YMN v. LCK

FCMP 229 / 2016

[2018] HKFC 182

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS

NUMBER 229 OF 2016

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Judgment
(Maintenance – Guardianship of Minors Ordinance (Cap 13))

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The Application

1.  This is an application by a mother for maintenance against the father of her son.  The child was born out of wedlock so the application was made under s 10(2) of the Guardianship of Minors Ordinance (Cap 13).  Paternity and liability are not in dispute so quantum is the only issue to be determined in this trial.

2.  For convenience I shall refer the applicant mother as “M” and the respondent father “F”.  The child is a boy and was born on 21 June 2015, so he is now 3 years old.  I shall refer him as “KC”.

Parties’ Background

3.  M is now 32 years old and F is 35.  They came to know each other via online dating in early 2013.  Their relationship quickly turned to an intimate one and subsequently, M gave birth to KC.  Sadly, their relationship came to an end in early 2016.  At that time, KC was short of one-year old.

4.  Though both parties agree that their relationship was an intimate and short-lived one, there is considerable divergence between them over what happened during the course of it.

5.  M’s version is essentially one that she was deceived into the relationship.  M said they started cohabitation at a rented flat in Ngau Tau Kok in September 2013 with F footing the rentals.  In March 2014, she stopped working as a saleslady in a cosmetics shop for attending a make-up artist course.  At the same time, F gave her $10,000 every month as living expenses.  The couple even went to Maldives in July 2014 to get married, or at the very least, to go through a marriage ceremony with marriage rings being exchanged.  She was in firm belief that she had lawfully married F on that occasion and at all times she was living with her ‘husband’.  Aspiring to build a family, in due course she found herself pregnant with KC.  Sadly, the happy story ended when their relationship took a sweeping downturn in December 2015.  What happened was that F could not be reached for several days when KC had a fever. This situation compelled M to pay a visit to F’s parents’ home upon which, to her dismay, she discovered that F was already married to another woman on 15 December 2013, way before her own “marriage” in Maldives.  Upon realizing the truth, she took KC to move back to live with her maiden family in September 2016.  Upon further investigation, M realized that the law of Maldives actually prohibited foreigners to get married there.  In other words, whatever ceremony they might have gone through it was just for a ‘show’ with no legally binding effect.  Since F took away the ‘marriage certificate’, she was not able to produce it in the present proceedings.

6.  F offers a different story.  He denies they ever cohabited during the relationship albeit he admits at the relevant time M moved out to live in a leased premise but at no time did he move to live with her.   He denies having paid any rentals or living expenses to M as alleged.  He agrees both of them went to Maldives but no marriage ceremony ever took place.  It was no more than a romantic journey.  He describes their relationship during the first year as somewhat like ‘sex partners’.  It was only about a year later that he was serious about it.   He admits he did not inform M of the existence of another parallel relationship that he had been maintaining with his colleague who later became his wife.  It was not until about March 2014 (ie 3 months after his marriage) that he broke the truth to her.  Upon learning this, M pressed him to divorce his wife which he declined.  Nevertheless, their relationship continued intermittently. 

Parties’ Present Situation

7.  As said, M took KC to move back to live with her maiden family in a public housing unit in Tsz Wan Shan in September 2016 and has since been living there.  She is not working now for she has to take care of KC and assist in the household chores.  KC has commenced K1 schooling in a kindergarten nearby.

8.  F is always in the banking field. He is a branch manager of a bank and is living with his wife and his parents in a 3-bedroom apartment in Wong Tai Sin.  This apartment, a brand new property, was bought in the name of F’s mother for $11,160,000.  In February 2018, F purchased a flat in Mongkok (“Mongkok Property”) for $3,950,000.  He plans to move into this flat with his wife after the fitting out work is completed.  F admits that up to this date his wife has been kept in the dark regarding his relationship with M and the existence of KC.  When I made the remark that he is deceiving his wife, F acknowledged he should be a truthful husband. He is waiting for the best opportunity to break the news to her.

Interim Maintenance

9.  By a consent order F paid a monthly sum of $8,000 as KC’s maintenance from January 2017 to April 2017.  Subsequently, upon F’s undertaking to court, he has been paying a monthly sum of $6,000 since May 2017.

Parties’ Open Offer

10.  At the beginning of the trial, M sought a monthly sum of $29,000; inclusive of mother’s allowance.  At the closing submissions, Ms Hui, on behalf of M, seeks a monthly sum of $31,000 as from the date of the order to be made by the court and a monthly sum of $16,000 to be backdated from December 2016 with credits be given for the interim maintenance already paid.

11.  As for F, he initially offered a monthly sum of $7,000 which, according to his calculation, should be half of what KC needs. He takes the view that M should continue to live with her family, return to work and be responsible for the other half of KC’s maintenance.

12.  F sensibly agrees to have the maintenance order to be made by the court being secured by his Mongkok Property.

The Applicable Legal Principles

13.  The present application is made under s 10(2) of the Guardianship of Minors Ordinance, Cap 13.  The provision of s 10(2) is as follows,

(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.    (emphasis added)

14.  As can be seen, the manner in which how the power is to be exercised by the court is framed in general terms: the court may exercise the power given under s 10(2) as it thinks reasonable having regard to the means of that parent. 

15.  In WGL v ASB (Child Maintenance under the GMO) [2013] HKFLR 391, Deputy High Court Judge Chu (as she then was) compendiously analysed the differences between Hong Kong and England in terms of the legislative framework and come to the view that, despite the differences in legislation, courts in Hong Kong, in the exercise of discretion under s 10(2), may give regard to the matters provided in the English legislation.  These matters include the factors set out in paragraph 4(1) of Schedule 1 of the English Children Act 1989.  Paragraph 4(1) read as follows,

“In deciding whether to exercise its powers under paragraph 1 or 2, and, if so in what manner, the court shall have regard to all the circumstances including –

(i) the income, earning capacity, property and other financial resources which each person mentioned in sub-paragraph 4 [either parent] has or is likely to have in the foreseeable future;

(ii) the financial needs, obligations and responsibilities which each [parent] has or is likely to have in the foreseeable future;

(iii) the financial needs of the child;

(iv) the income, earning capacity (if any), property and other financial resources of the child;

(v) any physical or mental disability of the child;

(vi) the manner in which the child was being or was expected to be educated or trained.”

16.  It is well settled that the principles and guidelines set out in the English Court of Appeal judgment in Re P (Child: Financial Provision) [2003] EWCA Civ 837, [2003] 2 FLR 865 are very helpful guidance to the courts in Hong Kong.   In that case, speaking of the said paragraph 4, Bodey J gave the following guidance,

[76] In the light of para 4 of Sch 1to the Children Act 1989 and the authorities to which we have been referred, the following summary can be offered as to the considerations applicable to claims under Sch 1:

(i)   The welfare of the child while a minor, although not paramount, is naturally a very relevant consideration as one of ‘… all the circumstances…’ of the case.

(ii)   Considerations as to the length and nature of the parents’ relationship and whether or not the child was planned are generally of little if any relevance, since the child’s needs and dependency are the same regardless: J v C (Child: Financial Provision) [1999] 1 FLR 152 at 154B.

(iii)   One of the ‘… financial needs of the child…’ (to which by para 4(1)I the court must pay regard) is for him or her to be cared for by a mother who is in a position, both financially and generally, to provide that caring. So it is well established that a child’s need for a carer enables account to be taken of the caring parent’s needs: Haroutunian v Jennings (1980) 1 FLR 62 at 66C; and A v A (A Minor) (Financial Provision) [1994] 1 FLR 657 at 665G.

(iv)   By paras 4(1)(a) and (b) of Sch 1, the respective incomes, earning capacities, property and other financial resources of each of the parents must be taken into account, together with their respective financial needs, obligations and responsibilities. So ‘… the child is entitled to be brought up in circumstances which bear some sort of relationship with the father’s current resources and the father’s present standard of living…’ – per Hale J in J v C (Child: Financial Provision) [1999] 1 FLR 152.

(v)   However, as this latter concept lends itself to demands going potentially far wider than those reasonably necessary to enable the mother properly to support the child, ‘… one has to guard against unreasonable claims made on the child’s behalf but with the disguised element of providing for the mother’s benefit rather than for the child…’ – J v C (Child: Financial Provision) [1999] 1 FLR 152.

(vi)   In cases where the father’s resources permit and the mother lacks significant resources of her own, she will generally need suitable accommodation for herself and the child, settled for the duration of the child’s minority with reversion to the father; a capital allowance for setting up the home and for a car; and income provision (with the expense of the child’s education being taken care of, generally, by the father direct with the school).

(vii)   Such income provision is reviewable from time to time, according to the changing circumstances of the parties and of the child.

(viii)  The overall result achieved by orders under Sch 1 should be fair, just and reasonable taking into account all the circumstances.

[77] From the experience of this case, I would propose three further considerations:

(i)   In considering the mother’s budget, at least in bigger money cases, the court should paint with a broad brush, not getting bogged down in detailed analyses and categorisations of specific items making up opposing budgetary presentations. Rather, the court should do its best to achieve a fair and realistic outcome by the application of broad commonsense to the overall circumstances of the particular case.

(ii)   Comparisons with the commercial cost of providing professional care are unlikely to be of great assistance and may only serve to distract.

(iii)   When setting up a budget for the sort of lifestyle a child should be enabled to have, the court should not generally attach weight to the risk that the father may reduce or withdraw his support when the child comes of age (or ceases education or training) thereby obliging the child to adapt to a lower lifestyle at that time.

17.  Lastly, it should not be forgotten that courts in Hong Kong are enjoined by s 3 of the Guardianship of Minors Ordinance, Cap 13, that in dealing with matters concerning a child’s custody and upbringing, the courts shall regard the best interests of the child as the first and paramount consideration.

18.  Guided by the above principles, I now turn to the Applicant’s claims.

Issues to be dealt with

19.  I mentioned above that the parties have great disparity on their accounts as to what happened during their relationship.  I have to make it clear that this trial is not a moral trial.  It is not my duty to find who is morally culpable and should be condemned.  It has to be borne in mind that the central issue of these proceedings is the quantum of maintenance that F ought to pay.  As such, it is only necessary for me to deal with those issues that are pertinent to this central issue.  It would be inappropriate, and indeed unhelpful, to go into those factual disputes that are not relevant to this central issue. Fortunately, at trial the parties have sensibly refrained from embroiling themselves too much into the history of their affairs.  In my view, the following issues are pertinent to the determination of the appropriate level of maintenance that F has to pay in this relatively straightforward case:

1.  What are the financial resources and needs of F?  Under this head, there is an issue as to whether or not, apart from his salary, F has any other source of income or undisclosed asset.

2.  What are the financial resources and needs of M?  Under this head, I need to deal with whether or not M is able to work and be responsible in part for the maintenance of KC.

3.  What KC’s reasonable financial needs are?  These would require the consideration of whether or not M and KC should move to a separate accommodation and whether a claim for Mother’s Allowance should be allowed.

4.  Having regard to 1, 2 and 3 above, how KC’s financial needs are to be met?

The Father’s Financial Resources

20.  F was born and raised in Hong Kong.  He obtained his bachelor degree from a local university.  After that, he furthered his education in Australia and was awarded a master’s degree in International Business in 2007.  He has since graduation been working in the banking field.  As said, he is now a branch manager of a bank that he joined earlier this year.  Before then, he worked as a Senior Relationship Manager for another bank. 

21.  F is being paid a monthly salary of $58,000.  He does not know whether there would be any incentive bonus though he expects to have one in the region of $100,000 in about mid of 2019 if his branch performs well.

Does F have any undisclosed income?

The Mother’s Case

22.  It is M’s case that besides his job as a bank manager, F has income from other sources.  She relied on the fact that F has 2 business cards issued by 2 different companies.  While F is known as “B” in his bank, he has adopted different aliases in these companies. The first business card is issued by one PCC Limited on which F has a Christian name “T” and the other is issued by one IC Limited on which he is called “K”.   Ms Hui submitted that it shows F has business interests in these companies.

23.  At the relevant time, F operated 2 bank accounts: the IC Account and the SC Account.  At trial, F was cross-examined on the movement of funds in these accounts.  Ms Hui tried to establish that there were funds from some unknown or hidden sources being deposited into these accounts.  This lend support to the contention that F has other sources of income.

24.  Ms Hui took me to the movement of funds between these 2 accounts from January 2016 to May 2016 to make good her point; specifically, F was cross-examined on the source of the following deposits:

IC Account			SC Account
Date	Cash Deposit	Cash Withdrawals	Date	Cash Deposit
			8 January 2016	$90,000
1 February 2016		$31,500	2 February 2016	$50,000
1 March 2016	$69,500
			8 April 2016	$80,000
28 April 2016		$30,000
13 May 2016		$50,000
25 May 2016	$30,000

The Father’s Response

25.  F explained that PCC Limited was owned by his family’s insurance agent while IC Limited is owned by his mother.  These two companies hoped he could provide some banking advice to their customers so he was issued with these business cards.  No customers had ever been referred to him.  As a matter of fact, PCC Limited had already been closed and IC Limited had been dormant for a long time.  He used different Christian names or aliases in order to avoid the mixing up of clients from the two companies with clients from his bank. 

26.  As regards the bank accounts, the IC Account was his payroll account at that time and the SC Account was the account for managing his financial affairs such as for payment of his credit card liabilities. 

27.  Under cross-examination, F explained that as a bank manager, he was often requested by friends to exchange new bank notes for them, especially during the Chinese New Year time. The $90,000 deposit of 8 January 2016 into the SC Account was probably from the IC Account, the refund from friends for new bank notes or the reimbursement of vacation expenses from family members. 

28.  F accepted there is a difference of $18,500 arising from the withdrawal of $31,500 on 1 February 2016 from the IC Account and the deposit of $50,000 into the SC Account the next day.  He vaguely referred it as the reimbursement of vacation expenses from family members.

29.  As for the deposit of $69,500 on 1 March 2016 into the IC Account, it was the refund from friends for new bank notes.   F could not recall the exact sources of the $80,000 deposit into the SC Account on 8 April 2016. Probably, part of it was the money withdrawn earlier and the remainder was reimbursement of vacation expenses. 

30.  Lastly, the deposit of $30,000 on 25 May 2016 was from the $50,000 withdrawal he made earlier on 13 May 2016.

31.  F was at pains to explain that he has the practice of withdrawing cash, put them at home for use, especially for his wife’s medical treatment (see [43], [44] & [60] below), and he would then return the excess, mainly to the SC Account.  He has a safe at home.  At the time when he was giving his evidence (5 September 2018), he had $70,000 cash at home for ready use.

Discussion

32.  The period within which Ms Hui took me to the transactions was merely 5 months from January 2016 to May 2016.  Accordingly, I invited the parties to extend the period up to February 2018 in order to gain a better and fairer view of the situation.

33.  If one looks closely at the bank statements of these 2 accounts side by side, it can be seen that the transactions there do not support F’s contentions.

34.  First, if F had obtained some new bank notes for his friends for the Chinese New Year there should have been withdrawals of monies from his own account earlier on for the purpose (F agreed that it should be the case).  However, this assertion is unsupported by any entry on the statements.  It is noteworthy that while the value of the alleged new bank notes involved in 2016 was quite high, it is perplexing that there was not a single transaction in 2017 which can be referable to this purpose.  Likewise, the assertion that some of monies were reimbursements of vacation expenses is unsupported by any earlier credit card payments.

35.  Secondly, F said it has been his practice of withdrawing cash from the IC Account, keep them at home for ready use and return the excess.  He emphasized that since he worked in the bank it was convenient for him to withdraw whatever cash he needed in one go.  He could just do it over the counter and did not have to make the withdrawals via ATM machine. However, an examination of his Account statements from January 2016 to May 2016 do not support this assertion.  By way of examples, it can be seen that he withdrew the following withdrawals via ATM machine from his SC Account:

Date	Amount (HK$)
3 February 2016	$6,000
4 February 2016	$5,500
11 February 2016	$6,000 $4,000
18 February 2016	$6,000
5 April 2016	$5,000
7 April 2016	$6,000 $4,000
16 April 2016	$3,500
24 May 2016	$6,000 $2,000

36.  It has to be pointed out that there were a few withdrawals from the SC Account via ATM machine in the latter months but the frequency became not as often as before and such activity actually ceased after February 2017.  By and large, it was only starting from June 2016 that the movement of funds in these 2 accounts can on the face of it be read to be consistent with F’s alleged practice.  Nonetheless, as I see it, the fallacy with this explanation is that if there was any excess or surplus at home, as a matter of common sense, what F should have done was simply to withdraw less, for instance, to withdraw an amount sufficient to make up the shortfall.  It would simply be pointless for him to return the money into his account and then later on, to take the trouble of making withdrawal again. 

