NWC v. LLKA

FCMC 1099/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 1099 OF 2009

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JUDGMENT
(VARIATION OF MAINTENANCE)

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1.  There are 2 summonses before the Court. The Petitioner (Husband) is applying for Variation of 2 orders for payment of maintenance by the Petitioner (Husband) pursuant to section 11 of the Matrimonial Proceedings and Property Ordinance Cap.192 (MPPO).

2.  On 20 April 2010, it was ordered by consent that there be joint custody of the child of the family (the Child) with care and control to the Respondent (Wife) and access to the Husband. The Husband was further ordered to pay a sum of HK$4,500 per month as periodical payment to the Wife and HK$13,500 as periodical payment to the Child (the 1^st Order). The 1^st Order was subsequently varied by consent on 8 November 2012 (the 2^nd Order) whereby the Husband was granted care and control of the Child with defined access to the Wife. The periodical payment for the Child was reduced from HK$13,500 to HK$3,500. By a Summons dated 30 August 2013, the Husband applied for variation of the maintenance payable to the Wife pursuant to the 1^st Order. That application was repeated in a Summons dated 25 September 2013. In addition, the Husband applied for variation of the maintenance payable for the benefit of the Child pursuant to the 2^nd Order.

Issues

3.  The 2^nd Order was subject to a number of cross undertakings from the parties, including an undertaking from the Husband to the Court and to the Wife that he will not seek to vary maintenance to the Wife unless her monthly salary exceeds HK$10,000 and an undertaking from the Wife to the Court and the Husband to provide the Husband with documentary details of her salary (Recital J).

4.  The Husband’s case is that the Wife has been in flagrant breach of her undertakings. In addition, he argued that the Wife had made no or no genuine attempt to find employment in the 18 months after the 2^nd Order was made. The Wife is in a long term and ongoing relationship with Mr. C and had in effect formed a new family. He also pointed out that the Wife clearly had financial resources that she had failed to disclose to the Court. Further, the Husband pointed out that he was now responsible for the care and control of the Child and the Child’s expenses are increasing with age and that very little, if any of the maintenance paid to the Wife for the benefit of the Child was actually spent on the Child. The Husband has taken out substantial loans to fund the legal fees for variation of care and control. He has remarried and has another child with his new wife. He argued that after a brief marriage of only 11 months and in all the circumstances, he should not be asked to continue to pay any maintenance to the Wife for her own benefit or that of the Child.

5.  The Husband understands that he has undertaken not to apply for variation of maintenance to the Wife unless and until her income exceeds HJK$10,000 and that he has not formally applied to be discharged from that undertaking. However, he argued that it was a very brief marriage and he should not be asked to support the Wife for the rest of her life, especially in the light of Recital F, where it was obvious that the Wife was expected to find employment. He should not be prevented from making an application to the Court when the Wife is able bodied and could easily find employment but has deliberately chosen not to do so.

6.  Initially, the Wife denied that she was in breach of any of the undertakings. She subsequently admitted that she may have made some mistakes. However, this was due to her ignorance of the exact terms of the 2^nd Order and she has always acted in the best interests of the Child. She admitted that she was at fault for not finding employment. Apart from that, she denied all of the Husband’s allegations. She promised the Court that she would seek employment but urged the Court to order the Husband to continue with the payment of maintenance for her and the Child until such time that she is employed and her income exceeds HK$10,000.

Applicable Law

7.  Financial undertakings have the same status and enforceability as a court order (See Gandolfo v Gandolfo [1981] QB 259 and Symmons v Symmons [1993] 2 FCR 247). Without some other ground upon which an appellate court can properly interfere, the Court in England has held that it only has jurisdiction to release or modify an undertaking contained in an order if (1) it is just to do so; and (ii) there has been a significant change of circumstances (See Suffolk District Council v Clarke [2006] EWCA Civ 71). Where the undertaking was analogous to a periodical payments order, it is capable of being varied under s.11 of the MPPO.

