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FCMC 1410/2019
[2021] HKFC 258 4
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES
NUMBER 1410 OF 2019
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BKGGB also known as NGGB |
Petitioner |
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BKND |
Respondent |
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Coram: Deputy District Judge Susan Wong in Chambers (Paper Disposal)
Date of Application: 29th October 2021
Date of Submission in Opposition to the application: 15 November 2021
Date of Judgment: 17 December 2021
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JUDGMENT
(Leave to appeal)
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1.The Respondent, the Husband (“H”) sought leave to appeal my decision made on 15 October 2021 whereby it was ordered: -
(1) the upward variation of interim maintenance from HK$50,000 to HK$79,600 for the two children of the family commencing from 1st September 2021 and thereafter on the 1st day of each and every calendar month until further Order;
(2) F is to pay to the Petitioner, the Wife (“W”) the sum of HK$200,000 within two months from the date of the Order as legal costs provision; and
(3) No order as to costs.
2.In his Draft Grounds of Appeal dated 29 October 2021, H asked for an Order that: -
1. Paragraphs 1 - 3 of the Order dated 15th October 2021 be set aside; and that in lieu thereof Orders be made that:-
1.1 The interim children's maintenance Orders dated 10th September 2019 and 17th January 2020 and 12th October 2020, copy annexed hereto marked "B" for the Applicant to pay the Respondent of HK$50,000 per month do continue;
1.2 The misappropriation of the GBP182,040.86 (around HK$1,949,055) by the Respondent and/or the Respondent’s former solicitors Messrs. Withers under the Order dated 12th October 2020 shall be set-off and deducted from any amount due under the Interim Children's Maintenance Orders dated 10th September 2019, 17th January 2020 and 12th October 2020 until the misappropriated funds are fully utilized; and
1.3 The Respondent do pay the Applicant's costs of the Appeal, to be taxed if not agreed.
Applicable Legal Principles
3.Pursuant to section 63A(2) of the District Court Ordinance (Cap 336), leave should not be given unless the court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard. A reasonable prospect of success means an appeal with prospects that are more than “fanciful” (eg KNM v HTF [2011] HKCFI 602).
4.In a very recent Court of Appeal judgment in S v C [2021] HKCA 1372, CAMP 243/2021 (date of Judgment: 21 September 2021) where Hon G Lam JA said,
6. The proper approach of the appellate court in an appeal from an order for MPS is well established by the authorities, as summarised by Judge A Tse in ALDL v FTFC [2020] HKFC 180 as follows:
“5. The granting of maintenance pending suit is a discretionary remedy. On appeal, the Court of Appeal will not exercise the discretion afresh. Instead, it will only interfere with the decision when the discretion was wrongly exercised, such as being contrary to the principle or the primary judge had wrongly taken into account irrelevant matters or ignored relevant matters [see MWY v HWM HCMP 120/2017, 16 May 2017; WW v LLN [2019] HKCA 1278 at §§ 15-17.]
6. In CHWA v LNLAI [2019] HKCA 1017 at § 3.1, the Court of Appeal, in refusing leave to appeal, stressed ‘the interim nature of [maintenance pending suit] which generally requires the Court to adopt a broad brush approach in deciding the amount to be awarded. It is also for a limited duration until the final resolution of the issue of financial relief of the parties. Inevitably there will be adjustment to the final order to be made in the event of overpayment or underpayment of [maintenance pending suit].’
7. The threshold for appealing against an order for maintenance pending suit is a high one. The court is inclined to leave factual questions of expenses and income for determination at the ancillary relief hearing. The Court of Appeal also stated that appeals against maintenance pending suit orders are ‘rare’ and the ‘powers of interference [of an appeal court] are strictly limited’: K v K [2011] 1 HKC 66 at §§ 1, 3; Hewitt, Family Law and Practice in Hong Kong (3rd ed. 2018), § 6.076.”