37.  As pointed out by Ms Hui, it seems that it was only as from June 2016 that the deposits in these two accounts were traceable in that they were seemingly from earlier withdrawals.  This situation is in stark contrast with that before June 2016. Specifically, there were no more deposits which are said to be refunds from friends or reimbursements of vacation expenses.  I agree that there was a change in F’s modus operandi in the way in which he managed his accounts.  Ms Hui contended that it was not a mere coincidence. It was around that time the parties’ relationship totally broke down and engaged in mediation in about May 2016.  Subsequently, proceedings were issued in November 2016.  F therefore had every reason to hide his undisclosed income receipts by not putting them into these accounts.

38.  Ms Hui emphasized that F did not disclose his SC Account in his Form E of 30 December 2015.  It was not until 28 March 2017 that he disclosed this account, for the very first time, in his Answer to M’s 2^nd Questionnaire.  In this Answer, F said this is his family bank account mainly for family travel, leisure expenses and investment purpose.

39.  I accept F had the intention to conceal this account.  Question no. 14 of M’s 1^st Questionnaire of 4 January 2017 expressly sought F’s confirmation regarding his investments including but not limited to “cash or bank accounts” but his Answer (ie the 1^st Answer) dated 1 March 2017 made further disclosure of his HSBC life insurance policy only. Nothing was mentioned about the SC Account.  In my view, if the SC Account was his major account, there is no reason why he could have forgotten about it. 

40.  The assertion that the PCC Limited was owned by F’s family’s insurance agent is devoid of evidence and necessary particulars such as the name of the owner, how good the owner’s relationship with his family was, the nature of the business and how the arrangement came by.  Likewise, his assertion regarding the IC Limited is too devoid of particulars.  On the face of it this company was owned by F’s mother.  He explained that since his father at that time was diagnosed with cancer his mother had the company set up with the hope of earning some extra income but at the end, she suffered a loss of $40,000 to $50,000.  His mother all along was working as a clerk.  If his mother would wish to make some extra money, given the vagaries of business, as a matter of common sense, one would question why his mother did not take up some part-time work but instead chose to venture into a business which apparently was not something she was used to do.  With all these question marks, his assertions are no more than mere say-so. 

41.  For the above reasons, I do not find F’s explanation believable.  It is true that there is not any direct evidence that F had income from either PCC Limited or IC Limited but this per se is not conclusive that F has no other asset or source of income.  The evidence does suggest that, at the minimum, apart from his day-time job, F once involved in other business concerns.  Drawing the threads together, I am satisfied that the movements of funds identified in [24] above compellingly points to either one of the two conclusions.   Either F has receipts from unknown sources or he has some undisclosed assets being parked elsewhere.  Whichever conclusion it is F has failed to give a full and frank disclosure of his financial situation. 

42.  What are on the table is F’s monthly wages of $58,000 and the expectation of getting a discretionary bonus. What are not on the table are his hidden receipts or assets.  As can be seen above, the sums involved are not insubstantial. They were well over 6-digits in the course of 5 months. That said, I am conscious that there may be a possibility of some double-counting to which I must give due regard.  Doing the best I can, I would add another $10,000 to his monthly income, hence a total of $68,000.

The Father’s Financial Needs

43.  On the 2^nd day of trial, F tried to adduce some medical receipts in respect of his wife’s illness with the diagnosis and relevant particulars being redacted.  He withdrew the application when he was duly informed of the test in The Peruvian Guano case (1882) 11 QBD 55 and that if these documents were admitted, the court would have to allow Ms Hui to cross-examine him on these new materials.

44.  In evidence, he accepted there is insurance coverage for his wife from her employer though he mentioned that reimbursements may not be available for her wife’s gynaecological disease.

Car Expenses

45.  F purchased a brand new car for $251,700 in November 2017.  He said he purchased the car through the introduction of his maternal uncle.  His uncle knew the car dealer well so everything was arranged through the uncle.  His uncle was even so kind as to pay the $10,000 odd down payment for him and the rest was paid by way of a hire-purchase arrangement. He has to pay a monthly installment of $5,200 each for 48 months.  His evidence became inconsistent and confusing when he was being examined on how the monthly hire-purchase payments were made. He testified that he gave cash to his uncle who then settled it on his behalf. Initially, he said his uncle deposited the cash into the latter’s bank account for payment by transfer.  Later on, he changed to say his uncle issued a cheque and had it sent to either the car dealer or the bank to effect payment.  He added that at times, he received notifications from the bank that his uncle had forgotten to effect payments on his behalf but likewise, on some occasions he was late in giving cash to his uncle.  When being asked if there were such hiccups out of this clumsy arrangement, why F did not simply issue a cheque to his uncle.  His answer was merely that it was so arranged by his uncle. 

46.  The Hire-Purchase Agreement disclosed by F does not show a deposit of $10,000 odd. In fact, the deposit was $26,694. 

47.  More importantly, F agreed that, as a bank manager, he should be sensitive to the interest rate of a transaction.  Surprisingly, when being asked by the court, he admitted he did not know the rate of interest being charged by the bank; all he knew was he had to pay $5,200 per month.

48.  On my part, it is hard to believe that F, being a banker, would have adopted such an ungainly arrangement and been totally ignorant of the cost of the hire-purchase transaction.  His version is inconsistent, contrary to common sense and unbelievable. 

49.  The important question is why he had to make all these up?  In my view, there are two possible reasons.

50.  First, it is possible that the monthly payments were paid out from a bank account or a source that he had not disclosed.  Another possible reason is he was not the one who made the payments.

51.  As regards the first reason, he could circumvent it by arranging payments to be made (whether by way of cheques or transfers) from an account already disclosed.