8.  S.11 of the MPPO give the Court power to vary certain previous ancillary relief orders, including an order for the payment of periodical payments. S.11(7) also sets out that in exercising that power, the Court shall have regard to all the circumstances of the case, including any change in matters to which the Court was required to have regard when making the order to which the application relates. The Court has unfettered discretion to deal with the situation and has to have regard to all the circumstances of the case, including a regard to the circumstances de novo. However, as pointed out in the case of HCTT v TYYC CACV 380 of 2007, which concerned an application to vary a previous order made by consent, normally the earlier order would not be varied unless there has been a material change in circumstances.

9.  In applications relating to ancillary relief, both parties are under a duty to make full and frank disclosure of their financial position to the Court. This duty is absolute and continuous. Where one party fails to make full and frank disclosure, the Court is entitled to adopt a robust approach and draw adverse inferences against the party in default.

Background

10.  The Husband was born in Australia and has a Master Degree in Security Management. He first came to Hong Kong to work in 1990. In 2004, he began to work in security management. He was made redundant in 2009 and had to return to Australia and rely on unemployment benefits until he found a job as a consultant at Company Y in Singapore. He was seconded back to Hong Kong in 2011. He is now working for Company Y, Hong Kong office with an average monthly income of HK$128,948.08.

11.  The Wife was born in Mainland China. She emigrated to Hong Kong when she was 3 years old. The Wife says that she is currently living with her mother in Yau Tong. She worked as a saleslady, an assistant at a florist and a dental clinic, an office assistant and in a restaurant before she met the Husband. She is unemployed and says that the Husband is her only source of income.

12.  The parties met in early June 2006 through the introduction of friends. The Wife became pregnant with the Child after a 3 month courtship. The parties were married on 6 January 2007 and the Wife became a full time housewife. The Child was born on 17 June 2007.  On 23 December 2007, the Husband left the matrimonial home and the parties were separated. The Wife and the Child continued to live in the former matrimonial home and later to another rented apartment with financial support from the Husband.

13.  In about January 2009, the Husband was made redundant. He remained in Hong Kong to look for a job and lived on his savings. The Husband petitioned for divorce on the ground of 1 year separation on 3 February 2009.

14.  In about April 2009, the Husband’s funds ran out and he had to return to live in Australia. He lived on unemployment benefits and was not able to pay any maintenance to the Wife and the Child. The Husband continued to look for a job. A Decree Nisi was granted on 16 July 2009.

15.  After making some 80 job applications, the Husband was employed as a consultant in Singapore. He started work with Company Y! on 6 October 2009 and immediately resumed paying maintenance to the Wife and the Child. On 8 December 2009 and by consent, the Court made an order for maintenance pending suit (the MPS Order). In that Order, the Husband undertook to pay a sum of $9,000 per month for the benefit of the Child until the termination of his employment contract in March/April 2010 whilst the Wife undertook to the Court to provide the Husband with details of the breakdown of the Child’s expenses.

16.  On 20 April 2010, the 1^st Order was made by consent. Under that order there was to be joint custody of the Child with care and control to the Wife and access to the Husband. Further, the Husband was to pay a sum of $4,500 per month as periodical payments for the Wife and a sum of $13,500 as periodical payments for the benefit of the Child. A Decree Absolute was granted on 6 May 2010.

17.  The Husband met his current wife in January 2010. They were married in Hong Kong on 24 January 2011 and their child was born on 25 September 2011. In the meantime, the Wife also started a relationship with Mr. C in about late 2010. At the time, the Wife indicated that she was cohabiting with Mr. C and their child (E) was born on 15 July 2011. The relationship between the Wife and Mr. C was very volatile.

18.  The Husband complained constantly about difficulties in exercising access since the divorce. He subsequently became concerned that the Child was not receiving adequate care from the Wife and that the Child was being exposed to the highly conflictual relationship between the Wife and Mr. C. He applied to transfer to work for Company Y in Hong Kong and returned to live in Hong Kong in August 2011.

