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B B
CACV 127/2011
C C
IN THE HIGH COURT OF THE
D HONG KONG SPECIAL ADMINISTRATIVE REGION D
COURT OF APPEAL
E E
CIVIL APPEAL NO. 127 OF 2011
F (ON APPEAL FROM HCMC NO. 11 OF 2010) F
G G
BETWEEN
H HJFG Petitioner/ H
Appellant
I And I
KCY Respondent/
J Respondent J
K K
Before: Hon Cheung JA and Hartmann JA in Court
L Date of Hearing: 28 September 2011 L
Date of Handing Down Judgment: 28 October 2011
M M
N JUDGMENT N
O O
Hon Hartmann JA:
P P
Introduction
Q Q
1. This appeal arises out of various orders for maintenance pending
R R
suit made by Poon J in the Court of First Instance on 19 May 2011. It gives
S rise to issues relevant to the award of such maintenance in what these days are S
described as „big money‟ cases.
T T
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V V
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2. The parties to the appeal were married to each other in 1987.
B B
Two children were born to the marriage: a daughter, the elder, and a son. At
C the date of the hearing before us, the petitioner („the husband‟) was 55 years of C
age, the respondent („the wife‟) five years younger.
D D
E 3. During the course of their marriage, the husband and wife acquired E
very great wealth. The contribution of the parties to the building of that wealth
F F
is a matter of considerable dispute. It is the wife's case that, having worked
G with her husband in building the matrimonial estate through various business G
enterprises, when the marriage broke down she was effectively excluded from
H H
the businesses, certainly the principal businesses.
I I
4. The contribution of the parties to the building of the matrimonial
J J
estate is a matter for the final ancillary relief hearing. It is not relevant to this
K
appeal. Suffice only to say that, in addition to business interests in Hong Kong K
built up over the course of the marriage, the evidence suggests that today the
L L
main source of the family wealth comes from a decision to exploit the
M burgeoning economy of Vietnam by setting up investment funds. There are M
today a series of such funds concentrated on various sectors of the Vietnamese
N N
economy and on the economies of other countries in the Asia-Pacific area.
O The control and management of the funds is vested in a complex architecture of O
companies. I understand that certain of the funds are quoted on the London
P P
stock exchange.
Q Q
5. When the judge at first instance made his orders for maintenance
R pending suit, he took into account that in late 2009 the husband had declared his R
assets to have a net value of some $1.05 billion. The husband had further
S S
declared that in 2009 he had enjoyed an income of some $6.5 million per month
T T
by way of salary, dividends and bonuses.
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6. The husband had submitted that, because of crises in world
B B
financial markets, his income this year (2011) and next year would be
C substantially reduced. However, with no direct evidence to support that C
prediction, there having been no dividend or bonuses declared as yet, the judge
D D
was not prepared to place any reliance on it.
E E
7. As for the wife, the judge noted that she had declared her assets in
F F
late 2009 to have a net value of some $35.5 million but there had, on her
G assertion, been a major reduction of her capital position so that by the date of G
her affidavit of 27 October 2010 she had cash available to her in her bank
H H
accounts of only some $1.36 million.
I I
8. It was in September 2009 that the husband petitioned for divorce.
J J
During the course of the litigation, the wife discovered that the husband had for
K
several years been involved in a romantic liaison with a woman in Vietnam, K
there being two children of that union. In the result, in July 2010 a decree nisi
L L
of divorce was granted to the wife on her cross petition for adultery.
M Proceedings to determine an equitable distribution of the matrimonial estate – M
ancillary relief proceedings – then ensued and are still on-going.
N N
9. The wife‟s application for interim maintenance was not founded on
O O
a complaint that the husband had denied her financial support but rather on the
P complaint that he had been paying considerably less than the amount to which P
she was reasonably entitled, due regard being had to the lifestyle that was
Q Q
enjoyed prior to the breakdown of the marriage.
R R
10. By way of illustration, the wife asserted that before the breakdown
S S
of the marriage she enjoyed unlimited access to credit card spending but now
T the husband had imposed a total monthly limit of $550,000. By way of further T
illustration, prior to the breakdown of the marriage she and her husband had
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joint use of the family Bentley motor vehicle and Mercedes vehicles.
B B
However, since the breakdown she had been “relegated” to using the children‟s
C car – the make not being given – which was badly in need of repair. C
D D
11. The wife‟s application included a provision for the two children of
E the marriage, more particularly for the son. The wife accepted that the E
husband met all the major expenses for the two children including the son‟s fees
F F
in respect of the boarding school he attended in Europe. However, she sought
G financial assistance for the time when the son was back in Hong Kong on school G
holidays when, according to her, he spent the majority – but not all – of his time
H H
with her. She also sought provision to finance a number of holidays each year
I with the children. I
J J
12. It was the husband‟s evidence that since the separation he had paid
K
the rent, utility charges and management fees for the former matrimonial home K
in which the wife lived alone, except for those occasions when the son stayed
L L
with her during his school vacations. He accepted, as the wife said, that he had
M limited her credit card spending to $550,000 per month but spoke of meeting M
other major expenses such as medical insurance and certain of the wife‟s travel
N N
expenses. In addition, as the wife agreed, he met all of the children‟s major
O expenses. O
P 13. The husband estimated that the aggregate of the moneys he had P
paid by way of day-today support to the wife post separation had been a sum of
Q Q
over $730,000 per month. The husband said that he was willing to continue
R maintaining the wife and the two children as he had been doing or to consent to R
an order to pay $730,000 per month to cover the wife‟s monthly needs and
S S
those of the son when he was staying with her during his school vacations.
T T
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14. The husband did not agree to make any contribution to the wife‟s
B B
on-going legal costs. As I understand it, this was because, having said in late
C 2009 that she had net assets of some $35.5 million, the wife had not C
demonstrated that she could no longer reasonably procure legal advice other
D D
than by looking to him. Nor had she attempted to present any sort of legal
E budget that was subject to analysis in order to determine whether it was or was E
not reasonable.
F F
G 15. The husband‟s offers were not acceptable to the wife. Among G
other matters (which are not the subject of this appeal), the wife sought
H H
maintenance pending suit for herself and, to a limited extent, her son, in the sum
I of $1,827,700 per month. In addition, she sought provision for on-going legal I
costs in the sum of $770,000 per month. The total of these two claims was
J J
$2,597,700 per month.
K K
16. In her affidavit of 11 May 2011, the wife said that this was
L L
materially less than the sum which her accountants had calculated she was
M spending per month. Her accountants, she said, had summarised her expenses M
between September 2009 and December 2010 and in that regard had calculated
N N
that the average monthly spending ranged between $2.3 million and $2.4
O million. O
P 17. One of the wife‟s central complaints was that, because of the P
husband's control of the funds, she was now limited to spending just $550,000
Q Q
per month on her credit card allowance. In the result, she said, she had had to
R use her “limited savings” to pay for items – R
S “…which cannot be covered by credit cards, such as substantial capital S
calls on pre-separation investments. This also means I have been
T
prevented from pursuing post-separation investments which has caused T
me further financial disadvantage.”
