TWF v. HWKR

FCMC 7615/2019

[2020] HKFC 258

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 7615 OF 2019

________________________

________________________

________________________

D E C I S I O N
(Discovery)

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Application

1.  This is the substantive hearing for the petitioner wife’s (“Wife”) second specific discovery summons against the two interveners. 

2.  The first intervener (“Brother”) and the second intervener (“Sister”), respectively the brother and the sister (collectively, the “Siblings”) of the respondent husband (“Husband”), are joined in the present action for the limited purpose to determine the beneficial ownership of a landed property in Sentosa Cove, Singapore (“Sentosa Property”) (“Preliminary Issue”). 

3.  Originally the present application was made by way of the Summons filed on 4 September 2019 (“Original Summons”).  The Original Summons was issued under Order 24 rule 7 of the Rules of the High Court (“RHC”), Cap. 4A, whereby the Wife sought an order that the Siblings do answer her questionnaire (“Wife’s Questionnaire”). 

4.  In the Wife’s Questionnaire, the Siblings were asked to answer 26 questions (together with sub-questions) and to produce the related documents.  Those questions focus on the Siblings’ respective personal bank accounts and their joint account.

5.  At the direction hearing of the Original Summons, the Siblings volunteered to answer the Wife’s Questionnaire but reserved their positions to reject those questions they might find inappropriate. Accordingly, the Wife’s Questionnaire was served by consent.

6.  The Siblings then filed the “1st and 2nd Interveners’ Voluntary Answers” but refused to answer 20 out of 26 questions in the Wife’s Questionnaire.  An agreed list of issues to be argued at this hearing was jointly prepared by the Wife and the Siblings (collectively, the “Parties”) in November 2019.  Thereafter, the Parties have exchanged extensive affirmations leading to the drop of the majority of the items sought by the Wife.

7.  Helpfully the Senior Counsel and the Counsel have further reduced the questions in dispute to those set out in Annex II of the Skeleton Submissions for the Siblings (“Annex II”), namely, Questions 6, 7, 9-13, 20 and 21 of the Wife’s Questionnaire. 

8.  It is agreed that the only issue left to be determined at this hearing is whether the following documents and facts sought are relevant to the determination of the Preliminary Issue  : -

Issue (1) :  paragraph 1 of Annex II :    

the Siblings’ immigration records by the Hong Kong Immigration Department for September 2005 to October 2017

Issue (2) :  remaining paragraphs of Annex II :

(a)  account operation background in relation to the Brother’s HSBC (Singapore) A/C # 2X0-X-1X8 : Q11-13 of the Wife’s Questionnaire;

(b)  transactions in the Brother’s HSBC account (“Brother’s Account”) and the Sister’s UOB account (“Sister Account”) (collectively, the “Siblings Accounts”) with certain companies:

(i)  WII Limited : Q6 of the Wife’s Questionnaire;

(ii)  RI LLC : Q7;

(iii)  GCF : Q9-10;

(iv)  PII Limited Q20-21

(collectively, the “Companies”)

9.  The applicable legal principles governing the present application require clarification. A questionnaire is a mixture of discovery of facts and documents.  I am not persuaded that this Court has the discretion to extend the scope of discovery of documents under Order 24 rule 7 to cover the discovery of facts which are broadly governed by Order 26.  Nor do I think that I am empowered to order the interveners to answer a questionnaire involuntarily.

10.  The use of questionnaire for discovery of facts and documents is provided by rule 77(4) of the Matrimonial Causes Rules, Cap.179A.  It is however confined to discovery exercises between   (ex-)spouses in ancillary relief applications in the matrimonial proceedings.  Rule 77(4) provides : - 

“(4) Any party to an application for ancillary relief may by letter require any other party to give further information concerning any matter contained in any affidavit filed by or on behalf of that other party or any relevant matter, or to furnish a list of relevant documents or to allow inspection of any such document, and may, in default of compliance by such party, apply to the court for directions.”

11.  The relevant procedure is further elaborated in Practice Direction 15.11 and §17.30 of Rayden and Jackson on Relationship Breakdown, Finances and Children 18th Edition :

  ”Discovery of documents : questionnaire

  17.30. In ancillary relief proceedings discovery begins with service of the Form E and the documents which are required to be attached to the Form E, and any other documents necessary to explain or clarify any of the information contained in the Form E. Thereafter, discovery is by mutual request by means of a questionnaire served in advance of the first appointment, and by further questionnaire at a later stage of the proceedings with the court’s permission......”

12.  Apparently, discovery by means of a questionnaire is applicable to applications for ancillary relief between spouses or ex-spouses who have already filed Form Es.  For dispute of beneficial ownership involving third parties, it was emphasized in the landmark case of TL v ML & Ors(ancillary relief: claim against assets of extended family) [2006] 1 FCR 465, §34 that it “must be approached on exactly the same legal basis as if it were being determined in the Chancery Division” and is “of course completely different in nature to the familiar discretionary exercise between spouses.”  Pleadings are necessary for defining the scope of the dispute.

13.  Thus analyzed, I am slow to consider questionnaire as a proper form for a contested application for discovery against the Siblings, who have neither made any claim for ancillary relief nor filed Form E.  They are only involved in these proceedings for the sole purpose of determining the beneficial ownership of a property. 

14.  At the hearing, upon the consent of the Parties and their waiving their respective rights to issue and answer interrogatories without order as provided by Order 26 RHC, I granted leave to the Wife to withdraw the Original Summons upon issuance of two Summonses : one for discovery of documents as set out in paragraph 1 of Annex II pursuant to Order 24 rule 7 RHC (“Order 24 Summons”) ; and

one for discovery of facts as set out in the remaining paragraphs of Annex II pursuant to Order 26 RHC (“Order 26 Summons”). The two Summonses to be treated as if they are the Summonses for the purpose of this hearing.

15.  The application proceeded as scheduled.  The Wife subsequently filed the two Summonses on 5 November 2020.

BackgroundFacts

16.  The Sentosa Property consisted of a piece of land in Sentosa Cove, Singapore (“Sentosa Land”) and a house built thereon (“Sentosa House”).  In the pleadings, the Wife claims that the Husband was the sole beneficial owner of the Sentosa Property and the sole source of funding for it and that the Siblings only held the shares of it on trust for him, and accordingly, it shall be considered as part of the family assets for distribution between the Husband and Wife in the ancillary relief application. 

17.  The Husband and the Siblings resist the Wife’s claim.  They say that they had each contributed to the acquisition, construction, maintenance and expenses of the Sentosa Property and the beneficial interest followed the legal ownership.  For the present purpose, I am invited to focus on the background facts relating to the funding of the Sentosa Property.

18.  In a notice of transfer, the Sentosa Land is stated to have been purchased in September 2005 at SGD3.78 million by the Husband, the Brother and the Sister as tenants-in-common with each holding 10%, 40% and 50% respectively.  

19.  Ms. Yip, Senior Counsel for the Siblings, has summarized the funding of the Sentosa Property as follows.  The purchase price of the Sentosa Land was met by :

(a)  an initial 10% deposit at SGD378,000, by way of :-

(i)  a HSBC cheque of SGD75,600 dated 18 July 2005 issued by the Brother; and

(ii)  a casher order of SGD302,400 dated 21 July 2005 issued by the Brother

(b)  a cashier order of SGD1,113,000 dated 15 September 2005 issued by the Brother; and

(c)  a cashier order of SGD2,289,000 from OCBC dated 19 September 2005 (“Land Loan”). 

20.  The construction of the Sentosa House was completed in 2009 at the cost of SGD3,237,104.84, which was funded by :

(a)  a construction loan facility of which the total drawdowns were SGD1,222,862.38 in 2009 (“Construction Loan”), and

(b)  the remaining amount was funded from the Siblings’ joint account at OCBC, Singapore #656-X1 (“OCBC Joint Account”), which was opened in 2005 for loan repayment for the Sentosa Property.

(The Land Loan and the Construction Loan, collectively, the “Property Loans”)

21.  The Land Loan was later repaid from 2005 to 2017.  The Construction Loan was repaid from 2009 to 2017. Installment payments of the Property Loans were made through the OCBC Joint Account.  The Sentosa Property was sold at SGD15,500,000 in October 2017.

