Lm v. Fw
Read the full judgment text of FCMC 7076/2022 on BabelCite. This Family Court judgment was delivered on 22 March 2024 before Deputy District Judge W.Y. Ho.
Matrimonial Causes – Maintenance Pending Suit – Legal Costs Provision – Pre-Nuptial Agreement – Reasonable Needs – District Court – Whether Pre-Nuptial Agreement binding at interim stage – Court held Pre-Nuptial Agreement is a factor but not binding absolutely, weight depends on fairness and pending Crossley Application – Reasonable needs of Petitioner and Child assessed based on evidence and lifestyle – Petitioner granted maintenance pending suit despite net worth due to lack of liquid assets and dependency during marriage – Litigation funding denied as Petitioner has access to parental funds and liquidatable personal assets – Orders: Respondent to pay HK$406,000 monthly maintenance to Petitioner and HK$232,000 monthly for Child; Costs order nisi to Petitioner.
Legal issues: Whether Pre-Nuptial Agreement should be considered · Reasonable needs of Petitioner and Child · Sufficient financial means and litigation funding
Outcome: Maintenance pending suit granted; Litigation funding denied; Costs order nisi made.
Cited by 1 case · Cites 4 cases
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FCMC 7076/2022 [2024] HKFC 41 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO.7076 OF 2022 __________________________________
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----------------------------------------------- DECISION ----------------------------------------------- 1.This is the Petitioner’s application for the following orders:
2.Unless otherwise specified, all monetary sums referred to in this decision refer to Hong Kong Dollars. BACKGROUND 3.I set out the brief background facts and chronology of the present case as follows:
4.It is not disputed the parties are wealthy and have accumulated vast wealth from their respective careers. According to their Form Es, the Petitioner’s net value is at least $77,082,969 (with other sums still undetermined) and the Respondent’s net value is at $75,083,620.07. On their Form Es alone, the matrimonial assets are potentially well over $150 million. The parties’ respective net worth and their financial resources are strongly contested. As with most matrimonial cases, each party claims the other party has not provided full and frank disclosure of their true financial position. THE ISSUES 5.The Respondent concedes he has the ability to pay any sum of maintenance the court may order. Hence, there is no issue on the Respondent’s ability to pay. 6.The Respondent agrees to pay a reasonable sum towards the maintenance of the Child. The only dispute the Respondent has in respect of the Child’s interim periodical payments is the reasonableness of the quantum claimed by the Petitioner. 7.I am of the view the main issues of the Petitioner’s MPS application are as follows:
8.I am aware of and have considered the general principles to be considered in an application for maintenance pending suit and/ or interim periodical payments as set out in the case of HJFG v KCY [2012] 1 HKLRD 95. I will not repeat the same. 9.I have also considered the well-known principles relating to legal costs provision as set out in the case of Currey v Currey (No 2) [2007] 1 FLR 946. I shall not repeat the same. 10.I do not intend to repeat every submission made by the parties. Suffice to say, I have considered parties’ submissions in reaching my decision and I shall deal with those salient submissions in this Decision where appropriate. WHETHER THE PRE-NUPTIAL AGREEMENT SHOULD BE CONSIDERED IN THE PETITIONER’S APPLICATION FOR MAINTENANCE PENDING SUIT 11.Counsel for the Respondent, Mr. Scott SC, submitted that the court should adhere to, as closely as possible if not entirely, to the terms of the Pre-Nuptial Agreement. A number of cases including SPH v SA [2014] 3 HKLRD 497 were cited in support of his proposition. In particular, the Respondent asks this court to consider the Petitioner’s assets as specified in the Pre-Nuptial Agreement and to refuse her application on the basis that she has sufficient financial resources to meet her reasonable financial needs. 12.Counsel for the Petitioner, Ms. Rattigan SC, distinguished the cases cited. Ms. Rattigan SC submitted the present case is peculiar on its own facts in that the court has evidence from the Petitioner on the reasons why the Pre-Nuptial Agreement should be vitiated. Moreover, there is an impending Crossley Application hearing, which will determine the validity and enforceability of the Pre-Nuptial Agreement. In such circumstances, this court should ignore the terms of the Pre-Nuptial Agreement and proceed to assess the maintenance pending suit application in accordance with the Petitioner’s reasonable needs. 13.In order to understand the effect of the Pre-Nuptial Agreement on the Petitioner’s MPS application, I set out the salient provisions of the agreement as follows (names have been obliterated):
