E. On 17 June 2013, the Husband’s solicitors sought a time extension. The exchange of Forms E eventually took place on 18 June 2013. On 20 June 2013, the Wife’s solicitors wrote to the Husband’s solicitors complaining of non-disclosure. The Husband was subsequently ordered to provide the missing information on 24 June 2013. 19.In a letter dated 2 July 2013, the Husband’s solicitors alleged that he was trading in his own name as a consultant for the period from 1 December 2008 to 31 March 2012 and that his monthly income was HK$516,000. He admitted that he was the holder of the only issued share in TL Co Ltd but alleged that he was holding half of the interest in that share for the 2nd Respondent. He started working as the manager of TL Co Ltd since 1 April 2012 with a monthly income of HK$100,000. Copies of bank statements were provided to the Wife’s solicitors under cover of a letter dated 8 July 2013. 20.On 9 August 2013, the Wife’s solicitors raised queries as to the whereabouts and destinations of the HK$2,880,310, US$ 412,252.43 and AUD$290,349.24. By a letter dated 14 August 2013, the Husband’s solicitors confirmed that those sums were transferred to the 2nd Respondent. They further alleged that TF Co Ltd had always been used for trading and alleged that the company had nothing to do with the Husband’s medical practice. They also alleged that the business was conducted mainly by the 2nd Respondent and that the Husband was only assisting her. The Husband alleged that the proceedings had caused him great distress and he had therefore resigned as director of TF Co Ltd and transferred the share to his “business partner”, the 2nd Respondent. 21.After a round of questionnaires, the Wife issued an application under section 17 of the MPPO on 26 August 2013. Although the Wife’s s.17 application was disputed by both the Husband and the 2nd Respondent, HK$2,880,310 was returned to the Husband on 29 October 2013. On 27 November 2013, the 2nd Respondent re-assigned the allotted 9,999 shares in TF Co Ltd to the Husband but she remained as a director. On 22 April 2014, the 2nd Respondent transferred HK$3,727,056 to TF Co Ltd. 22.The 2nd Respondent was joined to these proceedings on 8 November 2013 for the purposes of the s.17 application. On 22 April 2014 (i.e a year after the commencement of these proceedings), the Husband finally admitted his relationship with the 2nd Respondent. He further admitted that he had paid for the down payment and mortgage instalments of Flat 49A and 52G. He stated that 52G was intended to be his permanent home with the 2nd Respondent. He further alleged that the 2nd Respondent had contributed towards the bulk of the down payment for Flat E out of her savings but he admitted that he had paid for the mortgage instalments and acted as guarantor. 23.The shares in TF Co Ltd and the above mentioned properties currently under the 2nd Respondent’s name are now the subject matter of a preliminary issue trial. 24.On 30 June 2014, the Wife’s solicitors wrote to the Husband’s solicitors, requesting for maintenance pending suit of HK$175,000 per month. This was refused by the Husband. The Wife then issued a summons for maintenance pending suit on 7 October 2014. On 11 February 2015, the parties filed a consent summons in respect of maintenance pending suit at HK$125,000 per month. 25.This was followed by an application by the Husband under s.17 of the MPPO in respect of money paid by the Wife to her mentor and former colleague. This application was eventually withdrawn with costs to the Wife. 26.In 2015 and as explained below, the Wife was diagnosed with endometrial cancer. The proceedings came to a stand-still to allow the Wife to receive treatment. Fortunately, the Wife is now in remission. 27.By a summons dated 20 December 2017, the Wife asked for an upward adjustment of the maintenance pending suit from HK$125,000 to HK$230,000 per month and for legal costs contribution in the sum of HK$3.6 million or alternatively a monthly sum of HK$300,000 for 12 months for the period leading up to the FDR. Income and Resources 28.There is no dispute that the Husband is a medical practitioner with a very high earning capacity. It was also agreed that he has the ability to pay the sums requested by the Wife as maintenance pending suit. 29.In to his latest Form E, the Husband alleged that he has a monthly income of HK$180,000 per month [B1/71]. However, he has also admitted during discovery that his average monthly income between 1 April 2011 and 31 Match 2012 was HK$516,500 per month (i.e. An annual income of HK$6,198,000). Although he alleged that he was working for TF Co Ltd since 1 April 2012 with a monthly income of HK$100,000, he also admitted that he still carried on his practice as a medical doctor with a gross medical service income of HK$300,000 generated by him for TF Co Ltd. Through discovery, it was found that TF Co Ltd had a turnover of HK$9,003,132.07 from the Husband’s medical consultancy service income for the period from 5 January 2012 to 31 March 2013 (i.e. HK$692,000 per month). According to the audited accounts of TF Co Ltd, it had a medical service income of HK$8,386,606 for the year ended 31 March 2016 and HK$8,606,540 for the year ended March 2015 (i.e. An average of HK$708,047.75 per month). There was also a dividend payment of HK$2 million in each of 2015 and 2016 and the payment of directors’ emoluments (ostensibly to the 2nd Respondent) in the sums of HK$1,680,000 and HK$2,397,500 for 2016 and 2015 respectively. 30.Although ownership is in dispute, there is no dispute that the Husband is living with the 2nd Respondent. There is also no dispute that 4 out of the 5 properties under the 2nd Respondent’s name are currently yielding a total monthly income of at least HK$25,500. 31.According to the Husband’s Form E, her has bank savings of just over HK$1.9 million and socks worth close to HK$250,000. According to the audited accounts of TF Co Ltd for 2016, the cash in bank and at hand amounts to over HK$7 million. 