7. It is important to note that MPS is an interim measure, intended to be temporary, and subject to adjustments in the final orders to be made in the determination of ancillary relief. Overall fairness can be achieved at that point by giving credit and set-off if there is found to have been any overpayment or underpayment in the interim. In other words, an order for MPS does not finally determine the rights and obligations of the parties, and since it involves simply the payment of money, its effects may in general be redressed by monetary relief at the end. This explains why in relation to MPS the courts “take a broad view” of the parties’ finances rather than engage in any detailed investigation, adopt a “broad brush” approach, and seek to arrive at “rough and ready” conclusions (see Rayden and Jackson on Relationship Breakdown, Finances and Children at §11.78; HJFG v KCY [2012] 1 HKLRD 95, §§32-38). Appeals should be rare and the parties should be encouraged instead to focus on, and bring about as early as practicable, the final resolution of their dispute. As has been said in Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 at §30 (albeit not specifically with regard to MPS), even if the threshold of reasonable prospects is met, the court may nonetheless in its discretion refuse leave to appeal in the interests of procedural economy and proportionality. For my part, I consider that leave to appeal from MPS orders should generally not be granted unless there is some special reason why the matter cannot or should not be left to the ancillary relief stage such as serious hardship caused by the order to a party. I can see none here based on the admissible materials, and on this ground alone I would dismiss the application.”
5.In RMH v. GY [2021] HKFC 215, HH Judge I Wong stated;
“30. Ms Irving has helpfully summarized Hon G Lam’s opinion as follows,
• The granting of MPS is a discretionary remedy and the Court of Appeal will only interfere where discretion was wrongly exercised;
• The interim nature of MPS requires the court to adopt a broad brush approach;
• MPS is for limited duration and adjustments to the final order can be made after the resolution of the final ancillary relief;
• The threshold for appealing against MPS is a high one;
• Factual questions of income and expenses are best determined at the final ancillary relief;
• The powers of interference (of an Appeal Court) are strictly limited;
• Appeals should be rare with parties encouraged to focus on final resolution of their disputes;
• Even if the threshold of reasonable prospects is met, leave to appeal may nevertheless be refused "in the interests of procedural economy and proportionality"; and
• Leave to appeal from MPS Orders should generally not be granted unless there is some special reason why the, matter cannot or should not be left to the ancillary relief stage, such as serious hardship caused by the order.
GROUNDS OF APPEAL
6.H listed 8 grounds in his Draft Grounds of Appeal: -
“1. The learned Judge erred in fact and in law by not finding that the Respondent and her former solicitors, Withers, in contempt of Court, by misappropriating children's maintenance held in the secured escrow account of Withers on a stakeholder basis, to pay off her legal fees due breached the Interim Children's Maintenance Orders dated 10th September 2019 and 17th January 2020 (the "Interim Children's Maintenance Orders") and the Order dated 12th October 2020 (the "Secured Interim Children’s Maintenance Order"), because:-
1.1. Pursuant to the Interim Children's Maintenance Orders, the Respondent was awarded HK$50,000 per month as children's interim maintenance;
1.2. Pursuant to the Secured Interim Children's Maintenance Order, Withers received a total GBP182,154.68 (around HK$1,949,055) in their escrow account as children's maintenance arrears and ongoing children's maintenance from the Battersea rescission monies and paragraph 2 of the Secured Interim Children's Maintenance Order states: "Save and except the transfers referred to Recital D and Paragraph 1 above, all the remaining balance of the Deposit shall be held in the Escrow Account by the Petitioner's Solicitors Messrs. Withers as stakeholder and is only to be released only upon the written agreement between the parties and or further Order";
1.3. In the Respondent's evidence at paragraph 53 of her 18th Affirmation dated 17th August 2021, the Respondent admitted that that she instructed her then solicitors, Messrs. Withers, not to comply with the Interim Children's Maintenance Orders and/or the Secured Interim Children's Maintenance Order and to misappropriate the monthly interim children's maintenance to pay off her legal fees to Withers, where was no application to purge the Respondent's contempt nor Withers' contempt by misappropriating the stakeholder money of GBP182,154.68 (around HK$1,949,055) was held for the children's maintenance to be paid to the Respondent pursuant to the Secured Interim Children's Maintenance Order.
2. The learned Judge erred in fact and in law by failing to hold that the Respondent and Withers were in contempt of Court and failed to apply to purge their contempt and the learned Judge should therefore have applied the Hadkinson principle in refusing to hear the Respondent’s MPS Application unless and until the Respondent purged her contempt as the Respondent was in breach of the Interim Children's Maintenance Orders and Secured Interim Children's Maintenance Order by misappropriating the children's maintenance to pay off her legal fees.
