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Chai v Peng [2014] EWHC 750 (Fam)

Date:18 MAR 2014
Law Reporter

(Family Division, Holman J, 13 March 2014)

Financial remedies - Maintenance pending suit

The full judgment is available below.

The husband and wife were married for 42 years and had five adult children together. The wife initiated proceedings in England first and then the husband issued proceedings in Malaya where he primarily lived. In just one year that had accumulated costs of approximately £1.6m.

The wife applied for maintenance pending suit. Initially the husband provided her with £1.85m but that provision had now almost been exhausted and she sought provision of a further £125,000 per month plus £245,000 to cover legal costs until a final hearing.

It was not possible to say that the wife's case in England was so devoid of merit that an application for further maintenance pending suit should not be considered but her projected expenditure was excessive. Maintenance had to be confined to that which was reasonable. She would be provided with £35,000 per month for the two months leading up to the final hearing. A further £100,000 would be paid on account of the wife's legal fees.

The fully referenced, judicially approved judgment and headnote will appear in a forthcoming issue of Family Law Reports. A detailed summary and analysis of the case will appear in Family Law.


Neutral Citation Number: [2014] EWHC 750 (Fam)

Case No. FD13D00747



Royal Courts of Justice

Date: Thursday, 13th March 2014



(sitting throughout in public)


B E T W E E N :

CHAI Petitioner/wife

- and -

PENG Respondent/husband


Transcribed by BEVERLEY F. NUNNERY & CO.

Official Court Reporters and Audio Transcribers

One Quality Court, Chancery Lane, London WC2A 1HR

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MR R. TODD, QC and MR N. YATES (instructed by Vardags) appeared on behalf of the Petitioner/wife.

MR T. BISHOP, QC (instructed by Payne Hicks Beach) appeared on behalf of the Respondent/husband.




[1] I have heard this case throughout, and now give this judgment, in public. This is an application for further maintenance pending suit. The estimate given for today's hearing was one day. As is well‑known, an estimate must necessarily include within it sufficient time for judicial pre‑reading and time for preparation and delivery of a judgment. The reason for that is that by tomorrow the court has, of course, moved on to tomorrow's cases, and yesterday the court was busily engaged on yesterday's cases. For today there were delivered, some time yesterday afternoon, several lever arch files, together with a vast bundle of many hundreds of pages, being a recent statement and exhibits of Baroness Shackleton of Belgravia, the solicitor for the husband. Mr Bishop, QC, counsel for the husband, kindly suggested in his skeleton argument today those parts of the various bundles which should be read. They aggregate to somewhere of the order of 300 pages. As I have commented during the course of today, 300 pages at the rate of two minutes per page is itself something of the order of ten hours of reading. On top of that, bundles of authorities were assembled by counsel containing around ten different authorities. The estimate of one day was patently far too short for the sort of profound consideration of this potentially complicated case which the skeleton arguments and the assembled documentation presumed. I can only deal with this in an extremely broad brush way today.

[2] The essential background is that the parties were married to each other for around forty‑two years. They have five children, now all adult. The husband is now aged about seventy‑four. The wife is aged about sixty‑eight. The husband is said to be a very rich man and there has been no attempt today to suggest otherwise, although I have no clear idea as to the scale of his wealth, nor his liquidity. It is not suggested that the wife, in her own name and own right, is possessed of any significant assets at all, save for the balance of the payments that the husband made to her last May and June. She is currently living here in England. He appears to be primarily living and based in Malaya.

[3] The wife was the first to commence proceedings, here in England. The husband immediately countered by contending that at the date of those proceedings, which are the proceedings still before this court, this court had - and therefore has - no jurisdiction at all. As well as that, he rapidly started up his own proceedings in Malaya. So, in no time at all these parties were fighting on two fronts. I understand that there has also been some litigation in Canada, with which they are also in some way or other connected and where there is a property. Neither set of proceedings has yet got very far, despite being in existence now for around a year. Yet the legal costs which have been incurred already can only be described as eye‑watering. Here in England the wife has incurred legal costs to date of around £920,000, inclusive of VAT. In Malaya she has incurred costs to date of the equivalent of around £95,000. So, already the wife has spent over £1 million in legal costs. The husband is not liable to pay VAT, so his costs here are net of any VAT. However, the net figure that he has already incurred - and, indeed, paid - here is £567,000. I have inquired how much he has also incurred in Malaya, but so far that figure has not been supplied. It therefore follows that already, whilst still being engaged in what might be described as preliminary skirmishes, these parties, between them, have spent at least £1,600,000 in costs.

