KEWS v. NCHC

FCMC 13087/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 13087 OF 2008

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BETWEEN

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J U D G M E N T

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1.  This is a trial on the Respondent's applications for:

(1)   Periodical payments for her maintenance;

(2)   An adjournment of her application for capital provision under the Matrimonial Proceedings and Properties Ordinance, Cap.192 (“MPPO); and

(3)   An adjournment of her application under s.17A of the Matrimonial Causes Ordinance, Cap.179 (“MCO”).

2.  For the sake of convenience, I shall call the Petitioner “the Husband” and the Respondent “the Wife” in this Judgment.

Brief History

3.  These are a relatively young couple without any children.  The Husband is now aged 34 and the Wife aged 32.

4.  The parties met in about 1993 to 1994 when both of them were still in their teens.  The Husband later went to the United States to further his tertiary education at the Harvard University.  In the summer of 1996, the Wife went to visit and stayed at the Husband’s then residence in the City of Boston.  According to the case now run on behalf of the Wife, a most unpleasant incident happened during her stay which, it is now argued, may have triggered all the mental and physical disabilities now suffered by the Wife.  There is allegation that during the stay, the Husband had molested her and later left her alone in the flat without food and company.  This, according to the Wife’s case, had caused a psychological trauma on the Wife.  I shall call what happened in 1996 the “1996 incident” in the Judgment below. 

5.  The 1996 incident is denied by the Husband.

6.  I must pause here to say that despite the above serious allegation, the Husband’s conduct, as far as that incident is concerned is never a live issue at this trial.  This is so because the Wife is not in a position to give evidence in this regard.  She is now pursuing her claims through her Guardian ad litem because her mental condition does not allow her to give evidence in court.

7.  Despite the said incident, what happened was that the parties continued their friendship which later even developed into a romantic relationship.  They eventually got married in the year of 2000 despite the disapproval of their parents, especially on the side of the Husband. 

8.  After marriage, the Husband’s relationship with his parents improved.  He finally got their blessings and a big banquet was hosted at the Hong Kong Shangri-la Hotel at the expense of the Husband’s father.

9.  It was most unfortunate that even before their marriage, the Wife had started to show signs of her illness, firstly in the form of eating disorder.  The initial symptoms were not serious but over time, they have progressed to such a stage that the Wife is now virtually home bound and is not able to take care of herself.  Her mother is now appointed as her Guardian ad litem to carry on the present litigation.

10.  As far as the Wife’s medical condition is concerned, from about 1997 to 2000, the Wife had sought treatment from various psychiatrists for panic attacks, insomnia and depression.  However, in 2002, she was diagnosed to be suffering from a very rare gut disorder called “superior mesenteric artery syndrome”.  This is how the Wife’s father (hereinafter called “RW2”), a medical practitioner himself, described the Wife’s medical condition in his affidavit filed on 16 March 2010 (A4/1093):

“7.…This is a very rare disease in which the artery (superior mesenteric artery) coming out from the aorta supplying most parts of the gut impinges on the second part of the duodenum thus causing blockage to the normal passage of food from the stomach to the small bowel…”

11.  For the past 8 years, the Wife had gone through 10 operations during which a large part of her digestive system had to be removed, including the whole of her stomach.  For a considerable period of time, she could not eat properly and had to rely on intravenous fluid and nutrient solutions.  According to RW2, there has been some slight improvement recently in that the Wife is now able to eat 2 meals a day.  However, she only weighs 70 pounds and is on heavy medication.  She is still home bound and a full time maid has to be employed to look after her. She is now under the joint care of 2 experts in gastrointestinal diseases for her gut problem and another expert for her genital prolapse.  It is sad to say that all experts are of the view that it is rather unlikely that she would be able to recover to the extent of having normal daily activities or to enter into gainful employment. 

12.  It is not in dispute that despite the deterioration of the Wife’s health during the marriage, the parties remained attached to each other at least up to 2006, when the Husband said he needed a break and to re-establish his career.  The Husband returned to stay with his parents and the parties remain separated ever since.

13.  The Husband issued a petition for divorce on 3 November 2008 based on 2 years separation.  A decree nisi was granted on 24 March 2009.  On 19 February 2009, the Wife filed both the Form A (Notice of an Application for Ancillary Relief) and Form B (Notice for an Application Under Rule 56B). 

14.  In her Form A, the Wife has applied for all kinds of ancillary relief including:

(a)   an order for maintenance pending suit;

(b)   a periodical payments order;

(c)   a secured periodical payments order;

(d)   a lump sum order;

(e)   a settlement of property order;

(f)   a transfer of property order; and

(g)   a variation of settlement order

15.  A FDR hearing was later held before Judge Melloy which failed and thus the matter was transferred to my court for trial.

