CLK v. YFMS
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FCMC 8081/2014
[2018] HKFC 138
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES NO. 8081 OF 2014
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| BETWEEN | CLK | Petitioner |
| and | ||
| YFMS | Respondent |
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| Coram: | Deputy District Judge D. Cheung in Chambers |
| (Not open to public) |
| Date of Hearing: | 20th October 2017 |
| Date of Handing Down Judgment: | 21st August 2018 |
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J U D G M E N T
(Maintenance Pending Suit & Litigation Funding)
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1. This is a hearing of the petitioner wife’s (“the wife”) application for upward adjustment and variation of her maintenance pending suit and extension of litigation funding against the respondent husband (“the husband”) granted under the order dated 21st September 2015 (“the last MPS Order”) and order dated 6th October 2015 (“the last LCC Order”).
2. For the aforesaid application, the wife had taken out a summons dated 4th May 2017 together with her 7th Affirmation and the 2nd Affirmation of her instructing solicitors in support (“the current MPS application”).
Brief History
3. The wife took out the Divorce Petition dated 20th June 2014 against the husband and the 1st application of the wife for maintenance pending suit and litigation funding was taken out by a summons dated 29th April 2015, and argued and heard before Deputy District Court Judge Yim on 21st September 2015. As a result, the last MPS Order and the last LCC Order were granted.
4. It was ordered that the husband do pay the monthly maintenance pending suit at the rate of HK$5,000 for the wife’s expenses from December 2014, and the husband do contribute towards the wife’s ongoing legal costs as part of her MPS for HK$600,000 to be paid by 12 monthly instalments.
5. The husband had duly complied with the last MPS Order and the last LCC Order.
6. By the present application, the wife asks for :
(a) maintenance pending suit in the monthly sum of HK$28,000 or such sum as the Court shall think fit;
(b) legal costs contribution in the sum of HK$2,100,000 or such sum as the Court shall think fit;
(c) alternative to the above, to make a capital payment in the sum of HK$5,550,000.
The Law on Interim Maintenance
7. The power to order maintenance pending suit is set out in s 3 of Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”) whereby the court may order a party to make to the other such periodical payments for his or her maintenance and for such term beginning not earlier than the date of the presentation of the petition and ending on the date of the determination of the suit, as the court thinks reasonable.
8. Further, for the current MPS application, it is submitted by the husband that the wife is applying for “variation”. Therefore, the starting point and basis is the last MPS Order and the last LCC Order.
9. The powers to vary a periodical payment order are expressly provided for by section 11(1) and 11(2) of MPPO :
“(1) Where the court has made an order to which this section applies, subject to the provisions of this section, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.”
10. How those powers are to be exercised is stated in section 11(7):
“(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates and, where the party against whom that order was made has died, the changed circumstances resulting from his or her death.”
11. The proper approach to such an application has been succinctly summarized in Raydan and Jackson on Divorce and FamilyMatters, 18th Edition, Chap.18.21:
“ … The court considers the application to vary on the basis of the means of the parties as they stand at the time when the case is before it, and approaches the matter as if it were assessing the payments de novo. It follows that the principles governing the assessment of periodical payments will in broad measure apply to applications to vary: the overriding objective is fairness. Discrimination between the sexes must be avoided. The court should consider not only the descending income of one party but also any ascending income of the other, and take into account of any increase or decrease in responsibilities or liabilities on the part of each party, including obligations to a new family. Whilst the court deprecated the notion that a husband and father could evade his financial responsibilities it would have regard to reality; there was life after divorce and a payer was entitled to order his affairs in such a way as to balance his responsibilities to his existing family with his proper aspirations for a new future, in particular, that he should have accommodation suitable for proper staying contact. In considering the application the court might have regard to the availability of social security benefits to the wife and children if there was no practical alternative. Financial mismanagement by the payer or the payee may be one of the relevant circumstances to which the court is required to have regard under s 31(7), and conduct on the part of a wife post the substantive ancillary relief order can be weighed in the balance in an application for a variation of periodical payments.
12. This approach was examined and endorsed by the Court of Appeal in AFM v VFM (Variation ofMaintenance) [2008] HKFLR 106 at 111:
“3. The traditional approach to variation was not to re-fix afresh the amount of maintenance but to consider the amount of change in the actual means of the parties so that the new order should merely be increased or decreased roughly in proportion to the change in the means: Foster v Foster [1964] 3 All ER 541, Jackson’s Matrimonial Finance and Taxation 7th Ed. Ch.3.131.