[4] This case was listed today for 10.30 a.m. I was asked what time I would expect to start in court to allow some time for pre‑reading. I sent a message that we would sit at 12 noon, but that the parties or their lawyers must be here at 10.30 a.m. to negotiate. I inquired, when we did assemble in court, whether there had been any negotiation and the answer was that there had been none. Mr Tim Bishop, QC, on behalf of the husband, said openly in court that he had express instructions from his client not to enter into any negotiations about maintenance pending suit or any matters connected with maintenance pending suit. His position is that he should not be required to pay one penny and there is simply nothing about which to negotiate.

[5] Maintenance pending suit is, however, but a relatively small part of this case. After a marriage of forty‑two years' duration and the having of five children, it is absolutely patent that under any fair legal jurisdiction anywhere - at any rate in the western world (in which of course I include Malaya) - there will have to be fair provision by this husband, who has all the means, for his wife of so many years, who has none. Frankly, it is deeply depressing that they have been litigating for around a year, both here and in Malaya; that they have already incurred this phenomenal expenditure of at least £1,600,000 in costs; and, so far as I am aware, that there has been little, if any, attempt actually to sit down and to negotiate. This case is not about the divorce. They both agree that they seek a divorce. It makes not a row of beans difference whether their marriage is dissolved here or in Malaya. It is only about one thing - money. Sooner or later they need to sit down and discuss money. I implore them to do so before this appalling litigation gets yet further out of control.

[6] There is another aspect to which I wish to refer in this judgment. English courts, in all procedural matters, are subject to what is called the overriding objective in r 1 of the Family Procedure rr 2010. That requires the courts to deal with cases justly. Dealing with a case justly includes, so far as practicable, ensuring that it is dealt with expeditiously and fairly and that it is dealt with in ways which are proportionate to the nature, importance and complexity of the issues; saving expense, and allotting to the case an appropriate share of the court's resources while taking into account the need to allot resources to other cases. The aggregate court fees that these parties have paid to date in payment for all this expensive litigation here are a mere £2,355. For that, they have already had all or part of six days of court time here in England. Quite separately, although of course it is of no direct concern of mine, they have had a further twenty separate days of court time in Malaya. So far as the situation here is concerned, neither of them are British citizens. Neither of them currently pays any English taxes whatsoever. Very serious issues ought to arise as to just how much time of an English court these parties should be able to take up on these preliminary skirmishes, whilst squeezing out the many needy litigants who need precious court time to recover their children from abduction or seek their return from care, and other such issues.

[7] The current situation in the case is that a hearing of two days has been fixed for 30 April and 1 May 2014 to consider some kind of Hemain‑type injunction against the husband, preventing him from proceeding further with his divorce proceedings in Malaya. Further down the line, no less than ten days of precious court time have currently been set aside in October 2014 for this court to consider whether it is more appropriate that the divorce takes place here or in Malaya. I recall that in the case of Spiliada Lord Templeman observed that disputes of that kind should be resolved more in hours than in days, and so it borders on the fantastic that these parties are contemplating a ten‑day hearing in October. Further, I have been given a costs schedule for the wife's costs for this hearing today. I see from that that her counsels' fees, inclusive of VAT, for this one‑day hearing alone are no less than £28,000. Her total costs just for today's hearing are about £55,000. So, if that is the level of fees for a one‑day hearing on maintenance pending suit, the thought of the cost of the projected ten‑day hearing in October is little short of mind‑boggling.

[8] I mention all these matters in order to try to reinforce in the minds of the parties and their advisers, who are of the highest quality imaginable, the utmost importance of getting this case under control. At the moment it appears to me that this worldwide litigation is completely out of control. Phenomenal costs are being spent, a phenomenal amount of court time worldwide has already been taken up, and very long delays are in contemplation when, as I have said, what is really needed is for the parties - together, of course, with their legal advisers - to sit down together and negotiate. Beyond any possible doubt this husband is going to have to make fair payment to the wife. The yardstick of fairness can be discussed and assessed quite separately from consideration of whether English or Malaysian rules may ultimately apply to resolution of financial relief.

[9] The wife is currently living in a home which has been available to the parties since the late 1990s in Hertfordshire, England. I say ‘available to the parties' because I expect that it, as so often in these cases, is actually owned by some legal entity such that the husband and the wife do not themselves very obviously or directly own it. But, there she is, living in Hertfordshire, surrounded apparently by 1,000 acres, in a property worth something of the order of £30 million. I am told that they own or possess houses in Malaya and Canada as well.

