Tsy v. Cwt
Read the full judgment text of FCMC 12343/2018 on BabelCite. This Family Court judgment was delivered on 28 February 2022 before District Judge S. Lo.
Matrimonial law – Variation of interim maintenance – Consent Order – Material change of circumstances – Broad brush approach – Costs – Whether court should adopt cautious approach instead of broad-brush approach – No, broad-brush approach applies – Whether significant weight should be attached to Consent Order – Yes, parties negotiated with legal advice and free will – Whether material change of circumstances exists – No, income increased, medical expenses reimbursed, expenses not excessive – Whether legal fee provision should be varied – No, not formally applied for – Variation Summons dismissed; Husband to pay costs to Wife
Legal issues: Broad Brushed Approach v Cautious Approach · Weight of Consent Order · Material Change of Circumstances · Recent Medical Diagnosis · Wife's and Child's Expenses · Litigation Funding
Outcome: Variation Summons dismissed
Cites 5 cases
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FCMC 12343/2018 [2022] HKFC 38 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 12343 OF 2018 ----------------------------
---------------------------- Coram : District Judge S. Lo in Chambers (Not Open to Public) Date of Hearing: 28 September 2021 Date of Judgment: 28 February 2022 ----------------------- J U D G M E N T ( Variation of interim maintenance/Maintenance pending suit) ----------------------- Introduction 1.This is the application of the respondent (“Husband”) by way of Summons filed on 23 December 2020 for downward variation of interim maintenance/ Maintenance pending suit (“MPS”) (“Variation Summons”). Since July 2019, the Husband has been paying HK$73,000 per month to the petitioner (“Wife”) comprising HK$64,000 per month as interim maintenance/MPS for their 7 year-old child and the Wife as well as HK$9,000 per month as legal costs provision. 2.The parties got married in June 2013. The Husband is now 43 years old and the Wife is now 41 years old. 3.The Wife filed a petition for divorce on 27 September 2018. Decree Nisi was granted on 1 March 2019. 4.At the hearing on 8 July 2019, with the assistance of both parties’ legal representatives, they reached an agreement and pursuant to the minutes signed, the Court made an order (“Consent Order”) as follows:
Husband’s Reason for Variation 5.In brief, the Husband’s case is that there has been a material change in circumstances and therefore the Court is entitled to look at the circumstances afresh. In particular, he pointed to the following matters:
Wife’s Opposition 6.The Wife’s position is that the Husband has not made out a case for variation, especially as the original MPS application was disposed of by way of the Consent Order through the assistance of their legal representatives before Deputy Judge A. Tse (as she then was) during the substantive hearing on 8 July 2019 (which lasted for over 2 hours). The Wife points to the following reasons:
Applicable Legal Principles 7.The power to vary under section 11(1) of the Matrimonial Proceedings and Property Ordinance (Cap. 192) (“MPPO”) applies to, inter alia, interim maintenance/MPS under sections 3 and 5. 8.In exercising the powers conferred under section 11, the Court shall have regard to all the circumstances of the case, including any change in any of the matters to which the Court was required to have regard when making the order to which the application relates. (see section 11(7) of the MPPO) 9.The usual basis for a variation is where there has been a material change in circumstances. The court is not required to proceed from the starting point of the original order but look at the matter afresh: AEM v VFM (No. 2) [2013] 2 HKLRD 144 at §10. At the same time the basis and intended effect of the original order are relevant factors to which the court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order: AEM v VFM [2008] 3 HKLRD 36, §14. 10.Further, in HCTT v TYYC (Variation of Consent Order), [2008] HKFLR 286, at page 286, §3, Tang VP (as he then was) said:
Also per Lam J(as he then was):