52.  In respect of the second reason, there is evidence from F that his father was a frequent user of the car and that his father paid the rental of the car parking space and some of the fuel.  If payments were in fact made by the father, naturally there would not be any evidence showing payment from him.  Even if his father had deposited the money into his account first there would still have been an entry of deposit which would certainly invite further questions from Ms Hui.  I therefore venture to think that the second reason is closer to the truth.  I do not consider it is necessary for me to come to a conclusion in one way or the other or whether the payer was actually F’s father. Whichever the reason F is not truthful about his source of income or financial needs.

53.  For the above reasons, I would exclude this item.

F’s Parents

54.  According to F, his father for many years used to work as a driver for an accountant firm.  He retired some time ago and has recovered from nasopharyngeal carcinoma.  F stressed that his father has no income; and as for his mother, she works as a clerk and is earning about $20,000 per month.  She is going to retire in 2020 upon which he is expected to contribute $15,000 for her living.  As of now, he is paying his parents $6,000 per month.

55.  In August 2017 his parents sold their home in Argyle Street for $9,180,000 and purchased a slightly larger one in Wong Tai Sin for $11,160,000 in the sole name of his mother.  This new 3-bedroom apartment was purchased after his father had retired and is now the home for his parents, F and his wife together with a foreign domestic helper.   His parents raised a mortgage of about $2,000,000 for the purchase; he did not provide any financial assistance whether by way of contribution or acting as a borrower or guarantor of the loan.

56.  As mentioned above, F purchased the Mongkok Property for $3,950,000 in February 2018 with a staff mortgage loan from the bank he served.  The down payment and the incidental expenses were pooled from F, his wife and his father. Specifically, his father helped him out with $150,000 for part-payment of the down payment.  Ms Hui drew my attention to his father’s bank account from which the $150,000 cheque was drawn.  It was a VIP Account.  F did not dispute Ms Hui’s suggestion that a VIP account would require his father having assets of at least $500,000 to $800,000. 

57.  The objective fact is that prior to moving to the new apartment in Wong Tai Sin, F and his parents had been living in the Argyle Street apartment since he was a Form 1 student and had his own bedroom.  This property is located at the strip of Argyle Street opposite to the Kowloon Hospital and is a typical serene middle-class neighbourhood.   The evidence compellingly suggests that F’s parents have their own means not only sufficient to maintain themselves but have been able to provide financial assistance as well.  Such financial assistance came at least in the form of the $150,000 deposit and for the conclusion that I have reached, probably the car too.

58.  For these reason, I would exclude this item.

F’s own spending

59.  I have no doubt that F needs to economize his spending.  F admitted in trial that notwithstanding he is married, he is still attending dating-parties and coffee-matching gatherings behind the back of his wife.  His explanation is that he goes with friends in groups and has no further contacts with the new acquaintances.  I have great doubt over what he said.  As Ms Hui rightly pointed out, there was group discount available (which F accepted) but the payment as shown on the bank statement shows he went alone.  In my view, these spending could be saved for the benefit of KC.  When I say so, I pass no moral judgment on him.

F’s Wife

60.   F’s wife has an income of about $20,000 per month.  According to F, she still has $100,000 after having paid $250,000 towards the purchase of the Mongkok Property.  I consider that apart from his mere say-so, there is no concrete evidence that F’s wife needs financial support from him, whether in the form of medical expenses or otherwise.   I would disallow the monthly sum of $6,000 that he said is paying his wife.

The Mongkok Property

61.  I consider there is little evidence in support of Ms Hui’s contention that the Mongkok Property is for investment purpose.  I accept F purchased it as the future home for him and his wife.  I would allow the relevant adjusted expenses.

F’s Health Condition

62.  F mentioned that he has been suffering from disc degeneration of lumbar spine but there is nothing to suggest that this condition would affect his earning capacity.

63.  On the basis of the above analysis and adopting a board brush approach, I reckon that F’s monthly expenses should be as follows,

The Father’s Monthly Expenses

General

Item	Amount (HK$)
Mortgage instalments (The Mongkok Property)	16,500
Utilities (electricity, gas, rates, telephone & water)	1,000
Management fees	500
Food	3,000
Household expenses	500
Total monthly household expenses	HK$21,500

Personal

Item	Amount (HK$)
Meals out of home	2,000
Transport	500
Clothing / Shoes	200
Personal grooming (including haircut and cosmetics)	100
Entertainment / presents	700
Holiday	1,000
Medical / Dental	100
Tax	1,000
Insurance premia	4,500
Total monthly personal expenses	HK$10,100
Total monthly expenses	HK$31,600

64.  I would round it up to $32,000 per month.

The Mother’s Financial Resources

65.  M was born in the Mainland and immigrated to Hong Kong when she was 14 years old. She completed her education up to Form 5 level. When she met F, she was working as a saleslady in a chain cosmetic shop.  She accepted she was able to earn about $30,000 per month.  After her relationship with F had broken down, she had for some time entrusted the care of KC to her mother so that she could return to work.  That was from March to May 2016 when she worked briefly in a Department Store as a saleslady but she had to quit abruptly because her mother, who had always been in ill-health, had to undergo a surgery.  Though the grandmother is merely in her 60’s, her health could not afford her taking care of KC.  As a matter of fact, M has to take her mother to hospital and clinic for follow-up from time to time.

66.  F takes the view that M’s mother should be available to assist in taking care of KC so that M may be released for taking up a gainful employment in order to contribute to KC’s living expenses. 

67.  As reported in the Social Investigation Report, the maternal grandmother once assisted in taking care of KC in the past.  F, however, did not challenge M’s evidence regarding why she had to quit her job and that the grandmother is in ill-health.  I accept what M said in this regard.  Further, the grandmother has no obligation to take care of KC.  If she is willing and able to do so, F should be thankful for this; but if the grandmother for any reason declines to do that, she has the right to do so.   The obligation falls squarely on M to take care of KC and on F to provide the financial needs.

