Susan Elizabeth Horton v. Gerard Fancis Horton and Another

HCMC000019/1983

IN THE HIGH COURT OF JUSTICE

DIVORCE JURISDICTION

BETWEEN

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Coram: Hon. Power, J.

Date: 16th November 1983.

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JUDGMENT

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1. In this matter the wife is suing for dissolution of marriage on the ground that the marriage has broken down irretrievably because the husband has behaved in such a way that she cannot reasonably be expected to live with him. She now makes application for an order for interim maintenance. The petitioner said in her petition that she "is of no gainful occupation" and this assertion has never been called into question.

2. In his first affidavit, filed on the 23rd June 1983, the husband said that he is a barrister practising the bars of Hong Kon and New South Wales and that his income from his practice represents his major source of income. He said that his gross receipts from practice in Hong Kong for the year ended 31st March 1983 were $3,640,958.00 amd that his expenditure incurred in earning this income was $900,000.00. He said that his net receipts then before tax were $2,740,953.00 and that from this it had to be deducted HonG Kong tax of $411,143.70, leaving an estimated net receipt from his Hong Kong practice of $2,329,840.30. He also estimated that his net receipt from his Australian income before tax was AU$269

3. In V. v. V. ⁽¹⁾, the Appeal Court of Hong Kong dealing with the question of maintenance pending suit, held that:-

4. This Court is not called upon to make a detailed investigation of the financial position of the parties but must make its award in accordance with, what is reasonable given the needs of the parties` It is true that the capital assets of the parties must not be ignored; however, the Court is primarily concerned with income.

5. The material before the before the Court revealed that the wife at the time when the proceedings were commenced had assets totalling about hK$800,000. The wife, in her affidavit filed on the September 1983, set out that she was the owner of an unspecified number of Krugerrands, this claim is disputed by the husband, and that she has sold 100 of these Krugerrands and placed the proceeds, amounting to $315,000, on deposit with the Chartered Bank . She also detailed certain bank accounts and gave, where she was aware of it, the balance in each. She said that she had the sum of $175,000 which had partly come from her savings account and partly from her current account on deposit.

6. She then set out an estimate of her monthly expenses, totally $33,879.00, which had been arrived at after consideration of her expenses for the months of July and August.

7. The only other moneys in which she might be said to have an interest were in certain trust funds, the extent of which has not been disclosed to the Court. The husband, in his first affidavit, detailed a number of trusts in two of which he said his wife had a beneficial interest and that "any future income distributions from these trusts are the discretion of the trustees". The husband suggests that the wife might be currently entitled to some income from these funds if she applies to the trusters. She says that she knows nothing of the details of the trusts and that she has made no application. The husband has not given any estimate of the amount of income to which she might be entitled therefrom. Given the paucity of information in this regard and the fact that no entitlement to income has been show, and bearing in mind that this is an application for interim maintenance, I think it proper to ignor any possible entitlement from the trusts.

8. The only assets which the husband in his original affidavit suggested were in the name of the petitioner were a current account with the ANZ Bank in Sydney of about AU$6,000.00 The current account at the Chartered Bank, Hong Kong of about $17,000 to $18,000, an apartment in Monte Carlo and a 1979 Peugeot motor car, which is not in Hong Kong.

9. Miss Leong, for the husband, suggested that the wife's estimate of monthly expenses was not a proper figure to work from as, during the months of July and August, the four children of the marriage was staying with the wife which would make the figures for food, entertainment, restaurants etc. very much higher than they would be when, as is usually the case, she is living by herself. She also suggested the figures for clothes, hairdressing and cosmetics and the figure for telephone, which is very much higher than the husband says is appropriate, are inflated. She submitted that the figure of $2,000 which the wife said she required so as to be able to give money to the children was much too high as the children were wholly supported by the husband.

10. The wife said that she and her husband had enjoyed a high standard of living during the course of their marriage and that her husband was a man of substantial wealth.

