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FCMC 10499 / 2018
[2020] HKFC 264
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES NO. 10499 OF 2018
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| BETWEEN |
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V, RHM |
Petitioner |
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and
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V, ES |
Respondent |
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also known as B, ES |
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| Before: |
Her Honour Judge Sharon D. Melloy in Chambers (Not open to public) |
| Date of hearing: |
17 July 2020 |
| Dates of the additional affidavits: |
17 November and the 1 December 2020 |
| Date of Judgment: |
15 December 2020 |
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J U D G M E N T
(Maintenance pending suit, Interim maintenance and Litigation funding)
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Introduction
1.This was originally an application by a Respondent wife dated the 21 January 2020 for maintenance pending suit for herself pursuant to section 3 of the Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO) and litigation funding as follows:
1. The Petitioner [husband] do pay to the Respondent [wife] Maintenance Pending Suit periodical payments in the sum of HK$363,500 per month or any other sum as the Court thinks fit until final order;
2. The Petitioner do pay HK$400,000 per month to the Respondent for legal costs; and
3. The Petitioner do pay the Respondent’s court ordered costs forthwith and by Gross Sum Assessment.
2.On the 17 July 2020, which was the date of the hearing, the original summons was amended by agreement, as follows:
1. The Petitioner [husband] do pay to the Respondent [wife] Maintenance Pending Suit periodical payments in the sum of HK$363,500 HK$116,197 per month or any other sum as the Court thinks fit until final order;
2. The Petitioner do pay to the Respondent interim maintenance of HK$28,703 per month per child for the benefit of RH-MV, a boy born on XX October 2004 (“R”). LAKV, a girl born on XX March 2006 (“L”) and HRHV, a boy born on XX March 2009 (“He”) totaling HK$86,110 per month to be paid to the Respondent’s Banque Havilland account number XXXX with the first payment to be made within 7 days of the date of the order made and thereafter on the 1st day of each month pending further order;
3. The Petitioner do pay HK$400,000 per month to the Respondent for legal costs; and
4. The Petitioner do pay the Respondent’s court ordered cots forthwith and by Gross Sum Assessment.
5. Costs reserved
3.At that hearing I indicated that it was imperative, in my view, that some essential expenses, especially those concerning the three children of the family, should continue to be paid until trial. Subsequently, on the 21 July 2020 the husband filed an undertaking in the following terms:
I, VRHM hereby undertake to this Honourable Court and to the Respondent to pay the monthly following expenses, including certain expenses for the children of the family, namely RHMV, a boy born on the XX day of October 2004 (“R”), LAKV, a girl born on the XX day of March 2006 (“L”) and HRHV, a boy born on the XX day of March 2009 (“He”), until further agreement between the parties or order of this Honourable Court as follows:
1. For the properties located at ABC Verbier, Switzerland (“Verbier Chalet”) and Residence Tzoumettaz, BEF, Verbier Switzerland (“Verbier Apartment”)(pending their sale):
a. Swiss Property Tax.
b. Home Insurance.
c. The Verbier Chalet Mortgage.
d. The Verbier Chalet Utilities.
e. The Verbier Chalet Internet, TV, and Telephone bills.
f. The Verbier Chalet Garden Maintenance.
g. The Verbier Apartment Mortgage.
h. The Verhier Apartment Utilities.
i. The Verbier Apartment Condominium Fees.
2. For He:
a. IHI Global Insurance.
b. Swiss Medical Insurance.
c. Fees for J’s Ladder’s PODS-CLM Monthly Case Load Management Fee for C.
d. Fees for SW (A Speech Therapy).
e. CO’s Salary (inclusive of local charges and taxes) at its present rate of HK$53,802 per month or less, unless otherwise agreed between the parties.
f. J’s & J’s Rent at its present rate of CHF700/HK$5,652 per month or less unless otherwise agreed between the parties.
g. J’s & J’s Salary (inclusive of local charges and taxes) at its present rate of HK$56,160.87 per month or less unless otherwise agreed between the parties.
