Wj v. Lky
Read the full judgment text of FCMC 5880/2018 on BabelCite. This Family Court judgment was delivered on 21 January 2020 before Her Honour Judge Sharon D. Melloy.
Matrimonial Causes – Maintenance Pending Suit – Interim Maintenance – Matrimonial Proceedings and Property Ordinance – Standard of Living – Financial Resources – District Court – WJ v LKY – Application for maintenance pending suit and interim maintenance for two children – Wife claimed HK$700,000 per month based on high standard of living – Husband argued dismissal based on previous agreement regarding sale of M shares and Yacht – M shares sold for reduced sum – Court held summons not to be dismissed – Court adjusted wife's budget to reflect current reality and affordability – Husband ordered to pay HK$235,000 per month for wife and HK$90,000 per month per child – Costs order made – Next hearing listed.
Legal issues: Whether summons should be dismissed · Quantum of maintenance pending suit and interim maintenance
Outcome: Application granted in part; MPS and interim maintenance ordered.
Cites 1 case
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FCMC 5880 / 2018 [2020] HKFC 30 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 5880 OF 2018 ----------------------------
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---------------------------------------------------------------- J U D G M E N T ---------------------------------------------------------------- Introduction 1.This is an application by a Petitioner wife for maintenance pending suit pursuant to section 3 of the Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO) and for interim maintenance for the two children of the family, a boy M who was born on the XX February 2012 (aged nearly 7 years) and a girl A, who was born on the XX April 2017 (aged 2 years and 9 months), under section 5 of the same ordinance. 2.By the time that this matter came on for hearing the wife had reduced her claim from HK$830,921.26 per month, as set out in her summons dated the 26 November 2018, to HK$700,000 per month. It is her primary position that this sum represents the very high standard of living enjoyed by the parties during the course of the marriage and that as far as possible this is the status quo that should be maintained pending final resolution of all outstanding matters. 3.The husband for his part argues that the wife’s summons should be dismissed in its entirety. He points to the previous agreement reached, as set out in the court order dated the 4 April 2019, and says that these agreements should remain in force. Each party’s respective positions on this are summarized in the court Memo dated the 6 January 2020 which, for ease of reference I shall repeat in full as follows:
4.On the 9 January 2020 the court received a response from the husband’s solicitors. They confirmed that the sale of the shares had been completed, albeit after some delay and that the sum of HK$2.068 million (approximately) had now been remitted into the wife’s account and that she was due to receive those funds shortly. In answer to the specific queries from the court they responded as follows:
The solicitors added that the husband was not in a position to advise the court on the progress of the sale of the Yacht, if any. 5.On the 10 January 2020 the court received a further letter from the wife’s solicitors in which they confirmed, inter alia, that their client had now received the funds referred to above. 6.The court is asked to now consider the wife’s application in light of these recent updates, which were anticipated at the time of the hearing. In addition, it should be noted that the husband also advanced an alternative position through his counsel Ms Rattigan, namely that any maintenance pending suit/interim maintenance ordered must be at a realistic level and that in any event the wife still had access to some funds and that as a result she should be able to meet the family expenses in the short to medium term. The main issues 7.Consequently the main issues to be determined at this juncture are a) should the wife’s summons of the 26 November 2018 be dismissed in its entirety? b) If not, how much should the husband pay to the wife for her interim provision and that of the two children of the family? Background 8.By both parties accounts they originally met in the United Kingdom in around 2000. The wife, who is Hong Kong Chinese, was studying a course related to the dramatic arts and the husband, who is Malaysian Chinese, was also initially enrolled at a university there. The parties then spent some time in both Beijing and Kualar Lumpur where they were engaged in various business ventures, some of which were initially funded or related in some way to the husband’s family. The husband comes from a very well known and wealthy family in Malaysia. In 2003 the parties moved to Hong Kong in circumstances which are somewhat disputed, but in any event they subsequently married on the XX November 2003 and began to live in the territory on a permanent basis. Initially it seems that they lived quite modestly and the wife set up her own jewellery business and the husband was involved in various investment and business ventures. It is the wife’s case that their financial circumstances changed a few years later when, in 2007 the husband inherited some money from his Grandfather. The husband’s account is slightly different, but in any event it is not disputed that the husband eventually invested in a securities brokerage firm based in Hong Kong, together with other members of his family, including his mother and sister, known as M Securities Limited (M). It is the shares from M that are referred to in the court proceedings to date (see in particular paragraph 3 above). The parties also purchased a village house in Clear Water Bay, which they subsequently rented out until it was sold in 2012. 9.In the same year the parties had their first child M, who was born on the XX February 2012, and the wife became a full time mother and housewife. They had a further child, a daughter A, who was born on the XX April 2017. Shortly thereafter the parties separated and in February 2018 the husband moved out of the former matrimonial home amid allegations that he had formed a relationship with someone else. 10.From a financial and business perspective the husband did well in those early years and in 2012 he and his family further invested inter alia in a company known as D, which is a company which operates casino’s and other leisure and entertainment businesses including hotels in the Asia Pacific region and worldwide. The husband was, until recently, the Managing Director and Chief Executive Officer of D. In 2013 D was listed on the Australian stock exchange. The husband explains the position from his perspective in his third affidavit dated the 22 February 2019 as follows:
It is of note that the husband and some of his other family members held the shares in D directly and through a variety of other corporate structures. 11.On the 19 March 2019, the husband’s position at D was terminated. Consequently, he no longer receives an income from D nor any of the other financial benefits that originally derived from his position with the company. The husband’s stance is that this happened because of the wife’s very aggressive and litigious approach in these proceedings. This in turn is robustly denied by the wife. In any event it is clear that D has been making massive losses (AUD124.5 million in the 2018 financial year alone). In his 4th affidavit dated 22 March 2019 the husband elaborates on this as follows:
12.The wife for her part says that this is all a hoax, that the husband deliberately orchestrated his termination from D and that in any event he has access to other funds including a ¼ share of monies arising from a settlement of long term litigation in Malaysia relating to his Grandfather’s estate. The suggestion is that the husband may receive in the region of HK$250 million. There will of course be arguments in due course concerning whether or not this sum, is non matrimonial in nature and the extent to which the court may rely on it in ancillary relief proceedings in any event. The wife also states that:
13.It is also not disputed that the wife initially withdrew HK$12 million from the parties’ joint account in January 2018 and other funds including the husband’s salary and other reimbursements as and when they were received. In February 2018 she returned US$400,000 to the husband, but as at the 9 August 2019 she still held HK$5.45 million in her bank account. However, the court was also informed during the hearing that she has liquidated a life insurance policy valued at approximately HK$7.8 million to pay for legal fees and other expenses. Thus she does not have access to any other liquid funds at present. 14.In so far as the sale of the M shares are concerned, it is accepted that initially it was anticipated that they would sell for approximately HK$10 million and that it was on this premise that the wife was willing to compromise the situation as set out in the April order. It is now clear that the shares have been sold for a significantly reduced sum from that originally anticipated. The law Maintenance pending suit 15.The law is well known and not in dispute. Section 3 MPPO 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 set off. In other words, if there is any overpayment or underpayment that can normally be rectified at a final ancillary relief hearing. 16.Counsel for both sides referred inter alia to the Court of Appeal decision in HJFG v KCY (CACV 127/2011, 28 October 2011, where the following principles were reiterated with respect to maintenance pending suit/interim maintenance applications:
17.In so far as this particular case is concerned, it is accepted that the very high standard of living previously enjoyed by the parties during the latter part of their marriage, is of some relevance, as is the husband’s recent reversal of fortunes and his potential windfall from his family’s litigation in Malaysia. It is the duty of the court to try to ascertain the present reality of the situation, in so far as far as that is possible, given the preliminary stage of the proceedings and the fact that neither party has been cross examined. The court should not simply look at the parties’ most recent marital standard of living in a vacuum, but should look to all of the circumstances of the case when coming to a determination. Should the wife’s summons for maintenance pending suit/interim maintenance dated the 26 November 2018 be dismissed in its entirety? 18.I think not. Although the husband has now complied with the court order dated the 4 April 2019 and it is therefore accepted that the injunction order of the 15 February 2019 stands discharged as set out in order 2 of that order, it is also accepted as set out above, that the wife has received a great deal less than had been originally anticipated. In those circumstances it seems sensible to proceed with her application as it is unlikely that she will have sufficient funds to maintain herself and the children, prior to the conclusion of these proceedings. If not, how much maintenance should the husband pay to the wife as maintenance pending suit for herself and interim maintenance for M and A? 19.In essence the wife’s case is that the husband should pay what she seeks because she says that this is in keeping with the very high standard of living enjoyed by the parties during the course of the marriage and that in any event the husband can afford to pay that sum. I should say at this juncture that although the parties were clearly enjoying a high standard of living when they separated (the wife was living in a rental property with the children in Deep Water Bay, she had staff including two domestic helpers, a Nanny and security personal and she maintained the Yacht for weekend outings which had its own crew and significant expenses otherwise), I do not accept that in the current circumstances it is possible to maintain this same standard of living pending the conclusion of these proceedings. Some adjustment will be necessary. 20.In part this seems to have been initially accepted by the wife when she e-mailed the husband on the 29 January 2018 explaining why she had transferred the HK$12 million out of their joint bank account. In that e-mail she said inter alia as follows:
21.At the hearing Ms Irving for the wife confirmed that her client had had no alternative but to move out of the Deep Water Bay property and that she was now residing at an alternative address that she did not wish to reveal. One of the concerns here is that the wife and children may be vulnerable as they have allegedly been threatened by so called “gangsters”. The wife believes that this issue has arisen because of some of the husband’s business dealings. In any event she has moved to an apartment with a more affordable rent. This is highlighted in a most recent list of expenses. She has not, however, reduced her other general expenses including those related to running a household. Those remain at the same level as the Deep Water Bay property. I should say at the outset that this is not accepted and that it follows that the cost of running a flat is likely to be less than the costs associated with running a house. The reasonable needs of the wife and children and the husband’s ability to pay The wife’s needs 22.The wife’s up to date budget is set out in her most recent affirmation dated the 9 October 2019, as amended by Ms Irving during the hearing. Ms Irving confirmed that the mortgage payments were largely covered by the rent and that the wife had reluctantly let go of her security detail and therefore she would no longer need to pay for a body guard(s). It was pointed out that this cost may need to be revisited in the event that there were any further incidences. It was acknowledged that the costs associated with running the boat were high, but it was also submitted that these needed to be paid until the boat was sold. In total then the general expenses amount to just under HK$390,000 per month. This includes payment of the salaries for two domestic helpers and a driver plus a Nanny. These are set out in full below, together with the wife’s personal expenses at HK$193,000 per month.
