Hjfg v Kcy

CourtCourt of Appeal (Hong Kong)
Judgment Date28 Oct 2011
Citation[2012] 1 HKLRD 95
Judgement NumberCACV127/2011
SubjectCivil Appeal
CACV127/2011 HJFG v. KCY

CACV 127/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 127 OF 2011

(ON APPEAL FROM HCMC NO. 11 OF 2010)

________________________

BETWEEN

HJFG Petitioner/
Appellant
And
KCY Respondent/
Respondent

________________________

Before: Hon Cheung JA and Hartmann JA in Court

Date of Hearing: 28 September 2011

Date of Handing Down Judgment: 28 October 2011

________________________

J U D G M E N T

________________________

Hon Hartmann JA:

Introduction

1. This appeal arises out of various orders for maintenance pending suit made by Poon J in the Court of First Instance on 19 May 2011. It gives rise to issues relevant to the award of such maintenance in what these days are described as ‘big money’ cases.

2. The parties to the appeal were married to each other in 1987. Two children were born to the marriage: a daughter, the elder, and a son. At the date of the hearing before us, the petitioner (‘the husband’) was 55 years of age, the respondent (‘the wife’) five years younger.

3. During the course of their marriage, the husband and wife acquired very great wealth. The contribution of the parties to the building of that wealth is a matter of considerable dispute. It is the wife's case that, having worked with her husband in building the matrimonial estate through various business enterprises, when the marriage broke down she was effectively excluded from the businesses, certainly the principal businesses.

4. The contribution of the parties to the building of the matrimonial estate is a matter for the final ancillary relief hearing. It is not relevant to this appeal. Suffice only to say that, in addition to business interests in Hong Kong built up over the course of the marriage, the evidence suggests that today the main source of the family wealth comes from a decision to exploit the burgeoning economy of Vietnam by setting up investment funds. There are today a series of such funds concentrated on various sectors of the Vietnamese economy and on the economies of other countries in the Asia-Pacific area. The control and management of the funds is vested in a complex architecture of companies. I understand that certain of the funds are quoted on the London stock exchange.

5. When the judge at first instance made his orders for maintenance pending suit, he took into account that in late 2009 the husband had declared his assets to have a net value of some $1.05 billion. The husband had further declared that in 2009 he had enjoyed an income of some $6.5 million per month by way of salary, dividends and bonuses.

6. The husband had submitted that, because of crises in world financial markets, his income this year (2011) and next year would be substantially reduced. However, with no direct evidence to support that prediction, there having been no dividend or bonuses declared as yet, the judge was not prepared to place any reliance on it.

7. As for the wife, the judge noted that she had declared her assets in late 2009 to have a net value of some $35.5 million but there had, on her assertion, been a major reduction of her capital position so that by the date of her affidavit of 27 October 2010 she had cash available to her in her bank accounts of only some $1.36 million.

8. It was in September 2009 that the husband petitioned for divorce. During the course of the litigation, the wife discovered that the husband had for several years been involved in a romantic liaison with a woman in Vietnam, there being two children of that union. In the result, in July 2010 a decree nisi of divorce was granted to the wife on her cross petition for adultery. Proceedings to determine an equitable distribution of the matrimonial estate – ancillary relief proceedings – then ensued and are still on-going.

9. The wife’s application for interim maintenance was not founded on a complaint that the husband had denied her financial support but rather on the complaint that he had been paying considerably less than the amount to which she was reasonably entitled, due regard being had to the lifestyle that was enjoyed prior to the breakdown of the marriage.

10. By way of illustration, the wife asserted that before the breakdown of the marriage she enjoyed unlimited access to credit card spending but now the husband had imposed a total monthly limit of $550,000. By way of further illustration, prior to the breakdown of the marriage she and her husband had joint use of the family Bentley motor vehicle and Mercedes vehicles. However, since the breakdown she had been “relegated” to using the children’s car – the make not being given – which was badly in need of repair.

11. The wife’s application included a provision for the two children of the marriage, more particularly for the son. The wife accepted that the husband met all the major expenses for the two children including the son’s fees in respect of the boarding school he attended in Europe. However, she sought financial assistance for the time when the son was back in Hong Kong on school holidays when, according to her, he spent the majority – but not all – of his time with her. She also sought provision to finance a number of holidays each year with the children.

12. It was the husband’s evidence that since the separation he had paid the rent, utility charges and management fees for the former matrimonial home in which the wife lived alone, except for those occasions when the son stayed with her during his school vacations. He accepted, as the wife said, that he had limited her credit card spending to $550,000 per month but spoke of meeting other major expenses such as medical insurance and certain of the wife’s travel expenses. In addition, as the wife agreed, he met all of the children’s major expenses.

13. The husband estimated that the aggregate of the moneys he had paid by way of day-today support to the wife post separation had been a sum of over $730,000 per month. The husband said that he was willing to continue maintaining the wife and the two children as he had been doing or to consent to an order to pay $730,000 per month to cover the wife’s monthly needs and those of the son when he was staying with her during his school vacations.

14. The husband did not agree to make any contribution to the wife’s on-going legal costs. As I understand it, this was because, having said in late 2009 that she had net assets of some $35.5 million, the wife had not demonstrated that she could no longer reasonably procure legal advice other than by looking to him. Nor had she attempted to present any sort of legal budget that was subject to analysis in order to determine whether it was or was not reasonable.

15. The husband’s offers were not acceptable to the wife. Among other matters (which are not the subject of this appeal), the wife sought maintenance pending suit for herself and, to a limited extent, her son, in the sum of $1,827,700 per month. In addition, she sought provision for on-going legal costs in the sum of $770,000 per month. The total of these two claims was $2,597,700 per month.

16. In her affidavit of 11 May 2011, the wife said that this was materially less than the sum which her accountants had calculated she was spending per month. Her accountants, she said, had summarised her expenses between September 2009 and December 2010 and in that regard had calculated that the average monthly spending ranged between $2.3 million and $2.4 million.

17. One of the wife’s central complaints was that, because of the husband's control of the funds, she was now limited to spending just $550,000 per month on her credit card allowance. In the result, she said, she had had to use her “limited savings” to pay for items –

“…which cannot be covered by credit cards, such as substantial capital calls on pre-separation investments. This also means I have been prevented from pursuing post-separation investments which has caused me further financial disadvantage.”

18. The wife said that she had been forced to secure a loan against her Hong Kong apartment and to borrow money from family and friends.

19. After a two-day hearing, Poon J made the following orders.

20. First, he ordered that the husband pay interim maintenance for the benefit of the wife and son in the sum of $2 million per month until further order, that sum to include provision for legal costs in an amount which he did not specify.

21. Second, he ordered that the interim maintenance of $2 million per month be backdated by seven months to November 2010, the arrears in the sum of $14 million to be paid to the wife within 14 days. In making this order, he chose not to make any order of set-off, deducting from the $14 million the sums of money which the husband had been paying as and for the support of the wife (and the son) since November 2010.

22. Third, he ordered that the husband ‘be at liberty’ to pay a lump sum of $22 million ‘as interim maintenance’ within a month. If that payment was made together with the arrears of $14 million – a total of $36 million – then his first order that the husband pay $2 million per month as and for interim maintenance until further order would fall away. In practical terms, by means of this order, the judge gave to the husband the opportunity to make an advance capital payment to the wife, that payment to be deducted from the capital sum that would eventually be awarded to her.

23. Fourth, he ordered that all the interim maintenance payments, whether made pursuant to his first and second orders or pursuant to what may be described as the ‘lump sum option’ –

“… shall be made on account of any ancillary relief award that the wife may receive whether in these proceedings or otherwise and shall be set off against any such ancillary relief award.”

24. Fifth, he ordered that the costs of the application for...

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