HCMC 1/2022
[2023] HKCFI 1717
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MATRIMONIAL CAUSES NO 1 OF 2022
_________________
BETWEEN |
| | AD (also known as AT) | Petitioner |
| | and | |
| | RT | Respondent |
| | RET | 1st Intervener |
| | MT | 2nd Intervener |
_________________
| Before: | Deputy High Court Judge H. Au-Yeung in Chambers (Not Open to Public) |
| Date of Hearing: | 14 April 2023 |
| Date of Decision: | 3 July 2023 |
_________________
DECISION
_________________
A. INTRODUCTION
1. Both the petitioner wife (“W”) and the respondent husband (“H”) were born and raised in India. They got married in 2012.
2. There is one child in the marriage (“M”) who is now 9 years old.
3. W, H and M previously lived in Hong Kong with H’s family as part of a multi-generational household (“FMH”), which is owned by H’s father. At one stage, altogether 9 people lived in the FMH, namely, W, H, M, H’s parents, H’s younger brother, H’s younger sister and two domestic helpers. However, people in the household left one after another for various reasons, and at the moment, only W, M, H’s father and two domestic helpers are still living in the FMH.
4. H left the FMH in February 2020. The Divorce Petition was filed on 16 April 2020. Decree Nisi was pronounced on 6 October 2020.
5. Upon W’s application for maintenance pending suit (“MPS”)/interim maintenance (“IM”) and litigation funding (which was opposed by H), Her Honour Judge Melloy handed down her Decision on 11 September 2020 (“the 2020 Decision”) and ordered H to pay:
(1) MPS for W in the sum of HK$34,000 per month;
(2) IM for M in the sum of HK$41,000 per month;
(3) Litigation funding as MPS in the sum of HK$50,000 per month[1].
(“the September 2020 Order”)
6. The September 2020 Order was made upon the following undertakings given by the parties:
(1) H’s undertaking to continue paying M’s school fees directly;
(2) W’s undertaking to pay for Government rent and rates, utilities and management fees on the FMH and to pay for the food and other household expenses for the occupants including H’s parents and two domestic helpers together with the salaries of those helpers.
7. Both parties now seek to vary the September 2020 Order by virtue of the following summonses:
(1) H’s summons filed on 25 July 2022 (“H’s Summons”) to vary the MPS/IM as ordered by the September 2020 Order downwards;
(2) W’s summons filed on 21 October 2022 (“W’s Summons”) to vary the figures under the September 2020 Order upwards as follows:
(a) MPS in the sum of HK$41,500 per month with effect from 21 October 2022;
(b) IM in the sum of HK$50,060 per month with effect from 21 October 2022;
(c) Litigation funding in the sum of HK$290,000 per month and backdated to 31 May 2021 (that was the date when the litigation funding order was ordered to remain effective until further order of the court).
8. W’s case is that the monthly MPS should be increased by HK$7,500 (HK$41,500 – HK$34,000) so as to cater for her holiday expenses. On the other hand, IM for M should be increased by HK$9,060 monthly (HK$50,060 – HK$41,000). This increment is made up by two parts: HK$6,500 (holiday) and HK$2,580 (counselling fees).
9. By virtue of her 10th Affirmation filed on 19 December 2022, W further asked for another HK$30,000 per month for rental and an one-off moving costs of HK$350,000. However, she did not proceed with her request for the said one-off payment in the end because if she and M could stay at the FMH, no moving costs would be incurred.
10. While H did not make it clear the exact extent of the “downward variation” which he seeks in H’s Summons, his counsel suggested by virtue of her written submissions that the Court should order that:
(1) He should only be responsible for paying up to HK$5,000 per month for M’s school fees;
(2) No MPS for W;
(3) IM in the sum of HK$9,000 per month;
(4) Litigation funding in the sum of HK$25,000 per month.
11. In other words, the proposed monthly financial obligation on his part would be HK$39,000 in total.
12. It should also be noted by way of background that, despite the September 2020 Order, H has, from 1 December 2022 onwards, only paid W a total of HK$10,000 per month (as opposed to HK$125,000 pursuant to the September 2020 Order), on the ground that he did not have the financial means to pay more. This unilateral action was not done with the consent of W nor with the Court’s permission.
B. LEGAL PRINCIPLES
13. The applicable legal principles regarding MPS are well established and have been explained in HJFG v KCY [2012] 1 HKLRD 95 as follows:
“33. Jurisdiction to award maintenance pending suit to a spouse is statutory, being governed by the provisions of s.3 of the Matrimonial Proceedings and Property Ordinance, Cap. 192. By that section the court is given a discretion to make an order requiring either 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 of what may broadly be called the divorce litigation.
34. By definition, therefore, 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. ‘Maintenance’ is a broad concept. I do not seek to define its exact meaning but it seems to me that it must be restricted to those payments necessary to meet the recurring costs of living at whatever standard of living is appropriate. That being the case, no matter how great the wealth of the parties and how unevenly distributed that wealth may be at the time an application for interim maintenance is made, the court has no jurisdiction to make orders which for all practical purposes result in a form of pre-trial capital re-balancing. In the present case, the Judge recognised the long-established approach of looking to the ‘immediate and reasonable needs’ of the wife and son.
35. As to the amount of maintenance pending suit that may be paid, the Ordinance provides only that it must be ‘reasonable’, that is, having regard to the circumstances of the case, that it must be fair.
36. An important factor in determining fairness is a consideration of the marital standard of living. In this regard, each case must be considered according to its own circumstances. It is not simply to be assumed that great wealth equates to great extravagance. Some married couples who enjoy great wealth spend with comparative modesty and with a discipline born of discretion, others enjoy consumption on a grand scale.
37. The principles that have emerged over time to guide judges in matters of interim maintenance have been fashioned in the main to ensure fairness. This is well illustrated in the judgment of Nicholas Mostyn QC, sitting then as a deputy High Court judge, in TL v ML and Others (Ancillary Relief: Claim against Assets of Extended Family) [2006] 1 FLR 1263, at 1289, in which, having looked at earlier authorities, he derived the following principles that speak specifically to fairness or are based on the need to ensure it. For present purposes, it is sufficient to cite the relevant principles without citing the judge’s reference to the source of those principles:
i. The sole criterion to be applied in determining the application is ‘reasonableness’, which is synonymous with ‘fairness’.
ii. 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.
iii. 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. That budget should be examined critically in every case to exclude forensic exaggeration.
iv. 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.
38. Finally, it is to be noted that in applications for interim maintenance, when the amount to be paid is for a limited period only and not all of the evidence is necessarily before the court, it is not appropriate, nor indeed in most cases possible, for the court to conduct a detailed investigation into the finances of the parties. 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.”
14. It is also trite that in the event it is found, after a full ancillary relief trial, that there has been any overpayment or underpayment caused by the maintenance pending suit order, the matter can be rectified in the final ancillary relief order made after trial.
15. As aforesaid, the applications before this Court involve variation of orders of MPS and IM. The Court is empowered to vary a periodical payment order by virtue of section 11 of the Matrimonial Proceedings and Property Ordinance (Cap. 192, Laws of Hong Kong), and section 11(7) of which stipulated that:
“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 […]”
16. In WNWG v PBF (CACV 130/2011, unreported, 27 March 2012), Lam J (as Lam PJ then was) had the following to say:
“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 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 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. 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. Likewise, 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 untrammelled, 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.’ ”
17. In AEM v VFM [2008] 3 HKLRD 36, Cheung JA also explained in [14] that:
“ […]
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 : Primavera v. Primavera [1991] 1 FLR 16 and Cornick v. Cornick (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.”
18. The principles applicable to litigation funding are also well established. They have been set out in WW v LLN formerly known as LSM [2020] 2 HKLRD 487, [2020] HKCA 178 by the Court of Appeal as follows:
“20. The principles for granting litigation funding are well-established:
(1) In order to obtain litigation funding, the burden is on an applicant to demonstrate that she cannot reasonably procure legal representation by any other means. This includes showing that she cannot secure publicly funded legal help at a level of expertise apt to the proceedings. To the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, either directly or as the means of raising a loan to fund legal services;
(2) The subject matter of the proceedings and the reasonableness of the applicant’s stance in the proceedings will always be relevant.
(3) The period over which costs allowance is to be paid is also relevant. If the application 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. If the FDR fails, it would be for the new judge, on the basis of the materials properly before him, to determine whether a new allowance for legal costs should be granted and if so, in what amount.
HJFG v KCY [2012] 1 HKLRD 95, [80]-[83]; Currey v Currey [2006] EWCA Civ 1338.
21. The court should be alert to the risk of injustice arising from irrecoverable and/or unmerited sums paid for litigation funding, which would call for extra caution in the balancing exercise. As stated by Thorpe LJ in Moses-Taiga v Taiga [2005] EWCA Civ 1013, at§20:
‘… the whole purpose of alimony pending suit is to sustain the petitioner pending the court’s determination. There is manifestly a risk of unjustified and irrecoverable payments, but that has to be balanced against the risk of a denial of access to justice for the petitioner, if she has not the means to sustain herself and the litigation pending its determination.’ ”
19. In Rubin v Rubin [2014] 1 WLR 3289, it has also been held that:
“13 ..... (iv) The court cannot make an order unless it is satisfied that without the payment the applicant would not reasonably be able to obtain appropriate legal services for the proceedings. Therefore, the exercise essentially looks to the future. It is important that the jurisdiction is not used to outflank or supplant the powers and principles governing an award of costs in CPR Part 44. It is not a surrogate inter partes costs jurisdiction. Thus, a LSPO should only be awarded to cover historic unpaid costs where the court is satisfied that without such a payment the applicant will not reasonably be able to obtain in the future appropriate legal services for the proceedings.”
C. DISCUSSION
C1. Litigation funding
20. The previous litigation funding order was in the sum of HK$50,000 per month. W now asks to increase it to HK$290,000, and out of which HK$190,000 to be backdated to 31 May 2022.
21. In W’s 9th Affirmation filed on 21 October 2022 in support of W’s Summons, she put forward the following as the basis for the proposed increase in litigation funding:
“9. My legal costs as at the date of FDR on 16 September 2022 had risen to HK$5,099,464.80. On average, I am spending around HK$175,000 per month on legal fees. [H], 1st Intervener and 2nd Intervener’s latest Forms H dated 16 September 2022 revealed that their legal fees were around HK$3,667,992 and HK$890,357 and HK$430,250 respectively. [H] is spending around HK$126,000 per month on average since the Petition was filed in April 2020. Therefore, even at [H]’s own level of legal costs, the sum of HK$50,000 per month awarded to me in comparison is wholly unrealistic and unfair and should be increased.
10. It is virtually impossible and untenable to continue at the same level of litigation costs contribution of HK$50,000 per month. With the matter being transferred up to the High Court, I am advised that the litigation costs will increase due to the level of preparation required for the preliminary issue trial and the trial itself.
11. There should be an equal level playing field and ‘equality of arms’. However, in this case, [H] has a war chest to litigate these proceedings and full access to funding from [XXX] whereas my legal costs have been restricted to HK$50,000 per month since the start of these proceedings. I find this arrangement extremely unreasonable and unfair.”
22. W has given the following estimation[2] as her prospective legal fees:
| | | |
| (1) | Discovery application
| HK$411,000
|
| (2) | Preparation for trial up to PTR
| HK$1,296,000
|
| (3) | From PTR to completion of trial
| HK$3,447,500
|
| Total : | HK$5,154,500 |
23. By the time of the hearing of the Summonses, the FDR had been held, and parties were supposed to come back to this Court shortly for the First Directions Hearing, at which it was expected that the Court would give directions for the further preparation of the case for trial which would take place in 2024[3]. Apart from a section 17 application which W might or might not take out in due course, it was expected that the further directions to be sought from the Court would be quite standard. Even taking into account the complexity of the case, the estimation of costs in the region of HK$5 million is very much on the high side.
24. On the other hand, H proposes that only HK$25,000 per month should be paid. The bases for H to suggest such a low level of litigation funding are that (1) W has her own resources to pay for her legal costs; and (2) H cannot afford to pay more than the suggested sum. I will deal with these arguments in sections C1.1 and C1.2 below. However, putting these factors aside at the moment, the proposed monthly sum of HK$25,000 is an unrealistically low figure. Indeed, even the sum of HK$50,000 as ordered under the 2020 Decision is too low in the light of the subsequent development of the case. As pointed out by W, according to the Form H filed by H on 16 September 2022, the amount of costs to be incurred by H up to FDR was in the sum of HK$3,667,992, which is equivalent to a monthly sum of around HK$126,482[4].
25. According to H’s Form H dated 13 April 2023, it was estimated that the costs after FDR and up to and including the trial would be HK$1,060,000. However, it is noted that H did not put down any estimation on disbursements. Therefore, it seems that the estimation of HK$1,060,000 was arrived at without taking into account the fees payable to the valuation experts. Indeed, in the Form H which H subsequently filed on 9 May 2023, it was estimated that H’s total costs of ongoing or anticipated proceedings up to the conclusion of the trial was over HK$1.5 million.
26. Taking into account the aforesaid matters, I am of the view that if litigation funding is to be ordered, it should be set at the level of HK$120,000 per month. I appreciate that it is a figure which is much lower than that that was asked for by W. However, I am of the view that the Court should adopt a figure which is reasonable in the circumstances. While I think, as a matter of fairness, H ought to provide W with adequate funding so that her right in this matter can be properly protected, on the other hand it is not up to W to incur legal costs irresponsibly simply because H would foot the bill.
27. This action was ordered to be transferred to the Court of First Instance by HHJ Thelma Kwan on 16 September 2022. Taking into account the complexity of the matter, I am of the view that it would only be fair to W if the litigation funding provision is ordered to take effect from 1 October 2022.
28. Insofar as it is necessary, I also find that if the Court does not make this order, W will not reasonably be able to obtain in the future appropriate legal services for these proceedings, for it cannot be disputed that her former solicitors have refused to act for her further since December 2022, and a demand letter had been issued to her for the outstanding legal costs in the total sum of over HK$1.3 million.
C1.1 W’s financial resources
29. As mentioned, H contended that W has her own undisclosed source(s) of funds which she can make use of to pay her legal fees. It was argued, inter alia, that:
“W has been able to obtain significant loans from her family members: (1) her father-in-law (HK$280,000) (whom said he had no financial resources); (2) her sister (HK$715,880); and a friend ‘[S]’ (HK$425,623).
W has not given full and frank disclosure or explanation of these loans. In her letter dated 30 November 2022, W refers to a loan of an unspecified amount received ‘from a friend’. W refers to ‘borrowing funds from some of the parents at [M]’s school’ but gives no details as to how much she has borrowed or from whom.”[5]
30. In H’s Reply Submissions, his counsel further argued that:
“Aside from siphoning MPS/IM payments from H to contribute to her legal costs, W has also relied on third parties for financial support, which have not been fully or transparently explained. W’s total costs according to her Form H dated 16 September 2022 are HK$5,099,463. HK$4,080,482 has been paid[6] […]. However, H’s LCP payments (September 2020 – September 2022) totalled only HK$1,542,500. W therefore managed to pay HK$2,537,982 by other means. This does not tally with W’s account for loans received from friends and family which total HK$995,880 […]. HK$1,542,102 is unaccounted for. This alone should disqualify W from LCP as she has failed to properly explain these discrepancies. It is clear she has resources at her disposal to meet ongoing legal costs herself.”[7]
31. Putting H’s case to the highest, W had been able to ask around for loans. However, it is apparent that those loans had been obtained sometime ago: the loans from H’s father were obtained in August – October 2020, while the loans from W’s sister were granted in February – April 2021.
32. Even if W had obtained loans or other financial assistance from some other sources, the objective facts are that:
(1) Her former solicitors had refused to act further for her in November 2022 – W filed her Notice to Act in Person on 30 November 2022 (i.e. the day following the date on which H’s solicitors informed W’s former solicitors that H shall cease to pay litigation funding from 1 December 2022 onwards);
(2) On 9 March 2023, W’s former solicitors issued a letter to W, demanding her to settle her outstanding legal costs as follows:
| Invoice No. | Date | Amount (HK$) |
| 109866 | 3 May 2022 | 19,584.00 |
| 110081 | 7 June 2022 | 99,500.00 |
| 110170 | 6 July 2022 | 122,750.00 |
| 110337 | 8 August 2022 | 145,035.00 |
| 110471 | 6 September 2022 | 194,362.00 |
| 110559 | 5 October 2022 | 262,000.00 |
| 110685 | 2 November 2022 | 226,168.00 |
| 110838 | 1 December 2022 | 40,776.10 |
| AM/20/033[8] | 17 March 2021 | 50,000.00 |
F/N:858-B[9]
F/N:858-C[10] | 31 May 2021
15 September 2021 | 150,000.00 |
| Grand Total | 1,310,175.10 |
(3) It can be seen from the above that W had not paid towards the invoices issued by her solicitors since May 2022;
(4) W has to act in person in this application which is very important to her.
33. Ms Booth submitted that the demand letter “appears contrived” because it “refers to this court hearing and gives a deadline for payment with reference to 14 April 2023”[11]. In my view, even if the letter has been issued for the purpose of strengthening W’s argument in this application (in respect of which I do not think I need to express any view), it is neither here nor there, because there cannot be any doubt (and it is not argued otherwise) that the content of the demand letter represents the correct position as far as W’s outstanding fees owed to her former solicitors are concerned.
34. In my view, if W has indeed got other assets, other possible funds or other possible source(s) from which she could borrow money to pay off her legal bills, she would have resorted to those funds/sources so that she could have legal representation in this application for litigation funding which is very important to her.
35. It is also undisputed that W has applied for legal aid and her application has been rejected.
36. While W has a commercial property in India, it does not worth much. Indeed, H’s counsel did not rely on this matter at all in her argument.
37. It should also be mentioned that, while W is now earning a monthly salary of HK$21,000, H alleged that her earning capacity should be in the monthly sum of HK$45,000 because that was what she earned while she was working for XXXX. However, it is noted that she was only paid HK$18,500 by XXX up to December 2018, and her salary was only increased drastically to HK$45,000 in January 2019 (paid up to December 2019 only). Given the fact that H is the 98.5% shareholder, CEO and director of XXX, it is very likely that H could dictate how much W could receive from XXX as her salary. Therefore I do not think reference should be made to the amount of salary which W received from XXX when the Court considers her earning capacity.
38. I should put down a marker here that I will take the said monthly salary of HK$21,000 into account when I calculate the amount of MPS payable by H in Section C4 below. I will therefore disregard this amount for the time being.
39. By reasons of the aforesaid, I am satisfied that W has demonstrated that she cannot reasonably procure legal representation with her own assets whether directly or as the means of raising a loan. She has also shown that she cannot pay her legal bills by any other means. I find that W has satisfied the test for litigation funding.
C1.2 H’s ability to pay
40. It was the submission of H’s counsel that:
“W seeks a staggering HK$381,560 per month. H’s income is HK$85,000 p/m, with his personal and general expenses totaling HK$126,351 p/m; this will lead to a deficit of HK$422,911 p/m. H’s cash in bank means that he could not meet even 1 months’ (sic) worth of MPS/IM/LCP payments […]”[12]
41. It was further said that the total balance of H’s bank accounts has dropped from around HK$680,000 in November 2022 to around HK$143,000 in March 2023.
42. H has also explained his financial position as follows in his 5th Affirmation:
“17. […] XXXX’s financial performance began deteriorating with the protests in 2019. The net profits of the company fell from HK$6,372,053 in the year ending December 2018 to HK$91,401 in the year ending December 2019. This happened before the Petitioner issued her petition.
18. While XXXX recovered to a net profit of HK$1,611,588 in the year ending December 2020, this is 50% below the net profit for the year ending December 2018. The COVID pandemic had a devastating impact and the company made a new loss of HK$3,245,280 in the year ending December 2021 as per the management accounts.
19. While XXXX had revenues of HK$50,524,591.45 in the financial year ending December 2021, revenues from January to June 2022 have declined to HK$13,966,385.49, which is only about 26% of 2021’s total. In the same period, XXXX made a net loss of HK$3,402,073.95. This is due to a falling rate of transactions conducted by XXXX.
[…]
21. XXXXhas had to make 10 employees redundant at the end of June 2022 in order to reduce salary costs. […]
22. In additional to the redundancies, XXXXhas had to reduce the salaries of all employees by about 30% to 50%. I have had my own salary reduced to HK$85,000, or HK$83,500 after deduction of MPF […]
[…]
25. I previously relied on borrowing from XXXX to fund the deficits in my expenditures but I am no longer able to do so as XXXX is financially unable to provide further funding to me. In 2022, I have already borrowed HK$2,024,655.94 from XXXX. […]
26. To fund my income deficit, I have resorted to loans from banks, friends and [the 1st Intervener][13]. I recently borrowed HK$1,329,000 from HSBC on 22 June 2022, the monthly repayment of which is HK$24,808 (60 instalments). […]
27. In addition to the above, I have the following loans and liabilities:
| LIABILITY | AMOUNT (HK$) |
| Mortgage with HSBC | $6,097,286.93 as at 7 May 2022 |
| HSBC credit card | $33,820.74 |
| Cash instalment plan attached to HSBC credit card | $68,744.02 |
| HSBC personal plan | $404,069.60 as at 7 May 2022 |
| HSBC | $1,329,000 |
| Loan from [aaa] | $2,000,000 |
| Loan from [yyy] Limited | $19,377,000 |
| Loan from [ccc] | $16,894,000 |
| Loan from XXX . | $2,024,655.94 |
| Loan from the 1st Intervener | $500,000 |
| Loan from the 1st Intervener | $200,000 |
| TOTAL: | $48,928,577.23 |
28. The only meaningful bank balances I have is HK$1,017,820.68 in my HSBC account as at 20 July 2022, which actually presents funds I borrowed from HSBC, and a balance of HK$148,051.19 in my Bank C account no.xx-xxx-xxxx-x. […]
29. As to monies owed to me, there is only the loan of INR 1,600,000 (about HK$164,443) lent to my friend, […].
30. I have monthly expenses of about $240,000 per month […]
[…]
33. My financial position, particularly in terms of cash flow, is clearly unsustainable. I am drowning in debt and my ability to borrow further is exhausted. The only asset I can use to borrow against is my flat. I already owe HSBC $6,097,286.93 as at 7 May 2022 for the mortgage on my flat which is estimated to be worth $13,550,000 as at 24 July 2022 according to the Bank of China mortgage valuation. My outstanding liabilities to HSBC total HK$7,899,099 exceeds my equity in the flat and I will not be able to borrow further from HSBC. I doubt that will be able to borrow from other banks either due to my credit profile […]”
43. When the Court considers H’s financial position, it is not bound by H’s mere say so. Indeed, it is evident that H could manipulate such position for his own purpose. For example, while H represented to HHJ Melloy in mid-2020 that his income had “recently deteriorated significantly from HK$240,000 per month to HK$70,000 per month”[14], such monthly income could then be increased on 22 September 2020 (less than two weeks after the handing down of the 2020 Decision) to HK$120,000 (a more than 70% increment) by reason of his “steadfast loyalty and commitment to [XXX]’s success”[15]. What must be noted here are that:
(1) H is the 98.5% shareholder, CEO and director of XXX. That is the reason why H described XXXX as “his company” in his Affirmation[16]. Apparently, H could decide on the amount of his own salary;
(2) The adjusted net profit of the XXXX Group for the year ended 31 December 2019 had dropped to HK$60,000 (the corresponding figure for the previous year was HK$6.37 million). Net profit of XXX had also dropped from HK$6.3 million (in 2018) to a mere HK$91,401 (in 2019). Yet, H’s salary could still be increased so substantially in 2020.
44. Despite the very difficult situation which H told the Court that he and XXX had been in, this Court is aware that:
(1) In March 2019, H granted an interest-free loan in the sum of US$2,502,230 to the 1st Intervener (his sister) for two years for her investment in a company known as Wixxxxx Limited. It was stipulated in the Family Loan Agreement dated 14 March 2019 between them that if the 1st Intervener could not repay the loan, H would have the right to require the transfer of 100% of the shares in Wixxxxx Limited by the 1st Intervener to him. In March 2021, the said agreement was extended for two years. H’s solicitors, by letter dated 27 June 2022, explained further that:
“The loan to [the 1st Intervener] in the amount of US$2,502,230 has not been repaid to our client. The loan was funded from our client’s overdraft account with XXXX. As advised by XXXX’s accountants, our client’s liabilities to XXXX in his overdraft account should be reduced, for the reduction of credit risk. The loan from our client to [the 1st Intervener] was transferred from our client to XXXX, so that XX became the creditor of the said loan. In exchange for the loan becoming an asset of XXXX, our client’s overdraft account was reduced by the corresponding amount. [The 1st Intervener] transferred her liability under the loan to Wixxxxx, as the fund obtained from the loan were injected into Wixxxxx by her as a capital investment.”
(2) Ms Booth told this Court, upon seeking instruction in the course of the hearing, that the said loan was still left unpaid at the time of the hearing. In other words, Wixxxxx Limited was still indebted to XXXX for the sum of US$2,502,230, and the loan maturity date has been extended for one year to 2024.
(3) H’s solicitors also explained H’s financial situation by letter dated 27 June 2022 that:
“The purpose of the loan from [the 1st Intervener] is to cover our client’s various expenses, including his living expenses. Our client’s salary is not sufficient to cover [W]’s and [M]’s interim maintenance, legal cost provisions for [W], [M]’s tuition, his own legal costs and his living expenses. Our client is in deficit every month. Hence, our client has resorted to borrowing from [his] family, friends and XXX.”
(4) According to the single joint expert valuation report dated 30 August 2022:
(i) As at 31 December 2021, the XXXX Group had net current assets in the sum of HK$14.8 million, and net assets of HK$18.1 million. I have not lost sight of H’s assertion (made via his solicitors’ letter dated 9 September 2022) that he anticipated that the said positive net asset figure would become negative in 2022 because, inter alia, a number of debts would be written off. However, I do not think the Court should take this allegation into account because it is just H’s say so;
(ii) The 1st Intervener held 100% equity interest of Wixxxxx Limited which had made a net profit of HK$2.16 million in the financial year 2022 (after deducting HK$1.5 million as reserve for repayment of a loan borrowed by the 1st Intervener[17], otherwise the net profit would have been HK$3.68 million). According to the balance sheet of the Wixxxxx Group (it had two wholly owned subsidiary companies), as at 31 March 2022, it had HK$15.6 million net current assets and HK$19.1 million net assets.
(5) In the period between 1 April 2020 and 30 September 2021, XXXX had lent a sum of over AED2,120,159[18] to another company Sxxxxx Pxxxxxx Cxxxx Management Services LLC (“SP”), which was incorporated by the 2nd Intervener and three other individuals, and with which H claimed that he is totally unrelated.
45. In my view, H apparently has failed to give a full picture of his financial position to the Court:
(1) If he could not even make ends meet on a monthly basis[19], it is difficult to understand why he would not insist that the 1st Intervener shall repay at least part of the loan of US$2,502,230, rather than having had the whole loan assigned to XXX;
(2) H explained that he had to assign the 1st Intervener’s loan of US$2,502,230 to XXX because XXX’s accountants had advised that H’s liabilities to XXX in his overdraft account “should be reduced for the reduction of credit risk”. Even putting aside for the time being the question of whether such an advice makes sense or not (given the owner of the overdraft account (i.e. the borrower) is the 98.5% shareholder of the company), it can be seen from H’s Form Es that his liability to XXX had been reduced very substantially from HK$32.19 million as at June 2020 to HK$1.56 million as at February 2022. There should no longer be any further “credit risk” as alleged;
(3) Further, it is unexplained as to why it is alright for Wixxxxx Limited to owe XXXX the sum of US$2,502,230 instead and why XXXX does not have to worry about “credit risk” in this regard;
(4) In any event, the current position is that Wixxxxx Limited is now owing XXXX the sum of US$2,502,230 (around HK$19.5 million). Given the fact that Wixxxxx Limited has a positive net assets position, it is unclear why it cannot repay the said loan to XXXX forthwith (and if it has done so, XXXX would then be in a position to lend some money to H for him to satisfy any court order which is made against him (assuming for the sake of argument that XXXX is unable to do so without such repayment by Wixxxxx Limited as matters now stand)). Ms Booth said Wixxxxx Limited is not in a stable position and it might be because some of its net assets are receivables. These explanations are not accepted, because the latter part of the answer is just guesswork, and in any event it is still unclear as to why Wixxxxx Limited could not borrow from others for the purpose of repaying XXXX. Neither had H enlightened this Court as to why the 1st Intervener could not repay him/XXX or, at least, borrow from others for the purpose of repaying him/XXXX;
(5) Indeed, as mentioned above, a sum of HK$1.5 million has been specifically set aside by Wixxxxx Limited for repayment of the loan borrowed from H by the 1st Intervener. It is unclear as to why this sum was not repaid right away;
(6) Even if the 1st Intervener does not own H any money personally, there has been no explanation as to why she could not grant him further loans for satisfaction of any court order;
(7) What is more difficult to understand is that, despite the very difficult financial position that H would like this Court to believe that he is in, he is still able to afford to engage solicitors and counsel for the purpose of this hearing;
(8) Not only that H was able to engage a legal team to represent him at this hearing, according to the latest Form H which he had filed, it was anticipated that his total costs of ongoing or anticipated proceedings up to the conclusion of the trial of this action would be over HK$1.5 million. Further, he had proposed to W he would pay her and M a total of HK$39,000 per month. Where would such money come from?
46. In my view, the disclosure which H had made as far as his sources of funds are concerned is obviously deficient. I have no hesitation to assume that he has the ability to pay W for litigation funding. Indeed, it would be very unfair if the Court does not make an order for litigation funding in favour of W which would ensure that she would be legally represented at the trial because otherwise there would not be equality of arms.
C2. W’s application to vary MPS/IM upwards
47. W’s reasonable need (including that of M) has been assessed by HH Judge Melloy in the 2020 Decision. Both parties now seek to argue that the awarded amount should be adjusted, though to a different extent and for different reasons.
48. On the part of W, she alleged that there had been material changes in circumstances, in that it is now necessary for her to incur costs on accommodation, holiday and counselling.
49. I will consider these three aspects of need first. However, before I do that, it is useful to remind myself the marital standard of living of the parties and the relevance of such standard in the present applications.
C2.1 Standard of living
50. While it is trite that the Court is not trying to replicate W’s marital standard of living in the past, the Court should still take such standard into account when assessing reasonable need. In this regard, HH Judge Melloy described the standard of living of the parties as follows in the 2020 Decision:
“[…] In this instance it seems that the parties enjoyed a comfortable but not an overly lavish lifestyle. They lived as a three generational unit, in a house of approximately 3,000 square feet in the New Territories. They had domestic help and the husband and wife would travel from time to time, sometimes business class, but this is not on the face of it a couple who lived a very expensive lifestyle […]”[20]
51. The Court should also bear in mind that:
“[…] when a marriage breaks down and the parties begin to live in two separate households it is not possible, generally speaking, to maintain the same standard of living as before. There has to be, of necessity, some form of adjustment.”[21]
C2.2 Accommodation
52. As explained in paragraph 3 above, W and M are living with H’s father in the FMH which is owned by H’s father.
53. W alleged that she had received a text from H’s father on 28 November 2022 informing her that he had no option but to lease out the FMH as he was unable to meet his personal expenses and had no source of income. This was what he stated:
“[…] as u know my financial situation, I’m not able to manage my personal expenses n repair n maintenance of the house is very expensive. I hv no choice left but to rent the house, I’m going to talk property’s agents if they can find someone ASAP, I’m informing u so that u can find a solution, I don’t want u n [M] to leave the house but I’m helpless I’m very sorry for this situation, I want to talk about this matter so whenever u free call me or we can talk face to face!”
54. W stated in her skeleton submissions that she therefore intended to move to a 1,000 square feet 3-bedroom apartment, in respect of which she would need to pay monthly rental of around HK$30,000[22]. In case such a move is necessary, she also asked H to pay her a sum of HK$350,000 as moving costs.
55. She had also suggested as an alternative that H pays her HK$25,000 so that she may pay rent to H’s father. In such a case, she would be able to save the moving costs referred to above.
56. The question here is whether this Court is satisfied that W and M have any immediate need to pay rent, whether to H’s father or to a new potential landlord.
57. In my view, W has failed to establish such a need.
58. In W’s Form E dated 24 June 2020, she stated that H’s father:
“[…] may relocate to India in the upcoming months which might significantly affect my current living arrangement. The factors determining his move depend largely on the [H]’s next move as it is clear from his Affirmation (Paragraph 3(xvi)) that he controls my father-in-law’s salary and he can stop these payments. Should that happen, my father-in-law cannot afford to live in Hong Kong and will need to return to India.”[23]
59. W’s concern had become the reality shortly thereafter. According to W’s own evidence[24], the employment of H’s father with XXX was subsequently terminated by H in October 2020, and since then H’s father did not receive any further salary.
60. Be that as it may, it is evident that H’s father did not move back to India and that he is still living with W and M at the FMH.
61. W explained in her submission that H’s father did not move back to India as anticipated because of the pandemic situation. However, the pandemic situation, which has improved a lot recently, cannot explain the continuous presence of H’s father in Hong Kong (there is no evidence which suggests otherwise).
62. If the financial situation of H’s father is indeed so dire as alleged, I would have thought W and M had moved out of the FMH already.
63. I therefore would not accede to W’s request in this regard.
C2.3 Holiday expenses
64. In the 2020 Decision, HHJ Melloy totally disregarded W’s claim for holiday expenses, presumably because it was still impossible to travel under the Covid-19 pandemic at the time.
65. However, I agree that the resumption of international travel is a material change in circumstances which the Court should now take into account when assessing W’s reasonable and immediate need.
66. It was submitted by Ms Booth that “Holiday expenses should not be included in MPS/IM”[25]. Insofar as it is suggested that overseas travel cannot be taken into account as a matter of principle when the Court considers the reasonable amount for MPS/IM, I reject this argument. There is no hard and fast rule as such. Whether the amount should be granted must depend on the circumstances of the case.
67. In the present case, W stated that the family travelled at least 2 to 3 times a year on business class tickets. She therefore estimated holiday expenses to be around HK$7,500 per month for herself (i.e. HK$90,000 per annum) and HK$6,500 per month for M (i.e. HK$78,000 per annum) on the basis of two overseas trips per year.
68. Given it is undisputed that W was born and raised in India and that her mother is still living there, I consider that it is reasonable for her to visit her mother together with M once a year. In the circumstances of the present case, I consider it reasonable for them to travel on economy class rather than business class.
69. As they may stay with W’s maiden family while they are in India, no further costs of accommodation would be required to be paid.
70. W has produced evidence to show that she has paid for two tickets to India at around HK$7,500[26] each in October 2021 for her domestic helpers. On that basis, I assess the reasonable need of W and M in this regard is HK$7,500 and HK$6,000 respectively. In other words, the monthly sums payable for holiday expenses for W and M should be HK$625 and HK$500 respectively.
C2.4 Counselling for M
71. According to W’s 9th Affirmation filed on 21 October 2022:
“43. Her Honour Judge Melloy recognised the need for [M] to seek counselling and by way of an Order dated 23 March 2021[27] ordered [H] to cover [M]’s costs for play therapy at the first instance.
44. After paying for several sessions, [H] unilaterally decided that [M] did not require further therapy and ceased to cover the costs since July 2021. I repeatedly reminded [H] that he was required to cover the costs of [M]’s therapy under as per the Order dated 23 March 2021. However, he refused as he always complained that he had no funds.”
72. The above assertions were not disputed by H.
73. In Ms Booth’s reply submission, she stated that:
“H paid for 18 therapy sessions for [M]. He does not believe further play therapy is beneficial or affordable, although [M] can seek support via her school if required, which will not be of additional cost.”[28]
74. With greatest respect, it is simply not up to H to decide whether further play therapy is required for the benefit of M. As a matter of fact, before HHJ Melloy made the order on 26 July 2021, H had also submitted through Ms Booth that such therapy was not necessary. Apparently such submission had been rejected by Her Honour, otherwise H would not have been ordered to pay for such services. Such view of H is also not supported by the email dated 13 June 2022 which the Assistant Principal of the school at which M studied sent to W. It reads:
“Following a series of conversations and observations of [M] upon return to school, we believe it would be helpful to her to recommence her sessions with a psychologist/play therapist. The Academic Team believe that these sessions benefited her confidence hugely and, as a result, had a direct positive impact on her development here at school.
Unfortunately, we are unable to facilitate these sessions currently but would be more than happy to host an external organisation should you want [M] to attend during school hours.
I have sent this email to both you and [H], please do let me know if you would like to discuss it in further detail.”
75. The above email further demonstrates two points:
(1) The school cannot provide such play therapy counselling service to M;
(2) H has also been informed by the school about M’s need in this regard.
76. In such circumstances, it is difficult to understand why H would still assert in these applications that M does not need to receive such counselling service.
77. In the morning of the hearing, Ms Booth provided W with a list of government resources where, it was said, it is possible for M to receive counselling service free of charge. It was emphasized on H’s behalf that not every family could afford to pay a therapist and that W should try to obtain free service from the Government/NGOs.
78. Of course I would agree that for those families which cannot afford paid services, they should, for the best interest of their children, seek help from the Government/NGOs so that their children’s problems can be addressed as soon as possible despite their lack of means. However, for those families who can afford it, they should not rely on the Government/NGOs unnecessarily. If they do so, they are abusing the system and the free services, which should be left to serve those who are really in need.
79. In the present case, I do not accept that M really comes from a family in need as such. I have little doubt that H can afford to pay for such services for the reasons which I have explained in Section C1.2 above.
80. I agree with W that M should receive play therapy counselling twice a month. As her previous therapist is currently charging HK$1,280 per session, the total amount of reasonable need in this regard should be HK$2,560 per month.
C3. H’s application to vary MPS/IM application downwards
81. In H’s 5th Affirmation filed on 25 July 2022 in support of H’s Summons, apart from alleging that his financial position got worse and that he believed that W had financial resources available to her, H stated that:
“46. This is not a case where the family led a lavish lifestyle and despite the quantum of maintenance ordered, [W] still tries to claim monthly expenses of HK$190,718 in her updated Form E. I do not believe that this is anywhere near accurate and that the actual amount spent by [W] is below the amount ordered.”
82. I should point out right away that H’s reference to the figure of HK$190,718 which is the amount of expenses found in W’s latest Form E is not understood, for W is not asking the Court to assess her variation of MPS/IM application on that basis.
83. At the hearing, Ms Booth argued that the Court should re-assess W’s reasonable need, because, it was said, now that W has disclosed her evidence (such as bank statements), it can be demonstrated that W’s alleged need is actually not supported by evidence.
84. Take “personal grooming” as an example. While the budget of HK$4,000 for this item was accepted by HHJ Melloy in its entirety in the 2020 Decision, Ms Booth submitted to this Court that the lack of evidence in support of this item should justify a re-assessment thereof.
85. In W’s Answers to H’s Questionnaire filed on 5 October 2020, she explained that:
“The Petitioner incurs expenses for haircuts, facials, manicure, pedicure and waxing. The Petitioner pays for most of these expenses in cash and most of the shops do not provide receipts. Please see Annexure 28 for an invoice for personal grooming which the Petitioner has kept.”[29]
86. Ms Booth stated that the only invoice produced by W was merely in the sum of HK$1,150 and therefore the claimed amount of HK$4,000 is simply unsupported.
87. With respect, this argument is misconceived, for it is trite that the Court should adopt a broad-brush approach at this stage, and detailed investigation of the finance of the parties are not to be conducted. Hence, it is totally inappropriate for H to take the Court through W’s evidence in an attempt to obtain a finding that W has been unable to prove that she has incurred certain expenses in the past. The Court simply cannot and should not make such a finding (which involves rejection of W’s case that she has paid cash for the personal grooming services) without considering W’s evidence to be given in cross-examination.
88. Ms Booth has also prepared a table for the purpose of demonstrating that:
“W’s bank statements show that she has been utilising her MPS and to pay her legal fees, and often has excess remaining (hence W’s ability to accumulate HK$210,000) […]
This indicates W inflated her expenses for MPS/IM and the previous MPS/IM ordered was excessive. The Court is invited to assess W’s application critically. Siphoning funds for ulterior purposes is an abuse of process, and W has been dishonest as to her genuine monthly expenses.”[30]
89. I do not think these submissions may assist H. There is nothing wrong for W to make use of any leftovers of the MPS/IM to pay off her outstanding legal costs. It is trite that the Court would only use a broad-brush approach when fixing the amount of MPS/IM. It is therefore not surprising at all that the assessed need would be different from the actual amount of expenses, and that there may be leftovers from time to time. It is a quantum leap for H to say that W has siphoned funds for an ulterior purpose.
90. I will therefore only consider H’s points which are really made in relation to the material change of circumstances of W and M, rather than the alleged change in the state of evidence.
91. In H’s 5th Affirmation, he stated further that:
“47. Due to their own marital problems, my mother has moved out from the former matrimonial home and now lives with me after she was asked to leave by my father. I therefore do not believe that I should continue paying the full Government rent and rates, utilities and management fees on the formal matrimonial home, particularly as I have no financial obligation to support my father, the fact that he has substantial savings and since I have no beneficial interest in the property. It would only be fair if I were to pay for [W] and [M]’s shares.
48. Also, I believe the amounts for utilities and food are also lower now that my mother has moved out and should also be reduced to remove my father’s. I also do not believe that I should pay for two domestic helpers when [W] is not working.”
92. In order to deal with the above arguments properly, it is necessary to understand the rationale of the 2020 Decision and the approach which was adopted by HHJ Melloy. These may be seen from the following excerpts of the 2020 Decision:
“7. One of the difficulties in this case, even now after all of the evidence has been filed, is that neither party has set out the undertakings that they are prepared to enter into, in order to move this matter forward. The husband for his part says that his father (i.e. the paternal Grandfather) should fund the majority of the outgoings on the former matrimonial home, as he is the legal owner of the property and he employs the domestic helpers etc. The difficulty with this is that the husband does not proffer any undertakings in this respect. He does not, for example, undertake to continue to fund his father so that all of these basic outgoings can be met, in part for and on behalf of the wife and daughter. In fact, it is the wife’s case that the paternal Grandfather is being deliberately kept short of funds and that he may have no alternative but to return to India. Instead the husband says that he will only undertake to continue to pay for M’s school fees in the short term. Longer term he wishes her to attend a cheaper school. He also makes no concrete proposals with respect to transport for M. The wife for her part continues to assert that regardless of legal ownership, in reality the husband funded all of the expenses for the matrimonial home, for both herself, M and her parents-in-law, and that he should continue to do so. Thus, she wishes the maintenance to be increased so that she is able to pay for these expenses directly, but again she proffers no undertakings in this respect. The husband says that this could lead to the financial arrangements going around in circles. In his affidavit dated the 12 June 2020 he states as follows:
(xvii) I would suggest, respectfully, that it is more appropriate that the present arrangement continue and that the person who is legally responsible for the payment of the utilities and the maids, etc., continue to pay them, i.e. my father. If my father has any financial difficulties, he can always ask me directly. As noted later in this Affirmation, I have always been accommodating in that respect (see paragraph 25).
(xviii) I respectfully suggest that this approach is also logical because the household comprises of several people. It is not simply my daughter and the Petitioner for whom these expenses are intended to cover. I do not disagree with a fair contribution, but that is already and arrangement which exists without an order for interim maintenance payments, or re-routing payments through interim maintenance. If the Petitioner is paid these sums, that would potentially effectively double count the amount that is already paid to cover these expenses. If that is done, then I would reduce payments to my father and presume the position would have to be that the Petitioner will then have to take out part of her interim maintenance and pay the maids, pay for utilities, etc. I do not believe that it was her intention to be responsible for these, nor, as stated, is it logical.
8. Whilst I would accept that there is some logic in what the husband says, I do not accept that HK$30,000 per month is necessarily sufficient to pay for all of the outgoings on the former matrimonial home and to provide an allowance for both of the husband’s parents. As I have said the husband does not undertake to continue to pay the HK$30,000 per month or indeed any other sum. Thus, I also accept that there may be scope for the husband using this loop hole as a financial lever against both the wife and his parents. This would be unacceptable. However, the alternative would also be equally unacceptable. If I made an order that is closer to that sought by the wife, and if she chose not to pay the outgoings on the former matrimonial home, then that would be an equally unacceptable outcome. To that end it is of note, that just as in the case of the husband, the wife has offered the court no undertakings in this respect.
9. Faced with these two rather unattractive alternatives, I have decided to make an order that is more in line with that sought by the wife. But this will be conditional on the wife expressly undertaking to pay for all of the general outgoings on the former matrimonial home. This will be discussed in more detail below.”
93. HHJ Melloy then assessed W’s general expenses as follows:
Item
| Amount (HK$)
|
| Rent & Rates | 2,660 |
| Utilities | 6,900 |
| Management fees | 3,150 |
| Food | 10,000 |
| Household expenses | 5,000 |
Domestic Helpers
(1) Medical expenses
(2) Flight tickets | 9,260 |
| Total (General) | 36,970
*rounded to 37,000 |
94. Her Honour then explained:
“Given what I have said, on the premise that the wife, and not the Paternal grandfather shall be responsible for all of the outgoings on the former matrimonial home, I shall allow a further HK$2,660 per month for Government rent and rates, HK$3,150 for management fees and HK$9,260 for the payment of the two domestic helpers salaries. I shall not allow HK$10,000 for the parents in laws pocket money. This really is something that has to be settled between the husband and his parents directly. Nor will I allow HK$2,000 for any other unforeseen expenses. The other figures for food and household expenses shall remain as set out above in the interim interim Ruling. Thus, upon the wife’s express undertaking to pay for the Government rent and rates, utilities and management fees on the former matrimonial home and to pay for the food and other household expenses for the occupants including her parents in law and two domestic helpers together with the salaries of the two domestic helpers employed by her father in law, I shall allow the sum of HK$36,970 or say HK$37,000 for general expenses.” (Her Honour’s emphasis)[31]
95. Once HHJ Melloy’s reasoning is properly understood, H’s arguments may be dealt with quickly:
(1) As far as the expenses of Government rent and rates and management fees are concerned, I do not think the fact that H’s mother has moved away would amount to material change in circumstances, because the respective amounts of these items of expenses would not change no matter how many people are living in the FMH;
(2) As far as W’s general expenses are concerned, whether H’s father has substantial savings is neither here nor there in the circumstances of the present case. I should also emphasize that there is no reason why this Court should depart from the approach adopted by HHJ Melloy in the 2020 Decision;
(3) I agree that the general expenses in respect of utilities and food would be lower now, because H’s mother is no longer living in the FMH. The amount of expenses on utilities was previously assessed at HK$6,900. It should therefore be adjusted downwards by HK$1,725 (25% of HK$6,900). Food costs should be adjusted downwards by HK$2,500 (HK$10,000 x 25%).
96. For the avoidance of doubt, W is still obliged to discharge her duty under her undertaking as recorded in the 2020 Decision.
97. Before I move to another topic, I should also say a few words on M’s schooling.
98. It may be recalled that H has given an undertaking to the Court (which was also recorded in the 2020 Decision) that he shall pay for M’s school fees. While H has indeed indicated to HHJ Melloy that he would “only undertake to continue to pay for M’s school fees in the short term; longer term he wishes her to attend a cheaper school”[32], the undertaking which he had eventually given to the Court was without an end date.
99. In H’s Summons, while he has asked this Court to adjust the MPS/IM downwards, he has not applied to be released from the said undertaking. As a matter of fact, he did not state the extent of “downward adjustment” that he was seeking. He only stated in his Affirmation in support that:
“In a letter from Haldanes dated 21 July 2022, I explained my financial problems and asked for maintenance of HK$34,000 for [W]’s expenses and HK$41,000 per month for [M]’s expenses to be reduced to HK$40,000 per month in total. I will continue to pay for [M]’s school fees separately.” (emphasis added)
100. It was only in Ms Booth’s submissions that H made it clear that he would like to pay only up to HK$5,000 monthly for M’s school fees.
101. While H might have communicated with W in the past about his preference to admit M into another school which charges less school fees, I do not think it is an acceptable practice to keep an application as vague as it was. It is not the obligation of the other side to guess what the application is about.
102. In any event, I do not think that, for the best interest of M, the Court should impose a cap on the school fees payable by H as he suggested. As mentioned above, HHJ Melloy accepted in the past that M needed counselling service, and it is evident that even the Assistant Principal of her current school could observe that M still needs such service. I do not think it is advisable for M to switch to another school at this moment. Remaining in an environment with which M is familiar would be beneficial to her.
103. I therefore do not accede to H’s application to limit his obligation to pay school fees at the level of HK$5,000 per month.
C4. Conclusion on MPS/IM
104. W’s general expenses was previously assessed by HHJ Melloy at HK$37,000. According to my rulings above, it should be adjusted downwards to HK$32,775 (HK$37,000 – HK$1,725 (utilities) – HK$2,500 (food)). I would round it up to HK$33,000. In other words, half of which HK$16,500 should be treated as W’s share, and another half of the same amount would be M’s share.
105. W’s personal expenses was assessed at HK$15,000 in the 2020 Decision[33]. It should be adjusted upwards to HK$15,625 so as to take into account her holiday expenses. I would round it down to HK$15,600.
106. In the 2020 Decision, HK$22,500 had been allowed as M’s personal expenses[34]. HK$500 should be added thereto as holiday expenses, and HK$2,560 as counselling fees. The total amount would become HK$25,560. I would round it up to HK$25,600.
107. Therefore, the reasonable needs of W would be HK$16,500 + HK$15,600 = HK$32,100. I would round it down to HK$32,000.
108. As W has found a job in mid-March 2023 and is now earning HK$20,000 (net of MPF) per month, her need should be adjusted to HK$12,000 from 1 April 2023 onwards.
109. M’s need would be HK$16,500 + HK$25,600 = HK$42,100. I would round it down to HK$42,000.
110. W asked that the Court’s order on MPS/IM should be backdated to 21 October 2022. Since H has paid MPS/IM pursuant to the 2020 Decision up to 30 November 2022, and only paid HK$10,000 per month from 1 December 2022 onwards, for the sake of convenience, I think it would be more appropriate for the order herein on MPS/IM to take effect from 1 December 2022.
D. ORDER
111. I therefore order that the Order made by Her Honour Judge Melloy on 11 September 2020 be varied to the following extent:
(1) The respondent do pay maintenance pending suit to the petitioner for herself in the sum of HK$32,000 per month for the period from 1 December 2022 to 31 March 2023, and the sum of HK$12,000 per month with effect from 1 April 2023 until further order;
(2) The respondent do pay interim maintenance to the petitioner for the child of the family, M, in the sum of HK$42,000 per month, with effect from 1 December 2022 until further order;
(3) The respondent do pay litigation funding to the petitioner’s former lawyers (Messrs. Gall) in the sum of HK$120,000 per month with effect from 1 October 2022 until further order;
(4) The outstanding maintenance pending suit and interim maintenance for the period from December 2022 calculated up to the month of July 2023 (credit should be given to the amounts paid by the respondent since December 2022) shall be paid by the respondent to the petitioner within 28 days hereof;
(5) The outstanding litigation funding for the period from October 2022 calculated up to the month of July 2023 (credit should be given to the amounts paid by the respondent for the months of October and November 2022) shall be paid by the respondent to the petitioner within 28 days hereof;
(6) The respondent shall pay maintenance pending suit, interim maintenance and litigation funding (to the petitioner or her solicitors, as the case may be) for the month of August 2023 onwards on the first day of each month;
(7) Liberty to apply.
112. For the avoidance of doubt, parties are not released from their respective undertakings given to the Court as recorded in the 2020 Decision and such undertakings shall remain valid.
E. COSTS
113. I make a costs order nisi that the respondent shall bear the petitioner’s costs of the Summonses filed on 25 July 2022 and 21 October 2022 respectively.
114. The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof.
115. Unless any application for variation of the aforesaid costs order nisi is made within time, the petitioner shall lodge and serve her statement of costs within 7 days after the expiry of the said 14-day period. The respondent shall lodge and serve his statement of objection within 7 days thereafter. Summary assessment of the costs of the Summonses will be conducted on paper (no matter whether any statement of objection is lodged by the respondent within time) thereafter. The costs assessed shall be payable by the respondent within 14 days after assessment.
POSTSCRIPTS
116. After the hearing, W has sent two letters to the Court dated 17 May 2023 and 5 June 2023 respectively, in attempts to provide the Court with further information.
117. This is inappropriate.
118. For the avoidance of doubt, I should make it clear that I have not taken the matters mentioned in those letters into account.
| | ( H. Au-Yeung )
Deputy High Court Judge |
The petitioner appeared in person
Ms Madeleine Booth, instructed by Haldanes, for the respondent
[1] This order on litigation funding was initially made for a limited period, but has since then been extended. On 31 May 2021, HHJ Melloy ordered that the litigation funding order be effective until further order of the Court.
[2] W has also given her estimation on the fees for these variation of MPS/IM applications and First Directions Hearing. These estimations are not set out herein as they are no longer relevant for our purpose
[3] At the First Directions Hearing held on 12 May 2023, the trial was fixed to commence in September 2024
[4] The Petition was filed in the Family Court on 16 April 2020, hence, a total of 29 months had passed by then
[5] Paragraph 13.4(c) and (d) of H’s Skeleton Submissions
[6] Calculated by reference to, among other things, the demand letter issued by W’s former solicitors dated 9 March 2023
[7] At paragraph 16
[8] Counsel’s fees
[9] Ditto
[10] Ditto
[11] Paragraph 31 of H’s Reply Submissions
[12] Paragraph 13.2 of H’s written submissions
[13] H’s sister
[14] Paragraph 10 of HHJ Melloy’s Memo quoted in paragraph 2 of the 2020 Decision
[15] Bundle B11, page 2697 – wordings of the Head of HR & Administration of XX.
[16] Paragraph 15 of H’s 5th Affirmation
[17] In response to the single joint expert’s enquiry, H’s solicitors explained that: “Since [the 1st Intervener] is the 100% shareholder of [Wixxxxx Limited] and in 2019, she has taken a loan of USD 2.5 million (approx.) from [H] to inject capital into [Wixxxxx Limited]. Hence current profit is apportioned to make a reserve for repayment of the mentioned loan”: Bundle B11 at page 2626
[18] According to the letter of H’s solicitors dated 9 September 2022, the current amount due is HK$4,750,000
[19] According to paragraphs 22 and 30 of H’s 5th Affirmation, he was only earning a monthly salary (net of MPF contribution) of HK$83,500. However, his total monthly expenses were in the sum of HK$240,200. Even if we do not take into account the MPS/IM of HK$75,000, litigating funding of HK$50,000 and M’s school fees of HK$17,300, he would still have a monthly deficit of HK$14,400
[20] At [21]
[21] Ditto
[22] At the hearing, W said the range of rental is HK$28,000 to HK$32,000 per month
[23] At section 5.5
[24] Paragraph 24 of her 4th Affirmation
[25] At paragraph 12 of H’s Reply Submissions
[26] At Bundle B6, page 1564
[27] Date of the order should be 26 March 2021
[28] At paragraph 24
[29] Answer 29(j)
[30] Paragraphs 5 – 6 of H’s Reply Submissions
[31] At [16]
[32] 2020 Decision, at [7]
[33] At [17]
[34] At [18]