F v. W

FCMC 6824/2016

[2022] HKFC 257

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. 6824 OF 2016

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JUDGMENT

( Variation )

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A.  The Application

1.  The Order dated 11 September 2020 as amended on 22 October 2020 (“the 2020 Order”) sets out the following:

(1)  by consent, the Respondent Husband was ordered to pay:

(a)  the maintenance of a child (“Y”) in the monthly sum of HK$6,000 from 1 October 2020 until Y reaches the age of 18 or completed full time education, whichever is the later; and

(b)  a lump sum of HK$1,000,000 to the Petitioner Wife by 74 instalments from October 2021 in full and final settlement of both parties’ claim on ancillary relief matters.

(2)  the parties undertook to pay half of the living expenses of their adult child (“E”) until June 2023 at the agreed monthly sum of HK$13,500 from October 2020 to July 2021, and the agreed monthly sum of HK$17,500 from August 2021 to June 2023 (“the Undertaking”).

2.  It is common ground that the term “living expenses” in the Undertaking includes E’s educational expenses.

3.  On 20 December 2021, the Respondent took out an application (“1^st Application”) seeking relief against the Petitioner in the following terms:

“1. Order Petitioner to pay HK$558,000 for [E]’s increased overseas educational expenses beginning August 2021 to September 2022, which amounted to 75% of total gross income (household) after [the Respondent’s] retirement from HKSARG”.

2. Vary [the Respondent’s] payment of [Y]’s ancillary relief (from HK$6,000 as per Ct. Order on 11/9/20) to HK$2,400 per month as according to [the Respondent’s] reduced in (sic) monthly income after retirement.”

4.  On 20 May 2022, the Respondent took out another application (“2^nd Application”) for the following relief:

“To order Petitioner to pay the difference, as set out in the amended Court Order issued in October 2020, for supporting [E] whilst studying his undergraduate degree at University of California at Berkeley as listed in III and IV below:

Income:

Petitioner (Mother):

1. Salary – HK$ 76,900/month

2. Gratuity – HK$11,535/month (15% of salary)

Income Total – HK$88,435

Respondent (Father):

1. Before retirement salary: HK$91,615

2. After retirement Pension (beginning March 2022) – HK$22,727

Total income (HK$88,435 + HK$22,727) HK$111,162

 

Petitioner’s proportional share of total income 79.5%

(HK$88,435/HK$111,162) x 100%

 

Respondent’s proportional share of total income:

1. Before retirement: approx. 50%

2. After retirement: 20.5%

(HK$22,727/HK$111,162) x 100%

 

[E] overseas expenses approx. HK$60,000 per month

1. Non-resident tuition and others (US$50,000/yr)

2. Living expenses + rent (US$40,000/yr)”

5.  The Respondent confirmed at trial that he withdrew his 1^st Application insofar as E’s maintenance is concerned.

B.  Facts

6.  The Petitioner and the Respondent were married on 29 April 2000. They have 2 sons, E and Y. E was born on 20 October 2000 and is now 22 years old. Y was born on 11 October 2012 and is now aged 10. The divorce petition was presented on 3 June 2016. The decree absolute was pronounced on 28 October 2020.

7.  By an order dated 29 May 2019, the parties were granted joint custody of Y, while the care and control of Y was granted to the Petitioner. In 2019, E was over 18 years old.

8.  The 2020 Order on ancillary relief was made by consent after a hearing of Financial Dispute Resolution (“FDR”).

9.  Y has autistic symptoms when he was about 2 years old. Y was diagnosed to have autistic features and low average intelligence in various areas by Child Assessment Centre of the Department of Health. At the trial, the Petitioner informed the Court that Y was diagnosed to have Attention Deficit Hyperactivity Disorder and Autism Spectrum Disorder. It is also suspected that Y has dyslexia. Y is having various treatments and private tuitions in addition to his attendance in a main stream school.

10.  E was born in the United States. According to the Respondent, it was the parties’ intention that E would be educated in the United States. E went to the United States in 2012 for studies at Year 11. The Respondent said that it was E’s own choice to pursue his studies in the United States.

11.  E’s tuition fee for the initial years was not substantial. In August 2021, E was admitted to the University of California Berkeley as a transfer student. He was required to pay the non-resident tuition fee, which is higher than the amount he used to pay. According to the Respondent’s calculation, E’s expenses were increased to US$90,000 or HK$720,000 per year, which is about HK$60,000 per month. This is higher than the current monthly maintenance paid to E under the 2020 Order by HK$25,000.

12.  The Respondent said that he has been paying E’s additional expenses. The Petitioner paid E’s maintenance at the amount stated in the 2020 Order.

13.  The Petitioner said that she was not involved in the decision concerning the change of E’s university. She had spoken to E recently and understood that E can take up part time job to earn some income for his increased expenses. She also took the view that the Respondent exaggerated E’s financial needs.