11.It is trite that MPS is usually dealt with on a ‘broad brush’ basis as there is opportunity to achieve fairness if there had been an over-payment, by means of a set off. 12.Nonetheless, Ms Leung for the Husband submitted that where there is a risk of injustice arising from irrecoverable MPS, it was held in YS v TTWD (Maintenance Pending Suit) [2011] HKFLR 439 that the Court should adopt an “extra cautious” rather than broad brush approach. That case concerned a forum dispute where there may be no possibility to make a set off should the case successfully move out of the jurisdiction. It was held that the Court must be “extra cautious to avoid the risk of injustice arising from irrecoverable MPS.” (see §§12-13). 13.Ms Leung for the Husband also submitted that the risk of irrecoverable MPS is equally present in a case where term maintenance may well be ordered and there would no capital assets in the matrimonial pot by which any meaningful ‘set off’ can be made to redress over-payment of MPS if the Wife were to lose in the preliminary issue concerning the beneficial ownership of the Amalfi Property (“Preliminary Issue”). 14.The Preliminary Issue has been set down for trial in July 2022 with a Pre-trial review in May 2022. Broad Brushed Approach v Cautious Approach 15.I would first deal with the legal point raised by Ms Leung that in the present case, whether the Court should adopt a cautious approach instead of broad-brush approach when considering the child’s and the Wife’s interim maintenance/MPS. 16.In my view, YS v TTWD (Maintenance Pending Suit) relied on by Ms Leung is only applicable in the case when the forum is in dispute or where there was a MPS application at the same time as a jurisdictional challenge. It is not applicable generally. 17.Apart from the Preliminary Issue, it is also noteworthy that the Wife never accepted the Husband’s explanations for transferring a total of more than HK$4 million to his mother and his ex-girlfriends (i.e. repayment of a 26-year loan, gifts, interest free loan but without any repayments, etc). 18.Therefore, even if the Wife do lose on the Preliminary Issue, it is still possible for the Court to consider adding back the said HK$4 million into the matrimonial pot after the trial of ancillary relief. Further, I agree with Mr Kung’s submission that among the HK$64,000 monthly interim maintenance payable to the Wife, less than HK$20,000 is MPS payable to her and more than HK$44,000 are spent on the child. So, unless the Husband intends to ask the child to pay back the over-payment, the Husband’s arguments to depart from a broad-brushed approach must be rejected. What weight should be attached to the Consent Order? 19.Mr Kung for the Wife drew my attention to the Recital of the Consent Order wherein the carefully negotiated details of new deposits for the new rental apartment, the subsidy of moving to the new rental and the return of rental deposit to the Husband were set forth by the parties’ respective legal representatives. 20.The entire order itself was carefully drafted by the Husband’s legal representatives after a long negotiation between the parties and their lawyers including Counsel. 21.Further, according to the Wife’s previous submission, the Husband had actually fully accepted the Wife’s last open offer which was only HK$600 less than the Consent Order. 22.Therefore, I consider that the Husband had more than enough time before and during the negotiations to consider his financial situation and the Wife’s and the child’s proposed expenses before agreeing and signing the relevant minutes. 23.In my view, this Court shall attach significant and great weight to the Consent Order and there should not be a radical departure from the approach taken by the parties themselves as it was reached with legal advice and full consideration of the circumstances back in 2019 and they agreed to it with full knowledge and understanding and of their own free will. Is there a material change of circumstances necessitating a variation on a short-term basis? 24.Originally, the Husband alleged that his income has decreased from when the Consent Order was agreed because he had not received any double pay/bonus/incentive pay during fiscal year 2020/2021. Subsequently, it was discovered the following:
25.In my view, this aspect of the alleged change in circumstances related to the Husband’s salary is simply not factually supported. Ms Leung for the Husband also frankly admitted this point but still insisted that the Husband is running a deficit. 26.Besides, it is very suspicious as to why the Husband had withdrawn a total of HK$244,200 (average of HK$61,050 per month) from his bank accounts in the first 4 months of 2021 despite of his vague explanation of spending the same on his business entertainment. 27.Mr Kung for the Wife submitted that the tax loan and the borrowings from/transfers back to the Husband’s mother and his best friend, Ian, were simply a ploy to increase the Husband’s liability, which should be addressed and explored further in the AR trial instead of in the Variation Summons. I agree. In any event, I accept that the tax loan should be fully repaid by the Husband in December 2021, his monthly disposal income will increase by HK$42,017. 28.At the time of the Consent Order, the Husband was only making a base salary of HK$125,000 and despite COVID in 2021, he got a salary raise, promoted and replaced his former supervisor as managing director and head of Hong Kong Retail Distribution and at least one double pay along with yearly bonus, which brought his average monthly salary up to HK$178,202.78. 29.On one hand, Ms Leung for the Husband presently in her submission only asked for a small downward variation of HK$9,000 per month. On the other hand, the Husband is having luxurious lifestyle and spending quite a lot of money on trendy clothing and gambling. He claimed in his Affirmation in Reply that:
30.Ms Leung in her submission attempted to justify that losing of HK$50,000 on a poker game a night by the Husband was acceptable as client relations. With respect, I entirely disagree. 31.In short, I am not satisfied that there is a material change of circumstances necessitating a variation. Recent Medical Diagnosis 32.The Husband is claiming in his Affirmation in Reply for the first time that his recent medical diagnosis of Depressive Disorder by a psychiatrist. In my view, the medical expenses he documented is insufficient to constitute a material change in circumstances. More importantly, he admitted that most of his medical expenses were reimbursed by his employer’s medical insurance. His argument that his condition affects his earning capacity is even more irrelevant in view of his recent promotion to the rank of managing director of a public financial company. In any event, there is no or insufficient evidence that his medical condition causes him to lose or reduce his capacity to work. Allegations against the Wife of undisclosed income 33.Mr Kung for the Wife submitted that one of the unsupported allegations made by the Husband in his Affirmation in Reply, which the Wife did not have any chance to reply under oath, was that she had huge undisclosed assets. In my view, the Husband cannot use the opportunity of filing his Affirmation in Reply to make new allegations against the Wife as it would be obviously unfair to her. 34.In any event, I consider that the undisclosed income alleged by the Husband are not significant as the greatest sum of the alleged income of the Wife as set out in the table in Ms Leung’s submission is only about $470. Whether the Wife’s and child’s expenses should be significantly reduced 35.The Husband further complained the excessive and unreasonable expenses incurred by the Wife and the child. I consider that it is simply an attempt to re-litigate the Wife’s MPS application of 2019 as warned against by Lam J (as he then was) in HCTT v TYYC. In rehashing the same arguments, the Husband is simply having second thoughts about settlements he agreed to of his own volition and is trying to undo the Consent Order through the back door. His complaint must be rejected. 36.In any event, by adopting a “broad-brush” approach instead of detailed investigation, I accept the expenses claimed are not excessive and unreasonable as set out in the Wife’s 3rd affirmation. LitigationFunding 37.In the Variation Summons, the Husband just asked for downward variation of the interim maintenance/MPS from HK$64,000 to HK$47,000 but never prayed for a variation of legal fee provision. However, through his Affirmation in Reply, he suddenly “slipped” in many new matters which he had not raised in his Supporting Affirmation, of which variation of legal fee provision is one. It is again very unfair to the Wife who did not have the chance to reply. 38.The Husband in fact made on open proposal to remove the current legal fee provision. I consider that it is simply another the attempt of him to re-litigate the issue of legal fee provision, which had been agreed by the parties earlier. In any event, as he has failed to make a formal application to amend the Variation Summons, I refuse to consider his request for variation or removal of legal fee provision. Conclusion 39.To sum up, I am of the view that the Husband has not made out a case for any variation of the Consent Order on any basis. The Variation Summons be dismissed. 40.I see no reason to depart from the general rule that costs shall follow event. I now make an order nisi the Husband to pay costs with certificate for counsel to the Wife, which becomes absolute unless any party applies to vary by summons with supporting affirmation within 14 days. Such costs shall be summarily assessed on paper without oral hearing, if not agreed by the parties, with the following directions:
Petitioner: Mr Kung Kin Chung instructed by Pang, Wan & Choi Respondent: Ms Vivien Leung instructed by Sidney Lee & Co. | ||||||||||||||
Cases cited in this judgment