3. For R:
a. IHI Global Insurance
b. Swiss Medical Insurance
4. For L:
a. IHI Global Insurance
b. Swiss Medical Insurance
4.Three days later, on the 24 July 2020, the wife issued a subsequent summons as follows:
1. The Petitioner do release forthwith the sum of USD 50,000 to the Respondent from the proceeds of sale of Villa P at GHI, Phuket, Thailand held in the client account of Oldham Li & Nie, solicitors for the Petitioner, to be taken into account in the determination of the Respondent’s Summons dated 21 January 2020; and
2. Costs be to the Respondent.
5.As I have said, the original application was heard on the 17 July 2020 and on the 14 October 2020 it was further agreed that the second summons dated the 24 July 2020 would be included as part of the wife’s original summons and that this judgment would deal with both matters. In doing so it was acknowledged that the court has no ability to make an interim lump sum order, but that I could look at the second summons through the prism of the first. Mr Side, who appeared for the wife on the 14 October, said that the wife was simply asking for the ability to make payments from the proceeds of sale of Villa P (a Thai property recently sold by the parties and in which they each held a part interest). The solicitors for the husband namely Oldham Li & Nie currently hold the proceeds of sale of that property in a stakeholder account.
6.I should add that these applications have become somewhat of a nightmare to resolve. Despite the fact that maintenance pending suit applications, are, by their very nature supposed to be approached on a broad brush basis, on this occasion the court has been faced with over 170 pages of evidence, which has taken many hours to read. This includes an 85-page affidavit from the husband. This evidence does not include the parties Form E’s or any of the exhibits. The submissions are also in addition to this. The evidence filed includes the wife’s supplemental 8th affidavit dated the 17 November 2020 and the husband’s 10th affidavit in reply dated the 1 December 2020 in relation to the summons dated the 24 July 2020. It would be fair to state that each party continues to put his or her case at its very highest and that there is an evolving aspect to it, which only adds to the difficulty.
7.Further, following the hearing in July and on the same day that the husband filed his undertaking, the solicitors for the husband wrote to the solicitors for the wife, inter alia in the following terms:
As you and your Counsel agreed at the hearing on 17th July 2020, the proceeds from Villa P should be used towards the Children’s expenses. Thus, the funds from Villa P will remain in the OLN client account and in the event the funds are required to pay for the Children’s expenses, our client will deduct such amount and we will provide you with a detailed accounting of how the funds are being used towards the Children’s expenses. To date, the funds from Villa P remain in the OLN account.
8.On the 6 October 2020 the solicitors for the husband wrote to the court, stating inter alia as follows:
Children’s Expenses
The children’s expenses are paid from three (3) separate bank accounts:
1. Credit Suisse (Account No.XXX (USD, CHF +EURO)
2. HSBC (Account No. 6XX-XXX-XXX)
3. Banque Cantonale Valais (Account No. XXX): This is a Swiss Account dedicated solely for the purposes of providing payments, addressed to our client in Switzerland for the Swiss expenses. This account was previously topped up from our client’s HSBC and CS accounts. However, since July 2020, it was topped up using the Villa P sales proceeds. This account is used to pay for the children’s invoices, inclusive of their respective G tuition fees for the 2020/2021 academic year.
