GAY v. BNK

FCMC 13556/2013

[2020] HKFC 121

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 13556 OF 2013

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J U D G M E N T
(Ancillary relief – child maintenance)

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Introduction

1.  This judgment follows a 5-day trial set down to deal with the parties’ respective claims for ancillary relief.   

2.  Shortly before the Trial, by way of a Joint Statement of Issues filed 29 October 2019, the parties announced that they had agreed to a clean break with no order as to spousal maintenance for either of them, nor for lump sum payments or transfer of property.  On 29 October 2019 the Court made an order to that effect. 

3.  The remaining issue is the extent to which the Petitioner/Husband (H) should pay to the Respondent/Wife (W) financial support on a regular basis for the children of the marriage.  There are two children, both boys: R, who was born in August 2004 (aged 15 at trial) and M, born September 2007 (aged 12) (“the Children”). 

4.  On the first day of the Trial the Court was informed that the parties had agreed that, in principle, the sum of HK$22,000 per month would be a reasonable amount for H to pay to W for ongoing maintenance, subject to H’s ability to pay.   

Background

5.  The parties are Indian nationals.  H was born in July 1974 and is now 45.  He is the younger of two children.  His father has passed away and his mother (aged 72) is living with his elder brother and his brother’s family in India.  H completed his education in India and holds a bachelor’s degree in Hotel Administration from Mangalore University.

6.  W was born in March 1962 and is now 58.  She is the elder of two siblings, and her younger sister (F) is aged 53.  She was also educated in India and obtained a Masters’ Degree in French Literature from the University of Bombay.

7.  H is an insurance and investment services broker. He has previously worked as a fitness consultant: he was involved with athletics in college and is a former member of the national athletics team of India.

8.  W’s career was as a flight attendant with a Hong Kong based airline (“the Airline”).  She joined the Airline in 1988 at the age of 26, moving to Hong Kong, and stayed in an apartment with her sister, F.  F had joined the Airline the year before, also as a flight attendant.  She remains with the Airline, but according to W she may also be retiring soon, possibly in early 2021. 

9.  The parties met in Mumbai, at a gym where H was working, and they dated for 2 years before marrying in May 2002 in India.  Later in 2002, H moved to Hong Kong.  He spent considerable periods working in other countries during the marriage.  Between May 2004 and January 2006, he was located in Malaysia, and between August 2007 and January 2009 he lived in India, also in connection with his employment at the time. 

10.  Upon his return to Hong Kong in early 2009 and over the next two years the relationship between the parties soured and W repeatedly asked H to leave the matrimonial home, an apartment in Tung Chung which was registered in the names of W and F (the FMH).  In April 2011, H moved out of the FMH into a rented apartment.  The month of April 2011 has been treated, at least for the purposes of the Court’s jurisdiction to grant a decree dissolving the marriage, as the date of separation.  W says that separation in fact took place prior to this time, possibly as early as April 2009.  Given the limited nature of the dispute, it is not necessary to resolve this issue. 

11.  The Children were both born in India, however they have been brought up and educated in Hong Kong.  They live with W and F in another property in Tung Chung which was purchased by W and F in 2010 (“the Tung Chung Property”). 

12.  The Children attend an ESF school in Kowloon (“the ESF School”).  R is in Year 11 and M in Year 8.  They are doing well academically.  R has had some behavioural issues in school and in 2017 was assessed by a clinical psychologist as presenting possible symptoms of ADHD which might warrant “psychiatric evaluation”.  W has found it difficult to obtain such an assessment through the public health system, given the lengthy waiting list.  Private consultations have been unaffordable.  During her evidence at the Trial she updated the Court by saying that R was seeing the school counsellor on a regular basis. 

The Proceedings

13.  The proceedings were commenced by H filing a Petition in September 2013 seeking dissolution of the marriage on the ground of two years separation.  A week or so before then W had filed for divorce in India, but H successfully applied for a stay of the Indian proceedings on the basis that Hong Kong was the more appropriate forum. 

14.  The Decree Nisi was pronounced in July 2014. 

15.  On 17 November 2014 the Court made an Order for joint custody of the Children with care and control to W and defined day-time access to H as set out in a previous Order dated 13 February 2014.  H no longer sees the Children; there has been no direct contact with them for some time.  By Summons filed in July 2016 H has asked for further orders in relation to access and this application has been adjourned sine die with liberty to restore. W has expressed the hope that the boys’ relationship with their father would be rebuilt over time after the conclusion of the case.^[1]  

16.  In September 2015, W applied by Summons for interim maintenance for the Children.  On 4 July 2016 the Court ordered H to pay HK$6,000 per month for each of the Children, a total of HK$12,000 per month, to commence on 1 August 2016 and to continue at that rate until further order (“the IM Order”).  It granted liberty to apply particularly in respect of the Children’s school fees.

17.  By her application, W had sought HK$25,000 per month for the Children on an interim basis.^[2] H’s position during the hearing before Melloy J in February 2016,^[3] was that he was only in a position to pay about HK$2,500 per month.  He asked to Court to take into account his additional contribution towards the Children’s extra-curricular activities.^[4]

18.  H was then acting in person.  So was W.  He represented to the Judge that his employment only entitled him to commission payments, i.e. he was not entitled to a salary. 

19.  The Court examined the documents he produced and found that this statement was not accurate – his contractual terms entitled him to a base salary of HK$40,000 per month from September 2015 for six months to March 2016 reducing thereafter to HK$25,000 per month. 

20.  The Court concluded that H was capable of earning at least HK$40,000 per month going forward.^[5]  Her Honour noted in her judgment (“the IM Judgment”), that having “deliberately lied” to the Court, H’s credibility had been “severely dented”.^[6]

21.  In his affidavit dated 2 August 2019 for the Trial, H sought to explain that when he spoke to the Judge about his “commission only” employment, it was to his previous employment, which had ended in August 2015.  He repeated this explanation during his evidence at Trial, in other words that there was a misunderstanding between him and the Judge. 

22.  I am quite sure that the learned Judge would not have made such a critical statement without being sure of what was being presented to her by H.  The focus of her analysis was on his capacity to pay a reasonable sum to W for the maintenance of the Children from his employment and financial resources at the time of the hearing.  

23.  It is not in dispute that H has failed to make payments in accordance with the IM Order from the date it took effect and has in fact been paying only half of the amount ordered each month.  He has, at times, made additional ad hoc payments, but these have not been sufficient to meet the arrears and the amount owing for back maintenance under the IM Order is now considerable. 

24.  On 17 May 2017, W filed a Judgment Summons to enforce compliance with the IM Order.  H filed a Summons on 11 August 2017 to vary the IM Order and reduce his payments (“the Variation Summons”) to $1,000 per month per child i.e. $2,000 per month and for this variation to be backdated to 1 July 2017.

