Tky v. Ysga
Read the full judgment text of FCMC 2208/2023 on BabelCite. This Family Court judgment was delivered on 20 June 2025 before Deputy District Judge Jacqueline Lee.
Legal costs provision – Maintenance Pending Suit – Matrimonial Proceedings and Property Ordinance (Cap 192) s.3 – Impecuniosity – Full and Frank Disclosure – Assets – Costs – Whether Petitioner satisfied test for legal costs provision – Whether Petitioner had deployable assets – Whether Petitioner gave full disclosure – Whether Respondent's financial means could support LCP – Petitioner's application dismissed – Petitioner to pay Respondent's costs summarily assessed at HK$700,000
Legal issues: Whether Petitioner satisfied test for legal costs provision · Whether Petitioner's legal costs budget was reasonable · Whether Petitioner had deployable assets · Whether Petitioner gave full and frank disclosure · Whether Respondent's financial means could support LCP · Costs of the application
Outcome: Wife's application for legal costs provision dismissed
Cited by 8 cases · Cites 5 cases
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FCMC 2208/2023 (formerly FCMC 903/2022) [2025] HKFC 94 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 2208 OF 2023 ------------------------
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------------------------ DECISION ------------------------ 1.This is the rehearing of the Petitioner’s (“Wife”) legal costs provisions application (“LCP”) pursuant to the Court of Appeal’s judgment dated 31 December 2024 (“Judgment”). See: [2025] 1 HKLRD 977. Background 2.The background of the case has been succinctly summarized in the Judgment. See: §§ 7-16 of the Judgment. 3.This was a short marriage of 4 years. They have 2 daughters, aged 6 and 5. The parties are in their early 40s. The Wife is a certified accountant and worked as a partner of an international accounting firm. The Respondent (“Husband”) set up a real estate consultancy company, AREC, and was involved in a number of companies in different capacities, including as a director and/or shareholder. 4.The Wife now wishes to sought the following amount to be paid by the Husband as her legal costs provisions:
5.According to the Wife’s 9th affirmation filed on 28 March 2025, she now said a sum of HK$270,000 would be incurred up to and including FDR. The applicable legal principles 6.The position in law is neatly summarized in the Judgment as follows:
7.The Court of Appeal in WW v LLN formerly known as LSM [2020] 2 HKLRD 487 at §20, where it was stated inter alia as follows:
8.In making an application for litigation funding, the applicant should provide some breakdown of the anticipated costs to support the application. Hartmann JA explained the rationale for this requirement in HJFG v KCY [2012] 1 HKLRD 95 at §78:
Discussion 9.According to the Wife’s 9th affirmation, she emphasizes that due to her impecuniosity, she is unable to pay for her legal costs. The Wife further says her recent loan applications were rejected by the banks. The parties’ financial position 10.Based on the updated Form Es filed by the Wife on 9 September 2024 and the Husband on 10 September 2024, the parties each claimed to have negative assets. 11.In their first Form E, the Wife claimed that she earned HK$160,000 per month and the Husband claimed that he earned HK$19,570 per month. By their updated Form Es, the Wife claims that her monthly salary was reduced to HK$115,000 from September 2024 onwards, while the Husband is earning a monthly income of HK$21,248. 12.The only liquid assets available to both parties are their respective income and savings in bank accounts. According to their updated Form Es, the Wife had HK$34,721.37 and the Husband had HK$57,257.04. 13.In short, both parties claim they do not have sufficient means to support themselves and the children. The scope of the LCP 14.The Wife’s LCP summons was filed on 28 November 2022 under the previous action FCMC 903/2022. The children’s matter was concluded on 20 October 2023 whereby the court made no order as to costs. Despite the children’s matter has already been concluded, the costs incurred for the children’s matter continues to be included in the LCP application. 15.In my view, the Wife seeks to recover costs incurred for the concluded children’s matter, is an attempt to walk through the back door of the system for a costs order against the Husband. If the Wife’s LCP application in respect of the concluded children’s matter is to be allowed, it would represent a subversion of the exclusivity of the costs order made by the court on 20 October 2023. 16.It is trite that the court will not award historic unpaid costs unless the court is satisfied that without such payments the Wife will not reasonably be able to obtain appropriate legal services in the future. See: Rubin v Rubin [2014] 1 WLR 3289 at §13. 17.The Wife has assured her solicitors that she would prioritize repaying outstanding legal fees if she receives any capital at the conclusion of the ancillary relief proceedings. 18.According to paragraph 4.4 of the Wife’s 12th affirmation, she said:
