IISW v. SDS-W

FCMC 1399 / 2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 1399 OF 2006

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R U L I N G
(Form of Order, Directions and Costs)

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Form of Order

1.  This hearing arose out of my judgment dated the 6 February 2013 when I said in conclusion that:

49.  I will therefore discharge the wife from her undertaking contained in the court order dated the 15 May 2007 not to seek to vary the financial provision for the children until April 2010.

50.  The husband shall pay a lump sum to the wife equivalent to the children’s school fees (i.e. tuition fees and capital levies) for the period from September 2009 to date, such figure to be calculated and provided to the court with documentary evidence in support.

51.  The issue of the charging order nisi shall be adjourned for further argument as directed on the 4 November 2011. In the meantime the charging order nisi shall remain in effect.

52.  The father shall be responsible for payment of the children’s school fees going forward. The parties are invited to make submissions with respect to this. I will also invite the parties’ legal representatives to make submissions with respect to the appropriate structure for the court order.

Costs

53. Given my concerns as expressed in this judgment and given that both parties will be coming back to court in any event I will reserve costs for further argument.  

2.  As stated in that judgment I accepted that the wife had had the benefit of receiving payments until 7 September 2009 (paragraph 21). I stated clearly that the new order should take effect from September 2009. I also confirmed that the husband should pay all ongoing school fees after that date. Given that my order was for the lump sum to be calculated “to date” I will expect that to be until the end of the academic year 2013 – i.e. July 2013.

3.  I also accept that the wife may calculate the fees a year in advance – so that she may claim for the school fees for the next academic year upon the production of an invoice in the Autumn. So in other words the wife may produce an invoice now for the academic year 2013/14 and so on and so forth.

4.  Mr Clough for the wife proposes that the wording of the order should be as follows:

A. The Petitioner is released from her undertaking set out in the Order dated 15^th May 2007 not to seek to vary the financial provision for the children until April 2010 and the said undertaking is discharged

1. The Respondent is ordered to pay to the Petitioner the sum of HK$1,190,179 being his liability for the maintenance of the said 2 children for school fees from the month of September 2009 to 6^th February 2013

AND

B. Upon the undertaking of the Petitioner that upon receipt of the funds from the Respondent paid in accordance with the terms set out below to defray the same to pay the school fees of the said children, namely E and O for the following school year:-

2. The Respondent is ordered to pay the Petitioner to sum of HK$172,241 for the maintenance of the said two children for their school fees between February 2013 and the end of the 2012/2013 school year in July 2013.

3. The Respondent is further ordered to make the following subsequent payments being annual maintenance payments for the school fees of the said two children by payment to the Petitioner for the children’s benefit:

i. With effect from July 2013 the Respondent shall pay the annual sum of (amount) for the maintenance of E and the annual sum of (amount) for the maintenance of O for the school year ending July 2014 and in subsequent school years in the manner set out in paragraphs ii & iii below.

ii. For subsequent school years, the maintenance payable to the Petitioner for E shall be in such sum as represents his annual school fees for that year and likewise the maintenance payable to the Petitioner for O shall be in such sum as represents her annual school fees for that year.

iii. The first payment shall be for the school year commencing September 2013 and shall be paid on or before 1^st August 2013.  Subsequent payments shall be made on or before 1^st August in each subsequent year.

iv. The order shall continue for so long as the children, or either of them, remain in full time education or reach the age of 18 years (whichever is the later) and in relation to tertiary education references to “school” shall read as if the reference was to “university” or other place of tertiary education.

5.  I accept that save that it seems to me that paragraph A 1 and B 2 should be amalgamated into one paragraph as follows:

The Respondent is ordered to pay to the Petitioner the sum of HK$1,330,490 being his liability for maintenance of the said two children for school fees from the month of September 2009 to July 2013. [1]

6.  In so far as the remainder of the order is concerned – I have no difficulty with it save that paragraphs 3 i) should read with effect from September 2013 and paragraph 3 iii) should be amended to read the 1 October 2013 for this year only.  

7.  Thus the order should read as follows:

A. The Petitioner is released from her undertaking set out in the Order dated 15^th May 2007 not to seek to vary the financial provision for the children until April 2010 and the said undertaking is discharged

1. The Respondent is ordered to pay to the Petitioner the sum of HK$1,330,490 being his liability for maintenance of the said two children for school fees from the month of September 2009 to July 2013

AND

B. Upon the undertaking of the Petitioner that upon receipt of the funds from the Respondent paid in accordance with the terms set out below to defray the same to pay the school fees of the said children, namely E and O for the following school year:-

2. The Respondent is further ordered to make the following subsequent payments being annual maintenance payments for the school fees of the said two children by payment to the Petitioner for the children’s benefit:

i) With effect from September 2013 the Respondent shall pay the annual sum of (amount) for the maintenance of E and the annual sum of (amount) for the maintenance of O for the school year ending July 2014 and in subsequent school years in the manner set out in paragraphs ii & iii below.

ii) For subsequent school years, the maintenance payable to the Petitioner for E shall be in such sum as represents his annual school fees for that year and likewise the maintenance payable to the Petitioner for O shall be in such sum as represents her annual school fees for that year.

iii) The first payment shall be for the school year commencing September 2013 and shall be paid on or before 1^st October 2013.  Subsequent payments shall be made on or before 1^st August in each subsequent year.

iv) The order shall continue for so long as the children, or either of them, remain in full time education or reach the age of 18 years (whichever is the later) and in relation to tertiary education references to “school” shall read as if the reference was to “university” or other place of tertiary education.

