C v. F

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

SUIT NO. 1701 OF 2000

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BETWEEN 

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Coram: H.H. Judge Bruno Chan in Chambers

Date of Hearing: 1st September 2004

Date of Judgment: 20th September 2004

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J U D G M E N T

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1.This is the Respondent Wife’s application for maintenance pending suit against the Petitioner Husband in their divorce proceedings.  He is a 58 years old company director, while she is a 52 years old housewife.

Background

2.This is a typical “rags to riches” story of a couple from humble background who married young some 37 years ago when they went through a form of marriage in 1967 which was subsequently formalized by registration at the Marriage Registry in 1994.

3.The Husband started out as a lowly printing worker earning a meagre sum of $350 per month and worked his way up to eventually having his own small printing business with some partners in the late 60s, while the Wife stayed home to raise their 4 children, 2 sons and 2 daughters who are now adults.

4.In the mid-70s the Husband broke up with his partners and formed his own printing company known as T Printing Co. Ltd, in which he also made the Wife a director, and with the purchase of a industrial unit for his company, his business started to grow and the parties’ financial position soon improved.

5.In the early 80s the Husband obtained a substantial printing contract from Coca-Cola and his business had since flourished.  Soon the parties moved into a 3,300 sq. ft. flat in Estoril Court at mid-level Hong Kong which was purchased under the name of T Printing Co. Ltd, employed 2 domestic servants and a driver for the family, and sent their 2 sons to study in the U.S.

6.In the early 90s the Husband moved his business production into China and built his own factory on purchased lands, employing over 1000 workers in his factory run by his siblings, while the 2 elder sons work for the business in Hong Kong which has expanded to include several BVI holding companies and subsidiaries.  With the expansion of business brought in more wealth, the parties were able to enjoy a very comfortable lifestyle and high standard of living, including large sums of spending money per month for the Wife and the family, membership of the Hong Kong Jockey Club, the use of several luxurious family cars and holidays in Europe.

7.In 1997 the Wife discovered that the Husband was having an affair with a much younger woman, and after a confrontation between the parties, the Husband moved out of the matrimonial home at Estoril Court in October 1997 to cohabit with his said girlfriend.  He had however continued to provide substantial maintenance for the Wife and her household, including as much as $130,000 per month for her use, settling her 5 credit card bills of up to $100,000 per month, paying for her household utility bills and her chauffeur, and a further sum of $50,000 per month through T Printing Co. Ltd for her director fee / salary, bringing his total financial provisions for the Wife to between $250,000 and $300,000 per month on average, not counting the extra spending monies given to her during festive seasons such as Christmas and Chinese New Year.

8.On 25^th February 2000 the Husband issued a petition for divorce in these proceedings based on the parties’ separation for at least 2 years since October 1997.  On 21^st June 2000 the Wife issued a notice of application for ancillary relief and required the Husband to file his affidavit of means.  She also indicated in her Form 4 that she intended to defend the petition, as a result the Husband had agreed not to proceed with his petition, and no further steps were taken by either party in the proceedings for the next 3 years.

9.By November 2003 the Wife appeared to have change her mind about the divorce and informed the Husband that she would no longer defend his petition.  Accordingly a fresh Form 4 was filled on her behalf indicating that she only wished to apply for ancillary relief including maintenance pending suit in the proceedings, and requested the Husband to make financial discloses in particularly those about his companies.

10.Shortly thereafter in February 2004 the Husband cancelled the Wife’s credit cards, stopped his company’s payment of her director fee / salary, and has since reduced her monthly maintenance to $90,000, although he has continued to pay for her chauffeur and household utility bills as well as the provision of family cars for her use.  His explanations for reducing his financial provisions for the Wife were that his business has been declining since the 1997 Far East economic crisis, with a marked decrease in the turnover and profit in 2003, resulting in him no longer able to continue with the level of maintenance for the Wife as before, which he claims to be excessive and unreasonable in any event, as her outrageous spending was merely to punish him for his affair.

11.Not surprisingly, the Husband’s action was met with strong suspicion by the Wife that he was putting financial pressure on her due to her request for financial disclosure of his group of companies, and hence she immediately sought and obtained an order for the Husband to file his affidavit of means, which he subsequently did on 24^th March 2004, and to launch an application for maintenance pending suit, which is now before me, for an order at more or less the same level of maintenance as before at $250,000 per month including her director fee from T Printing Co. Ltd, pending the substantive hearing of ancillary relief which will probably come within the next 6 months with the decree nisi of divorce having just been pronounced on the Husband’s petition.  As is common in these applications, no oral evidence was given and Counsel for both parties argued their case based entirely on the affidavits before the Court, where there were 2 from each side, a standard Financial Statement (Form E) and a supplemental narrative one.