68.  I accept M has an earning capacity of about $30,000 per month.  Yet, this earning capacity can only be transformed into cash as and when she is released from taking care of KC.  At one stage during trial the issue of hiring a helper was subject to examination.  Initially, F suggested that a part-time maid may be considered as a helping hand so as to release M but he quickly dropped this proposal when he realized that, even on the basis of his very own calculation, a part-time maid could cost as much as $18,200 per month.  The option of hiring a live-in foreign domestic helper was then explored.  F eventually agreed it is necessary to have a live-in domestic helper if M is to return to work; and in that case, she needs to rent a flat.

69.  As I see it, the problem with this option is that hiring a live-in domestic helper would mean M has to provide a place of abode for the helper at a standard acceptable to the Immigration Department.  No doubt the existing accommodation is out of the question.  The remaining choice is to rent a larger flat but this would mean higher rentals.   Even where a domestic helper is available, she may not be readily able to take up M’s role on the day following her reporting duty.  Common-sense informs me that there should be some tune-in time for the helper to familiarize herself with her duties and, most importantly, with KC.  All these would require the participation of M and these would prevent her from returning to work immediately. There would be bound to be a transitional period of a few months during which M has to stay behind before she could release herself.  Translated all these to monetary terms means there must be some additional cash available for this contingency. As I see it, the reality is that this extra cash is not available.

70.  It may further be pointed out that while a domestic helper may have the benefits that F wants, there is a downside of it, at least in the few years to come.  F agreed that, as a saleslady and in order to fetch the income that she used to make, M would have to work in rush hours such as after-office hours, weekends and holidays.  These would mean she would not have time to stay with KC after the school hours.  KC has just started kindergarten.  M’s presence or her being around when needed, for instance, when KC is sick in school and has to be taken home, is necessary for the welfare of the son.  When KC is in the primary school, I believe it would then be a more appropriate time for M to consider returning to the labour force, maybe as a start, on part-time basis. 

71.  On the above analysis, the conclusion I can come to is that M is not able to utilize her earning capacity for the time being.

72.  M’s Form E of 23 May 2018 reported a net asset worth of $77,300 only.  This is mainly in the value of her Mandatory Provident Fund. This has not been challenged by F.

73.  F pointed out that there were unusual movements of funds in M’s 2 bank accounts.  Shortly before she was granted legal aid, from mid-July to mid-September 2016 she sold her stocks investment and withdrew funds totaling about $163,800 within short intervals.  F submitted that M’s purposes were two-folded. First, she did this to facilitate her application for legal aid. The second is she parked her funds at some place in order to claim more maintenance from him.

74.  I agree the movements were not in line with the history but on evidence, it is clear that not all the withdrawals are inexplicable.  M said out of the money she withdrew, $28,060 was paid to the Legal Aid Department as her contribution for the present proceedings on which there is no challenge from F; and part of the money was for meeting her daily needs, which on average was about $12,500 per month till December 2016. This included the rental of August 2016.  It is not in dispute that F ceased paying KC’s living expenses in August 2016, the financial burden necessarily landed on M’s shoulder.  Considering this and also that M was not in gainful employment after May 2016, I accept her explanation.  That said, I am conscious that there are still funds in the region of $70,000 (or even slightly more) that is subject to challenge.  M explained that she had to return $70,000 to her friend, one Ms Cheng, because she borrowed $70,000 from her for payment of betrothal cash gift on F’s behalf.  This is denied by F.  Be that as it may, I have no doubt that the amount in issue is relatively insignificant for the purpose of the present litigation.  As regards the assertion that the withdrawals were for the purpose of facilitating M’s application for legal aid, there is no evidence before me pointing one way or the other but I would be very surprised if the Legal Aid Department did not have a sight of M’s bank passbooks when processing her application.

75.  For the above reasons, I accept M has liquid asset in the region of $10,000 only.

What are KC’s reasonable financial needs?

76.  The final figure that M puts forward is $30,703 per month; this includes the Mother’s Allowance but does not include the costs of a live-in domestic helper. F’s figure is $17,340, inclusive of rental and a live-in domestic helper. 

77.  There are two issues required to be resolved.  The first is whether or not KC needs a separate accommodation and the second is whether an award of Mother’s Allowance has to be given. 

Does KC need a separate accommodation?

78.  KC has been living with M and her maiden family in a public housing unit in Wong Tai Sin since September 2016.  This is a 2-bedroom unit of about 40 m². This small unit is now housing 7 persons, viz, M’s parents, her 3 younger sisters, M and KC.  Except KC, all are grown-ups.  M and KC are sharing a lower bunk bed and they are being cramped in one of the rooms together with M’s mother and a sister. 

79.  M has already lodged an application for the allocation of a public housing unit in 2016.  The reality is that there is a long queue and she is expected to wait for a few more years before a unit would be available.  For this reason, she explored the possibility of renting a small flat in the proximity of KC’s school in May 2018.  The flats she viewed were about 20 m² (or 200 ft²) large and were fetching rentals of $12,000 per month, inclusive of management fees, rates and government rents.  

80.  I consider that looking at the situation objectively, the existing living condition where 6 adults and a small child are being cramped in a small flat is highly unsatisfactory.  It should not be forgotten that KC is growing; in time he would need more space and definitely he should have his own bed.

81.  KC’s terrible living condition as depicted above has not been subject to any challenge.  Nevertheless, F took the view that his son could continue to remain there.  That said, it seems to me clear that F’s child care plan, which was submitted on the second day of trial, also necessitates a separate accommodation for the mother and the son.  It has to be recalled that F is adamant that M should return to work and earn at least $30,000 a month. That was the amount she was making when she worked as a saleslady before March 2014.  In order to put M back to this position, F eventually agreed that a foreign domestic helper would be required to take care of KC but this would mean some extra space for the helper.

82.  I think I am entitled to give some reference to F’s own standard of living. F was brought up in a middle-class neighbourhood and had his own bedroom when he was a child.

83.  For all these reasons, I have come to the view that a separate accommodation is required, at least for the time being before a public housing unit is being allocated.

84.  F said $8,000 should be sufficient for the rental.  This is unsupported by any concrete evidence. It is true that the flats they (or M) rented back in 2013 to 2015 were merely $8,200 to $8,500 per month but that was the situation a few years back. 

85.  On the evidence before me, I accept M’s evidence that an appropriate flat would cost around$12,000 per month. This would include management fees, rates and government rents.

86.  For the reasons that I set out in [69] & [70] above, I do not consider for the time being hiring a domestic helper is a feasible option. 

The Mother’s Allowance

87.  It is well settled that the court may augment the periodical payments order for a child to include an allowance for the mother, especially if the mother has to give up work or is unable to work because he has to look after the child: Haroutunian v Jennings (1980) 1 FLR 62; WGL v ASB (Child Maintenance under the GMO), supra, at [194].

88.  On the approach to be adopted, Thorpe LJ said the following in Re P (Child: Financial Provision), supra,

[47] Those issues settled the judge can proceed to determine what budget the mother reasonably requires to fund her expenditure in maintaining the home and its contents and in meeting her other expenditure external to the home, such as school fees, holidays, routine travel expenses, entertainments, presents, etc. In approaching this last decision, the judge is likely to be assailed by rival budgets that specialist family lawyers are adept at producing. Invariably the applicant's budget hovers somewhere between the generous and the extravagant. Invariably the respondent's budget expresses parsimony. These arts have been developed in Matrimonial Causes Act 1973 claims, particularly where the budget is advanced to found the calculation of the price of the clean break. But it is worth emphasising the trite point that, by contrast, an order for periodical payments is always variable and will generally have to be revisited to reflect both relevant changes of circumstance and also the factor of inflation. Therefore, in my judgment, the court should discourage undue bickering over budgets. What is required is a broad common-sense assessment. What the court first ordains may have a comparatively brief life before a review is claimed by one or other party.

[48] In making this broad assessment how should the judge approach the mother's allowance, perhaps the most emotive element in the periodical payments assessment? The respondent will often accept with equanimity elements within the claim that are incapable of benefiting the applicant (for instance school fees or children's clothing) but payments which the respondent may see as more for the benefit of the applicant than the child are likely to be bitterly resisted. Thus there is an inevitable tension between the two propositions, both correct in law, first that the applicant has no personal entitlement, secondly, that she is entitled to an allowance as the child's primary carer. Balancing this tension may be difficult in individual cases. In my judgment, the mother's entitlement to an allowance as the primary carer (an expression which I stress) may be checked but not diminished by the absence of any direct claim in law.

[49] Thus, in my judgment, the court must recognise the responsibility, and often the sacrifice, of the unmarried parent (generally the mother) who is to be the primary carer for the child, perhaps the exclusive carer if the absent parent disassociates from the child. In order to discharge this responsibility the carer must have control of a budget that reflects her position and the position of the father, both social and financial. On the one hand she should not be burdened with unnecessary financial anxiety or have to resort to parsimony when the other parent chooses to live lavishly. On the other hand whatever is provided is there to be spent at the expiration of the year for which it is provided. There can be no slack to enable the recipient to fund a pension or an endowment policy or otherwise to put money away for a rainy day. In some cases it may be appropriate for the court to expect the mother to keep relatively detailed accounts of her outgoings and expenditure in the first and then in succeeding years of receipt. Such evidence would obviously be highly relevant to the determination of any application for either upward or downward variation.

89.  On the assessment of the Mother’s Allowance, given the modest sum being claimed for by M, I propose to adopt a broad brush approach in assessing what is a reasonable budge to cover the general needs of KC which should include the needs of his primary carer. This is also the approach adopted in WGL v ASB (Child Maintenance under the GMO), supra, and in H v S [2012] HKFLR 236.

90.  I now turn to the budget.  Leaving the amount of rental aside, the other major differences in terms of figure are in respect of Extra-Circular Activities, Entertainment, Holidays and meals for KC.  Parties have provided different figures for them but the items have not been subject to any examination by either side. 

91.  As commented by Thorpe LJ in Re P (Child: Financial Provision), supra, where he observed in [47] that “Invariably the applicant’s budge hovers somewhere between the generous and the extravagant” and “Invariably the respondent’s budge expresses parsimony”, I have the impression that M’s figures on some of the items appear on the high side whilst F tends to lean on the lower side. Taking a board brush approach and doing the best I can, I reckon that KC’s needs are as follows,

Household

Item	Amount (HK$)
Rent	12,000
Utilities	1,000
Food	1,500
Household items	300
Sub-total	14,800

Mother

Item	Amount (HK$)
Meals out of home	400
Transport	150
Clothing / Shoes	200
Personal grooming (including haircut and cosmetics)	100
Entertainment / presents	100
Holiday	1,000
Medical / Dental	220
Insurance premia	1036
Mobile phone fee	152
Sub-total	3,358

KC’s Expenses

Item	Amount (HK$)
School fee	1,520
School books and stationery	500
Medical / Dental	760
Extra-Curricular Activities	1,000
Entertainment / presents (include accompanying adult)	1,000
Holidays	1,000
Clothing / Shoes	500
Insurance premia	645
Meal	1,800
Diaper	450
Learning materials, toys	400
Haircut	80
School uniform	140
Body care and other products	350
Transport	100
Sub-total	10,245
Total Monthly Expenses	28,403

92.  KC’s school fee is currently free for the reason that M is in receipt of subsidy under the Government’s Kindergarten and Child Care Centre Fee Remission Scheme.  She would not be eligible for any subsidy if her Adjusted Family Income under the Scheme is over $75,764, ie if the monthly maintenance payable by F exceeds $18,941.