14.I agree with Ms. Rattigan SC that the cases cited by the Respondent are factually different from the present case in that none of those cases had a pending Crossley application yet to be determined. This court is now faced with the conundrum of how and whether weight should be given to the Pre-Nuptial Agreement when its validity and enforceability is in issue and not yet determined. 15.Having considered counsels’ submissions, my view is that the approach to be taken is a half-way-house between Mr. Scott SC and Ms. Rattigan SC’s suggested approach. The Pre-Nuptial Agreement is not to be cast aside and ignored entirely, but at the same time it is not to be adhered to religiously. 16.The starting point for this court must be to accept the Pre-Nuptial Agreement as being, prima facie, valid and enforceable until the court declares otherwise. This would hold true especially in cases where the parties clearly have the mental capacity and intellect (such as the parties presently before me) to understand the terms of the document they have signed. 17.I agree with the principle as set out by Mr. Justice Mostyn in paragraph 33 of his judgment in the case of BN v MA [2013] EWHC 4250, set out as follows:
18.In general, the court should not avoid adhering to the terms of a nuptial agreement at the interim stage. The reasoning behind the proposition that courts should give effect to a nuptial agreement (as enunciated in the case law cited before me) is to respect the parties’ right and autonomy to organize their financial affairs. So long as the terms of the nuptial agreement are fair, and the application of the nuptial agreement does not result in a great disparity of wealth between the parties or in any capital redistribution, the courts should endeavour to give effect to the parties’ wishes as expressed in their agreement. In absence of unfairness or other injustices, it should not be the court’s duty or role to reconfigure the parties’ financial distribution where the parties have expressly set out their wishes by way of a legal document. This must be true even when deciding interim maintenance applications. 19.However, in instances such as the present case where there is a pending determination of the validity and enforceability of the nuptial agreement, the court must be mindful of this unresolved dispute and should not proceed blindly in adhering to the provisions of the nuptial agreement. I am of the opinion it is not proper or appropriate for this court to engage in any preliminary assessment on whether the impending Crossley Application is likely to be successful. 20.I am of the opinion that this court, in this particular case, should treat the Pre-Nuptial Agreement as one of the factors to be considered in arriving at a decision on the proper order to be made in respect of maintenance pending suit. This court should consider all factors, as one would in other maintenance pending suit applications, and then consider whether the Pre-Nuptial Agreement can or should be given any weight in all the circumstances. Fairness is, of course, an override principle when considering whether any weight should be attached to the Pre-Nuptial Agreement. 21.This court’s primary consideration would be to consider the reasonable needs of the parties, the payer’s ability to pay, and the financial resources of the receiving party. Once this court has a preliminary view on whether the maintenance should be ordered and the sum to be ordered in absence of any nuptial agreement, this court should then consider the effect of the Pre-Nuptial Agreement on the ultimate maintenance pending suit order. If the application of the Pre-Nuptial Agreement results in a great disparity on what this court finds to be a reasonable maintenance order to be made, or results in injustice to the parties, this court should be slow to give weight to the agreement at the interim stage. 22.Moreover, the court should bear in mind the parties’ ability to meet any subsequent orders made at the ancillary relief trial regarding overpayments or underpayment. I am of the view that if the application or adherence to the Pre-Nuptial Agreement will cause an ultimate redistribution of assets such that the subsequent trial court’s discretion on the proper distribution of marital assets is hindered or limited, this court should also be slow to give weight to the Pre-Nuptial Agreement at the interim stage. This is especially so in circumstances where there is a pending Crossley Application. REASONABLE NEEDS OF THE PETITIONER AND THE CHILD 23.There is no dispute as to the Respondent’s financial ability to meet any maintenance order to be made by the court. The Respondent does not dispute he should pay for the Child’s reasonable expenses. I further note this concession is consistent with the terms of the Pre-Nuptial Agreement. 