The Law

12.This application is of course brought under s. 3 of Matrimonial Proceedings and Property Ordinance which provides that “On a petition or joint application for divorce …… the Court may order either party to the marriage to make to the other such periodical payments for his or her maintenance and for such term, being a term beginning not earlier than the date of the presentation of the petition or making of the application and ending on the date of the determination of the suit, as the Court thinks reasonable”.  This being the only statutory guidance as to the award of maintenance pending suit, means that the Court has a discretion in the matter, and subject to the result being “reasonable”, the discretion is not fettered in any way.  (See Waller v Waller [1956] P 300, [1956] 2 All ER 234, 236, CA, and Griffith v Griffith [1957] 1 All ER 494, 495).

13.Furthermore, as it is intended that the award will operate for a relatively short period, several months as is anticipated in this case, it would not be appropriate for the Court to make a detailed investigation of the financial position of the parties when considering whether to grant maintenance pending suit, as was held by Power J, as he then was, in Miller v Miller [1985] 1 HKC P 595 when he said that the sole criteria in making an award were reasonableness and the needs of the parties, and that the Court should not take a long term view nor considering the potential earning capacity and future capital prospect of the parties.  This approach was confirmed in the later case of Wong Wai Chi, Susanna v Kim Miu Sup, Mark (LACV 263 / 98) when Liu, JA said this in his judgment : -

“It is trite law that in an application for interim maintenance, the Family Judge is not called upon to make any thorough investigation of the income and financial capabilities of the parties.  At that stage, there would simply be no time to be perfect.  The Family Judge would have to guide himself by s. 3, having regard to the reasonable requirements of the wife and the ability of the husband to pay”.

14.Although the sole statutory guideline in considering maintenance pending suit is that the award shall be “reasonable”, the Court will nevertheless bear in mind all the factors drawn to its attention relating to the marriage and the parties to it, and perhaps the 2 most outstanding matters in every case, as in this one, are the standard of living of the parties, and the ability of the husband to pay.

The Evidence

15.There is no question that the standard of living enjoyed by the parties has been quite high and comfortable, in particularly since the 1990s.  According to the Husband, in addition to paying the Wife more than $300,000 per month for her maintenance for the past 6 years since their separation in 1997, which he has estimated to be more than $30 million in total, he has also spent $5 million renovating her home, purchasing her new furniture and buying her 3 luxurious cars, including a Ferrari at $2 million in 1999 and a Mercedes S500 at $1.5 million in 2000 for her sole use, while he himself also has the use and enjoyment of 2 other Mercedes Benz purchased by his company.

16.After leaving the former matrimonial home in October 1997, the Husband has since been cohabiting with his girlfriend presumably at first at a flat at Hillsborough Court in Old Peak Road, Hong Kong which he purchased in 1998 for more than $13 million of which he paid $5.2 million for the down payment.  One year later in 1999 he purchased his present home, a 4,000 sq. ft. house at La Palais, No. 8 Pak Pai Shan Road, Hong Kong by means of a holding company in joint names with his girlfriend for $45 million, of which $13.5 million was paid for the down payment.

17.According to his Form E, the Husband has beneficial interest in 6 properties including the 2 properties mentioned above, with a total market value of almost $80 million, but most of which are heavily mortgaged to banks.  Some of them have been let out for rental income.  He also holds, or has held, directorships in 7 companies, most of which are part of his printing business, others are assets holding companies.  He is said to have stocks and shares investments at about $5.5 million, and cash in the banks of about $655,000, but he also claims to have total debts of more than $45 million including $39 million due to his company and $5.9 million being bank overdrafts, hence he says despite his apparent wealth, he net worth is in fact in the negative by more than $8 million after taking into account of his liabilities.

18.The Husband has put his current total monthly expenses at almost $770,000, which he later in his supplemental affidavit corrected that $108,000 of which being his car expenses are in fact paid by his company, which still leaves his monthly expenses at more than $660,000, including $32,000 for utility bills, $14,000 for meals out of home, $16,000 for clothing and shoes, and $38,000 for entertainment and presents, all of which indicative of a high standard of living.

19.I shall next consider the Husband’s case : that he is no longer capable of maintaining the Wife at the same level as before, and that even if he is, it would not be reasonable for him to do so as she does not need as much as $250,000 per month as she claims.

20.First a brief account of the Husband’s financial situation according to his Form E.  He owns T Printing Co. Ltd (“T Printing”) which he formed in 1981, the parent company of his printing business.  In 1993 with a view to expend his business into China he together with an investor formed T Printing (Holding) Co. Ltd (“T Holding”), a BVI company in which T Printing holds 76.19% of the issued shares while the remaining 23.81% are held by the investor, GE (Overseas) Ltd, a company owned by his friend Mr Fong.

21.T Holding in turn holds 2 main companies, T Printing (HK) Co. Ltd (“T HK”) with 50% of its shares held by T Holding and the other 50% by the said Mr Fong, and T Printing (China) Co. Ltd (“T China”), a BVI company wholly owned by T Holding.  T HK is responsible for the trading business while T China is responsible for the manufacturing side of the business.

22.T Holding also holds a third company called G Printing Co. Ltd (“G Printing”) which was formed in 1999 to deal with one single customer in Europe.  The Husband is also said to have held directorship in 2 other companies called L Ltd which holds his present home on the Peak, and R Ltd, another BVI company, but has disclosed no further information about it.

23.The Husband claims that his main source of income comes from T Printing by way of consultancy fees and bonuses, which he puts at an average sum of $375,000 per month, and together with housing and entertainment allowances, he claims to receive $618,133 per month from his business.  In addition, as aforesaid, T Printing pays for his car expenses of $108,000 per month, while he also receives rental income from some of his properties, including $151,024 per month from his factory units at Sing Tek Industrial Building, and a further sum of $47,500 per month if he is able to let out his properties at Hillsborough Court and Convention Plaza, although it is not clear at the hearing whether he has done so.

24.Therefore even according to his own evidence, the Husband has a total income of almost at least $770,000 per month, and possibly more at his disposal.  From this income he says he has the unenviable burden of having to utilize almost half of it to meet his monthly mortgage instalments of all his landed properties, leaving only about $400,000 to meet his other expenses as well as those of the Wife, which he submits is clearly inadequate to enable him to maintain her at the level as before.

25.Furthermore, the Husband has alleged in his Affidavit of 26^th August 2004 that due to his declining business since the 1997 economic crisis, he proposed to the Wife in 1998 to cut down on his maintenance for her but she refused and had continued to spend without any control.  He said this in his Affidavit : -

“ …… In order to satisfy her unreasonable financial demands I sank myself into deeper and deeper financial difficulties by borrowing from banks in form of mortgages and also from the T printing business.  The latter had caused my partner, namely the Fong family represented by Mr Fong , severe objections.  The continual payment of a salary by the T Printing (China) Co. Ltd to the Respondent also caused much disquiet from my business partner.

The disharmony with the Fong family had escalated in the recent months.  Mr Fong refused to sign the “audited” accounts ending 31/12/03.  That greatly delayed the filing of this affirmation as I was advised that I should disclose the said accounts in support of the fact that the business and profits had declined sharply in 2003.  In the end, my negotiation with Mr Fong broke down.  For the first time since we went into business together in 1993 he would not sign the accounts even though they were prepared in exactly the same accountant firm under the same accounting principles as in the past years.  Produced and shown before me copies of the “audited” accounts of T group of companies for the year ending 31/12/2003, marked as exhibit “CSH-2”.

The management accounts up to the end of June 2004 have been produced.  It also shows that the profit continues to drop in the first half of this year.  Produced and shown before me are copies of the half year management accounts of the T group of companies, marked as exhibit “CSH-3”.

At present, I am indebted to the T group of companies to the extend of about $38 million.  Under great pressure from Mr Fong I started to repay of the same by instalment and also to stop any further “borrowings” in the future.  In fact and in truth, I am overdrawing my Bank of China account (A/C no 02670600041646) in order repay $100,000 / month to the T group of companies since March 2004.  Out of the said $38 millions, about $35 million were incurred after I left the Respondent.  $30 million of which were solely for upkeeping the Respondent because I was made to pay her about $4 millions / year for about 6 1/4 years.  I also paid for the renovation of her home, purchased her furniture and her 3 luxurious cars at the total sum of about $5 million.  My monthly liabilities and expenses have increased to $869,440.00 as I have to repay the debt owed to T printing group”.

26.This repayment, the Husband says, has further reduced his ability to maintain the Wife at the same level as before, and he now proposes to pay her $150,000 per month to meet all her expenses including her household utility bills and her chauffeur, but that his company will continue to provide and maintain the 3 cars for her use.

27.Ms Yip, Counsel for the Wife, however complains that the Husband’s disclosure of his means is in fact incomplete, sketchy and evasive, that his 2^nd Affirmation was only filed shortly before the hearing after much chasing by the Wife’s solicitors, that he has failed to answer a single question of the Wife’s questionnaire served on him more than a month ago for further financial information, which has thus put the Wife in a difficult position, as she cannot verify the Husband’s allegations and is prevented access to answers relating to his finances.  Counsel therefore submits that the Court is not bound to, and in the light of the available evidence, should not accept the Husband’s assertions in particularly his inability to pay and his monthly income position.  She relies on the judgment of Charles J in G v G (2002) 3 FCR 339, also a maintenance pending suit case, in which he said : -

“I accept the submissions made on behalf of the wife that : (a) just as is the case when making a final award …… in awarding maintenance pending suit the overriding consideration for the court is to arrive at a fair result; and (b) Baker v. Baker …… , F v. F …… and in particular F v. F …… are cases which support the view that in awarding maintenance pending suit a court does not have to accept the assertions of the paying party as to his or her means …… .

In my judgment important points to consider in respect of the dilemma posed when there is a dispute as to the means of the paying party are : (a) the extent of the compliance by the paying party with his or her duty to make full and frank disclosure; and (b) the force of the points made by the applicant in light of the disclosure made by the paying party and the other evidence as to, for example, the lifestyle and spending of that party.  If a paying party asserts that he or she does not have the means to meet the maintenance pending suit claimed it is trite to point out that he or she has, or should normally have, the ability to provide full and compelling disclosure to demonstrate that this is the case and thus that the assertions of the applicant that he or she is more wealthy are based on sand and have little or o reasonable prospect of success …… .

…… and I agree the duty (as on the final hearing) is to frankly furnish to the court all the necessary materials to enable it to decide the issues that it has to decide.

If the paying party does not perform that duty and thus does not provide such disclosure, then in my judgement and without hearing oral evidence the court on an application for maintenance pending suit does not have to accept and proceed on the basis of his or her assertions as to means and an inability to pay.  In my judgement this is so notwithstanding the point that because the court has not heard oral evidence it is not in a position to make findings as to credibility, or to make findings (which can be based on adverse inference) as to the extent of the means of each party.

In my judgment if the paying party does not perform his or her duty as to disclosure on an application for maintenance pending suit the court, on an application for maintenance pending suit, can take a broad and robust view of disputes as to means which it is not then in a position to decide …… ”.

28.It is well established that in ancillary relief proceedings, which include maintenance pending suit, there is a duty on both parties to make full and frank disclosure of the relevant materials to enable the Court to exercise its discretion to make the order, and if it is of the view that the evidence disclosed by a party is deficient, inferences may be drawn by the Court from such defective disclosure against that party when making the appropriate order.

29.Ms Chan for the Husband has insisted that he has already made full disclosure of his income in his Form E, whilst he should not have to answer the Wife’s lengthly questionnaire which is not relevant in most part to the present application and is oppressive.  She also accuses the Wife of filing her affirmation late and only upon urges of the Husband’s solicitors, while the Husband has done his best to up-date his company’s accounts despite the difficulty getting his partner Mr Fong to sign them.

30.I do not think it would be helpful for me to go into the relevancy of the Wife’s questionnaire at this stage as it was not argued by the parties in any details at the hearing.  It is of course pertinent to consider whether there is evidence, or sufficient evidence, in support of the Husband’s case that he has been in financial difficulty.

31.We all recognise the economic downturn in this community since 1997, and it is common knowledge that properties have lost as much as more than half of their value, whilst salaries have generally been slashed amongst employees.  It would however be reckless to say that this has equally affected everybody in Hong Kong.

32.As the Husband is the managing director and majority shareholder of T Printing, the parent company of his printing business, it would be obvious to examine the company’s audited accounts to see the impact, if any, of the economic downturn on his business.  For this hearing the Husband has not only produced the audited accounts of T Printing for the past 4 years, i.e. from 2000 to 2003, but also those of its subsidiaries such as T Holding, T Hong Kong and T China for the same periods, as well as the management accounts of the T group of companies for 2004 up to the end of June.  Although for comparison purpose one would have hoped that the accounts could go back to the year of 1997, but with some useful tables prepared by Counsel for the Wife in respect of the profit situations of these companies, I agree that for the present purpose, there are sufficient information before me to give some indication of how the Husband’s business has fared over the past few years.

33.I shall deal with T Printing first.  In 2000, it had a turnover of $95,839,102, increased to $102,779,888 in 2001, dropped back very slightly to $100,061,309 in 2002, but considerably to $84,630,337 in 2003, a drop of about 15%, resulting in a reduction in gross profits by almost of $10 million, which can be said to be significant.  Ms Yip however argues that despite this drop in turnover in last year, the profit situation of the company has remained more or less the same the past 4 years at between $33 million and $34 million.  She further points out that the retained profit brought forward for the years 2003 was in fact the highest in 4 years at $40,608,946, some $11 million more than the $29,493,572 recorded for the year of 2000, for example, and that the retained profits carried forward for 2003 were then adjusted to a lesser figure of $34,525,321, much lower than the $40,608,946 for the previous year of 2002, is in fact partly due to diminution in value of fixed assets of almost $3.3 million, an acceptable accounting practice which was not made in previous years and should in fact have no significant impact on the real profits of the company.  As convincing as this argument may sound, the account of T Printing for 2003 does show a drop in business turnover and gross profit, as do the accounts for all the subsidiary companies for the same period of last year, whilst the balance sheets, which are unaudited, of the group of companies show a further reduction in turnover for the first half of 2004.

34.The question however must be whether all these have affected the Husband’s income as alleged.  The Wife doesn’t think they have.  Firstly, she says that the Husband has since 1997 made the following major purchases worth over $66 million : -

(a)   January 1998 a Property at Sceneway Garden in the name of his girlfriend for $5.55 million;

(b)   May 1998 the Hillsborough Court Property plus carpark in his own name for $13.6 million;

(c)   July 1999 his present residence House XYZ, Pak Pai Shan in the name of L Ltd of which he and his girlfriend are equal shareholders and director for $45 million;

(d)   July 2000 a Mercedes Benz S600L in the name of T Printing for $1.19 million;

(e)   June 2002 a Porsche 911 Carrera 4S for his girlfriend for about $1 million.

35.All these purchases, argued Ms Yip, were made after what the Husband said that the 1997 Far East economic crisis has caused his business to decline, which demonstrate the incredulity of his case.

36.Whilst it is true that these assets were purchased for over $66 million in total, it is also a fact that the majority of the purchases, namely the 3 landed properties which represent more than 97% of the total value, was made some years back in 1998 and 1999, in particularly the Hillsborough Court flat and House 28 were heavily funded by bank mortgages the repayment of which were spread over long period of time and were met by the monthly housing allowances given to the Husband by T Printing, I cannot safely say that these purchases by the Husband must go to demonstrate that his business has not been affected by the economic downturn since 1997.  His spending habit certainly does not help his argument, but given the figures as shown in the company’s accounts, in particularly those for the year 2003 and the first half of 2004, I am unable to draw any conclusion one way or the other without further information or the assistance oral evidence which will no doubt be available at the substantive hearing.

37.The monthly income of the Husband which he derives from his business may however shed some light on his financial ability.  According to his evidence, one of his main income comes by way of consultancy fee from T Printing’s subsidiary T China which paid him $4.6 million in 2000 and 2001 respectively, but was increased to $4.9 million in 2002, and further more to $4.975 million in 2003, showing a general up-ward trend at least over the past 2 years, and despite the reduced gross profits in 2003 for the parent company T Printing.  So as far as consultancy fee is concerned, the Husband’s income in this area does not appear to have been affected by the performance of his business, it is however not clear what impact the performance of his companies for the first half of 2004 may have on his income.

38.One of the most contentious issues between the parties is the Husband’s alleged loan of $38 million from the T group of companies due to the Wife’s uncontrolled spending, and as a result he has been under great pressure from his partner Mr Fong to make monthly repayments at $100,000 to the companies, and to stop any further borrowings in the future, thereby substantially reducing his ability to maintain the Wife as before.

39.It is not clear whether the Wife disputes the existence of the loan of $38 million, although the accounts of T Printing do show that there was indeed substantial amount due from a director, increasing from $16 million in 2000 to more than $37 million in 2003.  She however argues that it is absurd for the Husband to say that she was the cause for such huge loan from the company, in particularly when he has failed to mention how much he himself spent to decorate his house on the Peak, or how much he had paid for his girlfriend’s spending over the years.

40.Even assuming that this loan is genuine and that it is not some accounting practice created to off-set or justify the equally substantial retained profits that we have seen from the audited accounts which have been carried or brought forward over the past 4 years, I can understand why the Wife feels indignant by this allegation of the Husband.

41.Firstly the Husband has not produced any documents such as his director’s account evidencing such loan.  Secondly, even if he did borrow from the company to pay for the Wife’s maintenance, it could not have been as much as $4 million per year as alleged, as a substantial part of her monthly expenses such as her household utility bills, her chauffeur’s salaries, the provision of her cars, as well as her monthly credit card bills were all paid or provided for by his company, and there is simply no documentary evidence that these payments were in fact arranged by way of some kind of loan from the company, whilst the additional monthly sum of $50,000 paid to the Wife by the company was in fact stated as her salary or director fee and clearly not a loan from the company.  If therefore the remaining monthly sum of $100,000 or so paid by the Husband to the Wife for her maintenance was indeed borrowed from the company, it could not have amounted to $30 million over 6 years as alleged by the Husband, and therefore if he is indeed in debt of $38 million to the company, the Wife says that the bulk of such loan could not have been for her maintenance, but rather was from his own extravagant spending on himself and his girlfriend.  I find this argument of the Wife convincing.

42.It is equally absurd, the Wife argues, for the Husband to allege that he has been put under pressure from Mr Fong to start repaying such loan to his company by monthly instalment of $100,000.  Firstly, as pointed out by Ms Yip, at the rate of $100,000 per month, it would take more than 30 years to pay up the loan of $38 million and she questions the practical purpose of such instalments.

43.More importantly, with the Husband being the sole beneficial owner of the parent company T Printing, and the majority as well as controlling shareholder of T Holding and its subsidiaries, Ms Yip argues that it is inconceivable that the minority shareholder Mr Fong or his family could put pressure on the Husband whom she says was simply fibbing.

44.With the assistance of the flowchart prepared by Ms Yip in her skeleton submission, one can easily see that the Husband, being the founding member of the T group of companies and with 100% ownership of the parent company T Printing and 76.19% of T Holding, clearly has not only the majority shareholding, but as Ms Yip has pointed out, the controlling power of his companies as well.  Minority shareholder such as Mr Fong of course has the right to raise objection within the company, but given the circumstances of the case and the timing of the Fongs’ objection, and in view of the fact there does not appear to be any objection against the company paying for the down payment of the Husband’s house or the substantial monthly mortgage instalments, for example, and in the absence of evidence of their objection, documentary or otherwise, I can understand why the Wife finds the Husband’s allegation skeptical and suspicious.

45.It is also argued by the Wife that when the Husband said in his Form E that he had to pay $359,700 per month in mortgage instalments for all his landed property, this is in fact incorrect as the monthly mortgage instalments for his Shiu Fai Terrace at $42,739 and for his home at House 28 at $221,734 totalling more than $262,000 per month are according to the documents (P. 42, 189 and 306 of Bundle A1) were in fact paid by T HK, and hence the total monthly mortgage repayment he has to make is only about $151,000, less than half of what he has alleged.  Taking into account of his earlier admission that it is T Printing which pays for his car expenses, it is submitted by the Wife that the Husband has in fact grossly exaggerated his monthly expenditure, and can therefore spare a lot more to pay the Wife’s maintenance.

46.In the circumstances and for the reasons aforesaid, although I accept that his printing business may not be doing as good as before the past year or so, I am not satisfied that the Husband has demonstrated that he is incapable of paying the Wife’s maintenance at $250,000 per month as requested, which is only some $100,000 more than what he says he can afford and offers.  The next question is of course whether it is reasonable to order him to do so, as it is his case that the Wife does not actually need to spend as much as $250,000 per month, and that she herself has sufficient savings to meet any deficits that she may have in the meantime until the final hearing.

47.Given the background of this case and the high standard of living enjoyed by the parties during the more recent years of their marriage, it is obvious that the Wife is not without means.  Beside being a director of T Printing and the registered owner of the former matrimonial home at Estoril Court and its carpark, she has also stated in her Form E to have $6.4 million cash in the bank, about $1 million in stocks and shares investment, and $2 million worth of watches and jewelleries.  The Husband believes she has over $10 million in cash, more than $7 million worth of watches and jewelleries, and $4.5 million worth of stocks and shares investment.  Whatever the real position may be, it is not necessary or possible for me to resolve the parties’ assets situation at this stage, but it is another useful indication of the parties’ wealth and lifestyle.

48.What is not so clear, however, is how much exactly are her reasonable needs.  In Part 4 of her Form E, which she filed on 10^th May 2004, she put her current total monthly expenses at $166,460 plus payments made by the Husband’s company.  However under Part 4.1 for her general expenses, there were 4 items namely utilities, management fees, car expenses and insurance premia, and chauffeur totalling $42,460 were paid by the company, and in Part 4.2 for her personal expenses, she stated that her tax, the amount of which was not specified, was paid by the company as well.

49.So if one were to add up all itemised expenses but excluding those paid by the company, the Wife’s total expenses would amount to only $124,000 and not $166,460 as stated.  If however one were to include those expenses paid by the company save for her tax the amount of which was not specified, one would then obtain the figure of $166,460.  On this basis when the Wife put her total monthly expenses at $166,460 plus payments made by the Husband’s company, she must have meant the additional payment of her tax by the company the amount of which, I assume, she did not know at that stage.

50.If therefore this is indeed the Wife’s monthly expenditure at $166,460, is it reasonable to order the Husband to pay her a lot more at $250,000 simply because that was what he had been paying her for the past 6 years up to January 2004, or is the Wife saying that because of the reduced maintenance from the Husband since February 2004, she has been forced to cut down on her expenses in particularly on her credit card spending to the present level which she says is unfair and not representative of what she used to enjoy in the past and is entitled to continue to do so until the substantive hearing of ancillary relief ?  It is unfortunately not very clear from her supportive affidavit.

51.The Husband says that of the monthly maintenance he used to pay the Wife since their separation in 1997, $100,000 of which was for her to save up, while another $100,000 was to settle her credit card bills as a result of her excessive spending which he says was not necessary but merely her way to punish him for his affair.

52.Whilst there may be some truth about the saving up of money by the Wife which may explain the amount of her savings, whether at her stated figure of $6 million, or his at $10 million, there is no documentary evidence before me as to how much she used to put aside for savings, or about her spending, such as credit card statements, to enable me to decide whether the Wife’s credit card spending were excessive, or were used to punish the Husband, given especially the parties’ high standard of living before the breakdown of the marriage.  On this issue it would be useful to refer to the judgment of Thorpe J, as he then was, in F v F (Ancillary Relief : Substantial Assets) (1995) 2 FLR 45, where it was also about maintenance pending suit of an even bigger money case, when he said : -

“It does seem to me that the determination of the wife’s reasonable needs for herself and the children both present and prospective depend crucially upon the investigation of a variety of issues raised not only in the interim provision affidavits, but also in the substantive case affidavits which cannot be resolved without full discovery and oral evidence.  Therefore, if I decide a figure within or approaching the high ground, the wife would be foolish to assume that the same conclusion would emerge from a substantive hearing.  Equally, if I decided a figure in the low ground the husband would be rash to assume that that same result would flow at the substantive hearing.  It seems to me that in these cases involving very large sums of money, it is generally speaking superfluous for there to be a full-scale investigation of interim provision.  The discipline imposed by the parties in the preparation of the case should ensure that the duration of the interim period is a matter of months rather than years and any under provision or overprovision can always be corrected when the account comes to be taken at the substantive hearing.  During the course of the substantive hearing, the account that the judge takes is principally an account of the applicant’s prospective future needs.  But there is no reason why accounts should not be taken of the much less significant reckoning of her needs and the needs of the children over the interim period.  If that account reveals that thee has been overprovision and if that overprovision is the product of excessive demands and estimates on the part of the applicant, then there is every opportunity to do fairness by set-off.

In my experience contested hearings to determine a rate of interim provision in big money cases are almost unknown and I think that their rarity reflects the practical considerations that I have attempted to define.

So what considerations bear upon the exercise of my discretion ?  First, I think that it is very important to recognise that in measuring affluence, extravagance and reasonable needs there are no absolutes.  All these concepts are comparative.  It might be said, and at points Mr Blair came close to saying, well really with an offer of more than a quarter of a million per year open in the affidavit how can the wife say that her reasonable needs are not met ?  I think that there is an obvious danger in adopting that presentation.

That fact is that the Matrimonial causes Act 1973 is a statute designed to provide statutory criteria sufficiently flexible to meet the circumstances of every conceivable case.  The reality is that the husband and wife in this case belong to a tiny percentage of the world population who have control and management and entitlement to huge sums of money.  The husband in his substantive affidavit in the proceedings has said that for their purposes he is willing that the court should treat him as having now and in the foreseeable future capital assets of not less than ?50m.  The wife says, although it is in issue, that in marriage he told her that their annual expenditure amounted to ?m.

Thus, in determining the wife’s reasonable needs on an interim basis it is important as a matter of principle that the court should endeavour to determine reasonableness according to the standards of the ultra-rich and to avoid the risk of confining them by the application of scales that would seem generous to ordinary people.  Thus I conclude that it would be wrong in principle to determine the application on some broad conclusion that if the wife cannot manage at the rate of a quarter of a million a year, she ought to be able to.  I think that it is necessary to establish a yardstick that more nearly reflects the standard of living which has been the norm for the wife ever since marriage and for the husband for considerably longer.

I think it is also relevant to have regard to the fact that even on his own case the wife and children have been significantly undermaintained since the separation, since the petition and since the issue of her formal application.  It is not asserted on her behalf that she has incurred debt in consequence, but it is said that she has had to draw on reserves in the sense that she has had to draw upon the reservoir of family hospitality for holidays and she has had to draw on her accumulated wardrobe by avoiding ordinary spending on clothes and accessories.

It may be that when the case is decided substantively it will be possible to do a retrospective review not only in respect of the period between this date and the substantive hearing, but also in respect of the period between filing of the petition and today.

The third consideration that I reflect is that the wife should not be at any significant disadvantage over the course of the period between today and the substantive hearing as the costs bill begins to accelerate towards its climax with delivery of briefs.  So far she has been able to litigate on credit and I assume that that arrangement will continue, although it has been made plain to her that her solicitors expect her to meet disbursements as the case progresses.  She has got some not insignificant assets of her own in Switzerland with a total value of about SFr 165,000.  It seems to me the sensible way of regarding that is as money available to her either to secure the costs of the litigation or to meet disbursements or to meet costs in part between now and the substantive hearing.  On that basis I neither make allowance for legal costs in her interim needs nor take account of yield that might come from Switzerland to meet her present expenditure.

The fourth consideration is that even in the case of a family of unusual riches it would surely be wrong for the court not to look carefully and indeed critically at the suggested budget.  Mr Pointer has said that the all-important particularisations in the bundle are the product of a team effort, the team members begin the wife, her solicitor and her counsel.  Well, it would be naïve to ignore the psychology of the team members.  Inevitably it is a litigation exercise.  It is in part an advocacy exercise.  There is every incentive to put figures as high as they reasonably can be put and perhaps some temptation to gild the lily.  So I find that Mr Blair’s most powerful submission is in his detailed exposure of certain elements within the wife’s budget which are unjustifiable even in a “super rich” case and which must result from excess of zeal on the part of the compilers of the budget.  I suppose in a sense the neatest example is the estimated figure for petrol.  As the wife’s evidence makes plain, if you are very rich you can spend £40 on buying a candle.  But a gallon of petrol or a litre of petrol costs the same whoever you are and I cannot see how the figure of £6,500 could be justified for petrol expenditure”.

53.Here neither has the Husband made any specific comment or criticism about the Wife’s itemized expenses in her Form E, nor did his Counsel at the hearing, other than the mere accusation that her credit card spending were excessive, but how and in what way were they excessive, I have received no assistance, for example, by way of credit card statements which the Husband could have easily produced as he or his company used to settle them and hence must have copies.  This issue was simply not properly canvassed at the hearing at all, and I agree with Ms Yip for the Wife that if the Husband does not perform his duty as to disclosure, the Court can take a broad and robust view of the dispute as to the Wife’s spending which it is not in a position to decide at this stage.

54.I am of course not saying that it is therefore unnecessary for the Court to look carefully and critically at the Wife’s items of expenses, but in the absence of any detailed breakdown, I can only use a very broadbrush approach, whilst always reminding myself of the standard of living of the parties.  Doing the best I can and comparing hers with his, the single item that has attracted the Husband’s criticism is the contribution of $5,000 to her parents which he may rightly argue that with her own resources, it should not form part of his responsibility.

55.The other items that I find to be of significant difference are spending on clothing and shoes and personal grooming between the parties, with the Wife’s spending on clothing and shoes almost twice as much as the Husband’s, and almost twenty times more on personal grooming.  On the other hand, his entertainment expenses are almost 8 times more than hers.  All these may well be explained by the different roles of the parties in life and work and hence their different needs, but they also go to show the difficulties the Court has in assessing the reasonableness of the parties’ spending in the absence of oral or documentary evidence, and I do not think it would be possible for me to say at this stage that the Wife’s spending of $30,000 on clothing and shoes, for example, or the Husband’s entertainment expenses of $38,000, are typical of their lifestyle, or that they are excessive, exaggerated or unreasonable.

56.Another issue that I have difficulty resolving at this stage is over the monthly salary of $50,000 which the Husband’s company used to pay the Wife until early this year.  According to the Husband’s Affidavit, the Wife was paid this salary by the company not because she was doing any work but because he was advised that by doing so he could save some tax, and that the payment was to satisfy her demand of extra money for her to keep.  This payment has since been stopped as the Husband said it had caused difficulties with his business partners.

57.It is not clear by which company was this salary paid, because if it was T Printing which was wholly owned by the Husband, there were simply no business partners.  If it was by one of the subsidiaries in which Mr Fong has a minority shareholding, I have already stated my reservations about his role on these matters earlier in this judgment.  On the other hand, if the salary payment was as the Husband has alleged for tax purpose, then it could well be the company’s administrative decision.  Again it cannot easily be resolved at this stage.

58.The last issue that I need to deal with is that if part of the past maintenance for the Wife was indeed for her savings, as alleged by the Husband, is it reasonable to order him to continue to contribute towards her savings at this stage ?  It is not clear how much of such maintenance payments was used to be saved up by the Wife, but whatever the amount, if it were part of parties’ lifestyle and practice in the past, I fail to see why it should be treated differently from, say, paying for her large credit card bills or providing 3 cars for her use.  However, in view of the reduced profits of his companies since 2003, is it still reasonable for the Wife to insist in saving up as much as before, since like spending, the amount of savings one makes should generally be proportional to one’s income or profits.  Again this is an issue which cannot be easily resolved at this stage.

59.In conclusion and taking a broadbrush approach, bearing in mind that my decision will mean providing for the Wife only for the next 4 – 6 months or so before the substantive hearing, where it can certainly be reviewed retrospectively and adjusted accordingly, I believe a sum of $200,000 per month as interim maintenance for the Wife, dating back to February 2004, but with credits to be given for her household utility bills and salary for her chauffeur already paid, would in the circumstances be reasonable as it is, I believe, well within the Husband’s means, and at the same time sufficient to meet the Wife’s general needs at more or less the same standard of living and lifestyle she used to enjoy save perhaps as to the provision for her savings.  As pointed out by Thorpe J in F v. F, any under or over provision as a result of this order of mine can always be corrected at the substantive hearing.  This monthly sum of $200,000 shall include payment for all her household utility bills and the salary of her chauffeur, but not include the provision of cars for her use which the Husband has offered to continue through his company.

60.Lastly, on the question of costs, I propose that it be reserved for the substantive hearing when the parties’ financial position will become much clearer.

Ms Dora Chan instructed by Messrs T.L. Ip & Co for the Petitioner Husband;

Ms Anita Yip instructed by Messrs Stevenson Wong & Co for the Respondent Wife.