19.In the circumstances, save and except the Wife’s “believe”, there is no evidence to suggest that the Wife’s solicitors ever inform the Wife that they would down tools unless they are paid outstanding costs as well as being funded for the future. Lack of clarity of the anticipated legal costs 20.The Wife sets out the breakdown of the anticipated legal costs in paragraph 44 of her 5th affirmation and paragraph 91 of her 9th affirmation. Ms Yu, counsel for the Wife also provided an updated legal costs budget attached to her written submissions. 21.At the hearing, I requested Ms Yu to provide a breakdown of legal costs solely for financial matters for reference. It turns out the total legal costs solely for financial matters would be HK$1,646,278. 22.Ms Booth, counsel for the Husband submits that looking at the Wife’s updated legal costs budget and considering the actual work done by the Wife’s legal representatives so far, the amount of legal costs for financial matters is around HK$752,800. 23.The Wife was not able to offer an explanation for the differences. 24.I find the Wife’s calculation of her legal costs “confusing”. There is no reason why the total legal costs charged and to be charged by the Wife’s legal representatives for financial matters cannot be matched with the legal costs budget as affirmed by the Wife. 25.This cast serious doubts on the reliability of the legal costs budget submitted by the Wife. It is very difficult for the court to consider the reasonableness of the Wife’s request and make an assessment. The Wife does not have any assets that she could reasonable deploy? 26.In the updated Form E, the Wife did not disclose the value of her personal belongings. On 4 March 2025, I gave directions on the selection of the single joint expert witness in respect of the Wife’s handbags and diamond ring. The Husband complains that the Wife was uncooperative in giving instructions to the single joint expert. The Wife on the other hand claims that she could not afford to pay HK$10,000 as her contribution to the single joint expert report. 27.In the absence of single joint expert report, the Husband submits that the Wife has valuables (wine collection, diamond ring and seven luxury handbags), which in total should worth HK$1,011,857. 28.The Wife says her wine collection does not have any resale value, however in order to save costs, on 1 April 2025, her solicitors informed the Husband’s solicitors that for the purpose of FDR, she was prepared to agree the value of the wine worth HK$153,527. 29.On 12 May 2025, the Wife’s solicitors further informed the Husband’s solicitors that for the purpose of FDR, she was prepared to accept that the value of her wine worth HK$214,857.80. 30.The Wife further says she had attempted to put one of her seven luxury handbags which she purchased from Christie’s for sale. She was told by the second-hand shop that there was issue of the authenticity of that handbag. 31.In the hearing, Ms. Yu confirmed that the Wife would accept HK$214,857.80 as the value of her wine collection. The Wife contends that in order to maintain her standard of living, she should not be asked to dispose of her personal valuables. 32.It is trite that the standard of living enjoyed by the family before the breakdown of the marriage is one of the factors to be considered in financial matters, however when a marriage breaks down and the parties begin to live in two separate households it is not possible, generally speaking, to maintain the same standard of living as before. There has to be, of necessity, some form of adjustment. This case is no exception. 33.I do not consider handbags and wine collection are personal necessities. I accept that while it may take the Wife some time to liquidate her personal belongings, yet these assets cannot be discounted or ignored when considering the Wife’s ability to raise funds for litigation. See: LM v FW, [2024] HKFC 41 at §73. 34.According to the Wife’s solicitors’ letter dated 26 February 2025, the Wife claimed that the value of the diamond ring is HK$130,000 and her seven luxury handbags worth HK$186,000. According to the Wife’s case, including her wine collection worth HK$214,857.80, at least she would have HK$530,857.80 worth personal valuables at her disposal. 35.In my view the Wife did not pass the first hurdle of the Currey v Currey, i.e. she has no assets or none that can reasonably be deployed. See: Currey v Currey (No.2) [2007] 2 Costs LR 227 at §§19-20. 36.Further, according to the Wife’s 9th and 12th affirmations, she was able to borrow HK$500,000 from her friend, HK$350,000 from her cousin and her mother. In the circumstances, while the Wife may have difficulties in obtaining loans from banks, yet she was able to borrow money from her friends. The Wife’s failure to give full and frank disclosure of her financial position? 37.The Husband submits that the Wife’s financial disclosure to date was deficient and the court should not be confined to the Wife's "mere say-so" as to the extent of her income and resources. 38.The Husband asserts that the Wife’s had failed to explain the significant deposits received by her. The Husband drew the court’s attention to the following facts:
39.Ms Booth further submits that the Wife has failed to submit her Tax Demand Notes to substantiate her claim for tax expenses. 40.I agree with the Husband’s submission that the Wife’s explanation is a complete non-answer. Bearing in mind the Wife is a certified accountant, she should be sensitive to numbers. Further, the transactions in question are recent transactions. I find it hard to believe that the Wife could not recall any of the transactions involved. 41.Overall, I find the Wife’s evidence on the material aspects of the case is self-contradictory. 42.I also find that there was a lack of full and frank disclosure on the Wife’s part. The Wife has failed to produce any evidence that would shed light on her actual amount of tax payments. The Wife offered no explanation as to why she was not able to produce the Tax Demand Notes. 43.In my view, it would be impossible not to conclude that the Wife was committed to hiding her assets and coming up with farcical reasons of why she was not able to comply with her full and frank disclosure obligations. The Wife had exaggerated her expenses? 44.The Husband considered the Wife’s expenses were exaggerated and unreasonable. He gave the following examples:
45.According to the Wife’s latest Form E filed on 9 September 2024 and her 12th affirmation, her monthly personal expenses were HK$273,500 (excluding mortgage payment which was paid by the Husband). 46.I consider some of the items claimed by the Wife were excessive and downward adjustments should be made to reflect the reasonableness of the amount. For the purpose of this rehearing, I will not re-assess the children expenses as the interim maintenance order had been made on 7 September 2023 which was not the subject of the rehearing. 47.The Wife’s income was reduced from September 2024, however her estimated tax payment is stated as HK$15,000 per month in her latest Form E. This is inconceivable as a large part of her salary is treated as rent refunds by her employer. The tax expense appears to have been overstated again. 48.The breakdown of which is as follows:
49.The Wife is earning a monthly income of HK$115,000. Based on the above assessment, the Wife has financial means to pay for her expenses. I would just make a further point. As the Wife’s monthly income was reduced from September 2024 onwards, her tax liability should be further reduced in 2025. 50.Even taking the Wife’s case to its highest, she is indeed in financial difficulties, the court would also need to consider the Husband’s financial means and ability to pay. The Husband’s financial means 51.The Husband is currently paying for the children’s monthly school fees of HK$42,000 per month, and HK$28,000 as monthly interim maintenance. The above sum exceeds the Husband’s monthly income of HK$21,248. The Husband has to borrow money from his parents to meet the payments. 52.Ms Yu submits that in assessing the Husband’s financial means, the court should take into account of the Husband’s income, his ability to borrow from his parents, the Husband’s interest in the sale proceeds of Greenview Property and the Husband’s earning capacity. 53.The Wife emphasizes that the Husband had received funds from his parents all along, hence the Husband should be able to continue to receive financial assistance from his parents going forward. 54.Ms Yu goes on to argue that despite the sale proceeds of the Greenview Property had already been distributed by the Wife’s cousin to the Husband and the Husband’s mother separately, she asserts that HK$10,000,000 distributed to the Husband’s mother in fact belongs to the Husband. 55.She invites the court to consider the principles of presumption of advancement that the Husband’s mother held HK$10,000,000 on trust for the Husband. 56.Ms Booth contends that the Wife has no basis to allege that the Husband’s mother held HK$10,000,000 on trust for the Husband. The sale proceeds of Greenview Property were distributed to the Husband and the Husband’s mother by the Wife’s cousin. If HK$10,000,000 indeed belonged to the family or the Husband instead of the Husband’s mother, why would the Wife’s cousin distribute the sum to the Husband’s mother. 57.Ms Booth further argues that no application has been taken out by the Wife to dispute the beneficial ownership of any asset, there is no legal basis for the Wife to allege the Husband’s mother was to hold HK$10,000,000 on trust for the Husband. 58.The Wife’s bare assertion is not sufficient for the court to conclude that there is any trust arrangement as between the Husband and his mother. The alleged sum of HK$10,000,000 will not be taken as the Husband’s assets. 59.Further, I find that many of the submissions came close to those that might be made at the conclusion of the ancillary relief trial, when the court is being asked to make findings of fact in relation to the computation exercise. I do not consider that these submissions are needed at this interim stage. Financial resources from the Husband’s parents 60.The Wife urges the court to look to the Husband’s parents’ financial resources to pay for the Wife’s LCP. 61.The Court of Appeal had made the following observations in their Judgment:
62.In WC v HC [2022] 4 WLR 65 Peel J had addressed the topic of inter vivos subvention as follows:
See also KEWS v NCHC [2013] 2 HKLRD 314, §§ 33-36, 49 63.While the Husband’s parents did lend him money for the purpose of paying children’s expenses, however, their assistance appears to be on an interim basis rather than on a long term and recurring basis. Leave was given to the Husband to file his mother’s affirmation at the hearing. 64.According to the Husband’s mother affirmation dated 17 April 2025, she said since 14 September 2023, she and the Husband’s father had made it clear that they would not lend any money to the Husband if such money were to be given to the Wife. 65.Further, there is no evidence to suggest that there is an inheritance certainty on the Husband’s part. Earning capacity of the Husband 66.The Wife relies on the previous findings of His Honour Judge CK Chan who took the view that the Husband could have an average monthly income of HK$85,000. 67.In my view, this is neither here nor there as regards the issues before me. Both parties received good education and both of them should have a positive career prospect. However, in light of the current global economic situation, and the fact that the Husband has a lower earning capacity than the Wife all along, I do not find this line of argument offer any assistance to the Wife’s case. Conclusion 68.For the above reasons, I find that the Wife’s application must be dismissed. Costs 69.Costs should follow the event. Costs of this application, including the costs of the Court of Appeal hearing be paid by the Wife to the Husband, with certificate for counsel, summarily assessed at HK$700,000. Conclusions 70.I make the following order:
Ms Teresa Yu , instructed by Messrs. Wellington Legal LLP, solicitors for the Petitioner Ms. Madeleine Booth, instructed by Messrs. Withers, solicitors for the Respondent |
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