Procedural History

22.  The Wife’s first discovery application under the Preliminary Issue proceedings was made by way of summons dated 5 October 2018 (“First Discovery Summons”).  By the Order dated 9 October 2018 (“2018 Order”), the learned Deputy District Judge D. Cheung ordered the Husband and the Siblings to produce a number of bank statements between September 2005 and October 2017.  Leave was also granted to the Siblings and the Husband to adduce and rely on expert evidence by way of the first report dated 18 October 2016 (“First RSM Report”) and further report to be obtained by then (“Second RSM Reports”), prepared and to be prepared by a firm of accountants in Singapore in respect of the purchase, development, maintenance and sale of the Sentosa Property.  The Wife was at liberty to adduce expert report in response within 28 days after the determination of the First Discovery Summons.

23.  The First Discovery Summons was argued before this Court on 12 April 2019.  At that hearing, all four parties were legally represented.  This Court took the opportunity to raise concerns about the further conduct of this case, in particular, the issues and areas upon which the expert(s) were to give opinion on, hence, direction for the parties to seek expert evidence directions after determination of the First Discovery Summons was given. 

24.  The decision (“Discovery Decision”) of the First Discovery Summons was handed down on 6 June 2019 (under the former action FCMC16534/2015).  This Court then fixed a case management direction hearing to 27 June 2019 in order to expedite the Preliminary Issue Proceedings and to settle the contested main suit which had been left unresolved since 2015, ending up with the commencement of the present action.  Parallel applications for maintenance pending suit, payment out, committal proceedings had been dealt with, followed by the present application.

Grounds of Application

25.  The Wife contends that the source of funds in the Siblings’ Accounts call for investigation because the Siblings have provided no justification of their ability to fund the Sentosa Property other than relying on two additional terms loans obtained from OCBC bank for their personal use.

Siblings’ Opposition

26.  The Siblings complain that the Wife’s Questionnaire was an ill-drafted request asking for details about the opening, purposes and operation of their personal accounts as well as all transactions over SGD2,000 and the counter-parties of some of those transactions.  It was a fishing exercise which was designed to carpet search the Siblings’ personal accounts as if they were doing a questionnaire between the spouses for ancillary relief, aiming at hunting around the documents in the hope that they will reveal some information to pursue more inquires including, inter alia, the hidden assets of the Husband.

Legal Principles

27.  The applicable legal principles are not in disagreement.

Preliminary Issue

28.  It is well-settled law that for determination of ownership of landed property, the starting point is that equity follows the law and so beneficial interest follows the legal title.  The burden rests on the party (the Wife in this case) who asserts the beneficial interest is different from the title to prove the contrary : Stack v Dowden [2007] 2 AC 432.

29.  Procedurally, the TL v ML proceedings should be approached in the same way as a standard claim for ownership of property, where pleadings are filed to ensure that the real issues in dispute are defined: Leung Wing Yi Asther v Kwok Yu Wah (2015) HKCFAR 605. 

Order 24 rule 7

30.  Order 24 rule 7 RHC is applicable to matrimonial proceedings by virtue of rule 3 of the Matrimonial Causes Rules (Cap 179A). The governing principles can be summarized as follows :

a.  Under Order 24 rule 7, a party will be ordered to disclose documents in his possession, custody or power if the applicant is able to show prima facie case to establish that the documents are relevant to the matters in issue;

b.  The Peruvian Guano test of relevance applies.  The test is whether the documents relate to the matters in question in the action, which not only be evidence on any issue, but also which contains information which may either directly or indirectly enable the party to advance his own case or to damage the other side’s case.  A document which may lead to a train of inquiry, which may have either of these two consequences should be disclosed : Compagne Financiere du Pacifique v Peruvian Guano Company [1882] 11 QBD 55

c.  Once a prima facie case has been made by the applicant, the court has a discretion whether or not to order disclosure.  The burden then shifts to the other party objecting disclosure.  The court will not order production unless it is satisfied that production is necessary either for disposing fairly of the issues between the parties or for saving costs;

d.  “Fishing” is not allowed, and discovery should not be oppressive.

e.  Statements in a party’s affidavit of documents are conclusive, e.g. of whether he has or has had any documents other than those disclosed: Hong Kong Civil Procedure 2020, Vol 1 §24/7/2.

31.  Relevance is to be determined by reference to the pleadings.  While the matters in question may cover wider ground than the issues as disclosed in the pleadings, it is not the purpose of discovery to enable the applicant to turn a non-issue into an issue : Melvin Waxman v Li Fei Yu & Ors HCA 1973/2012 30 January 2015 § 61; or to let the applicant hunt around the documents in the hope that they will reveal some improprieties on the other party or will provide information for the applicant to pursue more enquiries : Re the Estate of Ng Chan Wah HCAP5/2003 5 March 2003 §16.

Order 26

32.  The principles governing interrogatories are similar to Order 24.  The interrogatories must relate to a matter in question between the parties and they are necessary either for disposing fairly of the cause or matter or for saving costs.  The test of relevance is akin to the Peruvian Guano test.  “Fishing” interrogatories are not permitted.  The questions must not be asked for the purpose of enabling a party to see if he can find a case, of which he presently knows nothing, which is different from the pleaded case he now makes : Lee Nui Foon v Ocean Park Corp (No 2) [1995] 222

33.  With these principles in mind, I now turn to consider the arguments of the Parties.

Analysis

34.  In the Wife’s pleadings, the alleged trust was pleaded generally.  The Wife’s position is highlighted in §11 of the Petitioner’s Skeleton Submissions, “At least this much can be said about the Wife’s pleaded case : ultimately the Wife claims that the Husband is the sole beneficial owner of the Sentosa Property, and that the [Siblings] held their shares (40% by the [Brother] and 50% by the [Sister]) on trust for the Husband.  Of particular relevance is the Wife’s pleadings that the [Siblings] have conducted themselves in relation to the Sentosa House in a manner that is entirely inconsistent with ownership or otherwise having a proprietary interest.”

35.  The Wife alleges that the Husband has throughout the years held assets through nominees and the Siblings have provided no justification of their ability to fund the Sentosa Property other than the two OCBC bank loans.  It is now argued for her that “Without explaining where these funds came from the position may be that the Court will infer that the funds are not beneficially the [Siblings] but that they hold them on resulting trust for the person who provided the funds.” , hence, the source of funds in the Siblings’ Accounts call for investigation and the transactions involving some companies should be further scrutinized so as to ascertain the Siblings’ property ownership or entitlements to rental income of some other landed properties (other than the Sentosa Property). §§11-14 of the Wife’s written submissions. 

36.  However, the present application is not a discovery application between the spouses for ancillary relief.  The sole issue in dispute in the Preliminary Issue proceedings is limited to the ownership of the Sentosa Property as defined in the pleadings. The pleadings define the battlefield and are fundamental to enabling every procedure facet to operate fairly.  An issue that has not been pleaded is not an issue before court : Hong Kong Civil Procedure 2020 Vol.1 §18/0/3 and §18/8/3A. 

37.  In determining whether the Sentosa Property was or was not owned by the Husband, the court must apply law of property : Bhura v Bhura & Ors (No.2) [2015] 1 FLR 153 §7. Therefore, when perusing the bank statements disclosed by the Siblings, the focus is on the source of the funds to the Sentosa Property.  Plainly the Wife is not entitled to stretch the arms of discovery beyond the matters in dispute so as to explore the ownerships of the companies having transactions with the Siblings by asking how and why such transactions took place apparently in the hope that she might find something indicating any involvement of the Husband. 

38.  The mere speculation that the Companies might be the nominees of the Husband or in some way linked to him because he had a practice of making investments through nominees does not advance the Wife’s position any further.  Order for disclosure will not be made on mere speculation.  Indeed, the Wife’s pleadings were silent on the Siblings’ Accounts or the Companies, or how they were operated by the Husband or belonged to him. 