11. In her second affidavit, filed on the 25th October, the wife said that there had been substantial changes in her financial position since her first affidavit which had been caused mainly by the enormous expense to which she had been put defending divorce proceedings instituted in Australia by her husband. She said that the amount of HK$315,000 which had been placed on deposit with the Chartered Bank had been used for payment of costs and disbursements incurred in both the Hong Kong and the Australian proceedings. She said that the deposit in the National Westminster Bank was now reduced from $1,000 to £650 and that the money in the joint U.S. Dollar Savings Account had been closed and the money withdrawn in cash. She said that her current account at the Chartered Hong Kong Bank now had a balance of $6,857.79. She said that the 3 month Deposit Account of HK$175,000 has remained on deposit but that it has been ear-marked to pay costs and disbursements incurred in Australia. She said that she had been informed that. the costs and disbursements in the Hong Kong proceedings were now in excess of $675,000. She said that in Australia she had paid AU$5,008.11 into the account of one solicitor and that she had paid approximately AU$5,050 on account to another solicitor. She said that she understood that the disbursements in Australia amounted to over HK$200,000.00 in excess of these payments. She said that she had sold the remaining Kruggerands and had used the proceeds of that sale to defray outstanding costs and disbursements.

12. It seems clear, and indeed no issue was really made of this in the argument before me, that, at the present time, the cash which the wife formerly had at her disposal has been spent, or is about to be spent, mainly for the purposes of meeting legal expenses. The wife said that her husband had stopped paying her the HK$10,000 a month which he paid from the lst May 1983 to 1st September 1983 and that he had ceased paying rent for the former matrimonial home. She said that the last payment of rent made by the respondent was on the 1st July 1983. The position of the wife then is that she has no gainful occupation and has no remaining balance of disposable cash.

13. The husband filed a third affidavit on the 24th October 1983. He concluded this affidavit by saying : -

"I say that since the end of May 1983 the petitioner has received from me or out of  joint accounts substantially funded by me just over HK $248,000. when this figure is looked at together with the ready cash available to her as deposed to by her, the value of her total assets and her right to ask for trust distributions to be made to her, and the level of my income and expenditure also considered, it is not reasonable for her to receive interim maintenance."

14. This was the attitude of the husband when the matter came before the court.

15. In paragraph 41of that affidavit, the husband says, "The only income which I receive apart from my income from the bar is some trust distributions and the interest on the bank deposits, the savings bank interest and interest on the fixed interest securities which have been set out in my affidavit of means". He went on to say "The trust distributions of income are from either the GF Trust or the Horton Investment Trust. The trust income of these trusts has to be distributed to avoid a penal rate of Australian tax. The petitioner has just as much right to be considered by the trustees in making these distributions as I have, and she was invited by my solicitors to make appropriate representations to the trustee of the Horton Investment Trust, where income was becoming available for distribution, which invitation is set out in my letter dated 20th July 1983".

16. The petitioner does not suggest that the wife has ever received any distribution from this trust. He says that "She has just has much right to be considered by the trustees in making these distributions as I have". As I have already indicated I do not think it appropriate in this application to take into account any possible entitlement from the trusts.

17. The husband goes onto state that his receipts from his practice at the bar from the 1st April 1982 to 31st October 1982 amounted to HK$2,094,399 and that his receipts for practice for the same period in 1983 amounted to HK$1,476,376 and. that fee notes sent out from the 1st April 1982 t6 31st October 1982 amount to HK$2,467,500 and that the fee notes for the same period in 1983 amounted to HK$1,636,000. He says that upon this basis, it is likely that his income from the bar for the period ending 31st March 1984 would be about 2/3 of his income for the period ending the 31st March 1982 and that the gross for the year ending 31st March 1984 will, therefore, be in the amount of HK$2,427,305. He said that he expected his chambers expenses to be slightly less amounting to an estimated HK$700,000 which would result in net income of HK$1,727,305 from the bar. I am prepared for the purposes of this application to accept this figure.