3. The learned Judge erred in fact and in law by failing to find that the Applicant's ability to pay the Interim Children’s Maintenance Orders was based upon the Secured Interim Children's Maintenance Order which provided the funds for the Interim Children's Maintenance Orders to be paid until November 2022, whereby:-
3.1. The learned Judge therefore erred in fact by finding that the Applicant has the ability to pay for the increased children’s maintenance of HK$79,600 per month commencing 1st September 2021 and to pay for the HK$200,000 legal costs provision within 2 months to the Respondent, when he clearly indicated, acting in person, at paragraph 33 of the Judgment that he only offered an additional HK$21,000 provided that his application dated 14th July 2021 to release him from his undertaking dated 6th May 2019 was granted, failing which he does not have any access to his assets or funds;
3.2. The Interim Children's Maintenance Orders of HK$50,000 per month of children's maintenance was only being paid pursuant to the Secured Interim Children's Maintenance Order and the Applicant remains bound by the financial undertaking dated 6th May 2019 prohibiting him from dealing with any of his assets without the Respondent's prior-consent, which did not even allow for him to pay the interim children's maintenance, nor litigation funding for the Respondent, nor for his living expenses, nor his legal fees;
3.3. The Applicant was only able to liquidate GBP132,040.86 from his assets pursuant to the Order dated 12th November 2020 for his legal fees, and as set out in his 17th Affidavit dated 14th July 2021, he has been unable to liquidate up to that amount due to the poor UK property market and because the Respondent registered cautions against the UK properties at the UK Land Registry and only receives an income HK$15,000 per month (see paragraph 42 of the Judgment dated 15th October 2021) so he had no ability to pay the interim children's maintenance nor litigation funding for the Respondent.
4. The learned judge erred in fact and in law by finding at paragraphs 7 and 43 of the Judgment dated 15th October 2021 that the Applicant had spent HK$12 million on legal costs for his former solicitors, Oldham, Li & Nie ("OLN") in breach of his undertaking dated 6th May 2019 in respect of which the Applicant has applied for it to be uplifted by Summons dated 14th July 2021, which application has not yet been heard nor even listed for hearing. The learned Judge therefore erred by concluding that the Applicant had the ability to pay for increased children's maintenance and litigation funding by withdrawing money from his business. The learned Judge erred in making an Interim Children's Maintenance Orders and legal costs provision on the assumption that the Applicant had access to HK$12 million as legal fees to his former solicitors, which he had not.
5. The learned Judge erred in fact and in law by failing to find that the Applicant was bound by his financial undertaking dated 6th May 2019 and that his application dated 14th July 2021 for the uplift of this undertaking had not been considered nor listed for hearing so the Applicant had no ability to pay and that unless and until there is an order to vary the Applicant's undertaking dated 6th May 2019 and an uplift of the undertaking, the Applicant is unable to utilize his assets to pay for the interim children's maintenance nor the legal costs provision nor his own legal fees, with his current available income of HK$15,000 per month.
6. The learned Judge erred in fact and in law by finding at paragraph 45 that the Applicant had an ability to pay an additional HK$21,000 per month on top of the HK$50,000 per month of interim maintenance ordered when it was an undisputed fact that he could not do so until his application to be released from his financial undertaking dated 6th May 2019 was heard and granted as referred to at paragraph 34 of the Judgment dated 15th October 2021.
7. The learned Judge erred in fact by finding at paragraph 45 of the Judgement dated 15th October 2021 that the Applicant had agreed to pay for another HK$21,000 on top of the HK$50,000 of monthly children's maintenance, when the HK$21,000 was offered on condition upon (1) the Applicant being released from his financial undertaking dated 6th May 2019 as referred to at paragraph 34 of the Judgment and (2) that the Respondent continued to rent property in Hong Kong and (3) had a reasonable need to pay for her monthly rental. The Respondent’s evidence was that as she was granted an order to relocate to the UK with the children to reside in her parent's property in Ascot and she left Hong Kong so she no longer has to pay for rental, and as set out at paragraph 31 of the Judgment, the Respondent’s reasonable needs in the UK did not include rental.
8. The Applicant further reserves his right to rely on the rule in Ladd v. Marshall regarding new evidence after the hearing on 15th July 2021.