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18. The wife said that she had been forced to secure a loan against her
B B
Hong Kong apartment and to borrow money from family and friends.
C C
19. After a two-day hearing, Poon J made the following orders.
D D
20. First, he ordered that the husband pay interim maintenance for the
E E
benefit of the wife and son in the sum of $2 million per month until further
F order, that sum to include provision for legal costs in an amount which he did F
not specify.
G G
H 21. Second, he ordered that the interim maintenance of $2 million per H
month be backdated by seven months to November 2010, the arrears in the sum
I I
of $14 million to be paid to the wife within 14 days. In making this order, he
J chose not to make any order of set-off, deducting from the $14 million the sums J
of money which the husband had been paying as and for the support of the wife
K K
(and the son) since November 2010.
L L
22. Third, he ordered that the husband „be at liberty‟ to pay a lump
M M
sum of $22 million „as interim maintenance‟ within a month. If that payment
N was made together with the arrears of $14 million – a total of $36 million – then N
his first order that the husband pay $2 million per month as and for interim
O O
maintenance until further order would fall away. In practical terms, by means
P of this order, the judge gave to the husband the opportunity to make an advance P
capital payment to the wife, that payment to be deducted from the capital sum
Q Q
that would eventually be awarded to her.
R R
23. Fourth, he ordered that all the interim maintenance payments,
S whether made pursuant to his first and second orders or pursuant to what may S
T
be described as the „lump sum option‟ – T
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“… shall be made on account of any ancillary relief award that the
B wife may receive whether in these proceedings or otherwise and shall B
be set off against any such ancillary relief award.”
C C
24. Fifth, he ordered that the costs of the application for maintenance
D pending suit be to the wife in any event, to be taxed if not agreed. D
E E
25. The husband has appealed these orders.
F F
The grounds of appeal
G G
26. By way of summary, it can be said that Ms Lucy Stone QC, the
H H
husband‟s leading counsel, advanced the following grounds of appeal.
I I
27. First, the judge fell into error in the way in which he purported to
J apply the approach to interim maintenance in „big money‟ cases adopted by J
K
Coleridge J in Charman v Charman (unreported, Family Division of the High K
Court of Justice, 11 February 2005). In particular, in adopting the approach,
L L
the judge failed to provide any analysis or explanation as to the basis upon
M
which he determined that $2 million per month was an appropriate sum to meet M
the “immediate and reasonable needs” of the wife (and son) pending the
N N
disposal of the wife‟s claim for ancillary relief.
O O
28. Second, when he backdated the amount of monthly interim
P maintenance by seven months, the judge erred by failing to take into account P
that during that seven months the husband had been paying maintenance to the
Q Q
wife (approximately $730,000 per month) and to offset that sum. If he had
R done so, it would have reduced the backdated sum of $14 million by over R
$5 million.
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29. Third, the judge erred in the circumstances of the case in finding
B B
that the wife had established a claim for a contribution towards her on-going
C legal costs. C
D D
30. Fourth, in any event, the order that the husband pay to the wife
E interim maintenance of $2 million per month was so high, even in relation to the E
highest reported awards in recent years in England and Wales, that, absent
F F
special factors, of which there were none, the order was plainly wrong.
G G
31. Fifth, in the circumstances of this case, the judge erred in awarding
H costs to the wife. H
I I
A brief look at established principles
J J
32. Before turning to the individual grounds of appeal, it is necessary,
K K
in order to be able to consider the issues in context, to give some brief
L
consideration to certain uncontentious principles governing applications for L
maintenance pending suit, principles to which in large measure the judge
M M
himself made reference in his Reasons for Decision.
N N
33. Jurisdiction to award maintenance pending suit to a spouse is
O statutory, being governed by the provisions of s.3 of the Matrimonial O
Proceedings and Property Ordinance, Cap. 192. By that section the court is
P P
given a discretion to make an order requiring either party to the marriage to
Q make to the other such periodical payments for his or her „maintenance‟ as the Q
court thinks „reasonable‟, subject to the condition that the duration of any such
R R
order is limited to the period of what may broadly be called the divorce
S litigation. S
T T
34. By definition, therefore, maintenance pending suit is restricted to
U payments which constitute „maintenance‟, which are reasonable in the U
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circumstances and which will endure for no longer than it takes to determine the
B B
divorce litigation. „Maintenance‟ is a broad concept. I do not seek to define
C its exact meaning but it seems to me that it must be restricted to those payments C
necessary to meet the recurring costs of living at whatever standard of living is
D D
appropriate. That being the case, no matter how great the wealth of the parties
E and how unevenly distributed that wealth may be at the time an application for E
interim maintenance is made, the court has no jurisdiction to make orders which
F F
for all practical purposes result in a form of pre-trial capital re-balancing. In
G the present case, the judge recognised the long-established approach of looking G
to the “immediate and reasonable needs” of the wife and son.
H H
I 35. As to the amount of maintenance pending suit that may be paid, the I
Ordinance provides only that it must be „reasonable‟, that is, having regard to
J J
the circumstances of the case, that it must be fair.
K K
36. An important factor in determining fairness is a consideration of
L L
the marital standard of living. In this regard, each case must be considered
M according to its own circumstances. It is not simply to be assumed that great M
wealth equates to great extravagance. Some married couples who enjoy great
N N
wealth spend with comparative modesty and with a discipline born of discretion,
O others enjoy consumption on a grand scale. O
P 37. The principles that have emerged over time to guide judges in P
matters of interim maintenance have been fashioned in the main to ensure
Q Q
fairness. This is well illustrated in the judgment of Nicholas Mostyn QC,
R sitting then as a deputy High Court judge, in TL v ML and Others (Ancillary R
Relief: Claim against Assets of Extended Family) [2006] 1 FLR 1263, at 1289,
S S
in which, having looked at earlier authorities, he derived the following
T T
principles that speak specifically to fairness or are based on the need to ensure it.
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For present purposes, it is sufficient to cite the relevant principles without citing
B B
the judge‟s reference to the source of those principles:
C C
i. The sole criterion to be applied in determining the application is
D „reasonableness‟, which is synonymous with „fairness‟. D
E ii. A very important factor in determining fairness is the marital E
standard of living. This is not to say that the exercise is merely to
F F
replicate that standard.
G G
iii. In every maintenance pending suit application there should be a
H specific maintenance pending suit budget which excludes capital or H
I
long-term expenditure, more aptly to be considered on a final I
hearing. That budget should be examined critically in every case
J J
to exclude forensic exaggeration.
