NS v. NK

FCMC 8255 / 2022

[2023] HKFC 171

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 8255 OF 2022

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________________________

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J U D G M E N T
(Ancillary Relief)

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Introduction

1.  This ancillary relief application, is between the petitioner (“Wife”)  and the respondent (“Husband”).

Husband’s application before the ancillary relief trial

2.  On 4 July 2023, just one week before the first day of the ancillary relief trial, the Husband through his solicitors, wrote a letter addressed to the Family Court Registry

“…to request that the Respondent be permitted to issue a Summons for leave to adduce his 6^th affirmation dated 30^th June 2023 to update his Form E as his lost his job … the solicitors for the Petitioner has already been given a copy of the said 6^th affirmation.

If this request is refused, we will apply to the trial Judge without a summons being issued.”

3.  This letter was addressed only to the Family Court Registry and the Wife was not copied in on the letter.  There was no affirmation filed on behalf of the Husband’s solicitors in support of the summons to explain the delay in filing the evidence, or the steps that the solicitors had taken to obtain the Wife’s views on the late filing of evidence, or whether the filing of the late evidence would prejudice the Wife.  The summons was simply accompanied by the Husband’s purported 6^th affirmation, which failed to contain the reasons for the delay.

4.  The dates for the ancillary relief trial had been set down at the hearing on 1 November 2022 before His Honour Judge KK Pang.  Both the Wife and the Husband were legally represented at this hearing. The Orders made at this hearing clearly stipulated the directions that parties had to comply with for the filing of affidavits regarding section 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”)  and at paragraph 7 of the Order of 1 November 2022 stated that:

“7. No further affidavit without leave.”

5.  Following the hearing in November 2022, there were two separate Pre-Trial Review hearings on 6 April 2023 and on 31 May 2023.  Both parties were legally represented at the hearing on 6 April 2023, although the Husband filed a Notice To Act in Person after the April 2023 hearing. 

6.  The Husband was without legal representation at the Pre-Trial Review hearing on 31 May 2023, ostensibly since his application for Legal Aid was still pending but he was legally represented from 13 June 2023, when his solicitors filed their Notice to Act.  It is significant that the Husband had the same firm of solicitors representing him from the time he filed his Form 4 – Acknowledgement of Service dated 19 September 2022 until 6 April 2023, and again from 13 June 2023 onwards.

7.  The Husband filed his narrative affirmation on 6 January 2023 in compliance with paragraph 6 of the order dated 1 November 2022. The Husband also filed his third Form E on 20 April 2023 (“H’s 3^rd Form E”).  He could have and, should have, provided any update on his employment in H’s 3^rd Form E.  As stated above, no explanation was given by the Husband as to why this was not done.

8.  Given the history of the proceedings and the fact that the Husband had the benefit of legal representation, I was not prepared to immediately accede to the Husband’s request to file further evidence at such a late stage.  Hence on 5 July 2023, I wrote to the Husband’s solicitors and referred them to the letter dated 11 May 2023 sent by the Honourable Madam Justice Queenie Au-Yeung to the President of the Law Society, regarding unilateral correspondence to the court. I also requested the Husband’s solicitors to confirm that they had sought the Wife’s views to adduce new evidence one week prior to the commencement of the ancillary relief trial prior to writing unilaterally to the court.  The response received from the Husband’s solicitors was unhelpful.

9.  In light of the fact that it was inappropriate for the Husband’s application to be dealt with by letter, leave was not granted for the filing of his purported 6^th affirmation prior to the trial. Accordingly, this issue had to be addressed on the first day of the trial.  On the first day of the trial however, the Husband did not present any summons nor did he file any evidence to explain the delay, or address any prejudice the Wife might suffer in respect of the late application.  In fact, Counsel for the Husband, Ms Chow accepted that the proper procedure had not followed but she nevertheless, pressed ahead in asking for the 6^th affirmation to be admitted. 

10.  Ms Chow submitted the Husband needed an opportunity to address the Wife’s allegations regarding the transfer of her share in her company, SBDL as the issue of the share transfer was only raised in the Wife’s narrative affirmation of 9 January 2023.  Another reason given was that the Husband was not legally represented for a period of time.

11.  Counsel for the Wife, Mr Marwah, objected to the Husband’s application and his excuse of being temporarily legally unrepresented as the reason for the delay. Mr Marwah drew the Court’s attention to the Wife solicitor’s letter of 6 July 2023 to the Husband’s solicitors, complaining that even after the Court’s directions of 5 July 2023 that the Husband solicitors persisted in writing unilaterally to the court without sending a copy to the Wife. Regardless of this, the Wife proposed to not object to the purported 6^th affirmation if the Husband agreed to pay the Wife’s legal costs in respect of his application.  The Wife’s proposal was not accepted by the Husband.  

12.  I note that the Wife brought up the issue of the share transfer in her first Form E dated 25 February 2021 (“W’s 1^st Form E”)  and the Husband had amply time and opportunities to address this matter before the week before the trial.  As for the issue of not having solicitors on the record, this was only the case for a mere nine weeks.

13.  The Husband’s disregard for proper procedure is of concern, particularly when there was a request to file further evidence without taking out any formal application.  The Husband’s conduct in not communicating to the other side first and unilaterally writing to the court is also of concern. Taking into consideration that there was no proper application, plus the absence of evidence explaining the undue delay, the Husband’s application was denied as the court is not bound to consider any court documents or affidavits not formally filed.

14.  Leave was however granted to both parties to adduce evidence in evidence in chief limited to the question of the Husband updating his employment status, because the question of the Husband’s employment and earning capacity was material to the ancillary relief trial. 

Background

15.  Both the Wife and Husband were born and raised in Japan. At the time of the trial, the Wife was 44 years old, while the Husband was 51 years old.  The parties met in 2016 in Hong Kong and married on 10 October 2018.  The parties separated on 11 August 2020, and the Wife petitioned for divorce on 1 September 2022. The decree nisi was granted on 4 January 2023.

16.  The Wife was a high school graduate.  She relocated from Japan to Hong Kong in or around May 2017 while she was still an employee with a Japanese company. Within two months of moving to Hong Kong, the Wife resigned from the Japanese company and established a beauty business from scratch catering for Japanese clients.  At the time of the trial, she was a director of a beauty shop opening in Causeway Bay.  The Wife’s clientele is limited to the Japanese community due to the her being unable to communicate in Chinese or English despite having lived in Hong Kong for several years.

17.  The Husband has lived and worked in Hong Kong since 2003, and he is a permanent resident of Hong Kong.  The Husband studied in the USA for two years but he did not complete his university degree as he had to return to Japan earlier than he had planned.  The Husband’s vocational background was in sales, which he has been doing for over 20 years albeit in different sectors such as technology, selling advertisement space in newspapers, financial services and most recently in alcohol and the food and beverage industry.  The Husband is fluent in both Japanese and English, and is able to communicate in Cantonese at a conversational level. 

18.  In 2007, the Husband incorporated his consulting business, NWI which on the Husband’s evidence, is a vehicle used to provide various services to support small to medium companies who required his experience and expertise.  The Husband also used the company to provide Japanese/ English interpretation and translation work on an ad hoc basis.  Between June 2022 and 14 January 2023, the Husband was employed as a manager of a Japanese restaurant through NWI and earned a regular income of HK$50,000. 

19.  Additionally, the Husband is one of the co-founders and shareholders of OL which operated a sake bar at PMQ.  At the time of the trial, the Husband was a minority shareholder of OL due to his previous need to liquidate shares to meet his expenses.  The Husband is also a director and 100% shareholder of SBDL which was originally incorporated by the Wife in 2017.  This company is currently dormant. 

20.  I accept the Husband’s evidence that he is a very experienced professional in sales and business development.

21.  Both the Wife and the Husband were married previously. The Husband’s first marriage lasted six years and there were no children born within that first marriage.  The Wife has four children from her first marriage; K, a son born on xxAugust 2009, M a daughter born on xxFebruary 2012, and a pair of twins born on xxAugust 2014, A1, a son and A2, a daughter.

22.  The Wife relocated from Japan to Hong Kong with all four of her children from her first marriage and the Husband, treated all four children as his own, by formally adopting them in Japan.  During the marriage, the Husband took on the parental responsibility for all four children and treated them as children of the family. Pursuant to the Order dated 24 August 2021, sole custody, care and control of the K, M, A1 and A2 was granted to the Wife.

23.  The Wife and Husband themselves, had a daughter, D born on  xxNovember 2018.  The Order dated 24 August 2021 granted joint custody to the Wife and Husband with care and control to the Wife, and supervised defined access to the Husband (“Access Order”). 

24.  The marriage started to fall apart in or around February 2020 during the Covid-19 pandemic when the family spent more time at home together.  The children’s schools were closed, the Wife was not able to operate her beauty business and the Husband was not able to manage his business.  It was the Wife’s case that the close proximity of the family at home led to the Husband becoming more verbally abusive towards her, K, M, A1 and A2.  This in turn led to increased tensions within the home and matters would quickly escalate into arguments between the Wife and the Husband.

25.  It was the Wife’s case that in August 2020, the Husband started to physically abuse her which led to an incident on 11 August 2020, wherein the Wife and the Husband were involved in a physical altercation regarding D.  The Husband was charged and tried for the assault against the Wife, for which he was formally acquitted on 28 April 2023.  As such, I will not repeat the Wife’s allegations here regarding the incident on 11 August 2020. Since then, the Wife and all of the children have moved out of the former matrimonial home and live separately from the Husband.  The Husband shares an apartment with a friend.  

The wife’s case and open offer

26.  It was the Wife’s case that the ancillary claims between the parties is a straightforward matter since there are no surplus assets between the parties for division and neither spouse requires spousal maintenance.  The key contention was the level of child maintenance the Husband needed to contribute towards the children’s expenses.  The Wife maintained that the Husband was the main breadwinner of the family prior to separation, and as such, there should be an equal contribution by the parties towards the children’s expenses.  The Wife further claimed that the Husband had failed to provide full and frank financial disclosure of his finances and he had also been under-utilising his earning capacity.

27.  The Wife’s open offer was consistent with her case.  She proposed that there be a clean break between the parties, that each party was to retain the assets held in their respective sole names, and each party was to be responsible for their own debts and liabilities. The Wife also proposed that the children’s expenses were to be shared equally since both parties had similar earning capacities. Thus, the Wife sought maintenance from the Husband for the benefit of the children in the sum of HK$6,500 per child per month or a total of HK$32,500 per month.

The husband’s case and open offer

28.  It was the Husband’s case that he had limited financial means; his consulting company, NWI was not performing well, and although he had made genuine efforts to find a job it was to no avail. In addition, the Husband maintained that since the criminal charge was made against him, he suffered from depression and until his acquittal in April 2023, the criminal case severely hindered his ability to seek new employment.

29.  The Husband did not challenge the Wife’s earning capacity but he did challenge the family’s standard of living as claimed by the Wife.  As for the family’s standard of living during the marriage, although the Husband accepted that he paid the rental and utilities for the family apartment, he did not accept that living expenses was more than HK$20,000 per month during the marriage.  It was the Husband’s case that the family spent HK$10,000 per month on their daily consumption, eating out and daily necessities for school and living.