16.  At trial, it was common ground that during the 6 years of marriage from 2000 to 2006, the Husband had only been engaged in gainful employment or business for a relatively short period of time.  That was so partly due to the Husband’s unsuccessful business ventures but also partly due to the fact that the Husband had to look after the Wife or accompany her to seek overseas treatment.  During all these years, the parties mainly lived on the generous support of their respective families.

17.  It is now the case of the Wife, which was advanced by the Guardian on her behalf that the Husband, though not currently having substantial assets under his name, does come from an extremely wealthy family.   It is submitted in counsel’s final submission that justice can not be done to the Wife’s capital claims at this time because a division of the Husband’s existing capital assets can in no way afford sufficient security for the Wife’s future needs.  There is little uncertainty that the Husband will, in due course, benefit by inheriting a proportion of his parents’ substantial wealth.   Furthermore, the Husband has not to date fulfilled his promise in his career that his education and qualifications reflect.  Therefore, she is now asking for an adjournment of her application for capital provision sine die.  In the meantime, the Husband should be ordered to give proper maintenance in the form of periodical payments so as to cater for the current needs of the Wife.

18.  In counsel’s opening submissions, there was mentioning that as the Wife is unable to give evidence on the 1996 incident, she wishes to retain her right to seek compensation from the Husband when she is able to be present and the application may be conducted on a level playing field.  By this, I take it as meaning that an adjournment should be granted so that she would be able to argue on the Husband’s conduct when she becomes psychologically fit to give evidence herself.

19.  The Wife has also made an application under s.17A of the MCO (A1/6).  Similarly, the Wife also asks for this application to be adjourned sine die with liberty to restore.

20.  The Husband’s stance is that although he does come from a family with a famous name, neither he, nor his parents are as wealthy as the Wife thinks they are.  The Husband agrees to provide periodical payments for a limited period of time (6 years) but he objects to any indefinite period of adjournment of the Wife’s application for capital provision or her s.17A application.

Issues

21.  After hearing the parties and their counsel’s submissions, I think these are the issues to be resolved:

(1)   Does the Husband come from an extremely rich family?

(2)   Should the court adjourn the Wife’s application for capital provision and her s.17A application?

(3)   What kind of ancillary relief should be granted to the Wife?

Does the Husband come from an extremely rich family?

22.  It is the case of the Wife that the father of the Husband who is in his early seventies and is the grandson of the founder of the WO empire.  His mother is seventy and is the daughter of the late Dr. L, one of the founders of a hospital in Hong Kong. He was the Chairman of the hospital until his death in 2005 and thereafter, the Husband’s brother W has become the chairman.   It is the Wife’s case that both of the Husband’s parents have substantial interest in their respective family companies.

23.  As far as I can understand from the Wife’s case, the wealth of the Husband’s parents is important in 2 ways.  First, it is not in serious dispute that the Husband has no substantial assets under his name at the moment.  But as he has 2 extremely wealthy parents, it is likely that he will inherit from his parents’ substantial wealth in the future.  Therefore, it is only fair that the Wife’s application for ancillary relief in the form of capital provision be adjourned to a later time.

24.  Second, when this court considers the periodical payments to be made by the Husband towards the maintenance of the Wife, not only his present income or earning capacity should be taken into account.  The court should also take into account of the likely assistance that the Husband’s parents would give in order to assist him to comply with a court order in this regard.  Here the notion of judicious encouragement comes into play.

The Evidence

25.  As far as evidence in concerned, the Wife did not give evidence herself, obviously due to her present psychological predicament.  Only the Wife’s parents did give evidence to the effect that the Husband’s parents have given financial support to the parties in the past so as to allow them to lead a reasonably high standard of living even without the Husband having to enter into regular employment.  They said the Husband was able to buy various expensive items for the Wife during marriage. They have even compiled a list of designer goods (as shown in Tab 4 of counsel’s opening bundle) with a total value of $1,135,120.

26.  The Husband also gave evidence.  He does not dispute that he comes from a reputable family but his parents are not as rich as others think.  He said his parents are already in their seventies and live in a 1,300 sq ft. rented apartment in Happy Valley. They drive a common Japanese car with no chauffeur.  In short, they are not living an extravagant life at all.

The Court’s View

27.  As far as this issue is concerned, I note that there is no direct evidence on the financial well being of the Husband’s parents.  They were not summonsed to give evidence or to be cross examined.  During his submissions, Mr. Pilbrow SC, counsel for the Wife tried to convince this court of their enormous wealth in 2 ways.

28.  First, reference was made to the 2008 Annual Report of the WO Company International Limited (A4/1174).  From the said document, one can see that it is a company controlled by the Husband’s family with the father of the Husband being named as a Non-executive Director.  From the structure of the company management, one can safely assume that the Husband’s father was not the person in charge as he was only one of the 5 Non-executive Directors.  The Executive Directorship belonged to another member of the Husband’s family.

29.  For the 2008 results, the company recorded a loss of $172,600,000 but still a total annual dividend of $0.34 per share was declared.

30.  From the consolidated balance sheet, the net assets of the company amounted to $6,779,507,000.  If one should look at the shareholdings of the Husband’s father, he was in possession of 150,000 shares, which was 0.05% of the total shareholdings. Translating that into monetary terms, the worth of those shares were $3,389,753.  For dividends, he should have received a total sum of $51,000 (150,000 x $0.34= $51,000) for the year of 2008.

31.  For the year of 2009, the company made a profit of $736,800,000 with annual dividends of $0.70 declared. The net assets of the company amounted to $9,374,919,000.  For the Husband’s father’s shareholdings, which remained the same as in previous year, they were valued at $4,687,459 ($9,374,919 x 0.05% = $4,687,459) and the total dividends received at $105,000 (150,000 x $0.70 = $105,000).

32.  As there is no other evidence on the financial well being of the Husband’s father, I am not satisfied that he is a very rich man as portrayed by the Wife.

33.  Mr. Pilbrow has also referred me to the wealth of the Husband’s mother.   He quoted certain passages in a Judgment handed down by the Court of Appeal concerning a matrimonial case involving the Husband’s uncle (i.e. the Husband’s mother’s younger brother) W, and his former wife (CACV 70/1998, Date of Judgment: 17 December 1998) (A4/1184-1218). 

34.  In the Judgement, the court recited the findings of Deputy Judge Saunders (as he then was as the trial Judge) that W was entitled to a trust (Waltly No. 1 Trust Fund) jointly with the Husband’s mother and other descendants of the family.  The value of this trust amounted to $24,500,000.  Naturally, the judgement did not touch upon the Husband’s mother’s share in the trust. 

35.  The judgement also recited the evidence of W’s parents on them making a mutual will leaving life interests to each other and on the death of the survivor a gift over to the children (i.e. including the Husband’s mother) equally.   As the parents are now deceased, it is the Wife’s case that the Husband’s mother should have received certain legacies from the estate.  However, there is no evidence on the amount of the legacies received.

36.  After considering the above evidence, I am afraid that I can not be satisfied that the Husband’s parents are people in the “extremely rich” category as depicted by the Wife.  There is no doubt that both of them come from famous and reputable families.  With this background and their past endeavours, I am sure that they are now living a happy and comfortable retirement life.  But with the existing evidence, there is simply no basis for this court to draw the conclusion that they are extremely rich people as believed by the Wife.

Should the Court adjourn the Wife’s application for capital provision and/or her s.17A application?

37.  The next issue is the Wife’s application for adjournments.

38.  For the matter of adjournment, the Wife has adopted a 2- way approach.  First, she asks for her application for capital provision under ss.4 and 6 of the MPPO be adjourned sine die with liberty to restore, presumably pending the recovery of her health so that she can give evidence on the 1996 incident, and/or the Husband’s inheritance from the estates of his parents, thus enabling him to give a more generous package towards the maintenance of the Wife.

39.  Second, the Wife has also filed a Notice under Rule 56B of the Matrimonial Causes Rules, Cap.179A (“MCR”) making an application under s.17A of the MCO, which reads:

“17A. Financial protection for respondent in certain cases

(1) This section shall apply where-

(a) the respondent to a petition for divorce in which the petitioner alleges any such fact as is mentioned in section 11A(2)(c) [i.e. 1 year separation with consent] or (d) [i.e. 2 years separation] has applied to the court under this section for it to consider the financial position of the respondent after the divorce; and

(b) a decree nisi of divorce has been granted on the petition and the court holds that the only fact on which the petitioner is entitled to rely in support of his petition is that mentioned in section 11A(2)(c) or (d).

(2) The court hearing an application by the respondent under subsection (1) shall consider-

(a) all the circumstances, including the age, health, conduct, earning capacity, financial resources and financial obligations of each of the parties; and

(b) the financial position of the respondent as, having regard to the divorce, it is likely to be after the death of the petitioner should the petitioner die first.

(3) Notwithstanding anything in this Ordinance but subject to subsection (4), the court shall not make absolute the decree of divorce if an application has been made under subsection (1), unless it is satisfied that-

(a)the petitioner should not be required to make any financial provision for the respondent; or

(b)the financial provision made by the petitioner for the respondent is reasonable and fair or the best that can be made in the circumstances.