K K
iv. Where the affidavit or form E disclosure by the payer is obviously
L
deficient, the court should not hesitate to make robust assumptions L
about his ability to pay. The court is not confined to the mere
M M
say-so of the payer as to the extent of his income or resources. In
N such a situation, the court should err in favour of the payee. N
O 38. Finally, it is to be noted that in applications for interim O
maintenance, when the amount to be paid is for a limited period only and not all
P P
of the evidence is necessarily before the court, it is not appropriate, nor indeed
Q in most cases possible, for the court to conduct a detailed investigation into the Q
finances of the parties. While, in order to determine what is or is not
R R
reasonable, some analysis is always required, that analysis can be conducted on
S a „broad brush‟ basis. S
T T
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Issues arising out of the judge’s adoption of the ‘Charman’ approach
B B
C 39. In his Reasons for Decision, Poon J placed considerable emphasis C
on the approach to interim maintenance in big money cases adopted by
D D
Coleridge J in his 2005 decision in Charman. Poon J identified two methods
E of approach articulated by Coleridge J, the two being independent of each other. E
F 40. As to the first method of approach, while recognising that he had F
no jurisdiction to make such an order, Coleridge J suggested that in a big money
G G
case such as the one before him – a case in which it was inevitable that there
H would be a division of the marital assets, giving to each party very considerable H
I
capital sums – the best way to avoid the often complex and restrictive issues I
arising out of applications for interim maintenance was for the party being
J J
asked to provide financial support (the husband in that case) to make a capital
K
payment to the party seeking support (the wife), that capital payment to be paid K
„on account‟ of any sum she would eventually receive either when the case was
L L
finally determined. In this regard, Coleridge J said the following:
M M
“I indicated during argument that I thought the proper way of dealing
with cases of this kind, where there is no shortage of liquid resources,
N is for the husband to make, as it were, a payment on account of the N
eventual sum. I have indicated that I shall make an order this
afternoon in any event in a conditional form. The form of the order
O will give the husband the option of putting to bed, once and for all, all O
these interim debates about maintenance by payment to the wife of £5
P million on account of any sum she receives eventually in settlement of P
the case and any costs liabilities which might arise. “
Q Q
41. Coleridge J considered that an appropriate capital sum to be paid
R by the husband would be £36 million. He said: R
S
“I hope the husband will think very seriously about taking that course S
because it will deal with all debate about the question of interim
support and issues relating to costs and things of that kind. If he pays
T that sum to the wife …then the wife‟s applications for all forms of T
maintenance pending suit will be dismissed. Otherwise, I shall
require him to pay maintenance pending suit at a rate which I will now
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set…”
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42. Poon J adopted the same approach, encapsulating it in his third and
B B
fourth orders, namely, that the husband be at liberty to pay a lump sum of $36
C million to the wife and, should he do so, the order for monthly payments of C
interim maintenance in an amount of $2 million would fall away and the $36
D D
million lump sum payment would be set off against any final award of capital
E made to the wife. E
F F
43. As it was, the husband in the present case chose not to make a
G capital payment. G
H 44. It should be said that in the hearing of this appeal no criticism was H
I
made of this approach. I believe there is much to commend it. In I
proceedings in which there are sufficient liquid assets and in which the ancillary
J J
relief litigation has a single focus, that is, an equitable distribution of the capital
K
assets making-up the matrimonial estate, it allows for an early movement of K
capital from the one party to the other, avoiding the need for an interim
L L
maintenance order and enabling the party receiving the capital to provide for his
M or her own legal costs as well as enjoying the form of living he or she chooses, M
one that is not dictated by the restraints of an interim maintenance order.
N N
45. As in England and Wales, however, the courts of Hong Kong have
O O
no jurisdiction pursuant to s.3 of the Matrimonial Proceedings and Property
P Ordinance to make such an order. It must be one adopted by the parties. P
Q Q
46. As to the second approach drawn from Charman, Coleridge J
R asked himself the following question: R
S “So assuming the husband does not take my invitation to pay that S
capital sum, what is the proper approach to an application of this kind,
nowadays, in the context of wealth at this enormous level? What is
T the correct approach to answering the question as to the T
„reasonableness of provision‟?”
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47. In answer, he said:
B B
“… I am sure that the court nowadays needs to look at this question of
C maintenance pending suit more broadly. Since the decision in White C
[White v White [2001] 1 AC 1996] has altered the focus of these cases
to look not so much at what a party, usually the wife, needs but to what
D D
a party has earned, it seems to me that that part of analysis must also be
factored into a maintenance pending suit debate if the court is to make
E an order which is in the overall sense reasonable: All aspects of the E
financial picture must be looked at to achieve a „reasonable‟ figure.”
F F
48. Recognising that there were several means by which this approach
G could be put into effect, in the case before him Coleridge J adopted the G
following methodology.
H H
I
49. First, he took the husband‟s latest open offer of settlement as I
representing the level of capital which, at the very least, the husband himself
J J
would expect to have to pay to the wife either by way of settlement or after
K determination by the court. Second, he extracted from it those capital assets K
included in the offer which were not income bearing such as the former
L L
matrimonial home which the wife had always occupied. Third, he calculated a
M reasonable rate of return on the capital that was income bearing and, having M
made provision for tax and the like, used the annual income as one of the
N N
yardsticks by which to measure the interim maintenance due to the wife.
O O
50. It is to be noted that, in adopting this approach, Coleridge J did not
P abandon the obligation placed on him by statute to look to the reasonableness of P
Q
any award made. As he said: Q
“Of course, the court must have an eye to the level of expenditure as
R R
well and whether it, even in the context of these enormous figures, is
reasonable.”
S S
51. That being said, Coleridge J was not of the view that items of
T T
capital or long-term expenditure should be excluded. In this regard, he said:
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“The wife has produced a budget of £700,000 which she has pared
B down for the purposes of this application to £500,000. It is attached B
to a detailed skeleton argument which Mr. Ewins has prepared for the
purposes of this afternoon. He has extracted from it items which
C C
conventionally used to be thought to be only items which should
appear on a permanent budget. As I have already indicated, I am not
D quite sure whether that is appropriate nowadays in circumstances D
where a party has almost a vested rights to a large award based on the
length of the marriage and the size of the financial cake, but that is the
E way it is put. So looking at the wife‟s reasonable needs, it is said that, E
looking at the way she has been living, the amount she has been
F spending, particularly on holidays, the amount she would like to be F
able to spend is £500,000, that is to say about £14,000 a month. That,
it is urged, is reasonable.”
G G
52. As it was, having made the observation that “nowadays, in cases of
H H
this magnitude, one needs to strike a balance and have an eye at least to what
I the eventual outcome of this case is likely to be,” Coleridge J determined that a I
reasonable figure for maintenance pending suit for the wife was £30,000 a
J J
month.
