HPF v. YKK

FCMP 98/ 2017

[2018] HKFC 69

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MISCELLANEOUS PROCEEDINGS NO. 98 of 2017

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

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Introduction

1.  This is a summons dated the 25 July 2017 by the Applicant mother for interim financial support for the three children, namely YML, a girl born on the XX September 1999. YML is now 18 years of age but still in full time education. Secondly, YTB, a boy born on the XX August 2007 and now aged 10. YTB has special needs and is said to be on the Asperger’s/Autistic spectrum. Lastly YSL, a further boy who was born on the XX July 2009 and is now aged 8 years.

2.  In accordance with a court order dated the 18 July 2017 the Respondent father has been paying the Applicant mother the sum of HK$65,000 per month as interim maintenance i.e. HK$25,000 for the eldest daughter and a further HK$20,000 per month for each of the two sons.

3.  The mother maintains that this is woefully inadequate and not in keeping with the high standard of living enjoyed by the parties during the course of their relationship. The mother seeks a sum in excess of HK$150,000 per month. The father for his part asks that the mother’s summons be dismissed. He is prepared to continue to pay HK$65,000 per month subject to a little fine tuning.

Background

4.  In the interests of saving some time I have taken the liberty of repeating part of Father’s skeleton submission where he sets out the relevant factual background as follows:

6.   …

(a)  Mother was born on XX/12/1979, now aged 38.  She is the sole shareholder and director of W Real Estates Agencies (HK) Limited (“W Ltd”) [HB/49-50 & 83], and she also works as an employed estate agent at X (Hong Kong) Limited (“X Ltd”).

(b)  Father was born on XX/04/1969, now aged 48.  He also works in the estate agent industry, and is a sole shareholder and director of Y Real Property Agencies Limited (“Y Ltd”) and Z Investment Limited (“Z Investment Ltd”) [HB/196/§§2.4 & 2.5].

(c)  Therefore, both parties are businessmen and working parents.  This is not a case where Mother is a housewife with no income.  The difference on the extent of wealth between the parties is also unclear (see hereinbelow).

(d)  In 1998, the parties met each other in the estate agency industry and started cohabitation.  Father at that time, was a married man with a son born out of his 1^st marriage.  Father formally divorced with his ex-wife in or about 2005 or 2006.

(e)  The parties has a comfortable but not luxurious living standard. [This is denied by the mother]. During their relationship, the parties lived at Flat E and Flat F, ABC, XX Shum Wan Road, Hong Kong (“the Family Home”).  Flat F and Flat E were combined into one unit, and were previously held by Mother and Mother’s brother, HYW respectively [RB/4/§9].  Mother also held Car Parking Space No. 7, DEF No. XX Shum Wan Road, Hong Kong (“CPS-7”) [RB/17/§12.7].

(f)  Father owns Flat D, 1^st Floor, ABC XX Shum Wan Road, Wong Chuk Hang, Hong Kong (“Flat 1D”), which the family also used during their relationship [RB/15/§12.1].

(g)  Mother alleges that the parties had 4 maids and 2 drivers, and had 1 long-haul and 2 short trips every year [HB/59/§5.3].

(h)  It is undisputed that the family has always had access to private cars.  Mother alleged that the family had 6 cars [HB/59/§5.3], while Father’s case is that most of the cars were used for business purposes [RB/9/§26]., except a Toyota Alphard and occasionally the Mercedes Benz.

(i)  In about 03/2015, the parties separated.  The reasons of the separation are disputed.  Mother alleges that she left the Family Home in fear of her personal safety [RB/18/§12.12], while Father’s case is that Mother moved out on her own motion, and entered back by making a false police report [RB/6/§15].  It is undisputed that afterwards, Father moved to live in Flat 1D, while Mother and the Children continued to live in the Family Home.

(j)  In 2016, Father married Ms L, his present wife.  There were two children born out of this marriage, a girl born on XX/09/2016 (aged 1) and an infant just born in 12/2017.  The family of 4 now lives in Flat 1 D together with a domestic helper.

(k)  Mother did not seek any financial provisions for the Children until after nearly 2 years of separation, by Originating Summons dated 23/05/2017.

7.   Father had some contributions to the Children’s expenses after the separations:

(a)  Father’s evidence is that he paid about HK$409,000 to Mother as maintenance for the Children [RB/7/§19]. On Mother’s own evidence, she confirmed receipt of HK$240,000 [RB/24/§25];

(b)  It is the evidence of Father, which was not denied by the Mother in her 3^rd Affirmation that (b1) Father has always reimbursed the Children’s expenses [RB/7/§18]; and (b2) Father has offered to pay maintenance in cash to ML [the daughter] [RB/7/§19], but Mother refused to accept the same.

8.   But it is not disputed that Mother remained responsible for the Children’s expenses until she made the application for “maintenance pending suit” in July 2017.

5.  There is a further dispute in relation to the sale of the former Family home which was sold by the mother in June 2017. There are currently two further cases being dealt with in the High Court – one with respect to the proceeds of sale from this property (I am told that the father is not party to these proceedings) and further an application by the mother against the father in relation to the enforceability of a Chinese Memorandum which the parties entered into upon separation. The mother is asking that this agreement be set aside and the father is asking that it be upheld. I understand that this litigation is ongoing.  

6.  There have also been difficulties with respect to the arrangements for the two younger boys, necessitating police involvement and many allegations and counter allegations being made by one parent against the other. The CDR hearing is scheduled for the 28 August 2018 at 2:30 pm. 

The law

7.  As the parties are unmarried reference to the relevant law can be found in the Guardianship of Minors Ordinance, (GMO) Cap 13 and the Guardianship of Minors (Amendment) Ordinance 2012. Section 10(2) of the GMO states as follows:

10. Orders for custody and maintenance on application of either parent

(1)  

(2)  The court may as regards a minor, on the application of a person with whom, whether by virtue of an order under subsection (1) or otherwise, custody of the minor lies at law, make in respect of the minor any one or more of the following orders-

(a) an order requiring payment to the applicant by the parent or either of the parents of the minor of such lump sum (whether in one amount or by instalments) for the immediate and non-recurring needs of the minor or for the purpose of enabling any liabilities or expenses reasonably incurred in maintaining the minor before the making of the order to be met, or for both, as the court thinks reasonable having regard to the means of that parent;

(b) an order requiring payment to the applicant by such parent or either of such parents of such periodical sum towards the maintenance of the minor as the court thinks reasonable having regard to the means of that parent;

(c) an order requiring the securing to the applicant by such parent or either of such parents, to the satisfaction of the court, of such periodical sum towards the maintenance of the minor as the court thinks reasonable having regard to the means of that parent;

(d) an order requiring the transfer to the applicant for the benefit of the minor, or to the minor, by such parent or either of such parents, of such property, being property to which the parent is entitled (either in possession or reversion), as the court thinks reasonable having regard to the means of that parent;

(e) an order requiring the settlement for the benefit of the minor, to the satisfaction of the court, of such property, being property to which such parent or either of such parents is so entitled, as the court thinks reasonable having regard to the means of that parent. (Replaced 80 of 1997 s. 78)

8.  Section 13 adds that:

(13) (3) On an application under section 10 the court may, in any case where it adjourns the hearing of the application for more than 7 days, make an interim order, to have effect until such date as may be specified in the order and containing─

(a) provision for payment by either parent to the other, or to any person given the custody of the minor, of such periodical payments towards the maintenance of the minor as the court thinks reasonable having regard to the means of the parent on whom the requirement is imposed; and

(b) where by reason of special circumstances the court thinks it proper, any provision regarding the custody of the minor or the right of access to the minor of either of his or her parents,

but an interim order under this subsection shall not be made to have effect after the end of the 3 months beginning with the date of the order or of any previous interim order made under this subsection with respect to the application, and shall cease to have effect on the making of a final order or on the dismissal of the application.

9.  In addition, reference can also be made to the useful summary to be found in LCTK v TKKP FCMP 173 of 2009, unreported dated 25 June in which HH Judge Chu (as she then was) summarized the legal principles thus:

THE LEGAL PRINCIPLES

5. The Court has power under s.10(2) of the Guardianship of Minors Ordinance (“GMO”) to make various forms of financial provision for a child, which includes periodical payments towards such child’s maintenance.

6. There are no equivalent statutory matters as those set out in s. 7 of the Matrimonial Proceedings and Property Ordinance which the Court has to have regard to in exercising its discretion in making financial orders for a child under the GMO and the test is simply what is reasonable having regard to the means of the parent on whom the requirement is imposed (s. 10(2)(b)).

7. Under s. 13 (3) (a) of the GMO, the Court has the power to make an interim order, but such interim order shall only have effect for 3 months from the date of the order, and shall cease to have effect on the making of a final order or on the dismissal of the application.

8. Our GMO is based on the UK Guardianship of Minors Act which is now incorporated in Schedule 1 of the Children Act 1989. Paragraph 9 of Schedule 1 relates to interim orders. However, there is now no 3 month limitation for an interim order in the UK provisions. Why there still remains in our legislation this limitation is not quite clear, but there seems to be nothing to stop the Court to make a further interim order, upon the cessation of the first one.

9. There is no dispute between the parties as to the general legal principles. This being an interim application, and not having had the benefit of seeing the parties in the witness box with their evidence tested, the Court will have to adopt a broad brush approach. The Court will not take a long term view and what matters is the immediate and reasonable financial needs of the Child.

With respect it seems to me that that remains the position now.

Disclosure

10.  It seems to me that one of the difficulties with this application is that neither party had, on the face of it, made full and frank disclosure of their current financial situation. Although this was the mother’s application, her financial disclosure was inadequate and she failed to come up to proof on many aspects of her case. For example, she said during the hearing that she was only earning a basic salary of HK$8,000 per month as a real estate agent, but she did not produce any evidence in support of what was in reality simply a bare assertion on her part. She also said that in total she received a sum of approximately HK$15,700 per month. A contract of employment was not provided, nor did the court have sight of any tax demands. It is of note that the bank statements and bank passbooks which were produced, were not complete copies and that those that were attached to her Form E appear to have been heavily redacted.

11.  There was also an issue with respect to the rental payments of the mother’s lease and whether or not the mother was receiving that benefit as a “payment in kind” This was not clear from the papers. Ms Yip S.C for the father accused the mother of a complete lack of financial transparency. I have some sympathy with her on this. In particular Ms Yip said that there was no evidence that the mother was in financial difficulty as claimed. In some of the credit card statements provided it appears that the mother paid off her credit card in full each month. These amounts varied from HK$27,736 to HK$48,305 to HK$23,010 for the period from August – October 2017. It is of note that the mother first issued this application in July 2017 and that these payments were made after her application was filed. Similarly, it is of note that the Family home was only sold shortly before this application was made. There are also issues with respect to the mother’s alleged income from W Real Estates Agencies (HK) Limited.

12.  The other difficulty with the mother’s application is that much of the evidence filed was in Chinese and no attempt was made to provide any translations notwithstanding the fact that the parties had elected to file their evidence in English and they knew that the matter was being dealt with by a monolingual judge.

13.  The mother also produced different estimates of expenses. For the purposes of this application she asks the court to rely on the figures provided in her affirmation dated the 25 July 2017 and not those to be found in her Form E. For the avoidance of doubt it was unhelpful in the extreme to have two sets of competing figures for the same application.

14.  The mother also points to the lack of financial disclosure provided from the father. For the avoidance of doubt I accept that equally the father has not produced full and frank disclosure of his current financial situation and that this is also unacceptable. The mother has filed a summons in that respect that is returnable before the court in the first instance on the 10 May 2018.    

Discussion

How much maintenance should the father pay to the mother as interim maintenance for the three children of the family?

15.  During the course of the hearing the parties made some concessions. The father produced the following schedule attached to his submission and marked “A”, which formed the basis of these discussions:

No.	Item	M’s Claim[1]	F’s Offer[2]	F’s Updated Offer
1.	Monthly rental of Residence	$23,400[3]	$0	$0
2.	Utilities, management fees, government rate and rent and household expenses	$9,000	$3,000	$3,000
3.	Driver	$20,000	$7,500	$10,000 (direct payment)
4.	Monthly rental of Car Parking Space and Fuel	$16,900 + $3,400 = $20,300	$1,000	$3,000
5.	Maids	$18,000	$7,500	$6,000 (direct payment)
6.	Tutorial fees	$40,100.68 (including school bus)	$18,000	$18,000 (direct payment)
7.	Pocket Money	$3,000 ($1,000 x 3)	$3,000	$3,000
8.	Normal meals and fruit	$9,000 ($3,000 x 3)	$9,000	$9,000
9.	Clothing, toys, books and uniform (1)   ML (2)   SL (3)   TB	$5,000 ($2,000) ($1,500) ($1,500)	$5,000	$5,000
10.	Health/Nutrition/Medical	$3,000 ($1,000x3)	Reimbursement up to $3,000	Reimbursement up to $3,000
11.	Health Insurance	$1,500 ($500x3)	$1,500	$0
12.	Travel/Leisure	$3,000 ($1,000x3)	$3,000	$3,000
	TOTAL	$155,500.68	$61,500	$63,000, rounded up to $65,000

16.  Immediately then it was clear that items 7, 8, 9 and 11 were not in dispute and the only issue in relation to item 10 was whether or not the sum should be reimbursed to the mother upon production of receipts or alternatively whether it should be paid to her as part of the monthly maintenance sum. After standing the matter down the mother confirmed in addition that she was no longer disputing items 2, 3, 4 and 5.  The remaining items remain in dispute. I will deal with these one by one.

Rental

17.  The mother says that she was short of money and that consequently she sold the Family Home. As things stand the mother has undertaken not to dispose of the net proceeds of sale. The father maintains that he knows nothing about this litigation. In any event, on a short term basis, it is clear that the mother and the three children need somewhere to live. Notwithstanding the mystery surrounding the tenancy agreement and the payment of the rental I nevertheless accept, on a broad brush basis, that it is appropriate that the father should contribute towards the rental. I will order that he contribute HK$17,550 being ¾ of the total monthly payment of HK$23,400 per month.

Tutorial fees

18.  This is an area of considerable dispute. The mother seeks HK$40,100 per month and the father offers HK$18,000 per month and for these payments to be made by him directly to the providers concerned. The difficulty is that it proved almost impossible for the court to fathom out how the Chinese receipts produced were able to support the figure of HK$40,100 per month claimed. The mother simply failed to come up to proof in this respect. Consequently, I will accept the figure of HK$18,000 per month as offered by the father, but this sum shall be included in the maintenance figure.

Health/Nutrition/Medical

19.  Likewise the sum of HK$3,000 per month shall also be included in the maintenance figure. It will not be a reimbursable sum.

Driver/Maids

20.  Further, I shall order that the sum of HK$16,000 in total shall be included in the maintenance figure (HK$10,000 for the driver and HK$6,000 for the maid/s). Given the high level of conflict that exists between the parties it seems to me that it is more sensible for provision to be made for these expenses to be paid as part of the maintenance sum as opposed to the father paying any third parties directly.

Conclusion

21.  In conclusion then it seems to me that the sum of HK$80,500, rounded down, shall be notionally paid by the father to the mother as interim maintenance for the three children broken down as follows:

No.	Item	M’s Claim[4]	F’s Updated Offer[5]	Ordered amount
1.	Monthly rental of Residence	$23,400[6]	$0	$17,550
2.	Utilities, management fees, government rate and rent and household expenses	$9,000	$3,000	$3,000
3.	Driver	$20,000	$10,000 (direct payment)	$10,000
4.	Monthly rental of Car Parking Space and Fuel	$16,900 + $3,400 = $20,300	$3,000	$3,000
5.	Maids	$18,000	$6,000 (direct payment)	$6,000
6.	Tutorial fees	$40,100.68 (including school bus)	$18,000 (direct payment)	$18,000
7.	Pocket Money	$3,000 ($1,000 x 3)	$3,000	$3,000
8.	Normal meals and fruit	$9,000 ($3,000 x 3)	$9,000	$9,000
9.	Clothing, toys, books and uniform (4)   ML (5)   SL (6)   TB	$5,000 ($2,000) ($1,500) ($1,500)	$5,000	$5,000
10.	Health/Nutrition/Medical	$3,000 ($1,000x3)	Reimbursement up to $3,000	$3,000
11.	Health Insurance	$1,500 ($500x3)	$0	$0
12.	Travel/Leisure	$3,000 ($1,000x3)	$3,000	$3,000
	TOTAL	$155,500.68	$61,500	$80,550 rounded down to HK$80,500

Can the father afford to pay this sum? 

22.  Given that it appears to be the father’s case that he can afford to pay any reasonable sum that is ordered by the court, notwithstanding what is stated in his Form E, I am satisfied that this is within his ability to pay.

Costs

23.  I am very concerned by the litigation conduct of both of the parties and the way in which both sides seem to have prepared their case. In such circumstances I shall also make an order nisi to be made absolute in 28 days’ time that there be no order as to costs.

Order

24.  In conclusion then I shall make an order as follows:

1) Order 3 as contained in the court order dated the 18 July 2017 shall be varied to the extent that the Respondent shall pay interim periodical payments to the Applicant for the three children of the family in the total sum of HK$80,500 per month (with HK$30,000 for the daughter and HK$25,250 for each of the sons), the first payment to be backdated to the 1 May 2018 and thereafter to be paid on the 1st day of each succeeding month pending further order;

2) There shall be an order nisi to be made absolute in 28 days’ time that there be no order as to costs.

3) There shall be a callover in relation to the future conduct of the Applicant’s summons dated the 22 May 2017 on the 10 May 2018 at 9:30 am.

4) Both parties do personally attend that hearing.