Pursuant to our client’s Undertaking filed on 22nd July 2020, our client has continued to pay for the children’s expenses as follows:
1. For the properties located at ABC Verbier, Switzerland (“Verbier Chalet”) and Residence Tzoumettaz, DEF Verbier Switzerland (“Verbier Apartment”)(pending their sale):
a. Swiss Property Tax
b. Home Insurance
c. The Verbier Chalet Mortgage
d. The Verbier Chalet Utilities
e. The Verbier Chalet Internet, TV, and Telephone bills
f. The Verbier Chalet Garden Maintenance
g. The Verbier Apartment Mortgage
h. Thy Verbier Apartment Utilities
i. The Verbier Apartment Condominium Fees
2. For He:
a. IHI Global Insurance
b. Swiss Medical Insurance
c. Fees for J’s Ladder’s PODS-CLM Monthly Case Load Management Fee for Candace
d. Fees for SW (A Speech Therapy)
e. CO’s Salary
f. J’s & J’s Rent
g. J’s & J’s Salary
3. For R:
a. IHI Global Insurance
b. Swiss Medical Insurance
4. For L:
a. IHI Global Insurance
b. Swiss Medical Insurance
In addition to the above, our client has continued to pay for the Chalet and Verbier Apartment maintenance and numerous repairs required as of late. Our client also has been paying for all Swiss social security, taxes etc. to be paid for J, J and C per Swiss tax and social regulations. As stated above, our client has also paid for the Children’s G tuition fees for 2020/2021 full school year.
For ease of reference, we now list the children’s expenses paid by our client for the months of July, August and September 2020:
Grand Total: $3,065,347.42
As a relevant update, our client’s bank account position as of 22nd September 2020 are as follows:
⦁ HSBC: HK$2,283,572.35
⦁ Credit Suisse: CHF469,825 (HK$3,664,635)
9.Thus it is clear from this that the husband has dipped into the Villa P proceeds of sale, without seemingly first obtaining the specific consent of the wife to do so. On a positive note however, the children’s tuition fees, which were not covered by the husband’s original undertaking, have now been covered in full for the academic year 2020/21. The list of expenses that the husband says he has paid from the 1 July 2020 to the 30 September 2020 amounts to HK$3,065,347.42. This also includes the sum of HK$67,200 per month that the husband has been voluntarily paying to the wife for her and the children’s expenses since March 2020. It seems that the wife’s amended summons seeks the additional sums on top of these amounts. A schedule of the payments is attached to this judgment and marked “A”.
Background
10.This is all being played out against a very difficult factual background. Just over a year ago, on the 1 November 2019, this court handed down a judgment on a Crossley application made by the wife whereby a consent summons dated the 4 May 2017, and subsequently amended on the 16 October 2017, was set aside. In that judgment I set out the background to the case by reference to each party’s counsels submissions as follows:
Background to the marriage
14. Both parties set out the background to the marriage in their respective submissions. Mr Pilbrow says inter alia as follows:
2. This Court is possibly aware of the history of this marriage as the matter has been before it on several occasions. In brief however:
(i) H is of Dutch origin but came to Hong Kong in 1991. He set up a clothing business by the name of FC Ltd (“F”) in 1993, in which he remains a 60% shareholder. This is his 3rd marriage and he has 2 children by those earlier marriages, who live in Paris and Milan respectively.
(ii) W was born in Australia of American parents. Having spent early years in Korea and Hong Kong, she moved to USA after her parents’ divorce. She returned to Hong Kong in 2002, when she started working for GO (“G”).
(iii) Having met in 2002, the parties married in May 2004. According to W, the date of separation was in 2017. There are 3 children of the family namely R (14 years), [now 16 years] L (12 years) [now 14 years] and Heֹ (9 years)[now 11 years].
(iv) H suffered an asthma attack in 2010, due to the caring hospital’s failure properly to treat him. As a result, H now … ” suffers from Global Developmental Delay from anoxic encephalopathy and cerebral endemic caused by severe asthma attack. He is non-verbal, still in diapers and has severe behavioural issues and life-threatening Aerophagia, which constitutes the need for the gastronomy tube and suffers 2-3 seizures per hour.” (W’s Form E [B2/694].)
Further, R has been disturbed by his parents’ divorce, leading to him requiring psychological assistance after he threatened suicide upon learning of this father's decision to separate.