[10] At a relatively early stage of these proceedings, in May 2013, the husband agreed to make an up‑front payment to the wife in Malaysian currency, but the equivalent of about £1,850,000, payable by instalments in May and June of last year. That was on the basis of his undertaking to continue for the time being to provide for her appropriate medical and dental expenses as part of his entitlement under his employment contract, and to use his best endeavours to ensure that for the time being the usual running costs of this mansion and estate in Hertfordshire continued to be met. The whole agreement and order was very firmly on the basis that the payment of the £1.85 million was to be ‘on account of the wife's claims in any jurisdiction for financial provision arising from the breakdown of this marriage'. The order also clearly made plain that it was without prejudice to their respective contentions as to jurisdiction and other matters.

[11] The period chronologically that that payment was intended to cover and make provision for is, frankly, obscure. The formal operative part of the order itself was that, on the basis of that payment, ‘the wife's application for maintenance pending suit be adjourned to a final hearing'. It is, frankly, obscure what precisely was intended and connoted by those words ‘a final hearing'. At that time there was in fact an application due to be heard within the next month or so which might have resulted in the English proceedings coming to a complete end. It was not heard at that time and the proceedings currently still subsist. Alternatively, the words ‘final hearing' might be contemplating a final hearing as to financial provision, which could have been some eighteen months or two years away. So, it is, frankly, obscure and unclear to me how long that payment of £1,850,000 was intended to last. The wife says that when she received it, she effectively apportioned it as to £1 million for her own living and other expenses, and as to £850,000 funding of legal fees to her solicitors. More recently, she has said that she is down to her last £50,000. Mr Bishop, QC has calculated that on that basis - namely, that she has spent £950,000 on her living and other outgoings between mid‑May 2013 and mid‑January 2014 (when she made the statement) - she has spent upon herself, and maybe also some payments referable to the adult children, at the average rate of about £126,000 per month. Mr Bishop has pointed out by reference to some documents in the bundle that actually as at early to mid‑January 2014 she appears still to have had £37,000 in the bank and £45,000 in a share portfolio, so that actually she had conserved nearer £82,000 rather than £50,000. On that basis, the monthly average rate of expenditure is a little lower. Be that as it may, the wife says that the money has now gone.

[12] On her behalf, accepting that he has had very little time in which to develop his case, Mr Richard Todd, QC has asked for further funding at the rate of £125,000 per month for herself and all her expenditure, plus funding to take her between now and the end of the hearing on 1 May of £245,000 to cover her legal costs. That is made up of a combination of about £70,000 currently owing in costs to her solicitors and an estimated further £175,000 in costs, inclusive of VAT, between now and early May.

[13] Mr Bishop very resolutely resists the application and makes the following broad submissions. First, he stresses that by a judgment in December 2013 of considerable length and detail (which I have not had the time to read) a judge at first instance in Malaya has already concluded that Malaya is the more appropriate forum for these divorce proceedings to be heard in. That judgment is itself now the subject of an appeal. The appeal was heard for one day about three days ago, but has been adjourned part‑heard to a date later in March. Mr Bishop submits that the Malaysian courts are already fully seised with proceedings in relation to this marriage. A Malaysian judge has made a considered and fully explained decision that it is the more appropriate forum, and Mr Bishop submits that for me to make any order for maintenance pending suit here would be ‘an improper interference with the process of a foreign court'. I cannot, for my part, accept that at this stage the making of an order for maintenance pending suit represents any ‘interference' with the process of a foreign court. The very last thing that I seek and intend to do by my decision today is interfere in any way whatsoever with the process in Malaya. But, the fact of the matter is that currently there is no completed decree or judgment of divorce in either jurisdiction, and in both jurisdictions these highly expensive, largely tactical, preliminary skirmishes are still under way. Mr Bishop referred to ‘all this legal activity in Malaysia' but there is patently also considerable legal activity here.

[14] Next, Mr Bishop submitted that I should have in mind the inherent merits of the wife's case in England. That is difficult for me to do at this stage today. What I do know is that she is currently resident in England, and now, at any rate, has been resident here for at least eighteen months in a home which appears to have one of the homes of this family for many years. As I have already indicated earlier today, it may well be that if, by the hearing fixed for late April, the Malaysian appellate court has itself affirmed, or decided, that Malaya is the more appropriate forum, and if it is apparent that they have reached that conclusion by a process of reasoning and application of principles that are broadly familiar to the eyes and approach of this, and other, western courts, then it may be that the wife will have an uphill struggle to obtain any kind of Hemain‑type injunction. If that is so, then it may be that the court, whoever the judge may be, on 30 April and 1 May will be better placed than I am at this brief encounter today to form a view about the ‘inherent merits' of the wife's case in England. But I am certainly quite unable to say at this hearing today that her case is so devoid of merit that I should not further consider an application for further maintenance pending suit.