39.  Some reliance has been placed on the Discovery Decision to argue that investigating into the in-out transactions in the Siblings’ Accounts are relevant to the matters in question in determining the Preliminary Issue.  However, the Discovery Decision should be read as a whole and in light of the issues to be determined by then and the evidence then before the Court.

40.  The First Discovery Summons was to determine whether the Siblings should disclose the bank statements of the Siblings Accounts without redaction.  It was argued in view of the fact that some of those redacted statements had been referred to and relied on in the RSM Reports, which were adduced by the Siblings and the Husband in support of their respective cases (as endorsed by the 2018 Order).  By then, not only the Wife’s challenge against the Siblings’ ability to fund the Sentosa Property met with no solid answer, her complaint that the redacted parts had rendered the sense of the rest of the banks statements problematic and misleading attracted no valid explanation from the Siblings.

41.  In those circumstances, production of the unredacted bank statements of the Siblings’ Accounts was then ordered to allow the Wife to deal with the RSM Reports and to review those bank statements together with the bank statements and information provided (and to be provided) by the Husband.  The Discovery Decision was specifically stated to be made as the state of the documents then stood.  Further, the Wife’s request for details of the entries in the Siblings’ Statements was rejected and she was reminded that minute investigation would unlikely be necessary for the determination of the Preliminary Issue.

42.  The present application goes to whether the opening, purpose, operation and in/out transactions of the Siblings’ Accounts, being the Siblings’ personal accounts, are relevant to the matters in question in the Preliminary Issue proceedings.  The Wife essentially seeks to investigate into the source of the money in the siblings’ personal accounts.

43.  I share the view of Ms. Yip that the Wife appears to have ignored the 5^th affirmation of the Brother and the 5^th affirmation of the Sister (collectively, the “Siblings’ Affirmations”) in this application.  In those affirmations, the Siblings’ qualifications, work experience, assets, investment were accounted at some length which were absent at the hearing of the First Discovery Summons. At present, there is evidence that the Siblings had considerable local and overseas investments as well as some connections with Singapore.  They could not be regard as plainly having no ability to invest in the Sentosa Property as the Wife sought to portray in the First Discovery Summons.  The Brother’s Account was opened in 2000, long before the investment of the Sentosa Property.  He has been granted the principle permanent residency in Singapore.

44.  For the reasons set out below, I am further convinced that the documents and facts sought are not necessary or related to the matters in dispute. 

Issue (2) (a) : Q11 - 13 of the Wife’s Questionnaire ~ the Brother’s  A/C # 2X0-X-1X8

45.  In relation to Item (2) (a), I accept Ms. Yip’s submission that such account was neither referred to in the Wife’s pleadings nor has she produced any evidence to relate such account to the funds contributing to the Sentosa Property.  A careful reading of the bank statements of such account for the period between January 2012 and October 2017 will find that:

(1)  #0X1-X-4X2 and #2X0-X-1X8 are two sub-accounts of different currencies (SGD and USD respectively) of one current account under Customer Number 152-X held at HSBC Bank;

(2)  transactions relating to the OCBC Joint Account (i.e. the contribution to the Sentosa Property) all took place in the SGD currency, and hence in #0X1-X-4X2.  #2X0-X-1X8 is unrelated to the contribution to the Sentosa Property; and

(3)  #2X0-X-1X8 is a USD sub-account which has no meaningful transactions at all but nominal value.  It is obviously a dormant sub-account.

46.  Therefore, I am persuaded that the Wife fails to satisfy the test of relevance.  Such information is not required to dispose the issues in dispute fairly. 

Item 2(b) (i) - (iv) : Q6, 7, 9, 10, 20, 21 ~ Transactions in the Siblings’ Accounts with the Companies

47.  The Siblings are required to account for a number of transactions (both deposits and withdrawals) in their personal accounts relating to the Companies as well as the Siblings’ relationships with the Companies for the Wife’s investigation.

48.  On the pleadings now stand, neither the ownership of the Siblings Accounts nor that of the Companies forms the subject matter of the pleadings.  None of the Companies were referred to therein.  The relationship between the Siblings and the Companies are not pleaded issues.  The Preliminary Issue trial is not to determine the ownership of the Siblings’ personal accounts or that of the Companies.  Needless to say, the Siblings are not parties to the ancillary relief application which entitles the Wife to look into all aspects of their personal assets.

49.  Prima facie, the Siblings’ Accounts and the Companies do not belong to the Husband.  The Sister’s husband was the sole director and owner of the WII Limited and PII Limited.  The Wife has not justified the logical connection between the relationships among the Siblings and the Companies, and the ownership of the Sentosa Property. 

50.  The query concerning the transactions in the Siblings’ Accounts with the Companies only arose for the first time in the Wife’s affirmation in reply, her 15^th Affirmation, when she claimed to have found some old documents (“Basement Documents”) at the basement of her home lately, i.e. allegedly a table of the Husband’s properties in Singapore in 1997.  The authenticity and/ or genuineness of such documents are disputed by the Husband.  She appeared to be suggesting that a number of companies were the Husband’s nominees.  This has triggered another round of filing of evidence of all parties.

51.  Looking at the Basement Documents closely, they could be at best arguably to have referred to WII Limited and RI LLC only ( to be elaborated further below), GCF (Q9-Q10) and PII Limited (Q20-21) were in fact not mentioned at all.  The Wife has actually no evidence that relates GCF and PII Limited to the Husband other than bare allegation.  Therefore, she has not made out a case on relevance in respect of these two companies.

52.  As Ms. Yip points out, the Wife’s argument that WII Limited and RI LLC were referred to in the Basement Documents is convoluted.  The fact that only the first two words of the name of RI LLC were mentioned in the Basement Documents renders the Wife’s argument unconvincing especially when there were at least 2 other companies share the same two words in their company names. 

53.  Insofar as the transaction between the Brother’s Account and RI LLC is concerned, it is a withdrawal of fund (Q7) from the Brother’s personal account to RI LLC (not the OCBC Joint Account, the designated account for funding the Sentosa Property). Details of such withdrawal are not relevant to the ownership of the Sentosa Property.  The same logic applies to the withdrawals from the Sister’s Account to PII Limited (Q21) and, accordingly, that withdrawal is also irrelevant here.

54.  Turning to the transactions between the Brother and WII Limited (Q6), the Wife fails to explain why those transactions are specifically relevant to the ownership of the Sentosa Property.  She seems to suggest the discovery has a bearing on the Siblings’ ability to fund the Sentosa Property: §8 and §9 of her submissions, arguing that the Siblings do not have the ability to fund the Sentosa Property as they have alleged, i.e. the Brother made his total contributions at SGD2,524,360.17.  However, the total sums under Q6 are SGD271,913.49 only, just about 10% of the total contribution claimed by the Brother. 

55.  In such circumstances, the discovery sought under Q6 is not necessary for the fair disposal of the issue whether the Brother has the ability to pay the total contribution of SGD2,524,360.17.  Instead, the Siblings gave account of their financial resources as well as their financial arrangements among themselves and the Sister’s husband (i.e. through the latter’s companies, WII Limited and PII Limited), in their affirmations to undermine the Wife’s allegation of their inability to pay. 

56.  Even on the assumption that WII Limited and RI LLC were the companies referred to in the Basement Documents and belonged to the Husband (I have not so found but solely for analysis purpose), it is difficult to see how the Brother had transactions with these companies in his personal account will lead to a conclusion that the Brother’s Account belongs to the Husband. 

57.  For reasons set out above, I accept Ms. Yip’s submission that the Wife has not articulated any solid linkage of those transactions with the funds contributed towards the Sentosa Property.  She failed to discharge her burden of showing relevance. 

Immigration Record

58.  I shall now turn to consider the Wife’s request for the Siblings’ “Immigration Records by the Hong Kong Immigration Department for September 2005 to October 2017”.

59.  To start with, the exact order sought remains unclear.  The present Summons was issued under Order 24 rule 7 RHC for specific discovery of documents.  Of concern is the fact that the Summons seeks specific discovery of “immigration records” which is not defined in the Summons, nor the exact form of the “documents” is specified.

