BKSH nee KSH v. JAB

FCMC 5366/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 5366 OF 2008

------------------------

------------------------

-----------------------

J U D G M E N T
(Sale of Property and Variation of Maintenance)

------------------------

Applications

1.  This is a hearing of the Respondent’s 2 applications both dated 7 March 2016.

2.  Despite the fact that the parties were divorced quite some time ago, I shall continue to refer to the Petitioner as “the wife” and the Respondent as “the husband” in this judgment purely for the sake of convenience.

3.  The first application of the husband was an application for ancillary relief in which he asked for:

“1. Resolution of the amount of past maintenance to be deducted from the sale of the house

2. Resolution of the amount of upkeep charges of the family home to be paid by either party

3. Variation of ongoing maintenance

4. Variation in the “Education Fund”

5. An order for [the wife] to pay [the husband] half of her accommodation costs since September 2014

6. Leave to enforce the order in the UK

7. Costs”

4.  The second application was a summons for “ORDER OF ENFORCEMENT”.  I shall not repeat the wordings of the summons in verbatim as they contain some unnecessary narration of facts.  As I understand it, the husband is asking for the following orders:

(1)   The house in England (which is registered under the parties’ joint names and at 45 Trefusis Road, Glensilva, Flushing Falmouth Cornwall, TR 115UB England)(“the house”) with its furniture and fittings are to be sold by private treaty through an agent called “Lillicrap Chilcott” (“the estate agent”) at a price to be first decided by the estate agent representing the market value. The estate agent is authorised to accept any offer which is no less than 5% below the said price.  If the house is not sold within 3 months, it should then be sold by auction with a reserved price of £1.5 million and that the estate agent is to be paid an agent fee of 3% of the sale price.  If the auction fails, the estate agent should advise the court on how to achieve the sale of the house.

(2)   The personal and private effects should be distributed to the parties by agreement failing which a removal expert called “Britannia Lanes of Cornwall” is to be appointed to make a full inventory and store the items pending further order of the court.

(3)   The appointment of the firm of “Foot Anstey” to represent the parties in the sale of the house and after the deduction of all necessary outgoings, each party should be paid a sum of £250,000 with the balance to be put in the firm’s clients’ account pending agreement on the deductions in the order dated 9 August 2010 or further order of the court.

(4)   The wife to comply with all reasonable requests from the estate agent to facilitate the sale of the house.

(5)   That leave is to be granted to apply to the UK Courts for enforcement of the order.

(6)   Costs to the husband.

5.  One will notice that the husband’s 2 applications concern 2 important basic issues, one concerning the sale of the house and the other the children’s maintenance.

Background

6.  This case has a rather long history.

7.  The wife is a Korean national.

8.  The husband is a British national.

9.  The parties were married in 1994 and within wedlock, 2 children were born.  They are:

(1)   B, the elder son, now aged 21, a medical student studying in the UK; and

(2)   J, the younger son, now aged 18, a first year University student doing a foundation course also in the UK.

10.  On 9 May 2008, the wife issued a petition for divorce based on the behaviour of the husband and a decree nisi was granted by this court on 4 February 2009.   The decree was made absolute on 26 February 2010.

11.  On 19 November 2009, the parties agreed on a joint custody order of the 2 children with care and control being given to the wife.

12.  As to ancillary relief, the parties also reached a settlement on the same day based on which the court granted a consent order in the following terms (“the 1^st AR Order”):

(1)   The house is to be sold at the best available market price or at a price to be agreed and at a time to be agreed.

(2)   After the deduction of all reasonable outgoings, a sum of HK$3,000,000 is to be deducted to establish an education fund for the school or university tuition fees of the 2 children (“the Education Fund”).  If the Education Fund is not exhausted at the completion of the children’s full time education, the balance is to be divided between the parties in equal shares.

(3)   The husband shall pay a monthly maintenance of HK$30,000 towards the maintenance of the 2 children (being HK$15,000 each) from 1 December 2009 until the sale of the house, the actual receipt of the sale proceeds and the establishment of the Education Fund and thereafter the maintenance shall be increased to HK$34,000 per month (being HK$17,000 for each child).

(4)   Upon the sale of the house and after the deduction of all reasonable outgoings and the establishment of the Education Fund, the balance shall be divided between the parties in equal shares and the husband shall pay a further sum of US$186,851 to the wife from his own share.

(5)   If the house cannot be sold by 30 June 2010, as from 1 July 2010, the husband shall continue to pay the monthly maintenance of HK$30,000 per month for the 2 children (HK$15,000 each) until the actual sale and the receipt of the sale proceeds, but the husband has to pay back a lump sum representing the difference between the monthly sum of HK$41,000 and HK$30,000 as calculated from 1 July 2010 from his share of the sale proceeds of the house.

(6)   The payment of the children’s maintenance will last until them reaching the age of 18 years or finishing full time education whichever is later.

(7)   The settlement is a full and final settlement of the parties’ respective claim for ancillary relief, except for the maintenance of the children.

(8)   There is liberty to apply for carrying out the terms of the order.

(9)   No order as to costs, including all costs reserved.

13.  The anticipated sale of the house did not materialise and relying on the “liberty to apply” provision, the parties came back to the court for a further order.   On 9 August 2010, this court, again based on the consent of the parties, granted a further order  in the following terms (“the 2^nd AR Order”):

(1)   The house is to be sold as soon as possible at a price not less than £2.35 million or at such price may otherwise be agreed.

(2)   In the event that the husband is unable to pay any or the whole sum of HK$30,000 monthly maintenance for the 2 children as from 1 September 2010, all such arrears of maintenance shall be paid out from the husband’s share of the sale proceeds upon the sale of the house.

(3)   After sale, an account is to be taken of the sums due from the husband to cover the following:

(a)  The sum of US$186,851 as stated in § 4 of the 1^st AR Order.

(b)The sum representing the total difference between HK$41,000 per month and HK$30,000 per month as stated in § 5 of the 1^st AR Order.

(c)  The arrears of maintenance as stated in § 2 of this order.

(d)The sum of all outgoings and expenses paid for by the parties on the house to be agreed by the parties.

(e)  Any other sum of money to be agreed by the parties.

(4)   The solicitors or agent representing the parties in the sale shall deduct from the husband’s share the total sums of money due to the wife as stated in § 3 of the order and pay over the same to the wife.

(5)   There is no order as to costs.

14.  As at the date of this hearing, it is common ground that both parties and the 2 children have all relocated to England.   The husband has remarried with 2 children (aged 11 and 9 respectively) from this new relationship.   The wife used to live with the younger son, J, in the house but I was told that J has just moved to University accommodation recently.  The elder son is now studying at a medical school and is living away from home.

15.  It is the case of the husband that the wife has been uncooperative in the sale of the house resulting in the non-performance of the 2^nd AR Order for over 6 years. Moreover, as the husband is now retired and has taken up new financial responsibilities for his new family, he now asks for the maintenance order in favour of the children to be varied.

16.  The wife disputed the husband’s case and therefore, the husband’s applications have to be adjourned to today for trial.

Discussion

The combined effects of the 1^st AR Order and the 2^nd AR Order

17.  Pursuant to the agreements of the parties, the court has granted 2 ancillary relief orders (ie. the 1^st AR Order and the 2^nd AR Order).  I think it is important to have a clear understanding of the combined terms of the said 2 orders right at the beginning.

18.  It is my ruling that the combined terms of the 1^st AR Order and 2^nd AR Order are:

(1)   The husband shall pay a monthly sum of HK$30,000 as maintenance for the 2 children, ie. HK$15,000 each, starting from 1 December 2009 until the sale of the house, the distribution of the sale proceeds and the establishment of the Education Fund and thereafter, the maintenance are to be increased to HK$34,000 per month (ie. HK$17,000 each): §3 of the 1^st AR Order. 

(2)   The payment of the children’s maintenance shall last until the children attaining the age of 18 or finishing their full time education, whichever is the latter: §6 of the 1^st AR Order.

(3)   The house is to be sold as soon as possible at a price not less than £2.35 million or at such price to be agreed by the parties: §1 of the 2^nd AR Order.

(4)   After the payment of all reasonable outgoing and expenses, a sum of HK$3,000,000 will be deducted from the sale proceeds to establish an Education Fund out of which the school and university tuition fees of the children will be paid.  If the Education Fund should not be exhausted at the end of the day, the balance will be shared between the parties equally: §2 of the 1^st AR Order.

(5)   The net sale proceeds will be shared between the parties equally but subject to the following payments to the wife from the husband’s share: §4 of the 1^st AR Order:

(i)   In the event that the husband shall fail to pay the children’s maintenance, such arrears will be deducted from the husband’s share of the net sale proceeds: §2 of the 2^nd AR Order.

(ii)   A sum of US$186,851: §4 of the 1^st AR Order and §3(a) of the 2^nd AR Order.

(iii)   The total of the monthly sum of HK$11,000 (representing the difference between HK$41,000 and HK$30,000) calculated from 1 July 2010 until the receipt of the sale proceeds: §5 of the 1^st AR Order and §3(b) of the 2^nd AR Order.

(6)   The solicitors or the agent handling the sale shall deduct the above sums from the husband’s share and paid over to the wife: §4 of the 2^nd AR Order.

(7)   The above terms are in full and final settlement of the parties’ respective claim for ancillary relief, except for the maintenance of the children: §7 of the 1^st AR Order.

Sale of the house

19.  I shall first deal with the sale of the house.

20.  I start off by reminding myself that the parties have already reached a full and final settlement of their respective claim for ancillary relief some 7 years ago. An important term of the settlement was for the sale of the house with the sale proceeds to be shared between the parties subject to certain deductions for the establishment of the Education Fund and from the share of the husband.  This court has no power to rewrite the terms of their agreement or vary the consent orders already made, except may be for the children’s maintenance.  What the court can only do is to give further directions on how the 1^st AR order and 2^nd AR Order are to be carried out.

Estate agent

21.  The first issue is which estate agent should be appointed.  The husband suggested Lillicrap Chilcott.  The wife does not dispute that Lillicrap Chilott is a “well known firm of estate agent”.  Therefore, I have no hesitation in directing that Lillicrap Chilcott should be appointed as the estate agent to conduct the sale of the house.

Agent fee

22.  The husband asked for 3% of the sale price to be paid to the estate agent upon a successful sale.  I note that the husband has produced no evidence justifying such an agent fee, but at the same time I do not see any strong objection from the wife on the amount to be paid.  Therefore, I accept that an agent fee of not more than 3% of the sale price should be paid at sale. 

Solicitors

23.  Next is the firm of solicitors to be engaged to conduct the sale.  The husband suggested the firm of Foot Anstey.  I understand that this is a local firm and I have no reason to question its integrity and competency and therefore, I direct that the firm of Foot Anstey is to be engaged for the sale of the house.

Selling price

24.  As to the selling price, the parties indicated at trial that the reserved price of £2.35 million (as previously agreed in the 2^nd AR Order) should be adhered to. However, they cannot agree on the issue of public auction in case that the house could not be sold by private treaty.

25.  On this issue, my view is that in the event that the house could not be sold after a period of 6 months by private treaty, such sale should be effected by public auction.  The husband asked for a reserved price of £1.5 million.  The wife said it was too low but did not give any alternative proposals.   Under these circumstances, I will adopt the proposals of the husband and set the reserved price of the public auction at £1.5 million.   This is only a reserved price and I am sure that if the market is right, a much higher price can always be fetched for the benefit of both parties.

Time for sale

26.  As to the timing of sale, I think it is reasonable for the house to be sold by private treaty within 6 months from the order, failing which by public auction within 4 months thereafter.

Personal and private effects

27.  There does not seem to be any strong objection from the wife and therefore, I will order that the parties’ personal and private effects in the house to be distributed between the parties by agreement, failing which the removal specialist of “Britannia Lanes of Cornwall” should make a full inventory and store the same in their warehouse pending further order of the court.

The children’s maintenance

Variation of maintenance

28.  The next issue is the husband’s application for variation of the children’s maintenance.

The legal principles

29.  The Court’s power to grant an order for variation is governed by s11 (1) and (7) of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”) which provides as follows:

“11. Variation, discharge, etc. of orders for financial provisions

(1) Where the court has made an order to which this section applies, then, subject to the provisions of this section, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.

....

(7)   In exercising the powers conferred by this section 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 and, where the party against whom that order was made has died, the changed circumstances resulting from his or her death.”

According to the said provision, the court, in considering such an application for variation, has to consider all the circumstances of the case and in particular, any changes in the matters to which regard has been made in reaching the original order.

30.  In the case of AEM v. VFM[1], Cheung JA has explained the modern approach in dealing with such an application at paras 14.4-8 of the Judgment:

“4. The modern approach, as required by section 11(7), is for the Court to consider all the circumstances of the cases. The Court is not required to proceed from the starting point of the original order but look at the matter afresh: Flavell v. Flavell [1997] 1 FLR 353 at 357B following Lewis v. Lewis [1977] 1 WLR 409 and Garner v. Garner [1992] 1 FLR 573.

5. Any change in any of the matters to which the Court was required to consider when making the original order was one of the circumstances to be considered.

6. Almost invariably, an application to vary an earlier periodical payment order will be brought on the basis that there has been some changes in the circumstances since the original order was made, for example, continuing inflation; the increased costs in supporting a growing child and that one party may be more adversely affected than another by the increase in the costs of living: Garner v. Garner.

7. An increase in the wealth of the husband was a relevant factor to be taken into account: Primavera v. Primavera [1991] 1 FLR and Cornick v. Cornick (No. 2) [1995] 2 FLR 490.

8. At the same time the basis and intended effect of the original order are relevant factors to which the Court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order: Boylan v. Boylan [1988] FLR 282.”

31.  As to the weight to be attached to the original order, Tang VP (as he then was) said in the case of HCTT v. TYYC [2008] 5 HKC 86 at paras 15-16:

“15. But as Garner v. Garner [1992] FLR 573 shows that does not mean that the earlier order, whether made by consent or not, carries no weight. How much weight should be given to the earlier order must depend on the circumstances. Cazalet J said in the English Court of Appeal:

“Almost invariably, an application to vary an earlier periodical payment order will be brought on the basis that there has been some change in the circumstances since the original order was made; otherwise, except in exceptional circumstances, the application will, in effect, be an appeal. If an order is not appealed against, or is made by consent, then the presumption must be that the order was correct when made. If it was correct when made, then there will usually be no justification for varying it unless there has been a material change in the circumstances. However, because of the impact of continuing inflation, because children grow older and cost more to support and because, for example, the cost of living in its increase may hit one party harder than another, it will usually follow that, if time has passed, there will inevitably have been changes in the circumstances, of the parties concerned.

Following Lewis v. Lewis, by which decision this court is bound, a court on the hearing of an application to vary is fully entitled to look at all the relevant matters set out in s.25 of the Matrimonial Causes Act 1973.  On occasions, the court may be slow to accede to an application to vary a consent order; not least because the parties’ solicitors might otherwise be deterred from either seeking to negotiate such a provision or to achieve finality.  Another factor which may influence a court will be the time that has passed since the original order was made.  If an application consequent on an order is brought very soon after that order has been made, the court, in normal circumstances, is likely to attach more weight to the earlier order than if it had been made some years previously.  Likewise, the court would expect to pay full regard to any special terms agreed between the parties at the time the original order was made- as, for example, when endorsements on briefs or contemporaneous correspondence show that an agreed order has, for some particular reason, been set at an artificially low figure.  Shortly stated, the court must decide what weight it should attach to the original order and all the surrounding circumstances.  However, once an application to vary is before it, the court is fully entitled to make an order considering all the circumstances afresh, paying such regard to the older order as may be appropriate.”

16. Thus, although the jurisdiction to vary is untrammelled, normally the earlier order would not be varied unless there has been a material change in the circumstances.”

32.  I shall bear the above principles in mind when I come to consider the facts of this case.

The case for the husband

33.  The husband relies on the following submissions in support of his application:

(1)   There has been a material change of circumstances in that:

(i)   he is now aged 66 and has retired on 30 May 2016;

(ii)   he has very little income, mainly a small state pension from the UK Government at £643 per month;

(iii)   he has remarried with 2 young children aged 11 and 10 respectively;

(iv)   his present wife is working as a teaching assistant with a monthly income of about £1,300 per month;

(v)   he and his present wife own an apartment in UK with a net worth of about £48,000 only;

(vi)   his total monthly outgoings amount to £4,624 per month or £55,193 per annum (p.12 of Trial Bundle); and

(vii)   his monthly deficit amount to £2,681 per month or £23,327 per annum (p.12 of Trial Bundle).

(2)   On the other hand, the wife is still running her business and is in a better financial position than the husband.

(3)   Both B and J have now attained majority and are studying in the UK on a full time basis.  Their university tuition fees are limited to about £9,000 per annum which can also be covered by low interest student loans from the UK Government.  Therefore, the husband should be relieved from the obligations to pay the children’s university tuition fees.

34.  Based on the above, the husband now asks for the children’s maintenance to be stopped as from the date of this hearing and the establishment of the Education Fund to be set aside.

My views

35.  Despite the objections from the wife concerning some of the figures relied upon by the husband, I am satisfied that those figures should more or less represent the present financial situation of the husband.  In other words, I am satisfied that the husband has recently retired and his monthly income will largely be restricted to the state pension that he is currently receiving.

36.  As to the wife’s financial position, I understand that she may be running some business ventures but I do not think she is enjoying the financial affluence as the husband would like to believe she is.  This is largely due to the fact that she had suffered from cancer and the fact of her relocation to the UK with the younger son in about 2014.

37.  After considering all the circumstances of this case, I have decided that it may not be appropriate for the children’s maintenance to be terminated as from the date of this hearing.  However, I am of the view that the husband’s responsibility to pay the children’s maintenance should end at the completion of their present university degrees.  

38.  These are my reasons.

39.  I note that when the parties reached their agreement in 2009 and 2010 (the 1^st AR Order and the 2^nd AR Order), the husband had already formed an intimate relationship with his present wife.   His 2 young children were born sometimes in 2005 and 2006.  Therefore, the fact that the husband had a new family and 2 young children were circumstances already prevailing at the time of agreement.  They cannot be regarded as something new or being a change of circumstances justifying a variation of the maintenance order.

40.  On the other hand, I do accept the fact that the husband is getting older due to the lapse of time and he has retired from full time employment recently. However, that does not mean that he is not in a position to continue to pay the children’s maintenance because he still holds half of the equity in the house.   It seems that both parties have no strong objection that the house is worth about £2.35 million.  Half of that being £1.175 million, ie. about HK$12,000,000 (by adopting an exchange rate of £1: HK$10.20).   Even with the deductions under the 1^st AR Order and the 2^nd AR Order, I think there is still a not insubstantial amount of money being left to the husband.

41.  I understand that B has another 3 years before he will finish his medical degree.  According to the wife, he wants to do another PhD which may take another 3 years.   It is my view that the husband’s duty to support B should end in 3 years’ time, ie within the time that would allow B to complete his medical degree.  If he should decide to pursue further studies after that, I think he has to find his own way to do it.   Assuming that the sale of the house could be effected within the coming 12 months, ie. on or before 1 October 2017, the husband’s future liability towards B after that date would be restricted to 2 years only, ie. HK$408,000 (HK$17,000 x 24 = HK$ 408,000). 

42.  As for J, he has another 4 years before he finishes his first degree upon which the husband’s duty to support him should end.  As from 1 October 2017, the husband has to pay another HK$612,000 (HK$17,000 x 36 = HK$612,000).  

43.  In other words, the total sum of B and J’s future maintenance as from 1 October 2017 amount to HK$1,020,000 (HK$408,000 + HK$612,000 = HK$1,020,000).   It is a sum well within the husband’s ability to pay.

44.  As a further step to achieve certainty and finality between the parties, I think it is preferable to fix the date of increase of maintenance (from HK$30,000 to HK$34,000) now, instead of waiting for the sale of the house.   Again, assuming that the sale of the house could be achieved in about 12 months, I would vary the maintenance order and fix the increase of maintenance to start from 1^st October 2017 and such payments would end on the children finishing their first university degree or by 31 August 2019 for B and 31 August 2020 for J, whichever is earlier.

45.  I understand that the wife would like to have all future maintenance for the children to be converted into a lump sum and paid out from the husband’s share of the sale proceeds.  In view of the husband’s claim of impecuniosities, I think it is fair to make such an order so as to achieve something akin to a clean break.  Therefore, it is my ruling that the periodic payment order for the children’s maintenance is to be replaced by a lump sum order of HK$1,020,000 which is to be deducted from the husband’s share of the net sale proceeds.

Education Fund

46.  The provision for the establishment of the Education Fund (HK$3,000,000) was contained in the 1^st AR Order.   There is no dispute that the purpose of such a fund was to cater for the children’s future educational needs.  There are 2 important points to note here.  First, the use of the Education Fund was restricted to the payment for “school or university tuition fees” of the children.   Therefore, I do not accept the wife’s arguments that the children’s living expenses should also be paid out from this fund.   Second, there was no provision in the 2^nd AR Order setting aside the establishment of this Education Fund.   It is clear from the 2^nd AR order that it only deals with the issue on how to carry out the sale of the house and to calculate the sums being owed by the husband to the wife, but leaving the establishment of the Education Fund untouched and intact.  

47.  The husband is now arguing that he should not be responsible for the children’s future university tuition fees as the children could have financial assistance from the UK government making the establishment of Education Fund unnecessary. I do not agree.  It is true that needy students in the UK can apply for financial assistance from the government but they have to be repaid upon employment after graduation.  I agree with the wife’s view that if the parents can afford to pay for the tuition fees, which I believe is the case here, there is no reason why they should not shoulder such responsibilities and require the children to repay the student loans upon graduation.   After all, it was the parties’ unequivocal agreement that the children’s school and university tuition fees should be paid out from their joint assets, there is no reason why any of them should renege on such agreement, especially when they are financially able to do so.  

48.  Having said the above, one also has to bear in mind that only a small part of the Education Fund needs to be utilized.  Given that I have already restricted the husband’s payment of the children’s maintenance to 3 and 4 years respectively (ie not beyond their present university education) and if the husband’s estimation of the children’s university tuition fees at £9,000 per annum is correct, that means the total future university tuition fees amount to £63,000 only (£9,000 x 3 + £9,000 x 4 = £63,000, ie about HK$642,600).  In other words, only about 20% of the Education Fund needs to be used and the balance will go back to the parties in equal shares.   Under these circumstances, I think it is fair to reduce the Education Fund to £70,000, allowing some room for future increase or inflation, which should be enough to pay for the 2 children’s university tuition fees for the coming 3 to 4 years.  The division between the 2 children should be £30,000 for B and £40,000 for J. 

49.  In principle, this sum should come from the Education Fund to be established after the sale of the house.  This arrangement means that both parties will share the future tuition fees equally.  In order to simplify the matter, I think it is better for the husband just to bear half of this sum, ie. £35,000.   In other words, instead of establishing such an Education Fund, I would direct that a sum of £35,000 is to be deducted from the husband’s share of the net sale proceeds to satisfy his liability towards the 2 children’s future university tuition fees.

Past maintenance and up keep charges of the house

50.  At the beginning of trial, there were some disputes on the expenses being incurred by each party on the maintenance of the house.   Each claimed reimbursement from the other party.  During the course of trial, the husband proposed, which was later accepted by the wife, that they would regard each party’s past financial contribution to the upkeep of the house to be more or less the same and so they will not make any further claim of reimbursements from the other party.   Therefore, there is no need for me to make any order in this regard. However, for the way forward and in order to avoid any future disputes, I would direct that the wife should be responsible for future outgoings as long as she is enjoying the use of the house.

51.  Just to complete the discussion, the husband did ask for the wife to pay for half of the accommodation costs since September 2014.  It is not clear whether he is still pursuing that claim, but even if he is, it is my view that the wife being a joint owner has every right to reside in the house with the sons until its sale.

Arrears of maintenance to be deducted from the husband’s share

52.  It is one of the husband’s applications that there should be a “resolution of the amount of past maintenance to be deducted from the sale of the house”.

53.  There is no dispute that the husband has defaulted in the payment of maintenance since 1 December 2009.  However, it is the husband’s case that certain sums of money should be deducted from the said arrears of maintenance, including education fees (meaning the school or university tuition fees after the children have relocated to the UK), housing allowance (meaning the fee payable by the wife when she started staying in the house), holiday expenses (meaning the money that he has paid for the children’s past holidays).  

54.  I have already ruled that the children’s school and university tuition fees should continue to be paid by the husband.   I have also ruled that the wife needs not pay anything for her previous stay at the house in England.  As to past holiday expenses allegedly paid by the husband, apart from the fact that there is no evidence to prove the actual amount spent on the children, I am not convinced that such sums, even if proved, should be deducted from the monthly maintenance payable by the husband.

55.  However, there are some other items that I think should be deducted from the maintenance payable by the husband.  They include the school fees paid by the husband or through his former employer, the details of which are contained in §22 of the husband’s supporting affidavit (pp19-20 of the Trial Bundle).  The total amount of such payments is HK$942,581.50.  I understand that most if not all are related to school fees of the children, which according to §2 of the 1^st AR Order, should be paid out from the Education Fund, meaning that they should be borne by the parties equally.  Therefore, it is my ruling that the wife should bear half of that amount and the easiest way to achieve that is to deduct half of that sum at HK$471,290.75 (HK$942,581.50 x ½ = HK$471,290.75), to be rounded up to HK$470,000, from the arrears of maintenance owed by the husband.

56.  Based on the above, the total arrears of maintenance until the sale of the house should be:

(1) Maintenance from 1/12/2009 to 30/9/2017

    (HK$30,000 x 94 = HK$2,820,000)   HK$2,820,000

    Less

(2) 1/2 of school fees paid by the husband    HK$470,000

   Net: HK$2,350,000

Leave to enforce the order in the UK

57.  In both of his applications, the husband asked for leave so that he could enforce this court’s order in the UK.  At trial, I asked for the legal basis upon which this court has power to grant such an order but the husband cited the provisions of the Maintenance Orders (Reciprocal Enforcement) Ordinance, Cap.188 instead, which are clearly irrelevant to our present situations.   On the second day of trial, the husband then applied for an adjournment so that he could seek legal advice by making an application to the Legal Aid Department. As we were already in the middle of the trial and more importantly, I do not think the husband’s application for legal aid would have assisted his case in any way, I refused his application for adjournment. 

58.  Going back to the merits of the husband’s application for leave to enforce a Hong Kong order in the UK, I am not aware that this court has such a power. Obviously, whether the UK courts would enforce such an order is a matter for that jurisdiction.  Therefore, the husband’s application in this regard is refused.

Conclusion on the maintenance and deductions

59.  Based on the above discussion, these are the rulings on the children’s maintenance:

(1) The total amount of arrears of the children’s maintenance (from 1 December 2009 to 30 September 2017) is HK$2,350,000, such sum is to be deducted from the husband’s share of the net sale proceeds of the house.

(2) In addition, the following sums should also be paid and deducted from the husband’s share of the net sale proceeds of the house:

(i) A lump sum of HK$1,020,000 being the future maintenance of the children as from 1 October 2017 to 31 August 2020.

(ii) A lump sum of £35,000 being half share of the children’s university tuition fees as from 1 October 2017 to 31 August 2020. 

(iii) A sum of HK$ 946,000 (the difference between HK$41,000 and HK$30,000 as from 1 July 2010 to 30 September 2017: HK$11,000 x 86 = HK$946,000).

(iv) A sum of US$186,851.

(3)   The total amount of the above deductions are therefore:

(i) HK$2,350,000

(ii) HK$1,020,000

(iii) £35,000

(iv) HK$946,000

(v) US$186,851

Orders

60.  The orders to be made are:

(1) For the sale of the house:

(i) The house is to be sold by private treaty at or above the reserved price of £2,350,000 within 6 months of the order.

(ii) If the house cannot be sold by private treaty within 6 months, such sale should be effected by public auction with a reserved price of £1,500,000 within 4 months thereafter. 

(iii) Lillicrap and Chilcott is to be appointed as the estate agent to conduct the sale.

(iv) The estate agent is to be paid an agent fee of not more than 3% of the sale price.

(v) The solicitors firm of Foot Anstey is to be appointed as the handling solicitors for the sale.

(vi) After the deduction of all reasonable and necessary outgoings and expenses of the sale, the net sale proceeds should be divided between the parties in equal shares, but subject to deduction from the husband’s share as set out in the following paragraph.

(vii) The parties’ personal and private effects in the house are to be distributed between the parties by agreement, failing which the removal specialist of “Britannia Lanes of Cornwall” should make a full inventory and store the same in their warehouse pending further order of the court.

(2) The following sums should be deducted from the husband’s share of the net sale proceeds by the handling solicitors and paid over to the wife:

(i) HK$2,350,000 as the maintenance for the 2 children as from 1 December 2009 to 30 September 2017.

(ii) HK$1,020,000 being future maintenance for the children as from 1 October 2017 to 31 August 2020.

(iii) £35,000 being the husband’s half share of the children future university tuition fees.

(iv) HK$946,000 being the difference between HK$41,000 and HK$30,000 as from 1 July 2010 to 30 September 2017.

(v) US$186,851.

(3) This order is in place of the 1^st AR Order and the 2^nd AR Order.

Costs

61.  As both parties are unrepresented, I think a fair order is that there shall be no order as to costs, including all costs reserved.   This will be in the form of an order nisi to be made absolute upon the expiry of 14 days from the handing down of this judgment.