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K v C

Judgment Cited authorities 8 Cited in Precedent Map Related
Vincent
Judgment Date05 July 2007
Year2007
Judgement NumberFCMC5508/2005
Subject MatterMatrimonial Causes
CourtFamily Court (Hong Kong)
FCMC005508/2005 K v. C

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

SUIT NO. 5508 OF 2005

______________________

BETWEEN

K Petitioner
and
C Respondent

______________________

Coram : H.H. Judge Bruno Chan in Chambers

Date of Hearing : 25 June 2007

Date of Judgment : 5 July 2007

______________________

J U D G M E N T

______________________

1. There are two matters before me, both by way of inter-parte summons issued by the Petitioner Wife, the first in time of 15th March 2007 is for an order for the Respondent Husband to file and serve his answer to her request for specific discovery, which can be easily disposed of by an order adjourning it sine die with liberty to restore as the particulars requested for had just been provided by the Husband shortly before the hearing, but which those representing the Wife would need time to consider, hence an adjournment would not just be appropriate but also necessary, with the question of costs to be reserved.

2. The second matter, which took up the bulk of the allotted time to properly thrash out is the variation of a maintenance pending suit order made earlier by consent by Deputy Judge Lo on 1st December 2005, in which the Husband was to pay $25,000 per month for the Wife, now to be increased by an amount of $190,000 to $215,000 per month, essentially to cover her legal costs of her ancillary relief application upon the dissolution of what was essentially a short 3 years childless marriage, which has now been set down for trial in November this year. In effect, she is asking the Husband to fund her litigation.

3. There is no dispute of the court’s jurisdiction to award a costs allowance in an order for maintenance pending suit, where the English Court of Appeal in the latest case of Currey v Currey [2006] EWCA Civ 1338, [2007] FLR gave a very helpful review of the development of the recent case-law, which started in A v A (Maintenance Pending Suit : Payment of Legal Fees (2001) 1 FLR 377, and endorsed by G v G (Maintenance Pending Suit : Costs) [2002] EWHC 306 (Fam), [2003] 2 FLR 71, where it was said that the power to include provision for legal fees within maintenance pending suit is a discretionary one which has to be exercised with a view to promoting fairness between husband and wife, and that fairness is a “two-way street” and therefore has to be exercised having regard to the positions of both the husband and the wife, and thus to the possibility that such an order could or would be unfair to the paying party as well as to the advantages and disadvantages to the other party that would flow from making or refusal of the order.

4. In Moses-Taiga v Taiga [2005] EWCA Civ 1013, (2006) 1 FLR 1074 the issue of legal costs forming an element of maintenance pending suit first came into full consideration by the English Court of Appeal where Thorpe LJ in the leading judgment identified three criteria which would mean that there was no source of funding other than to approach the court for maintenance pending suit including a substantial element to fund the costs of litigation : that the applicant had no assets, could give no security for borrowings, and could not guarantee an outcome that would enable her to enter into a Sears Tooth agreement under which certain rights of the applicant are assigned to the solicitors. His Lordship then concluded that, in such exceptional cases, the statute could be construed to extend to maintenance pending suit including an element to fund legal costs, while cautioning that in all these cases the dominant safeguard against injustice is the trial judge’s discretion, as it would only be in cases that are demonstrated to be exceptional that the court would consider exercising its jurisdiction.

5. Then came the case of TL v ML and Others (Ancillary Relief : Claim Against Assets of Extended Family) (2005) EWHC 2860 (Fam), (2006) 1 FLR 1263, where Nicholas Mostyn QC sitting as a deputy High Court Judge referred to the “exceptional circumstances” raised by Thorpe LJ in Moses-Taiga and indicated that he would be surprised if Thorpe LJ intended to impose any need to demonstrate anything beyond the three criteria referred to above, and that the inability to raise a litigation loan could be dealt with by way of the production of correspondence between the applicant’s solicitors and two banks eliciting a negative response.

6. The exceptional test developed in TL v ML was looked at again in C v C (Maintenance Pending Suit : Legal Costs) (2006) 2 FLR 1207, where the wife applied to vary an order for maintenance pending suit made by consent to increase the amount to include a further significant sum to enable her to maintain her legal representation, when it was argued on behalf of the husband that it would be wrong in principle for the husband to have to underwrite the wife’s costs because she could raise money on the security of her half-share in the matrimonial home, which share was worth more than £500,000. For the wife it was argued that it was wrong that she should be required to fund her costs by mortgaging the family home when she had no assurance that it would become hers in the end.

7. Hedley J agreed with the wife that the three criteria establishing exceptional were illustrative only and not definitive on the part of Thorpe LJ, and that he regarded the facts before him of a 15-year marriage with two minor children and the bulk of the assets under the control of one party, and the need for investigation of them as making the case exceptional and permitting the court to add a costs component to maintenance pending suit, notwithstanding the fact that the wife did have available security and had already raised some money towards her costs from a bank.

8. In Re B (Maintenance Pending Suit) (2006) EWHC 1834 (Fam), (2007) FLR, on hearing cross-appeals from an order for maintenance pending suit including a costs allowance, Munby J accepted the wife’s submission that equality of arms required that the husband made at least some contribution to her ongoing costs, and rejected the husband’s argument that the wife should continue to mortgage the former matrimonial home in which she and the children were still living until there was nothing left or until such time as no lender was prepared to advance any more.

9. And so I come to the latest decision of the Court of Appeal in Currey, where the leading judgment was given by Wilson LJ who considered that the word “exceptional” used by Thorpe LJ in Moses-Taiga was obstructing the proper exercise of the jurisdiction to include a costs allowance when he said : -

“ I consider that the word “exceptional” is obstructing the proper exercise of the jurisdiction to include a costs allowance; and I am convinced that Thorpe LJ never intended that it should do so. To that extent I agree with Mr Mostyn. There is a recognised syndrome in which, in order to illumine his exposition of the proper approach, a judge uses a word; and then, to his astonishment, finds that the word of intended illumination is mistaken for the proper approach itself. But I would go further than Mr Mostyn, just as Hedley J has gone in C. For it is clear that the reference by Thorpe LJ to an applicant’s need to demonstrate that she “has no assets [and] can give no security for borrowings” should not be taken literally. Mrs C did have assets and could
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