Directions on the Charging Order

8.  Both sides made some representations in relation to the Hong Kong property. I have also been referred to some correspondence on the issue. In a nut shell the husband agrees to sell the property at the price of HK$4 million or above. He also agrees to use the net proceeds of sale in the first instance to pay a lump sum equivalent to the outstanding children’s school fees as set out above. However he wishes to retain any balance left over for his own use in order to pay off his creditors. The wife for her part said that she wishes the property to be transferred to her free from encumbrances so that she is able to use the same for the benefit of the children. However she has not made any application to transfer the property or otherwise and now asks for time in order to file the appropriate summons and affidavit in support. I have some difficulty with each parties approach given that my judgment was handed down some 7 months ago. Had the wife wanted to take out a further summons then she should have done so before now. I also have some difficulty with the order that she apparently intends to seek. How can the court order that the property be transferred to her unencumbered given the current circumstances? I am also loath to allow the parties to attempt to re litigate matters which may inevitably lead to going over old ground with very little purpose or hope of sensible resolution. It should also be noted that I do not accept the husband’s argument that he needs the remaining net proceeds of sale for his own use and that he is able to pay for the children’s school fees out of income. This, even on his own case, seems to me to be an extremely unlikely proposition at present. He is simply not earning enough to do so.   

9.  In the alternative Mr Clough for the wife has suggested that the charging order nisi be made absolute and that in the first instance the net proceeds of sale be paid into court. By way of an indication this seems to me to be a much more sensible way to proceed. My preference would be to make an order that the charging order nisi be made absolute and that the net proceeds of sale (being the sale price less all reasonable costs and expenses related to the sale including the redemption of the mortgage and the loan in favour of PrimeCredit Limited, legal costs and agency fees) be first applied to pay the lump sum of HK$ HK$1,330,490 referred to above. The remaining net proceeds of sale could then be paid into court so that the wife is able to claim against those funds for payment of the school fees going forward. A word of warning though - the funds paid into court will not be regarded as funds to be held as security in the event that the husband is unable to pay the school fees. Rather the funds shall be paid into court in order that the wife shall then claim against them in order to pay for the children’s school fees (tuition fees and capital levies) going forward. When those fees have run out she will then be at liberty to issue a further summons against the husband for maintenance of the children.

10.  Given these circumstances I will therefore adjourn the issue of the charging order until the 5 December 2013 at 9:30 a.m. If the wife wishes to issue a further summons then she must do so by this date. In the absence of any further summonses my intention is to make an order as set out above.

Costs       

11.  I have been very critical of both parties in these proceedings. For example at paragraph 17 of the judgment I said as follows:

            17. I have therefore had the benefit of perusing three lever arch files which contain the pleadings and other related documents pertaining to the actions in Singapore. What is interesting to note is that it appears that many of the same points that were raised in Action No MSS 6XXX/2009, have been raised again before me in the present action and that neither party appears to have made much effort to satisfactorily deal with those points in the intervening period. For example the husband complained in the Singaporean proceedings about the wife’s failure to make full and frank disclosure of her assets – especially in relation to the properties held by her in Turkey and the way in which the lump sum of US$900,000 has been utilized. Documentary evidence was sparse then and it was sparse when the matter came back before me. Likewise the wife accuses the husband of material non disclosure with respect to his business dealings. The husband maintained then, just as he maintains now, that he has little documentary evidence in support of what he says because that is the way business is done in Vietnam. And so it goes on. I should say that as a general comment that I did not find either party to be entirely credible. 

I added at paragraphs 19 and 20 as follows:

 19. Thus it seems to me that it was clear that it was never the intention that the husband should continue to pay the sums identified and that the wife should only seek payment from the money held in court, if he didn’t pay. Rather the intention was that the wife should rely on those funds – hopefully for a three year period, but that in the event that that wasn’t the case then it seems to me implicit in the order that she should be able to come back to court and ask to be released from her undertaking and depending on the circumstances seek further maintenance.

 20. Thus I remain of the view that it was quite wrong of the wife to present her case both in Singapore and Hong Kong as she has done. Further the husband’s stance that her undertaking was in some way “absolute” is also incorrect. Given that it seems to me that there can be no arrears of maintenance as such.         

In conclusion I said at paragraph 34 that

 34. At the end of the day I do not find either party particularly credible; very little evidence has been produced by either side to support what at times have been quite outrageous assertions. Each party has put their case at its highest. Neither has been particularly convincing.     

That remains my view.

12.  It is against this background that the wife now seeks her costs of and incidental to the application on an indemnity basis. I can see absolutely no basis for that application. The husband says in turn that he should be awarded costs because he tried to settle throughout. Again, given the judgment, I can see no basis for that stance.

13.  The wife “won” on some but not all of her case. She was certainly successful in terms of quantum in that the order to pay maintenance for the two children of the family as their school fees is far in excess of anything offered by the husband in terms of maintenance payments for the children, at any stage of the proceedings. But she failed in that I did not accept her interpretation of the original order. (See paragraphs 19 and 20 of the original judgment set out above). This was the central and most important aspect of the case. It seems to me that everything else to a certain extent, hinged on this. The parties consequently spent a great deal of money on litigating the point. There can be no doubt that the husband was successful, in that his interpretation was at the end of the day the preferred interpretation. There were also other issues relating to disclosure on both sides. I have been critical of both sides in this respect. Consequently it seems to me that the most appropriate order, in these circumstances is that there should be no order as to costs in relation to the proceedings leading to the judgment of the 6 February 2013 and of this hearing.