W v. S

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

SUIT NO. 2767 OF 2004

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J U D G M E N T

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1. There are two matters before me, the parties’ application for ancillary relief upon the granting of a decree nisi of divorce to the Petitioner Wife on 28^th May 2004, and the Respondent Husband’s application for defined access to the only child of the family, J, a son born on 10^th September 1998 and is now just 7 years old, after having conceded at the hearing that his custody care and control be granted to the Wife.

2. The Husband, now 43 years of age, and the Wife, now 39, first met in 1993 in London where he was a citizen and was studying for a Master degree in Systems Analysis and Designs at City University in London, after completing an undergraduate degree in marketing in Canada, while she was from Hong Kong working as a fashion designer in London.  She was then also running a fashion design business in Australia financed by her father, with shops in Australia, a factory in China and an office in Hong Kong.  As a result she would travel extensively between these places.  While in London, she lived in her own flat at B House,  which was also purchased by her father who is the chairman and substantial shareholder of a Hong Kong public listed construction company.

3. In about 1994 the Husband came to work in Hong Kong as an information technology salesman during which he stayed in a flat in Tsuen Wan owned by the Wife’s parents.  There is some dispute between the parties over whether or not the Husband did pay rent for the flat, which I do not find necessary to resolve here as it is in my view of no bearing on the matters before me.

4. In 1996 the Husband moved back to London to work at his father’s family company, U Ltd.  There is again some dispute as to how long he had work at U Ltd.  He claims he worked there for 6 weeks, but the Wife says it lasted only 2 days as he could not get along with his brother who was the managing director of the company.  The evidence on this is not clear, but the upshot is that the Husband left U Ltd to work for another company called L Bureau, and in September of the same year the parties were married in Cheshire and lived together in the Wife’s B House property.

5. About 3 months after the marriage the Husband left L Bureau to move to M in Weybridge, London where he earned about £41,000 a year including commission.  In fact all his jobs during the marriage were mainly computer software related.

6. In early 1997 the parties wanted to start a family and decided that they needed a bigger place to live.  The Wife turned to her father for assistance who then lent the parties the money to purchase a 3-storey property known as S A’s Villas in London for £645,000 which was put in the Wife’s sole name, while the B House flat was subsequently sold by the Wife with all the sale proceeds returned to her father.

7. In addition the Wife’s father also assisted the parties with the costs for the renovation and furnishing of S A’s Villas, but it is in dispute between the parties as to the amount, which the Wife puts at more than £150,000 from her father, whilst the Husband contends that only £70,000 may have come from her father while he himself had also paid £40,000 towards the renovation from his salary.  In any event after the Husband received a sum of £364,286 in 1998 and a further £206,766.79 in 1999 from the sale of his U Ltd. shares, he repaid £160,000 to the Wife’s father for his loan for the purchase of the property.

8. Between 1996 and 1998 the Wife began selling her fashion business and gradually recovered about HK$2 million in total which she put into her mother’s National Westminster Bank current account of which she was one of the signatories.  It was from this account that the Wife would from time to time draw cheques to meet the family’s expenses including some of the renovation and furnishing expenses for S A’s Villas, as well as with her Goldfish credit card of which she was the principle holder and the Husband a supplementary card holder, which would then be reimbursed by funds from the parties’ joint HSBC account.

9. Around March 1998 the Husband changed his job to L R where he earned a basic salary of about £45,000 per annum with bonus of approximately £25,000.  He says he remained at L R until around February 2000, which the Wife believes to be much shorter, but in any event after L R the Husband started his own business called E Limited with 3 other partners, and invested £40,000 into that company from the sale proceeds of his U Ltd. shares.

10. Later in 2000 with the departure of his partners, the Husband asked the Wife to be a director and company secretary of a new company known as F Limited which continued the business of E Limited from their home at S A’s Villas.

11. Unfortunately F Limited was unsuccessful and was eventually wound up in June 2003.  In about August 2003 the Wife and J left London to return to settle in Hong Kong where she took up a position in her father’s public company as a corporate development manager.  She says it was her joint decision with the Husband to return to Hong Kong to make a fresh start, where he could market the software that he had developed at F Limited, but the Husband alleges that it was the Wife’s own decision to return to Hong Kong against his wish which had led to some serious arguments between them at that time.