23.In addition the wife seeks interim maintenance for M and A as follows:
Based on these figures it seems to me that the total amount that the wife is now seeking amounts to approximately HK$650,000 per month as opposed to HK$700,000 per month as stated during the hearing (i.e. HK$390,000 + HK$193,000 + HK$68,300 = HK$651,300). 24.The husband for his part maintains that there now needs to be a bit of a reality check and that the wife’s reasonable needs should amount to just under HK$225,000 per month. This is set out in the husband’s 5th affidavit dated the 25 September as follows:
The main items in dispute Rent, mortgage and management fees 25.The wife has moved to much cheaper accommodation and I accept that HK$138,000 per month, in the circumstances of this case, is entirely reasonable. I also accept that the rental for the Discovery Bay property covers both the mortgage repayments and management fees. Utilities and other household expenses 26.These are all a bit on the high side and are probably more reflective of the costs associated with running a house as opposed to an apartment. I accept the husband’s estimates for both namely HK$7,000 per month for utilities and HK$5,000 per month for household expenses. Food 27.Likewise the cost of food for one adult, a child and a toddler at over HK$23,000 per month seems very much on the high side. Again I will accept the husband’s estimate of HK$15,000 per month. Car expenses 28.The husband does not challenge the car expenses and I accept those at HK$11,500 per month. Staff 29.The wife does not work, she is now living in an apartment as opposed to a house, but she is still proposing that allowance be made for two domestic helpers, a driver and a Nanny. She is no longer asking for the cost of the body guards. I will allow for the cost of one domestic helper and a driver. I will not allow for the cost of a Nanny, which I agree seems excessive in the circumstances. In total then I will allow HK$18,000 per month to cover the cost of two domestic staff. The Yacht 30.I will not release the wife from her agreement to sell the Yacht. This is an expense that the parties can ill afford and as agreed steps should now be taken to sell it without more ado. I will allow the sum of HK$100,000 per month to cover the cost of the yacht for the next 6 months only i.e. until the end of July 2020. The Yacht needs to be sold within that time frame. The wife’s expenses 31.I largely agree with the husband’s estimates and comments. He has not challenged some of the wife’s expenses and I will allow her estimates for transport, personal grooming, medical etc. I agree that the wife’s contribution to her parents should not form part of the maintenance pending suit budget. Thus it seems to me that in total the wife needs approximately HK$66,700 per month to cover her own personal expenses. In particular, over HK$100,000 per month for clothes and shoes seems excessive and is clearly unsustainable in the short term. The children’s expenses 32.I also accept that some of the children’s expenses are capable of reduction. I will reduce the cost of the ECA’s to HK$5,000 per month per child, or HK$10,000 in total. I also accept the husband’s estimates in relation to entertainment/presents (HK$4,000) and holidays (HK$9,000). I will allow HK$5,000 per month for clothing/shoes. The wife’s estimates for school fees, medical and dental and uniform are accepted. 33.In total then the schedule of expenses should read as follows:
In total then this amounts to HK$313,162 or say HK$315,000 per month rounded up plus a further HK$100,000 per month for 6 months or until the yacht is sold. Can the husband afford to pay this sum? 34.I accept that some of the husband’s sources of income have dried up, but by the same token I accept that it is more likely than not that he will receive some funds from the trust settlement, which at the very least is a financial resource than he may have recourse to in the short term in order to pay for the immediate needs of his wife and children. In addition, he could cash in the life insurance policy valued in the region of HK$7.8 million. This is another financial resource that is immediately available to him. Backdating 35.I do not intend to backdate this order given the fact that the wife does have some financial resources at her disposal. Costs 36.I accept that neither party has been wholly successful in the stance taken by them in this application and that some of the wife’s claims do appear to have been somewhat excessive. Likewise, it is of note that the husband made no other proposal to the wife and that she really had no option but to make this application. Consequently, I shall make an order nisi to be made absolute in 28 days’ time that the Respondent husband shall pay half of the Petitioner wife’s costs of and occasioned by this application on a party and party basis to be taxed if not agreed. There shall be certificate for counsel. Order 37.The order shall read as follows:
Ms Frances Irving instructed by Withers for the Petitioner Ms Mairead Rattigan instructed by Jonathan Mok Legal for the Respondent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment