Hsyc v. Cltk
Read the full judgment text of FCMC 11141/2013 on BabelCite. This Family Court judgment was delivered on 2 April 2014 before Her Honour Judge Sharon D. Melloy.
Matrimonial law – maintenance pending suit – interim maintenance – full and frank disclosure – reasonable needs – District Court – HSYC v CLTK – Husband failed to disclose financial resources – Court ordered maintenance based on broad-brush approach – Respondent to pay HK$20,000 monthly for wife and HK$15,000 per child – Costs awarded to Petitioner
Legal issues: Maintenance pending suit and interim maintenance amount · Husband's ability to pay and disclosure · Wife's reasonable needs
Outcome: Maintenance pending suit and interim maintenance granted. Respondent ordered to pay monthly maintenance and costs.
Cited by 1 case · Cites 3 cases
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FCMC 11141 / 2013 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 11141 OF 2013 ----------------------------
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------------------------------------------------------------ J U D G M E N T ------------------------------------------------------------ Introduction 1.This is an application by a Petitioner wife for maintenance pending suit for herself pursuant to s.3 Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO) and interim maintenance for the two children of the family; boys aged 13 and 10 years, pursuant to s.5 of the same ordinance. The main issues 2.In broad terms there is only one issue to be determined namely how much maintenance should the husband pay to the wife for herself and the two children of the family on an interim basis. Background 3.The parties married in April 2000 and separated on the 8 December 2011 when the husband left the former matrimonial home following allegations by the wife of infidelity on his part. The wife issued a divorce petition on the 1 August 2013 and the decree nisi was pronounced on the 9 October 2013. The parties sensibly came to terms in relation to the boys and they subsequently agreed joint custody with care and control to the wife and reasonable access to the husband. 4.The wife has been a housewife since marriage. The husband is a Managing Director of a family jewellery business. Each party’s case The wife’s case 5.The wife’s case is that the husband works for the family business – which was established by his parents many years ago. It has now developed into what appears to be a substantial jewellery company with X retail shops in Hong Kong dealing in all kinds of jewellery and precious stones including diamonds. It seems that this business has evolved over time and that originally the company sold more traditional gold items and jewellery. The wife also says that the family business holds a number of properties through various corporate structures. Although the wife accepts that the husband’s actual income is fairly minimal, it is her case that a significant portion of the family’s regular monthly expenses were paid for by the husband’s family company/ies and that this is a financial resource that is currently available to the husband. 6.The wife points out that she is totally reliant on the husband financially. The parties married when she was only 24 and they had their first child within the year. She says that she became a housewife by agreement. Although she has a degree in Hotel and Catering Management she has not worked since marriage and even prior to marriage her work experience was fairly minimal. She also suffers from rheumatoid arthritis, which may make an immediate return to the workforce problematic. The husband’s case 7.In contrast it is the husband’s case that he has had an easy life and that he is not actively involved in the running of the family business. Although he accepts that additional monies have been made available to him and his wife and children, he says that these monies are gifts from his parents and that this money is not something that he is entitled to as of right. In his affirmation of the 25 February 2014 he said at paragraph 8 that
8.It is the husband’s case that his parents have cut down on their financial support because a) the wife’s maintenance claims have increased significantly, b) the wife refused to let his parents see the grandchildren and c) the wife has made a claim against the property in which she is presently living, which is a property owned by a family company. He says that this has angered his parents. 9.Thus it is the husband’s case that he does not have the financial resources to pay the wife as requested. The husband says that prior to separation he paid the wife HK$37,000 per month, but that recently the wife’s requests for payment have increased significantly. It is still not clear to me, even following the hearing what expenses were historically covered by the sum of HK$37,000 per month and what expenses were paid directly, on the husband’s case, by the family business and/or his parents. Each party’s respective proposals 10.The wife seeks an undertaking from the husband that she be permitted to continue to reside with the children in the property in which she is currently living – “the C Road property”. In addition she seeks either a monthly payment of HK$80,000 or a monthly payment of HK$58,197 plus an undertaking by the husband that he continue to pay the utilities (electricity, gas, water, telephone, management fees, rates and government rent (if any) on the “C Road property”, plus the children’s school fees and other associated expenses. In addition the wife seeks an immediate payment of HK$50,416.54 being a reimbursement of monies spent by her for the family. 11.The husband for his part offers to pay the wife maintenance of HK$37,000 per month with a possible 5 – 10% uplift – i.e. HK$40,500 maximum. In addition he says that he will undertake to provide for the wife’s housing at the “C Road property”. Thus the maintenance payment proposed is to cover all of the other expenses, including it would seem the children’s school fees. The law Maintenance pending suit and interim maintenance 12.The law is well known and not in dispute. Section 3 Matrimonial Proceedings and Property Ordinance Cap 192 states that the only governing principle is that the court shall make such order as it considers reasonable in all of the circumstances of the case. Consequently applications such as these are approached on a broad-brush basis. A detailed examination of the parties’ means may be examined at a later date at a full ancillary relief hearing if there is no agreement in the meantime, when there is then every opportunity to achieve fairness by means of a set off. In other words, if there is any overpayment or underpayment that can normally be rectified at a final ancillary relief hearing. Applications for interim maintenance under section 5 of the same ordinance are approached in the same way. As Rayden points out
13.Further
14.Likewise the court may look to the assertions made by the payee and take a similar approach when looking at her means and alleged reasonable requirements. The court should look to the reality of the situation, in so far as it can, in relation to bare assertions made by either the husband or the wife. 15.Although I was not specifically referred to further authority by either side it seems to me that the following section from Jackson’s Matrimonial Finance 9th edition (paragraph 3.92) may also be of some assistance:
16.Counsel for each side has also referred me to a number of cases. Mr Barnes for the wife has referred me in particular to the Court of Appeal decision HJFG v KCY [2012] 1 HKLRD 95 where it was held that:
17.Ms Li for the husband has also referred me in particular to the Court of Final Appeal’s decision in KEWS v NCHC [2013] 2 HKLRD 314 and argues that the same principles should be applied to the present case. Although I would accept that in the final analysis KEWS v NCHC may be of some relevance on final ancillary relief, it is hard to apply these same principles to a maintenance pending suit/interim maintenance application, given that there can be no findings of fact made in relation to the financial resources of the husband and the financial relationship between him, his parents and the family business. The husband’s ability to pay 18.Counsel for the wife makes a number of points in support of the wife’s basic contention that the husband does have the capacity to pay. He says that a) the husband has failed to make full and frank disclosure of his means, b) his portrayal of himself as being underemployed in the family business is a litigation tactic, c) his alleged drop in income is not supported by the evidence, d) his level of income and other financial resources are greater than he is willing to disclose and e) he is also in a position to meet the wife’s reasonable needs in the short term – by borrowing against assets if need be. a) Failure to make full and frank disclosure 19.It is alleged that the husband has taken a de minimalist approach to disclosure. As will be seen I would accept that to be the case. In his Form E dated the 13 November 2013 the husband states that he has an income of HK$33,000 per month. There is no reference even to a year end bonus. He does not provide information in relation to any other income nor to any other financial resources. He says that he is a 50% beneficial owner of a factory unit in Kwun Tong. He does not admit to owning any cars. He offers the wife HK$5,000 per month as maintenance for herself, HK$18,000 as maintenance for the two boys and a further lump sum for the wife of HK$500,000.K$18,000 20.This pattern continued in his Answers to the Wife’s request for Further and Better Particulars dated the 30 January 2014. When he was asked about the source and purpose of the following deposits he responded as follows:
21.This general approach continued in paragraph 22 as follows:
In general he said that
22.It was therefore noted with some surprise that the husband’s counsel said as a matter of fact in her written submission that
23.She then went on to analyse the bank accounts and stated that on average an additional HK$15,800 per month had been deposited into the husband’s bank accounts in addition to his salary from August 2011 to March 2014. She referred to those items in Annex 1 of her submission. The schedule in Annex 1 was exactly the same as that set out in paragraph 20 above save that references to “can’t recall” had been deleted. Likewise she said that from September 2011 to February 2014 additional cash deposits were made into the husband’s bank account which averaged out at HK$8,440 per month. This is set out in Annex 2, which again is exactly the same as paragraph 21 above save that where the husband had previously said inter alia that he could not recall the purpose of some items. In Annex 2 those words have likewise been deleted. In summary she said that:
24.This had not been the husband’s case either on affidavit or in Answer to Requests for Further and Better particulars. Counsel goes on to argue that the husband’s financial resources have reduced over the last 6 months and that this can likewise be gleaned from the bank statements. She concludes
25.Thus it seems that the husband’s barrister was saying something quite different in her submissions as compared to the husband’s written evidence on oath. When challenged on this she said that she was acting on her client’s instructions. She also offered to put the husband in the witness box to give evidence presumably to make good the deficiencies of his written evidence. No notice had been given to the other side of her intention to do this. It goes without saying that this was a completely inappropriate way to proceed especially given the fact that hearings of this nature are generally dealt with on a submission only basis. Her application in that respect was denied. 26.In such circumstances it is clear that the husband had taken a de minimalist approach to the discovery process. There was a “catch me if you can” element to it. He has failed to make full and frank disclosure of his means both in his original Form E and in his subsequent Answers to the wife’s questionnaire. His present financial situation is still far from clear. By way of example the wife says that the husband currently owns a Porsche Turbo and an Alfa Romeo. No cars have been disclosed by the husband to date. It is not clear how those cars are held. In his Answer to the Wife’s questionnaire the husband said at paragraph 39 that he paid HK$25,000 to “A Motors Ltd” for car repair of the Respondent’s [i.e. the husband’s] own car”. As things stand the information provided by the husband is still patchy and far from complete. 27.Mr Barnes also points out that this is not congruent with the husband’s spending patterns as identified in his credit card statements in any event. According to his counsel the husband has spent on average HK$37,230 per month from September 2011 to September 2013 on credit card expenditure. Although the husband’s counsel argued that this included expenditure for the whole family, it should be noted that the parties separated in December 2011, just two months after this record began. Put simply none of this adds up. b) The husband’s portrayal of himself 28.It is of note that it is the husband and not the wife who first described himself as a “play boy” although interestingly counsel for the husband made the point that his credit card spending was not reminiscent of a play boy life style. In any event although the wife acknowledges that the husband is not a director of the family companies and that any shareholding held by him is minimal nonetheless she makes the point that
29.Time will tell which version is correct. On the face of it however the husband’s involvement in the family companies seems to be more extensive than he was originally prepared to admit. c) Alleged drop in income 30.The husband’s main point is that in any event, regardless of the financial resources that were made available to him previously, that this has now changed. As indicated above it is not possible for me to make any definitive findings of fact in relation to this at the current stage of the proceedings. I would however accept the point made by counsel for the wife that if indeed that is the husband’s case then the onus is on him to provide clear and unequivocal evidence in support of what he says. To date such evidence has not been forthcoming. d) Level of income and financial resources greater than he is willing to disclose 31.The husband says that he is willing to pay up to HK$40,500 per month as maintenance pending suit/interim maintenance, whilst at the same time he only admits, according to his counsel to having financial resources of HK$40,360 per month. In addition he offers other various undertakings. Thus even on the husband’s own case he is seemingly prepared to pay more than his income or his other financial resources permit. The only logical conclusion that one can reach in such circumstances is that it is extremely likely that the husband has an income and/or he has financial resources at his disposal that are greater than he is willing to disclose. e) the husband is in a position to meet the wife’s reasonable needs in the short term – by borrowing against assets if need be. 32.The husband admits to having a share in a factory premises. Thus there is a possibility that he could borrow against this property in the short term in order to fund the wife’s reasonable needs. There is also the suggestion that he owns two significant cars – which if shown to be true, could likewise be utilized for a similar purpose. What are the wife’s reasonable needs? 33.The wife produced the following schedule setting out her reasonable needs and those items that she believed were agreed as follows:
34.I have marked with an * those items which appear to have been agreed. The husband said in court that he would undertake to pay or to provide for the wife’s housing at the “C Road property” and to undertake to pay for the management fees and utility costs. He did not dispute the food costs and was willing to agree the domestic helper costs at HK$4,500 per month. In so far as the wife’s medical expenses were concerned (injections for her arthritis) this was agreed at HK$12,500 per month – being the actual historical cost of the injections. In so far as the extra tuition fees were concerned the husband said that he thought that the sum of HK$6,000 per month was more appropriate although he added that he would be willing to go up to HK$8,000 per month. Historically the husband alleged that the parties had paid HK$5,000 – HK$6,000 per month for the children’s extra tuition. He challenged the medical/dental expenses and countered with HK$900 – HK$1,000 per month. He said that the children did not take lunch at school and did not need pocket money. The husband did not comment on the wife’s own expenses and merely reiterated that he did not have the means to pay. 35.Having heard both parties counsel I will allow the following expenses for the wife and the two children of the family:
36.At present the wife still has the use of a supplementary credit card with a limit of up to HK$10,000 per month – which she tends to use for car related expenditure i.e. petrol and car parking etc. I have therefore not included the care expenses in the calculation above. This order is however made on the premise that the husband will continue to undertake to make the supplemental credit card available to the wife and that she will be able to use it up to a limit of at least HK$4,000 per month. There was also some ambiguity in relation to the children’s school expenses. When I queried this with counsel she said that the husband’s offer of HK$40,500 per month was inclusive of school fees. However there seemed to be some suggestion that the husband would undertake to continue to pay the school fees directly. I am therefore proceeding on that premise. If the husband refuses to pay the school fees directly then that amount will likewise need to be added to the monthly maintenance figure. 37.Although the husband has repeatedly said that he does not have the financial resources available to pay the wife more than HK$40,500 per month plus the additional undertakings agreed to, I am satisfied that he should be able to pay the sum ordered. Back payment of HK$58,197 38.In addition the wife seeks a further sum of HK$58,197 which she says represents monies spent by her which should have been reimbursed by the husband for things like the domestic helpers salary, clothes for the children, balance of tuition fees etc. This is disputed by the husband – who claims that the wife has already been reimbursed for many of those items. He also says that the wife sought and he paid on her request far more than the HK$37,000 per month originally paid following the separation. On his case the following sums were paid following the separation:
39.Although the wife has produced copies of some receipts in support of what she says it is hard to determine at this stage what the reality of the situation might be. I will not therefore accede to the wife’s request at this stage. This is however something that may be addressed further at a later stage if no agreement is reached in the meantime. Conclusion 40.In conclusion then I will make an order that in total the husband pay the wife HK$50,000 per month plus he will undertake to continue to provide for her housing and to pay for the management fees and utility expenses direct, together with the children’s school fees. On a very broad brush basis this also seems to be in keeping with what the husband says was the standard of living enjoyed by the parties prior to the separation. The only difference is that the wife now needs funds to pay for her arthritis injections of HK$12,500 per month. (HK$37,000 + HK$12,500 = HK$49,500 per month). Costs 41.Although neither party can be said to have entirely won nor entirely lost, given the husband’s general approach to the discovery process and the fact that the wife really had no alternative but to seek the assistance of the court I will make an order nisi to be made absolute in 14 days time that the Respondent do pay the wife’s costs of this application on a party and party basis to be taxed if not agreed, such costs to be paid forthwith. Order 42.Consequently I shall make an order as follows:
IT IS ORDERED THAT:
Mr Peter Barnes instructed by Haldanes for the Petitioner Ms M Li instructed by Henry Wan & Yeung for the Respondent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
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Further hearings and rulings under FCMC 11141/2013