60.  In fact, I have not been referred to any statutory provision or legal authority upon which the Court has power to order a reluctant party to apply to the Immigration Department in order to produce such “immigration record” for the purpose of discovery.  A review of the decided cases in this area will suggest the difficulty of this application. Absent any statutory provision or legal authority to extend the rights and duties of discovery in legal proceedings to require a party to apply to an authority in order to produce a “record” for the purpose of discovery,  the Order 24 Summons shall be dismissed.

61.  Even if I am wrong in the above-analysis, I take the view that the “document” sought is irrelevant, of little probative value and discovery of such is not necessary for disposing fairly of the cause or matter or for saving costs.

62.  Mr Clough, Counsel for the Wife, contends that in light of the fact that there were a number of cash deposits and ATM withdrawals from the Siblings’ Accounts and the Siblings seldom travelled to Singapore, their “immigration records” concerning the dates of their departure from and arrival in Hong Kong and the in/ out control point, for the period between September 2005 and October 2017 are relevant to the operation of these accounts. They demonstrate whether the Siblings were out of Hong Kong at the time of those transactions.  As a result, they will lead to a train of enquiry on who operated the Siblings’ Accounts, how they were operated and if, they were operated by the Husband.

63.  Absent any slightest evidence that the Husband has ever operated those accounts, I am not convinced. Suffice it to say that the presence of the Siblings in Hong Kong at the time of those cash deposits and ATM withdrawals (even if that is the case, for analysis purpose) do not necessarily mean that those accounts were operated by the Husband. 

64.  As Ms. Yip submits, the Wife’s sole basis to seek the immigration record is, in fact, to cross-examine the Siblings on the cash deposits and ATM withdrawal of their bank accounts with reference to the “Immigration Record”.  That shall not be allowed for it is trite law that the Court does not order discovery on matters which go solely to cross-examination: Thorpe v Chief Constable of Greater Manchester [1989] 2 All ER 827 CA.

65.  Besides, the Wife suggests that there should be restriction on operation of the bank accounts by non-residents in Singapore.  She nevertheless fails to explain what those restrictions were and how they are relevant to the matters in issue.  Further, the period requested from 2005 to 2017 is extensive.  The Siblings Statements only concerned the period after January 2012 (for the Brother) and after January 2013 (for the Sister).  In my view, the “immigration record” sought is not necessary for a fair disposal of the disputed ownership of the Sentosa Property, nor for saving costs. 

66.  Confined to what the Order 24 Summons specifies, the Wife is not entitled to change to request affirmations of the Siblings on their history of previous visits to Singapore, time and purposes of those visits, and passport records in support by adding §25 to the Petitioner’s Skeleton Submissions. I accept Ms. Yip’s submission that such last-minute change by way of submission does not form the proper basis of a discovery application and hence, shall not be entertained. Sensibly, Mr Clough did not pursue such request further at the hearing.

Conclusion

67.  Having considered the Parties’ submissions and the evidence before me, I take the view that the Wife has failed to establish the legal basis for her present application.  I order that the two summonses be dismissed.  Case management directions for further conduct of the Preliminary Issue proceedings, including filing of witness statements, will be dealt with in the upcoming case management direction hearing.

Costs

68.  Of the issue of costs, I take into account that part of the requests of the Wife’s Questionnaire were acceded to by the Siblings who voluntarily filed the voluntary answers to it. Some of the remaining requests were answered in the Siblings’ affirmations, leading to the drop of most of those requests before this hearing.  The remaining requests, being the subject matters of the present hearing, were disallowed after full arguments.  I accordingly make a costs order nisi that : -

(1)  the costs of the Original Summons between the Siblings and the Wife up to and inclusive of the filing of the 5th affirmations of the Siblings, including all costs reserved, be in the cause of the Preliminary Issue proceedings;

(2)  the costs thereafter, including the costs of this hearing, the filing and serving of the Order 24 Summons and Order 26 Summons and all costs reserved, be paid by the Wife to the Siblings, to be taxed if not agreed, with certificate for one counsel.   

69.  This costs order nisi shall become absolute at the expiration of 14 days after the date of this Decision.

70.  I would like to thank the Senior Counsel and the Counsel for their valuable assistance.

Mr Neal Clough and Tony C.H. Chow, instructed by Messrs Ho & Ip, for the Petitioner

Ms. Anita Yip, S.C leading Ms. Lily Yu, instructed by Messrs Chaine Chow & Barbara Hung, for the first and second interveners

FCMC 7615/2019

[2020] HKFC 84

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 7615 OF 2019

________________________

________________________

________________________

DECISION
(Maintenance Pending Suit & Litigation Funding)

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Application

1.  This is the application of the petitioner wife (“the wife”) for variation of the Order dated 17 November 2017 as amended on 31 January 2018 (to correct a typographical error) (“Consent Order”) for upward adjustment of her maintenance pending suit and provision of litigation funding.

Previous MPS Orders

2.  This is indeed the wife’s third application for maintenance pending suit and legal costs provision.  The first application was made on 31 December 2015 (“First Application”).  Deputy District Judge D. Cheung handed down his Judgment on 3 March 2016 (“First Judgment”).  The learned Judge ordered, inter alia, that: -

(a)  upon the husband’s undertaking to allow the wife to live rent free at their former matrimonial home, a house at the Peak (“Matrimonial Home”), and to be responsible for all utilities, management fees, food at home, household expenses, car expenses, expenses for domestic helper, driver and the children (“Expenses Undertaking”),

(b)  the husband do pay the wife HK$61,000 per month (inclusive of HK$35,000 for payment of her bank loans) until further order of the Court; and

(c)  the husband do pay the wife HK$50,000 per month for legal costs provision until Financial Dispute Resolution hearing or 10 February 2017, whichever is earlier.

(the whole order, the “First Order”).

3.  On 8 March 2017, the wife sought an increase from HK$61,000 to HK$130,000 and for legal costs provision from HK$50,000 to HK$80,000 per month (“Second Application”). In his Judgment dated 7 August 2017 (“Second Judgment”), the learned Judge ordered, inter alia, that :-

(a)  upon the husband’s Expenses Undertaking and his additional undertaking (“Costs Undertaking”) to pay the wife HK$50,000 per month as her ongoing legal costs provision from the sale of a house situated at Sentosa in Singapore (“Sentosa Property”) until Financial Dispute Resolution hearing or not more than 12 months, whichever is earlier;

(b)  the husband do pay the wife HK$99,000 per month (inclusive of HK$35,000 for payment of her bank loans and HK$25,000 for payment of debts owed to her friends and relatives) as maintenance pending suit from 10 July 2017 onwards. 

(the whole order, the “Second Order”). 

(the First Order, the Second Order, collectively, “Previous Orders”)

(the First Judgment, the Second Judgment, collectively, “Previous Judgments”)

4.  Pursuant to an agreement of both parties which was embodied in the Consent Order, the wife’s monthly maintenance pending suit was reduced to HK$64,000 upon the husband’s upfront payment of around HK$965,732.08 (“Upfront Payment”) to settle her bank loans (“Bank Loan Settlement”).  The legal costs provision of the monthly sum of HK$50,000 was paid from the sale of the Sentosa Property in October 2017 to October 2018.

5.  In the present application, the wife seeks an order that the husband do pay her from 10 July 2019 onwards: -  

(a)  monthly maintenance pending suit under §4 of the Consent Order be increased from HK$64,000 to HK$150,000; and

(b)  monthly ongoing legal costs provision of HK$50,000 until the hearing of the Preliminary Issue or further order of the Court

Background

6.  The wife is now aged 58 and the husband 70. They got married in 1990.  Their daughter was born in 1990 and their son was born in 1994.  The children are in gainful employment and self-supporting. At present, the parties live together at the Matrimonial Home.  The Matrimonial Home was acquired under a limited company, which are held by the parties and the husband’s sister. 

7.  The wife petitioned for divorce based on unreasonable behaviour under action FCMC16534/2015 (“Previous Action”) on 30 December 2015.  The husband filed Answer and Cross Petition on 2-year separation subsequently.  With the agreement between the parties, the wife commenced the present action by filing a fresh petition on 2-year separation on 28 June 2019.  The Previous Action will be discontinued upon the grant of Decree Nisi under the present action.