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40.  As one can see from the above provision, in a case where the petitioner obtains a decree nisi based on 2 years separation, the said decree should not be made absolute unless the court is satisfied that:

(1)   the petitioner should not be required to make any financial provision for the respondent; or

(2)   the financial provisions to be made is reasonable and fair or the best that can be made in the circumstances.

41.  Similarly, the Wife asks for this s.17A application to be adjourned as well.  The effect of this application, if successful, will prevent the decree nisi from being made absolute, thus preventing the formal dissolution of the marriage.

The Wife’s Application for Capital Provision under MPPO

42.  Mr. Pilbrow has, in both his opening and final submissions, referred me to a number of cases to support the proposition that despite the general policy that the court will attempt to deal with the parties’ respective capital claims shortly after the breakdown of the marriage, the court has the power to adjourn the capital claims in exceptional circumstances.

43.  In the case of MT v. MT (Financial Provision: Lump Sum) 1992 1 FLR, the wife therein made an application for a lump sum against the husband who had no assets.  The husband came from a very wealthy German family and his father was in an advance age.  Under German law, the husband was entitled to at least 1/8 of the estate of his father.  As the husband was expecting to inherit a substantial legacy from his father’s estate on father’s prospective demise in the near future, the court granted the wife’s application for adjournment of her application for a lump sum until the death of her father-in-law.  Bracewell J gave the reasons for allowing the adjournment as follows (at p.368 D):

“I have considered all these authorities with care, and I am satisfied that I do have a discretionary power to grant an adjournment of the wife’s application for a lump sum, and I further find that it is appropriate for me to exercise that power in favour of the wife. I am satisfied that justice between the parties demands such an adjournment in the unusual circumstances of this case. My reasons for exercising discretion in favour of the wife are as follows:

1. The husband has the certainty of a Pflichtteil [i.e. 1/8 of the estate]. The amount will reflect upon whatever is ultimately the appropriate order in favour of the wife.

2. The father is 83 and, on any view, is likely to die within the next few years and unlikely to survive beyond that. He is said by Dr. Gigleberger to be in excellent health, but the husband acknowledges that he has had a serious operation and has a heart condition for that he takes pills. Therefore, I do not regard his death as a long term matter, but I find it foreseeable.

3. The case cannot, in justice, be dealt with now by any order by reason of the imponderable factors.

4. The parties have always anticipated and lived for this prospective capital, and, in a long marriage with no other capital, the wife would be harshly done by if she did not have eventually a share commensurate with her needs and the amount of capital available.

5. The attitude of the husband towards providing for his wife gives me serious concern as to her financial future if she is not permitted to apply for a lump sum at a later date. The husband has even gone so far as to invite the Swiss bank to call in a loan which would have had the effect of rendering the wife and son homeless. He has written of forcing the wife, by financial pressure, to return to Germany against her wishes. Reliance on periodical payments places her in a precarious position. They can be only capitalised on the application of the payer, which the husband, on my judgment, would never do, since he objects to the wife having any capital in any circumstances. To restrict her to periodical payments only would put her at the mercy of her husband, who I find would seek actively to minimise his responsibilities.

6. The only possibility of a clean break, which must be desirable in this case, is by adjournment of the application.

7. The effect of refusing to adjourn would mean that the wife would be permanently without capital even to buy a modest property in an unfashionable area of London, unless she were to remarry well. On the other hand, the husband would remain with the prospect of substantial wealth for him alone to enjoy.”

44.  It is clear from the above authority that the court does have a discretionary power to grant an adjournment of an application for capital provision under special circumstances and I believe that the Husband is not attempting to argue otherwise.   The issue here is whether this court should exercise this discretionary power in favour of the Wife under the circumstances of this case.

45.  If one should look at the facts of the present case, one would immediately realise that they are very much different from those in MT v. MT. 

46.  Here, the Husband’s parents are in their early seventies and there is no evidence whatsoever to suggest that they are in bad health.  More importantly, I have already ruled, in the earlier part of this Judgment, that they are not extremely wealthy people as the Wife would like to believe.  Therefore, it is unlikely that the Husband would receive a substantial legacy from his parents’ estate even if they should pass away in the near future. Furthermore, the Husband’s entitlement to their estate is not guaranteed as the husband was under German law in the case of MT v. MT. 

47.  All in all, I am not convinced that even if I should grant an adjournment to the Wife’s application for capital provision, her case would be assisted in any substantial way by the Husband’s prospective succession to his parents’ estate, which I believe would not be happening in the near future.

48.  Mr Pilbrow has also relied heavily on the case of Hardy v. Hardy [1981] 2 FLR 321 in which Ormrod LJ has given a rather detailed discussion on the difference between a s.23 or 24 application under the English Matrimonial Causes Act 1973(which is equivalent to our ss. 4 and 6 of the MPPO) and a s.10 application of the same Act (which is equivalent to our s.17A of the MCO).

49.  According to the facts of Hardy, the parties married in 1967 and within wedlock, 2 children were born.  The husband was the son of an extremely well known bookmaker, who was also a race horse trainer on a large scale.  The husband worked as an assistant trainer for his father. It was apparent that the father was an extremely rich man having 2 businesses – a bookmaking business and a racehorse training business- both of which clearly were on a very large scale. However, the husband only received at that time the minimum salary payable under union arrangement for assistant trainers, which was then GBP 70 per week.  It was upon that basis that the court was asked to deal with the financial provision for the wife.

50.  The wife in Hardy initially only filed a notice of application under s.10, but was later advised by the Registrar to make an application under ss. 23 and 24 as well under an apparent incorrect practice that s.10 application was to be treated as if it was an application under ss.23 and 24.  The fact that the wife’s initial application was only restricted to s.10 is particularly important and this will become apparent in the discussion below.

51.  At the hearing before the registrar, the wife asked for an adjournment of her application for a lump sum on the basis that it would not be possible for her to show on the then existing evidence that it was a case for a lump sum, but she wished to reserve her position to a future time when the husband has some assets.  The application was refused by the registrar who then proceeded to consider the wife’s application for a lump sum.  On the then available evidence, the application for a lump sum was dismissed.  The wife appealed.

52.  Ormrod LJ stated at p.323F of his judgment that this practice of treating the 2 applications to be the same was obviously wrong:

“ We are told that the wife’s solicitors, who practice in Nottingham, believe that the practice in the Nottingham county court, dealing with s.10 applications, is to treat them as if they were applications by the wife for periodical payments, lump sum and/or property adjustment orders under ss. 23 and 24 of the 1973 Act. If that is the case the practice is manifestly wrong and requires to be revised. The two forms of relief are quite distinct, although of course they overlap.”

53.  Obviously this confusion has led the registrar to suggesting the wife to file an application under ss.23 and 24 and subsequently overlooking the wife’s s.10 application.

54.  Furthermore, as the wife in Hardy was a respondent who has not filed an answer claiming relief, she was entitled to make an application for ancillary relief under s.23 at any time after the decree of divorce as of right (r.68(3) of the English Matrimonial Causes Rules 1977 refers, which is equivalent to our r.68(3) of MCR).  His Lordship has also stated at p.327 C that what the wife could have done was simply to withdraw her application for a lump sum before the registrar and that would be the end of the matter:

“ So, we have the situation that the wife did not need to make a claim at all for a lump sum. Moreover, has Mr. Martineau, when he appeared before Mr. Registrar Guest, simply stated to the registrar that he was not proceeding with his claim for a lump sum, the matter would have stopped there. He could not have been forced to proceed with it. The only difficulty in this case is that, instead of stating to the registrar that he was not going to proceed with his application, Mr. Martineau, very understandably, used the conventional language and asked for his application for a lump sum to be adjourned generally. Speaking for myself I cannot believe that this purely semantic difference should be allowed to make potentially so vast a difference to this wife; the difference between having her application for a lump sum dismissed and therefore finally disposed of, and preserving it for what it is worth in the future.

55.  As a result, the wife’s appeal to the English Court of Appeal was allowed.

56.  As far as our case is concerned, I think it can be distinguished from the case of Hardy in 2 important ways.

57.  First, unlike the wife in Hardy, the Wife in this case has filed an application for all forms of ancillary relief on her own initiative by filing her Form A, together with the s.17A application. Therefore, she could not be regarded simply as a respondent who has not made a claim for relief in the answer and so who would have an unrestricted right to make an application in the future.

58.  Second and even more important, the husband in Hardy clearly had an extremely wealthy father and his income was deliberately kept to a minimum even though he was working for his wealthy father.  Therefore, it was fair to allow the wife to reserve her position until a later time. 

59.  However, in the present case, I have already ruled that the Husband does not have an extremely rich father.   Furthermore, there is no suggestion that the present income of the Husband was deliberately kept at a minimum so as to defeat the Wife’s claim.  To be fair to the Wife, her counsel did try to convince this court that the Husband was not utilising his full earning capacity, on which I will discuss later in this judgment, but this is certainly not a case in which there was a collusion between the Husband and his wealthy family trying to defeat the Wife’s claim at all costs.

60.  Based on the above facts and reasoning, I am not convinced this is a proper case for me to exercise my discretion to grant an adjournment to the Wife’s application for capital provision under the MPPO.

61.  Before I leave this issue, I would like to say something on the 1996 incident.  I remind myself that it is also the Wife’s case that the application under the MPPO should be adjourned so that she would be able to argue on the Husband’s conduct when she is fit to give evidence herself.