7.Mr Barnes representing W submitted in his Skeleton Submission in Opposition to H’s Application for leave to appeal (“his Submission”),
“3. The Draft Grounds of Appeal list 8 grounds but there is substantial repetition, and essentially H is making only two points:
(1) That W and her former solicitors, Withers, have been guilty of misappropriating the Children’s maintenance, which amounts to contempt of a Court Order and that therefore the Court should not have heard the MPS Summons (Ground 1 and 2); and
(2) That the Court erred in finding as a fact that H had the capacity to pay the additional maintenance for the Children and the legal costs provision (Grounds 3 to 7).
4. Paragraph 8 of the draft Grounds is a reference to Ladd v Marshall which is not explained by H and does not therefore constitute a ground at all.”
8.I agree in its entirety.
9.As to Grounds 1 and 2, I must admit that they were never brought up at all during the hearing or submission and I only learnt the issues when I read the Draft Ground.
10.Mr Barnes in his Submission submitted,
“12. H’s assertion is purportedly based on paragraph 53 of W’s 18th Affirmation (filed in opposition to his unsuccessful application for leave to appeal the Relocation Judgment). This comes from a passage headed “Dire Financial Situation” and at §53 W said that “the HKD50,000 interim maintenance that I receive goes directly to the lawyers each month, as I have enormous debt with them due to the Applicant’s litigious behaviour.” (emphasis added). Nowhere in that statement is it stated that W instructed Withers to defy the Court Order dated 12 October 2020 which requires HK$50,000 per month to be paid to W out of the amount held by Withers (“the Withers Escrow Account”). To the contrary, W confirmed that she receives the HK$50,000. Any arrangement W may have had to make regular payments to Withers whether of this sum or a higher or lower amount is entirely irrelevant and a matter between W and Withers.
13. It is notable that pursuant to the New Arrangement for Application for Leave to Appeal in the Family Court, W is not permitted to file an affidavit (as H has not filed any)…
14. Further, this wild allegation is only now appearing on this application for leave to appeal: H did not make any such point during the MPS hearing, whether in an affidavit (he did not file one), or written or oral submissions.”
11.As a matter of fact, the relocation trial was not heard by me but by my learned colleague, Deputy Judge T Kwan. In any event, what H alleged are not Grounds of Appeal.
Grounds 3 to 7
12.Mr Barnes in his Submission submitted,
“15. These grounds argue that the Court erred because:
(a) His ability to pay an additional amount (he says the Court was limited to his “offer” to pay another $21,000) was conditional on the grant of his application dated 14 July 2021 for an uplift of the 6 May 2019 undertaking §3.1, 3.2, 5, 6, 7.
(b) The Court erred in finding that he had “spent HK$12,000,000 on legal costs for his former solicitors OLN: §4”
13.With the greatest respect, what I have said in my Judgment was,
“43. For my part, I make no findings as to how much H earns as he has not given any information in relation to Kings Letting alleging that he could only do so when the relevant information became available from the financial controller. However, although he said he had already transferred the business to his son in May 2019, I do not believe that he could not get any money from his business. These proceedings were only commenced in February 2019 and he had already incurred HK$12 million on legal costs. Where could the money have come from?”
14.Again, Mr Barnes rightly pointed out in his Submission,
“18. …this finding correctly applied the legal principles (as recited by the Court in its Judgment) including the ability of the Court to make robust assumptions about a party’s ability to pay in the absence of sufficient disclosure, including where, as here, that party does not file an affidavit explaining his financial position, and relies instead on unsupported assertions made in submission advanced at the hearing.
19. Further, the Mother suggested fund for the Uplift Maintenance be paid from the escrow funds held by Withers, thus no reason why this amount could not be paid immediately, the arrears are HK%88,500 to date i.e. 3 x HK$29,500 (for Sep – Nov 2021).”
15.I agree in its entirety.
16.By reason of the above mentioned matters, the Respondent’s proposed appeal has no reasonable prospect of success and there are no other reasons in the interests of justice for the appeal to be heard. His application for leave to appeal is dismissed with costs to the Petitioner, to be taxed if not agreed.
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(Susan Wong) |
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Deputy District Judge |
Mr Peter Barnes instructed by Messrs PAYNE CLERMONT VELASCO for the Petitioner
The Respondent was not represented
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