25.  On 14 May 2019 the Court directed that the Variation Summons be dealt with at the ancillary relief trial. 

26.  During the proceedings H raised allegations against W that she had taken deliberate and calculated steps to minimise her beneficial interests in joint properties held by her and her sister for strategic purposes so as to present an incorrect picture of her financial resources. 

27.  The documents reveal what appears to be a long-standing intertwining of the finances of W and her sister F including their holding of joint bank accounts and their co-ownership of landed properties in Hong Kong and India.  The most valuable of such jointly owned properties is their present apartment in Tung Chung.  There are also two landed properties in India in their joint names. 

28.  W applied by Summons to seek orders per TL v ML^[7]confirming the limited extent of her beneficial holding in the various properties.  At one point, W’s sister was named as Proposed Intervener in these proceedings, but ultimately, H did not press the point and accepted that the assertions made by W of her interests in the various properties were correct for the purposes of determining the question of ongoing maintenance for the Children.  In May 2019 the TL v ML proceedings were withdrawn.^[8] 

The Law

29.  Section 5(2)(a) of the Matrimonial Proceedings and Property Ordinance(Cap. 192) empowers the Court to order that “a party to the marriage shall make to such person as may be specified in the order for the benefit of a child of the family, or to such a child, such periodical payments and for such term as may be so specified.”  Such orders may be made in divorce proceedings “before or on granting the decree of divorce, of nullity of marriage or of judicial separation, as the case may be, or at any time thereafter”: s 5(1).

30.  Section 7(2) of the MPPO provides further guidance to the Court in exercising its powers under s. 5:

Without prejudice to subsection (3), it shall be the duty of the court in deciding whether to exercise its powers under section 5, 6 or 6A in relation to a child of the family and, if so, in what manner, to have regard to all the circumstances of the case including the following matters, that is to say –

(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;

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

and so to exercise those powers as to place the child, so far as it is practicable and, having regard to the considerations mentioned in relation to the parties to the marriage in paragraphs (a) and (b) of subsection (1), just to do so, in the financial position in which the child would have been if the marriage had not broken down and each of those parties had properly discharged his or her financial obligations and responsibilities towards him.

31.  Section 11 of MPPO further provides for the Court to be able to vary or discharge previous orders made under, inter alia, section 5(2) of the Ordinance – s. 11(1) – and in exercising its powers under 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…”: s. 11(7). 

32.  The Court is required to make an order which is reasonable having regard to all the circumstances, and so as to achieve fairness between the parties.^[9]

33.  In W’s Opening Submissions it was submitted that the onus was on H to demonstrate, with “clear and convincing evidence” that there had been a material change of circumstances to vary the IM Order and that in the absence of this, his Variation Summons should be dismissed.^[10] W referred to the judgment of the Court of Appeal in HCTT v TYYC^[11]in support of the proposition that, although the Court’s power to vary was unrestricted, “normally the earlier order would not be varied unless there has been a material change in circumstances”. 

34.  H’s Supplemental Opening Submissions countered this, by referring to a passage in AEM v VFM (No. 2) [2013] 2 HKLRD 144 dealing with applications to vary, where, at [9], Cheung JA said this:

The modern approach is that the court has to consider all the circumstances of the case, and the court is not hide-bound by the existence of a previous order: the court must look at the matter de novo and make an order that is reasonable in the circumstances.  The usual basis on which a variation of an order for periodical payments is founded is that there has been a material change in the circumstances of one or both the parties.  On application for revision, the court, as it was put in one case, has “regard to all the circumstances of the case in the same manner as if those circumstances had existed at the date of the original order.”  Even before White and Miller v Miller; McFarlane v McFarlane the court could increase an order for periodical payments beyond the payee’s strict budgeting requirements if the payer’s circumstances justified it.  Now, as a result of those cases, it is clearly established that a payee’s “reasonable requirements” are “no more a determinate or limiting factor on an application for a periodical payments order than they are on an application for payment of a lump sum”, and those words apply just as much on an application to vary a periodical payments order.

35.  H’s submissions emphasised that the “usual basis” on which a variation of an order for periodical payment would be sought was because there had been a “material change in the circumstances of one or both of the parties”, but that it was not a requirement that there had been such a change in order for the Court to vary the existing order upward or downward.   

36.  H’s Variation Summons was filed in response to W’s application by Judgment Summons^[12] to enforce the arrears of payment under the IM Order and was an application to vary an interim order. 

37.  In AEM, as noted by the Appeal Committee of the CFA on the husband’s application for leave to appeal, the original order made in 1991 (which was varied twice before the husband sought a third variation in 2009) had been described by the learned trial Judge as a “comprehensive and detailed settlement with terms and conditions covering all the parties’ assets and properties as well as their future and long term needs and obligations and those of the children”.^[13] It was a final adjudication of the question of ongoing periodical payments, not an interim order.   

38.  The IM Order, as is always the case in orders for maintenance pending suit or interim maintenance, was the result of an assessment by the Court of the written evidence placed before it which was broad brush, made without hearing evidence from the parties and intended to have effect for a limited period of time, pending the determination of all financial issues between the parties: HJFG v KCY [2012] 1 HKLRD 95 (CA) at [38]. 

39.  Since the IM Order was made, there have been material developments, including W’s retirement from the Airline and H’s change of employer.  

40.  There is a difference between interim orders whether for spousal or child maintenance, where a detailed examination of finances may not have been possible, and final orders which follow either a consent settlement or judgment after trial.  The more considered and thorough analysis which results in final orders is one of the elements underpinning the relevance of whether there has been a material change of circumstances which might justify the variation of what was carefully considered and adjudicated upon or was the result of an agreement between the parties. 

41.  Applicants seeking to vary final orders for periodical payments which follow consent settlements or trials are not required as a matter of law to demonstrate a material change of circumstances, although this is the “usual basis” on which such applications proceed: AEM v CFM (No 2) (CA) at [9].  It must follow that there is no requirement for H to demonstrate a material change of circumstances to vary the IM Order, although this will be relevant to the order the Court will make on his application. 

H & W’s respective positions, in brief

(a)     H’s position

42.  H’s case is that he has “always sought and intended to provide for the children to the highest extent of his ability.”^[14] He says that when he has been in a position to do so, he has prioritized the children and paid greater amounts of maintenance for their upkeep and support. 