14.  The Respondent retired in March 2021. He received a lump sum gratuity payment of HK$3,860,000. His monthly income was reduced from HK$91,625 to the monthly gratuity income of HK$23,000[1].

15.  The Respondent’s main grounds for his applications are as follows:

(1)  His income was substantially reduced following his retirement from the Police Force in March 2021. The income of the Petitioner is about 75% of their total income. According to the Respondent, the proportion for payment in support of E’s educational expenses shall be readjusted to the effect that the Petitioner shall bear 75% of E’s updated expenses and the Respondent shall bear 25%.

(2)  E’s overseas tuition fee and living expenses were substantially increased after he was transferred to University of California at Berkeley in August 2021 as E has to pay a higher fee as non-resident in California. The Respondent submitted that E’s increased expenses is about HK$60,000 per month. It is expected that E will graduate from his studies in the University of California Berkeley by June or December 2023.

16.  Last year, the Respondent stopped the full payment for Y’s maintenance. He has not paid the instalment payment of the lump sum maintenance to the Petitioner under the 2020 Order. The Petitioner took out a Judgment Summons against the Respondent on 4 November 2021. The Judgment Summons will be dealt with separately.

C.  The Parties’ Respective Financial Positions

17.  The Respondent has filed a Form E on 3 January 2022, and the Petitioner has filed hers on 29 April 2022. The Respondent has also provided his updated financial position at the trial.

18.  The Petitioner owns a property in Tuen Mun (“Tuen Mun Property”) with an estimated net value of about HK$1,370,550. The monthly repayment for the mortgage and a loan obtained for the down payment of the Tuen Mun Property is HK$22,818. The Tuen Mun Property is generating a rental monthly income of HK$14,000.

19.  The Petitioner has about HK$224,000 deposits at bank, MPF and contract gratuity of about HK$1,236,000. This gratuity will only be available to the Petitioner if she finishes the 3 years contract of employment. She has some insurance policies and stock holding. In total, the value of her assets stated in the Form E is HK$2,869,000.

20.  As a result of the holding over of the tax payment for the last 4 years, there is an unpaid tax payment of about HK$400,000 to be made.

21.  She is earning a monthly income of about $78,480. The Petitioner is living with Y at a rented property in Tsuen Wan. The monthly rental is HK$14,500 plus utilities and management fee of about HK$2,300.

22.  As Y is diagnosed of having autism, he has to attend therapy and private tuition at a monthly fee of about HK$7,000. Y received disability allowance of about HK$1,400, but this is not a regular payment. The Petitioner is paying more than 50% of Y’s financial needs.

23.  The Petitioner is paying E a monthly sum of HK$17,940 pursuant to the 2020 Order and sometimes more.

24.  The Respondent used to earn a monthly income of HK$91,625. He retired from the Police Force in September 2021 while the struck off date was effective on 30 March 2022[2]. He is receiving a monthly gratuity payment of about HK$23,000.

25.  Upon his retirement, he received a lump sum gratuity payment of HK$3,860,000. The Respondent said that he has already spent this sum to pay off his old debts for his gambling, household expenses, expenses for E, and the tax payment withheld for the last 4 years of about HK$400,000. Since E has started to study in the University of California Berkeley, he paid E more to cover his additional educational expenses. In July and August 2022, he paid E a total of US$74,537 (about HK$581,000).

26.  With the consent of the Petitioner, the Respondent produced at trial some documents to substantiate his contention that he spent the whole of his retirement gratuity payment. These include the repayments to his friends and relatives, tax payments and payment to E. The Respondent also produced a loan agreement dated 8 January 2016 in respect of a loan of HK$1,300,000 made by his sister to him; and a loan agreement in 2019 under which his friend K lent him HK$160,000. There are other loans for which no written agreement had been entered. The Respondent produced some bank statements and payment slips in support.

27.  The Respondent does not have substantial assets. He is living with his mother. According to his Form E, he is paying a monthly rent of $3,000. Under the 2020 Order, he has to pay E a monthly maintenance of HK$17,500. The Respondent said that he pays about HK$40,000 per month to E. He is relying on loans from relatives or friends to cover these expenses.

28.  He accepted that notwithstanding his retirement, he can find a gainful employment and he will do so.

D.  E’s Maintenance

29.  The parties’ payment for E’s maintenance is made pursuant to their Undertaking given to the Court as embodied in the 2020 Order.

30.  An undertaking was given by the parties. The Court can discharge an undertaking but not vary it.

31.  It is within the Court’s jurisdiction to release an undertaking if there is a material change of circumstances which are unforeseeable at the time when the undertaking was given and which make compliance of the undertaking not feasible. The Court has to achieve a fair result. The paramount consideration is the best interest of the child. [TLS nee J v RCS, FCMC 1637/2012, 16 January 2014;]

32.  In TLS nee J v RCS, supra, the learned Judge Own summarised the position as follows:

“15. Besides, a party who has given undertakings can seek an uplift or release of the undertakings in one or more of the following situations:-

(a) There has been a material change of circumstances since the undertakings were given which are not foreseeable at the time and which make compliance not feasible;

(b) The subject matter to which the undertakings relate no longer exists which render compliance impossible;

(c) The party to whom the undertakings were given releases the other party from complying with the undertakings;

(d) The undertakings were obtained through fraud or misrepresentation.

16. In any event, the question of whether to enforce or discharge an undertaking ultimately is a matter of judicial discretion designed to achieve a fair result … (see Shepherd Homes Ltd v. Sandham [1971] 1 Ch 341).

17. Having said, whatever the “fair result” is to be in the present case vis-à-vis the parties must not have displaced or jeopardized the best interests of the children which are always the first and paramount consideration of the Court. Thus, the two does not necessarily sit happily together or hand in hand.”

33.  The Petitioner objected to the release or variation of the Undertaking. There is no suggestion that the Undertaking was obtained through fraud or misrepresentation. Although the Respondent appeared to have taken issue on the existence of the Undertaking, he confirmed at trial that he did not dispute that the Undertaking as embodied in the 2020 Order was given.

34.  The Respondent is relying on the ground of material change of circumstances for his applications. He asked the Petitioner to pay him HK$810,500, in his words, “to offset Respondent’s immediate support for [E]’s overseas studies from school year 2021-2023 (calculation attached in Respondent’s Form 8 dated 2022-5-20 refers)”.[3]

35.  The changes identified by the Respondent are (1) his retirement resulting in a substantial reduction of his monthly income; and (2) the increase of E’s educational expenses.

36.  The Respondent is not seeking to release the Undertaking, but to vary it. As said, the Court cannot vary an undertaking given by the parties, which is an agreement and commitment made by them. This dispose of the application.

37.  For the sake of completeness, the grounds put forward by the Respondent do not justify a release of the Undertaking.

38.  The Respondent’s retirement is an event known to the parties when they gave the Undertaking. According to the Petitioner, which was not disputed by the Respondent, the Petitioner provided at the FDR records of her payment of several millions dollars to settle debts then owed by the Respondent to banks and financial institutions, as well as information that the Respondent would receive about HK$3.8 million when he retires from the Police Force. The Court had heard further submission from the parties. The Undertaking was then given and recorded in the 2020 Order[4].

39.  It was specified in the Undertaking that each of them agreed to pay E a monthly sum of HK$17,500 for August 2021 to June 2023, which is a period after the Respondent’s retirement. At the time when the Undertaking was given, the Respondent must have known that his income would be substantially reduced upon his retirement. This reduction is not a material change of circumstance that justifies a release of the Undertaking.

40.  The change of E’s tuition fee is not a reason to release the parties from their Undertaking. When E changed the University, the Respondent who supported the change and paid the additional fee had not discussed or sought the agreement of the Petitioner for the change or the payment of the additional fee. The increase in E’s tuition fee was committed by E, who is an adult, with the support of the Respondent, when they knew the amount of maintenance given by the Petitioner under the 2020 Order.

41.  Notably, the Respondent is now seeking the Petitioner’s payment to him for money that he said he had paid E to cover his increase in tuition fee. The Respondent also repeatedly said at the trial that he spent all his lump sum gratuity and has no money to pay the Petitioner. This is not relevant in the present context as the Respondent’s undertaking to pay HK$1,000,000 to the Petitioner is not a subject matter before the Court.

E.  Maintenance for Y

42.  Pursuant to Section 11(1) of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”), the Court has the power to vary the order for payment of Y’s maintenance. Section 11(7) of MPPO provides that in exercising the powers conferred by Section 11, 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.

43.  The Court has an unfettered discretion in determining a variation application by having regard to all the circumstances of the case. Normally, there shall be a material change in the circumstances to justify a variation, especially in cases where the order was made by consent. The approaches set out in the Court of Final Appeal in DD v LKW to ensure fairness between the parties also apply to variation applications. [HCTT v TYYC, CACV 380 of 2007, 2 July 2008, [16]; AEM v VFM [2013] 2 HKLRD 144 [15]]

44.  As the Court has decided above, the Respondent’s retirement and the reduction in his income upon retirement are matters known and considered by the parties when the 2020 Order was made. The debts that the Respondent has settled by his lump sum gratuity are mostly debts known to the Respondent at the time of the 2020 Order. There is no change of circumstances to justify a variation of the Respondent’s payment of a modest sum of HK$6,000 per month for Y’s maintenance under the 2020 Order.

45.  In view of the special needs of Y, his financial needs are higher than HK$6,000, and such additional financial needs are paid by the Petitioner. In other words, the Petitioner is paying more than the Respondent for Y’s expenses. The Respondent is receiving a monthly income of HK$23,000 after retirement. He admitted that he would be able to find a gainful employment. There is no reason to vary the modest amount that the Respondent is ordered to pay for Y’s maintenance.

F.  Order

46.  The Respondent’s applications are dismissed. As both parties appeared in person, I make no order as to costs to the Respondent’s applications.