CHENG YUET CHUN v. CHOW PAK CHU

IN THE COURT OF APPEAL

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JUDGMENT

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McMullin, V.-P. :

1. On the 13th November we dismissed the appeal of Cheng Yuet Chun whereby she sought to secure an increase in periodic payments for the maintenance of herself and her two children. We now give our reasons for doing so.

Background

2. The appellant and the respondent CHOW Pak Chu were married in August 1970. The respondent is a police officer who presently holds the rank of Senior Inspector in the Royal Hong Kong Police Force. Some time in 1982 their marriage ran into difficulties. The couple were then living at Flat 10 in Staff Quarters at the Police Training School in Wong Chuk Hang. The two children of the marriage, both boys, were then living together with them in the family residence. The younger boy is now 8 year old and the elder 13.

3. On the 8th November, 1982 the respondent left his quarters and went to stay with his mother who owns a flat which occupies with several other relatives. The appellant and the two boys continued to live in the staff quarters at Wong Chuk Hang.

Course of proceedings

4. On the 1st July, 1983 the appellant applied by Originating Summons to the District Court under Section 5 of the Separation and Maintenance Ordinance Cap. 116 for orders of custody and maintenance. The subsequent proceedings were very protracted and were, for various reasons, many times adjourned. An interim order for custody with provision for access to the respondent was made on the 29th July, 1983. On the 29th September a further interim order was made whereby the respondent was directed to pay to the appellant $2,000 per month for her maintenance and $2,000 for the maintenance of the two children. Prior to those orders the respondent had been regularly paying a sum of $350 per month to the appellant for her maintenance.

5. On the 28th January, 1984 Judge Caird made final orders in respect of custody and maintenance together with provisions for access. The appeal was concerned only with the order for maintenance.

6. By that order the respondent was obliged to pay $2,000 per month to the wife for her own maintenance and $1,000 per month each for the maintenance of the two children. She was dissatisfied with this arrangement and immediately applied for legal aid for the purpose of appealing against that part of the judge's order. She also sought legal aid and eventually this was granted only to the extent of enabling her to apply for a review of the judgment. Applications for leave to appeal and for review were heard together by Judge Caird on the 22nd February and were refused.

7. Eventually legal aid was granted to her for the purpose of appealing from the judge's order and leave to apply out of time for leave to appeal was given by the Court of Appeal on the 4th July, 1984. On the 25th July 1984 the Court of Appeal granted leave to appeal.

Evidence of respondent's means

8. In coming to his conclusions on the question of maintenance the District Judge relied upon certain figures contained in affidavits made by the appellant and by the respondent which were produced in evidence. Relying upon the mother's affidavit, he found that the total of the reasonable living expenses attributable to herself and to her two children came to $5,775 per month. She was living rent free but had no other source of income than the periodic payments being made by her husband. The amount of maintenance awarded was $1,575 less than this.

9. Turning to the position of the husband, the judge accepted that his sole income was his monthly salary of $12,741.75. He also accented that the respondent's total financial commitments, listed under 12 separate heads of expenditure, including the $4,200 payable under the interim order, were necessary commitments and amounted, to $13,392.98. This list includes sums paid by way of monthly installments to banks, from which the respondent had raised loans including loans of money to cover the payment of his salary tax for the financial year 1983 to 1984.

10. No provision was made in the sum of $13,392.98 for the payment of salary tax for the year 1984 to 1985. The judge, taking the view, which the appellant did not seek to controvert, that that liability would be in the region of $2,000 per month, added that sum to the list of necessary expenditures - as he had found them to be. The resultant total of $15,392.98 thus overtopped the respondent's current income by a sum of $2,651.23.

Appellant's case

11. Miss Serena Lau, who appeared for the appellant, did not seek to challenge the validity of any of these figures in themselves. Her complaint was that, in arriving at his figure of necessary expenditure incurred by the respondent every month, the judge had included three items which should properly have been excluded from the judge's calculation of resources remaining available to cover the reasonable living expenses of the father, mother and children, this being the figure to which he should then have applied - as it appears he intended to do - the rough and ready "one third rule".

12. These three items are as follows: $1,200 paid by the respondent regularly every month to his mother by way of maintenance; $2,000 which the judge found to be a reasonable sum to cover miscellaneous expenses of the respondent himself including food, clothing, travelling and entertainment; and $2,000 which the judge considered to be a necessary provision against the payment of salary tax.

Conclusions

13. We took the view that Miss Lau was right to maintain that the respondent's own personal expenditure should not have been included in this way. Nor would we quarrel with the judge's view that the respondent was entitled to regard some degree of financial commitment to the support of his mother as a proper discharge of filial duty. We were satisfied, nevertheless, that this was not an overriding obligation which entitled the respondent to place it in the category of necessary expenditures to be deducted before considering what was available for the wife and children. This figure had originally been $1,600 but had been reduced from that to $1,200 prior to the interim order. In his judgment, the judge himself took the view that it would be necessary to curtail it further although he did not suggest any specific figure. The rights of the wife and children are paramount in this regard and we did not think it right that the respondent's mother should be given priority in this way.

14. We took the view, however, that the judge was right to find that the figure of $2,000 for salary tax liability must be deducted before the amount available for the necessary living expenses of the wife and children is calculated. We did not accept the argument that the respondent should be obliged to borrow, as he has done once in the past to cover his tax commitments in the future. His ability to contribute would be reduced by such action, since he would have to repay interest, as well as the capital borrowed.

15. This by itself, as Miss Lau fairly conceded, is fatal to the appellant's case. She did not contest that nine out of the twelve items on the respondent's list should be regarded as necessary expenditures to be deducted from the figure of the monthly salary in arriving at the assets available for distribution. These include the monthly repayments of various loans and the payment of various life insurance premiums, which total $5,992.98, leaving a balance of $6,748.77, out of the monthly salary.

16. From this, however, should now be deducted the $2,000 for payment of tax, which leaves a disposable balance of $4,748.77 only. This seemed to us to be the true figure available for distribution on the date of the summons. His order meant that $4,000 of that was allocated to the use of the appellant and the two children, leaving the husband with $748.77 only for his own personal use and for any contribution which he might feel obliged to make to his mother.

17. On this view of the matter, the appellant has clearly achieved a position more favourable than that to which she was entitled at the date of the summons. It is therefore impossible to make any alteration of the order in her favour.

18. The respondent told the Court that he was not asking to have the present figure reduced, although it had been throughout his contention that, even as it stood, it was beyond his financial resources.

19. In her fifth ground of appeal - abandoned by Counsel in the course of the hearing - Miss Lau had proposed to ask the Court to say that the judge was wrong to disregard an imminent increase in the respondent's salary. It may very well be that the respondent's financial position has improved and that it may further improve in the near future. If his financial state does improve significantly, it will be open to the appellant to seek a review of the present order.