62.  The first observation that I would like to make is that the Wife’s evidence on the 1996 is rather flimsy, if there is any evidence at all.  More importantly, I have to bear in mind that the 1996 incident, if it did happen at all, happened 4 years before the parties’ marriage.  I have strong reservation in whether the Wife can establish the causal link between the 1996 incident and her subsequent psychological and physical disabilities, bearing in mind that their romantic relationship had eventually blossomed into a marriage which lasted for at least 6 years.

63.  Despite all the sympathy I may have towards the Wife for her present predicament, I am afraid her chances of succeeding in her argument on the Husband’s conduct, if we really do come to that stage, is rather slim.  Therefore, I do not accept the issue on the 1996 incident to be a valid ground for the granting of an adjournment of the Wife’s application under the MPPO.

The Wife’s s.17A Application

64.  I now come to consider whether there should be an adjournment of the Wife’s s.17A application.

65.  As stated in the case of Hardy, the applications under ss. 4 and 6 of the MPPO and s.17A of the MCO are different in nature.  Therefore, I have some reservation when counsel stated in the conclusion of his final submission that “ [The Wife] seeks an order that her claims for capital both under the M.P.P. O. and M.C.O. be adjourned sine die with liberty to restore.” 

66.  It is my view that s.17A is not a provision for a party to claim for maintenance, be it in the form of periodical payments, lump sum or otherwise.  It merely states that the court shall not make absolute the decree nisi unless it is satisfied that the petitioner should not be required to make any financial provision for the respondent or that the financial provision made is reasonable and fair or the best that can be made in the circumstances.

67.  The effect of the Wife’s application for adjournment of this s.17A application, if successful, is to delay the granting of a decree absolute for an infinite period. 

68.  I have already stated the reasons for refusing an adjournment of the application for capital under the MPPO and I do not intend to repeat them here, but it suffices for me to say that those reasons are also relevant in my consideration on whether to adjourn the s.17A application.

69.  In addition, I take notice of the facts that this was a not a particularly long marriage; the parties had no children; during the 6 years of marriage, the Husband did provide support to the Wife in terms of some monetary contribution and accompany her to seek various treatments both locally and overseas; they have separated for over 4 years; and most importantly, both of them are of a relatively young age.  The Husband is now aged 34 and I understand that he has now entered into another intimate relationship.  Under the circumstances of this case, I think to deny him a chance to remarry for an indefinite period, or may be for the rest of his life is not a fair order to be made.  In the circumstances, the Wife’s application for an adjournment of her s.17A application is also refused.

What kind of Ancillary Relief to be granted to the Wife?

70.  As I have refused to adjourn both the Wife’s application for capital provision under the MPPO and the s.17A application under the MCO, I now proceed to consider the Wife’s application for ancillary relief.

71.  I think it would be useful if I should set out the parties’ respective positions on ancillary relief here.

72.  It is clear from the Wife ‘s arguments presented during the course of the trial that she accepts that there are presently no assets standing under the name of the Husband and that was why she asked for an adjournment of her application for capital provision to a later time.  It therefore follows that upon the refusal of her application for adjournment, and upon the consideration of the s.7 factors, a natural consequence would be for the Wife’s application for capital provision to be dismissed.

73.  Before I leave the topic of the Wife’s application for capital provision, I think her counsel had at one stage suggested that the court should consider the notion of judicious encouragement saying that as the Husband came from an extremely rich family, her parents should somehow be encouraged by a judicial decision to cater for the Wife’s future needs even though the Husband himself was not in a position to shoulder up this responsibility at this moment.  However, as can be seen from the earlier part of this judgment, the court has already ruled that the Husband’s parents are not extremely rich people as believed by the Wife, therefore, the notion of judicious encouragement has no place in this judgment.

74.  As far as the claim for periodical payments is concerned, the Wife had quantified her needs at $42,550 per month.  The reasonableness of this figure was not really challenged by the Husband and therefore, I do not intend to go into a detailed discussion of the quantum.  What is really in issue is the Husband’s ability to pay.

75.  It is the Husband’s case that he is only earning a monthly sum of $14,000 and so he is offering to pay this sum as his contribution towards the Wife’s maintenance, but limit it to a period of 6 years, which is a period more or less equal to the length of their marriage.

The Law on Ancillary Relief

76.  The jurisdiction of the Court in granting financial relief (which includes both periodical payments and lump sums) for a party is governed by section 4 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”) which provides:

“4. Financial provision for party to a marriage in cases of divorce, etc.