43.  The IM Order was premised on the estimate that H would be able to earn approximately HK$40,000 per month.  H said that for a lengthy period of time after the IM Order took effect this did not happen.  He also points to unexpected debts which, when combined with his lower than expected earnings, meant that he has only been able to pay about half of the sum ordered by Melloy J.^[15]

44.  As noted, H agrees that the amount of HK$22,000 per month is reasonable, considering W’s means and financial resources, subject to his ability to pay.^[16]

45.  In his written opening, H sought an order for “interim child maintenance for the two children of the family of HK$3,000 per month per child, backdated to 1 June 2017, and time for repayment of arrears.”^[17] In closing, this was confirmed, namely that he was able to afford to pay HK$6,000 per month “until at the earliest November 2020 (with great difficulty)”, given his liabilities, his income and his own expenses both personal and work-related.^[18]  He asks for an order varying the amount of maintenance to HK$3,000 per child per month until October 2020 and HK$4,000 per child per month from November 2020, with 3% increase annually until each child reaches the age of 18 or finishes full time education.^[19]

46.  H’s position is that the arrears of maintenance accrued under the IM Order prior to 1 June 2017 (i.e. from 1 August 2016 to 31 May 2017, a period of 9 months) will remain outstanding, but he should be given time to pay. 

(b)     W’s position

47.  W’s statement of her proposed orders requested that the Court make the following orders

(1) H pay maintenance of HK$30,000 per month as to HK$15,000 per child;

(2) the maintenance be linked to the CPI and adjusted annually with effect from 1 January each year; and

(3) there be an Attachment of Income Order, given H’s history of non-compliance with the IM Order, and to secure the Children’s maintenance long-term. 

48.  W’s closing position was that H should contribute HK$22,000 per month as maintenance for the Children and the Court should make an order to that effect.  She reserved her right to pursue arrears of unpaid maintenance due under the IM Order, including by Judgment Summons, therefore objecting to any backdating of the variation. 

49.  W argued that the evidence demonstrates that H has an earning capacity of “at minimum” HK$40,000 per month.^[20]  Her case is that H’s failure to keep up with the IM payments can be explained by (1) his failure to utilize his earning capacity, (2) his mismanagement of his financial affairs and (3) his excessive or exaggerated debts.^[21]

The Evidence

50.  In addition to their Forms E and Answers to Questionnaires, the Court has before it six affidavits from H and three affirmations from W.  These have included narrative affidavits/affirmations filed for the purpose of the Trial dated 3 July 2019 (“H’s narrative affidavit”) and 19 July 2019 (“W’s narrative affirmation”).  H filed a reply affidavit on 2 August 2019 (“H’s reply affidavit”).  Pursuant to leave, short updating affidavits/affirmations were filed in the lead up to the Trial (“updating affidavit/affirmation”).      

51.  During the Trial each party gave evidence. There were no other witnesses.  W was given leave^[22] to call the sister, F, but she did not do so.

52.  Overall, and subject to the comments set out below, I am satisfied that both parties endeavoured to give truthful evidence to the Court.  Naturally enough, they were protective of their respective positions and anxious to explain the financial challenges they each currently face and those they expect to encounter in the future. 

53.  For his part, H expressed concerns that he may be facing an order to pay an amount which, he says, will be unsustainable.  On his behalf, it was submitted that he is, essentially, “insolvent”, that he has not been able to keep up with payments of HK$12,000 and this is despite making his best efforts to maximise his income and minimise his expenses. His claimed intention throughout has been to place the Children first and to provide for them to the extent that he is able to do so.  His principal concern is that if the Court were to award an amount in excess of his capacity to pay, he would face bankruptcy.^[23]

54.  W’s primary focus is on the needs of the Children. She has been supporting them since separation with limited assistance from H.  Now that she is no longer in regular employment, her ability to do so is diminished. She asserts that as a direct consequence of H’s failure to provide sufficient financial support, she has had to rely on F’s generosity, including for their accommodation and she is financially indebted to her sister.  Her savings, including from her MPF payment, have become substantial depleted.   

The Needs of the Children

55.  Both parties acknowledged that despite the agreement in principle that the sum of HK$22,000 per month would be a reasonable amount for H to be paying to W for the maintenance of the Children (subject to his ability to do so), the Court was still required to consider the needs of the Children as part of its duty under s. 18 of the MPPO. 

56.  In assessing the Children’s needs, the Court is required to consider the standard of living enjoyed during the marriage: C v F [2006] HKFLR 4; s. 7(2), MPPO. 

57.  The Children have been brought up in a comfortable if not a luxurious lifestyle.  The present property in Tung Chung is approximately 1,200 sq. ft. in size, with three bedrooms and a domestic helper’s room. This is comparable to the FMH, which was also situated in Tung Chung. 

58.  The family took regular holidays – once or twice a year – and the Children attended annual summer camps.  At one point they had two domestic helpers living in the household, albeit one being employed by the sister, F. 

59.  The Children’s education has been maintained to a high standard, with both attending an international kindergarten and ESF schools throughout their primary and now secondary education.  W produced evidence that H had been paying for at least some of their school fees during the marriage. 

60.  In her narrative 12^th Affirmation for the Trial, W estimated the expenses for herself and the Children as in her last Form E dated 3 May 2019, i.e. at HK$55,250 per month.  These had been slightly reduced by the time of the Trial^[24]:

	Item	Form E HK$	Updated HK$
	General
1.	Food	$8,100	$8,100
2.	Household expenses	$500	$400
3.	Laundry	$300	-
4.	Accommodation costs (including utilities, home telephone, internet etc)	$14,000	$14,000
	Total	HK$22,900 x 2/3rd = HK$15,266	HK$22,900 x 2/3rd = HK$15,000
	Personal
5.	Total	$1,600	$1,600
	Children
6.	School fees	$21,400	$21,400
7.	Extra tuition fees	-	-
8.	School books and stationery	$500	$200
9.	Transport to school including school bus	$3,700	$2,300
10.	Medical/dental	$3,700	$2,000
11.	Extra-curricular activities	-	-
12.	Entertainment/presents	-	-
13.	Holidays	-	-
14.	Clothing/Shoes	$600	$400
15.	Insurance Premia	-	-
16.	Lunches and Pocket Money	$300	-
17.	Other Transport	$400	$150
18.	Uniform	$250	$50
19	Others – PTA & CAS fees	$600	-
	Total children expenses	HK$30,750	HK$26,500
	TOTAL MONTHLY EXPENSES	HK$55,250	$50,600

61.  H accepted these expenses as reasonable – even if based on approximations.  If anything, the absence of any claim for extra-curricular activities, entertainment, and holidays, is surprising.

62.  W said in her last Form E that she anticipated an increase in some of the more substantial expenses in the future, relating to accommodation and higher school fees as the Children progress into their later school years.  I will deal with these issues in turn. 