3. … The parties initially moved to Switzerland in 2011 but returned briefly to Hong Kong in 2012 before moving to Phuket. In 2014, the family moved to Georgia, USA but in May 2015 returned to Switzerland, where W and the children still reside. All moves by the family have essentially been driven by H’s health. Between November 2016 and December 2017, H underwent multiple operations and hospitalizations as confirmed by the medical certificate given by the family’s doctor in Verbier Dr. PD dated 10th January 2019. As a result W also suffered great stress over this period as confirmed by Dr KR, clinical social worker in the clinical note dated 14 January 2019 (annexed marked “C”).
4. It is apparent from the evidence that H maintained the family in a luxurious standard of living of the highest degree, provided presumably by the success of F. In January 2017, H met and now lives in Hong Kong with a further lady and her daughter. A review of the expenses he claims in his Form E ([B2/680-682]) indicates that he continues to maintain the same standard of living.
15. These basic facts do not appear to be disputed, although it is the husband’s case that the wife unilaterally decided to move back to Switzerland from Georgia. He also remains of the view that the best option for H is for him to be cared for on a full time basis at a school called J in Roswell, Georgia, USA. He also maintains that the family have been living significantly beyond their means for a very long time. With that in mind it is of note that the husband is now aged 62 and that he has had some health issues of his own including some heart problems and throat cancer which is now in remission. The wife for her part is now 45 years of age. She also has some health issues which she believes to be stress induced.
16. In Ms Rattigan’s opening she explains in more depth some of the salient points leading up to the divorce, with particular reference to the parties’ finances, as follows:
14. In order to meet expenses that were no longer being met by income the Petitioner sold the former matrimonial home in Sai Kung, in October 2014 for HK$130 million. After paying off some HK$20 million in debt, HK$78 million (US$10 million) was transferred to Switzerland to fund the family’s high living expenses which had, as the Petitioner feared, become unsustainable.
15. In March 2015 the Respondent informed the Petitioner that she wanted a divorce. In February 2017, the Petitioner told the Respondent that he also wanted a divorce. The Respondent informed the Petitioner that she had retained Ms. Sharon Ser of Withers to act for her, the Petitioner retained Mr. Gordon Oldham to represent him in the impending divorce proceedings. The Respondent also consulted lawyers in Switzerland. The parties began to negotiate with regard to trying to settle matters between them as amicably as possible. The Respondent had suggested mediation in Switzerland but this did not take place. Instead, the parties negotiated directly, with the involvement of lawyers on both sides.
16. One matter that was of great concern to the Petitioner was the fact that he had to pay high taxes in Switzerland as a result of holding a “Permit B” in order to live there when he was not in fact doing so. As part of their negotiations the parties, therefore, took advice in Switzerland so that the Respondent would be able to obtain her own permit to live there after the divorce.
17. On the advice of his lawyers the Petitioner filed the Petition for divorce in Hong Kong on 12th April 2017 [A1/1]. The Respondent who was represented by Withers in Hong Kong as well as her lawyers in Switzerland then filed a Form 4 Acknowledgment of Service on 2nd May 2017 stating that she intended to defend the case on the basis of forum non conveniens [A1/5-7].
18. The parties continued to negotiate the terms of their financial settlement after the Petition was filed. This culminated in an agreement being reached (the “Consent Agreement”) which was drafted as a Consent Summons and was duly signed by the Respondent on 4th May 2017. This was then filed at Court on 5th June 2017 [A1/12] (the delay being caused as the Petitioner was travelling). The Consent Agreement specifically records the Respondent’s consent to Hong Kong being the appropriate forum and jurisdiction, she had not instituted proceedings in Switzerland at any time prior to this. At the time of the Consent Summons being filed the Respondent was receiving legal advice from Withers in Hong Kong and from Vafadar Silviotti Zapelli in Switzerland.
19. After the Consent Summons was signed by the Respondent she filed a Notice to Act in Person on 29th May 2017 [A1/8].
20. In July 2017, the Respondent informed the Petitioner that, after having taken further tax advice in Switzerland, it would be more efficient for maintenance as agreed under the Consent Agreement to be paid by a lump sum.
21. This started a further course of negotiations between the Petitioner and Respondent whereby they agreed to amend the Consent Agreement as requested by the Respondent. Both parties continued to receive legal advice through this process.