24.The main dispute regarding the application for the Child’s interim maintenance is the quantum of the interim maintenance to be ordered. 25.In respect of the Petitioner’s share of general expenses and her own personal expenses, the Respondent disputes liability to pay. He argues the Petitioner has sufficient financial resources to meet her own financial needs, whatever they may be. The Respondent also argues the Petitioner has grossly exaggerated her expenses and the marital standard of living enjoyed by the parties. 26.I shall deal with the items of expenses below. Mortgage payments for Unit 1901 27.One major item of the Petitioner’s general expense is the mortgage repayments for her own property in Shanghai (“Unit 1901”). The main dispute regarding this expense is whether the Respondent should be responsible for the said repayments as part of the maintenance pending suit to be ordered. 28.The Petitioner wholly owns Unit 1901, which has an outstanding mortgage of approximately RMB¥16 million. The Petitioner’s parents are currently residing in the said unit. The monthly mortgage repayments are equivalent to the sum of $100,491. The Petitioner claims the Respondent had all along provided funds to the Petitioner to enable her to settle the repayments. Hence, the Respondent should continue to settle the said mortgage repayments. 29.The Respondent does not dispute the sum of the mortgage repayments. As far as the Petitioner claims the Respondent had made such payments during marriage, I note the Respondent has not made an outright unambiguous denial of the same in his affirmations. The Respondent merely argues that Unit 1901 is not part of the matrimonial assets (as per the Pre-Nuptial Agreement). Since the Petitioner’s parents have been paying the mortgage repayments and clearly have the means to continue making such payments, the Respondent should not be made to pay the same. 30.Having considered the submissions of senior counsel, I agree with Mr. Scott SC in that considering the appropriate quantum to order for maintenance pending suit, the Respondent should not be responsible for the payment of the said mortgage repayments. 31.Firstly, there is no dispute the Petitioner’s father has been assisting the Petitioner with the mortgage repayments of Unit 1901 since January 2021. Although the Petitioner claims the parents agreed to assist on a temporary basis only and cannot continue indefinitely to assist in making the said repayments, there is no further explanation from the Petitioner as to why the father cannot continue making such payments. I note the Petitioner describes the father as being a self-employed businessman who retired since 2014. No further description on the father’s financial means were given in the evidence filed before me. However, upon reading the Petitioner’s affirmations, it is clear the father is of substantial means. He was able to provide the Petitioner a seed money in the sum of USD$1.012 million for her to use to gain investment experience. He has also been able to afford the mortgage repayments in the sum of $100,000 per month for a period of more than 2 years as at the date of the hearing. In such circumstances and in absence of evidence to the contrary, I fail to see why the father cannot continue in his assistance with the mortgage repayments of Unit 1901. 32.As stated by Ma CJ (as he then was) in the case of KEWS v NCHC (Contribution by Third Parties) [2013] HKFLR 180 at page 192:
33.Secondly, the Pre-Nuptial Agreement states that Unit 1901 is the Petitioner’s Separate Property which is not subject to any division in the final ancillary relief settlement. To order the Respondent to make payments towards this property is in effect ordering the Respondent to redistribute part of the matrimonial assets to the Petitioner’s own asset. Given this will be a matter that will be decided by the ancillary relief trial judge, and since the Petitioner’s father can continue to assist in the mortgage repayments, I accept the Respondent’s submission that these mortgage repayments should not be considered when assessing the proper sum to be ordered for maintenance pending suit. Food and meals out of home 34.The Petitioner claims a total of $150,000 for expenditure on food and meals out of home for the Child and herself. 35.Ms. Rattigan SC concedes that the breakdown of the food expenses at Exhibit LMJ 4-4 is not supported by receipts (save and except the expenses of cordyceps). Ms. Rattigan SC explains the lack of documentary evidence is due to the Respondent’s failure to provide proper disclosure of the Petitioner’s supplementary credit card statements. Since the Respondent is the main credit card holder, he is in possession of the statements and not the Petitioner. The Petitioner should not be penalized for the failure of the Respondent to disclose the supplementary credit card statements. 