Accommodation

63.  W says is that, although she is not contributing to the mortgage or paying rent at the moment, she and the Children are not entitled to free accommodation and that at some point in the future she will have to find alternative accommodation.  She set out her concerns in her narrative affirmation:

80. I do not accept that the Children and I can live for free at [the Tung Chung Property].  There are outgoings to be paid including management fees, rates,      ongoing maintenance and repairs and utilities, not to mention paying rent.  At a bare minimum, the Children and I must contribute to these expenses, even if we are not paying market rent.  It is unreasonable and unfair to [F] to assume that she can continue supporting us on her income and not save for her own imminent retirement.  The Children are not and should not be her financial responsibility, she is forced into this situation to help as we are family.  But she is not wealthy and she has her own future to live and plan for and it cannot be fair that she has to continue making sacrifices to accommodate us. 

81. [H] claims that the Children and I can live in the [Tung Chung Property] and [F] cannot throw us out, because I am a registered owner of the property.  Although I am a registered owner…it does not mean that I can reside there for free.  The property is subject to a mortgage and there are other outgoings and expenses … .

82 I am very concerned that once [F] retires the Children and I will not have a place to live, and this may happen in January 2021.  For now, we still have a roof over our heads providing that I agree to contribute and pay rent.  We occupy two bedrooms and F has one bedroom.  There are four of us and [F] is there less than one week per month. 

83 [H] has offered to have the Children stay with him and he will support them.  This is at least an option we can consider closer to the time but his relationship with the Children will need to have improved considerably if this is to happen.      

64.  H disputed W’s assertions as to the possibility of eviction.  In his reply affidavit sworn 2 August 2019 he said this:

34. “Eviction” threat by [F]: The Respondent asserted that [F] has constantly threatened her that she and the Children would be evicted from the [property] before the end of 2017, in spite of the fact that she is the joint legal owner having the right to reside at the property with the Children.  The Respondent made such assertion back in November 2017, and in response, I made my own proposal to the Respondent suggesting parties to make a joint application for variation of care and control so that the Children could reside with me. …

35. Despite this threat, which the Respondent has been asserting for years, she has never been evicted.  Neither is such a threat credible, as the Respondent on her own case remains the legal joint tenant of the property with a right of occupation.  The threat of eviction is also at odds with the Respondent’s own claims in her Narrative Affirmation that she has long-standing close financial and non-financial relationship with [F], and that [F] has been supporting her and the Children financially till present.  Again, the Respondent fails to provide satisfactory evidence to support her asserted risk of being evicted.   

65.  W’s understanding of F’s intention upon retirement was that there is a possibility that she will retire in early 2021 and may want to move back to India, to Mumbai and either sell the flat or rent it out.  This is a vague and bare assertion, not supported by any statement or evidence from F.  Relevantly, the Airline has changed its policy to increase the mandatory retirement age for flight attendants from 55 to 60.^[25]

66.  W’s insistence that she had no entitlement to remain in the flat stems in part from the Order of the Court of First Instance dated 6 January 2017 (“the Tung Chung Judgment”) which declared her beneficial interest in the Tung Chung flat to be limited to the amount she had contributed to the property when it was purchased in 2015 and/or payments of the mortgage on the property, fixed in the sum of HK$485,000.  W did not defend the Action or appeal the Judgment.  H has criticised her for not doing so and has raised the question of whether the Action was artificial in the sense that it deliberately went undefended in order to reduce W’s beneficial interest in the Tung Chung Property for the proposes of these proceedings and any claim H might make to it.   

67.  The Tung Chung Judgment also awarded F the sum of approximately HK$830,000 as debts allegedly accrued by W, together with interest thereon.  Deducting her declared beneficial interest, W was required to pay to F the sum of approximately HK$695,000, which she did in June 2017 out of the proceeds of MPF entitlement she had received upon retirement. 

68.  The question is whether the Court should accept W’s assertion that she and her sister are on bad terms, and that she and the Children are at risk of being removed from the Tung Chung Property in early 2021 and being required to obtain alternative accommodation in Hong Kong or elsewhere. 

69.  I do not accept this assertion.  It seems to me that F has no reason to feel resentment towards her sister.  In the period since separation, W has transferred to F her interests in landed properties in Hong Kong and India in payment of alleged debts, and has paid to F the bulk of her MPF. 

70.  There is no evidence (other than W’s assertion, which she did not elaborate upon during her oral evidence) that W and her sister have been anything but close in the period before the marriage and since separation and that they remain so.  I note, for emphasis, that W had the opportunity to call her sister as a witness at the Trial, during which she might have confirmed these assertions, but she did not do so. 

71.  I accept that W will be expected to contribute to the costs associated with the present accommodation, including utilities and reasonable contribution towards the mortgage.  As I have already noted, H did not argue that the figures she claimed as her ongoing expenses including for such accommodation were unreasonable.   

School fees

72.  As set out above, the present costs for the Children’s education at the present ESF school is HK$26,450:

School fees	$21,400[26]
School books and stationery	$500
Transport to school	$3,700
Uniform	$250
PTA and CAS fees	$600[27]
Total:	$26,450

73.  Taking into account the parties’ financial positions, and in the absence of additional support from another source, it has been apparent for some time that the school expenses including fees are not sustainable.  Her Honour Judge Melloy said this in her Judgment dated 4 July 2016:

The children’s schooling

23. The mother said that she was open to the children changing schools to something that was more affordable.  Given the parties financial situation it seems to me that urgent consideration should now be given to this.  I fail to see how the parties can afford to pay for the children’s school fees in addition to a contribution of c HK$12,000 per month each from their own respective incomes for the children’s expenses.

74.  Despite this exhortation, the Children remain in their present ESF school.  Both parties want the Children to stay.  So do the Children.  R is very resistant and according to W has threatened to run away from home if he is made to attend a different school. 

75.  On this issue, there is disagreement between the parties as to the efforts they have made since the remarks of the learned Judge in the IM Judgment. H says that he has tried to explore the available options of the boys attending alternative schools, but W has been uncooperative and unsupportive.  For her part, W says she has considered other schools, and in the past year or so has begun to make applications.  Very little of this was backed up with any documentary evidence of what she had done.

76.  W said at the Trial that she had applied to the ESF for a fee waiver, but this was only lodged on 3 November 2019 (the day before the Trial).  She explained that she had previously made enquiries with ESF as to this option, but, given her salary and property assets, she did not meet the eligibility criteria.  Nonetheless, even taking these elements into account, it does not explain why she did not lodge the application until the day before the Trial was to commence.  She has long since transferred her interests to F in satisfaction of claimed debts, she no longer works full time, and her financial position has considerably diminished. 

77.  In any event, W said she was hopeful that given the change of circumstances, and the fact that the Children had been in the ESF system since P1, the application for the fee waiver would be successful.  She informed the Court that she would revert to ESF after this Judgment is handed down. 

78.  There is a second possibility – support from the Zoroastrian community in Hong Kong and internationally.^[28]   W said in her evidence that she had approached the local Association, and was “quite sure something will work out”, given their “huge trust fund.”  She added, incidentally, that the Association might also help with orthodontic treatment for the Children.   