[15] On the financial substance of the application Mr Bishop has very strongly developed and emphasised his point that the wife seems to have spent a phenomenal amount of money already between May/June 2013 and now. He has calculated, on the basis of material in the husband's statements and disclosure, that the rate of living during the marriage was more of the order of £20,000 a month. He points out that in her own first statement in these proceedings the wife apparently said that she needed to spend at around the rate of £102,000 per month. So, Mr Bishop submits that by reference either to the level of spending during the marriage or even to the wife's own estimates earlier in these proceedings, suggested expenditure at the rate of around £125,000 per month is, frankly, grossly inflated.

[16] One rapidly sees how she arrives at her figure when one sees in her expenditure budget that she says she requires £22,000 per month for her chauffeur and Rolls Royce Phantom and nearly £38,000 per month for her personal security. There are a number of items in her budget which, in reality, are clearly more of a one‑off rather than a recurring type - for instance, money for ‘re‑laying driveway' or ‘shipping of possessions from Canada' or ‘redecoration and replacement furniture' which is not an exercise which she needs to undertake in the short period between now and the next hearing.

[17] Finally, Mr Bishop expresses ‘great concern over the wife's legal costs expenditure'. He points out that, even allowing for the fact that the wife, but not the husband, has to pay VAT, her expenditure here has exceeded his by about £230,000. At first blush that, of course, seems a very large figure - although when, between them, these parties have chosen to spend something of the order of £1,600,000, or more, worldwide, the disparity of £230,000 begins to seem relatively small. Mr Bishop drew my attention to some documentation indicating the number of hours that staff or partners or directors of the wife's solicitors have devoted to aspects of this case. He submits that they are completely disproportionate and must be exaggerated. I cannot, today, embark on that kind of scrutiny. It is tantamount to inviting me to conduct some sort of detailed assessment of the wife's solicitors' bill. As I say, the figures are eye‑watering, but the amount that the husband himself has expended is in excess of £500,000.

[18] I must, of course, confine any award to what is reasonable. I must confine it to what reasonably the wife needs between now and later consideration of maintenance. I should not be over‑generous. Insofar as legal funding is concerned, of course I do have to consider whether other sources of funding are available to her. There is a reference in Mr Bishop's skeleton argument to the possibility of her obtaining legal aid. That, frankly, borders on the farcical in the context of the case that I have described. She has no assets over which she can give security. I do not know whether, in the longer term, she might be able to obtain a litigation loan, but she certainly does not have one at the moment.

[19] So, bringing all these considerations into some sort of just balance, I stress, first, the very short, interim and impressionistic nature of the order that I propose to make. Secondly, I make it on the basis that the husband will continue fully to discharge, or cause to be discharged, the items in his undertakings (b) and (c) of 21 May 2013. I make it very firmly on the repetition of the bases of that agreement and order recorded as (d), (e) and (f). In other words, in particular, the payments for which I am now about to provide must be accepted as being ‘on account of the petitioner wife's claims in any jurisdiction for financial provision arising from the breakdown of this marriage'. These are very firmly sums to be paid ‘on account' and therefore which may later be set off against any more substantial award that is either ordered or agreed upon anywhere in the world.

[20] Bearing all those considerations in mind I propose to limit my award to the period between now and the next hearing, fixed for Wednesday, 30 April 2014. That is, strictly speaking, seven weeks away, but I propose to treat it as two months. In my view in that period the wife cannot sensibly expect further provision remotely of the order of £125,000 per month. I propose to provide by way of general maintenance at the rate of £35,000 per month which, over my assumed two months, is £70,000. The fact of the matter is that there is a limit to how far any solicitor will go out on a costs limb, at the risk of the firm's own funds, with the sort of phenomenal figures in this case. Again, on the basis that it is firmly to be paid on account, there must be a further payment towards the wife's costs. The figure that I propose to allow is £100,000. Accordingly, the husband must pay, or cause to be paid, to the wife forthwith, by which I mean as soon as reasonably practicable, a sum of £170,000 by way of maintenance suit between now and the end of April 2014. I apportion that as to £70,000 for her general maintenance and £100,000 for her costs. I will expect it to be allocated in that way.