22. On 16th October 2017 the Petitioner and Respondent signed an Amended Consent Summons (the “Amended Consent Agreement”) and this was filed at Court on 20th October 2017 [A1/24]. This provides for a financial settlement for the Respondent including property transfers and for hers and the Children’s maintenance as set out in the Petitioner’s 4th Affidavit, under the terms of the Amended Consent Summons the Respondent would receive 10% of the net proceeds of F if sold. It also provides for the Petitioner to pay for the Children’s insurance, health care, school fees and associate costs and to continue to cover all of H’s expenses over and above the agreed maintenance payments. Currently, the Petitioner pays approximately HK$452,000 per month towards the Children’s expenses which includes H’s ski therapy, regular therapy, insurance premia and carer salaries [B2/660-691].
23. Following the signing of the Amended Consent Agreement the Petitioner transferred a lump sum of CHF3 million (equivalent to HK$23.5 million) to the Respondent as agreed.
24. After the Amended Consent Summons was filed the Registrar came back to the parties to say that there was a problem with the Petition because the Children were overseas. He required an amendment to the Petition to state this. The amendment was duly made by OLN but the Respondent refused to agree without stating why.
25. Unfortunately, after having received the CHF3 million into her account, the Respondent then sought to resile from the Consent Agreements, she engaged new solicitors, Boase Cohen & Collins (“BCC”) to write to the Court on 23rd November 2017 asking that the Consent Summons at Court not to be made Orders. This letter came a day after OLN had written to the Registrar to ask that the Court made an Order in terms of the Consent Summons dated 17th October 2017 [A1/78].
26. The Petitioner was left with no alternative but to file a Summons seeking to have the Consent Summonses made Orders of Court after negotiations between the parties failed. After the Petitioner had filed his original Summons of 9th February 2018 [A1/135], he was shocked to find out that the Respondent then made an application for injunctions and extensive discovery against the Petitioner and F and also for interim maintenance for herself and the children in the Entremont Tribunal in Switzerland on 29th March 2018. She did so despite having received CHF3 million from the Petitioner for her and the Children pursuant to the Amended Consent Agreement. The Petitioner’s 3rd Affidavit sets out that he was not immediately served with these proceedings as rather than being sent to his lawyers, they were sent to the parties’ home in Switzerland where the Respondent lives. Further, the Respondent had not informed the Swiss Court that there are proceedings currently underway in Hong Kong.
27. After extremely expensive proceedings in Switzerland the Swiss Courts ruled in favour of the Petitioner and stated that matters should be dealt with by the Court in Hong Kong, … [A1/200].
28. The Court was informed at a hearing on 17th July 2018 that the Respondent intended to proceed in Hong Kong for final orders in relation to the divorce and the Children. She also stated that she was no longer going to agree to the divorce Petition as filed and agreed in the Consent Summons on the basis of 2 years separation as she wanted to argue the date of separation being later, no application had been made to file an answer out of time as would be required. In order not to waste further costs on this the Petitioner agreed to amend the Petition to be based on 1 year of separation (without prejudice to his position on the date of separation as agreed by the parties in the first Petition).
29. After the hearing on 17th July 2018 the Respondent changed solicitors and went back to Withers.
30. Having been told at the hearing on 17th July 2018 that the Respondent was agreeing to jurisdiction in Hong Kong, the Court was further informed at the hearing on 26th September 2018 by the Respondent’s Senior Counsel that the Respondent would be discontinuing the proceedings that she had brought in Switzerland.
31. Unfortunately, this was not the case, the Respondent has continued to pursue an appeal in Switzerland against the Court’s refusal to grant her interim financial relief in that jurisdiction (despite the fact that she was paid a considerable lump sum and the Petitioner continues to meet the majority of the expenses).