79.  If there is a chance that assistance could be obtained from either of these sources, then it would be in the best interests of both Children to remain at their present school.  This is particularly so with R, who is very resistant to change.  Absent this, and unless either party’s financial position dramatically alters for the better, they will be forced to make the difficult decision to enrol the Children in another school where the fees will be more affordable.   

H’s capacity to pay

(a)     H’s income and earning capacity

80.  In 2014, after some unsuccessful ventures in magazine publishing and in fitness consulting, H decided to pursue a career in the financial services industry.  He obtained a position with CFS Limited in July 2014 where he worked on a commission-only basis.  He moved to A (HK) Limited in August 2015 with a basic salary of HK$40,000 per month for the first six months through to March 2016, thereafter reduced to HK$25,000 per month, plus discretionary bonus payment dependent upon him writing financial transactions in excess of the total cumulative he had been paid.  As his cumulative salary was in excess of the total transactions written, he did not receive any discretionary bonus during his approximately 2 years with the company.^[29] In the witness box he explained, pithily, “I could not outrun the clawback”.    

81.  In September 2017 he resigned from A (HK) Limited and found a position with CF (HK) Limited (“CF”) as a Senior Consultant in the Wealth Management Team.  He was first paid a fixed monthly salary of HK$25,000 plus commission on a case by case basis between September 2017 and August 2018.  Under the terms of his contract with CF, and unlike his previous job, there was no “clawback” or offset of the commission income.  After a year, his contract was renewed, but on a commission-only basis. 

82.  He is presently a Director of the Private Wealth Management Team of CF, although this does not mean he is an appointed director of the company.  The title of “Director”, H explained in his written evidence^[30] and when he gave evidence at the Trial, was given to him very much for the purposes of making a good impression for marketing purposes and that it was common within the industry to “inflate” titles in this way. 

83.  H summarised the nature of his work in the industry in his narrative affidavit:

82. … Given the nature of the financial services industry, my income can be highly fluctuating and are highly dependent on the macro economy and the general business outlook of the target markets.  Also it is very common for practitioners to take a few years to build up their clientele before they could have a prospect to develop their earning capacity and generate a decent income on purely commission basis.  As such, I experienced great difficulties in generating much income when I was at [CFS Limited] and [A (HK) Limited] and my income during that period was not satisfactory.  In mid-2017, I started my work at [CF] and have been working there since then.  The main part of my work at [CF] is to on-board new clients to purchase personal insurance policies and investment products through [CF] and to maintain the relationship of my existing clients so that they will continue to use our products and introduce other new clients.  Under the relevant regulations by the SFC, I am not allowed to solicit clients by emails, cold calls or marketing.  Therefore, the standard practice to attract more clients is through networking and seeking introduction or referral from existing clients.  This is time consuming and difficult. 

83. … At present, my income solely depends on the amount of businesses I have brought to my employer which results in commission given to me by my employer on a discretionary case-by-case basis.  To explore new clientele and solicit more business in order to generate commissions, I have to incur business expenses such as attending networking events to meet people, meeting clients at coffee-shops or restaurants, travelling to clients’ offices, purchase of seasonal gifts to clients for maintaining client relationship/loyalty, etc. All these spending have to be paid out from my own pocket, and will not be reimbursed by my employer.  From my past experience and current practice, it is my estimation that these business expenses will generally take up at least 15-20% of my average monthly income, and may even take up more during holiday seasons, such as Christmas and Chinese New Year.  Further, there is always no guarantee that the more business expenses I spend, the more commissions I can generate. 

84.  H does not have any Cantonese ability which might enable him to service a wider range of clients.  The majority of his clients are expatriates and many are living areas such as Sai Kung and Discovery Bay.^[31]

85.  In his oral evidence, H explained that when he signed up new clients, there would be a prospect of up-front commission and residual commission, both paid directly to his employer, but to which he was entitled to a percentage when it was received.   

86.  As noted, H relies on commission income alone, as his base salary of $25,000/m ceased in August 2018, upon renewal of his contract with CF.^[32] The contractual terms are set out in a letter dated 24 August 2018:

REMUNERATION:

1) Commission

In consideration of the Services provided by you, you will be rewarded on a commission basis for business written and issued by CF.  Commission will be paid on a case by case basis, dependent on the commission received by CF for that business.  All renewals paid by Institutions are the property of CF. 

You will be paid commission on an indemnity basis.  Should this Employment Agreement be terminated, CF has the right to retain any commission pending to cover any commission paid to you for policies sold to clients which are still within the earning period or as required by the local tax authority.  One the earning period is up, any commission held back to the above will be payable to you. ...

2) Allocation Rate

You will receive a commission rate allocation of 120% of Core Credits (“CC”), paid monthly in arrears.  Any on-going renewable income is fixed at 100% of CC.  To be reviewed annually.

For further details, please refer to appendix 1.

87.  Appendix 1 was produced at the Trial and sets out the rates by reference to the product sold and divides these rates between “upfront” or “ongoing/renewable” commissions.  In addition, the employee may qualify for a “productivity bonus” depending on how many Core Credits are achieved.  “Core Credits” are described in Appendix 1 as the “percentage of all issued business credited to you as a consultant”. 

88.  For what are called “Term Insurance” products, H is entitled to ongoing/renewable income of up to 50% of the paid premia for the first year, dropping to 35% for the second year.  CF also sells a management investment called iFast, for which H can obtain either upfront, one-off, commission or ongoing renewable commission.  He said he preferred the latter as it provided more stable income and was less risky if the client withdrew mid-term, (which might result in him having to refund part of received commission). 

89.  It appears H has focussed his efforts on selling two products: Term Insurance and iFast. 

90.  For the 12 months to May 2019, the date of his most recent Form E, his earnings, including salary to August 2018 and commission, amounted to on average HK$44,388.67 per month.^[33] 

91.  This was a considerable improvement on his position in the year or so after the IM Order, when he was at A (HK) Limited and then in the fledgling period with CF. 

92.  2018 was a good year, and in some months his commission entitlements were substantial.  In February, April and May 2018, he received commission income of HK$55,490, HK$67,727 and HK$58,474 respectively, in addition to his monthly salary of $25,000.  In November 2018 his commission income amounted to HK$111,468 (his salary had by then ceased). 

93.  H was asked about the 2018 results, and in particular about November 2018.  He explained that this was an unusual month, and that it had resulted from an ex-patriate couple moving their UK pensions offshore and the percentage receipts which flowed from that transaction to CF. Since then, the UK government has tightened the applicable rules and introduced a tax on such transactions to discourage this from being repeated.  He did not expect further business of this nature to come his way, at least for the foreseeable future.