12. The Husband was then working on a new project called C with 4 other partners, which later became formalised as C Ltd in November 2003, for which he was given 20% of the shares.  He thereafter ceased involvement with C Ltd and in December 2003 came to Hong Kong to join the Wife and the child, but he says he was unwelcome there and so he stayed for only 7 weeks before returning to London where he initially stayed at S A’s Villas before moving into his parents’ home in mid-2004.

13. He remained unemployed from February to June 2004, living on unemployment benefit and thereafter he worked on a commission basis for N Internet for about 6 months making only about £500 in total.  Later he became unemployed again and eventually in early 2005 he decided to move to Vancouver Canada where he has dual citizenship.  Initially he was employed as a free lance consultant with T Consulting Inc. for several months and earned CAD6,000 in total.  Since June 2005 he has been employed as a business development associate with S Software Limited where he earns CAD40,000 per annum, being CAD2,400 per month (HK$15,600) after tax.  He is at present renting a room in a friend’s house, although it is not clear whether he has been paying rent on a regular basis, as he says he would sometime pay in kind by doing chores for his friend.

14. Since their return to Hong Kong in August 2003, the Wife and the child have been staying in one of her parents’ properties at  Yau Yat Cheun, Kowloon used to be occupied by her grandmother.  The Wife was also given HK$1 million by her father for decorating and furnishing the flat, for which she spent about $830,000 with the balance still in her bank account.  She says she is not required to pay her parents any rent for the 2 bedroom flat, but she would be responsible for its management fees and household utilities, and that she has been told that when her younger brother marries in future, she and her son will have to move out to make room for him and his family.

15. The Wife now earns HK$25,000 per month at her father’s company plus a year’s end double pay, giving her a monthly average of HK$27,000.  She has enrolled J into K Junior School where he is now doing Primary 2, and has hired a domestic servant to look after him while she works.

16. In May 2004 the Wife caused S A’s Villas to be sold through her estate agent in London for £1.35M and after various deductions including the repayment of the balance of the original purchase price of £485,000 to her father, the net proceeds of about £843,959.53 (as at 12^th September 2005) was stake held by her solicitors in an interest bearing account with the Hongkong and Shanghai Bank pending the determination of these proceedings.

17. On 19^th March 2004 the Wife filed a petition for divorce based on the Husband’s behaviour, and also asked for custody care and control of J and general ancillary relief.  On 28^th May 2004 the decree nisi of divorce was granted to her uncontestedly, with the question of custody and ancillary relief adjourned to Chambers.  As aforesaid the Husband subsequently agreed that custody care and control of J be given to the Wife but the question of his access to J including his trips to Canada for staying access remains unresolved, as well as the division of the sale proceeds of S A’s Villas, which is really the central issue between the parties.

18. The Wife proposes that £150,000 of the sale proceeds should first be repaid to her father for his financial assistance given to the parties for the refurbishment and other costs of S A’s Villas, as well as certain expenses including council tax and utilities bills incurred by the Husband while at S A’s Villas but paid by her on his behalf in the total sum of £487.38, with the balance of £693,472.15 to be divided into 2 equal shares between them, but out of the Husband’s share of £346,736.08 or the equivalence of HK$4,854,305, HK$358,086 should first be repaid to her for the various sums paid on his behalf including his tax due to the Hong Kong Inland Revenue Department during his stay in Hong Kong, and a further sum of HK$240,000 being security for 2 years of his maintenance for J, leaving a final balance of HK$4,256,219 which she says the Husband should receive together with all his other assets in his name and any joint named assets in the Charles Schwarb account and the joint HSBC account in London, while she should receive the balance of the net sale proceeds and to keep all assets in her own name.  This proposal is set out in details in her solicitors’ letter to the Husband’s of 6^th September 2005.

19. As for J, the Wife proposes that both parties should be equally responsible for his expenses which she estimates at HK$20,000 per month, and so she claims a monthly sum HK$10,000 from the Husband for J’s maintenance to date back to 1^st September 2005.

20. Whilst he agrees that the Wife’s father should be repaid for his financial contribution towards the purchase of their matrimonial home at S A’s Villas, the Husband argues that the Court should ignore the renovation expenses which he might have made as the evidence on them is not all clear, and that he himself should also be repaid the £160,000 which he repaid the Wife’s father during the marriage for the purchase of the property, before dividing the balance of the sale proceeds between them in equal share, thereby giving him £502,500 or the equivalence of HK$7,035,000 instead of the lesser sum of £346,736.08 or HK$4,854,305 as proposed by the Wife before her various further deductions.

21. Furthermore, he believes that he is entitled to 50% of the dividends of about HK$2 million paid during the marriage on the Wife’s shareholdings in 2 companies owned or controlled by her father known as K Insurance Ltd and K Insurance Brokers Ltd respectively which were gifted to her during their marriage.  He believes that these dividends were part of their family assets which have been kept by the Wife and hence he should be entitled to half thereof in the amount of HK$947,835 which together with his Charles Schwab funds of HK$128,500, should round up his total share of the family assets to HK$8,250,000, while the Wife should keep the balance of the sale proceeds of S A’s Villas of HK$5,475,670 which together with the savings in her own accounts as well as her shares in the 2 said company would give her a total sum of HK$21.65 million, which is a lot more than what he is seeking.  This proposal of the Husband is set out in his solicitors’ letter of 5^th September 2005.

The Law

22. In deciding on the question of ancillary relief, it shall be the duty of the Court to have regard to the conduct of the parties and all the circumstances of the case including those specific matters as set out in Section 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192.  In the present case there is no issue of any conduct of either party that is of any bearing.  In fact it is not so much as to any claim by either party against the other as between them, but rather how to divide the balance of the net sale proceeds of their former matrimonial home, the single most valuable asset of the parties during the marriage.

The Issues

23. At the very outset it seems that the parties were, and still are, agreeable that the sale proceeds of almost £844,000 should in principle be divided equally between them, but that certain deductions or adjustments should be made to their respective share for payments that they had or might have made during the marriage, and most of the trial was in fact spent on ascertaining what these payments were about, and whether they should be taken into account in dividing the sale proceedings, the issues of which can be summarised as follows : -

(1) what financial assistance the Wife’s father had made for the renovation of S A’s Villas and whether he should first be repaid from the sale proceeds before its division;

(2) what payments the Wife had made on behalf of the Husband and whether such payments should be deducted from his share of the sale proceeds;

(3) what financial contributions the Husband had made for the purchase and renovation of S A’s Villas and whether such payments should be repaid to him from the sale proceeds first before its division between the parties;

(4) whether the Husband is entitled to 50% of the dividends declared and accrued on the Wife’s shareholdings in K Insurance Limited and K Insurance Brokers Limited.

24. I shall deal with the 1^st issue first.  The Wife claims that the parties have always relied upon the round figure of £150,000 as being the probable total of the monies spent upon renovation of S A’s Villas, which is the figure recorded by the Husband in a memorandum (B2 : 586) prepared by him which the Wife alleges in or about early 2002 when he was suggesting to sell S A’s Villas so that its proceeds could be used for his further investment in F Ltd. and that the parties could then move to a cheaper accommodation.  The Husband now disputes this figure and the principle that the contribution from the Wife’s father should be refunded, and argues that it would be reasonable for the Court to ignore the whole question of the renovation altogether.

25. As a result the Wife has filed her 3^rd Affidavit exhibiting all the records and receipts for renovation that she has managed to gather, but which she says are incomplete, which amount to £133,455.20 in total.  On top of this she also alleged in her affidavit that her father had met the costs of legal expenses and other costs listed in the completion statement for the purchase of the property amounting to £14,725.70 (B2 : 608), which bring the grand total to just below £150,000.

26. The Husband believes that the Wife has double or even triple accounted many of the payments for the renovation and subjected her to lengthy cross-examination during which she conceded that it might have been the case, albeit unintentionally due to some failure in her memory as the renovation took place more than 7 years ago, and that the correct total figure could well be less at only £116,695.55.

27. While accepting that many of these payments came from the National Westminster account of the Wife’s mother, the Husband contends that at least £40,000 of the renovations were debited to the parties’ Goldfish card, which was paid out of the joint HSBC account, into which his salary was deposited and therefore was ultimately paid for by him.

28. The Wife disputes this and argues that as the majority of the renovation bills were incurred between November 1997 and June 1998, the Husband’s net income for these months did not amount to £40,000, bearing in mind that his salary from L R did not commence until March 1998, while the first payment from the sale of his U Ltd. shares did not come until October 1998, and hence she does not believe that the Husband had the means to pay this sum which she says was probably met by the £39,000 withdrawn from her mother’s National Westminster account between December 1997 and January 1998.

29. It is true that at the time when S A’s Villas was being renovated, the Husband was working at M at only £41,000 a year, a major part of which no doubt would have been spent on the family, and that although in March 1998 he changed his job to L R at a higher salary, it is unlikely that he would be able to accumulate enough money from his salary at that time to pay as much as £40,000 towards the renovation costs.  Furthermore, there is the memo on B2 : 586 prepared by him in which he referred to the renovation costs of £150,000.

30. This memo, reproduced hereinbelow, sets out various figures in connection with S A’s Villas : -

S A’s Villas
Purchase Price	645000.00
Renovations	150000.00
Legal	3000.00
	______________
Total	798000.00
Selling Price	1500000.00
S	160000.00
Legal	2000.00
Renovation	2000.00
Agent	45000.00
Moving	3000.00
	_____________
Total Selling Costs	212000.00
	___________

31. If this memo was indeed made sometimes in 2002, as alleged by the Wife, the Husband was then involved in the F Ltd. business which turned out to be unsuccessful later in 2003, it would therefore be a logical deduction that the parties would have been discussing the possible sale of S A’s Villas and to use the sale proceeds on F Ltd. and the family, which led to the preparation of the said memo by the Husband in which he appeared to be trying to figure out the selling costs after deducting the various payments and expenses including the renovations of £150,000.

32. This however does not necessarily follow that the Husband had acknowledged in the memo that the £150,000 came from the Wife’s father or that he should be repaid.  The Wife’s evidence is that most, if not all, of the renovation costs were paid with monies from her mother’s National Westminster account.  There is however no evidence that the monies in this account came from the Wife’s father.  The only evidence about the source of some of the funds in this account is that the proceeds of the sale of the Wife’s fashion business of about HK$2 million were deposited into this account.  It is not at all clear whether there were other monies in this account that came from any other sources.

33. It is of course the Wife’s evidence that it was her father who assisted her financially with her fashion business, which is probably true as it is unlikely that she would have the necessary capital at that time to start up her business, it does not however follow that with the sale of her business and the proceeds paid into her mother’s account, the money therein therefore belonged to her father and when money from this account were used to pay for some of the renovation costs of S A’s Villas, they became loans from the father and should therefore be repaid to him upon the sale of the property.

34. There is no question about the Wife’s parents, in particularly her father, providing financial assistance to her on various occasions prior to, during and after the marriage up to in fact today.  There are numerous examples, including the purchase of B House and S A’s Villas for her, the provision of her present residence, payment of $1 million for the renovation of her present residence, and so on, but the questions of what should be repaid, and how to repay them are not at all clear for such dealings or transactions between the Wife and her parents.

35. For the B House flat and S A’s Villas, the arrangements were more apparent because the purpose was clear : to assist the Wife in purchasing her accommodation, and the evidence is also clear as to the source of the funding : loans from the Wife’s father.  It therefore makes sense that after the properties were sold, these loans should be repaid.

36. It is however not so clear as to the other alleged financial arrangements.  For the Wife’s fashion business, as there is no evidence of how much financial assistance her father had provided to the Wife, it is not clear whether the subsequent sale proceeds of about HK$2 million were in fact more, or less, or equivalent to the money that was provided for, and if it was less, was the Wife required to meet the shortfall, or if there was surplus, how much was it and was the Wife entitled to treat it as her own, and above all, why were the sale proceeds paid into her mother’s account instead of to her father as repayment, as was the case with the 2 properties ?  These are just some of the many questions over the financial relationship between the Wife and her parents which were not answered, or answered adequately from the evidence before the Court.

37. Furthermore, if indeed the sale proceeds of the Wife’s fashion business which were deposited into her mother’s account were to be treated as repayment to her father, why then was the Wife allowed to draw on such sale proceeds from the said account from time to time throughout the marriage, not only to pay for the renovation of S A’s Villas, but also to meet her family’s expenses, as was her evidence, without any record which she would have been expected to keep so that she could account to her father for the purpose of repayment in future, and why was she expected to have to repay her father for monies drawn from this account for the purpose of renovations, but not for the various expenses of her family during the marriage ?

38. By asking all these questions, I do not mean to imply that I have reservation over the Wife’s credibility as a witness.  In fact, having heard and observed her in evidence, I find her generally to be a frank and honest witness, which I can also say the same about the Husband, but that in view of the way her finance has been intermingled with those of her parents, in particularly over transactions going back to some 7 or 8 years ago during the marriage, it is simply difficult, if not impossible, for her to give a very clear account or record of what monies from her parents all these years were supposed to be loans that needed to be repaid, and what were supposed to be gifts or financial assistance without any obligation to repay.  I believe that she has just wrongly assumed that the renovation costs of £150,000 paid from her mother’s account ought to be repaid upon the sale of S A’s Villas.  Given the evidence before me and for all the unanswered questions, I agree with the Husband that I should ignore any possible requirement to repay any renovation costs to anyone and that they should not be deducted from the sale proceeds.

39. I shall next consider the issue over the Wife’s seeking repayment from the Husband’s share of the sale proceeds of various expenses which she says he incurred after the separation.  They first appeared in her 4^th Affidavit (B3: 754) and amounted to HK$124,105.54 in total.  In her open offer letter of 6^th September 2005, the Wife appeared to have conceded that the council tax and utility bills could be paid out of the sale proceeds as they were incurred during the marriage and were therefore payable in any event, but she added J’s child benefit used by the Husband from September 2003 to February 2004 at the rate of £65 per month, with the final total amount adjusted to HK$118,086.10.

40. The Husband accepts liability for his tax of HK$82,064 and for the loan to his friend of HK$14,000, but disputes the other sums such as the bicycle consignment cost of HK$1,302.10 as it was for sending his bicycle from London to Hong Kong in January 2004 when he was hoping to join her there, while the HK$8,000 was money given to him for his use while in Hong Kong, both of which he argues were no different from other family expenses which both parties had paid during the marriage, to which I agree.

41. Although there appears to be cross criticisms of both parties in respect of their contribution to the marriage and the family, such as the Husband’s poor investments on his failed business, or the Wife’s failure to work regularly during the marriage, I am unable to find any evidence to justify such criticisms.

42. All the evidence in fact reveals that both parties had contributed financially towards the support of their family and their only child, the Husband with his salary and resources such as the sale proceeds of his U Ltd. shares, and the Wife with the money from the sale of her fashion business and resources from her parents, as well as with their Goldfish credit cards reimbursed from their HSBC joint account or the Wife’s mother’s National Westminster account, and there is simply no reason or basis to say any particular expenses paid by one party for the other during their marriage should be repaid in this manner. This is not a partnership action where it is necessary to keep a very clear and accurate account of all spending between the partners.  It is simply not practical or reasonable to do so in this jurisdiction, nor is it the intention, in my view, of the legislation on ancillary relief.

43. A lot of the court’s time had in fact been spent arguing over the parties’ failure to produce all the relevant copies of their Goldfish credit card, the Wife’s mother’s National Westminster account, or the parties’ joint HSBC account in London, with fingers pointing at each other of deliberately hiding the true financial picture from the court, allegations in which I am however unable to find any substance, and with the evidence available before me, I do not think anyone is guilty of misleading the court, nor do I think that the production of these missing documents would take the parties’ respective case any further.

44. The same argument, in my judgment, also applies to the 3^rd issue over the Husband’s request for his payment of £160,000 to the Wife’s father for S A’s Villas be repaid to him from the sale proceeds.

There is no dispute that the £160,000 came from the sale proceeds of the Husband’s U Ltd. shares.  However, once the parties had decided to purchase S A’s Villas as their matrimonial home, both have a duty to contribute towards the purchase price and the renovation thereof, in particularly the Husband as he then was gainfully employed and the main breadwinner of the family, and I fail to see why it matters whether the funding came from his salary, or his savings or the sale proceeds of his U Ltd. shares, which is no different from the Wife’s payments for the renovation costs whether they were from her own savings or from her parents, and if she is not entitled to such repayment, why should the Husband be ?  In the absence of any clear agreement between the parties over these payments at the time they were made, I regard them as no more different than the many other payments and financial contributions made by the parties for their family during the marriage, and I do not agree that the Husband should be allowed to the repayment of the £160,000 from the sale proceeds of S A’s Villas before their division.

45. I shall now deal with the issue of whether the Husband is entitled to 50% of the accrued dividends of HK$1,895,670 declared on the Wife’s shareholdings in K Insurance Limited and K Insurance Brokers Limited during the marriage.

46. There is no question that the Wife were given these shares after the marriage in October 1997, which are now worth more than HK$14.5 million.  Although she has stated at discoveries that they were gifts from her father, she looks on these shares her father’s to deal with as he may direct.  Her evidence is that when her father transferred his shareholding in these companies to her, she was then residing in London and she recalls signing some documents at her father’s request but did not pay much attention to them, and that it was only at such time when she was required to prepare her Financial Statement in these proceedings, that she approached her father for further information concerning these shares.  She was then told to obtain the details from his secretary and it was then that she became aware that dividends had accrued to her shareholdings over the years but they were never paid to her.

47. From the receipts for the annual dividends produced by the Wife on B3 : 820 – 827, it is clear that the payments were all made to her brother.  In her oral evidence the Wife said that she was told by her brother that he had paid all the dividends to their father to be re-invested into the companies, and that any sums which had not been so re-invested were probably intermingled with his own monies or in the joint account of the parents.

48. The Wife’s case is that as neither she nor the Husband has contributed to the acquisition of these shares and to a great extent both were unaware of their existence until after the breakdown of the marriage, she argues that the Court should not include them and the accrued dividends as one of the matrimonial assets for division between the parties, and that their existence has in no way contributed to the lifestyle established prior to the breakdown of the marriage.

49. It is quite clear from the evidence of this case that the Wife’s father has regularly made financial provisions for his children, including the Wife and her younger brother.  Many of these were no doubt generous provisions but not necessarily outright gifts as such that the Wife could deal with them as she wishes.  She sees these shareholdings as similar provision for her, probably as part of her future security, but that her father would retain the overall right to deal with them, which explains her lack of knowledge about them and the fact that the dividends were never once paid to her but instead all through her brother back to her father goes to support her case.  I therefore agree with her that although these shareholdings should be treated as part of the Wife’s assets, they were never part of the matrimonial assets nor of any value to the parties during the marriage and thereafter even up to now, and that although they do have the benefit of securing the Wife’s future, I do not agree that the Husband is entitled to share the dividends which the Wife has never received or benefited therefrom.

50. As both parties have already agreed that they should be allowed to retain all other assets in their sole name, whereas the Charles Schwab Investments in joint names be transferred to the Husband, my conclusion over the sale proceeds of S A’s Villas, which is the only remaining substantial asset of the marriage, is that it should be divided equally between the parties without any deduction for repayments, save for the 2 sums which the Husband has conceded, his tax of HK$82,064 and his friend’s loan of HK$14,000, which should be deducted from his share.  The above financial arrangements are to be in full and final settlement of all financial claims between the parties for themselves which claims shall stand dismissed. With his share of the family assets the Husband would be able to purchase his own residence in Vancouver if he so wishes, not necessarily the type of which he desires, but a reasonably decent home the standard of which would not be much different from the Wife’s present residence, and one which he can properly accommodate J during his visit, which lead me to the final issues between the parties which concern J.

51. Firstly, there is the Wife’s application for maintenance for J at HK$10,000 per month to be secured by a lump sum for 2 years of HK$240,000 from the Husband’s share of the sale proceeds of St. Ann’s Villas, on the basis that J’s reasonable needs amount to HK$20,000 per month for which the Husband should be equally responsible, and as he has failed to pay any maintenance for J since the breakdown of the marriage and the fact that he resides outside the jurisdiction, she believes that such maintenance should therefore be secured.

52. In her Financial Statement filed almost 1 1/2 years ago, the Wife put the total expenses for her household, herself and J at just under HK$25,000 per month, with J’s personal expenses at almost HK$7,300, including his school fees of HK$3,942 at K Junior School.  In her more recent 4^th Affidavit the Wife updated J’s monthly expenses to HK$20,840.88, and proposes that the Husband shall bear half of his expenses, hence her claim for $10,000 per month for J.

53. The Husband disputes this amount, arguing that J’s expenses could not have increased almost threefold over such a short period of time, even though if they may have included his share of the costs of the Wife’s household and the domestic helper, that his personal expenditure has also soared, such as entertainment to HK$1,000, lunch and pocket money to HK$2,000, and eating out at HK$3,00, all of which vastly exceed the Wife’s own expenses.  He believes that such high standard of living is well beyond the Wife’s income, and that therefore she must have been heavily subsidized by her parents, as has been confirmed by her own evidence that her parent often pay for their meals out, for their holidays and that she has the use of her father’s credit card.

54. It is argued for the Husband that if this is indeed the case, then it is a matter for the Wife and her parents, and it would not be right for her to ask him to support J to this standard of living that she herself cannot afford, nor can he, at his present annual income of CAD40,000, which is approximately CAD2,400 per month after tax, or HK$15,600 per month.

55. Although there is some criticism of the Husband under-utilizing his earning capacity, there is no evidence to indicate he had deliberately taken his present job to avoid his obligation to his son.  The evidence in fact shows that despite his apparent expertise in the field of information technology/computer software, the Husband had never been able to hold down his jobs or business for long or with any great success during the marriage, and hence the Wife must take him for what he is as far as his earning capacity is concerned.  It is of course hopeful that with the substantial lump sum that he is to receive in these proceedings, he may be able to make good use with some of it to improve on his earnings or earning capacity in future.

56. The Husband has put his current monthly expenses at CAD2,750, of which CAD800 is for his rent and CAD320 is what he says he can spare to contribute towards J’s maintenance. His other expenses appear to be normal and were not seriously challenged by the Wife. However if he is to use his lump sum to purchase his own accommodation, it will free up the CAD800 for rent and although he may then have mortgage payments to deal with, I believe he can still afford to increase his contribution to something like CAD600 for J to commence on the first day of the month following his receipt of his lump sum. I do not however agree that this payment should be secured as there is no evidence to suggest that the Husband would not face up to his responsibility to his son.

57. Finally, there is the issue over the Husband’s access to J. He says he has found it difficult to be far away from his son, and that despite numerous correspondence with the Wife regarding the matter, it was not until June 2004 when the parties appeared before another judge when she finally offered him staying access to J. He therefore fears that the Wife is either attempting to distance him from his son, or that it is the consequence of her over-protectiveness of J.

58. As it was, J had a holiday with his father in UK in 2004 and again in Vancouver this year, and according to the Husband, both holidays have been a great success.

59. The parties are now agreed that J should spend half of his summer holiday each year and alternate Christmas and Chinese New Year with the Husband so long as he is returned to Hong Kong and to the Wife’s care 3 days prior to the commencement of his next school term, but there is disagreement over the Husband’s request for access every Easter holiday and the Wife’s concern over the proposed arrangement for J’s flight to visit his father in Vancouver unaccompanied by any adult.

60. The Husband says he wants J to feel he has a second home in with his father in Vancouver, and that this is best achieved only by frequent visits there. The Husband feels that it is reasonable that he has every Easter with J as he must concentrate his time with his son during school holidays, and that J’s access with his father is the only time that he has the opportunity to spend time with his paternal extended family.

61. The Husband therefore proposes that J be allowed to fly as an unaccompanied minor to see him in Vancouver in all his future access as he himself has limited holiday time which he prefers to spend with his son in Vancouver, as otherwise if he were to fly to pick up J in Hong Kong and to fly back with him to Vancouver or to return him to Hong Kong afterwards, each trip will take up 3 days of his access to his son. Furthermore, he says there is also a large financial cost to making 2 trips for himself each time he wishes access to J.

62. The Wife denies that she is being difficult to the Husband’s access to J, but she is concerned that as J has just celebrated his 7^th birthday, at this age a flight across the Pacific for 16 hours is a major undertaking for him and that it should not be undertaken more than twice a year, and that the shorter school holidays in Christmas, Chinese New Year or Easter, with jet lag either way of the flight, do not recommend themselves to such distance travel. She says it would therefore be preferable if the Husband was to travel to Asia to have access to J either in Hong Kong or anywhere in the area where he himself can enjoy visiting as well, until J is a little older when he reaches his teens.

63. To assess J’s ability to fly as an unaccompanied minor, a report was urgently obtained from the Social Welfare Officer Mr. Ho who also attended the hearing for oral examination. Mr. Ho found that J is an adaptable and sociable child who he believes could cope with the journey under the supervision of the airline staff, though he also stressed the importance of the parents preparing J for such travel.

64. The Husband proposes that for J’s first visit, which should be this Christmas, he would arrange for someone J knows to collect him so that he would go unaccompanied one way only on his return flight back to Hong Kong to allow him to get accustomed to it. He also seeks an order for the Wife to share the costs of air travel for his access to J as he did not voluntarily end up living in a different country from his son and had J been still in London, he himself would never have left, and as a result of the Wife’s decision to li8ve in Hong Kong, he now finds himself having to pay 2 adult return fares plus J’s return fare every time he wishes access. Given the disparity in resources, and given that access is for J as much as for him, the Husband believes that it is only reasonable for the Wife to share the costs of travel for access.

65. In considering the question of access, the same principle over custody applies, i.e. the child’s welfare is of paramount consideration. There is no dispute that it would be in J’s interest to see his father and that includes spending time with him in his home in Vancouver. I do not believe that the Wife is trying to distance J from his father, nor do I think she is being over-protective, but as J has been under her sole care since their return to Hong Kong in August 2003, and in view of his age, it is natural and understandable, as all parents do, for her to be concerned if J is to undertake such a long journey for the first time of his life unaccompanied by any member of his immediate family.

66. However, J has also been quite accustomed to air travelling by now despite his young age and as assessed by the Social Welfare Officer, seems capable of undertaking such flights unaccompanied provided of course proper arrangements will be made with the airline for him to be escorted at all time from check-in to boarding the plane where the flight staff will take over, during which J will probably divide his time between watching TV and sleeping, and after landing he will again be escorted off the plane and taken all the way through custom and immigration until he is delivered into his father’s hands. So my question is : what could possibly go wrong during the trip that has caused the Wife so much concern? She has mentioned the possibility of J becoming sick, or needing to go to the toilet, or becoming frightened of air turbulence, but nothing really of the sort that cannot be handled by the airline staff, or that may expose him to any harm.

67. I repeat that I can understand the Wife’s concern, which is only normal and natural, but I also agree with the Husband that other arrangements such as for him or someone of his family to accompany J for the entire round trip are simply not practical, both financially and time wise, and that if such trips are to be delayed for several years until J is older, it will mean his time with his father will be reduced to a bare minimum which cannot, in my view, be in his best interest. Having heard the evidence, I believe that J should be allowed to undertake such a trip as proposed by the Husband provided the necessary arrangement referred to is in place for him throughout the entire trip, including his suggestion to get someone from his family that J knows to accompany him for the first trip in the forthcoming Christmas. If after the first trip, the Mother still finds it undesirable or unsuitable for J to undertake similar trips in future, no doubt she will bring the matter right back to court armed with good reasons for the necessary order. For these reasons and on the basis of the his proposed arrangements for J, I would allow the Husband’s application accordingly, but not for Easter as I agree with the Wife that it would not be suitable at this stage for J to undertake similar trip in Easter, not just because she says J needs to spend some time during that holiday to prepare for school examinations, but also because I agree that as it is between his Christmas and summer holiday, it would be one journey too long and too many for J at his age, and I accept the Wife’s proposal that it would be better to leave Easter flexible, and that if the Husband wishes to come to Hong Kong at this time, he can share Easter with J either here or take him for a short trip the neighbourhood.

68. As for the costs of J’s trips to see his father, I agree that the parties should share them as I look at them as part of J’s living expenses, but will let the parties work out the mechanics of such payments between themselves, failing which to come back to court for direction.

69. Lastly, on the question of legal costs which I understand to be not insubstantial for both sides, as neither party is wholly successful on all the matters that were argued before me, and that both have needlessly embarked on matters which I found not entirely relevant or helpful in resolving the issues, I think it is only appropriate that each should bear his/her own costs. This is an order nisi to be made absolute at the expiration of 21 days.