93.  I would expect that in times when KC grows he will not require any diapers but at the same time it is reasonable to expect that his other expenses such as food and travelling expenses would increase.  In other words, some figures may slightly go down while some may go the other way.  On all accounts and considering that a new household is going to be established and without seeking to be arithmetically precise, I would assess KC’s needs at $29,000.  I am satisfied that $29,000 should be reasonably sufficient for the mother and the son in the few years to come.

How KC’s financial needs are to be met?

94.  I now come to the ultimate issue.

95.  I have assessed that F has a monthly income of about $68,000.  Due to the failure of F to give a full and frank disclosure, this figure is merely the best assessment I can make on basis of the evidence before me. 

96.  I have assessed KC requires a monthly sum of $29,000 for his maintenance. This should be sufficient to cover the rentals so that M could move out to live with KC in a leased premise nearby.  Looking at the items and the figure as a whole, I am satisfied that $29,000 is a reasonable sum for a household of two living in a small rented flat and for covering their daily needs without any room for extravagance.  As I observed above, whilst M is currently being prevented from returning to work when KC is attending kindergarten, she should be able to do so gradually when the son enters primary school.  In that event, not only that the extra cash should be able to cover M’s own expenses and to alleviate somewhat F’s financial burden, it would also enable the mother and the son to enjoy a better standard of living.  Their situation should also improve when a public housing unit is being allocated to them.

97.  F’s financial needs are assessed at $32,000 per month.  With the conclusion that I have come to regarding his financial resources, he should be able to afford a monthly maintenance of $29,000. 

98.  F is adamant that he would very much want to start a family with his wife.  He is planning to have a child in 2019.  I respect his aspiration.  He is entitled to fulfil whatever plan he has with his wife when he is financially capable to do so but I hope he bears one important thing in mind – he already has a son and comes with him a life-long responsibility, though by the time when KC comes of age, this court would not have further jurisdiction over the matter.  For the time being, this responsibility would be enforced by the court if that is needed.  I wish to sound out a reminder to F that KC’s reasonable needs should never be sacrificed for the sake of his unborn half-sibling.  F should realise that his financial predicament arises not so much from the fact that he has a son but arises from the fact that he has to support two households.

99.  Section 10(2)(a) of the Guardianship of Minors Ordinance, Cap 13, empowers the court to give a lump sum order for the purpose of enabling any liabilities or expenses reasonably incurred in maintaining KC before the making of the order to be met. 

100.  F paid a total of $32,000 as interim maintenance from 1 January 2017 to 5 April 2017 pursuant to an order dated 4 January 2017.  After that, upon his undertaking to court, F has been paying a monthly sum of $6,000.  I reckon that up to 31 October 2018 (ie over a period of 22 months), F has paid a total of $140,000. On the basis of my assessment of KC’s needs, it is patent that the interim maintenance was grossly insufficient.  I accept that M has borrowed $40,000 from her friends after having exhausted most of her savings and sale proceeds of stocks. 

101.  I consider the present case is one that is appropriate to give a lump sum order for reimbursing the expenses reasonably incurred by M.  It is the submission of Ms Hui that such reimbursement should be at the rate of $16,000 per month but there has not been any explanation or elaboration on why this is an appropriate figure, nor is there any evidence in this regard.  Making an assessment of this kind is never an exact science.  Back in early 2017 KC was merely 1 ½ years old, his needs at that time would not be exactly the same as those what he is requiring now.  All in all, I think it is safe to assume that his needs back then should be less than what have been assessed in this trial.  One item that readily comes to my mind is the holiday expense.  Doing the best I can and taking a broad brush approach, I would exclude the rental ($12,000), utilities ($1,000) and school fees ($1,520); hence, a total of $14,520.  I would make a further deduction of $1,000 on holiday expenses, thus making a total of $15,520.  F has already paid $140,000.  The amount of expenses that F has to reimburse is therefore $156,560 (($29,000 - $15,520) X 22 months) - $140,000). I round it up to $157,000.

102.  The evidence is that F has at least $200,000 in his bank account.  There should not be any difficulty on his part to pay this amount. 

Orders

103.  For the reasons aforesaid, I give the following orders:

1. The respondent shall pay the applicant a sum of $29,000 per month as periodical payments for the benefit of KC, the first payment to be made on 1 November 2018 and thereafter on the 1^st day of each and every month until KC reaches the age of 18 years of age or ceases full time education, whichever is the later.

2. The periodical payments in paragraph 1 above shall be secured by the Mongkok Property.

3. The respondent shall pay the applicant a lump sum of $157,000 within 14 days.

Costs

104.  M has succeeded substantially with her claims.  The $29,000 monthly maintenance awarded in her favour is the very sum she asked for in her open proposal. Normally, costs should follow the event.  In addition, notwithstanding that F was well aware of M’s personal and family circumstances he unrealistically insisted that M should return to work and leave KC to be taken care of by M’s mother.  It was not until the second day of trial that he conceded somewhat that M may move out with KC to live separately.  There is also an aggravating factor that he was not truthful regarding his financial means and needs.  Given all these there is no reason why F should not pay the costs of the present proceedings.

105.  I therefore give an order nisi that the respondent do pay the applicant the costs of these proceedings, including costs reserved, to be taxed if not agreed on party and party basis.  The applicant’s own costs to be taxed in accordance with the Legal Aid Regulations.