94.  According to CF’s Return of Remuneration and Pension (IR56B) for the last available financial year 2018/2019 H earned an income of HK$594,984 or HK$49,582 per month.     

95.  The financial year of 2019/2020 has been less successful for H compared with 2018/2019 and his highest earning month was July 2019 at HK$42,335. 

96.  H projected his income for November 2019 at “HK$23,000 in residual income or a little bit more”.  He said that December was, historically, a bad month for writing new business, and he would be limited to residual income – meaning ongoing commission on contracts already written. He expected to get a ‘bump up’ in his income for the months after each quarter (when he would receive additional commission from company receipts) so would expect to receive higher income in January, April, July and October each year, all being well. 

97.  H was asked why, if he in fact was building up more clientele, his income was decreasing.  He referred to the general macroeconomic situation, to Brexit, to the Hong Kong protests, and to the general sentiment discouraging additional investment arising from volatility in the marketplace.  I accept that this may have impacted on some of his business and consequently his income.   

98.  H was also asked about the prospect of obtaining more stable work, perhaps at a bank or other financial institution.  He said that this would be difficult if not impossible due to his poor credit history. His credit rating has been assessed by TransUnion as “I”, the second lowest rating according to that body.^[34]

99.  H also referred to his health problems.  He has bronchial asthma, and a family history of heart disease.  He has suffered from depression for some time and has had occasional panic attacks for a number of years.  He has been in counselling since 2019.    

100.  While W did not resile from her contention that H has not maximised his earning capacity, few questions were put to him on this issue in cross-examination.    

101.  In Closing Submissions, W criticised H for she said was his failure to explain precisely how his commission has been calculated and paid.    

102.  There are three difficulties with this criticism.

103.  First, Annexure 1 refers to the commission entitlement in less than exact terms: the entitlement to “Ongoing/Renewable Income” for Term Insurance products is “up to 50%” of the premia for the first year and then “up to 34” for the second year after the product has been sold.  The same qualifier is used in respect of iFast: “up to 1.12% of NAV.”   (Underlining added.)

104.  Secondly, the pay slips from CF received monthly by H do not provide a breakdown of the amount of remuneration product-by-product. 

105.  Thirdly, there is a limit to which parties in matrimonial litigation must volunteer information without prompting.  I accept that the onus is on both parties to provide full and frank disclosure, but they are not expected to guess all of the particulars the other party wants to obtain.  If the point had value, W could have raised it before Trial so that H could make the appropriate additional enquiries with his employer.   

106.  In closing, W advanced a number of submissions that H had failed to explain his income from CF, had not utilized other products he had available to him through CF, and had failed to hire a business development manager to assist in shaping his future business.  She criticised H for not disclosing his performance appraisals (if they exist) and she submitted that the gaps in the evidence meant that the Court should find that H had failed to discharge an “evidential burden” of justifying why he had “not realized his HK$40K earning capacity”.^[35]

107.  The “HK$40K earning capacity” was an estimate made by this Court during the determination of the interim maintenance application of what H might reasonably be expected to earn from August 2016 onwards, based on a broad appreciation of the evidence at the time and the submissions put forward. 

108.  As the evidence shows, H took positive steps to move from A (HK) Limited, where he had failed to earn a single commission entitling him to an amount in excess of his salary, to a company which would supply him with a salary plus commission (not clawed back or set off against his salary) and which ultimately has secured a better reward for his efforts. He has, in my view, taken considerable steps in the last few years towards maximising his earning capacity. 

109.  W’s closing submissions also criticised H for failing to provide sufficient evidence of the impact of the instability in the market on his ability to earn income.  I do not accept this criticism.  H has been in the financial products industry for a number of years and can speak to the present state of the market.   This issue must have arisen in the course of his discussions with existing and prospective clients and they have shared their views with him.  I expect he has attempted to reassure his clients of the advantages of investing in the particular product offered to them, despite the uncertain financial environment. 

110.  The Court is not blind to the global and local economy, nor does it require evidence of fluctuations in the economic situation in Hong Kong and internationally.  It is apparent that at the time of the trial there was considerable financial uncertainty in the marketplace.  The market sentiment has not improved since then and, given the present difficulties caused by the Covid-19 virus, may well have worsened. 

111.  H provided a chart – P4 – in which he predicted his future earnings at the rate of HK$32,250/m for the year November 2019 to October 2020.  This is based on his current residual income, and includes his best estimate of what additional income he may be able to obtain by the sales of the products available through his employment with CF. 

112.  W had little to say about the details of this projection, other than that she maintained in her closing submissions that H had a minimum earning capacity of HK$40,000 per month and that if, in fact, H is earning less than this per month it must be due to a lack of effort on his part. 

113.  I reject this submission.  Having failed, for more than a year after the IM Order, to achieve an income matching the level estimated by the Court, he switched employers, and was able, through considerable effort, to achieve a significant improvement in his income.  The fact that he has not kept up with the payments under the IM Order is in part due to other factors, including his expenses and an action taken against him by W’s sister resulting in a Judgment against him in May 2017.^[36]  W’s ongoing criticisms of his efforts, frankly, lack substance. 

114.  Further, in my judgment, H’s estimate of his future earnings: on average HK$32,250 per month, is a reasonable projection given his 2019 income.  This well be optimistic, given the extraordinary events which have taken place since the Trial.  From this sum, MPF of HK$1,500 will be deducted, leaving H with HK$30,750 per month. 

(b)     H’s Assets/Liabilities

115.  H has very little in the way of assets, and W did not suggest otherwise.  His bank balances are insignificant.  His Form E asserteda claim in W’s landed properties, but this has been dropped. 

116.  On any case, H’s debts are considerable.  At the time of his updating affidavit sworn 3 October 2019, he said they amounted to HK$604,475.71.^[37]

117.  They fall into three categories: a HSBC Credit Card debt, the outstanding arrears under the IM Order and loans from friends/relatives.       

(i)     HSBC Credit Card debt

118.  According to the statement dated 25 October 2014, H’s credit card account was closed on 26 June 2014 with a closing balance of $68,520.71.  The Trans Union Credit Report^[38] dated 22 August 2019 labelled the “account status” as “Write-off”. 

119.  H’s position is that, despite this classification, the debt has continued to attract interest at the rate applied by HSBC to overdue credit card balances, and he extrapolates from this that he owes HK$324,288.21, increasing with every passing month.^[39]  

120.  He said he has been repeatedly contacted by a “Mr. Singh”, apparently acting on behalf of the bank, “3 – 4 times a week” demanding repayment of the debt.^[40]

121.  W says that there is no or at least insufficient evidence to demonstrate that the debt has continued to increase by the compound effect of interest being charged on the outstanding balance. 