4. The modern approach, as required by section 11(7), is for the Court to consider all the circumstances of the cases. The Court is not required to proceed from the starting point of the original order but look at the matter afresh: Flavell v Flavell [1997] 1 FLR 353 at 357B following Lewis v Lewis [1977] 1 WLR 409 and Garner v Garner [1992] 1 FLR 573.
5. Any change in any of the matters to which the Court was required to consider when making the original order was one of the circumstances to be considered.
6. Almost invariably, an application to vary an earlier periodical payment order will be brought on the basis that there has been some changes in the circumstances since the original order was made, for example, continuing inflation; the increased costs in supporting a growing child and that one party may be more adversely affected than another by the increase in the costs of living: Garner v Garner.
7. An increase in the wealth of the husband was a relevant factor to be taken into account: Premavera v Premavera [1991] 1 FLR 16 and Cornick vCornick (No.2) [1995] 2 FLR 490.
8. At the same time the basis and intended effect of the original order are relevant factors to which the Court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order: Boylan v Boylan [1988] FLR 282.”
Recent case law
13. In a recent Court of Appeal decision on variation – WNWG v PBF – [2012] HKCU 675, these basic principles were reiterated. The Hon Lam J said that:
[12] As regards the approach that the court should adopt in considering an application for variation and the weight to be attached to the original order, Tang V-P said in HCTT v TYYC [2008] 5 HKC 86 at paras 15 to 16:
“15. But as Garner v Garner [1992] 1 FLR 573 shows that does not mean that the earlier order, whether made by consent or not, carries no weight. How much weight should be given to the earlier order must depend on the circumstances. Cazalet J said in the English Court of Appeal:
“Almost invariably, an application to vary an earlier periodical payments order will be brought on the basis that there has been some change in the circumstances since the original order was made, otherwise, except in exceptional circumstances, the application will, in effect, be an appeal. If it was correct when made, then there will usually be no justification for varying it unless there has been a material change in the circumstances. However, because of the impact of continuing inflation, because children grow older and cost more to support and because, for example, the cost of living in its increase may hit one party harder than another, it will usually follow that, if time has passed, there will inevitably have been some changes in the circumstances, and in particular in the financial circumstances, of the parties concerned.
Following Lewis v Lewis, by which decision this court is bound, a court on the hearing of an application to vary is fully entitled to look at all the relevant matters set out in s 25 of the Matrimonial Causes Act 1973 [i.e. s.7 MPPO] . On occasions, the court may be slow to accede to an application to vary a consent order, not least because the parties’ solicitors might otherwise be deterred from either seeking to negotiate such a provision or to achieve finality. Another factor which may influence a court will be the time that has passed since the original order was made. If an application consequent on an order is brought very soon after that order has been made, the court, in normal circumstances, is likely to attach more weight to the earlier order than if it had been made some years previously. Like-wise, the court would expect to pay full regard to any special terms agreed between the parties at the time the original order was made – as, for example, when endorsements on briefs or contemporaneous correspondence show that an agreed order has, for some particular reason, been set at an artificially low figure. Shortly stated, the court must decide what weight it should attach to the original order and all the surrounding circumstances. However, once an application to vary is before it, the court is fully entitled to make an order considering all the circumstances afresh, paying such regard to the old order as may be thought appropriate.”
16. Thus, although the jurisdiction to vary is untrammeled, normally the earlier order would not be varied unless there has been a material change in circumstances.”
[13] And further at para 37, His Lordship said,
“Justice requires that proper weight should be given to the consent order.”
[14] Though the emphasis may be slightly different, Cheung JA was of the same view in AEM v VFM [2008] 3 HKLRD 36, at para 14, in particular at sub-paras 6 and 8,
“6. Almost invariably, an application to vary an earlier periodical payment order will be brought on the basis that there has been some changes in the circumstances since the original order was made, for example, continuing inflation, the increased costs in supporting a growing child and that one party may be more adversely affected than another by the increase in the costs of living: Garner v Garner.
8. At the same time the basis and intended effect of the original order are relevant factors to which the court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order: Boylan v Boylan [1988] 1 FLR 282.”
14. It is therefore with these principles in mind that I now come to consider the matters relevant to the current MPS application.
