Ab Also Known As Abw v Maw

CourtFamily Court (Hong Kong)
Judgment Date08 Dec 2015
Citation[2016] 2 HKLRD 1
Judgement NumberFCMC6310/2015
SubjectMatrimonial Causes
FCMC6310/2015 AB also known as ABW v. MAW

FCMC 6310/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 6310 OF 2015

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BETWEEN

AB also known as ABW Petitioner

and

MAW Respondent
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Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to public)
Date of Hearing: 27 October 2015
Dates of correspondence: from the 29 October – 2 November 2015
Date of Judgment: 8 December 2015

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J U D G M E N T
(Litigation funding)

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Introduction

1. This is an application by a Petitioner wife for litigation funding, pursuant to s 3 Matrimonial Proceedings and Property Ordinance, Cap 192 (MPPO). She seeks the sum of HK$800,000 per month to be backdated to the 1 September 2015. In the alternative she asks that any lump sum provision for litigation costs provided by the husband be without prejudice to either party’s contention at trial concerning how each side’s litigation costs should be treated.

2. This application raises an interesting point of principle. In the event that a paying party, still more often than not the husband as in this case, chooses to provide an interim lump sum payment to a wife, as opposed to paying a monthly amount for litigation funding, should that be offset against the wife’s final award for ancillary relief as of right? This is especially pertinent when, as here, it is said that the husband is paying for his legal costs from capital, which means that the size of the matrimonial pot is potentially diminishing, but the husband is not likewise required specifically to account for his own legal cost expenditure. The net result theoretically is that the matrimonial pot may be reduced by the husband’s legal costs, which in turn means that the wife’s potential share of the assets is less than it would have been otherwise. This inherent unfairness is then arguably compounded by the fact that the monies advanced to the wife for litigation funding are then to be deducted from her share of the assets as of right. Mr Scott SC for the wife points out that this conundrum does not arise if the wife receives a monthly sum for litigation funding. He accepts that the husband will not be able to pay HK$800,000 per month from income, but that this will most probably need to come from his cash reserves i.e. from capital in any event.

The central issue

3. Thus the central issue is whether or not an agreement to pay an interim lump sum for litigation funding should always include the words “to be offset against any final award to the Petitioner (receiving party) in the ancillary relief proceedings”. In addition I need to determine the issue of litigation funding generally – i.e. whether the husband should be given an opportunity to pay the wife a lump sum for that purpose and if so on what terms and/or in the alternative what is the appropriate level of maintenance pending suit to be paid as litigation funding if the same is to be paid on a monthly basis.

Background

4. I have set out the background to the marriage briefly in a short judgment on discovery dated the 9 October 2015 as follows:

Background to the marriage

5. The parties married on the XX March 1994 in New Zealand, which is where they are both from. They have three daughters who are now aged nearly 17, 13 and 10. They are all presently being educated at the X International School in Hong Kong. The parties have resided in the Territory since 1999. The wife still resides here with the children, whereas the husband relocated to London in January 2013 in order to take up a new position with company A2. In May 2014 the wife issued a judicial separation petition based on mild unreasonable behaviour particulars. A fresh divorce petition was later filed based on one year separation with consent. This is dated the 21 May 2015. The decree nisi was pronounced on the 14 September 2015. The parties have joint custody of the children with care and control to the wife and reasonable access to the husband to include holiday access.

6. There are two family trusts – the W trust which was settled on the 11 January 2005 and the W Discretionary Trust which was settled about 18 months later on the 28 June 2006. There are some issues surrounding these trusts.

7. In addition to discovery and the trusts there are also other potential issues concerning inter alia the date of separation and post separation accruals and their treatment by the court.

How has the litigation been funded to date?

5. It seems that there has been an issue with respect to litigation funding and how interim payments generally are to be treated almost from the beginning of this litigation. However in the main the parties were able to reach consensus on the issue. On the 14 October 2014 the parties agreed through mediation as follows:

(11) So that both the husband and the Wife shall have funds available to meet their respective costs in the matrimonial proceedings, they agree as follows -

i. that they shall within 10 days of the date of this agreement arrange to open a separate trust account with their respective solicitors (‘the legal costs trust accounts’) into which the husband shall pay a sum of $1 million into each account, a total of $2 million. That sum shall be drawn from matrimonial capital under his control.

ii. That the $1 million paid into each legal costs trust account shall be used by each party solely for the purposes of meeting his or her on-going legal costs in the...

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2 cases
  • Withers (A Firm) v Antonia Basile Also Known As Antonia Basile Wilson
    • Hong Kong
    • High Court (Hong Kong)
    • 18 April 2018
    ...Ms. Ser. There were no special circumstances in the 10 bills. He also referred to the decision of the divorce court having reported in [2016] 2 HKLRD 1 to show that the case had raised important 9. The defendant filed and served her 2nd affidavit as reply on 6 February 2017. She disagreed w......
  • Withers (A Firm) v Antonia Basile Also Known As Antonia Basile Wilson
    • Hong Kong
    • High Court (Hong Kong)
    • 18 April 2018
    ...Ms. Ser. There were no special circumstances in the 10 bills. He also referred to the decision of the divorce court having reported in [2016] 2 HKLRD 1 to show that the case had raised important 9. The defendant filed and served her 2nd affidavit as reply on 6 February 2017. She disagreed w......

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