122.  H produced no document whether from HSBC or any agency acting on the bank’s behalf showing the amount due. 

123.  In cross-examination, H said that he went to the bank to obtain a chop on the 2014 credit card statement referred to above.  He did not know precisely when he had done this.  He did not ask the staff the amount then outstanding.  Nor has the “Mr. Singh” ever told him during any of the multiple calls whether the outstanding sum is HK$68,520.71 or some other, higher amount.   

124.  He is reluctant to contact the bank, directly or through his solicitors, in case HSBC would serve proceedings on him.  I can appreciate this reticence, but it means that he is left without evidence to support his contention as to the amount owing.

125.  In light of this, and the absence of any document confirming the current amount due, I am not able to accept H’s assertion that the debt has risen to more than HK$324,000 and will continue to rise so long as it remains outstanding.      

126.  At the same time, I do not accept that H has been absolved of the debt.  It is possible, even likely, that it may have been sold by HSBC perhaps as part of a package of bad debts to a collection agency who continue to press H for payment. 

127.  For the purpose of this ruling I accept that the debt remains in the sum of $68,520.71. 

(ii)     Arrears of maintenance

128.  In closing, H said that during the Trial W had “resiled from her previous position that H should repay arrears of interim maintenance” and that therefore H withdrew his application for variation.^[41] My notes show no such concession, and indeed W specifically rejects this in her Reply Closing Submissions.^[42]   H’s Supplemental Closing Submissions did not seek to argue otherwise. 

129.  At the time of the Trial, H owed HK$200,000 under the IM Order.  Unless H has increased his payments since the Trial, that sum will have increased by $6,000 per month from November 2019 to the date of this Judgment. 

(iii)    Loans

130.  In part due to his poor credit rating, the lack of a credit card account, or any other means of obtaining loans from institutions, H has relied on the support of friends or acquaintances to lend him money for his expenses including the servicing of debts.

131.  There are three current loans, totalling approximately HK$80,000.^[43] W did not seek to challenge the existence of these loans, or to suggest that they were not to be repaid, in accordance with the loan documents disclosed by H.  Rather, she alleged that H had acted unreasonably in incurring these further liabilities.^[44]

H’s needs/expenses

132.  At Trial, by way of summary, H produced two charts relating to his ongoing expenses: P1, a chart of the previous 40 months, and P4, his prediction of future expenses. 

133.  H’s claimed his ongoing monthly expenses as comprising:

Item	HK$
Rent	15,000
Maintenance payment[45]	6,000
Contribution to H’s family	3,025
Insurance[46]	1,223
Telephone	220
Utilities/household expenses	1,700
Food	3,000
Work transportation	2,000
Personal transportation	1,200
Grooming	1,500
Business expenses	3,500
Medical/dental	1,200
Travel to India	1,000
Total	HK$39,168

134.  In fact, the figure should be HK$45,168 given that H is presently obliged to pay HK$12,000 rather than HK$6,000 under the IM Order. 

135.  Additionally, H will be required to find money to repay the personal loans referred to previously by the following dates

Date	Amount (HK$)
April 2020	38,500
July 2020	14,187.50
Aug 2020	27,500

136.  W was closely critical of H’s expenses, particularly in respect of his rental, his ongoing business expenses, and the transfers to his mother and brother in India.    

(i)     Rent

137.  H previously rented a room in a sub-divided apartment in Quarry Bay.  The conditions were, in a word, claustrophobic.  In his narrative affidavit he explained his decision to move to better accommodation:

11.b.  In September 2018 I moved out from my previous accommodation

which I had been living for about 2.5 years.  The reason is that I started to develop mental health issues such as disrupted sleep and aggravated bronchial asthma due to the poor living condition of my previous accommodation, which was a subdivided unit of approximately 96 sq. ft. with no window.  Heeding my doctor’s advice that I should move to a much more proper accommodation, I moved to the current small apartment.

c. I also hope that by having a proper residence, my Children would stay or visit me at my place, with a hope to facilitate my access to my Children and re-establish the father-son relationship.  This has caused an increase in monthly rent from HK$9,000 (a sub-divided unit) to HK$15,000 (present apartment).       

138.  H produced a letter issued by his doctor confirming the advice given. 

139.  H’s current apartment is a 1-bedroom flat in Hung Hom, Kowloon.  At Trial, H said that he was still looking for less expensive accommodation, in the region of HK$12,500 per month. 

140.  I accept that the current amount for rent is reasonable.  In Hong Kong, the securing of accommodation is a question of balance: there may be less expensive apartments, but their location may not be as convenient as the current apartment in Hung Hom, resulting in greater travel time and expense.  I do not consider that H’s decision to move out of the shared flat to be unreasonable – indeed, this was a sensible step for him to take and he followed medical advice in doing so.  The fact that he is still looking to reduce his rent supports his case that he is making efforts to minimise his ongoing expenditure.    

(ii)     Business expenses

141.  H testified that he did not receive any subsidy or reimbursement for the expense of doing business under his contract with CF. This was not challenged and there is nothing in the letter of employment to suggest such an entitlement. 

142.  H referred to the element of “risk/reward” in obtaining new business and encouraging further investment from existing clients.  This has, at times, meant fostering the relationships with gifts of dinners and other items.    

143.  The November 2018 income, for example, had been the end-product of a deal which had to be encouraged by this kind of client entertainment. 

144.  W argued in her written evidence that these expenses are likely to be tax deductable.  I accept this to be the case.  H has not allowed for any tax component in his expenses. 

145.  I accept also that the level of expenditure related to business is quite high, particular in respect of travel, and gifts for clients.  The difficulty is in concluding that this is not a reasonable expense.  It is not so extravagant as to be disproportionate to the results i.e. that further products were sold and commission earned.  This is the nature of the business H is presently engaged in.

146.  I also accept that H must present well, if he is to secure the confidence of his clients and potential customers.  The amounts he has budgeted for clothes and grooming are not unreasonable.  

147.  I agree that November 2018 presented itself as an opportunity for H to meet some of the arrears of maintenance then owing under the IM Order, as perhaps did some of the months prior to then, when he earned in excess of HK$40,000, the Court’s previous estimate of his capacity.   

(iii)    Contribution to family in India

148.  H contributes an amount each month to his elderly mother for her upkeep.  His budget is HK$3,025 which includes the cost of transmission of the funds.  His mother has Parkinson’s disease.  His brother cannot support his mother due to his own health problems.  He has a heart problem and has a form of blood cancer.   

149.  I can understand H’s desire to support his family members in India and to provide for them in their need.   Some level of support is reasonable, of course, but the needs of the Children come first.  I also note that H has been increasing the amount he has been remitting, from HK$2,000 in late 2017 to HK$3,000 now.^[47] If he considers that he cannot withdraw this regular support for his mother and brother, then other economies will have to be made. 