36.Although I am prepared to accept that food expenses of the Petitioner and the Child are of a substantial amount, I do not accept the current sums claimed and do not accept the food expenses of the family during marriage was in the sum of $188,767 per month, as set out in the breakdown in Exhibit LMJ 4-4. 37.I am of the view there is double counting of various heads of expenses set out in Exhibit LMJ 4-4. For example, according to Exhibit LMJ 4-4, the expenses for meat for the Child alone is RMB¥2,650 per week. The “family” expenses on meat is another RMB¥2,500. This means the Petitioner, the Child and Respondent spend RMB¥5,150 per week on meat products alone. I find it hard to believe that this sum is reasonable even for a wealthy family of three. Moreover, I find it hard to believe that the Child could have consumed RMB¥2,650 worth of meat per week at such a young age, on top of all the other alleged food products he would consume per week. 38.Although I am prepared to accept the family had a regular habit of consuming tonic foods, this cannot possibly bring the general food expenses of the Petitioner and the Child to $100,000 per month. 39.Having considered the family’s wealth and living standard, and the evidence before me, I find the sum of $50,000 to be a reasonable sum for food expenses of the Petitioner and the Child. 40.In addition to the general food expenses, the Petitioner claims a sum of $50,000 per month for expenditure on meals out of home. This sum includes expenditure for herself and the Child. The Respondent complains this sum is grossly exaggerated. However, I note that in his Form E, the Respondent claims to spend over $65,000 per month on meals out of home. Although he claims he incurs this sum due to the need to socialize for work and that his company reimburses the said sums, the Respondent does not say that the expenses are wholly company related. I am of the view that the Respondent’s expenditure must also include his own private dining expenses as well. Furthermore, I am of the view that the Respondent’s expenditure must be somewhat indicative of the family’s pre-separation living standard. 41.Having considered the submissions of senior counsel, I accept Ms. Rattigan SC’s submission that the pre-separation lifestyle of the family was to dine in high-end restaurants frequently. I am of the view that $40,000 per month is more than sufficient to cover the Petitioner and the Child’s reasonable expenses for dining out of home. Other general expenses 42.In so far as the Petitioner claims car expenses, the Respondent merely disputes the quantum of the expense. It is not disputed the family had drivers at their disposal prior to separation. I am satisfied the car expenses as claimed by the Petitioner are fully supported by documentary evidence and I accept the claimed sum of $60,000 is a reasonable sum. Although the Respondent claims there is no evidence the Petitioner paid this sum, he does not provide any documentary evidence to support his proposed sum of $40,000 as being the reasonable sum. In absence of any documentary evidence to support the Respondent’s proposed figure, I am inclined to accept the Petitioner’s figure as being the more accurate figure. 43.As for household expenses, I accept the Respondent’s submissions in that the Petitioner does not require a substantial sum under this head of expense. The Petitioner and Child are currently living in a luxury serviced apartment and the services provided will include cleaning as well as repairs. It is envisaged any household expense would only be related to miscellaneous items. I therefore accept the Respondent’s proposed sum of $15,000 as being the reasonable sum. 44.The Respondent has already agreed to settle directly the utilities and management fee expenses of the Former Matrimonial Home. 45.As for the domestic helper’s expenses, I find the sum exaggerated. The documentary proof provided for the Hong Kong domestic worker is for the sum of SGD2200 (which is equivalent to approximately $12,500). I find the more reasonable sum to be $15,000 (inclusive of a part-time helper in Shanghai). 46.The rental expense of $190,000 is not disputed and therefore I accept the same to be a reasonable sum. 47.By reason of the above, I find the general expenses of the Petitioner and Child to be as follows:
The Child’s expenses 48.The Respondent has agreed to settle the school fees directly. Furthermore, the medical and dental expenses are covered by the Respondent’s company insurance. 49.The Respondent does not dispute the sum claimed by the Petitioner for child-minding fees and uniform. However, he does dispute the quantum of the remainder of expenses claimed as being over-inflated and exaggerated. 50.Having perused the evidence available before me, I make the following findings in respect of the Child’s claimed expenses:
51.By reason of the above, I accept the Child’s reasonable monthly expenditure to be as follows:
52.The Child’s expenses (including his share in the general expenses) amount to $231,910.10. I shall round this figure up to $232,000. The Petitioner’s personal expenses 53.I shall first set out my findings on the reasonable sum of the Petitioner’s monthly personal expenditure and then proceed on to whether the said sum should be paid by the Respondent or the Petitioner herself. 54.Having considered the evidence before me, I make the following findings on quantum of the Petitioner’s personal expenses:
55.By reason of the matters set out above, I accept the Petitioner’s reasonable monthly expenses (excluding those sums which for reasons given should not be included in the calculation for maintenance pending suit) to be as follows:
WHETHER THE RESPONDENT SHOULD BE MADE TO PAY MAINTENACE PENDING SUIT TO THE PETITIONER 56.Mr. Scott SC submits the Petitioner and the Respondent should each be responsible for their own expenses due the parties’ own substantial wealth. In summary, Mr. Scott SC submits the parties have “ring-fenced” their own assets as set out in the Pre-Nuptial Agreement. The assets listed by the Petitioner in Schedule C of the Pre-Nuptial Agreement shows she has sufficient means to meet her own expenses and therefore the Respondent should not be ordered to make any maintenance pending suit payments. 57.The Petitioner claims she now no longer owns the shares in Timebase, Sharp Edge and Surplus Creation. She also claims that despite the Register of Members of Timebase record the shares in Timebase were transferred to the Petitioner’s father for a consideration in the sum of $48,757,346, there was no such cash settlement. This is strongly contested by the Respondent. 58.It is clear from the evidence before me and from counsel’s submissions, the parties’ respective financial means and the various allegations made by the parties in respect of their current financial position are strongly contested. It is trite to say that such issues of factual dispute cannot and should not be resolved at a maintenance pending suit application. In particular, the issue of whether the Petitioner is the beneficial owner of Timebase cannot be resolved at this interim stage. These substantial disputes of facts can only be resolved at trial. In such circumstances, this court can only consider the Petitioner’s MPS application based on the evidence before it and can only err on the side of caution. 59.Since the sale / transfer of the Petitioner’s shares in Timebase is, on the face of it, properly executed, I am not prepared to accept otherwise when considering the Petitioner’s MPS application. 60.Having considered the evidence provided to me at this stage, I accept the Petitioner is currently unemployed and does not earn a regular income. 61.As for the Respondent argument that the Petitioner has more than sufficient financial resources to enable her to meet her own personal expenses and her share of the general expenses, I agree the Petitioner’s Form E discloses her net worth to be over $77million. However, I note the bulk of this sum relates to the Unit 1901 (worth approximately $55million). Her liquid assets as disclosed in the Form E is cash in the sum of $2,263,047. I am of the view that most of this cash will be used, if not already done so, on payment of her legal fees. 62.As for the Petitioner’s personal items in the value of over $17million, those assets are not readily available for use as cash would be. Although, for reasons I will set out later, I am of the view these assets are financial resources for the purposes of considering litigation funding, these assets cannot be easily liquidated to meet immediate daily financial needs of the Petitioner. 63.Furthermore, I note that during marriage, the Petitioner was financially dependent on the Respondent for her daily expenses. The Respondent agrees to the following in his 3rd Affirmation:
64.In other words, not only did the Petitioner quit her job during marriage, the Respondent had specifically requested the Petitioner to dispose of her shares in her most valuable company. I therefore find it difficult to accept Mr. Scott SC’s submissions that the Petitioner is financially independent and is in possession of sufficient liquid financial resources to meet her own immediate financial needs. Until it is determined at the ancillary relief trial that the Petitioner has substantial assets to meet her own needs, this court should err in favour of the Petitioner to ensure her immediate financial needs are being met. 65.In considering the effect of the Pre-Nuptial Agreement on the Petitioner’s MPS application, I have considered the terms therein. I do not find payment of maintenance pending suit to be contrary to the terms of the Pre-Nuptial Agreement. It is clear that on a proper reading of the Pre-Nuptial Agreement, the parties were only protecting their pre-marital assets. The terms of the Pre-Nuptial Agreement do not pre-empt parties from making ancillary relief applications on matrimonial assets in general. 66.As set out earlier in this Decision, I have taken into account the terms of the Pre-Nuptial Agreement when considering the Petitioner’s claim for maintenance provision on the mortgage repayments of Unit 1901. For reasons already given, having considered all factors, I have not allowed this item of expenditure when considering the proper amount of maintenance pending suit to be awarded. 67.In so far as any maintenance pending suit order may result in the division of assets contrary to the terms of the Pre-Nuptial Agreement, I note it is always open to the trial judge to make the proper adjustments at the ancillary relief trial when considering the division of matrimonial assets. Given the Respondent’s substantial wealth and his ability to meet any interim maintenance order I may make, I am of the view an order of interim maintenance will not prejudice the Respondent’s position at the ancillary relief trial or at hearing of the Crossley Application. 68.Hence, for reasons I have already set out above, I am of the view that the Respondent should be ordered to pay maintenance pending suit to the Petitioner. 69.I have calculated the Petitioner’s reasonable personal expenses to be $240,568 per month and her share of general expenses to be $165,000 (in addition to the expenses the Respondent is willing to settle and/or reimburse directly). I shall round this up to $406,000. LITIGATION FUNDING 70.Having considered the submissions of the counsel, I accept the Respondent’s submission that the Petitioner is unable to satisfy the conditions set out in Currey v Currey so as to warrant an award of legal costs provision. 71.For reasons set out above, I accept the Petitioner’s parents are of considerable wealth. I am of the view the Petitioner’s parents are a source of financial assistance of which the Petitioner has been utilizing. This must be taken into account when considering the Petitioner’s financial resources. Although it is not to say the parents should be forced to fund the litigation, it does mean the Petitioner has available to her a source of funds which she can utilize to pay for her legal fees. 72.In so far as the Petitioner claims Unit 1901 cannot be sold and cannot be utilized as collateral to raise further loans, I disagree. This is not a case where the parents rely on the Petitioner financially. The parents clearly have the means to support themselves and therefore are not required to live in Unit 1901 by necessity. There is nothing in the evidence thus far to show the parents cannot move out and find alternative accommodation. In such circumstances, the Petitioner’s claim that Unit 1901 is not available for raising funds is not accepted. 73.As disclosed in the Petitioner’s own Form E, the Petitioner owns luxury handbags, art pieces, a wine collection, jewellery and watches worth around a total sum of $17,580,000. Although the liquidation of such assets may take time, such items are capable of liquidation and cannot be discounted when considering the Petitioner’s ability to raise funds for litigation. I am of the view that the Petitioner’s personal assets as set out in her Form E are assets that can reasonably be deployed for the purposes of litigation funding. 74.I therefore decline to make any award for legal costs provision. SUMMARY 75.By reason of the matters set out above, I make the following orders:
COSTS 76.Although I have not allowed the Petitioner’s application for litigation funding and have discounted some items of expenditure when considering the appropriate figure of maintenance to be awarded, I am of the view the Petitioner should be regarded as largely successful in her application. I therefore see no reason why costs should not follow the event. 77.I therefore make a costs order nisi as follows: Costs of the Petitioner’s summons be to the Petitioner to be summarily assessed, with certificate for 2 counsel. Unless any party applies to vary the costs order within 14 days hereof, the costs order shall become an order absolute. 78.The parties shall, within 14 days after the costs order nisi turns absolute, jointly lodge their proposed directions for the paper disposal of the summary assessment of the Petitioner’s costs for the court’s consideration.
Ms Mairead Rattigan S.C. and Mr Cristian Tsang instructed by Messrs Haldanes for the Petitioner Mr John Scott S.C. and Ms Bonnie Cheng instructed by Messrs Chaine Chow & Barbara Hung for the Respondent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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