(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may, subject to the provisions of section 25(1), make any one or more of the following orders, that is to say-

(a) an order that either party to the marriage shall make to the other such periodical payments and for such term as may be specified in the order;
(b) an order that either party to the marriage shall secure to the other to the satisfaction of the court, such periodical payments and for such term as may be so specified;
(c) an order that either party to the marriage shall pay to the other such lump sum or sums as may be so specified.

(2) Without prejudice to the generality of subsection (1)(c), an order under this section that a party to a marriage shall pay a lump sum to the other party-

(a) may be made for the purpose of enabling that other party to meet any liabilities or expenses reasonably incurred by him or her in maintaining himself or herself or any child of the family before making an application for an order under this section;
(b) may provide for the payment of that sum by instalments of such amount as may be specified in the order and may require the payment of the instalments to be secured to the satisfaction of the court. “

Section 7 Considerations

77.  In deciding on how to exercise its power in this regard, the Court is bound to consider Section 7 of MPPOwhichprovides:

“7. Matters to which court is to have regard in deciding what orders to make under sections 4, 5 and 6

(1) It shall be the duty of the court in deciding whether to exercise its powers under section 4, 6 or 6A in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say-

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.”

Income, Earning Capacity, Property and other Financial Resources

The Wife’s Situation

78.  I have already described the present medical condition of the Wife in the earlier part of this judgement and there is no dispute that she is not in a position to look after herself, not to mention in earning a living.  She is now totally dependent on the financial support of her parents with a monthly contribution of $14,000 from the Husband.

The Husband’s Earning Capacity

79.  The Husband’s financial position is highly contentious, not on how much he is earning at the moment, but on whether he has fully utilised his earning capacity.  There is no dispute that he is earning a monthly income of about $14,000 per month (after deduction of MPF) and he has contributed the whole sum of that money towards the maintenance of the Wife.  The Wife is saying that he has an earning capacity much higher than $14,000 per month.

80.  It is the Wife’s case that the Husband has a Harvard degree in Economics and has just completed the EMBA from Kellog/HK UST Business School which is an undisputed and valuable asset.  According to the Financial Times, the Kellog EMBA ranked number 1 in the world in 2009 and its graduates commanded an average annual salary of about HK$ 225,000 per month (USD 345,111 per annum). In addition, the Husband was qualified to practise as a stock broker having passed the Securities and Futures Commissions Paper 1 to be a licensed representative for dealing in securities and advising in securities and asset management.

81.  The Husband is currently employed by a Swiss private bank as a Senior Control Officer with a monthly salary of $15,000.  According to him, after the deduction of MPF, the net income is $14,250.  At trial, he gave evidence to say that he was informed by the management that by the end of this year, his salary will be increased but the amount is not yet certain.  He said it may be increased to something between $30,000 to $40,000 per month.

82.  On the face of it, I do agree that for a Harvard graduate and an EMBA graduate, a monthly salary of $14,000, or even $30,000 to $40,000 seems to be too low.  But I also have to consider the special circumstances of this case, including the Husband’s career history as follows:

(1)   The Husband’s Harvard degree was obtained in 1998.  After graduation, he worked with a company called A for a short period of time at the salary of $24,000 per month.  He left the company in 1999 to care for the Wife who told him that she had cancer, which was untrue.

(2)   He worked for another company called NH in February 2001 but left upon the request of the Wife as she did not like being alone.

(3)   After rejoining NH in 2002, the Husband changed to part time in January 2003 after the Wife’s first operation in November 2002.

(4)   From December 2003 to March 2004, the Husband accompanied the Wife to a Clinic in the USA for treatment.

(5)   In April and May 2004, the Husband and Wife were in Vancouver for faith healing.

(6)   From September to December 2004, the Husband and Wife attended a faith healing church in Texas.

(7)   The parties separated in 2006 after which the Husband returned to work for NH in May 2006 but left in February 2007 as the business did not prosper.

(8)   In 2007, the Husband studied for the Securities and Future Commission Paper 1 Exam and obtained a license for Dealing in Securities, Advising in Securities and Asset management in March 2008.

(9)   In January 2009, the Husband attended an Executive MBA program at the HKUST with sponsorship from his father and graduated in May 2010.

(10)  On 24 February 2009, he commenced his present employment at a salary of $15,000 per month, to be increased to about $30,000 to $40,000 by the end of this year.

83.  From the above chronology, I tend to agree with Mr. Egerton’s submission that the Husband’s career was put on hold from 1999 to 2006.  He is now in his mid-thirties and has to compete with those much younger graduates.  A Harvard degree but without any relevant working experience is really nothing.  His EMBA was only obtained a few months ago and this has already helped him in getting a prospective increase in salary.  He is now working very hard in the process of rebuilding his career and trying to become financially independent and self-sufficient.  In the circumstances, I do not agree with the Wife’s contention that the Husband is not utilising his full earning capacity.

The Husband’s other Financial Resources

84.  It is part of the Wife’s case that during the subsistence of the marriage, the parties had enjoyed a reasonable high standard of living without the Husband having a regular or highly paid employment.  This was possible because the parties had the financial support of the Husband’s wealthy parents. 

85.  I have already ruled that the parents of the Husband are now leading a comfortable retirement life but they are not people in the extremely rich category as believed by the Wife.  Furthermore, I think it is quite clear from the evidence that the parties’ reasonable high standard of living was not dependent solely on the Husband’s parents.  No doubt, they had provided financial assistance to the parties, for example by holding a big wedding banquet and by providing financial assistance in terms of paying for the parties’ credit card and other spending. But it was equally true that the Wife’s parents had also provided financial assistance to the parties.  For example, RW2 had once purchased a flat in Causeway Bay and allowed the parties to live there.  He had even signed blank cheques for the parties’ use when they went overseas for treatment.  Therefore, I am satisfied that the parties have received financial assistance from their respective parents during the subsistence of the marriage.

86.  Obviously, the Husband’s parents are still supporting him financially or otherwise he would not be in a position to contribute all his income for the Wife’s interim maintenance. There is no reason to believe that such support will not be continued.

87.  Equally, the Wife’s parents are also supporting her because the present contribution of the Husband is obviously not enough.  I believe that support will also continue.

Financial Needs, Obligations and Responsibilities

88.  In her Form E, the Wife has quantified her needs at $42,550 which was not seriously challenged at trial. However, according to RW2, this figure may likely to increase in the future because he will no longer be able to purchase certain medicine at a discount after his retirement  in a few years’ time.

89.  In the Husband’s Form E, he quantified his financial needs at $45,900 which is inclusive of the $14,000 interim maintenance that he is currently paying to the Wife.

Standard of Living Previously Enjoyed

90.  There is no dispute that both parties had a reasonably high standard of living during marriage, which was made possible only by the financial support from their respective parents.

Age and Duration of Marriage

91.  The Husband is now aged 34 and the Wife aged 32. 

92.  They married in 2000 and separated in 2006.  This marriage lasted for 6 years.

Physical and Mental Disability

93.  The Wife is suffering severe physical and psychological disabilities.  Her medical conditions were set out in paragraphs 10-11 above and I do not intend to repeat them here.

94.  There is no evidence to suggest that the Husband is suffering from any form of physical or mental disability.

Contribution

95.  As far as financial contribution is concerned, I note that both parties had to rely on the generous support of their respective parents in order to maintain their high standard of living. As to other contribution, I am satisfied that the Husband has devoted much of his attention to the Wife during her sickness, for example by accompanying her to overseas treatment.  I trust this must have an adverse effect on the development of the Husband’s career.

Ancillary Relief for the Wife

96.  After considering all the circumstances of this case and in particular, the Wife’s future needs and the Husband’s present and future earning capacity, I am minded to grant a periodical payment order in favour of the Wife.  As to quantum, I am satisfied that a reasonable figure would be a monthly sum of $14,000 until the end of this year and thereafter to be increased to a monthly sum of $21,000.  I came to these figures because from now on to the end of year, $14,000 per month is already the whole of the Husband’s monthly income.  As from 2011, I expect the Husband’s salary to be increased to $30,000 to $40,000 per month.  The sum of $21,000, catering for about half of the Wife’s needs, will still be within the Husband’s ability to pay.   I am also aware that by ordering these sums for maintenance against the Husband, he may still have to seek some form of financial assistance from his parents, but there is no reason to believe that such assistance will not be forthcoming under the circumstances of this case.

97.  As to the length of payment, I do not think it is right to restrict it to 6 years as requested by the Husband.   Therefore, the maintenance will be paid until the death of either party or the re-marriage of the Wife whichever is earlier, or until the further order of the Court.

98.  As for the Wife’s application for the other forms of ancillary relief, they are all dismissed.

Orders

99.  Based on the above reasons, I will make the following orders:

(1)   The Husband shall pay a periodical payment to the Wife at the rate of $14,000 per month on the first day of every month for the month of November and December 2010, and as from 1 January2011, such periodical payments be increased to $21,000 until the death of either party or the re-marriage of the Wife whichever is earlier, or until the further order of the Court.

(2)   Apart from the claim for periodical payments, all other forms of the Wife’s application for ancillary relief be dismissed.

(3)   For the purpose of the s.17Aapplication, I am satisfied that the above financial provision made by the Husband for the Wife is reasonable and fair or the best that that can be made in the circumstances of this case.

Costs

100.  I think there should be no order as to costs, including all costs previously reserved, if any.  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 Judgement.