32.In contrast, the Wife says that she has been suffering from a debilitating disease called Myalgic Encephalomyelitis or more commonly known as Chronic Fatigue Syndrome (CFS) since 2008. In June 2009, she resigned from the University, and has since only done some part time research work. Apart from publishing an article in 2013 (which the Wife says was written prior to her resignation) and some co-authored publications, she has had little (if any) income. In March 2013, the Husband ceased to make any maintenance payments to the Wife. For a period of about 18 months, the Wife has had to rely on her savings for her not only her living expenses but also the costs of these proceedings. In 2015, the Wife was diagnosed with endometrial cancer and she has had to pay for her treatment with the maintenance she was receiving. She is unemployed and has no income, although her earning capacity is in dispute. The Husband suggested that the Wife should work as an English tutor earning $300 to $400 per hour to maintain her own living. He also suggested that the Wife should rent out a car park for HK$1,800 to supplement her living expenses. 33.The Wife’s bank savings only amount to HK$100,000. She already has HK$1.8 million outstanding legal fees and is due to receive an updated bill of costs from her solicitors. She is also faced with the costs of the upcoming trial of the preliminary issue. The Wife’s medical condition 34.According to the Wife, she was diagnosed with CFS in 2008. She says that this is a chronic medical condition with complex, multi-varied and fluctuating symptomatic nature which requires a wide range and cocktail of different management and treatment strategies, for example, physical modality interventions, dietary control and measures, rest and relaxation and health supplements. As a result of the symptoms, she has reduced energy, functioning capacity and slowed down body function. Hence, a disproportionately large amount of time is required for her to prepare for or complete a task. She also finds multi-tasking very difficult. Factors such as stress, rushing, over-exertion, poor sleep, heightened emotions or prolonged strain, exacerbates the symptoms and can cause her overall body functioning to “shut down” and force termination of all activity engagement completely, i.e. She will become bed-ridden. 35.She says that she has been trying her best to cope with this condition, especially within the constraints of Hong Kong where the condition is poorly understood and acknowledged by the medical system and practitioners. The protracted litigation, the demands of a house move and renovation, the need to care for her elderly mother in Australia and the lack of financial security has added to her stress levels. 36.The Husband accepts that there is a disease called CFS but denies that the Wife is suffering from it. He says that the Wife should see a psychologist instead. 37.In October 2015, the Wife was diagnosed with endometrial cancer and had to undergo immediate surgery involving complete removal of her entire reproductive organs (radical hysterectomy), removal of all lymph nodes in her pelvis and partial stripping of the wall lining of her cervix. Although the surgery was successful, she has been suffering from carious health complications. These included impaired circulation and pain in her lower body and legs, lymphedema, a range of surgically-forced menopause symptoms (e.g. greater fatigue, severe hot flushes and night sweats, mood changes, deteriorating changes to the skin and soft tissue structures, breast swelling and aching and continuing and recurrent unresolved gynecological problems. 38.The Wife alleges that her pre-existing CFS has worsened as a result of the post-surgery complications. It was also aggravated by the stresses and anxiety brought about by the proceedings and the uncertain outcome of her financial circumstance. She has deep seated fatigue, dominating muscular/soft tissue pain and tightness, sluggish circulation and swollen and tender lymph glands, fogging of the brain, extreme cognitive fatigue and affected cognitive functions with blurring vision, gastrointestinal problems, labored breathing, chest pain and heart palpitation, dietary intolerances to certain food and physical intolerances to extreme climate or environmental conditions. 39.In September 2016, a CT scan revealed that there was a 20mm well defined low density, non-enhancing lesion at the left superior aspect of the vagina, for which gynecological review was recommended. 40.In addition, the Wife says that she had other pre-existing or degenerative health issues such as problematic feet structure (bunion deformities and flat arches in both feet), with associated pain, gait issues with resulting incidence of falling, increasing lower back pain from degenerations found in her lower spine, as well as dental issues (teeth mal-alignment and impaired biting function, reduced jaw bone density and problematic tooth structure. She also required regular clinical monitoring of other pre-existing health issues such as the retinal degeneration in both eyes which was detected in 2004. 41.According to the Wife, because of the worsened CFS and other additional health issues, she has progressively sustained substantial weight gain of at least 10 kg since 2013. Apart from the CFS and the extent of the lymphedema, the Husband does not appear to dispute most of the symptoms resulting from the surgery. Applicable Legal Principles 42.This application is made under section 11 of the MPPO, 43.The principles on variation are set out by Cheung JA in AEM v VFM [2008] 3 HKLRD 36 at §14 as follows:
44.The jurisdiction to vary is untrammeled, but normally the Court would take into account if there has been any material change in the circumstances since the earlier order: HCTT v TYYC [2008] 5 HKC 86 per Tang VP at §§14-16. His Lordship referred to the following passage of Cazelet J in Garner v Garner [1992] 1 FLR 573 at §15 which stated as follows:
45.In the same case, Tang VP pointed out that the above mentioned principles are to guard against unmeritorious applications for variations who have second thoughts about settlements. This was reinforced by Lam J (as he then was) at §49:
46.As for any application for maintenance pending suit, “the Court has to balance the reasonable needs of the applicant against the respondent’s ability to pay for them”: HJFG v KCY [2012] 1 HKLRD 95 at §31 per Yuen JA. 47.As to the function of maintenance pending suit, “[a]n award for maintenance pending suit is by its very nature a measure designed to hold the ring and to ensure that the claimant can live reasonably pending the final determination of her claims. A legal services payment order is designed to ensure access to justice and that the parties can litigate on an equal footing. Both types of award are always adjustable if it transpires at the final hearing that there has been too much or for that matter too little paid”: per Mostyn J in MET v HAT (interim Maintenance) [2015] 1 FLR 576 at §10. 48.Whilst the Court will take a broad brush approach, regard must be had to the matters outlined in Jackson’s Matrimonial Finance and Taxation, 8th ed., at §2.5:
The Wife’s Claim 49.The Wife’s claim is for an upward variation of maintenance pending suit from HK$125,000 per month to HK$230,000 per month. In addition, she is asking for legal costs contribution in the form of a lump sum of HK$3.6 million or HK$300,000 per month for 12 months. 50.The breakdown of the Wife’s claimed living expenses are as follows:-
Whether there are any changes of circumstances 51.The Husband appears to accept that there have been material changes of circumstances for the Wife. He accepted that the Wife was diagnosed with endometrial cancer and had to undergo immediate surgery which was successful. He noted the Wife’s assertion of impaired circulation and pain in the lower body, the forced menopausal symptoms, the other gynecological problems and the alleged worsened CFS. It was not in dispute that at least the cancer and recovery from her surgery was something new which was likely to have increased her medical expenses. However, he argued that it was not to the extent of HK$105,000 per month. He also pointed out that the Wife had allegedly been suffering from the CFS condition since 2006. He submitted that the purported deterioration of this condition was only a guise to drum up further expenses at beauty parlors. He further argued that many of the purported changes simply do not justify the significant increase in many of the heads of claim and that the Wife is simply rehashing her previous arguments. 52.It is clear that the Husband accepts that there are changes of circumstances which would increase the Wife’s expenses. Apart from her illnesses and effect of surgery, it cannot be disputed that the cost of living has risen since 2015. Further, it is unlikely that the Wife would have expected the proceedings to be so protracted and costly. The only dispute is quantum. Standard of Living During the Marriage 53.There can be little, if any dispute that reasonable needs are measured against the standard of living enjoyed by the parties during the marriage. 54.The Husband gave a history of their standard of living from 1987 onwards. The Court will not, and is not required to conduct a forensic examination of the monthly expenses from the start of their marriage. Further, at that time, both parties were working and had their own resources. Whatever the reason was for the Wife’s resignation, she has been financially dependent on the Husband since 2008. There is no dispute that between 2009 and 2012, the Wife’s expenses (exclusive of housing) amounted to HK$95,000. From 2012 and until February 2013, the Husband paid her HK$150,000 per month as living expenses. It is clear from the above, that the standard of living during the marriage was in fact fairly high. Disputed Heads of Claim 55.Some of the heads of claim are not in dispute. In her claim, the Wife is asking for HK$16,000 as contribution to her parents. This was originally opposed. The Husband said that the Wife should not be supporting her parents in these difficult times. The Wife has always contributed towards her parents, who had given the Husband and his family tremendous help during the early years. Despite the fact that the Husband alleges that these are “difficult times”, he has chosen to support the 2nd Respondent’s parents. When this was pointed out to the Husband, he conceded that this sum should be included in the maintenance pending suit. The undisputed heads of claim include:
56.The major items of expense in dispute are the increased medical expenses, increased holiday expenses, deferred expenses, utilities, household expenses and clothing and shoes. Medical Expenses 57.The bulk of the Husband’s criticisms under this category are targeted at the Wife’s expenses at Beauty House. The question as to whether the Wife has been suffering from CFS has been an ongoing issue in these proceedings. The Husband pointed out that the Wife has allegedly been applying self-help measures to cope with her symptoms since 2008. These include regular care in a local beauty parlor mainly for the purpose of improving lympatic and overall circulatory flow. The treatment allegedly involved low dosages of ultra sound and laser, as well as whole body massages and facial and neck treatment with various serums by beauty therapists. According to the Wife, her CFS condition has now worsened and the cost of treatments have hence increased. The Husband does not accept that the Wife’s CFS condition as deteriorated. He argued that if these treatments are working, the Wife’s condition would not have deteriorated. The fact that her condition has so deteriorated is testament to the futility of the treatments. He also argued that the nature of the treatments at the beauty parlor are unclear and that the Wife has in fact failed to undertake the treatments suggested by her own expert, Dr. Bateman, which includes complimentary and alternative medicine providers, garment, micro-current massage therapy, gentle yoga, interventions that improve circulation, weight, dietary health, psychological well being and self-help capabilities. Instead, the Wife has been receiving Body treatment, Eye treatment, Facial treatment, 3D treatment, Tri-body treatment. She has also spent vast sums of money on eye creams, SR serums, Collagen Serum, Perfect Body. 58.The Husband does not accept that the Wife is suffering from CFS. Instead according to his expert, Dr. Calais Chan, the Wife is suffering from a psychological condition. The Husband wants the Wife to try a course of psychological treatments. He has however, not suggested how much the suggested treatments would cost. 59.As for the effect of cancer, the Husband pointed out that the Wife has recovered well from surgery apart from suffering from lymphedema in the lower limbs. However, according to Dr. Chung:
60.The Husband therefore argued that the Wife has healed relatively well, although he does not reject the possibility that due to her recovery from cancer and surgery, she may require some additional medical treatment, diagnoses etc. He suggested that a more reasonable sum (inclusive of the treatments at the beauty parlor to be around HK$25,000 per month. 61.On the Wife’s part, she has produced an Accountant’s report to illustrate her spending over the past three years, i.e. from 2015 to 2017. According to this report, the Wife has actually spent an average of HK$181,124 per month. This does not include the HK$16,000 contribution to her parents, various expenses that the Wife has had to defer. Her expenses in 2016 were lower due to the worsening of her post-cancer surgery complications and additional health issues including lymphedema and a 2 cm vagina cyst which caused her to be mainly home bound. 62.The Wife argued that her chosen treatments at the beauty parlor were endorsed by Dr. Bateman:
63.According to the Wife’s expert, Dr. Bateman, CFS is a multisystem illness that is by definition, debilitating, subject to relapse from activity or stress (physical, orthostatic, cognitive, emotional etc) and marked by cognitive impairment, sleep disturbances, orthostatic intolerance, widespread pain and altered immune function. This illness is supported by extensive documentation [B2/460]. The existence of this illness is not in dispute. According to the Husband’s expert, Dr. Chan, CFS is a fairly new diagnostic label, although the illness was clearly described more than a hundred years ago [B2/537]. Dr. Chan also agreed that CFS is a debilitating illness, which can lead to severe impairment of function in every aspect of the patients’ lives, including physical, psychological, cognitive, social and occupational. The only dispute is whether the Wife is suffering from CFS. 64.It is the Husband’s case that the Wife is NOT suffering from CFS but is using it as a guise to exaggerate her expenditure. Dr. Chan’s report has been severely criticized by Dr. Bateman as being “biased”, “weakly supported”, “exhibits disregard for the medical record, little awareness of the scientific literature regarding ME/CFS, and bias in the way the psychological tests were administered and interpreted”. She pointed out that Dr. Chan chose to use the MCMI III psychometric assessment, instead of the more up-to-date MCMI IV assessment. Dr. Bateman also challenged Dr. Chan’s use and interpretation of assessments. In particular, she pointed out that the alleged primary treatments guidelines for CFS mentioned by Dr. Chan has been discredited in the scientific community. 65.The Court is not in a position to rule on the dispute between the two experts at this stage. However, whatever the dispute is, the Husband’s case does not even appear to be supported by his own expert. Dr. Chan stated at paragraphs 115-116 of his report:
66.It appears that Dr. Chan has not ruled out the possibility that the Wife is suffering from CFS. He only challenges the extent of her symptoms and disabilities. I am further reinforced in my view by paragraph 120 of Dr. Chan’s report where he appears to be making recommendations for treatment of the Wife’s CFS (which according to Dr. Bateman, have been discredited in the scientific community):
67.There is a dispute as to the appropriate treatment for the Wife’s CFS. Dr. Bateman is of the view that the Wife’s self-help measures are appropriate and relevant, which is challenged by the Husband. He says that the self-help treatments currently used by the Wife are clearly not working and that she should try psychological treatment instead. However, this again, does not appear to be supported by his own expert. Dr. Chan stated at paragraphs 121-122 of his report:
68.Putting aside Dr. Bateman’s criticism that the treatments suggested by Dr. Chan have been medically discredited, Dr. Chan was only dealing with the Wife’s treatment from a psychological stand point. There appears no dispute that CFS is aggravated by stress. In the last few years, the Wife was not only faced with the effects of her alleged CFS condition, she had to deal with the breakdown of her marriage, the protracted proceedings, cancer treatment and its after effects. There appears to be also no dispute that CFS is a chronic condition and a patient can only manage or reduce the rate of deterioration. In respect of the physical symptoms, Dr. Chan admitted that the various alternative or complimentary treatments that she has been receiving do promote a personal sense of wellness. 69.The Wife instructed an accountant to calculate her average expenses between 2015 and 2017. This demonstrated that she has in fact incurred the expenses for alternative treatments at the beauty parlour. However, the fact that the Wife has incurred those expenses does not necessarily mean that they are reasonable. The treatments at this beauty parlour are not aimed solely at her alleged CFS condition. She has been patronizing this beauty parlour for beauty treatments long before her alleged illness. According to the records produced by the Wife, she was already spending over HK$100,000 per month at this beauty parlour in 2008. In addition to the alleged symptoms of CFS, the Wife also has to deal with the various post-surgery complications. 