18. He says that his personal expenses for the year ending 31st March 1983 not including amounts transferred for the purpose of making investments amounted to HK$1,906,667. It is to be noted that in this figure there was included not only the school and university fees for the children and the payments on the mortgage for the apartment in Monte Carlo but also figure of HK$77,000 for the purchase of a Mazda motor car, a figure of HK$250,000 for part of the building work on the Monte Carlo apartment and a figure of between HK$50,000 and HK$100,000 in payment for some of the furniture and furnishings for the Monte Carlo apartment.

19. The husband said that in order to minimize hotel expenses, he had now taken a lease of a flat at a monthly rental of $17,000 plus management charges and that lie expected to have to spend about $100,000 to purchase furniture and kitchen equipment. He said that given that he would have to employ an amah and pay electricity, telephone fees etc., he expected that his monthly expenditure in connection with the flat would be $24,000. He said that his total legal costs so far had been $234,405.41. He said that his personal expenses from the lst April 1983 to date had been approximately HK$1,400,000 and that he expected these will be in excess of HK$2,100,000 for the year ending 31st March 1984. He said given that he expected his net income to be HK$1,727,305 and that he expected to receive "interest, income and trust distribution income" in the amount of approximately HK$400,000. His surplus funds for the year ending 31st March 1984 would, therefore, be less than HK$30,000. It was upon this basis that the respondent was suggesting that it was not reasonable to order him to pay any interim maintenance to his wife. What the husband was saying was that although he expects to have a net income of $2,100,000, the calls upon this income are such that he cannot reasonably be expected to make any payment to his wife.

20. The wife, on the other hand, suggested that she was entitled to an order in about the same amount as would be ordered in an application for permanent maintenance. She submitted that that order should be for an amount of about 1/3 of the husband's net income and suggested the figure of $75,000 per month.

21. The Court must order what is reasonable, given the income of the husband and the needs of the parties. Even if the wife's figure of $34,000 for her needs be accepted, and I am by no means satisfied that it should be, the jump between that figure and $75,000 is, I am satisfied, not justified on the evidence before me.

22. Mr. Rodway, who appeared for the wife, suggested that she was entitled to have some provision made so that she could, from time to time, enjoy a vacation and that she was entitled, given the very large income of her husband and the life style which had been established when the parties resided together, to expect a generous award of interim maintenance.

23. One thing which the Court must not do in circumstances such as this is to give a wife an amount over and above what is reasonably necessary for her to maintain herself. Any such award would be clearly wrong for it would, in effect, be an award of capital. Further the Court must not make any award that takes into account the amount which she is likely to have to spend on costs. To do so would be equally wrong for it would anticipate an order for costs in her favour which may never be made. I am satisfied that the wife's suggestion that she needs $34,000 a month for her basic maintenance cannot be accepted. I am satisfied that the expenditure during the months of July and August was incurred not only as regards the wife but also as regards the four children and that the figure must be scaled down by about one third in order to arrive at the figure which applies to the wife alone. I am satisfied that she is entitled to have provision made for holidays and that she is entitled to have provision made which will allow her to treat the children in the same way as she has done in the past. I accept that the children are supported by their father but am satisfied that it would be wrong to place the mother in a position where she could not exhibit some degree of generosity to the children on appropriate occasions.. In all of the circumstances, I consider that the proper amount to award for interim maintenance a sum of $28,000 per month. I am satisfied that this order should be backdated so as to operate from the 1st September 1983. The arrears for September and October are to be paid forthwith. The payment for November is to be made forthwith and the payments for the months thereafter are to be made on or before the 1st day of each month. There will be an order nisi that lst respondent pay petitioner's costs to be taxed.

(1) 12 H.K.L.J. 83

Representation:

Mr. Rodway, Q.C. & Mrs. Pennington (instructed by Hampton, Winter & Glynn) for Petitioner.

Miss J. Leong (instructed by Helen A. Lo & Co.) for Respondent.