Issues of the case
15. The following issues arise for my consideration:
(a) How much maintenance should the husband pay to the wife as reasonable maintenance pending suit? (issue 1)
(b) Should the husband also increase his contribution towards the wife’s litigation costs as maintenance pending suit? (issue 2)
(c) Can the husband afford to pay these sum? (issue 3)
Issue 1
How much maintenance should the husband pay to the wife as reasonable maintenance pending suit?
The wife’s Financial Position and needs
16. The wife submitted that the last MPS Order was not a consent order, and that new evidence on the market rental of Park Tower would assist the Court to come to a view as to the pre-separation living standard of the wife.
17. The wife further submitted that there is strong evidence showing the husband paying HK$8,000 per month as maintenance to the wife before separation.
18. The wife also submitted that the existing tenant had surrendered the lease and she needed to fix the water leakage problem before the flat could be rented out, and she had acute cash problem, and her assets are quickly depleting, owing to the monthly deficit and continuous legal fees, and that even ignoring the legal fees, the wife is suffering a deficit of HK$12,000 per month.
19. On the contrary, the husband is now living with his new family at Park Tower and his monthly expenses is around HK$116,243, enjoying an upper middle class living style.
20. Therefore, to increase monthly maintenance to the wife from HK$5,000 up to HK$28,000 per month is fair, reasonable and within the financial capacity of the husband.
21. In the case of HJFG v KCY [2012] 1 HKLRD, 95, Hartmann J succinctly summarized the legal principles on the law on interim maintenance:
a. The sole criteria to be applied in determining the application is “reasonable” which is synonymous with “fairness”.
b. A very important factor in determining fairness is the marital standard of living. This is not to say that the exercise is merely to replicate that standard.
c. In every maintenance pending suit application there should be a specific maintenance pending suit budget which excludes capital or long term expenditure, more aptly to be considered on a final hearing.
d. Where the affidavit or form E disclosure by the payer is obviously deficient, the Court should not hesitate to make robust assumptions about his ability to pay. The Court is not confined to the mere say-so of the payer as to the extent of his income or resources. In such situation, the Court should err in favour of the payee.
e. While, in order to determine what is or is not reasonable, some analysis is always required, that analysis can be conducted on a “broad-brush” basis.
f. The reasonableness of the wife’s claim for interim maintenance must be judged according to the very high level of daily living that was enjoyed before the couple separated and which it appears the husband continues to enjoy.
22. It is worth noting that one of the major complaints made by the wife is that she has been deprived of the benefits or enjoyment of Park Tower which should be quantified in money’s value in her MPS.
23. The wife argued that she spent at least 1 night at Park Tower since she moved in and now there is substantial loss of enjoyment because she was no longer able to stay at that premise and use the club facilities in that premises.
24. The wife submitted that new evidence showed that the rental value of Park Tower is between HK$42,000 to HK$50,000 and daily rental of a comparative hotel room at Metorpark Hotel at Causeway Bay, i.e. HK$2,650 per night.
25. The wife’s case is that they had been living together for 3 months in Flat 10S (“10S”) after their marriage and each week, she spent a night at 10S and subsequently, she spent at least 1 night at Park Tower since she moved in until September 2013.
26. In paragraph 19 of her 7th Affirmation, she stated that regarding her enjoyment, its monetary value is about HK$20,000 per month (i.e. half of HK$40,000 per month), and that she is prepared to spend the full amount of any grant of maintenance for accommodation on renting a comfortable apartment or a hotel suite (on regular basis) for her pleasure that she used to/entitled to before separation.
27. Then what is maintenance pending suit? By definition, maintenance pending suit is restricted to payments which constitute “maintenance”, which are reasonable in the circumstances and which will endure for no longer than it takes to determine the divorce litigation.
28. “Maintenance” is a broad concept, and it must be restricted to those payments necessary to meet the recurring costs of living at whatever standard of living as appropriate.
29. An important factor in determining fairness is a consideration of the marital standard of living, it would be useful to consider the marital standard of living of the parties, and my focus should be on determining the “immediate and reasonable needs” of the wife.
30. My view is that prior to the Divorce Petition, Hong Pak Property (“Hong Pak Property”) is the wife’s main place of residence during the marriage for years.
31. Unlike other cases where one of the parties may move out from the matrimonial home, the present case is that the parties have been living separately for years. Therefore, for the wife’s accommodation, her standard of living had not been affected before and after the Divorce Petition.
32. The wife argued that she often went to 10S and later Park Tower doing household chores and that she is also a legal owner of Park Tower. Despite what she had submitted, my view is that her visiting and staying in those properties will not change her primary place of residence prior to the Divorce Petition.
33. As for the matters which the court should consider in assessing an application for maintenance pending suit, Rayden and Jackson on Divorce and Family Matters, 18th Edition, said these as follows:
“There is no hard and fast rule, and no fixed proportion: each case depends on its own facts. It has been said that the approach to maintenance pending suit should be empirical, and that ‘in the ordinary sort of case the district judges who deal with these applications will have to take a broad view of means on the one hand and income on the other and come to a “rough and ready” conclusion’, or take a ‘broad brush’ approach. The overriding consideration is the actual needs of the parties pending suit. Although the provisions of s 25 of the MCA 1973 are expressed to arise only when the court is deciding whether to exercise its powers under s 23, 24 or 24A, the court may nonetheless have regard to the criteria listed in s 25 on an application for maintenance pending suit.
34. The wife submitted that her enjoyment over Park Tower had been deprived of, however for the MPS purpose, the overriding consideration is to deal with the actual needs of the parties pending suit.
35. In the circumstances, her wish to spend the full amount of the grant of maintenance for accommodation on renting a comfortable apartment or a hotel suite (on regular basis) for her pleasure is misconceived.
36. According to the exhibit CLK-15 of her 2nd Affirmation and the exhibit CLK-77 of her 7th Affirmation, her total value of cash and stocks was HK$1,296,933.91 (approximately HK$1,300,000) on 25th July 2014. The Assets and Liabilities of the wife as of 2nd May 2017 shows that the wife had only HK$195,954.01 at her bank accounts and HK$102,132.84 value of stock, making it a total of HK$298,086.85.
37. The wife stated in her 2nd Affirmation that since 2007, the husband used to pay her HK$8,000 per month for her living expenses, and the husband also gave her extra cash ranging from HK$1,000 to HK$100,000. The wife also stated that on or about 14th March 2010, the husband gave her a cheque of HK$100,000 as gift for her birthday.
38. The wife explained that the husband stopped paying her HK$8,000 per month since November 2014, she therefore had to adjust her living standard and cut her expenditures as far as she could.
39. She further stressed that her costs of living was supported by the rental income of HK$15,500 she received in respect of Jupiter Property (“Jupiter Property”). This is the position prior to the last MPS Order.
40. Since August 2014 up to 1st May 2017, the wife should have received a total of HK$177,000 MPS payment from the husband (i.e. HK$32,000+HK$50,000+HK$95,000) and HK$600,000 LCC payment.
41. She should also have received rental payment of HK$62,000 for the period of August 2014 to November 2014. She stated that as at 25th July 2014, she had cash and stocks of around HK$1,300,000 in total.
42. Adding up the sum of HK$777,000 (HK$177,000 + HK$600,000) previously paid by the husband and the aforesaid rental payment of HK$62,000 and also the cash balance of HK$1,300,000, she should have HK$2,139,000 for her use.
43. By deducting the balance as at May 2017 which is approximately HK$300,000, she had spent HK$1,839,000.
44. In the 2nd Affirmation of her instructing solicitors, the interim bill to the wife showed that the wife had paid HK$1,445,000 on account as at 7th September 2016 and still owed her solicitors a sum of HK$324,971.60.
45. While she should have HK$2,139,000 to use, putting aside her expenses from August 2014 up to 1st May 2017 (i.e. 33 months), after paying her legal costs, there should be a balance of about HK$694,000.
46. If the wife’s monthly expenses is HK$18,000, then she should have spent HK$594,000, in that case her balance should be HK$100,000.
47. If the wife’s monthly expenses is HK$32,500, then she should have spent HK$1,072,500, in that case she should have incurred some debts already. Nevertheless, in her updated summaries of assets and liabilities, her total value of liabilities is only around HK$3,000.
48. The wife submitted that her current monthly expenses was HK$15,354.66 per month. I am of the view that throughout the period from August 2014 up to 1st May 2017, the wife had adjusted her living standard and cut her expenditures as far as she could, otherwise, her balance would not be HK$298,086.85.
49. I see no reason why the wife should not keep her marital standard of living as she used to enjoy, but that does not mean that she should raise her standard to a level beyond her actual and reasonable need.
50. My view is that the amount of the previous sum given to the wife was one of the indicators, though not conclusive one, for me to consider what amount should be reasonable and fair in the circumstances.
51. I accept that the husband used to pay her HK$8,000 per month, be it salary or maintenance, and she was also supported by the rental payment of HK$15,500 per month she received.
52. I have taken into account of the following, namely a substantial amount of the wife’s legal costs had been settled which had a direct impact to her financial position, and the tenancy agreement of Jupiter Property had expired and she needed to fix the water leakage problem before the flat could be rented out, as a result, her regular sources of income would be affected.
53. I accept that with the accumulative effect of the aforesaid, there is a change of circumstances which entitled the wife to ask this Court to review her actual needs again.
54. To deal with the issues raised by the wife, it would be useful to set out here a list of the wife’s alleged expenses, based on her Form E dated 25th July 2014 (“2014 expenses”) and her alleged current expenses (“2017 expenses”) :
General & Personal 2014 expenses 2017 expenses Mortgage instalments $3,351.00 $3,351.00 Utilities $1,000.00 $1,200.00 Management fees $1,140.00 $2,072.00 Food $3,000.00 $6,000.00 Household expenses $500.00 $1,000.00 Rates & Government Rent $517.67 $952.00 Meal out of home $1,000.00 $1,000.00 Transport $1,000.00 $1,000.00 Clothing/shoes $1,000.00 $3,500.00 Personal grooming $1,000.00 $2,000.00 Entertainment/presents $1,000.00 $2,000.00 Holiday $1,000.00 $5,000.00 Medical/Dental $500.00 $1,000.00 Tax $2,337.50 $1,860.00 Yoga Nil $661.11 Grand Total: $18,346.17 $32,591.11
55. In the premises and for the reasons articulated above, I have found and would allow as reasonable and/or necessary the following monthly expenses of the wife. I will allow the adjustment of the expenses on the utilities, management fee, household expenses, rates & government rent, tax, and yoga.
56. As to the expenses on food, clothing/shoes, personal grooming, entertainment/present, holiday, medical/dental, these items are flexible, and I will allow an increase of HK$3,000 to be spread over these items.
General & Personal adjusted expenses Mortgage instalments $3,351.00 Utilities $1,200.00 Management fees $2,072.00 Household expenses $1,000.00 Rates & Government Rent $952.00 Meal out of home $1,000.00 Transport $1,000.00 Tax $1,860.00 Yoga $661.11 food, clothing/shoes, personal grooming, $10,500.00 entertainment/present, holiday, medical/dental Grand Total: $23,596.11
57. With the increase of MPS to HK$8,000 together with rental income of HK$15,500, the wife will have HK$23,500 to spend and she will be back to the marital standard of living she used to enjoy.
Issue 2
Should the husband also increase his contribution towards the wife’s litigation costs as maintenance pending suit?
58. In the last LCC order, the wife estimated the costs for trial on preliminary issue and FDR hearing will be HK$750,000 and HK$150,000, and it was ordered that the sum of HK$600,000 would be required for a period for the preparation of the preliminary issue.
59. The wife now estimated that the legal fees up to the conclusion of trial on preliminary issues will be HK$2.1 million, and the legal costs previously incurred from filing of Petition for Divorce up to May 2017 was about HK$1.8 million, and the wife still owed her solicitors an outstanding amount of HK$324,971.60.
60. The test on legal costs provision is laid down in the case of Currey v Currey [2006] ALL ER (D) 218 (Oct) by Wilson LJ: “The initial overarching inquiry was into whether the applicant for a costs allowance could demonstrate that he or she could not reasonably procure legal advice and representation by any other means. Thus to the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, whether directly or as the means of raising a loan, in funding legal services. Furthermore,… she had also to demonstrate that she could not reasonably procure legal services by the offer of a charge upon ultimate capital recovery. … The court also would need to be satisfied that there was no public funding available to the applicant as would furnish her with legal advice and representation at a level of expertise apt to the proceedings.”
61. The guiding principles in Curery v Currey on legal costs provision were recently considered by the Court of Appeal in HJFG v KCY [2012] HKLRD 95, the Court of Appeal held that :
“78. Section 3 of the Matrimonial Proceedings and Property Ordinance, of course, still required the Judge to be satisfied that any contribution towards the wife’s ongoing legal costs was reasonable. That meant that he had to be able to conduct some analysis of the nature and extent and purpose of the contributions sought. On the part of the wife, that required some breakdown of her anticipate costs.
79. Aside from the fundamental requirement of supplying a sufficiently detailed breakdown of anticipated costs, I am of the view that the following principles articulated by Wilson LJ in Currey v Currey should in future be adopted as providing prudent guidance to both judges and practitioners in this jurisdiction.
80. In view of Wilson LJ, the initial, overarching inquiry should be into:
… Whether the applicant for a costs allowance can demonstrate that she cannot reasonably procure legal advice and representation by any other means. Thus, to the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, whether directly or as the means of raising a loan, in funding legal services.
81. As Wilson LJ pointed out, satisfying that condition alone may not be sufficient. In the broad exercise of discretion, a judge may consider that other factors must come into play:
The subject matter of the proceedings will surely always be relevant; and, insofar as it can safely be assessed at so early a juncture, the reasonableness of the applicant’s stance in the proceedings will also be relevant.
82. …Applicants should not therefore expect that an order that the allowance be paid until the final determination of all proceedings will be the inevitable order. It was observed that if the application for an allowance for legal costs was made before the FDR hearing, it may well be wise to order that the costs allowance should fund the applicant only up to that hearing.”
62. Further the Court of Appeal in HJFG v KCY referred to the fundamental reasoning that had been adopted by the Court of Appeal in KGL v CKY [2005] 1 HKFLR 215:
“There is no reason why public funds should be expended to fund litigation when there are ample resources available within family funds. With proposals for more active juridical involvement in pre-trial proceedings to restrict the incidence of costs this is in line with the modern approach. The court can deep better control of litigation if it’s funding is at least in part within its purview. The party that controls the funds will be less willing to use them on unnecessary interlocutory procedures if he or she will have to provide funding for the other side.”
63. The wife submitted that there have been unexpected issues raised by the husband, namely the genuineness of the marriage, the Macau Law on resulting and constructive trust and amendment of Points of Claim by the husband, therefore the estimated legal fees up to the conclusion of trial on preliminary issues will be HK$2.1 million, and that given the financial situation of the wife, she would be facing heavy financial pressure to pay off her legal fees.
64. The husband submitted that subsequent to the last LCC Order, the 2nd Respondent discontinued its claim and the husband also admitted ownership of the Macau property. These two steps cut short and reduced the issues to be tried and heard in the intervener proceedings.
65. In the 9th affirmation of the wife, she stated that substantial time was spent on whether the marriage was bogus or not at the preparation and the trial of the preliminary issues, and she was informed that both the husband and the 3rd Respondent (“R3”) and 4th Respondent (“R4”) had filed issues for the trial and they put down “genuineness of marriage” as one of the key issues.
66. In the 3rd affirmation of the husband, he stated that “the genuineness of the marriage” is not an issue on the trial on preliminary issues but just related to why R3 and R4 allowed the Park Tower to be registered in their names as joint tenants. There is no challenge on the validity of the marriage.
67. The wife and the husband held a different story as to the nature of their marriage and both parties brought out a lot of factual issues to support their stance on the genuineness of the marriage.
68. Although the husband stated that the genuineness of the marriage is not an issue on the trial on preliminary issues, it turned out that they are related.
69. The 2nd Respondent (“R2”) in its Reply raised the new issue of Macau Law and as a result, very substantial legal fees were incurred on seeking legal opinion of resulting trust/constructive trust in foreign law, and it was not until March 2017 that the husband and R2 admitted that the husband was the true beneficial owner of the Macau Property and did not hold the Macau property on trust for R2.
70. The fact that R2 discontinued its claim and the husband admitted the ownership of the Macau property may cut short and reduced the issues to be tried and heard in the intervener proceedings. However, the wife was not able to recover any costs to achieve that result.
71. I am not surprised to note that the wife had incurred more legal costs than she expected taking into account the history of the proceedings. Despite the aforesaid, the focus here is still reasonableness, and any further contribution towards the wife’s ongoing legal costs should still be reasonable.
72. The trial on the beneficial ownership of Park Tower was heard in early September 2017 before the hearing of the said application. The judgment of the preliminary issue was handed down and the wife will be able to recover her costs on the preliminary issue in due course.
73. Whether it is reasonable to ask for HK$190,000 for hearing for pre-trial review and HK$1,680,000 for a 8-days trial on the preliminary issue will now be a question of taxation of costs instead of contribution towards the wife’s ongoing legal costs. Otherwise, the requested HK$2.1 million will overlap the payment of legal costs she will recover from that judgment in due course.
74. At the time of the current MPS application, the wife still owed her solicitors the outstanding legal costs of HK$324,971.60. I accept that she is unemployed and cannot procure any bank facilities or loan from her property.
75. With the conclusion of the hearing of the preliminary issue, the parties should proceed to FDR hearing. I accept that the wife’s current savings and stock cannot allow her to afford continuing with the proceedings up to the FDR hearing.
76. In her 2nd affirmation, she stated that her estimated costs for FDR hearing is HK$150,000, and I accept that this sum would be reasonable for the preparation of the FDR hearing.
77. My view is that it is reasonable to provide her with (HK$324,971.60 + HK$150,000) HK$474,971.60 so that she can settle her outstanding legal costs with her existing solicitors and continue procure legal advice and representation from the same up to the FDR hearing. I will round up the figure to HK$480,000. I estimate that the FDR hearing should take place in the next 12 months, and the said contribution should be paid by way of 12 equal installments.
78. I am satisfied that there is a change of circumstances material enough from the wife to justify the variation of the last LCC Order.
Issue 3
Can the husband afford to pay these sums?
The husband’s Financial Position
79. The husband submitted that there has been substantial drop in his assets due to payment of the last MPS Order and the last LCC Order, payment of his own legal costs, making up of the short-fall in his family expenses, fluctuation in the stock market, and repayment of loans.
80. The wife submitted that it was amazing to see that within 2 years’ time, there is a drop of assets of the husband in the amount of over HK$13 million.
81. Despite the aforesaid, at the time of the current MPS application, the husband still had cash at Bank in the sum of around HK$700,000 and interest in stocks of around HK$789,000, and that his interest in companies is worth about HK$1.2 million.
82. In the 3rd affirmation of the husband, he presented a picture that he had basically been living off savings and by selling various assets during the past 2 years so as to pay for the expenses more particularly described at paragraph 34 of the said affirmation.
83. Without going into details of all the income and expenses of the husband, and for maintenance pending suit, my view is that the husband’s resources may include the husband’s ability to provide money by overdrafts or through loans from R2.
84. The husband stated that the net realizable value of the Macau property is about HK$3.32 million. As the husband has admitted in these proceedings that he was the beneficial owner of Macau property, if he will from time to time repay his shareholder’s loan to R2 when it was short of funds to meet the overdraft repayment, I see no reason why he could not sell the Macau property so that he will have more cash at hand.
85. Of all these available or potential sources aforesaid mentioned, I am of the view that the husband is able to pay the wife HK$8,000.00 per month as maintenance pending suit and HK$480,000 as ongoing litigation contribution up to the FDR hearing to be paid by 12 equal installments, namely HK$40,000 per month.
86. After considering all the circumstances of the case and the evidence received so far, I am prepared to vary the last MPF Order and the last LCC Order.
Order
87. It is ordered that
(i) the last MPS Order be varied to HK$8,000 per month, and the husband shall pay the wife the sum of HK$8,000 per month as MPS for the wife with effect from 20th June 2017, and thereafter to be paid on or before the 20th day of each succeeding month until further order of the court;
(ii) the husband shall pay the wife the sum of HK$40,000.00 per month as the wife’s ongoing legal costs provision, the 1st payment to be paid on 20th September 2018 and thereafter on or before the 20th day of each succeeding month until HK$480,000 had been fully paid or further order of the court;
(iii) all the aforesaid monthly payments will be paid on account of any sum eventually received by the wife and/or the husband when the AR is determined.
Costs
88. Despite the fact that the wife did not succeed in all her arguments, I consider that it would be fair that the husband shall bear the costs after taking into account of the stance and approach of the husband in the current MPS application.
89. I will make a decree nisi that costs of this summons shall be to the wife to be taxed if not agreed, such order to be made absolute upon the expiration of 14 days if no application made by either party. There shall be a certificate for counsel. Lastly, I thank both counsels for their assistance.
| David C. W. Cheung | |
| Deputy District Judge |
Representation:
Mr. Peter Wong instructed by Messrs. K.Y. Woo & Co for the Petitioner
Mr. T Yip instructed by Messrs. Pansy Leung Tang & Chan for the Respondent