32. The Petitioner is very concerned about the Respondent’s litigation conduct and the hemorrhaging of funds that should be used for the family. He is extremely worried that despite the parties having reached an agreement on the children and financial arrangements the Petitioner seeks to resile from this at great cost to the family both financially and emotionally. As stated above there are no agreed long-term plans for H other than the fact that the Petitioner will pay for him, and since these proceedings have started the Respondent has created all manner of obstacles over the Petitioner having access with the Children. At the rate at which the Respondent is spending and given the extremely high legal costs there will simply be nothing left for the Children’s security.
17. As will be seen this version of events is not fully accepted by the wife. In particular, she does not accept that she received detailed legal advice before signing the consent summonses. She also reiterated in her affidavits and in the witness box, that it was her firm belief that Switzerland and not Hong Kong was the most appropriate forum to deal with the divorce, as that is where both she and the children have been living. Similar to the husband she maintains that she is contesting this application, primarily because she too is concerned about the financial security of the children post-divorce.
18. When asked in the witness box how he felt about the wife reneging on the Amended Consent summons after receiving the CHF3 million that he had sent to her in accordance with his undertaking in that agreement the husband said that:
How it makes me feel is I feel like I’m being tricked. I mean we talked for months about an agreement, we draw it up, we sign it. I wire the money to her account and I don’t know, maybe a few days later she reneges on the whole thing. So how does that make me feel? And then since then we have spent, I don't know, I think, if we add up everything I spent on lawyers, I’ll be close to or over a million US dollars and she must be saying, “For what?” “For what?” To -- that money should have been there for -- to pay for H and for the children and that money is gone now. So how can I plan anything? How can I be saying, “Okay, I’m doing this and this and this” while then all of a sudden all the cards change and I’m sitting there with a huge cost and almost no money left?
11.In essence it is the husband’s case that his financial situation is now dire, that he is struggling to keep his company afloat amid the current global retail crises brought about by COVID 19, and that he has little capital to maintain the family otherwise. He says that the family are facing an extraordinarily difficult situation and one that is made considerably worse by He’s ongoing needs, which also have considerable financial implications. He has provided information concerning the apparent disappearance of US10 million since October 2014 to date and time will tell whether or not he is able to come up to proof on that. The wife for her part reiterates that the parties had enjoyed a very high standard of living during the marriage. She does not accept that the husband now has limited funds available to him and suggests that he has not made full and frank disclosure of his financial position. She says that he continues to lead a luxurious lifestyle and one that now includes his new partner and her daughter. This is vehemently denied by the husband.
12.Similarly, there are also concerns surrounding the alleged dissipation by the wife of a further HK$23.5 million (CHF 3 million) over an 18-month period. The wife has also provided an explanation for this and some supporting documentation in support of her position, but again time will tell whether or not she is able to come up to proof on this. She is now also in considerable debt and it is partly for that reason that her lawyers issued the second summons.
13.It should also be noted that the trial for final ancillary relief is currently scheduled for the 23 March 2021 with a further 5 days reserved. This is a milestone date and cannot be easily changed or vacated. The court will expect to be fully appraised of both of these issues and for appropriate tracing exercises to have been undertaken by both sides ahead of time. I should add that adverse inferences may be drawn in the event that this information is not forthcoming.
The issues
14.Thus I am asked to consider making a further order, notwithstanding the husband’s current undertaking and the fact that the children’s immediate schooling needs are now provided for. The wife says that her financial position is now extremely poor and she asks for additional financial assistance as a matter of urgency.
The law
Maintenance pending suit
15.The law is well known and not in dispute. Section 3 of the Matrimonial Proceedings and Property Ordinance, Cap192 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 normally approached on a broad-brush basis. Notwithstanding the myriad of arguments advanced in the written evidence, it is nevertheless still not possible for the court to come to any firm conclusions until after hearing from the parties themselves during a trial on final ancillary relief.
