AWTK v. LPW, A

FCMC 3438/ 2017

[2018] HKFC 3

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 3438 OF 2017

----------------------------

----------------------------

---------------------------------

J U D G M E N T
(Interim maintenance)

---------------------------------

Introduction

1.  This is an application by a Respondent wife for interim maintenance for the two children of the family, two boys now aged 13 and 16 years, pursuant to section 5 of the Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO).

The main issues

2.  The main issue to be determined is how much should the husband pay to the wife as interim maintenance for the two children of the family? The wife seeks HK$12,000 per month per child, (or HK$24,000 per month) such sum to be backdated to the date of the petition i.e. the 20 March 2017, and for a further sum of HK$15,900 being half of the cost of the children’s school trips last year. The husband for his part offers HK$3,000 per month per child. It is of note that he is not currently paying this sum.  

Background 

3.  The parties married on the XX January 1992 and the divorce petition was issued by the husband on the 20 March 2017 based on two year’s separation. The husband moved out of the matrimonial home in August 2016 and he has since formed a relationship with a third party, with whom he has had a child. The baby was born on the XX August 2017. The husband’s new partner also has two elder children from a prior relationship and she is said to work as a freelance web site designer earning between HK$20,000 – HK$30,000 per month. It is not known what financial support she also receives from the father of the two elder children.  

4.  The husband, who is British, is nearly 52 years old and he works in the IT field. Historically he has also had an interest in racing motor cars. Further he has owned a number of high end cars and there is currently a dispute between the parties concerning the ownership of a number of Ferrari’s and their value.

5.  The wife for her part is Cantonese and she holds a senior position at one of the local universities in Hong Kong. She is 50 years old.

6.  It does not appear to be disputed that the parties enjoyed, what counsel for the wife described as a fairly typical middle class life style. The parties lived in a self owned property and the boys originally attended good local primary schools and then ESF schools for their senior years. The boys have also enjoyed a wide range of Extra Curricular activities and they received additional tuition as and when required. The family would also travel overseas on a reasonably regular basis.  

7.  Initially it was the wife’s case that the husband had ceased all forms of financial support for the two children, including the payment of the school fees that he had historically paid by direct debit. Later she accepted, as set out in paragraph 24 of the husband’s affirmation dated the 24 August 2017 that he had infact paid for the following items:

(i)	02/06/2017	ESF	HK$28,000	Auto-Pay from my [the husband’s] SCB account.
(ii)	22/06/2017	Gov. Rates	HK$5,000	Online Payment
(iii)	10/07/2017	Prudential	HK$3,024	Family Travel Insurance

It seems that the husband had not informed the wife of these payments prior to her filing her 1^st affirmation dated the 3 August 2017. It is the wife’s case that the husband used to be solely responsible for the children’s school fees, all household bills and part of the boy’s extra-curricular activities/extra tuition fees. In addition, she said that they would share the cost of the summer holidays and other overseas school trips. She initially maintained that all of this ceased when the petition was filed in March 2017. In any event it is clear that the husband did not pay the school fees as regularly as before and that in June 2017 he cancelled the direct debit altogether. This was a matter of considerable concern for the wife. She further maintains that although the husband had initially agreed to pay for half of the boy’s school trips that he later changed his mind. At present then the wife is responsible for all of the boy’s expenses. She asks that the husband contribute slightly less than 50% of what she estimates the entire cost to be, as she acknowledges that she is currently earning more than the husband. The husband for his part maintains that he can simply not afford to pay more than the HK$6,000 per month offered.  

The law

Interim maintenance

8.  The law is well known and not in dispute. Section 5 of the Matrimonial Proceedings and Property Ordinance, Cap 192 states that maintenance for children can be ordered either before or after the granting of the decree for divorce. In the event that an application is made for interim maintenance, the court will adopt the same approach as when considering an application for maintenance pending suit under section 3 of the same ordinance. Thus the only governing principle is that the court shall make such order as it considers reasonable in all of the circumstances of the case. Consequently, applications such as these are approached on a broad-brush basis. A detailed examination of the parties’ means and their ability to pay maintenance for their children will only be examined in full at a later date at an ancillary relief trial. If there is found to be any overpayment or underpayment then that can normally be rectified at that time, if there is no agreement in the meantime.   

9.  In addition counsel for the wife has referred me to the Court of Appeal decision in HJFG v KCY (CACV 127/2011, 28 October 2011, where the following principles were reiterated with respect to maintenance pending suit/interim maintenance applications:

a.   The sole criteria to be applied in determining the application is “reasonable” which is synonymous with “fairness”.

b.   A very important factor in determining fairness is the marital standard of living.

c.   In every maintenance pending suit application there should be a specific maintenance pending suit budget which excludes capital or long term expenditure, more aptly to be considered on a final hearing.

d.   Where the affidavit or form E disclosure by the payer is obviously deficient, the Court should not hesitate to make robust assumptions about his ability to pay.  The Court is not confined to the mere say-so of the payer as to the extent of his income or resources.  In such situation, the Court should err in favour of the payee.

How much maintenance should the husband pay to the wife as interim maintenance for the boys?

The parties’ income

10.  The husband earns a salary of HK$75,000 per month. Although there was some dispute about whether or not he received additional income on a regular basis previously, for the purposes of this application I am proceeding on the premise that this is currently his only income.

11.  The wife for her part currently earns HK$105,452 per month. This is broken down in paragraph 8 of her 1^st affirmation as follows:

8.	My current monthly income as the ABC at DE University of Hong Kong is HK$105,452 which is split up as follows:-
	Basic pay per month:	HK$82,930
	Housing benefits:	HK$14,000
	(The non-accountable cash allowance of $14,000 will be payable up to 31st March 2018, the expiry date of my entitlement for housing benefits)
	Local Education Allowance for the 1st child (HK$49,238 per annum)	HK$4,103
	Local Education Allowance for the 2nd child (HK$53,025 per annum)	HK$4,419
		HK$105,452
		=========

I accept that the wife’s income will definitely reduce by HK$14,000 per month with effect from the 31 March 2018 and that in the event that the younger son goes to boarding school in September 2018 that likewise she will lose the Local Education Allowance at that time. Similarly, she will lose the allowance for the elder son when he goes to university – hopefully in the Autumn of 2019. Given that interim maintenance is a broad brush exercise I will therefore proceed on the basis that the wife’s income is around HK$91,450 per month (i.e. HK$105,452 – HK$14,000 = HK$91,452 – rounded down). As will be seen, it seems to me that on an interim basis the little extra leeway that this will give to the wife for the next two months is acceptable given that I do not intend to backdate the maintenance. I will elaborate on this below.    

12.  Consequently the parties earn c. HK$166,450 between them. Broadly speaking the wife earns approximately 55% of that amount and the husband 45%.           

The reasonable needs of the boys and the husband’s ability to pay

The reasonable needs of the boys

13.  In her Form E dated the 29 September 2017 the wife sets out her general and personal expenses as follows:

Part 4 Current Monthly Expenses 4.1 General
Item	Amount
Rent	0
Mortgage instalments	0
Utilities (electricity, gas, rates, telephone & water)	2,868.00
Management fees	100.00
Food	9,000.00
Household expenses	2,000.00
Car expenses	0
Insurance premia	181.00
Domestic helper(s)	0
Other (average costs for house maintenance and renovation work)	687.50
Total monthly household expenses	HK$14,836.50

                        Attach copies of the latest rental receipt.

4.2 Personal
Item	Amount
Meals out of home	2,400.00
Transport	1,000.00
Clothing / Shoes	1,200.00
Personal grooming (including haircut and cosmetics)	1,000.00
Entertainment / presents	800.00
Holiday	2,500.00
Medical / Dental	363.40
Tax	9,363.25
Insurance premia	1,447.20
Interim maintenance	0
Contribution to parents	10,000.00
Dependent family members	0
Mutual Fund	6,000.00
Office social events	640.00
Hobbies & interests	800.00
Professional memberships and affiliations	115.00
Total monthly personal expenses	HK$37,628.85

14.  The husband for his part sets out his expenses in his Form E of the 3 October 2017 as follows:

Part 4 Current Monthly Expenses 4.1 General
Item	Amount
Rent	10,000
Mortgage instalments	0
Utilities (electricity, gas, rates, telephone & water)	3,390
Management fees	1,400
Food	5,000
Household expenses	1,000
Car expenses	3,000
Insurance premia	0
Domestic helper(s)	0
Other (specify)	0
Total monthly household expenses	HK$19,290

                        Attach copies of the latest rental receipt.

4.2 Personal
Item	Amount
Meals out of home	4,500
Transport	0
Clothing / Shoes	1,250
Personal grooming (including haircut and cosmetics)	250
Entertainment / presents	400
Holiday	0
Medical / Dental	0
Tax	27,583
Insurance premia	252
Interim maintenance	6,000
Contribution to parents Mother	1,000
Dependent family members	2,500
Others (specify) New Child/Credit Card/Loan	15,000
Total monthly personal expenses	HK$58,735

4.3 Children
Item	Amount
School fees
Extra tuition fees
School books and stationery
Transport to school (including school bus)
Medical / Dental
Extra-Curricular Activities
Entertainment / presents
Holidays
Clothing / Shoes
Insurance premia	189
Lunches and pocket money
Other Transport
Child-minding fees
Uniform
Others (specify)
Total monthly expenses for children	HK$189

The wife’s general household expenses

15.  The parties own the matrimonial home as joint tenants, which is mortgage free. The wife’s remaining general expenses seem very reasonable and are accepted. I will round these up to HK$14,840 per month. Of that one third will be directly attributable to the wife and she shall be responsible for her own share of the household expenses in the sum of HK$4,945 per month. The remaining two thirds shall be split between the parties on a 55:45 basis i.e. 45% x 9,895 = HK$4,455 (rounded up). The husband shall be notionally responsible for this share of the general household expenses and the wife shall be responsible for the remainder.

The Boy’s actual expenses

16.  The wife set’s out the boy’s expenses in her Form E as follows:

4.3 Children
Item	Amount
School fees	21,000.00
Extra tuition fees	2,560.00
School books and stationery	683.00
Transport to school (including school bus)	1,200.00
Medical / Dental	726.80
Extra-Curricular Activities	3,400.00
Entertainment / presents	5,167.00
Holidays	5,000.00
Clothing / Shoes	1,500.00
Insurance premia	7,640.00
Lunches and pocket money	5,600.00
Other Transport	1,000.00
Child-minding fees	2,000.00
School Study Tour	2,650.00
Overseas School Study Tour (out-of-pocket expenses)	667.00
Overseas School Study Tour (ski clothing & accessories, suitcases, hiking outfits & sailing shoes)	624.75
Meals out of home	2,400.00
Total monthly expenses for children	HK$63,818.55

17.  Of those expenses I will take out of the equation the reference to entertainment/presents and holidays. Each party shall be responsible for their own presents for the boys and for other entertainment costs when they are with them. Likewise, each shall be responsible for the cost of holidays when the boys are with them save for the cost of the school trips, which I accept shall be shared between the parties on an equal basis, subject to agreement being reached between the parties concerning such trips in the first place. I have therefore removed the reference to the school study tour in this schedule. Likewise, I have removed the reference to the insurance premia, which on the face of it is more of a capital expense. In so far as the child minding fees are concerned the wife has explained that she pays her mother, the Maternal Grandmother, for any out of pocket expenses when she assists her in taking care of the boys. Whilst I would accept that there are some costs associated with this, HK$2,000 per month does appear to be a bit on the high side, especially when in addition the wife is contributing HK$10,000 per month for the paternal grandparents ongoing financial support. Thus I will reduce this sum to HK$1,000 per month. In addition, the cost of the boy’s extra-curricular expenses and extra tuition amounts to just under HK$6,000 per month. I accept that this will also need to be reduced. I will allow HK$4,000 per month. What is left appears to be the essential expenses for the boys as follows:

4.3     Children
Item	Amount
School fees	21,000.00
Extra tuition fees	1,560.00
School books and stationery	683.00
Transport to school (including school bus)	1,200.00
Medical / Dental	726.80
Extra-Curricular Activities	2,400.00
Entertainment / presents	0
Holidays	0
Clothing / Shoes	1,500.00
Insurance premia	0
Lunches and pocket money	5,600.00
Other Transport	1,000.00
Child-minding fees	1,000.00
School Study Tour	0
Overseas School Study Tour (out-of-pocket expenses)	0
Overseas School Study Tour (ski clothing & accessories, suitcases, hiking outfits & sailing shoes)	0
Meals out of home	2,400.00
Total monthly expenses for children	HK$39,069.80

18.  In total then I accept that the cost of maintaining the boys, without including the cost of a domestic helper, amounts to just over HK$39,000. The father shall be responsible for 45% of those expenses or HK$17,550 per month. (N.B - In the event that a domestic helper is employed I would expect the child minding fees to further decrease).     

19.  In total then the notional figure that the husband should pay for the children’s expenses is HK$22,000 (i.e. HK$4,455 + HK$HK$17,550 = HK$22,005) or say HK$11,000 per child per month. Although this is very close to the HK$12,000 per month per child requested by the wife, I will nevertheless make an order in this amount. It is also of note that this is very close to the figure of HK$21,000 per month for the boys school fees.       

Can the husband afford to pay this sum?   

20.  As indicated above the husband maintains that he simply cannot afford to pay more than HK$3,000 per month per child. As will be seen I do not accept that to be the case.

Rent              

21.  It was pointed out by counsel for the wife that there was no evidence to support the husband’s contention that he is paying rent of HK$10,000 per month. I tend to agree. The exhibit produced by him in support of this rental payment, shows a number of bills including that for Government rent and rates and other utility bills. There is no tenancy agreement or other documentary evidence showing payment of rent. Indeed, a quick perusal of the husband’s bank accounts also does not show a monthly payment of HK$10,000 per month. I could only find payments of HK$10,000 for July 2016, December 2016 and February and March 2017. This situation will need to be further clarified in due course. As things stand I am not convinced that the husband is currently paying rent of HK$10,000 per month as claimed.

Tax

22.  The husband had a tax bill last year of approximately HK$180,000. He was unable to pay this amount and it was agreed with the Inland Revenue that he would pay what was owed at a rate of HK$20,000 per month. Counsel for the husband confirmed during the hearing that the outstanding tax would be paid off by the end of 2017. In addition, counsel confirmed that the husband had infact been saving HK$7,500 per month and that he would be able to pay this year’s tax bill. The recent documents produced confirm that the husband has a current tax liability of HK$106,264, with HK$78,826 due on the 24 January 2018. On the husband’s case then the reference to tax in his schedule of outgoings in the sum of HK$27,583 per month can be reduced to HK$7,500 per month, being his tax savings for next year.

Maintenance

23.  As indicated above the husband is not currently paying any maintenance for the children and therefore it is factually incorrect to include the reference to HK$6,000 per month.

The Dah Sing Bank loan   

24.  Finally the husband was asked to provide the court with a copy of his Dah Sing Bank loan documents. It is of note that none has been provided, although one can see the sum of HK$460,000 being paid into his Standard Charted Bank credit card account in June 2017. Again this will need to be further clarified at a later date.

The husband’s outgoings

25.  Consequently it seems to me that the husband’s actual outgoings are probably closer to between HK$46,442 or say HK$46,500 per month as follows:

Item	Amount
Rent	0
Mortgage instalments	0
Utilities (electricity, gas, rates, telephone & water)	3,390
Management fees	1,400
Food	5,000
Household expenses	1,000
Car expenses	3,000
Insurance premia	0
Domestic helper(s)	0
Other (specify)	0
Total monthly household expenses	HK$13,790

                        Attach copies of the latest rental receipt.

4.2 Personal
Item	Amount
Meals out of home	4,500
Transport	0
Clothing / Shoes	1,250
Personal grooming (including haircut and cosmetics)	250
Entertainment / presents	400
Holiday	0
Medical / Dental	0
Tax	7,500
Insurance premia	252
Interim maintenance	0
Contribution to parents Mother	1,000
Dependent family members	2,500
Others (specify) New Child/Credit Card/Loan	15,000*
Total monthly personal expenses	HK$32,652

Total Monthly Expenses (4.1 + 4.2 + 4.3)

HK$46,442

(Please note that the original calculation in the Form E was incorrect and should have read HK$23,790 and not HK$19,290 for the general expenses and thus the final figure should have been HK$82,714 and not HK$70,714).

26.  Thus it seems to me that the husband should be in a position to make a proper financial contribution towards the boy’s expenses on an interim basis going forward.

Conclusion on the level of maintenance

27.  Consequently, I shall order that the husband do pay the wife HK$11,000 per month per child with effect from the 1 February 2018.    

Backdating

28.  The wife asks that this sum be backdated to the date of the petition. The husband says again that he cannot afford this and that in any event he has made some contribution towards the boy’s expenses since the date of the petition as set out in paragraph 7 above.

29.  The husband had approximately HK$425,000 held in a bank account when he filed his Form E. Counsel for the husband explained that this came from the Dah Sing loan and that some of these funds had been put aside for legal fees. Presumably this account also holds the husband’s tax savings.

30.  The wife for her part has significantly more savings than the husband including the sum of HK$1.8 million that she had transferred to the boy’s accounts. It is of note that the wife acknowledged during the hearing that this money formed part of the matrimonial pot and consequently I would suggest that she takes steps to transfer these sums back to her own account/s before the next hearing, so that there can be no misunderstanding in this respect.

31.  I have considered ordering the husband to backdate the interim maintenance to March 2017 – i.e. a period of 10 or 11 months. However, it seems to me that this may place an intolerable financial burden on the husband’s shoulders at this time. It is also of note that the husband could not have easily paid proper maintenance to the boys whilst at the same time paying the outstanding tax liability of HK$180,000 by instalments. Consequently, whilst acknowledging that the mother has been almost solely responsible for the boy’s expenses since March 2017, I will not backdate these payments as requested. This is something that may be considered again either at the Financial Dispute Resolution hearing or during other settlement negotiations.

The school trips

32.  I will though direct that the husband pays the additional sum of HK$15,900 being his share of the cost of the boy’s school trips last year, such sum to be paid on or before the 1 February 2018. I have considered directing that he pays 45% of the total sum, but given that I accept that the original agreement was that each party would be responsible for 50% of those costs, I will not interfere with that at this stage. Going forward the husband shall be responsible for 50% of any agreed school trips.      

Costs

33.  The wife has been more successful than the husband with respect to quantum, but she has not succeeded in persuading me to backdate the sum claimed. I accept however, that she has had no option but to take out this application. Consequently, I shall make an order nisi to be made absolute in 28 day’s time, that the husband do pay 50% of the wife’s costs of and arising out of her summons dated the 3 August 2017, such sum to be paid on a party and party basis to be taxed if not agreed. There shall be certificate for counsel.

Order

34.  Consequently I shall make an order as follows:

1)  The Petitioner do pay interim maintenance to the Respondent for the two children of the family in the sum of HK$11,000 per month per child, the first payment to be made on the 1 February 2018 and thereafter to be paid on the 1^st day of each succeeding month until further order.

2) There shall be an order nisi to be made absolute in 28 days time that the Petitioner do pay 50% of the Respondent’s costs on a party and party basis to be taxed if not agreed. There shall be certificate for counsel.  

3) Further it is directed that the Petitioner do pay the Respondent an additional sum of HK$15,900 such sum to also be paid on or before the 1 February 2018.

35.  Finally I would strongly suggest that the parties consider attending mediation with a view to resolving the issue of final ancillary relief. The parties are intelligent and the issues here are capable of resolution without the necessity of further court intervention which is both expensive and time consuming.