K K
53. In the case now before us, Poon J said the following in respect of
L L
this approach articulated by Coleridge J, namely, that, if the party being asked
M to pay maintenance pending suit declines to make a voluntarily capital payment M
on account then –
N N
“…the court will have regard to the possible impact of White v White
O on the question of reasonableness. This is so because the Court of O
Final Appeal has now authoritatively endorsed the guidelines laid
down by White v White in LKW v DD [2010] 6 HKC 528. It would
P appear [therefore] that what Coleridge J had said should also feature in P
maintenance pending suit applications in Hong Kong.”
Q Q
54. Poon J did not elaborate on the manner in which this approach
R should be manifested. R
S S
55. It is to be noted that, some 10 months after Coleridge J delivered
T his Charman judgment, Nicolas Mostyn, in his judgment in TL v ML, to which T
I have referred earlier (paragraph 34), chose to follow the principle set down in
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F v F (Ancillary Relief: Substantial Assets)[1995] 2 FLR 45, namely, that “in
B B
every maintenance pending suit application there should be a specific
C maintenance pending suit budget which excludes capital or long-term C
expenditure, more aptly to be considered on a final hearing.”
D D
E 56. I am of the view that the principles extracted from earlier leading E
cases by Nicholas Mostyn in TL v ML remain the principles that should guide
F F
judges in this jurisdiction. They are well understood by judges and
G practitioners alike. Whatever may have been the shortcomings in the final G
determination of ancillary relief proceedings of the old approach of „reasonable
H H
needs‟, in the more restricted context of applications for maintenance pending
I suit the principles stated by Nicholas Mostyn ensure fairness to both parties. I
More importantly, they are principles which manifestly comply with the
J J
restrictions imposed by s.3 of the Matrimonial Proceedings and Property
K Ordinance. K
L L
57. In this last regard, in big money cases – and it is to be remembered
M that we are talking only of such cases – the income to be earned on the capital M
awarded to a spouse will, no doubt in the majority of instances, enable the
N N
spouse not simply to maintain himself or herself to the very highest standards
O but will in addition provide funds for other forms of expenditure which may not O
properly be classified as „maintenance‟; capital expenditure of all kinds:
P P
investments, trusts, large charitable donations, purchase of commercial
Q properties and the like. Accordingly, if that same measure – namely, the Q
income to be earned on capital – is to be used in assessing interim maintenance,
R R
whether as the sole measure or in conjunction with others, it may be argued that
S what is awarded by that means exceeds „maintenance‟ as contemplated by s.3 of S
the Ordinance.
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58. Returning to the judgment of Poon J, having adopted the approach
B B
of Coleridge J as integral to big money applications for maintenance pending
C suit in Hong Kong, the judge went on to say the following: C
D “The evidence filed by the parties raised a number of hotly disputed D
matters, such as the wife‟s and husband‟s contributions to the
accumulation of the family assets, the extent of the family assets,
E E
whether the husband has siphoned off part of the family assets to his
second family in Vietnam, whether the husband has unreasonably
F curtailed the wife‟s expenses after separation. I do not propose to F
deal with them here. Strictly, these matters do not bear on the core
issue of reasonableness of the maintenance claimed.”
G G
59. The judge continued:
H H
“The parties have each engaged a forensic accountant to examine the
I underlying documentary evidence and present their views on the wife‟s I
expenditure prior to separation. However, the disputes relating to the
wife‟s expenditure are all factual, which can be addressed and disposed
J J
of without any expert‟s assistance. Indeed, I do not find the experts‟
evidence particularly helpful. Further, as already noted, the court
K adopts a broad brush approach in determining the amount of K
maintenance pending suit without any detailed investigation of the
financial positions, which is however exactly what the accountants
L have been instructed to do here. I doubt if it is really necessary to L
enlist the forensic accountants, which will only escalate the costs
M involved. M
Taking that matter in the round, including the wife‟s lifestyle and
N spending pattern before separation in September 2009, and the costs N
that she has incurred and will incur, I am of the view that a reasonable
amount of maintenance pending suit should be $2 million per month,
O O
inclusive of the element of legal costs. It should run from the date of
the application, that is, November 2010, and cover the time up to the
P substantive hearing of the ancillary relief application, estimated to be P
heard in May 2012.”
Q Q
60. On behalf of the husband, Ms Stone submitted that the only
R implication to be drawn from the judge‟s adoption of the approach of R
Coleridge J in Charman followed by a failure to articulate that he had
S S
conducted any form of critical analysis of the reasonableness of the wife‟s claim
T for maintenance pending suit was that the judge considered that, following the T
judgment of the Court of Final Appeal in LKW v DD, he was entitled to
U U
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determine the wife‟s application on a broader, less critical basis. While
B B
Ms Stone accepted that of course an exhaustive analysis is not required, she
C submitted that nevertheless some critical analysis of the reasonableness of the C
claim has to be conducted. Unfortunately, there was no indication in the
D D
judgment that any such analysis had taken place.
E E
61. In response, Mr Coleman SC, leading counsel for the wife, said
F F
that there was nothing in the submission. The judge had presided over a
G two-day hearing during which he was taken through the wife‟s ample evidence G
as to her reasonable needs and the criticism of those needs. The judge did not
H H
simply grant the wife her claims in full. He clearly took into account the
I competing submissions and came to a rational decision well within the range of I
his discretion: it being remembered that the husband had offered $730,000 per
J J
month while the wife had claimed $1.8 million with an extra amount to cover
K on-going legal costs. It was implicit in the judgment that a critical analysis K
had been conducted. What the judge did not wish to do, and rightly so, was to
L L
descend into a detailed forensic examination as urged upon him by the
M husband‟s counsel. M
N N
62. In the course of her submissions, Ms Stone advanced the
O proposition that there is no legal authority (not even Charman) for the court to O
determine an application for maintenance pending suit as though the sum to be
P P
determined is simply a sum on account of the wife‟s substantive claim in the
Q ancillary relief proceedings and on that basis to decline any analysis of the Q
reasonableness of the amount claimed.
R R
63. I agree with that proposition and it is broadly in that respect,
S S
I believe, that the judge fell into error. More specifically, I believe he did so
T T
by failing clearly to distinguish between a capital sum to be advanced
U
voluntarily and set off against any final award, this payment to be made in order U
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to avoid the need to assess interim maintenance, and the payment of interim
B B
maintenance itself.
C C
64. In this regard, I start by noting that the judge‟s order that the
D D
husband pay interim maintenance of $2 million per month to the wife backdated
E to November 2010 is in a number of respects almost a mirror of the order that E
the husband be at liberty to pay a capital sum to the wife of $36 million.
F F
65. In respect of both forms of payment, Poon J ordered that the full
G G
amount paid by the husband was to be set off against any capital award
H eventually made to the wife. In addition, both forms of payment included an H
I
unspecified provision for legal costs. I
J 66. As I have said, having determined that the husband should pay J
$2 million per month as and for interim maintenance until further order, the
K K
judge went on to order that the full amount of such maintenance was to be set
L off against any award of ancillary relief that would eventually be made in the L
wife‟s favour. This was an unusual order. Interim maintenance, as I have
M M
said, constitutes no more than periodical payments necessary to meet the
N recurring costs of living, even if in big money cases such costs are set at the N
extreme end of the spectrum. Why then should such temporary maintenance
O O
be set off against any capital award to be made to the wife? No reason was
P given. P
Q Q
67. There is a further concern. To say to the wife that for all intents
R and purposes she must pay back the husband the day-to-day living costs R
advanced to her while the husband need give no similar account of his own
S S
day-to-day costs may be interpreted as discriminating in favour of the husband.
T In this regard, it is to be observed that, in the present case, if the ancillary relief T
proceedings are determined after trial in or about May 2012, as anticipated by
U U
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the judge, the wife will have to account to the husband for interim maintenance
B B
received by her in a sum approximating $38 million. It is a substantial sum by
C any objective measure. C
D D
68. As I have said, in looking to the order of interim maintenance of
E $2 million per month, the judge did not see it necessary to distinguish between E
the amount that was to constitute recurring living expenses and the amount that
F F
was to constitute a contribution towards the wife‟s on-going legal costs. In my
G view, however, a voluntary advance of capital to the wife to enable her to live G
as she wishes in all respects (including providing for legal services) is to be
H H
differentiated from an order made by the court that one party pay an amount to
I the other on a monthly basis assessed to be reasonable, that assessment I
including provision for on-going legal costs.
J J
K
69. I shall return to the question of legal costs in greater detail. At K
this juncture, however, it should be said that I believe the judge would have
L L
been better advised to have specified what portion of his order of $2 million per
M month was to go to recurring living expenses and what portion was to go to M
legal costs. There have been a number of interlocutory proceedings in respect
N N
of which discrete orders of costs have been made. It is likely that there will be
O further such proceedings and further such orders of costs. At the end of the O
day there may be a need for some accounting in this regard. In such
P P
circumstances, knowing exactly what sum the husband has contributed to the
Q wife‟s on-going legal costs may be of central relevance. As matters stand, Q
however, no such calculation can be made.
R R
70. With respect to the judge, it is evident, I think, that he came to the
S S
view that in „big money‟ cases today maintenance pending suit in all its forms is,
T T
for all practical purposes, to be dealt with as being analogous to a capital sum
U U
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being paid on account, a sum therefore that will be set off against any final
B B
award made to the wife.
C C
71. This would explain why nothing emerges from the judgment to
D D
suggest any other reason why, in ordering that the interim maintenance of
E $2 million per month be backdated, the judge did not take into account the fact E
that the husband had all along been paying maintenance which in aggregate,
F F
according to his counsel, came to more than $730,000 per month. As I have
G said earlier, if the judge had considered that the order of $2 million per month G
was to constitute interim maintenance in its „traditional‟ sense, he would surely
H H
have ordered that the maintenance already paid by the husband should be offset
I or in some other equitable way taken into account. He did not do so. I
J J
72. It would seem to me also that this explains why the judge did not
K
find it necessary to articulate any critical analysis of the reasonableness of the K
wife‟s claims and instead considered the issue, as he expressed it, “in the round”.
L L
Why should any greater form of analysis be necessary when in the end result the
M total amount to be paid to the wife by the husband will be returned to him by M
way of set off?
N N
The contribution towards the wife’s on-going legal costs
O O
P 73. On behalf of the husband, Ms Stone submitted that, in light of P
existing authority, the wife had not made out a claim for a contribution towards
Q Q
her on-going legal costs and that the judge was therefore wrong to order any
R contribution towards those costs. R
S 74. Whatever may have been the position ten years ago, it is no longer S
T
disputed that the words of s.3 of the Ordinance are wide enough to empower the T
Hong Kong courts to include an element towards a party‟s legal costs in an
U U
order for maintenance pending suit: see KGL v CKY [2005] 1 HKFLR 215.
V V
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75. In submitting that, in light of existing authority, the wife had not
B B
made out a claim for a contribution towards her costs, Ms Stone relied
C principally on guiding principles enunciated by Wilson LJ, as he then was, in C
Currey v Currey [2007] 1 FLR 946.
D D
E 76. Those principles have been adopted in the Matrimonial Division of E
the District Court: see H v H (Interim Maintenance) [2007] HKFLR 311. To
F F
my knowledge, however, they have not been adopted in this Court or the Court
G of First Instance. G
H 77. Accordingly, before Poon J, the guiding principles set out in H
I
Currey, while of persuasive value, were in no way binding on him. I
J 78. S.3 of the Ordinance, of course, still required the judge to be J
satisfied that any contribution towards the wife‟s on-going legal costs was
K K
reasonable. That meant that he had to be able to conduct some analysis of the
L nature and extent and purpose of the contributions sought. On the part of the L
wife, that required some breakdown of her anticipated costs.
M M
N 79. Aside from the fundamental requirement of supplying a N
sufficiently detailed breakdown of anticipated costs, I am of the view that the
O O
following principles articulated by Wilson LJ in Currey should in future be
P adopted as providing prudent guidance to both judges and practitioners in this P
jurisdiction.
Q Q
80. In the view of Wilson LJ, the initial, overarching inquiry should be
R R
into –
S S
“… whether the applicant for a costs allowance can demonstrate that
she cannot reasonably procure legal advice and representation by any
T T
other means. Thus, to the extent that she has assets, the applicant has
to demonstrate that they cannot reasonably be deployed, whether
U directly or as the means of raising a loan, in funding legal services.” U
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81. As Wilson LJ pointed out, satisfying that condition alone may not
B B
be sufficient. In the broad exercise of discretion, a judge may consider that
C other factors must come into play – C
D “The subject matter of the proceedings will surely always be relevant; D
and, insofar as it can safely be assessed at so early a juncture, the
reasonableness of the applicant‟s stance in the proceedings will also be
E E
relevant.”
F 82. The period over which an allowance for legal costs was to be paid F
G
was also considered by Wilson LJ to be a factor of considerable relevance. G
Applicants should not therefore expect that an order that the allowance be paid
H H
until the final determination of all proceedings will be the inevitable order. It
I
was observed that if the application for an allowance for legal costs was made I
before the FDR hearing, it may well be wise to order that the costs allowance
J J
should fund the applicant only up to that hearing –
K K
“The FDR appointment is a watershed and all reasonable inducements
to both parties there to negotiate positively in the light of informal
L judicial indications should be in place. The knowledge of a spouse in L
receipt of a costs allowance that, absent settlement at or in the
immediate aftermath of the FDR, she will have to apply for a further
M allowance, which may or may not be granted, seems to me to amount M
only to a reasonable inducement, as opposed to improper pressure, to
N reach settlement.” N
O
83. In this regard, as Wilson LJ pointed out, if the FDR hearing fails, it O
will be for the new judge, on the basis of material properly before him – for
P P
example, rival open offers of settlement – to determine whether a new
Q
allowance for legal costs should be granted and, if so, in what amount. Q
R 84. Those observations accord with my understanding of the Hong R
Kong FDR procedures.
S S
T 85. Wilson LJ spoke of a legal costs allowance being structured, T
especially as to its duration, so as to best encourage a spouse in receipt of the
U U
allowance to act reasonably, looking in good faith to try and reach settlement.
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In KGL v CKY (page 219), this Court adopted the same fundamental reasoning
B B
albeit by reference to the spouse paying the allowance:
C C
“There is no reason why public funds should be expended to fund
litigation when there are ample resources available within family funds.
D With proposals for more active juridical involvement in pre-trial D
proceedings to restrict the incidence of costs this is in line with the
E modern approach. The court can keep better control of litigation if E
it's funding is at least in part within its purview. The party that
controls the funds will be less willing to use them on unnecessary
F interlocutory procedures if he or she will have to provide funding for F
the other side.”
G G
86. In the present case, the wife sought a contribution towards her
H on-going legal costs in a sum of $770,000 per month. It was estimated that H
this sum would be required for a period of 24 months. Accordingly, assuming
I I
the litigation continued for that anticipated span, the total contribution sought to
J cover legal fees and disbursements was $18.48 million. J
K K
87. Despite the extent of the contribution sought – a fearfully large
L sum – the breakdown of the wife's "estimated" fees and disbursements L
(amounting to a total of $18.5 million) was contained in the following terse
M M
schedule:
N N
"i. solicitors and counsels fees (for both matrimonial proceedings
and civil action): $10,000,000
O O
ii. accountants: $7,000,000
P iii. Secretary/paralegal/personal assistant support: $1,500,000" P
Q 88. In her affidavit of 11 May 2011, the wife gave some history of her Q
spending on legal costs. In this regard she said:
R R
“…I have so far incurred a total sum of about $10 million since
S September 2009, of which a total sum of about $4 million has been S
paid to my solicitors, the sum of $2.5 million to my barrister and the
T
sum of about $3.5 million has been paid to my accountants.” T
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89. The wife rejected any assertion that legal costs had been
B B
exacerbated by unnecessary and wasteful applications on her part. She said that
C her actions had been reactive rather than proactive. C
D D
90. Preparing a breakdown of anticipated legal costs in complex
E litigation of the kind in which the husband and wife now find themselves can be E
difficult. That being said, I am of the view that the brief schedule allied to the
F F
brief reference to the wife's history of expenditure on legal costs deprived the
G judge of any real ability to determine the reasonableness of what was claimed. G
Two matters raised during the appeal hearing illustrate the problem.
H H
I
91. First, the monthly contribution towards the cost of solicitor and I
counsel fees was not sought in respect of the ancillary relief litigation only. It
J J
was also sought in respect of an independent action in which the husband was
K
the plaintiff and the wife was cited as one of the defendants. What percentage K
of the costs and reimbursements would be absorbed in this second action was
L L
not stated. The difficulties were compounded by the fact that, before us at
M least, it appeared to be accepted that this action had for all intents and purposes M
been discontinued against the wife and prior to that had for a considerable
N N
period of time been almost dormant. On behalf of the husband, it was
O submitted that, in the circumstances, there was no need to make any on-going O
provision for this action.
P P
92. Second, the last item in the schedule related to a claim for a
Q Q
personal assistant for the wife who would act in a paralegal capacity, doing so at
R a total cost to the wife of about $1.5 million. Over the anticipated period of R
the continuing litigation, a period of some two years, this was equivalent to a
S S
monthly salary of $62,500. Why the wife required such assistance in addition
T T
to the on-going fees being paid to her solicitors, her counsel and her accountants
U
did not appear to be explained. Before us, it was said that the wife required U
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this assistance because she was no longer allowed access to the offices where
B B
she and her husband had once worked together and she was therefore denied
C secretarial support. That explanation, however, spoke of support of a more C
mundane nature, filing papers and the like, not a job that required the full-time
D D
assistance of a paralegal. In my judgment, unusual claims like this, even in big
E money cases, demand some rational form of explanation. E
F F
93. I have made earlier reference to my belief that it would have better
G if the judge had specified the exact amount that was to constitute the G
contribution to the wife‟s on-going legal costs. In this respect, it was
H H
submitted on behalf of the wife that in speaking of the element of legal costs as
I opposed to an element, the judge had to be read as saying that the full amount I
of legal costs claimed by the wife, that is, $770,000 per month, was granted to
J J
her, the balance of the $2 million being paid as and for recurring living
K expenses. I do not agree. If the judge had intended to state a specific figure K
for legal costs he would have done so. There is no indication in the Reasons
L L
for Decision that he analysed the costs claimed and determined that the full
M amount claimed was reasonable. It is also to be remembered that the judge M
ordered that the full sum of $2 million per month was to be paid to the wife on
N N
account of any ancillary relief award that she may receive and was to be set off
O against that award. To that extent, therefore, the husband would be „credited‟ O
with all of the interim maintenance he paid whether it was for legal costs or
P P
otherwise. That being the case, it seems to me that the judge did not consider
Q it necessary to break down the $2 million per month into constituent parts, Q
whether for legal costs or otherwise.
R R
S The award was in any event too high S
T T
94. On behalf of the husband, Ms Stone said that, while it was trite to
U
say that each case must be determined on its own facts and no direct comparison U
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was possible, nonetheless it was useful to consider the order made in this case
B B
with the two biggest reported awards made for maintenance pending suit in
C England and Wales. C
D D
95. In this regard, Ms Stone referred to F v F [1995] 2 FLR 45 and to
E Charman. In the first case, she said, bringing the figures up to date by reference E
to the cost of living index, the wife was awarded £48,000 per month, or about
F F
HK $600,000, notwithstanding the fact that the husband in that case was
G possessed of approximately three times the wealth of the husband in the present G
case. In the second case, again bringing the figures up to date, the wife was
H H
awarded about £37,000 per month, or about HK $462,500, notwithstanding the
I fact that the husband in that case possessed wealth about 60% greater than the I
wealth of the husband in the present case.
J J
K
96. On the basis that maintenance pending suit was for the wife‟s K
immediate and reasonable needs only, Ms Stone submitted that what emerged
L L
was that the award in the present case was “so vastly out of kilter” with those
M cases that it had to be plainly wrong. M
N 97. While I accept that a consideration of other awards in other similar N
cases must be of assistance, if only to attempt to ensure some consistency of
O O
approach, I would be hesitant to place too much weight on any such
P consideration, particularly when comparisons are made between awards made P
by the courts of England and Wales and awards made in this jurisdiction. The
Q Q
primary concern, although not necessarily the determinative one, must be the
R marital standard of living enjoyed by the parties themselves, a standard that is to R
be judged according to its own dynamics judged in the context of the nature of
S S
the society in which the couple have lived their married life.
T T
U U
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Conclusion
B B
C 98. In considering this appeal, what has emerged is that the judge at C
first instance was faced with a host of difficulties. Almost every issue was
D D
contested and in respect of almost every issue there was a multiplicity of
E complexities. E
F 99. Regrettably, however, for the reasons which I have given, I have F
been drawn to the conclusion that the judge fell into error in the manner in
G G
which he determined the wife‟s application. The award cannot therefore be
H allowed to stand. H
I I
100. In my view, to return the matter to the judge at first instance for the
J application to be considered afresh would result in unnecessary delay and in the J
expenditure of even greater costs. We have had the benefit of being able to
K K
consider the same papers that were before Poon J. We have also had the
L benefit of hearing from counsel in respect of those papers. Accordingly, I am L
satisfied that fairness dictates that we should make an award of maintenance
M M
pending suit in substitution of the order that we have set aside.
N N
A consideration of the wife’s claim
O O
101. On the available evidence, it is apparent that, when the husband
P P
and wife were together, they enjoyed the very highest standard of living. In
Q his Form E the husband said that his monthly expenses were in the region of Q
$1.35 million. The wife contested this. She said that his spending was far
R R
greater.
S S
102. The wife spoke of the husband purchasing a private jet in or about
T T
December 2009, the operation of the jet requiring the hiring of two pilots. She
U put the price of the aircraft at about $156 million. She also spoke of the U
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husband purchasing an 86 foot yacht in the summer of 2009 which would have
B B
been shortly before the parties separated. In addition, the wife asserted that the
C husband had purchased a similar yacht for use in Vietnam. The wife further C
spoke of the husband‟s stable of premium motor vehicles and his liking for
D D
expensive wine at the very best restaurants. She also spoke of the husband
E taking frequent “extravagant” holidays with the children to various exotic E
locations in the world.
F F
G 103. The husband did not contest the fact that he enjoyed the fruits of G
his success.
H H
I
104. I have no doubt that much of the husband‟s lifestyle is enjoyed I
through a series of companies. I make no criticism when I say that for the very
J J
rich that is the way of it. Assets are protected on the advice of accountants by
K
way of complex corporate structures. The maximum tax benefits are thereby K
obtained. No doubt the husband does have an obligation to entertain valued
L L
clients and to do so to the very highest standards. But the fact remains that the
M husband controls the various companies and the lifestyle is, I am quite sure, M
designed to his own desires.
N N
105. In light of this, I am satisfied that the reasonableness of the wife‟s
O O
claim for interim maintenance must be judged according to the very high level
P of daily living that was enjoyed before the couple separated and which it P
appears the husband continues to enjoy.
Q Q
R 106. The wife‟s schedule of her monthly expenses was set out in her R
affidavit of 27 October 2010. As I have said earlier, that schedule set her
S S
monthly expenses at $1,827,700.
T T
107. I regret to say, however, that, even judging the level of the wife‟s
U U
spending by the lavish standards on which I have just spoken, I am of the
V V
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opinion that an examination of the schedule reveals a number of instances of
B B
forensic exaggeration.
C C
108. By way of illustration, in her schedule the wife claimed the amount
D D
of $380,000 per month as and for “business” travel. As to the nature of this
E travel, she described it simply as “travel for office and board/clients/distribution E
meetings”. The wife listed eight countries to which, to a greater or lesser
F F
degree of frequency, she said it was necessary to travel. As to the demands of
G business travel, she said that it would be necessary for her to take a total of G
124 trips a year. On her estimate, the time taken up with this travel would
H H
amount to some 258 days a year. The wife, however, did not explain how it
I was that, having been excluded from the principal businesses of the family, her I
remaining business interests were of sufficient substance to require her to travel
J J
so extensively. Nor did she explain how it was that, if she had such substantial
K business interests, those interests should not themselves finance her travel. As K
to the wife‟s history of business travel, as Ms Stone pointed out, the records
L L
showed that in 2008/2009 the wife had taken just 22 business trips while in
M 2009/2010 she had taken 17 such trips. The wife did not explain how it was M
that there had been such a radical increase in her need to travel outside of Hong
N N
Kong on business.
O O
109. It should be said that the wife further claimed $150,000 per month
P P
for travel with the children during school holidays, this being for 10 journeys a
Q year including (understandably) “five star” accommodation. Q
R 110. For travel alone, therefore, the wife claimed some $530,000 per R
month.
S S
T 111. As to the time taken up with all of this travel, assuming that the T
holiday trips with the children took up three days each, this would add another
U U
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month to the wife‟s existing schedule of business travel. On this basis,
B B
business and leisure travel outside of Hong Kong would leave the wife with
C approximately just two and a half months in Hong Kong in each year. C
D D
112. The wife‟s figures concerning international travel were in my view
E entirely unconvincing, smacking, as I have said, of tactical exaggeration. E
F 113. I turned to a second illustration. As to matters of general F
entertainment, the wife claimed $350,000 per month for “meals out of home
G G
including business and personal entertainment” and then claimed a further
H $250,000 per month for what appears to be almost the same category of H
I
expenditure, a category that she labelled “ entertainment/presents (for business I
and private). This is a total of $600,000 per month for entertaining friends and
J J
business persons by way of eating out, attending functions, purchasing gifts and
K
the like – a figure of approximately $19,700 per day. Again, however, the K
wife did not explain how it was that, if she had to spend large amounts per
L L
month on entertainment for business purposes, the businesses themselves did
M not finance such entertainment. The wife continually asserted in her affidavits M
that she was a business woman of experience and acumen. That being the case,
N N
she must surely look to placing those expenses to best advantage for purposes of
O tax and the like. There was, however, no explanation in this regard. As to O
the expenses of entertainment, it should also be said, almost by way of a
P P
footnote, that the wife required a further sum of $15,000 per month for
Q entertainment for the two children and for the purchase of gifts on their behalf, Q
presumably to be given to others at birthday parties and such events.
R R
114. The wife further sought $70,000 per month in order to purchase her
S S
own car and to pay for petrol, car parking and the like. Over a two-year period,
T T
this would amount to a total sum of $1.68 million. In this regard, as I have
U
said earlier, the wife complained that she was no longer able to use the family U
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Bentley and the Mercedes motor vehicles and had been “relegated” to using the
B B
children‟s car. While I can well understand the wife desiring a prestige car
C befitting her material wealth, in my view her claim in this regard presented two C
problems. First, for all intents and purposes the wife was seeking a capital
D D
payment to purchase a capital asset, namely, a car worth well over $1 million,
E even if the capital payment was to be spread out over a period of time. Second, E
the wife, who never spoke of renting a vehicle, did not condescend to describe
F F
the car that she sought to purchase to enable the court to determine whether, if
G the purchase of such a car could be included in the description of maintenance, G
it was a reasonable purchase.
H H
I 115. Although the wife claimed $1,827,700 as and for her monthly I
living expenses, she said that her accountants had conducted an investigation
J J
which revealed that her monthly expenses were in fact well in excess of this.
K K
116. I have looked at these extra expenses. In my view, however,
L L
nearly all of them are misplaced in an application for maintenance pending suit.
M M
117. For example, the wife has put on record a claim of $1.65 million
N seemingly to reimburse her for a sum paid to a company called „O‟ Ltd to cover N
office and administrative expenses and expenses related to the purchase of
O O
furniture and equipment. „O‟ Ltd, it appears, is an investment vehicle in which
P the wife has invested a sum of about $8 million. Whichever way it is viewed, P
as Ms Stone pointed out, absent far more compelling explanation, it is difficult
Q Q
to see how such an item can form a legitimate claim pursuant to which the
R husband must pay the wife periodic payments by way of interim maintenance. R
S S
118. Equally, it appears that the wife has spent something in the region
T of $2.75 million hiring public relations consultants. We have not been made T
privy to the exact purpose for hiring these public relations consultants. In part,
U U
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it appears that they were hired in order to promote the wife‟s case concerning
B B
her interest in the family business interests in Vietnam. During the course of
C the appeal hearing, when this matter was raised, I indicated that, absent full and C
compelling argument, I would be loath to authorise this kind of expenditure on
D D
promoting the position of one party in matrimonial proceedings, proceedings
E that in this jurisdiction – absent the rarest of cases – are meant to be confidential E
and which may look to matters of the utmost privacy such as the interests of the
F F
children of the marriage. If, however, as was said during the course of the
G hearing, these expenses were incurred in a corporate context, the manner in G
which they can properly be claimed from the husband by way of interim
H H
maintenance and their reasonableness must be explained. This was not
I I
adequately done.
J J
119. By way of summary, having considered the wife‟s schedules in
K light of the criticisms made of them and in light of the submissions made in K
support of their reasonableness, I have been drawn to the conclusion that a
L L
reasonable sum of interim maintenance to meet the wife‟s recurring costs of
M living would be a sum of $800,000 per month. I am satisfied that, pending a M
final determination of the ancillary relief dispute, this will enable her to
N N
maintain the very high standard of living which she enjoyed with the husband
O before the breakdown of the marriage. O
P P
120. The $800,000 per month, which is to be paid with effect from
Q 1 November 2011, is to be backdated by 12 months. This is subject to the Q
condition that any payments made by the husband to the wife to provide support
R R
during that period of 12 months (from 1 November 2010 to 31 October 2011)
S are to be offset against the backdated payments. S
T T
121. As the $800,000 per month is paid as interim maintenance in order
U
to meet the living expenses of the wife, it is not paid „on account‟ nor U
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automatically will it be subject to any set off against any capital award made to
B B
the wife in the determination of the ancillary relief proceedings.
C C
122. The issue of a contribution towards the wife‟s on-going legal costs
D D
is more difficult to decide, mainly because of the lack of detail supplied by the
E wife in support of her claim. On behalf of the husband, it has been submitted E
that, in light of the Currey principles, I should reject the claim. It is to be
F F
reiterated, however, that, no matter how much wisdom is contained in the
G Currey principles, they were not binding on the judge at first instance. G
H 123. While I accept that the evidence as to the issue is not of substance H
I
and is justifiably open to criticism, nevertheless what does emerge in my view – I
sufficiently at least for the purposes of an interim application, one that can be
J J
amended if necessary when final determinations are made – is that the wife has
K
either lost or no longer has access to much of her capital base. In the K
circumstances, it would appear that she will no longer be able to meet her
L L
reasonable on-going legal costs unless some order concerning a contribution to
M her is made. As to the level of that contribution, I bear in mind that the M
ancillary relief proceedings are focused on complex corporate structures
N N
operating outside of this jurisdiction. That will no doubt add a level of
O complexity to the proceedings not encountered in other cases. I also take into O
account that, with the funds available to the marital estate, fairness demands that
P P
an attempt should be made to achieve some equality of arms. But that being
Q said, it does not mean that the financial floodgates are to be opened without any Q
reference to what in all the circumstances is reasonable. If either party
R R
embarks on misguided, profligate proceedings they will no doubt be punished in
S costs. If that should happen to the wife, the order that I now make will not S
protect her. Taking all circumstances into account, I am of the view that it
T T
would be fair to order that the husband pay to the wife a contribution to her
U U
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on-going legal costs (which are to include the costs of forensic accountants) in
B B
the sum of $500,000 per month.
C C
124. The $500,000 per month is to be paid with effect from 1 November
D D
2011 until further order or until the FDR hearing whichever takes place earlier.
E E
125. Should there be an FDR hearing and should it not be fully
F successful so that a trial hearing is required, it will be for the trial judge to F
determine whether there should be a further contribution by the husband to the
G G
wife‟s on-going legal costs and, if so, how much.
H H
126. In my judgment, it would be in the best interests of both parties if,
I I
instead of paying periodic interim maintenance and making periodic
J contributions towards the wife‟s on-going legal costs, the husband was to make J
a sufficiently substantial capital advance to her. That must, however, be a sum
K K
which will enable the wife not only to maintain herself on a day-to-day basis
L and to meet her legal bills until final determination of the ancillary relief L
proceedings but also to begin to order her life again in a manner she chooses,
M M
for example, to purchase a new motor vehicle or to rejuvenate her investment
N businesses. I would assess that sum at a minimum of $75 million. The benefit N
to the husband will be that the capital sum voluntarily advanced will be set off
O O
against any final award of capital that the wife will receive. The husband is
P therefore given liberty within 14 days of the date of this judgment to make a P
capital payment to the wife in a minimum sum of $75 million. Should he
Q Q
make that payment there will be two consequences. First, the order to pay
R interim maintenance of $800,000 per month, (including backdated maintenance), R
and a contribution towards the wife‟s legal costs of $500,000 per month will be
S S
set aside effective from 1 November 2011 and, second, the capital sum paid to
T T
the wife shall be offset against any final award made to her in the ancillary
U
relief proceedings. U
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127. This leaves the question of costs. I am of the view that the most
B B
equitable order in respect both of the hearing at first instance and the appeal is
C an order that there be no order as to costs; in short, that each party bears their C
own costs.
D D
E 128. To the extent set out, I would therefore allow the husband‟s appeal. E
F Hon Cheung JA: F
G G
129. I agree with the judgment of Hartmann JA. The appeal is
H therefore allowed to the extent set out in his judgment. H
I I
J J
K K
L L
(Peter Cheung) (M.J. Hartmann)
Justice of Appeal Justice of Appeal
M M
N Ms Lucy Stone QC, Mr David Pilbrow SC & Ms Sara Tong, instructed by N
Messrs Robertsons, for Petitioner/Appellant
O O
Mr Russell Coleman, SC & Ms Mairéad Rattigan, instructed by Messrs Withers
for Respondent/Respondent
P P
Q Q
R R
S S
T T
U U
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