Matrimonial & Probate — The financial (in)security of a mistress on the death of her benefactor
A mistress of a deceased businessman applied successfully to Court for interim maintenance and litigation funding. What’s the significance of this interim win for the applicant and others in a similar position?
LYYC v CHL and CSMS, the Executrices of the Estate of CGSK also known as CSKG, Deceased
|Reference:||FCMP 223 of 2017|
|Before:||Her Honour Judge Sharon D. Melloy in Chambers|
|Date of Judgment:||20 October 2020|
|Appearance:||Jeremy S.K. Chan, instructed by Withers, for the Applicant|
In this case, a mistress of a deceased businessman applied successfully to Court for interim maintenance and litigation funding. To qualify for a claim under the Inheritance (Provision for Family and Dependents) Ordinance (Cap 481), the applicant must prove that she was maintained by the deceased immediately before his death. The meaning of financially dependent “immediately before death” is a key issue in this case.
In Hong Kong, unmarried couples have very little protection in the event of a relationship breakdown. Whereas a married spouse would be entitled to a share of the matrimonial estate, or otherwise a needs-based claim, an unmarried partner, on the other hand, has no such legal entitlement. An interesting exception in the legal framework, is that whilst an unmarried partner may have no claim against her partner during his lifetime, she may be entitled to a financial dependent’s claim under the Inheritance (Provision for Family and Dependents) Ordinance (Cap 481) (“the IPFDO”) in the event of her partner’s death.
Under the IPFDO, there are two applicable standards of “reasonable financial provision” – “spouse” and “others” category. “Spouse” in the context of the IPFDO refers to a married spouse. Spouses are entitled to a share of the deceased’s estate as they would in the event of a divorce. On the other hand, the claims of those falling within the “others” category, including unmarried partners, adult children, siblings, are limited to a claim for “reasonable maintenance”. They are not entitled to a share of the deceased’s estate.
In order to qualify for a claim under the IPFDO, the applicant would have to prove that immediately before the death of the deceased, he or she was being maintained, either wholly or substantially by the deceased.
Issue: Meaning of financially dependent “immediately before death”
The meaning of financially dependent “immediately before death” is a key issue in this case, where the administrators of the estate contend that the mistress applicant had been financially “cut off” 3 years prior to the deceased’s death on the strict wording of the legislation.
Her Honour Judge Melloy granted the mistress’s claim for interim maintenance and litigation funding.
The deceased had been married for over 40 years and had four children. He also had another mistress with whom he had two further children. He was a very successful businessman in Hong Kong, and it was accepted that he had several long-term relationships with other women.
The applicant was a former employee with two children of her own but none with the deceased. Her case is that she had been the deceased’s mistress since 1992 and that he had provided financial support to her for well over 20 years. This included the provision of a flat for her to live in, provision of a car and a regular monthly payment, in addition to her salary and other valuable gifts. The deceased also left her with shares to a company which owned a valuable office unit in Admiralty under his codicil.
The wife and the first family do not accept her case. However, the estate was unsuccessful in striking out the applicant’s claim.
Both the Court of Appeal and the Family Court considered that the applicant had at least a triable case and, therefore, that it is only fair she should be able to receive funding to litigate her claim, in the same way that the estate is able to use estate funds to finance their case. Her Honour Judge Melloy did not consider it fair in the circumstances to force the applicant to sell her only landed property to fund her living expenses and litigation, especially when the applicant’s case is that the property was a gift from the deceased, which the deceased had intended for her to retain free of mortgage after his death.
The applicant was granted interim maintenance and litigation funding on her undertaking that, should she be unsuccessful, she would repay the estate which means that she would likely have to sell her home. Any sums received by the applicant may ultimately be off set against her final award. As she was successful in this application, the costs for the applicant’s claim for interim maintenance and litigation funding were ordered to be paid to the applicant out of the estate.
This recent Decision by Her Honour Judge Melloy represents a significant interim win for the applicant and others in a similar plight in three important ways:
1. Where the beneficiaries seek to have their financial needs considered by the Court, they must give full and financial disclosure of their own financial circumstances. In the absence of such disclosure, the Court will not take their financial needs into consideration.
2. It is possible for an applicant under the IPFDO to be awarded both interim maintenance and legal costs provision even where his or her entitlement to make a claim under the IPFDO is in issue.
3. A grant of interim maintenance and/or legal costs provision may be subject to an undertaking to repay the estate in the event the applicant fails to establish his or her case at trial. The Court may be more ready to make interim orders where the applicant has assets by which he or she can repay the estate if required.
This commentary is authored by Vivien Leung and Billy Ko, Partner at Withers. It was first published in the online edition of Hong Kong Lawyer on 15 January 2021.
|Jeremy S.K. Chan
Jeremy enjoys a broad civil practice, concentrating particular emphasis upon private client work and Chancery matters, in particular matrimonial finance & family law, inheritance & probate, trust & administration, conveyancing & land disputes. He is widely regarded as “one of the top family practitioners”, as noted in Chambers & Partners Global 2020 and recognised as a leading junior counsel in estates and probate litigation by Doyles’ Guide 2020. Find out more from Jeremy’s profile.
|Vivien is a former solicitor with a decade of litigation experience. Before joining the Bar in 2020, Vivien trained and practised as a commercial litigator from 2009 to 2016 at Deacons; from 2016 to 2019, she practised as a family lawyer at Withers.
Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case.