WLK by MYW her next friend v. CCIW AND OTHERS

FCMP 176/2019

[2022] HKFC 26

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 176 OF 2019

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DECISION
( Interim Financial Provision )

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INTRODUCTION

1.  The husband (“the Deceased”) of the Applicant (“the Wife”) passed away without making financial provisions for her in his last will.

2.  Represented by the daughter of the 3^rd Respondent as her Next Friend, the Wife by an Originating Summons filed on 9 September 2019 claims reasonable financial provision under the Inheritance (Provision for Family and Dependents) Ordinance (Cap. 481) (“the IPFDO”).

3.  There are currently 2 applications before this Court. 

4.  The first and main application is by the Wife to apply for an interim financial provision under the IPFDO for (i) monthly expenses; (ii) an order to remain in the Deceased’s property; and (iii) legal costs incurred.

5.  The 1^st to 10^th Respondents are children of the Deceased and the Wife.  The 11^th and 12^th Respondents are the 6^th and 10^th Respondents respectively in their capacity as the executrixes of the Deceased’s last will.

6.  Only the 1^st, 2^nd and 7^th Respondents (“the Opponents”) defend the Wife’s claim and oppose her present application. 

7.  The second application is the Opponents’ application to file and serve additional affirmation in opposition to the Wife’s application for interim financial provision.

BACKGROUND

8.  The Deceased and the Wife were married in 1953 by customary marriage.  They registered their marriage in Hong Kong in 1984. 

9.  The Deceased and the Wife gave birth to the 1^st to 10^th Respondents between 1956 and 1971.

10.  The Applicant is 85 years old, she was diagnosed with dementia of Alzheimer’s Type since 2014. 

11.  The Deceased died at the age of 87 in August 2018 in Hong Kong.  The Deceased’s estate (“the Estate”) comprises a property (“the Property”), approximately HK$1.86 million in bank accounts, and stocks in various companies. 

12.  According to the Deceased’s will dated 3 December 2013 (“the Will”), the estate is to be divided among the 1^st to 10^th Respondents, no provision has been made for the Applicant.

THE WIFE’S CASE

13.  The Deceased and the Wife had a long marriage of 65 years before the death of the Deceased.

14.  The Deceased had worked as a mini-bus driver and always been the sole bread winner for the family.  The Wife had always been a housewife.

15.  Since 1988, the family had lived at the Property that was purchased through the homeownership scheme.

16.  All of the Respondents except for the 3^rd, 6^th and 10^th Respondents are US citizens now living in the US.   Although granted residency in the US, the 10^th Respondent stayed in the US for only 2 years before returning to Hong Kong, the 3^rd and 6^th Respondents did not fulfil the stay requirement to qualify for green card. 

17.  The 1^st and 4^th Respondents were the first to stay in the US since 1978.  The 4^th Respondent applied for residency for the Deceased and the Wife in 1983 and their applications were approved in 1986. 

18.  Since then the Deceased and the Wife had to travel back and forth between Hong Kong and the US to meet the green card requirement.  The Wife became US citizen in 2015.

19.  After the Deceased retired at 65, he sold his minibus and invested in the stock market in 1997.  He continued to financially support the Wife and paid her a few thousand dollars every month as pocket money.  The Deceased opened 2 fixed deposit accounts with HK$1.85 million and used the monthly interest to cover the Wife’s living expenses.  All household expenses, utilities and management fees were settled by auto-pay from his bank accounts.

20.  The Wife and the Deceased were diagnosed with dementia in 2014 and 2016 respectively.

21.  The 3^rd and 6^th Respondents accompanied the Deceased to the law firm for making the will, the Deceased expressly told the lawyer that he did not include the Wife as a beneficiary under the Will because he expected that the 10 Respondents would utilise the Estate to look after the Wife financially following his death.

22.  Now, the Opponents are unwilling to follow the intention of the Deceased and insist that the Estate be distributed instead of letting the Estate by used for taking care of the Wife’s financial needs before distribution.

23.  After the death of the Deceased, the Wife relocated to Hong Kong in 2018.  The Wife had been staying at the Property and taken care of by the domestic helper who used to take care of the Deceased.

24.  After the Deceased had dementia in 2016, the 1^st to 10^th Respondents each contributed to a fund for payment of the domestic helper.  After the death of the Deceased, that fund was used to cover the expenses of the Wife but when the balance became low, the 1^st to 10^th Respondents except the Opponents made another contribution.  Again, the 1^st to 10^th Respondents except the Opponents agreed to use the fund to settle part of the legal costs already incurred by the Next Friend in these proceedings.  At the time of this application, the legal costs were incurred up to the region of HK$300,000.

25.  After the Deceased’s bank accounts had been unfrozen after the Grant of Probate on 13 March 2019, the 6^th and 10^th Respondents drew money from the accounts to cover the monthly expenses of the Wife.

THE OPPONENTS’ CASE

26.  The marriage between the Deceased and the Wife broke down in 1970s.  During the time when the Deceased was in prison between 1972 and 1974, the Wife had an extramarital affair and squandered the family asset including the Deceased’s hard-earn money and properties.

27.  The Deceased was very upset when he was out of prison and wanted to divorce her.  The 2^nd Respondent persuaded the Deceased not to divorce the Wife to avoid leaving psychological impact on his younger siblings.

28.  The only reason why the Deceased and the Wife subsequently registered their marriage in 1984 was for their under-aged children to apply for residency of the US.

29.  Even though the Deceased let the Wife stay at the Property, they led separate lives under the same roof.

30.  The Deceased would give the Wife HK$1,000 per month as pocket money.

31.  The Deceased told the 7^th Respondent that he had given the Wife HK$200,000 after selling the minibus in 1997 for time deposit which was subsequently paid to the 4^th Respondent. The Deceased also told the 7^th Respondent in 2009 that he had given HK$1 million to the 4^th Respondent to take care of the Wife for life in the US. 

32.  The Wife would travel back and forth to the US and spending around half a year in the US.  In 2009, the Wife settled down in the US with the 4^th and 5^th Respondents.  Since then the Deceased no longer paid the Wife the pocket money.

33.  The Deceased made the Will in December 2013 but did not provide for the Wife under the Will because he had already provided for her.

34.  The Deceased instructed the 1^st Respondent to purchase a burial lot for him and the Wife and said it was the last thing he needed to do for her in August 2013.

35.  In January 2016, the 2^nd Respondent also heard the Deceased say he had already given her enough money to live in the US for her entire life.

36.  It is just that the 4^th Respondent reneged on his promise and denied having received the HK$1 million for taking care of the Wife.

37.  The other Respondents moved the Wife to Hong Kong despite the objection of the Opponents.  It would be the Wife’s best interest to stay in the US.

38.  The Opponents find the continued use of the Estate to provide for the Wife objectionable by the 6^th and 10^th Respondents in their capacity as executrixes.  The Opponents have instructed their solicitors to request their executor’s account of the Estate.

39.  The Wife should be able to sustain her own living with the money the Deceased had given her and the Supplemental Security Income (“SSI”) as a US citizen.

GROUNDS OF OPPOSITIONS

40.  The Opponents oppose the present application for an interim order on the following grounds:

     (1) Reasonable financial provision has been made to the Wife;

     (2) The Wife has no immediate need of financial assistance;

     (3) The amount claimed is too high; and

     (4) The Court has no jurisdiction to allow the Wife to remain in the Property.

APPICABLE LEGAL PRINCIPLES

41.  The Wife’s present application is made under s.3 and s.7 of the IPFDO as the wife of the Deceased for interim provision with s.5 to be taken into consideration. 

REASONABLE FINANCIAL PROVISION HAS BEEN MADE?

42.  The Opponents submits that the Wife is unable to show that the Deceased has failed to make reasonable financial provision for her. 

43.  It is the Opponents’ case that the marriage had broken down in as early as 1974 by reason of the Wife’s extramarital affair and squandering of family asset and the Deceased had already made sufficient financial provisions for the Wife including the HK$200,000 and HK$1,000,000 as clean break settlement.

44.  The Opponents accept that it is premature and not necessary for the court to resolve the factual disputes at this juncture.

45.  Whether the Wife had an affair and had squandered family assets in the 1970s, the undisputed fact remains that the Deceased and the Wife registered their marriage in Hong Kong in 1984 which suggests that the marriage subsisted.   If it was due to a need to facilitate those Respondents under 18 to move to the US, there was no longer such need when all the Respondents had obtained residency in the US in 2000s.

46.  If the marriage was there just as a matter of form, there should be no need for the Deceased to allegedly give the Wife pocket money and the HK$200,000 for time deposit.

47.  When the HK$1 million for clean break settlement was allegedly made in 2009, it would also be a good time for divorce, yet the Deceased and the Wife stayed married. 

48.  For whatever reason the Deceased and the Wife were not divorced, if the Deceased considered the marriage having come to an end and there was a clean break settlement, there should be no reason why he would purchase burial lot for both the Wife and himself for them to be buried together in 2013.

49.  By the time the Wife stayed in the US in 2009, she would be taken care of by the 4^th and 5^th Respondents, it would not be unreasonable for the Deceased to not give the Wife monthly payments.

50.  I am of the view that the undisputed facts do not sit well with the Opponents’ case that the marriage had broken down long ago or at all.

51.  Another major dispute is whether the Deceased had a clean break settlement with the Wife for HK$1 million.  There is no evidence whatsoever of what terms or arrangement of the alleged clean break settlement were between the Deceased and the Wife.   The Wife did not even receive the HK$1 million herself even the Opponents’ case.

52.  The only evidence available is that the 7^th Respondent allegedly heard the Deceased say he gave the 4^th Respondent HK$1 million for him to take care of the Wife in the US.  It is the Opponents’ own case that the 4^th Respondent had denied receipt of the money.  This will be a major factual dispute at trial.

53.  Whether the alleged HK$1 million can be considered a clean break settlement based on the present evidence is in doubt.

54.  Assuming there was the HK$200,000 that the Deceased gave the Wife in 1997, it was so long ago.  It is the Wife’s case that the money had long been exhausted for her expenses which is reasonable.

55.  Reasonable financial provision under s.3(2) of the IPFDO means “such financial provision as it would be reasonable in all the circumstances of the case for such a person to receive, whether or not that provision is required for his or her maintenance”.

56.  One of the factors that the Court has to take into account by reference to s.5(2) of the IPFDO is to “have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce”. 

57.  The marriage sustained until the death of the Deceased.  The Wife has dementia and 85 years of age, she has no earning capacity and has been a housewife.  She has limited asset.  Even if there was financial provision previously made to the Wife, it was made a long time ago, and the fund has been exhausted by now.  The Wife’s entitlement to Old Age Allowance is clearly not enough to sustain her living.  The size of the Estate consists of at least HK$1.86 million in the Deceased’s bank accounts in addition to the Property and value of the Deceased’s stocks.

58.  There are serious factual disputes at trial.  However, based on the present evidence before me, it is my preliminary view that it is likely that the Wife would be entitled to have a share of the asset of the Deceased at the time of his death had it been a divorce.

IMMEDIATE NEED OF FINANCIAL ASSISTANCE?

59.  S.7 of IPFDO allows for an interim order for an applicant who “is in immediate need of financial assistance, but it is not yet possible to determine what order (if any) should be made”.

60.  As discussed by Lam JA (as he then was) in ACLS v HSB(TL)L in [2013] 2 HKLRD 444, §§40 – 47, “immediate need” means something which calls for immediate attention and that urgency can be a facet of an immediate need and in other cases it is the seriousness of the consequences of not dealing with the need calls for immediate attention.

61.  The Opponents argue that the Wife’s application was made only on 15 May 2020 long after the death of the Deceased on 8 August 2020, it shows that the Wife had no immediate needs.

62.  There had also been difficulties on the part of the Wife to serve the Originating Summons on the Opponents out of jurisdiction which caused delay.

63.  More importantly, in the present case, the monthly expenses had been met by the withdrawals from the Deceased’s accounts since the Grant of Probate on 13 March 2019, it was only due to the Opponents’ challenge of the use of the Estate that it became necessary for the Wife to make the application.  I do not consider the argument of delay carries much force.

64.  The Opponents submit that the Wife should have abundant financial resources and her need can be met by her own or other sources.

65.  From the Wife’s evidence, she has only limited asset in the banks which would not be enough to sustain her for more than 1 or 2 months assuming her mental incapacity does not hinder her making use of the such resources.

66.  The Wife does have the old age allowance in the sum of HK$3,585 per month.  This amount is far from enough to sustain her living monthly.  The Wife is no longer entitled to the SSI as she is not residing in the US.

67.  The Opponents submit that the Wife’s expenses can be met by the 1^st to 10^th Respondents, but the evidence is clear that the Wife’s monthly expenses are met with the withdrawals from the Deceased’s accounts, none of the 1^st to 10^th Respondents or the Next Friend have since then personally contributed to the Wife’s monthly expenses.

68.  The Opponents argue that the domestic helper was employed by the 10^th Respondent who signed the employment contract, she should be personally responsible for the wages.

69.  Based on the mental condition of the Wife, she is clearly not in a position to enter into an employment contract with the domestic helper.  In the employment contract, the domestic helper’s workplace is the Property, so clearly the domestic helper’s job was solely to take care of the Wife.  While it is true that the 10^th Respondent might be personally liable under the contract, the salary was not personally paid by her but from the Deceased’s bank account.  Further, there is a term that provides for termination of the employment of the domestic helper by 1-month notice, the 10^th Respondent would not be personally liable to a limited extent under the termination clause of the employment contract.

70.  The 1^st Respondent offers to take care of the Wife in the US, that way she would be entitled to the SSI again.  The offer is not made by way of an undertaking, there would be difficulties of enforcement even if it was by way of an undertaking.  Given the 1^st Respondent’s serious allegations and negative remarks made against the Wife in his affirmations, I have serious reservation that it was a genuine offer to take care of the Wife.  There would be other issues relating to the travelling by the Wife who is mentally unfit, especially during COVID-19.  In any event, whether the Wife is willing to take up on the offer depends entirely on her, there is simply no acceptance of such offer.

71.  Having regard to the above, I am of the view that the Wife is in immediate need of financial assistance.

CLAIMED AMOUNT TOO HIGH?

72.  The breakdown of the Wife’s monthly living expenses of around HK$15,680 as follows:

Utilities	HK$600
Management Fees	HK$780
Food	HK$3,000
Household Expenses	HK$200
Domestic Helper	HK$6,000
Meals out of home	HK$1,000
Transport	HK$1,000
Clothing/Shoes	HK$500
Personal Grooming	HK$500
Medical/Dental	HK$1,500
Other (Nutritional Supplement)	HK$600

73.  After taking into account of the Old Age Allowance from the government in the sum of HK$3,585 per month, the Wife is now claiming the total amount of HK$12,095 per month for monthly expenses.

74.  The Opponents argue that the Wife’s expenses are too high considering her age, medical needs and basic living needs, no figures have been suggested by them.

75.  The Opponents complained that no receipts had been provided save for utilities, management fees, medical/dental, nutritional supplements in the total sum of $3,480 had been provided. 

76.  I have considered each of the above item.  I consider these amounts claimed to be reasonable. 

77.  The employment contract states HK$4,630 as the wages for the domestic helper, it was explained that when taking into account of extra working days on Sundays and public holidays, the total amount as the wages of the domestic helper would become HK$6,000. I consider this explanation reasonable.

78.  There is no dispute that the Estate is not big enough to afford the monthly expenses of the Wife.  The amount in the bank account alone would be enough to sustain the monthly expenses of the Wife for about 13 years.

79.  I accept the sum of HK$12,095 being the reasonable sum as interim financial provision for the Wife’s monthly expenses after deduction of the Old Age Allowance.  I also consider that justice requires that the interim provision should begin from the date of the Originating Summons.

LEGAL COSTS

80.  The Wife’s Summons amended on 13 October 2020 seeks only interim provision in the sum of HK$12,095 per month and an order for the Wife to remain at the property.  Legal costs provision is not sought in the Amended Summons.

81.  The Wife only asks for the legal costs provision by the Next Friends’ affirmations.  I am not satisfied that this is the proper way to claim the legal costs.  This item is not allowed in this application.

REMAIN IN THE PROPERTY?

82.  It is submitted by the Opponents that the Court has no jurisdiction to grant an order for the Wife to stay in the Property.

83.  S.7 of the IPFDO provides that “the court may order that, subject to such conditions or restrictions, if any, as the court may impose and to any further order of the court, there shall be paid to the applicant out of the net estate of the deceased such sum or sums and (if more than one) at such intervals as the court thinks reasonable; and the court may order that, subject to this Ordinance, such payments are to be made until such date as the court may specify, not being later than the date on which the court either makes an order under section 4 or decides not to exercise its powers under that section.”

84.  The Opponents rely on the case of Smith & Smith & ors [2012] 2 FLR 230, §20 in which Mann J says:

“There was a limited debate before me as to the jurisdiction if any to order occupation of the house. For reasons which will appear, I do not think it necessary to go into that question. I shall assume for the purpose of this judgment that the jurisdiction exists, although it is not possible to see that it exists at least under the Inheritance Act, but on the basis that I am going to make the assumption I do not need to lengthen this judgment by considering the question. That, then, is the basis of the claims made by the claimant in the application before me.”

85.  I share Mann J’s view. I am not of the view that I have the jurisdiction to order that the Wife be allowed to remain rent free in the Property.  No order would be made to such effect.

86.  However, if the Wife has to stay somewhere else, obviously further expenses and costs would be incurred, and one can expect an application for upward variation of the order for interim financial provision to be then made.

APPLICATION TO ADDUCE ADDITIONAL EVIDENCE

87.  The second application to be dealt with here is the application by the Opponents to adduce as additional evidence affirmation filed on 29 April 2021 in opposition to the Wife’s application.  In essence, the evidence is from the 7^th Respondent’s friend that the Wife had been hospitalized for a few months.

88.  Relying on Ladd v Marshall [1954] 1 WLR 148, the Opponents submit that the additional evidence was not available at the scheduled time of their filing of evidence to oppose and lodging of skeleton submissions.  There are “genuine extenuating circumstances” that justify the addition evidence to be adduced.

89.  I do not agree that the additional evidence could not have been made available earlier.  In the 2^nd Affirmation of the 1^st Respondent filed on 29 July 2020, he already learnt that the Wife was hospitalized on 31 March 2020. In the 4^th Affirmation of the Next Friend filed on 26 August 2020 explained that the Wife had been in and out of hospital for different lengths of time.  The Opponents had ample opportunities to adduce further evidence if they considered the Wife’s hospitalization to be of importance long before their present application.

90.  Further, the Wife’s present application is for interim financial provision, if there are new development of matters that turn out to be of significance that should be taken into account, the Opponents could always apply for a variation of any interim order made.  I do not agree there genuine extenuating circumstances that justify the Opponents’ present application.

91.  I would therefore dismiss the Opponent’s application for adducing additional evidence.

92.  Costs should follow the event.  I make an order nisi that costs of the Opponent’s Summons be to the Wife, to be taxed if not agreed.

CONCLUSION

93.  By reason of the foregoing, in relation to the Wife’s Summons, I order that the Respondents do pay interim provision in the sum of HK$12,095 per month be paid out of the Estate of the Deceased to the Wife from 9 September 2019.

94.  The proper costs order in my view for the Wife’s Amended Summons is an order nisi for costs to be in the cause of the Originating Summons.