16.Reference may also be made 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:
a. The sole criteria to be applied in determining the application is “reasonable” which is synonymous with “fairness”.
b. A very important factor in determining fairness is the marital standard of living.
c. In every maintenance pending suit application there should be a specific maintenance pending suit budget which excludes capital or long term expenditure, more aptly to be considered on a final hearing.
d. Where the affidavit or form E disclosure by the payer is obviously deficient, the Court should not hesitate to make robust assumptions about his ability to pay. The Court is not confined to the mere say-so of the payer as to the extent of his income or resources. In such situation, the Court should err in favour of the payee.
17.Ultimately, and as Rayden points out
In practice, as oral evidence is rarely given, it will be unusual for the court on an application for maintenance pending suit to be in a position to make findings of fact on issues in dispute sufficient, for example, to deal with conduct or allegations of non disclosure. However, if it is demonstrated that the paying party has not performed his duty to make full and frank disclosure of his financial resources, then the court can take a broad and robust view of his means, and it does not have to accept and proceed on the basis of the assertions of the paying party as to his means and an inability to pay. The court can look at the reality of the situation …… Any under provision or over provision in the order for maintenance pending suit can always be corrected when the account comes to be taken at the substantive hearing when there are every opportunity to do fairness by set off ……” (See paragraphs 16.18 of Rayden, 18th edition).
18.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 try to 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.
Should the court order that the husband make any additional payments in the interim, other than those already covered by his undertaking and the voluntary payment of HK$67,200 per month?
19.Although there is some dispute over what the husband is actually paying, I tend to accept that he is currently paying in the region of HK1 million per month for the wife and the three children of the family. By anyone’s standards this is a very high sum and is probably not sustainable longer term. In such circumstances I do not intend to make an order for any additional sums to be paid pending the trial on ancillary relief and other than as set out below. I will also hold the husband to his agreement to continue to pay the wife HK$67,200 per month on a voluntary basis.
20.The wife maintains that the husband only started to pay for many of the items on the list following the hearing in July. That maybe true given that he only gave his undertaking following that hearing. I also accept that there may be some items that have not been paid historically. However, it seems to me that to order the husband to pay more than he has undertaken to pay, together with the payment of the children’s school fees, may place an intolerable burden on his shoulders at present.
Litigation funding and the summons dated the 24 July 202
21.Ms Booth for the husband set out the law on litigation funding in her written submission as follows:
78. As to the law on the funding of litigation costs, as recently set out by the Court of Appeal in WW v LLN Formerly Known as LSM [2020] HKCU 609 following HJFG v KCY (supra) and Currey v Currey [2006] EWHC Civ 1338, the following principles apply (§§20-21):
“(1) In order to obtain litigation funding, the burden is on an applicant to demonstrate that she cannot reasonably procure legal representation by any other means. This includes showing that she cannot secure publicly funded legal help at a level of expertise apt to the proceedings. To the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, either directly or as the means of raising a loan to fund legal services ...
(2) The subject matter of the proceedings and the reasonableness of the applicant’s stance in the proceedings will always be relevant.
(3) The period over which costs allowance is to be paid is also relevant. If the application was made before the FDR hearing, it may well be wise to order that the costs allowance should fund the applicant only up that hearing. If the FDR fails, it would be for the new judge, on the basis of the materials properly before him, to determine whether a new allowance for legal costs should be granted and if so, in what amount: HJFG v KCY [2012] 1 HKLRD 95, § §80-83; Currey v Currey [2006] EWCA Civ 1338.
[21] The court should be alert to the risk of injustice arising from irrecoverable and/or unmerited sums paid for litigation funding which would call for extra caution in the balancing exercise. As stated by Thorpe LJ in Moses-Taiga v Taiga [2005] EWCA Civ 1013, at §20:
‘ … the whole purpose of alimony pending suit is to sustain the petitioner pending the court’s determination. There is manifestly a risk of unjustified and irrecoverable payments, but that has to be balanced against the risk of a denial of access to justice for the petitioner, if she has not the means to sustain herself and the litigation pending its determination.’”