70.In addition to the above, the Wife has deferred some medical and dental treatments, including urgent treatment for her teeth, podiatric treatment and measures for her feet and regular clinical monitoring of the retinal degeneration in both of her eyes. 71.In the light of the numerous medical problems faced by the Wife, her request for HK$86,000 per month as medical and dental treatment is reasonable. Travelling Expenses 72.The Wife’s claim is for HK$36,000 per month as travelling expenses. The bulk of this travel budget is for making trips to visit her mother in Australia. She sometimes stops over in Melbourne to attend consultations with her treating doctor for CFS. The remainder of the budget is to enable her to travel for leisure. The Husband says that this is unreasonable and offers HK$18,000 per month. 73.There is a dispute as to whether the couple travelled by business class during the marriage. The Husband relied on the receipts produced by the Wife and says that the evidence clearly shows that they had always travelled in economy class. The destination and class of travel was in fact unclear from the receipts [B2/417; 421.59-421.60]. However, the Wife was able to produce some boarding passes from 2012 to indicate that she did travel at least for part of the time in business class [B1/242-248]. 74.The Wife explained that disregarding the dispute in respect of the travelling cost during the marriage, she now needs to travel more comfortably as a result for her physical condition, including lymphedema. The Husband argues that the Wife should not now be allowed to travel in business class as she has been coping with CFS since 2008. Firstly, there is evidence to show that she did sometimes (although not always) travelled in business class. Further, the Wife is not saying that she needs to travel in business class because of her alleged CFS. Instead, it is because she suffered from lymphedema. However, according to the report from Dr. Chung [B2/553], the lymphedema in the lower limbs have subsided in 2017. 75.The Husband also criticized the Wife for stopping over in Melbourne, instead of flying direct to Brisbane to visit her mother. This ignored the fact that her treating doctor for CFS is in Melbourne. However, there are only 365 days in a year. If the Wife plans on more travelling, she would be spending less time at the beauty parlour. Some of the budget for alternative treatment could be used for additional travelling. In my judgment, a sum of HK$25,000 per month would be reasonable. Clothing and Shoes 76.There appears to be no dispute that the Wife has put on very substantial weight, especially after her surgery. The Wife is asking for HK$15,000 per month to enable her to purchase a new wardrobe. The Husband says that although the Wife’s clothes will be tight, they are still wearable. 77.The Wife has put on at least 10 kg since 2013. The Husband’s stance is wholly unreasonable. These proceedings have already gone on for 5 years and is unlikely to be concluded within the next 3 years (with the trial if the preliminary issue still pending). With that amount of weight gain, it is ridiculous to suggest that the Wife should be expected to squeeze into her old clothing for the next few years. 78.The Wife says that she was accustomed to wearing designer clothing during the marriage. The Husband admits that she had some designer clothing but they would only purchase off season items at outlets. The budget sought by the Wife would in no way enable her to purchase a wardrobe from top end designers, even at an outlet. It would only be sufficient to purchase from lower end designers. In the Court’s view, even according to the Husband’s case, this is commensurate with the previous standard of living. Household Expenses 79.The Wife’s claim is for HK$8,700 under this head. Apart from the usual household items, she says that there are substandard structural issues from the previous renovation. As a result, there are constant breakdowns and her bedroom is uninhabitable. She will therefore have to effect repairs. Some electrical items would also have to be replaced. 80.Firstly, the defects found in the Wife’s flat are supported by a survey report. The more serious defects include de-bonding of plaster over various areas in the flat, the moiety of the ceiling is curved, there are water stains and water leakage in both the living and master bedroom, uneven flooring and defective water drainage in bathrooms and the lack of fire resistance walls in the kitchen. 81.The Husband asserts that these repairs or renovation have never been reasonable or necessary because they are not immediate needs. He pointed out that the Wife spent HK$2.1 million on renovation and furnishing her flat in 2014. There is therefore no reason for her to renovate her flat again. In any event, he says that since these renovations have been deferred, they can be further deferred until the end of these proceedings. 82.Maintenance pending suit is based on reasonable needs “generously interpreted”. The Wife cannot be expected to live in the current conditions of her flat. Even if she does not renovate her flat, she would have to effect some repairs. Further, the Husband himself (without the need for renovations or repairs) is spending HK$8,000 as household expenses. In all those circumstances, the Wife’s claim is wholly reasonable. Utilities 83.The Wife is asking for HK$6,200 per month as utility expenses. The Husband says that this is highly exaggerated as she lives alone. He is offering HK$3,000 per month. 84.The Court understands that the Wife may be spending a lot more time at home than the Husband and the 2nd Respondent. However, her alleged utility expenses do appear to be rather high. In my view, the Husband’s offer is reasonable. Domestic Helper 85.The Wife is asking for HK$5,000 for a part time local domestic helper. The Husband says this not reasonable as they never had a helper during the marriage. Despite that, the Husband himself also has a part time helper which costs HK$4,000 per month. It is difficult to see why it is reasonable for him to have a helper but not for the Wife. Other Items 86.The other items of expenditure in the Wife’s Form E do not appear to be in dispute. Conclusion 87.In HJFG v KCY [2012] 1 HKLRD 95, Hartmann JA (as he then was), at paragraphs 37 and 38 of the judgment, gave a succinct summary of the law in the area of maintenance pending suit:
88.The Wife’s reasonable needs are based on the standard of living during the marriage. Her needs should not be confined to the mere basics, but generously interpreted. The Wife in this case has based her reasonable needs on a high standard of living which she claims to have been provided by the Husband during the marriage. Although this is disputed by the Husband, his very high earning capacity is not in dispute. Whilst it remains to be seen whether this case would qualify as a “big money” case, it would be helpful to refer to the guidance given by Thorpe J (as he then was) in F v F (ancillary relief substantial assets) [1995] 2 FLR 45, on the exercise of the Court’s discretion in determining the Wife’s reasonable needs on an interim basis:
89.The Husband was paying the Wife HK$150,000 up to 2013. Even without the various medical problems and the need to visit family in Australia, the monthly expenses of the Husband himself comes to about HK$180,000. This is in addition to a payment of up to HK$200,000 per month to the 2nd Respondent. In my judgment, a sum of HK$220,000 is reasonable as maintenance pending suit for the Wife. Back Dating 90.The Wife is asking for the maintenance pending suit order to be back dated to the time of the last Order for maintenance pending suit in February 2015. She argued that the Court has unrestricted power to vary its own order retrospectively and to backdate any variation in a pre-existing order beyond the date of the application for variation. However, she admitted that orders are not usually backdated to a date prior to the notice of application to vary unless the justice of the case so requires. She submitted that that there are special circumstances in this case which justified backdating of the order, namely:
91.On the other hand, the Husband argued that backdating the order to the last maintenance Pending suit order is highly unusual. The Wife has to show a change of circumstances in order to justify a variation. If the Court were to backdate the Order to the date of the last Order, it would negate the need for the change of circumstances. He submitted that the Order for variation should at most be backdated to the date of the application, i.e. December 2017. 92.In AEM v VFM [2008] 3 HKLRD 36, the parties divorced in 1991. The Court sanctioned a settlement whereby the Husband paid the Wife periodical monthly maintenance payments which were index-linked and automatically increased annually by the lower of the Retail Price Index (RPI) of the country in which the Wife resided or by the Husband’s increase in salary (the 1991 Order). In 1994, the Wife returned to the UK. In 1998, the Judge in Hong Kong ordered an annual increase in the payments, but this was not index-linked (the 1998 Order). In 2006, the Wife made a further application for variation. 93.Her application to vary the 1998 Order was granted by index-linking the payments and backdating this to 1999, adopting: (a) a 2.2 annual increase from the adjusted 1998 figure for the years 1999 to 2005, based on the average RPI increase between 1997 and 2004; and (b) a 5% annual increase from 2006, based on the Wife’s evidence on UK inflation (the 2006 Order). The Husband was now worth more than HK$110 million and although his monthly salary with a major listed company had not increased since 1998, his total recorded income had increased for 5 of the past 7 years. He appealed against the 2006 Order, arguing that the Judge erred in: (1) backdating it; and (2) adopting the 5% annual increased from 2006, submitting that the index-linked provision in the 1991 Order did not permit any further upward adjustment because his salary had not increased. 94.When the 2006 Order was made, the Wife was 56 years of age. She did not work had had to spend more time looking after the daughter. The Wife had since 2003 sold her property in Scotland and also her bed and breakfast business. This was due to the drop in the profit of the operation and the poor health of her father who had terminal illness. Her father died in 2004. Her mother has been unwell and required her constantly keeping up her company and spending more time with her. This would make it difficult for the Wife to maintain a regular job. The Wife had also disposed of her property in Farrer Top. 95.The Judge found that the Wife had a total capital of slightly over HK$565,000. It was the Wife’s intention to acquire a larger property to live in. The Judge found that Farer Top was never purchased or intended to be the final home for the Wife and children because it was purchased while she was still living in Hong Kong as one of the investments of her lump sum; it was always her intention that she should reside at the much bigger and more expensive Bury Farm should she return to live in the UK. 96.The appeal was dismissed by the Court of Appeal, which held that the exercise of the power under s11(1) of the Matrimonial Proceedings and Property Ordinance (Cap.192) to vary a periodical payment order required that all the circumstances of the case be considered, including any change in circumstances since the original order was made, such as continuing inflation, increased costs of raising a growing child, the greater adverse effect of increased costs of living on one of the parties and the Husband's increased wealth. The Court was not required to proceed from the starting point of the original order but could look at the matter afresh. The basis and intended effect of the original order were also relevant factors and the Court should not depart radically from the parties’ agreement embodied in a consent order. The Court had an almost unrestricted power to vary its own order retrospectively and to backdate any variation to a pre-existing order beyond the date of the application for variation. In practice, orders were not usually backdated to a date prior to the notice of application to vary, unless the justice of the case so required. 97.In that case, the Court found that the Wife had shown exceptional circumstances which justified backdating the order to 1999. There was sufficient evidence to show that rising costs of living eroded the value of the Wife’s payments. Further, the 2.2% annual increase was modest and gradual over the years. So the Judge could have made the adjustment by reference to the index-linked provision in the 1991 Order or without it. The Husband’s substantial wealth had grown since the divorce, and an upward adjustment would not cause him any hardship. 98.In S v S [1987] 2 All ER 312, Purchas LJ of the English Court of Appeal stated that:
99.In that case, the backdating was drastically reduced on appeal. The Court of Appeal found:
100.In Cornick v Cornick (No.2) [1995] 2 FLR 490, a backdating order was affirmed because of the fact that the Husband’s income had risen substantially during that period and the Wife had not in fact received what had been expected. 101.It is noteworthy that all the above cases relate to final orders for periodical payments, rather than maintenance pending suit. There is a vast difference between the two types of orders. The Husband’s counsel rightly pointed out that the purpose of an order for maintenance pending suit is to address the immediate needs of a party. The Wife’s lack of savings and her long term needs are matters that will be and should be fully considered at the ancillary relief trial. The existing order for maintenance pending suit was made by consent. There is no question of “an order to right a wrong order”. Further, some of the Wife’s expenses have been deferred (for example, dental treatment, podiatrist and increase travelling) and they have now been provided for. Those expenses were not incurred in 2015. Applications for maintenance pending suit are decided on a broad brush basis. Any under or over payment will be considered at the ancillary relief trial. The Court understands that because the Wife was under treatment for cancer, which was only diagnosed after the last order, she was not in a condition to make any application for variation at that stage. It is also obvious that her medical expenses increased dramatically after her diagnosis. At the same time, her ability to attend treatments at the beauty parlor or travel were restricted during her cancer treatment. In order to achieve a rough and ready compensation for those increased expenses, this order will be backdated to the date of the present application. Legal Costs Contribution 102.The Wife’s application for the provision of a sum of HK$32.6 million or alternatively HK$300,000 per month for a period of 12 months as legal costs contribution. 103.Such applications are made under the umbrella of maintenance pending suit pursuant to section 3 of the MPPO, which provides as follows:
104.It is therefore clear from the wording of that section that that Court has no jurisdiction to order a lump sum provision. 105.Although these proceedings were commenced in 2013, the parties are nowhere near FDR. The discovery process was difficult and protracted. There is now a pending trial of the preliminary issue. There is no dispute that the Wife is in need of litigation funding or that the requested sum is well within the Husband’s ability to pay. 106.The Wife is the sole registered owner of a property in Parc Royale. During the initial stages of this application, the Wife wanted to resolve the issue of litigation funding without a contested hearing. She then proposed to the Husband that he should become the guarantor of a mortgage loan for the sum of HK$3.6 million by securing her property and such sum shall be held by her solicitors as costs on account for the sole purpose of financing her legal costs, and that the Husband shall be solely responsible for the monthly mortgage repayments and interest. The Husband indicated that he was, in principle, agreeable to the proposal. The parties then corresponded in the draft consent summons. However, before the terms of the summons could be agreed, the Wife became increasingly concerned about the security of her only home and asset for the following reasons:
107.The Husband says that the Wife is not entitled to her claim. He argued that the parties have reached a binding agreement on legal costs provision and the Wife should be held to it. Alternatively, he argued that the quantum requested by the Wife is unreasonable. 108.The principles under which these applications are decided are well settled. In Currey v Currey [2006] EWCA 311 held that an order for legal costs provision can be made if it is demonstrated:
109.The Husband’s counsel has cited a number of cases in which binding agreements were reached in negotiations. However, even if there were a binding agreement, the Court has no power to order the Wife to mortgage her property. There appears to be no dispute that she is in need of legal costs provision in these proceedings. The issue will have to be decided according to the principles under Currey v Currey (supra), namely, whether the Wife has any assets which can be reasonably deployed. 110.The Currey test has been applied in a number of cases. In Rubin v Rubin [2014] 1 WLR 3289 at 3294, Mostyn J referred to his decision in BN v MA (maintenance Pending Suit: Prenuptial Agreement) [2014] Fam Law 443:
111.The Court in that case also referred to TL v ML [2006] 1 FLR 1263 and went on to set out the factors that should be considered in such applications, which include:
112.In LCYP v JEK (FCMC 4880/2014, the Wife was a housewife with no regular income. The Wife had a property which was purchased as an investment property and was subject to a mortgage. The property was leased to a tenant and the rental was sufficient to cover the mortgage repayments. In the Wife’s application for maintenance pending suit (including legal costs provision), the Husband argued that the Wife’s property should be liquidated to cover her past or future legal costs. The Court found that it was doubtful if any bank would provide such a loan to the Wife. She has already many loans from personal friends and it was unreasonable to expect her continuous dependence on such loans in the future, especially when the Husband was in a position to pay. The Court also found that obtaining legal services in Hong Kong by offering a charge on the outcome of the litigation was neither practical nor feasible. Since the Wife was in possession of a landed property, it was unrealistic to expect her to get legal aid. 113.In DX v LN (FCMC 7870/2014), the Wife was also a full time housewife whilst the Husband was a businessman working in his father’s business, for which he was groomed to take over. They were both from the Wuhan but were married in 2006 in Hong Kong. The parties relocated to Hong Kong in 2010. In 2012 to 2013, the Wife discovered that the Husband was having an extra-marital affair. She moved out of the matrimonial home after removing her jewellery and some gold bars from the safe deposit box and withdrawing HK$3.2 million in cash from her own bank account as well as their joint account. She eventually rented a small flat near the former matrimonial home and started divorce proceedings in 2014. The Husband agreed that the marriage had irretrievably broken down but care and control of the children was hotly contested. During the custody trial in April 2015, the Wife claimed that almost all of her funds had been exhausted and applied for maintenance pending suit. The Husband argued that the Wife was unable to satisfy the Currey test. The Court found that although the Wife had a property in Wuhan, it was “simply not practical or reasonable for her to have to liquidate or deploy it as security for borrowing for her legal costs”. 114.In W v C (FCMC 2201/2014, 11 August 2014), the parties to the marriage were in their 60s and had six children. They started a goldsmith business together in the 1970s but the Wife became a full time housewife after the birth of the second child. The Husband set up another family with a madam Szeto in the early 1980s and had four children with her. The parties together with the six children emigrated to Canada but the Husband returned to Hong Kong shortly thereafter to continue with his business. His business flourished and he was also extremely successful in the investment in landed properties. At the time of her application for maintenance pending suit, the Wife had cash of about HK$30,000 and CAD 11,500 in her bank accounts. She had two properties under her name which had a net equity of HK$3.5 million and HK$2.55 million respectively. The Husband argued that the Wife was unable to satisfy the Currey test. The Court held:
115.The Wife is the registered sole owner of her home. The Husband says that she is unable to satisfy the Currey test. As can be seen from the above cases, the Currey test does not require an applicant to have no assets. She must demonstrate that she has no assets which can be reasonably deployed. Although the Wife is the sole owner of a property, that is not only her sole asset but also her home. Although the Husband argues that the Wife is not suffering from CFS, there is no dispute that she not been in gainful employment since 2009 and that she was wholly dependent on the Husband for financial provision. She has no income. Not only has she exhausted her savings, she has had to obtain a bridging loan from a friend. Whilst her ability to resume employment remains to be decided, there can be no dispute that the Husband’s earning capacity is far higher than hers. The Husband admits that he has the ability to pay the requested sum. There is no possibility of her residence being sold at the end of these proceedings. There is already pending proceedings by way of a preliminary issue on the beneficial ownership of a number of properties which are under the 2nd Respondent’s name, to be followed no doubt, by another flow blown trial on the Wife’s ancillary relief application in view of the Husband’s hostile stance and attitude adopted throughout these proceedings. 116.In all the circumstances of this case, it is wholly unfair and unreasonable to expect the Wife to raise litigation funding by mortgaging her only home. This Court finds that the Wife is entitled to legal costs provision from the Husband. Quantum of Legal Costs Provision 117.The Wife is asking for HK$300,000 per month for a period of 12 months. The Husband says that this sum is unreasonable since pleadings for the preliminary issue are already closed. 118.These proceedings were commenced in 2013 but the parties are nowhere near FDR. The discovery was difficult and protracted. The documentation is voluminous. The Wife has been represented by the same legal team for the last six years. By the time of her application, the Wife was already in arrears for her legal costs to the tune of over HK$1.8 million (which was to be further updated). Legal costs provision order should not normally include costs already incurred. However, with such a substantial sum in arrears, it is most unlikely, if not impossible that the Wife’s present solicitors would continue to act for her if no payment were made. If the Wife were to instruct another legal team, it would probably be just as expensive and a complete waste of costs for the new team of lawyers to peruse the papers. 119.It is noted that although the Husband now argues that the sum requested by the Wife is unreasonable, he actually agreed with the sum during negotiations for the mortgage of the Wife’s property. 120.In A v A (Maintenance Pending Suit: Payment of Legal Fees) [2001] 1 WLR 605, it was held:
121.I find that the sum requested by the Wife is reasonable in all the circumstances. Orders 122.The Husband shall pay the Wife HK$220,000 per month as maintenance pending suit, such payment to be backdated to the date of her application; 123.The Husband shall pay the Wife a sum of HK$300,000 per month as legal costs provision for a period of 12 months. Such payments shall be made to and kept by the Wife’s solicitors and shall be used solely for legal costs in these proceedings; 124.Costs of and incidental to this application be borne by the Husband, on a party to party basis to be taxed forthwith if not agreed. There shall be certificate for Counsel.
Petitioner : Represented by Ms. Bonnie Cheng instructed by M/S Chaine Chow & Barbara Hung Respondent : Represented by Mr. Eric Leung instructed by M/S Tsang Chan & Woo Solicitors & Notaries |
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