30.  In his open proposal, the Husband proposed that each party retain the assets presently held under their respective sole names and to be responsible for their own debts and liabilities.  The Husband then offered to pay nominal maintenance of HK$1 per child per month for the benefit of each of the children.  

Issues

31.  Since the parties were in agreement that there are no assets available for division, the only outstanding issue was how should the children’s needs be shared between the Wife and the Husband.  In determining the answer to this question, the court will also need to consider the parties’ respective incomes, earning capacity, as well as the reasonable financial needs of the children, the Wife and the Husband.  

Legal Principles

32.  The court is required to have regard to the factors set out in section 7(1)  of the MPPO when determining ancillary relief orders :

(a)  the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b)  the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c)  the standard of living enjoyed by the family before the breakdown of the marriage;

(d)  the age of each party to the marriage and the duration of the marriage;

(e)  any physical or mental disability of either of the parties to the marriage;

(f)  the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring of the family; and

(g)  in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension)  which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

33.  In addition, the court is also to have regard to the factors set out in section 7(2)  of MPPO, when there are children of the family whose financial needs have to be provided for :

(a)  the financial needs of the child;

(b)  the income, earning capacity (if any), property and other financial resources of the child;

(c)  any physical or mental disability of the child;

(d)  the standard of living enjoyed by the family before the breakdown of the marriage; and

(e)  the manner in which he was being and in which the parties to the marriage expected him to be educated.

34.  In the case of LKW v DD [2010] 13 HKCFAR 537, the Court of Final Appeal laid out 4 principles as to how section 7 MPPO was to be approached.[1] Firstly, there was to be a fair distribution of the assets between the parties. Secondly, the concept of fairness meant that discrimination against gender or roles within the family was to be rejected. Thirdly, to discourage discriminate and to promote fairness, the court should view distribution against a “yardstick of equal division” which should be departed from only for good, articulated reasons. Lastly, there was to be a rejection of minute retrospective investigation of the failed marriage.

35.  The Court of Final Appeal identified a five steps approach to be adopted in all ancillary relief trials, namely :

(a)  Identification of the parties’ assets;

(b)  Assessing the parties’ financial needs;

(c)  Deciding to apply the sharing principle if there are surplus assets remaining after the parties’ needs have been catered for;

(d)  Considering whether there are good reasons to depart from the principle of equal division.

(e)  Deciding the outcome.[2]

Credibility of the parties

36.  Both the Wife and the Husband gave evidence at trial and conducted themselves appropriately.  Ms. Chow submitted that where there are discrepancies between the Wife’s and the Husband’s evidence that I would prefer the Husband’s evidence over the Wife’s. Ms. Chow’s submission was based on the Wife’s contradictory evidence regarding the incident on 11 August 2020 and social media posts which the Wife had made at that time.  As stated above, the Husband has been acquitted of the charges relating to the incident on 11 August 2020.  I, therefore, place no weight on the Wife’s evidence regarding the content of her social media posts.  That is not to say then, that on all issues the Wife’s evidence should be entirely rejected and the Husband’s evidence is to be preferred.

37.  In evaluating the evidence, the ultimate question I had to ask was whether the Wife’s or Husband’s evidence was inherently plausible or implausible, and/or whether her or his evidence was contradicted in a material way by other undisputed or indisputable evidence.  In this regard, I found the judgment of Deputy High Court Judge Au (as he then was)  in Lee Fu Wing v Yan Po Ting Paul [2009] 5 HKLRD 513 to be illuminating :

“53. In assessing the credibility of a party's case on a particular issue, I accept the submissions of Ms. Lisa Wong (leading counsel for the plaintiffs)  that the Court should take into consideration the following:

(a)  Whether the party's case is inherently plausible or implausible;

(b)  Whether the party's case is, in a material way, contradicted by other evidence (documentary or otherwise)  which is undisputed or indisputable;

(c)  Where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests. This is relevant to the assessment of his overall credibility; and

(d)  The demeanour of the witnesses.”

38.  Therefore, there were some issues where I preferred the evidence of the Wife and on other issues, I preferred the evidence of the Husband.  Where I preferred the evidence of one party over the other, I have explained the reasons for doing so.

The parties’ assets

39.  Neither the Wife or the Husband challenged the other as to their respective assets or liabilities.  I, therefore, conclude that the parties’ respective assets are as per Joint Table of Agreed and Disputed Assets and Liabilities as follows:

	Wife (HK$)	Husband (HK$)
Assets
Bank accounts	18,342.34	12,749.91
Value of shareholding/ beneficial interest in companies	2,897.17	33,864.07
Medical Insurance	27,216.66	--
Pensions/MPF	62,954.31	239,634.25
Sub-total:	111,410.48	286,248.23
Liabilities
Credit cards	157,704.86	250,071.05
Net total:	(46,294.38)	36,177.18

The family’s standard of living

40.  The family enjoyed a reasonable standard of living before and during the marriage between the Wife and the Husband.  The family had the assistance of a part-time helper. The family had always lived in rented accommodation which was not more than 750 square feet, with three bedrooms.  The children would have access to and enjoyed residential facilities such as a swimming pool and clubhouse.  In addition, the family was able to enjoy one overseas holiday each year.

41.  K, M, A1 and A2 have been attending public local schools, and are taught in English and Chinese.  D was in kindergarten at the time of trial.  I note that the Wife expressed her desire in her first Form E that the children should be able to attend the Japanese International School because they are Japanese speakers and they may wish to return to Japanese in the future, however, the option to study at an international school is not financially feasible. 

42.  The Husband stated in his first Form E that he had considered educating D in Japan however, his position changed in his second Form E, such that he proposed that the present schooling arrangements to continue.

43.  As for the family’s expenditure during the marriage, the Wife maintained that the Husband was historically the main breadwinner prior to and during the marriage.  The Husband’s evidence was that he paid for the rental of the Tung Chung apartment, the utilities and some of the family’s expenses.  At Part 5.2 of the Husband’s first Form E dated 17 August 2022 (“H’s 1^st Form E”)  he stated that he spent approximately HK$30,000 on the family, although he did accept in cross-examination that his contribution was closer to HK$40,000.  The Wife also claimed that she spent all of her income on the family which was approximately HK$7,000 to HK$10,000 per month. 

44.  I have kept this information in mind when assessing the needs and expenses of the parties and children.

Shares in SBDL

45.  Before addressing the main issues of the parties’ respective incomes and earning capacity, I should mention, what I consider is a side issue, the transfer of the Wife shares in SBDL to the Husband.  It is a side issue because the Wife has not requested the reinstatement of her shareholding nor has she attributed any value to the share which was transferred to the Husband to be added to the matrimonial assets.  In fact, the Wife has not applied for any remedy regarding the transfer of the share in SBDL which on her case, was done without her knowledge or consent.  

46.  It is not in dispute that in March 2017, the Wife incorporated SBDL.  It is the Wife’s evidence that prior to 2020, SBDL generated a monthly gross revenue of around HK$70,000 to HK$100,000, although the Wife herself only earned an average monthly income of between HK$7,000 to HK$10,000. 

47.  The Wife asserted that from the date of incorporation until 19 January 2019, she was the sole director and shareholder of SBDL.  She claimed that at some point in time, her shares in SBDL were transferred to the Husband but she could not recall signing any of the share transfer documents or providing her consent for the transfer of her shares to the Husband.  The Wife claimed that the Husband spent the revenue earned by SBDL to pay his debts which he incurred through his various manufacturing factories in Hong Kong and China.  It was the Wife’s case that the Husband engineered the transfer of the share in SBDL in an attempt to assert financial control over the company and to utilise the revenue generated.

48.  The Husband evidence was that he had helped the Wife set up SBDL.  In cross-examination, he agreed that and since the Wife’s skills and expertise was in providing beauty treatments, he took over the administration tasks in running the business.  The Husband was the one in charge of SBDL finances by settling all of the companies’ bills, and gave the Wife cash whenever she needed it. 

49.  On the question of the transfer of the Wife’s shares in SBDL, the Husband’s evidence was that this was done with the Wife’s agreement and consent in order for the Husband to open a bank account for SBDL. The Husband also claimed that the bank did not permit the Wife to open a bank because she was not a permanent resident of Hong Kong, she did not understand the language and the bank would not permit an interpreter to assist with the opening of the bank account for the company.  Thus, it was necessary for the Wife to transfer her share in SBDL to him for the easier administration of the company’s bank account.  The Husband’s explanation regarding the transfer of the Wife’s share in SBDL in order to open a bank account, does not make any sense.  Hong Kong is a leading global financial centre with a large representation of international banks.  Both non-residents and foreigners can open bank accounts in Hong Kong, although admittedly it can be easier for a resident of Hong Kong to open a bank account.  There are also different types of banks to choose from in Hong Kong to open an account and no doubt, some banks would even have personnel who would be able to communicate with the Wife in Japanese in order to open a bank account. 

50.  However, even though I do not except the Husband’s explanation for how he had the Wife transfer the shares in SBDL to him, I wish to emphasize that the Wife has not presented any evidence in support of her claim that the Husband misappropriated any money from SBDL or that he did so to assert financial control over the business.  The matter of the transfer of the Wife’s shares cannot be taken any further than as stated above.

51.  In any case, SBDL is currently a dormant company.  Since the separation, the Wife no longer operates her beauty business under SBDL.  In September 2020, the Wife incorporated SHK which operates a beauty shop in Causeway Bay.  The Wife is currently the sole director and shareholder of SHK. 

The Wife’s income

52.  It was the Wife’s case that the Husband refused to hire a full time helper during the marriage and insisted that she say at home to care for the children, which restricted her ability to earn more income at the time.  Hence, she was only able to earn an average of HK$7,000 to HK$10,000 per month during the marriage.  

53.  The Wife’s beauty treatment business was also further impacted by the Covid-restrictions during 2020 and 2021 when beauty services were not permitted to be provided.  The Wife’s income dropped from September 2020 and she had to utilise her savings to support the household and the children’s expenses, especially since the Husband has not provided any financial support for the children since the separation in August 2020. Between September 2020 to January 2021, the Wife’s average income was HK$25,000.

54.  The Wife’s utilisation of her savings to meet her expense is supported by her financial disclosure.  In W’s 1^st Form E, she disclosed that she had a total of HK$37,290.72 in her bank account held in Hong Kong and in Japan.  By the time of her second Form E dated 20 April 2023 (“W’s 2^nd Form E”), the Wife’s bank balances had dropped to HK$18,342.  

55.  I accept that the Wife’s evidence regarding her income and that her only income generating ability or financial resource is through her expertise in providing beauty services with SHK.  Through her hard work, the Wife’s income has improved greatly and she currently earns on average HK$77,000 each month.  The Wife further receives an allowance for the children from the Japanese Government equivalent to around HK$3,825 per month.  I assess the Wife’s income to be HK$80,000 per month on average. 

The Wife’s needs

56.  The wife’s monthly expenses as per her disclosure in these proceedings are as follows:

General expenses

Item	1st Form E (HK$)	Affirmation of Jan 2023 (HK$)	2nd Form E (HK$)
Rent	22,500	22,500	22,500
Mortgage instalments	--	--	--
Utilities (electricity, gas, rates, water and telephone)	2,300	1,500	3,000
Management fees	--	--	--
Food	6,000	15,000	15,000
Household expenses	2,000	3,000	3,000
Car expenses	--	--	--
Insurance premia	--	--	--
Domestic helper	5,000	5,200	5,108
Others (Broadband/ wifi)	398	398	398
Total monthly general expenses	38,198	47,598	49,006

Wife’s personal expenses

Item	1st Form E (HK$)	Affirmation of Jan 2023 (HK$)	2nd Form E (HK$)
Meals out of home	2,500	2,000	2,000
Transport	1,500	1,500	1,500
Clothing / shoes	1,500	2,000	2,000
Personal grooming (including haircut and cosmetics)	800	2,000	2,000
Entertainment / presents	1,000	500	800
Holiday	1,000	--	1,500
Medical / dental	300	1,000	1,000
Tax	0	0	583
Insurance premia	400	0	400
Interim maintenance	--	--	--
Contribution to parents	--	--	--
Dependent family members	--	--	--
Others (Mobile phone plan)	100	100	116
Total monthly personal expenses	9,100	9,100	11,899

Children

Item	1st Form E (HK$)	Affirmation of Jan 2023 (HK$)	2nd Form E (HK$)
School fees	--	--	--
Extra tuition fees	--	1,000	--
School books and stationery	1,000	1,250	2,000
Transport to school (including school bus)	2,500	0	0
Medical / dental	4,000	2,000	2,000
Extra curriculum activities	2,000	12,000	3,000
Entertainment / presents	500	2,000	2,000
Holidays	4,000	3,000	5,000
Clothing / shoes	1,500	2,000	5,000
Insurance premia	--	--	--
Lunches / pocket money	6,700	2,000	5,000
Other transport	--	500	--
Child minding fees	--	2,000	--
Uniform	200	100	100
Others: Mobile phone plan for K and M	200	200	200
Total monthly expenses for children	22,600	28,050	24,300
Total monthly expenditure for Wife	69,898	84,748	85,205

57.  The Wife was cross examined at length as to the reasonableness of her expenses.  The Husband challenged various items of the Wife’s expenditure such as her rental, utilities, personal grooming, personal holiday expenses as well as her expenditure on the children, on holidays and lunches. I accept that the Wife historically was in charge of the children’s expenses and continues to do so.  Accordingly, she would have a better idea of what the children’s expenditure is compared to the Husband.

58.  I find that the Wife’s rental to be perfectly reasonable and appropriate for six people, and that it falls squarely within the standard that the family enjoyed during the marriage. 

59.  I also accept the Wife’s evidence that the amount charged by utility companies does vary according to the seasons, with summer utilities being higher due to the use of air-conditioning at home.  The Husband suggests that I adopt a sum of HK$1,500 for the Wife’s utilities.  I note that the Husband’s own share of utilities in his current accommodation is HK$1,000, which is for a single person.  To then attribute a figure of HK$1,500 for a six-person household is unrealistic.  I accept a figure of HK$2,000 for utilities as reasonable for the size of the Wife’s household.

60.  As for the Wife’s expenditure on food and household, I am inclined to consider that these two figures combined are on the high side.  I would propose a sum of HK$10,000 for food and HK$2,000 for the general household expenses.  Overall, I find that the Wife’s personal expenses are reasonable and not at all inflated or extravagant, which is what the Husband suggests.

61.  Similarly, I do not find that the expenditure on the children to be unreasonable save to say that the amount spent on clothing could be reduced somewhat.  No doubt the Wife is resourceful and she will be seeking to keep costs down and the younger children will be able to make use of the older children’s clothes when they have grown out of it.  I would, therefore, propose a monthly average of HK$3,000 for clothing and shoes for the five children, which is HK$600 per month per child for this item. 

62.  As for the children’s holidays, I believe that HK$4,000 per month at present will be adequate.  I have borne in mind that any child over the age of 12 is usually charged as the same as an adult’s fare.  K is already 14 years old and M will turn 12 years old next year, however three of the children are still under 10 years old. 

63.  For the sake of clarity, I find that the following sums are reasonable for Wife’s expenses : 

General expenses

Item	Amount (HK$)
Rent	22,500
Mortgage instalments	--
Utilities (electricity, gas, rates, water and telephone)	2,000
Management fees	--
Food	10,000
Household expenses	2,000
Car expenses	--
Insurance premia	--
Domestic helper	5,108
Others (Broadband/ wifi)	398
Total monthly general expenses	42,006

Wife’s personal expenses

Item	Amount (HK$)
Meals out of home	2,000
Transport	1,500
Clothing / shoes	2,000
Personal grooming (including haircut and cosmetics)	2,000
Entertainment / presents	800
Holiday	1,500
Medical / dental	1,000
Tax	583
Insurance premia	400
Interim maintenance	--
Contribution to parents	--
Dependent family members	--
Others (Mobile phone plan)	116
Total monthly personal expenses	11,899

Children

Item	Amount (HK$)
School fees	--
Extra tuition fees	--
School books and stationery	2,000
Transport to school (including school bus)	0
Medical / dental	2,000
Extra curriculum activities	2,000
Entertainment / presents	2,000
Holidays	4,000
Clothing / shoes	3,000
Insurance premia	--
Lunches / pocket money	5,000
Other transport	--
Child minding fees	--
Uniform	100
Others: Mobile phone plan for K and M	200
Total monthly expenses for children	20,300
Total monthly expenditure for Wife	74,205

Children’s share of expenses

64.  In terms of the children’s share of the general household expense expenses, I attribute the sum of the HK$35,005 as the children’s share.[3] Hence, I have calculated that the children’s total monthly expenses to be HK$55,000[4].  This equates to each child’s total monthly expense being HK$11,000.  For the record, it should be noted that the onus for providing for all of the five children lies with both the Wife and the Husband.

The Husband’s income and earning capacity

65.  At the very beginning of his evidence in chief, the Husband stated that he wished to clarify various aspects of his evidence. In H’s 1^st From E, he declared that he was self-employed, earning no salary or income.  He did not disclose that his title was that of restaurant manager even though he was employed thus at the time.  This was followed by his second Form E dated 27 September 2022 (“H’s 2^nd Form E”), filed just six weeks after the first Form E.  He again disclosed that he was self-employed but this time he stated that his present monthly salary was HK$50,000.  In his evidence in chief the Husband explained that he had prepared H’s 1^st Form E himself, and he did not understand it, hence the need to provide an updated one six weeks later.

66.  With respect, I do not accept the Husband’s explanation as a reasonable excuse for inaccurate information.  At the time of H’s 1^st Form E, the Husband was legally represented and his solicitors would have no doubt advised him and / or explained to him any section which he did not comprehend.  Furthermore, the Husband is fluent in English and a very competent sales person with extensive experience in the business world.  I am of the view that the Husband fully understood the financial disclosure form that he completed and he chose to not provide full and frank financial disclosure regarding his income. 

67.  The Husband was employed as a restaurant manager of a Japanese restaurant between June 2022 until 14 January 2023 earning a salary of HK$50,000.  The Japanese restaurant closed on 14 January 2023.  In his Answer, the Husband disclosed that his salary was first deposited in June 2022 into his own personal account but thereafter, it was paid as a consulting fee into NWI.  The Husband’s evidence at trial was that he and the rest of the staff were informed of the restaurant’s closure one week prior. 

68.  However, the Husband failed to provide this information in his narrative affirmation and his third Form E filed on 9 January 2023 and in April 2023, respectively.  The Husband also did not write to the Wife to inform her of the change in his employment status nor has he provided any reasonable excuse for the omission of this critical piece of evidence.  I, therefore, take the view that the Husband actively tried to conceal the income he earned from the Japanese restaurant. 

(a)  Husband’s income streams

69.  By H’s 3^rd Form E, the Husband stated that his income dropped to HK$5,000 per month.  It was his evidence at trial that the salary he received as a manager was the peak of his earning capacity and going forward, he does not expect to earn as much.  This was not accepted by the Wife who claimed that the Husband has not provided a clear picture of his various income streams, in particular his self-employment income.  The Wife asserts that the Husband has earned income from other various source such as selling whisky, insurance commission and other services.

70.  The Husband gave evidence that the income from selling whisky is derived from him selling his previous collection or stock which is in essence, depleting capacity rather than earning an income per se. I agree with the Husband’s explanation regarding the whisky sales, particularly since there is no evidence to show that the Husband has also at the same time purchasing more whisky stock to sell in the future. 

71.  As for the insurance commission, the Husband accepted in cross-examination that the payments from IW was income from an insurance brokerage, even though he stated that he is not employed by the company and the commission was from sales he made back in 2012.  No other information or documents regarding his contractual relationship with IW was provided by the Husband.  It is questionable as to why commission is being paid to the Husband at present if he is no longer selling financial products.  It is unusual for commission on sales to remain unpaid for a long period of time, and on balance I believe that the Husband continues to sell financial products as and when the opportunity arises.  

72.  The Husband was cross-examined regarding various deposits into his personal bank account and the bank account for NWI.  In his Answers regarding various deposits into his NWI bank account, the Husband listed as “cannot recall”, although during cross-examination, he was prepared to admit that perhaps half of these deposits would represent his income from business.  Since NWI was set up as a consultancy company for the Husband’s services, it is reasonable to expect that all deposits into his NWI bank account would be for services rendered by the Husband.

73.  As to deposits into his personal bank account, which were for larger amounts than deposits into his NWI bank account, the Husband provided similarly evasive responses in his Answer.  There were also various other cash deposits where the sources were described as to “self” and the purpose was for “Credit card repayment”.  Some of these cash deposits were for several thousand dollars and they cannot be traced back to any other accounts held by the Husband.  The Husband did admit that the deposits may have been earned by him on an ad hoc basis, and it was submitted on his behalf that the sums were small and as such, it is not surprising that the Husband did not recall their source.  Although the amount for each deposit may be small, it does not justify the Husband’s lack of frank disclosure, his vague answers simply compound the proposition that the Husband has attempted to hide his income. 

(b)  Reasons given by the Husband for not being able to find work

74.  I will address each of the four reasons presented by the Husband as to why he could not secure employment, and explain why I have not accepted them to be valid reasons.  The Husband’s four reasons are:

(i)  He claimed to be suffering from depression following the assault charge,

(ii)  His reputation within the Japanese community had been tarnished by the Wife’s social media posts of 2020 and there was a criminal charge previous outstanding.

(iii)  The timing of the Access Order constrained the hours he was available work, and

(iv)  he had tried his best to find employment with no success.

Husband’s mental health

75.  In H’s 1^st Form E, he claimed that he was suffering from post-traumatic stress disorder since January 2021, social phobia and psychosomatic disorders.  In H’s 2^nd Form E, filed in November 2022 he stated that he suffered from depression and trauma and was waiting for an appointment on 2 May 2023.  This statement was then at odds with H’s 3^rd Form E wherein he disclosed “I suffer from depression and trauma.  I was diagnosed by a psychiatrist in 2022”.  The difficulty with accepting the Husband’s claims regarding his mental health is that he has not provided any evidence, such as a doctor’s note or medical certificate in respect of his health at all. 

76.  In addition, I have difficulty accepting that the Husband’s mental health has adversely impacted his ability to find better employment with a higher income because despite the Husband claims to have been suffering from post-traumatic stress disorder, social phobia and psychosomatic disorders since January 2021, he was able to secure a job as a restaurant manager from June 2022 until mid-January 2023.  Being restaurant manager job is commonly described as “people facing”.  It is hard to imagine that the Husband would have agreed to undertake this role if he was genuinely suffering as he claims.  Additionally, there is no evidence that the Husband’s condition is worse now compared to January 2021 which hinders him from being employed.

Husband’s reputation in the Japanese community

77.  The Husband referred the court to various social media posts made by the Wife on two social media platforms.  These posts were made by the Wife back in 2020 following the 11 August 2020 incident.  I accept the Ms Chow’s submissions that the Wife’s explanation during cross-examination on whether her comments in the posts were in reference the Husband, is an affront to common sense. 

78.  However, I do accept the Wife’s evidence her Facebook posts were made to a limited audience, namely her friends and contacts and not the world at large and that her that her Instagram “stories” were only available online for a short period of time. 

79.  More importantly though, is that the Husband has not been able to demonstrate how these social media posts has directly impacted his reputation, particularly when they were made three years ago.  I note that the Husband accepted that he has been able to maintain his standing within the Hong Kong’s sake industry, that he was someone respected in the sake industry and he had maintained his good reputation.  The Husband continues to promote Japanese sake in Hong Kong, and was invited to judge a sake competition in Hong Kong in 2022.  This evidence flies in the face of the Husband’s claims that the Wife’s social media posts have tarnished his reputation and jeopardised his career prospects. 

80.  It was also put to the Husband that despite the Wife’s social media posts and his pending criminal trial, the Husband was nevertheless able to obtain employment as a restaurant manager.  The Husband claimed that his friend provided him with the job.  Having lived here since 2003, it is hard to image that the Husband has fewer friends and contacts or connections within the Japanese or Hong Kong community or that the Wife has a wider sphere of influence despite having lived in Hong Kong for only six years with limited language abilities.  Given all these reasons, I do not accept the Husband’s accusations that the Wife’s social media posts or his outstanding criminal charge has tarnished his reputation and his employability within the Japanese community.

81.  The Husband has also not explained why he has not broadened his job search outside the Japanese community or Japanese food and beverage sector if he truly believes that the community has a negative impression of him.  Unlike the Wife, the Husband is not constrained by his language abilities in finding jobs outside the Japanese community.  The Husband has lived in Hong Kong for twenty years and his employment history shows that he is able to transition between different industries with ease.  His extensive experience in sales would be a clear advantage for him finding a job outside alcohol or food and beverage industry.

Access Order time constraints

82.  The Husband also used the excuse of access time with D to not find a job.  He claimed that his access is on Tuesday between 3:30 – 5:30 pm.  As stated above, the Husband has supervised access with D for two hours in the afternoon on the second and fourth Tuesday each month.  Paragraph 4(b)  of the Access Order clearly states that “access arrangements stipulated in paragraph 4(a)  can be flexibly implemented upon mutual agreement of all parties”.  The Husband admitted that he had never asked the Wife to change access for his work schedule.  He has also not been able to show that the Wife has rejected his request for access at a different time or that she has refused him access with D during the weekend.  As such, I do not accept the Husband’s case that the Access Order impedes his ability to be fully employed.

Husband’s best efforts to obtain a job

83.  The Husband has provided no evidence regarding the jobs that he has consider, enquired or applied for.  He has not even described what potential jobs or roles that he has considered applying for.  In fact, it was clear from the Husband’s evidence at trial that he has made no attempt to take responsibility for seeking any new work.  The Husband’s answer regarding his willingness to work was apparent when he stated that he did not want to work from 9 am to 11 pm.  This is a sentiment held usually by people have who the luxury of choosing not to work, however the Husband has the responsibility of financially supporting five children.  This attitude cannot be adopted by him.

84.  Consequently, I am not prepared to accept the Husband’s mere say so that he has used his best efforts to obtain a job as I am of the view that the true reason why the Husband has actively chosen to not seek full time employment is due to him not wishing to provide any financial contribution towards the children. 

Husband’s earning capacity

85.  The Husband clearly has an earning capacity and he has chosen not to utilise it.  The Husband’s LinkedIn profile lists the various sale positions he has had over the years.  In cross-examination, the Husband accepted that being a restaurant manager going forward was one possible source of employment plus the Husband remains very active in being a sake promoter, and this is a definite source of income for him as well going forward.  I accept the Husband’s evidence that he has a distinct advantage due to his continuing relationship with sake breweries, his expertise in sake and his close connection with SK.

86.  The Husband tried to distance his involvement with SK although he continues to promote their events.  He also belatedly revealed in cross-examination that SK may be sold for which he would likely be paid for his remaining 150,000 shares in SK even though he did assign those shares at nil value in H’s 3^rd Form E.  The Husband admitted that while he was aware of this possible sale a few weeks prior to the trial, he had made no attempt to provide any updated disclosure to the Wife or the Court.  Clearly the sale of his shares in SK is a material issue which the Court should have been made aware of.  

87.  Based on the Husband’s own evidence that his monthly contribution towards the family’s expenses during the marriage was about HK$40,000 per month, I have no hesitation in determining that the Husband’s earning capacity is not less than HK$50,000 per month especially in light of the fact that was historically the main breadwinner of the family and met the family’s expenses.  This amount is commensurate with the last job the Husband had a year ago. 

Husband’s needs

88.  The Husband filed a total of three Forms E.  For the sake of completeness, I set out his stated monthly expenses as follow:

General expenses

Item	1st Form E (HK$)	2nd Form E (HK$)	3rd Form E (HK$)
Rent	6,000	6,800	7,000
Mortgage instalments	--	--	--
Utilities (electricity, gas, rates, water and telephone)	316	1,000	1,000
Management fees	--	--	--
Food	500	1,000	1,000
Household expenses	1,500	500	500
Car expenses	--	--	--
Insurance premia	--	--	--
Domestic helper	--	--	--
Others (please specify)  credit card payment	--	20,000	20,000
Total monthly general expenses	8,316	29,300	29,500

Personal

Item	1st Form E (HK$)	2nd Form E  (HK$)	3rd Form E (HK$)
Meals out of home	1,000	1,000	1,000
Transport	800	1,000	1,000
Clothing / shoes	--	--	--
Personal grooming (including haircut and cosmetics)	--	300	300
Entertainment / presents	--	1,000	1,000
Holiday	--	--	--
Medical / dental	--	--	--
Tax	--	--	--
Insurance premia	--	--	--
Interim maintenance	--	--	--
Contribution to parents	--	--	--
Dependent family members	--	--	--
Others	20,000 (Credit card repayment)	10,000 (legal fees)	10,000 (legal payments until 28 April 2023)
Total monthly personal expenses	21,800	13,300	13,300

Children

Item	1st Form E (HK$)	2nd Form E (HK$)	3rd Form E (HK$)
School fees	--	--	--
Extra tuition fees	--	--	--
School books and stationery	--	--	--
Transport to school (including school bus)	--	--	--
Medical / dental	--	--	--
Extra curriculum activities	--	--	--
Entertainment / presents	200	200	200
Holidays	--	--	--
Clothing / shoes	--	--	--
Insurance premia	--	--	--
Lunches / pocket money	--	--	--
Other transport	--	--	--
Child minding fees	--	--	--
Uniform	--	--	--
Others	--	--	--
Total monthly expenses for children	200	200	200
Total monthly expenditure for Husband	30,316	42,800	43,000

89.  At the time of H’s1^st Form E, the Husband earned HK$50,000 and thus had a spare HK$19,684 which he could have contributed towards the children’s costs.  Similarly, at the time of H’s 2^nd Form E, based on his calculated expenses, the Husband had a balance of HK$7,200 which he could have contributed towards the children’s costs.  I find it inexcusable that when the Husband earned a regular monthly income of HK$50,000 he did not think it fit or proper to provide the Wife with maintenance for the benefit of the children on a voluntary basis.  I, therefore, place no weight on the Husband’s assertions that he will contribute towards the children’s expenses when his financial situation improves if a nominal order is made now for the children’s expenses.

90.  The Husband’s legal fees of HK$10,000 were only payable until the conclusion of his criminal trial in April 2023. Therefore, his expenses should be no more than HK$33,000 at present.  In any event, I do not understand how the Husband has higher expenses now with purportedly less income.  It does not make sense that the Husband continues to make regular payment of HK$20,000 towards his credit card repayment even though he is not employed.  At the very least he should have renegotiated his repayments.  The Husband’s level of expenses and unclear explanations regarding his various streams of income, leads me to conclude that he has other sources of income and supports the inference that I have reached that he has an earning capacity of not less than HK$50,000 each month.

Deciding the outcome

91.  A fair outcome of the ancillary relief claim would be an order to satisfy the needs of the children.  Clearly both parents have an ongoing financial responsibility towards all five children. I am satisfied the Husband has an earning capacity equal to that of the Wife and he should take immediate steps to maximise such capacity.  The Husband accepted that it would be fair for him to contribute towards the children’s expenses although he caveats this responsibility to occur only when he is financial able, which I reject.

92.  I find that the Husband should be responsible for half of all of the children’s expenses until each of the children turn 18 years old or complete full time education.  The Husband is, therefore, ordered to pay maintenance to the Wife for the benefit of the children, in the sum of HK$5,500 per child per month or HK$27,500 in total. 

Costs

93.  Cost should follow the event.  I find that the Wife has been largely successful in her application and that no reasonable open offers in respect of the children’s maintenance was proffered by the Husband. In fact, at paragraph 17 of his 3^rd Affirmation dated 5 January 2023, the Husband the claims that he had asked for a breakdown of D’s expenses but has not received any reply on the subject and hence he was not able to make any offers. All five children are children of the family.  The Husband’s financial responsibility is not limited just to D.  Regardless, the Husband’s position of not knowing the children’s expenses is simply not correct because the Wife had already filed her 1^st Form E at the stage and the Husband had the information as to the expenses of the five children.  I find that the Husband’s stance on this to be unhelpful in resolving the issue of children’s maintenance.

94.  As such, there is to be a nisi order that the costs of the Wife’s ancillary relief claim be paid by the Husband, including all costs previously reserved, to be taxed if not agreed.  This nisi order will be made absolute within 14 days of this judgment.  The Wife’s and Husband’s own costs to be taxed in accordance with the Legal Aid Regulations.

Orders

95.  I make the following orders:

(i)  Each party is to retain the assets held in their respective sole names, and each party is to be responsible for their own debts and liabilities.

(ii)  All forms of ancillary relief claims between the parties to be dismissed save for periodical payments for the benefit of the children.

(iii)  The Respondent do pay to the Petitioner, the sum of HK$27,500 per month or HK$5,500 per child per month by way of maintenance for the benefit of the children.  The first of such payment is to be made on 1^st September 2023 and thereafter, on the first day of each calendar month. These payments are to continue to be paid by the Respondent until each of these Children turn 18 years old respectively or complete full time education whichever is earlier.

(iv)  Penal notice be endorsed. Personal service of this court order shall be dispensed with.

(v)  A cost order nisi to be made absolute in 14 days that the Respondent do pay costs of the ancillary relief including all costs reserved to the Petitioner, with certificate of counsel, to be taxed if not agreed.

(vi)  The Petitioner’s and the Respondent’s own costs be taxed in accordance with the Legal Aid Regulations.

(vii)  Declaration pursuant to section 18 of the Matrimonial Proceedings and Properties Ordinance (Cap 192)  to be made.