49. There should be some breakdown of the anticipated costs to support an application for litigation funding: HJFG v KCY (supra) at §§78-79. The rationale for this requirement was explained by Hartmann J A at §78 as follows:
“Section 3 of the Ordinance, of course, still required the Judge to be satisfied that any contribution towards the wife’s ongoing legal costs was reasonable. That meant that he had to be able to conduct some analysis of the nature and extent and purpose of the contributions sought. On the part of the wife, that required some breakdown of her anticipated costs.”
Should the husband pay an additional HK$400,000 per month in litigation funding?
22.In this instance the wife also seeks an additional HK$400,000 per month for litigation funding. This is in a situation where, according to Mr. Jeremy Chan who appeared on behalf of the wife, no one, including the husband’s lawyers, are actually getting paid at present. Further the wife has not provided a full breakdown setting out how she came to these figures, simply stating that she requires HK$200,000 per month for her solicitors in Switzerland and a further HK$200,000 per month for her solicitors in Hong Kong. With respect this is not acceptable. There is also an ongoing dispute concerning other items held by the wife that she could, in an ideal world, either sell, or borrow against, as she has in the past. Thus, it is clear that she is not entirely without any means. Therefore, although it is accepted that she is unlikely to be able to successfully apply for legal aid, it seems that she may have other options available to her. The court is also concerned that the husband may simply be unable to pay this additional sum on top of the payments that he is currently making. It is also of note that these proceedings are highly litigious, although it would not be fair to hold either side entirely to blame for this.
Is it possible for the court to make an order in terms of the summons dated the 24 July 2020?
23.As indicated above it is not possible for the court to order that the husband pay the wife an interim lump sum. But in this instance, a property has been sold that is partly matrimonial property, and the husband has also used a portion of the net proceeds of sale in order to pay for some of the children’s expenses. To that end reference may be made to a letter from Oldham Li & Nie’s dated the 21 July 2020 as set out above.
24.The wife says that she is in a terrible financial situation. She claims to have debts of almost HK$4.5 million, which is said to include outstanding legal bills and other items owed for or on behalf of the children. Thus I shall make the additional order that the wife seeks save that this shall be expressed as a further order for maintenance pending suit/interim maintenance for the children in the sum of HK$32,500 per month to be back dated to January 2020 and to be paid for a 12-month period – i.e. a total sum of HK$390,000 or US$50,000. It is further directed that this sum shall be paid from the monies held by Oldham Li & Nie within the next 7 days and as with the husband, the wife shall provide a detailed account of how these funds have been used.
Costs
25.Given that neither party has been wholly successful in the applications currently before me I shall make an order nisi to be made absolute in 14 days’ time that there shall be no order as to costs of the two summonses referred to above.
Order
26.Consequently, I shall make an order as follows:
UPON the Petitioner husband’s undertaking as set out in paragraph 3 above.
AND UPON the husband further agreeing to continue to pay to the wife maintenance pending suit/interim maintenance for herself and the three children in the total sum of HK$67,200 per month.
IT IS ORDERED THAT
1. The Respondent’s original summons dated the 21 January 2020 and later amended on the 17 July 2020, shall be dismissed.
2. There shall be an order nisi to be made absolute in 14 days’ time that there shall be no order as to costs of original summons dated the 21 January 2020, the amended summons dated the 17 July 2020 and the subsequent summons dated the 24 July 2020.
IT IS FURTHER DIRECTED THAT:
3. The sum of HK$390,000 shall be released to the wife within the next 7 days from the funds held by Oldham Li & Nie in their stakeholder account from the sale of Villa P, being maintenance pending suit for the wife in the sum of HK$8,125 per month and interim maintenance for the three children of the family in the sum of HK$8,125 per month per child for a 12-month period backdated from January 2020 to December 2020.
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( Sharon D. MELLOY ) |
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District Judge |
Ms. Madeleine Booth instructed by Messrs Oldham Li & Nie for the Petitioner
Mr. Jeremy S.K. Chan instructed by Messrs Tanner De Witt for the Respondent
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