The Preliminary Issue – Sentosa Property

8.  There is a preliminary issue in this action (“Preliminary Issue”): the beneficial ownership of the Sentosa Property.  The wife contends the husband is the sole beneficial owner of it whereas the husband insists its beneficial interests were properly registered and are well-reflected in its legal title with the shareholdings between the husband, his brother, the 1^st Intervener (“Brother”) and his sister, the 2^nd Intervener (his brother and sister collectively, the “Siblings”) at 10%, 40% and 50%.  The proceedings are still at the discovery stage. The wife has been vigorously seeking discovery of documents from the Siblings after the close of pleadings.  A substantive hearing of another discovery summons between the wife and the Siblings was fixed to be heard in June.  There are other applications initiated by the parties.

9.  The Sentosa Property was sold after the Second Judgment in October 2017 (“Sale”).  The sale proceeds generated from the Sentosa Property has been one of the major subjects of dispute in this action.  The wife criticizes the husband to have undervalued his entitlement to the sale proceeds and took out committal proceedings against him. 

10.  On the other hand, the husband and the Siblings have engaged a professional firm to figure out the sharing of the sale proceeds among them, resulting in the compilation of three reports (the second report dated 26 October 2018 and third report dated 4 April 2019 be respectively named as the “Second Report” and the “Third Report”).  The husband alleges that he received the following amounts from the disposal of the Sentosa Property : -

		(HK$)
(a)	10% of forfeited deposit from an aborted sale (“Forfeited Deposit”)	529,929.60
(b)	10% of the net sale proceeds received from the Sale in 10. 2017, SGD605,852.19 (“First Payment”)	3,461,331.04
(c)	a further sum of SGD502,829.17 from the Brother by 3 installments between 11.2018 to 2. 2019, allegedly to be the loans from the Brother.  It is said that such loans were made in view of the adjustment of the 10% of the net sale proceeds assessed by the Second Report.  The report states the view that the husband’s entitlement should be adjusted upwards after taking into account of 2 term loans which were obtained for the Siblings’ personal use and benefits by placing the Sentosa Property as security. (“Second Payment”)	2,881,661.21
(d)	a further sum of SGD 227,305.01 from the Brother in 4.2019 as a result of further adjustment of the 10% of the net sale proceeds as assessed by the Third Report.  (“Third Payment”)	1,314,732.18

11.  The Forfeited Deposit was applied to satisfy the wife’s maintenance and legal costs provision by an Order by consent dated 14 March 2016. 

12.  The First Payment was spent for the purpose of the Consent Order, including the Upfront Payment, the wife’s maintenance and legal costs, medical expenses for the husband’s heart operation, renovation work for the Matrimonial Home and mediator’s fees. 

13.  The Second Payment was allegedly used for the maintenance and legal costs provisions of the wife according to the Consent Order, mortgage installments of the Matrimonial Home, outgoings and utilities, and overhead costs of a company jointly held by the parties for the period between November 2018 and March 2019, leaving the balance of HK$489,176.16.

14.  By agreement between the parties, the balance of HK$489,176.16 together with the Third Payment, making up a total sum of HK$1,803,908.34 had been stakeheld by the husband’s solicitors who later paid part of it for the wife’s maintenance, leaving the balance of HK$1,355,000 (“Balance”) at the time of this hearing.

15.  The wife looks to the Balance as ready cash for her maintenance pending suit.

Grounds of application

16.  The wife’s positon is that the increments sought have been necessitated as a result of a series of changes in circumstances since the Consent Order, none by her fault, and some contrarily due to the husband’s failure to honour some of the Expenses Undertakings.  Such changes have rendered the Consent Order no longer capable of meeting her reasonable needs.  

17.  She reiterates that she has been unemployed since 2012 (except for a very brief period of time) and relied financially on the husband.  The monthly maintenance of HK$64,000 is the sole source of income for her.  Apart from the sum of HK$25,000 for repayment of personal debts owed to her friends and relatives, she is only left with HK$39,000 for her monthly personal expenses.  Her living standards continue to be eroded.  She indeed needs HK$90,000 per month for her personal expenses to restore her marital standard of living, if her bank loans as well as personal debts owed to her relatives and friends are paid off.  She intends to repay the bank loans and the personal debts by monthly installments at HK$35,000 and HK$25,000 respectively.  She therefore asks for HK$150,000 for monthly maintenance pending suit.

18.  She complains that her litigation funding at a monthly sum of HK$50,000 ceased in October 2018 but the delay tactics of the husband and the Siblings have unnecessarily prolonged the proceedings and escalated her legal costs, hence the present application for litigation funding.

19.  She contends that the husband has ability to pay her for he is still active in his world-wide business and holds substantial hidden assets through nominee companies and nominees all over the world.  His routine of staying overseas for 2 weeks each month is a pointer to his active engagement in business and extravagant lifestyle.  In addition to the substantial cash generated from the Sale, he has been able to increase his borrowings by HK$13.9 million over the past 4 years, that is, an annual income of more than HK$3 million.

Grounds of opposition

20.  The husband disagrees.  He stresses that the learned Judge has already made assessments and determinations (including as to quantum) on the wife’s needs as well as the husband’s financial capacities twice in the Previous Judgments. The wife’s reasonable living expenses were assessed to be HK$39,000 while the husband’s affordability was held to be HK$99,000 per month in the Second Judgment.

21.  In the absence of material change in circumstances and evidence showing the improvement of the husband’s financial situation, there is no basis for the Court to revisit the issues already decided.  The wife is largely repeating her earlier (already rejected) claims and is baldly seeking increases. 

22.  It is said that the husband’s financial conditions are even worse than they were back in 2017.  His earning capacity and business have been deteriorating and the family assets are exhausted.  He therefore has to look to the Balance for funding the maintenance payment as well as his own legal costs.

Legal Principles

23.  The legal principles on awarding maintenance pending suit are well-established which are set out in the Previous Judgments in details and I do not intend to repeat here.  In brief,

(a)  Jurisdiction to award maintenance pending suit to a spouse is governed by section 3 of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“Ordinance”).

(b)  The Court is empowered to order a party to the marriage to make to the other such periodical payments for his or her “maintenance” as the Court thinks “reasonable”, subject to the condition that the duration of any such order is limited to the period up to the final resolution of the ancillary relief dispute and the grant of the decree absolute.

(c)  Maintenance is restricted to the recurring costs of living at whatever standard of living is appropriate to meet the “immediate and reasonable needs” of the other party.

(d)  What really matters is the immediate and reasonable requirements of the applicant balanced against the ability of the payer to pay for them, assessed using a broad-brush approach.

(e)  The amount must be “reasonable”, that it must be fair, having regard to all of the circumstances of the case.  An important factor is determining fairness is a consideration of the marital standard of living.  This is not to say that the exercise is merely to replicate that standard;

(f)  The Court has no jurisdiction to make orders which for all practical purposes result in a form of pre-trial capital re-balancing;

(g)  There should be a specific maintenance pending suit budget which excludes capital or long-term expenditures, more aptly to be considered on a final hearing. That budget should be examined critically in every case to exclude forensic exaggeration.

(h)  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 a situation, the court should err in favour of the payee.

(i)  The analysis should be conducted on a broad brush basis for the amount to be paid and for a limited period only.  Not all of the evidence is necessarily before the court, it is not appropriate for the court to conduct a detailed investigation into the finances of the parties.

(j)  If there is any overpayment or underpayment, it can be rectified at a final ancillary relief hearing.

See HJFG v KCY [2012] 1 HKLRD 95

24.  The power of the Court to vary a periodical order is provided by section 11 of the Ordinance.  The applicable principles are: -

(a)  The Court is to consider all the circumstances of the case, and is not required to proceed from the starting point of the original order but approaches the matter as if it were assessing the payments de novo.

(b)  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.

(c)  It follows that the principles governing the assessment will in broad measure apply to applications to vary: the overriding objective is fairness.

See Raydenand Jackson on Divorce and Family Matters, 18^th Edition Chapter 18.21

See AFM v VFM (Variation of Maintenance) [2008]HKFLR 106

(d)  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 an order is not appealed against, or is made by consent, then the presumption must be that the order was correct when made. If it was correct when made, then there will usually be no justification for varying it unless there has been a material change of circumstances.

(e)   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.

(f)  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.

See WNWG v PBF [2012] HKCU 675

(g)   Application for variation should not be persued when in substance the grounds advanced for variation tantamount to re-argument of the same issues that have been argued before the court before the making of the original order. 

See HCTT v TYYC [2008] HKFLR 286.

25.  When there is a dispute as to the means of the paying party, important points to consider are :

(a)  The extent of the compliance by the paying party with his duty to make full and frank disclosure;

(b)  The force of the points made by the applicant in the light of the disclosure made by the paying party and the other evidence as to, for example the lifestyle and spending of that party;

(c)  If a paying party asserts that he does not have the means to meet the maintenance pending suit claimed, he should normally have the ability to provide full and compelling disclosure to demonstrate that this is the case.

See G v G (Maintenance Pending Suit : Costs) [2003] 2 FLR 71

26.  With these principles in mind, I now turn to consider the arguments of the parties.

MPS Payment

Previous Applications

27.  To understand the parties’ arguments, it is necessary to set out a brief table summarizing the wife’s previous applications for maintenance pending suit and the determination of the Court as follows: -

Items	First application	First Judgment	Second application	Second Judgment	Present increment application
Food	3,000	0	10,000	3,000	10,000	+7,000
Meal out of home	7,000	7,000	9,000	9,000	9,000
Transport	1,000	1,000	2,000	2,000	6,000	+4,000
Personal grooming	7,000	7,000	7,000	7,000	13,500	+6,500
Holiday China (China-weekend hotel)	5,000	1,000		1,000	18,000	+17,000
Entertainment			3,000	3,000	3,000
Medical	1,000	1,000	4,000	4,000	8,000	+4,000
Parents	3,000	0
Contact lens	1,000	1,000	1,000	1,000	1,500	+500
Massage	3,000	3,000	3,000	3,000	7,200	+4,200
Facial	5,000	5,000	5,000	5,000	11,300	+6,300
Health club			1,000	1,000	1,500	+500
Telephone bills					1,000	+1,000
Personal Expenses	36,000	26,000	45,000	39,000	90,000	+51,000
Bank Loans	35,000	35,000	35,000	35,000	35,000
Personal Debts from friends			50,000	25,000	25,000
	71,000	61,000	130,000	99,000	150,000	+51,000
Plus legal costs	50,000	50,000	80,000	50,000	50,000
Total	121,000	111,000	210,000	149,000	200,000

28.  In the First Judgment, the learned Judge allowed the wife a monthly sum of HK$61,000 as maintenance pending suit, in that HK$26,000 for her personal expenses and HK$35,000 for monthly repayment for her bank loans. 

29.  In the Second Judgment, the learned Judge allowed the wife a monthly sum of HK$99,000 as maintenance pending suit, in that HK$39,000 for her personal expenses together with HK$35,000 and HK$25,000 for monthly repayment respectively for her bank loans and personal debts.

30.  All those payments were allowed in addition to the legal costs provision of a sum of HK$50,000 and the Expenses Undertaking.

31.  The wife did not appeal against the Previous Judgments.  Instead, she consented to the Consent Order and started to receive the monthly sum of HK$64,000 for her maintenance pending suit after all her bank loans were paid off by the Upfront Payment.

32.  The wife explains that her consent to the Consent Order was not an admission of the sufficiency of the amount of HK$39,000 for her personal expenses but was given in expectation that the ancillary relief issue would be resolved in 1-2 years.  The change in circumstances since the Second Judgement gives rise to the present application.

Change in Circumstances

33.  Before I proceed to consider each and every single item of the wife’s claim, it is necessary to state at the outset that the living pattern of the parties appears to be similar to that when the Second Application was made: the husband stayed in Hong Kong for two weeks each month and the wife mainly stayed out of Hong Kong during weekends and occasionally, 1 to 2 weeks in a particular month, and that she chose not to stay at the Matrimonial Home when the husband was there. (§§48, 55 of the Second Judgment).  She supplements that since around 2 years ago, she has been travelling out of Hong Kong for around 2 weeks each month to “escape from” the husband when he stays at home.  

Food

34.  Her first complaint is the husband’s failure to honour the Expenses Undertakings to provide her sufficient food at home.  In fact, she made similar complaint in the Second Application but on different footing.  She says that from September 2018 to March 2019, the two domestic helpers were on leave and the husband did not provide her food or money for food.  The last domestic helper ceased employment in May and the new domestic helper only reported to duty in June. Still, she has not been provided with food at home because the husband told the domestic helper not to buy her food and the domestic helper has no longer been provided with supermarket card or money for food when the husband was away as before.  When he is in Hong Kong, he purchases food for everyone at home except her.  She therefore needs to buy food for herself all the time and for her mother, the maid, and sometimes for the son for half of the month.

35.  The husband denies her allegation and stresses that there has always been a maid undertaking the duties in buying food, daily necessities and household items.  He has never been notified by the wife of any request for food or need for her to make such purchases.  He also regards the wife’s claim as excessive which was rejected by the Court before, in particular, she needs not be responsible for the children who are self-supporting now.  

36.  Despite the wife is claiming the same amount which was rejected by the learned judge in the Second Application, her reason for application is somewhat different from that in the last application.  She is now complaining that she has not been provided with sufficient food due to lack of service of domestic helpers and the unwillingness of the husband after the Second Judgment.    

37.  For the present purpose, I should be slow to make a ruling on whose version is true without the parties giving evidence in Court.  Suffice it to say that, in light of the fact that the husband is used to stay overseas on a half-monthly basis and his reliance on the domestic helpers to supply food to the wife will be affected by the performance or the cessation of employment of the domestic helpers even without the fault of the husband, I take the view that it is more appropriate to discharge the husband’s undertaking to supply food by putting a monetary order in place so as to secure the wife with constant and sufficient supply of food without interruption.   

38.  On the other hand, the husband will not be prejudiced by such payment for he would be discharged from his undertaking to provide food for the wife.  Further, I agree with him that the payment should not be extended to cover the needs of the wife’s mother and the self-supporting children.  Taking into account of the wife’s claim for an increment of HK$7,000 to cover her mother, her son, the maid and herself, I would allow an increment of HK$2,000 for her food at home, making a total of HK$5,000 for food at home.  I also discharge the husband from his undertaking on this front.  

Transport

39.  Of the claim for transport expenses, I however find no basis for upward adjustment. Her reasons for application continue to be the husband’s priority to the use of the car and the driver when he is in Hong Kong and her need to travel out of Hong Kong to avoid the husband when he stays at the Matrimonial Home for 2 weeks every month, which were considered by the learned judge when granting her HK$2,000 for her transportation in the Second Judgment.  At present, the husband continues to stay in Hong Kong for 2 weeks each month as he did in the Second Application.  The triggering factor of her transportation expenses remains unchanged.  Absent any material change of circumstances, I find no valid basis for upward adjustment.

40.  In fact, her chances of being deprived of the use of the car and the driver should be flimsy because of her alleged long-standing practice of staying overseas while the husband staying at the Matrimonial Home.

41.  The lack of service of driver between March and 20 June 2019 would not have added much burden on her.  She has the flexibility of using the various modes of public transports available at the Peak.  Her non-employment should provide her with more flexibility for public transport arrangement.  I find no solid basis for variation of the amount allowed by the learned Judge under this head. 

Holiday and Telephone Bills

42.  Similarly, her claim for additional holiday expenses is premised on the same triggering factor: “escape” from the husband for two weeks each month. 

43.  I do not take the view that her preference for staying in South East Asia over Zhuhai (as she did in the past), is a valid reason for drastic increment of HK$17,000 per month for holiday expenses.  The current maintenance payment for transport (HK$2,000) and Holiday (for China-weekend hotel HK$1,000) was allowed by the learned Judge after due consideration of the wife’s allegation that she mainly stayed in the mainland during weekends and occasionally for 1-2 weeks in a particular month so as to avoid staying at the matrimonial home when the husband was there for 2 weeks each month.

44.  Her present request is not arisen from change in circumstances but simply a change of her choice of travelling destination to her liking.  I do not regard such change as immediate and reasonable needs of the wife. As pointed out by Mr Chan, Counsel for the husband, there are various options open to her.  She could either continue her practice of staying at Zhuhai as she did in the past or staying at the Matrimonial Home, a large four-storey house with 7 rooms, which has been renovated to cater for the parties living separately under the same roof. 

45.  I would however allow some flexibility for the fluctuation of the accommodation costs in order to address her concern of the occasional increments of accommodation costs which are common in the market nowadays.  Coupled with her new claim for telephone call plan which is viewed as daily necessity in the modern society, I would adjust the holiday expenses from HK$1,000 to HK$3,000 to cover payments for her holidays and telephone bills.  Such adjustment is made in my opinion that her claim for HK$1,000 for the telephone bill is on the high side, in light of the availability of free-service of overseas telephone call and the competitive telecommunication market nowadays.  She will have the flexibility to apportion her expenses for overseas trips.

Personal Care

46.  I should deal with her claim for personal grooming, massage, facial, health club together. Such items of claim have been assessed and determined by the learned Judge in the Previous Judgment. In the absence of any solid evidence as to any material change in circumstances regarding her needs and expenses in such items, I find no valid reasons for any adjustments in this regard.

Medical

47.  Medical expenses of HK$4,000 were allowed by the learned Judge to cover the costs of her annual medical check-up.  Such arrangement was to avoid the trouble of the wife asking the husband for  reimbursement after his claim from the insurance company under the medical insurance policy.  Even though the husband stopped paying for her medical insurance premium in November 2017 and she has to pay for it at HK$2,300 per month by herself, the present payment of HK$4,000 should be sufficient to cover such payment as well as her medical expenses which were not covered by the medical insurance (which were reported to be HK$1,000 in her Form E).  There is no record of significant deterioration of health condition in recent years.

Contact Lens

48.  I agree with the husband that the wife’s claim for a 50% increase under this head is unjustified.  Her explanation that she needs eye drops to cure her dry eyes and she paid HK$3,000 for her eye check-up in November 2019 does not advance her position any further.  The costs for eye drops does not justify an increment of 50% and the eye check-up costs should be covered by the medical expenses.

New Bank Loans

49.  The wife says that the insufficiency of the maintenance pending suit entails new loans, to cover her monthly maintenance shortfall of HK$51,000 (her actual personal expenses HK$90,000 – personal expenses provided by the Second Order HK$39,000). Those bank loans include: HK$200,000 in March 2018, HK$300,000 in November 2018, revolving credit facility of HK$300,000 and HK$40,000 from credit cards in 2018.  From June to July 2019, she incurred an additional loan of HK$241,703 from a bank.  In December 2019, the bank loans amounted to HK$834,850 and the monthly minimum payment is HK$48,590.

50.  In summary, from the Bank Loan Settlement in November 2017 to December 2019, she obtained new bank loans of around HK$1,081,703 (HK$840,000 as of June 2019 + HK$241,703) (“New Bank Loans”) plus new personal debts owed to a friend of HK$300,000, making a total of HK$1,381,703.  

51.  She explains that she consented to have her maintenance reduced to HK$64,000 after the Bank Loan Settlement not because the amount of HK$39,000 per month (apart from the provision of HK$25,000 for repayment of personal debts owed to friends and relatives) is sufficient for her living expenses but because of her wish to resolve the ancillary relief issue in one to two years.  Her plan was however upset by the delay tactics of the husband and the present action is still at the discovery stage.

52.  Given she needs HK$90,000 to maintain her marital standard of living, she has therefore incurred a total of loans of HK$1,275,000 from November 2017 to December 2019 through 25-month period (HK$90,000- HK$39,000 = shortfall of HK$51,000 x 25 months).   She is however unable to give details about her use of such loans allegedly because there were always ad hoc expenses. 

53.  Apart from the HK$25,000 which is provided to her to repay her debts owed to her friends and relatives (and she has the liberty to use a portion of it to pay for her legal costs as provided in §132 of the Second Judgment) which was adopted in the Consent Order, she prays for an additional monthly payment of HK$35,000 for repayment of the New Bank Loans.

54.  The husband strenuously objects to such claim.  He reiterates that in an attempt to reduce the wife’s expenses in paying interests to the banks, he offered and actually effected the Bank Loan Settlement, resulting in the complete settlement of all her credit cards debts and bank loans on 16 November 2017.  Together with his continuous payments of maintenance pursuant to the Second Order and subsequently, the Consent Order, she should not have accumulated yet another set of New Bank Loans.  In the absence of detailed information about the flow and usage of such loans, he has reason to argue that the New Bank Loans were simply the wife’s method in obtaining quick cash.

55.  I am impressed by Mr Chan’s argument.  Different from the old bank loans which were incurred as a result of the husband’s non-payment of maintenance in the past as considered by the learned Judge in the Second Application, the New Bank Loans were obtained shortly after the Bank Loan Settlement.  A total of HK$1,081,703 from November 2017 to July 2019 was outrageous.  The wife however chose not to offer any detailed justification or account for the flow, whereabouts and the use of the funds in details, still less of any solid evidence in support.

56.  I remind myself that for consideration of the wife’s application for variation, the basis and intended effect of the Second Order and the Consent Order are relevant factors to which this Court should pay regard and there should not be a radical departure from the approach taken by the Court or the parties themselves when they had entered into an agreement embodied in a consent order.

57.  Given her reasonable needs and maintenance pending suit have been assessed and determined by the learned Judge in the Second Judgment and there has been no material change in circumstances as elaborated in my findings above (other than just turning the husband’s undertaking to a monetary order to avoid dispute in future and an allowance of HK$2,000 to provide for fluctuation of accommodation costs and her new claim for the telephone bill), she should have controlled her spending within the budget assessed by the learned Judge and should not have incurred further loans and debts. 

58.  Her substantial spending over the budget allowed in the Second Order and subsequently, the Consent Order, in the past few years could not be regard as reasonable recurring costs of living.  She should not be allowed to stretch her claim for maintenance through the back door of bank loans.  She is not entitled to ask for “restoration of her marital standard of living” at the monthly amount of HK$90,000 for her personal expenses (by way of loans) soon after the Second Judgment without appeal against it.   

59.  There is indeed no solid evidence before me to prove that the New Bank Loans were actually used for her living expenses.  The New Bank Loans do not satisfy the requirement of maintenance or reasonableness for the purpose of maintenance pending suit under the Ordinance.  In the premises, her claim for provision for repayment of the New Bank Loans is refused.

60.  For reasons aforesaid, I would vary the Consent Order to allow an upward adjustment of HK$4,000.  Such adjustment has also taken into account the general inflation which has been insignificant since the Second Judgment.  Such adjustment is allowed upon the Expenses Undertakings except the undertaking to provide food. I take the view that HK$68,000 would be sufficient to cover the wife’s immediate and reasonable needs as follows: -

Description	Amount allowed (HK$)
Food	$5,000  (increment of $2,000)
Meals out of home	$9,000
Transport	$2,000
Personal grooming	$7,000
Holiday and telephone bills	$3,000  (increment of $2,000)
Entertainment/presents	$3,000
Medical	$4,000
Contact lens	$1,000
Massage	$3,000
Facial	$5,000
Health club	$1,000
Payments to friends and relatives	$25,000
Grand Total:	$68,000

Legal Costs Provision

61.  Of the application for litigation funding, there is no disagreement that the Currey principles apply.  In the Previous Judgments, the learned Judge found that this is an appropriate case for litigation funding to be paid out of the husband’s fund.  The wife seeks to restore the legal costs provision provided under the Second Order which was adopted in the Consent Order but ceased in October 2018.  The husband has paid a total of HK$1,200,000 to the wife for her legal costs provision so far.  The wife says that she still owes her lawyers more than a million.  She gives a rough estimate of costs to be incurred up to the Preliminary Issue proceedings at HK$1,900,000.

62.  The husband does not dispute the quantum.  He further accepts further legal costs will be incurred for the Preliminary Issue proceedings and a monthly payment of HK$50,000 can be provided for the wife out of the Balance.  He however proposes to have it paid out of the Balance in the manner that after deducting HK$188,360 for the special management fee of the Matrimonial Home, HK$164,000 will be paid out of the Balance each month for payment of the wife’s existing maintenance of HK$64,000 and both parties’ legal costs of HK$50,000 each party for 7 months until the Balance be fully utilized because of his limited resources.  I will now proceed to assess his ability to pay.

Ability to pay

63.  The husband complains that the Second Order was made beyond his affordability, ending up with his non-payment of maintenance until he received the First Payment from the Sale.  He reiterates that he is now severely short in cash and is on the verge of defaulting payment.  He seeks support from the learned Judge’s view in the Second Judgment that the husband was beyond the retirement age and was no longer in active and gainful employment or business for many years.  The learned Judge found no other concrete source of fund for maintenance payment other than the income generated or to be generated from the Sentosa Property.  

64.  I am not convinced.  While I accept that the husband is beyond the retirement age, recently having undergone major heart operation, and the wife has produced no concrete evidence for proof of the husband’s active business engagements, substantial income or realizable liquid equities (his insignificant tax payment to the Singapore government could not be regard as solid proof of extensive income or earnings), I could not ignore the fact that he had the means and resources to secure comfortable lifestyle for himself after the Second Judgment. 

65.  Notwithstanding his alleged dire financial condition (alleged unpaid legal costs of more than HK$2,000,000, substantial debts of HK$15,900,000, monthly expenses of HK$350,698 (inclusive of mortgage installment of HK$201,485 and payments pursuant to the Consent Order), he continues to routinely stay overseas, mainly Singapore, for 2 weeks each month, logically incurring costs of air-flight, accommodation, transportation, food, entertainment and related travelling expenses.  Such expenses are apparently neither accounted for in his Form E nor affirmations despite the wife’s challenges.  His transportation expenses were reported to be HK$2,000 and none for holiday expenses.

66.  Even though I decline the invitation to consider the husband actively engaging himself in extensive business and income-generating for lack of solid evidence at this stage, I share the view with Mr Clough, Counsel for the wife that the husband has constant resources at least to afford himself monthly travel between Hong Kong and Singapore as well as overseas-stay for half of each month, if not for business should be for pleasure. 

67.  I also share the view of the learned Judge in §83 of the First Judgment that notwithstanding there was no identifiable source of fund of the husband, he has the ability to discharge his undertakings.  He is undoubtedly aware that his undertakings are commitments to the Court that he must be able to provide such funds, otherwise, he made empty promise to the Court.

68.  It is fair to say that his allegation of the sharp expansion of his personal debts from HK$2,000,000 in February 2016 to HK$4,900,000 in April 2017 and further to HK$15,900,000 in December 2019, among which HK$13,000,000 were loans from the Siblings, might explain the sources of his funding in the past few years.  This nevertheless signifies his strong borrowing power to maintain his current lifestyle of routine overseas trips.

69.  I should add that when he continued the Expenses Undertaking and gave the Costs Undertaking in the Second Application, he would not have predicted the occurrence of the Second Payment and the Third Payment, which were the products of the Second Report and the Third Report. Such payments were all made after the cessation of the legal costs provision in October 2018.  They doubled his projected income generated from the Sale which are extra fund to his original budget by the time he gave those undertakings in the Second Application and later, in the Consent Order.  It is clear to me that the Second Payment and the Third Payment is additional fund to his original budget which has substantially enhanced his ability to pay the maintenance of the wife.  Those payments were not before the Court when the learned Judge determined the Second Application.

70.  In the premises, the Balance, being an unforeseen income additional to his original budget, is readily available cash to the husband and there is no reason why it should not be used to meet the wife’s maintenance and legal costs provision.  While the husband has the privilege of continuing his current lifestyle of frequent travel without accounting for the source and the flow of his funds and his alleged loans in details, I can see the source of the wife’s grievances against his proposal to use part of Balance for his own legal costs which has an effect of exhausting the Balance within 7 months.

71.  In view of the husband’s strong borrowing power, of his ability to maintain his lifestyle of routine overseas trips for a long period of time, and of his receipt of substantial payments from the Sale, which were not available for consideration of the learned Judge in the Second Application, I have valid basis to depart my observation from that of the learned Judge in the Second Judgment.  There is new evidence to suggest that the husband has ability to pay the wife’s maintenance and legal cost provision.  

72.  As to the husband’s argument that it is not fair for the wife’s legal team to receive more payments than his own legal team.  I am cautious to avoid the wife being better off than the husband on making payment of legal costs to their respective legal team.  I nevertheless hold the view that the wife’s legal costs provision should not be dictated by the husband’s preference for allocating his resources on continuing his current lifestyle and frequent travel over paying his legal team.  It is apparently a matter of choice for the husband on how to use his fund.

73.  Further, the renovation of the Matrimonial Home which costs more than HK$830,000 was completed in around February 2018 and both parties express their eagerness to sell it as soon as possible.  Their disagreement on the selling price can be sensibly resolved by expert valuation. Taking into account of the value of the Matrimonial Home is said to be tens of millions or even a hundred of millions (as contended by the wife) and the husband’s obligation to repay the mortgage installment at the monthly rate of around HK$201,500 would cease upon sale, the Matrimonial Home is undoubtedly one of the valuable resources the husband and the wife could resort to.

74.  For reasons aforesaid, I am of the opinion that the husband has ability to pay the wife maintenance pending suit to cover her immediate and reasonable needs assessed at HK$118,000 (HK$68,000 plus legal costs provision of HK$50,000), bearing in mind the adjustment of the living expenses is mainly to turn one of the husband’s undertaking to provide food into a monetary order at HK$2,000 and the only item for increment is limited to HK$2,000 only.

75.  Given the variation is mainly to realize the husband’s undertaking to provide food by a monetary order from now on and to provide provision for fluctuation of accommodation costs as well as ongoing legal costs which are proactive measures, I find no room to backdate the effective date of this Order to the date of application.

76.  I have to emphasize that the maintenance pending suit order is only an interim measure pending substantive ancillary relief hearing, and that the amounts awarded could be reviewed retrospectively, so that any over or under-provision as a result of this order could always be rectified at the substantive ancillary relief trial.

Conclusion

77.  Taking into account of all the circumstances in this case, I conclude on a broad brush approach that it is fair to order the husband to pay the interim maintenance to meet the wife’s recurring costs of living and legal costs provision. I am satisfied that, pending a final determination of the ancillary relief dispute, this will enable the wife to maintain more or less the standard of living which she enjoyed before the breakdown of the marriage.

78.  Having considered all the evidence before me and the submissions of both parties, I order that: -

(a)  Paragraph 4 of the Consent Order be varied such that the husband shall pay the wife the sum of HK$68,000 per month as maintenance pending suit from the 10^th of May 2020 and thereafter on or before the 10^th day of each succeeding month until further order of the Court;

(b)  The husband shall pay the wife the sum of HK$50,000 per month as maintenance pending suit in respect of her ongoing legal costs provision from the 10^th of May 2020 and thereafter on or before the 10^th day of each succeeding month until the hearing of the Preliminary Issue but shall not be more than 12 months, unless otherwise order by the Court.  

79.  I should hold the husband to his continued Expenses Undertaking save that his undertaking to provide the wife with food shall be discharged.

80.  All payments aforesaid will be paid on account of any sum eventually received by the parties when the ancillary relief proceedings are determined unless otherwise ordered by the Court.

Costs

81.  The wife has not been entirely successful in this application. In consideration of the issue of hidden assets and the determination of the Preliminary Issue is relevant to the consideration of the husband’s ability to pay, and all the maintenance pending suit payment will be paid on account of any sum eventually received by the wife and/or the husband when the ancillary relief is determined unless the Court orders otherwise, and having considered all the relevant circumstances in this case, I make an order nisi that the costs of the present application be reserved.

82.  This Order Nisi shall be made absolute upon the expiration of 14 days from the date of this decision unless either party applies to vary the same by way of Summons.

83.  I thank all counsel for their assistance.

Representation: