BL v. SJY

FCMC 7831 / 2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER FCMC 7831 OF 2008

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J U D G M E N T
(Variation of maintenance)

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Introduction

1. This is an application by the Petitioner wife for an increase of maintenance for the only child of the family S, a little girl who was born in August 2007, from HK$6,500 per month to HK$19,600 per month with effect from August 2013. Although the Application for Ancillary Relief to vary was dated the 10 May 2013, the trial was a long time coming. In part this was because of issues concerning disclosure, which will be discussed in more detail below.

2. In my judgment on final ancillary relief dated the 19 May 2011 I made a number of findings which are relevant to the present application. For example I made an order that the wife receive the entire net proceeds of sale of the former matrimonial home on the basis of need. In doing so I acknowledged the difficulties that the wife faced at that time as follows:

42.  … The wife has no income at present. I accept that for reasons that are set out below that the husband has made it difficult for her to obtain a full time job. The husband has refused to pay her maintenance despite being ordered to do so. This has put the wife in an extremely difficult position. She has some funds at present, which appear to have come about in part by the sale of a diamond ring. She is unable to sell the stock because to do so would lead to significant loss. Her parents help financially as and when they can. They are not wealthy people. The wife has sole custody and care and control of S. S is based with her, and she sees her father on a regular basis. This will continue. Therefore the wife will need sufficient funds to ensure that S’s basic needs are met. If they cannot come from income, then in part they will need to come from the available asset base.

3. In so far as the earning capacity of each party was concerned I said as follows:

46.  Both parties earning capacity has been in issue in these proceedings. Early on the wife’s earning capacity came under scrutiny – hence the comments made by myself at the second maintenance pending suit hearing. Since then the wife has produced many examples of applications made by her for jobs. Initially I was quite sceptical. However during the wife’s cross examination of the husband she produced a letter dated the 25 August 2008 written by the husband to the Immigration Department. In it the husband informs the authorities that the wife was granted an employment visa, but that the documents that she produced in support of her application were false. Since then the wife has been in Hong Kong on a tourist visa. Therefore in order to work in Hong Kong she needs an employment visa. She says that this has been the biggest stumbling block to her getting a job. I believe her. Thus although on the face of it the wife has a good earning capacity this has been severely compromised by her immigration status. The husband says that he was simply responding to a query from the Immigration Department. No evidence has been produced in support of this assertion. I accept that the husband informed the Immigration Department in order to make life difficult for the wife and that he has been successful in that.

47.  The wife has placed S in a Kindergarten designed to support working parents. Therefore there shouldn’t be any difficulty from the perspective of child care in the event that the wife is able to find a job. 

48.  In so far as the husband is concerned, he is nearly 60 years of age. The wife maintains that he had a greater earning capacity previously and that by walking away from the pottery business he has severely undermined his ability to generate an income going forward. The husband denies this and has pointed to the fact that the pottery business was not doing well in any event. It is difficult to be able to form any firm view in this regard as the audited accounts have not been produced in relation to the pottery business. It is also clear that the pottery business is simply the husband’s alter ego.

49.  In any event the husband is now earning a living by virtue of his paragliding business. He says that he earns approximately HK$20,000 per month. The wife is receiving HK$3,000 per month from the husband for S and she also makes a little money from trading in stock. Her parents also assist her financially where they can. It is clear that her needs in this respect are significant and are ongoing.

4. In conclusion on the asset split I said

58.  Thus overall this division amounts to approximately just over a 50:50 split in favour of the wife. It gives the wife all of the remaining net proceeds of sale from the former matrimonial home and does so also on the basis of need. It recognizes the fact that the husband has not made full and frank disclosure of his assets and that he has sold at least one family property which remains unaccounted for. It will ensure that as far as possible the wife has some kind of financial buffer going forward and that she can meet the needs of both herself and S pending her entering into remunerative employment.

I added

63.  … By virtue of the division of assets the wife now has a little bit of a financial buffer upon which she can rely. Longer term she will need to maximize her own earning capacity.

5. Thus the order was made on the premise that the wife would need a) to obtain employment and b) that the lump sum would provide her with some form of financial security going forward. The order for maintenance for S was made on the premise that each party should pay half of S’s expenses. 

Background

6. I have set out the background to this case in my previous judgments – of which there are many!! In particular reference can be made to the judgment on ancillary relief referred to above. Since my order was made the husband has consistently refused to pay the wife the HK$6,500 per month ordered, necessitating three judgment summonses to be issued by her. There is a fourth pending. The husband has been imprisoned on two occasions and he has then paid what was due and owing to the wife for S at that time. He says that he has had to borrow in order to do so. This is not necessarily accepted. The husband has continued to work primarily as a paragliding instructor. He also imports various items relating to paragliding for sale in Hong Kong. The mother is still unemployed. It seems that there may still be issues concerning her immigration status and that she has not made any further attempts to obtain a permanent HKID card. She is presently in Hong Kong on a tourist visa despite the fact that she has now been in Hong Kong for a considerable period of time. It is not clear whether she has made any serious attempts to find work in the more recent past. The husband has applied for an employment visa and eventually produced a copy of a letter from the Immigration Department dated the 25 April 2014, which was attached to his closing submission. It is not clear if he has been successful in that regard. In the witness box he confirmed that he was currently in Hong Kong on a tourist visa and that he was able to earn money but he was not able to work. I am not sure of the up to date position or whether or not the husband is correct in what he says. 

The issues

7. There is only one issue to be determined namely should the maintenance payments for S be increased from HK$6,500 per month to HK$19,600 per month?

The Law in Hong Kong

The law 

8. The wife’s application to vary is made pursuant to section 11 (7) of the Matrimonial Proceedings and Property Ordinance Cap 192, which provides that:

“(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates ……”

9. It is accepted that in considering a change of circumstances, I may look at the case de novo. In other words the court is not necessarily fettered by the existence of a previous order. I may look at the situation afresh and make an order based on the parties’ existing financial circumstances. (See Ch 3.131 Jackson’s Matrimonial Finance and Taxation, 7^th edition). However, it is also true that there would normally be a reason for the application to vary or what some might call a “trigger”.   

10. The court has a very wide power, including a power to terminate payments and to backdate the variation ordered. The overall objective is to achieve a fair outcome (see M v M, FCMC 4070 of 1990, dated 12 May 2006, unreported).

Discussion 

11. The wife argues that notwithstanding the basis of the original order, i.e. that the parties should be equally responsible for S’s expenses, that the husband should now be responsible for 100% of S’s expenses. She also maintains that as S is now older that it is inevitably more expensive to maintain her. In her affidavit in support dated the 10 May 2013 she set out the expenses for the household as follows:

3.  Therefore our minimum monthly expenses will be as follows:-

General
Item	Amount
Rental	HK$14,000
Utilities	1,500
Food	5,000
Household expenses	1,000
Other	500
Sub-total: General cost for each person in the household: HK$21,000.00/2 persons = HK$10,500.00/person	HK$21,000.00

Reduced Personal expenses per month:
Item	Amount
Meals out of home	HK$500
Transport	500
Clothing / shoes	200
Personal grooming (including haircut and cosmetics)	500
Holidays	1,000
Medical / dental	100
Sub-total:	HK$2,800

Family child’s expenses per month:
Item	Amount
School fees	HK$4,000
Extra tuition fees	1,000
Transport to school (including school bus )	1,500
Medical / dental	100
Entertainment / presents	400
Holidays	900
Clothing / shoes	500
Other Transport	100
Uniform	100
Lunches and pocket money	500
Sub-total:	HK$9,100.00

12. In her Form E dated the 18 June 2013 her expenses are put as follows:

Part 4  Current Monthly Expenses

4.1  General
Item	Amount
Rent	11,000.00
Mortgage instalments	0.00
Utilities (electricity, gas, rates, telephone & water)	1,500.00
Management fees	0.00
Food	5,000.00
Household expenses	1,000.00
Car expenses	0.00
Insurance premia	0.00
Domestic helper(s)	0.00
Other (specify)	500.00
Total monthly household expenses Attach copies of the latest rental receipt.	HK$19,000.00

4.2  Personal
Item	Amount
Meals out of home	500.00
Transport	500.00
Clothing / shoes	200.00
Personal grooming (including haircut and cosmetics)	500.00
Holidays	800.00
Medical / dental	100.00
Tax	0.00
Insurance premia	0.00
Interim maintenance	0.00
Contribution to parents	0.00
Dependent family members	0.00
Other (specify)	0.00
Total monthly personal expenses	HK$2,600.00

4.3  Children
Item	Amount
School fees	1,760.00
Extra tuition fees (S)	150.00
School books and stationery	100.00
Transport to school (including school bus )	0.00
Medical / dental	100.00
Entertainment / presents	400.00
Holidays	900.00
Clothing / shoes	500.00
Insurance premia	0.00
Lunches and pocket money	0.00
Other Transport	100.00
Child-minding fees	0.00
Uniform	50.00
Others (specify)	200.00
Total monthly personal expenses for children	HK$4,260.00
Total Monthly Expenses (4.1 + 4.2 + 4.3)	HK$25,860.00

13. The difficulty with the wife’s position initially is that she had not made full and frank disclosure of her asset base in her updated Form E in that she had not referred to the lump sum payment. It later transpired, following the filing of two further affidavits, that she had transferred these monies to her father, who is currently holding RMB750, 000 on her behalf in Beijing. This is important because in the original judgment the intention was clear i.e. that this money was to be used in part as a financial buffer in the event that the wife was unable to find work, or there were other difficulties, as has proved to be the case. Quite rightly the husband insisted that the wife provide further information – which she did.

14. The wife also says that her family continue to provide her with some financial support – but because they are “family” a record of this has not been kept. It is not clear if they continue do so in addition to holding the lump sum on the wife’s behalf – or if these monies now come from the lump sum payment.

15. The wife also continues to allege that the husband has a greater earning capacity than that admitted to, that he continues to run his former pottery business on the side and that he receives a lot of his income in cash, which is not declared. In my original judgment dated the 19 May 2011 I said as follows:

The companies

39.  The wife suggests that the husband is continuing to run the pottery business on the side, possibly using third parties to front the business. Although this is clearly her suspicion, no hard evidence was produced in support of her assertions. Again I do not intend to take this matter any further at this time. 

16. Unfortunately that largely remains the case now. The wife refers to things that her daughter has said to her, she makes allegations against the husband, she says that the husband is clever and knows how to play the system – but there is very little in the way of hard evidence to support what she says.

17. Thus in the circumstances I remain of the view that the parties should continue to be equally responsible for S’s expenses. Serious attempts now need to be made by the mother to return to the workforce. In any event she has retained most of the lump sum payment, which will continue to provide her with a financial buffer, as had been the original intention. She has also retained her stock and share portfolio – which I note has risen in value in the more recent past. It seems that the wife has made some additional purchases – presumably from the lump sum payment.

18. According to the employment contract produced by the husband he is presently paid HK$20,000 per month. The audited financial statements for G Limited for the year ended March 2014 show that he had a turnover of just under HK1 million (HK$972,248) and a net profit of just under HK$65,000. He also runs some expenses though his company, such as his rent, water and utilities, motor vehicle expenses etc. But even putting this at its highest his operating expenses are just under HK$230,000 per annum or HK$19,166 per month. Thus on the face of it the husband does not appear to have a great deal of money either. I am though of the view, and this has been consistent throughout, that the father is able to pay HK$6,500 per month.  

How much maintenance should the husband pay going forward?

19. There is a slight discrepancy between the figures provided by the wife in her affidavit in support and those provided in her Form E, notwithstanding the fact that there is only one month between the filing of both documents. In the main this can be explained by the fact that S is now attending school and that the parties are no longer required to pay kindergarten fees. In such circumstances I intend to rely on the figures provided by the wife in her Form E. In doing so I acknowledge that the wife was paying more than 50% of the costs associated with raising S whilst she was at kindergarten. I do not however intend to make any adjustment for this.  

20. On the premise that the parties should be equally responsible for S’s expenses going forward, the husband should contribute HK$4,750 towards S’s share of the general expenses. (HK$19,000 divided by 2 = HK$9,500 each for the wife and S. HK$9,500 to be divided equally between the parties to cover S’s share of the general expenses = HK$4,750). In addition each party should pay half of S’s actual expenses in the sum of HK$2,130 each. (HK$4,260 divided by 2 = HK$2,130). Thus in total the husband should be contributing HK$6,880 (HK$4,750 plus HK$2,130 = 6,880), which is only slightly more than the HK$6,500 per month that he is supposed to be paying at present in any event.

Conclusion   

21. In such circumstances I will dismiss the wife’s Notice of application dated the 10 May 2013. On this occasion I will exercise my discretion and make no order as to costs. I should add that it is unfortunate that the war between the parties continues – with each attempting at times to go over old ground and to reargue issues which have already been determined. This must stop.

22. Finally there is still an outstanding matter to be dealt with namely the wife’s judgment summonses dated the 27 September 2013 and the 22 May 2014. These summonses shall be adjourned to the 17 April 2015 at 9:30 am for a callover. I would however urge the husband to now be sensible in this respect and to pay the wife what is due and owing to her, without the necessity of a further committal hearing.