150.  Overall, I regard the following as a reasonable level of expenditure per month:

Item	HK$
Rent	15,000
Maintenance payment[48]	6,000
Contribution to H’s family	750
Insurance[49]	1,223
Telephone	220
Utilities/household expenses	1,000
Food	3,000
Work transportation	2,000
Personal transportation	1,000
Grooming	500
Business expenses	3,000
Medical/dental	1,200
Travel to India	1,000
Total	HK$35,893

W’s assets and income

151.  As I have already noted, in the course of these proceedings H has raised several issues as to W’s asset holdings, her ongoing earning capacity, and her actual income, post-retirement.  These were substantially abandoned at the Trial, and the focus was concentrated on H’s own financial resources, including his ongoing income and earning capacity, and his expenses.

152.  W gave evidence of the difficulties she faced at present, including the depletion of her MPF, with more than HK$1.46M of the HK$1.68M going to her sister to satisfy the amounts she was indebted to F following the Tung Chung Judgment and other debts including her living expenses.^[50]

153.  H has argued that W has an ongoing capacity to earn and could start another career.  She has obtained some work as a French language tutor although this has not proved to be profitable.  She has obtained a position as a Junior Marketing Officer with a firm at an initial salary of HK$4,800 per month plus 10% commission.^[51]

154.  W gave evidence of suffering strain and being easily tired at the end of the day.  She has a shoulder injury which is healing but restricts her movement. 

155.  In light of all of this, it is clear she requires support from H for the needs of the Children.   

Discussion and conclusion

156.  At the time of the Court’s award of interim maintenance in July 2016, both H and W were working.  W has since retired and her income from part time work is insufficient to meet her own personal expenses let alone the general household expenses and those relating to the Children. 

157.  In the IM Judgment, the Court anticipated H should be in a position to make at least HK$40,000 per month from his then position with A (HK) Limited.  He did not do so, but I find this was not due to a lack of effort on his part.  It was not until he moved to CF that finally, in November 2017, he reached this level of income.  His earnings for the following year 2018 were a considerable improvement.  They have now diminished once again. 

158.  There have been other factors contributing to his failure to pay according to the IM Order, including having to meet the Judgment obtained by F in May 2017.  He does not have savings tucked away to which he may look to pay back maintenance under the IM Order, nor to service his personal loans (leaving aside the HSBC credit card debt) which will shortly have to be paid back. 

159.  As above, his present expenses exceed his current and projected earnings. 

160.  H should, to the extent possible, take steps to seek cheaper accommodation so long as this does not thereby increase his other expenses such as travel.

161.  I accept that a certain proportion of his business generation requires client entertainment but the amounts are estimates and in some months may be less than stated.  Again, the Children’s needs should take precedence.  When he has a good month, and receives in excess of the anticipated income, a proportion of this should be set aside for the Children, and paid to W. 

162.  Looking forward, and bearing in mind H’s ongoing liabilities which will have to be repaid, I consider that it is reasonable to expect H to pay HK$4,500 per month per child, or HK$9,000 per month in total to W, on a monthly basis until after repayment of his loans. 

163.  This reduction will be backdated to the beginning of December 2018 to recognise the periods when H was not able to earn the amount anticipated by the IM Judgment and has had to meet unexpected debts.  The IM Order is otherwise undisturbed. 

164.  From November 2020 the required payment will increase to HK$5,000 per month per child, or HK$10,000 per month.  Such payments to increase by 3% annually until each child reaches the age of 18 or finishes full time education. 

165.  Further, it is reasonable for W to be updated by H on his financial position going forward.  This can be a short summary, every quarter, accompanied by copies of his pay slips, and (if available) his Employer Return.  I will not make this an order, but I consider this to be appropriate so that W is kept informed. 

166.  In arriving at this figure for maintenance, I have particularly borne in mind H’s projected income, which I have accepted as a reasonable estimate, his ongoing personal debts, and that it is likely W will be pursuing enforcement of the arrears of maintenance.  The effect of the backdating of the reduction will reduce the arrears somewhat, but they will still be substantial.  It will be a matter for the Judge hearing the Judgment Summons what directions to give, and whether H should be permitted time to pay the arrears.  My findings on his present financial standing, and my rejection of W’s contentions that he has failed to utilise his earning capacity or has acted irresponsibly in managing his financial affairs should be taken into account.  

167.  I note that this sum will not meet the Children’s needs without the ongoing support from F for their accommodation (in respect of which I have found that this support will continue) and, if they are to remain at their present school, the subsidy or support from a charity or society. 

168.  W has asked for an attachment of earnings order. Under s. 28, MPPO, the Court may make an order that the income of the payer be attached as to the whole or part of the amount payable under the maintenance order.  In order to do so, it must be satisfied of one of three matters:

(i)     that the payer has without reasonable excuse failed to make any payment which is required to make by the maintenance order,

(ii)     that there are reasonable grounds to believe that the payer will not make full and punctual payment in compliance with the order, or

(iii)    the payer and designated payee agree to the making of an order. 

169.  The third condition does not apply.  I am not satisfied as to either (i) or (ii).   W’s request for an attachment of earnings order is refused. 

Costs

170.  In part G of his narrative affidavit, H raised a number of points relevant to the question of costs.  I have considered these.  It seems to me that given that many of the matters argued there related to claims which were not pursued at trial.  Taking into account the narrowing of the issues, and that neither party has been completely successful, I will make an order nisi that there be no order as to costs to be made absolute in 21 days in the absence of any application from either party.  If, contrary to that, the parties wish to make submissions on costs, they should write to the Court within those 21 days and directions for further submissions will be given.

Summary of Orders

171.  I therefore make the following Orders:

(1)     The Petitioner do pay to the Respondent periodical payments of maintenance for the benefit of the Children in the sum of $4,500 per month per child, total $9,000 per month, the first such payment to be made on 1^st July 2020 and thereafter on the first day of each calendar month.

(2)     The Order of the Court dated 4^th July 2016 be varied so that the interim maintenance payable thereunder continue until 30 November 2018, and with effect from 1 December 2018 be varied downwards to the amounts set out in paragraph 1 of this Order. 

(3)     With effect from 1 November 2020 the required payment for maintenance will increase to HK$5,000 per month per child, or HK$10,000 per month in total.  Such payments to increase by 3% annually so that the increase will take effect from 1 January each year. 

(4)     The periodical payments of maintenance as provided in paragraphs (1) to (3) do continue until the respective child reaches the age of 18 years or completes full time education, whichever is later, or until further order of the Court. 

(5)     There be a Section 18 Declaration.

(6)     There be an order nisi that there be no order as to costs, including all costs reserved, to be made absolute 21 days from today.

(7)     The costs of each party be taxed in accordance with Legal Aid Regulations.