19.  The Husband made an application to vary the order for the Child’s care and control on 20 January 2012. He also applied for a variation of the order for payment of maintenance to the Wife. In addition, he applied for variation of the order for payment of maintenance for the Child in the event of a variation of the order for care and control. There was a lot of acrimony between the parties and Mr. C became embroiled in the dispute. There was no dispute that he was writing or settling a lot of the emails from the Wife to the Husband.

20.  During this time, the care and control, of the Child remained with the Wife. On 31 August 2012, there was a domestic violence incident between Mr. C and the Wife. Both Mr. C and the Wife were arrested and charged with Assault occasioning Actual Bodily Harm (Mr. C) and common assault (the Wife). As a result of this incident, the Husband took out an urgent ex parte application to the Court on the same day. The Court ordered that the return of the Child to the Wife was to be suspended. The Child has lived with the Husband since that date. On 8 November 2012, the 2^nd Order was made by consent.

Whether the Wife has been in breach of her Undertakings

21.  The 2^nd Order was subject to a number of cross undertakings from the parties. Apart from Recital J, the relevant undertakings are:-

(1) An undertaking from the Wife to the Court and the Husband that any staying access of the Child with the Wife was to take place at the residence of the Wife’s mother (the Child’s grandmother) only and no access at the residence of Mr. C, the Wife’s partner or boyfriend (Recital F);

(2) An undertaking from both the Husband and the Wife to the Court and to each other with regards to holidays that they will respectively provide each other at least 2 weeks before travel with the itinerary, accommodation details and contact details and timing for contact between the Child and the other party by way of telephone, Skype or other means as technology develops (Recital H);

(3) An undertaking from the Wife to the Court and to the Husband to transfer into the Husband’s name the Manulife policy for the benefit of the Child (Recital K).

22.  In the summer of 2013, the Wife told the Husband that she was planning to take the Child to China to visit the Wife’s grandmother. At no stage was the Husband informed of any change of plans. On 31 July 2013, the Husband called the Wife to contact the Child and heard an international ringing tone. The Wife only confirmed that she had taken the Child to Phuket on 3 August 2013. Not only does the Wife subsequently admit that she had taken the Child to Phuket without providing any information to the Husband, she also admitted that they went to Phuket with Mr. C’s family, lived in a villa rented by Mr. C and spent the whole holiday with him.

23.  When confronted with the wording of Recitals F and H, the Wife explained that she had not bothered to read the Order and was unaware of the exact wording. She stated that it was a last minute change to travel plans and she was not aware of travelling details or the address of their accommodation in Phuket. She had never taken a holiday with the Child and was only given a chance to do so as a result of Mr. C’s generosity.

24.  The 2^nd Order was made as a result of a consent summons. Although some amendments were made to the wording, Recitals F and H were in the original consent summons. The Wife was legally represented at the time and there has never been any suggestion that her legal representatives were acting without instructions. To the contrary, the Wife argued in paragraph 16 of her 7th Affirmation that the Child was only prevented from having staying access at Mr. C’s home. There were repeated references to the terms of the Order in the remainder of her Affirmation. It was clear that she was aware of the terms of Recital F. The villa in Phuket was rented by Mr. C for his family holiday. It was his residence (albeit temporary) during that holiday. The Wife asserted that the holiday was a last minute arrangement and she was unaware of the details until after her arrival in Phuket. All she had to do to comply with Recital H was to ask Mr. C for the details. Even if the arrangement was made shortly before they left for Phuket, she could still have provided the details to the Husband.

25.  The Wife admits that under Recital K, she was required to transfer the Manulife policy to the Husband immediately after the 2^nd Order. The policy was not transferred. In her Answer to the Husband’s Questionnaire filed on 8 January 2014, the Wife alleged that the transfer could not be effected as a result of the husband’s failure to provide the necessary details. Even up to 6 December 2013, the Wife was writing to the Husband to ask for those details. However, she now admits that she had in fact surrendered and cashed out on that policy in June 2013. She explained that she had taken out another insurance policy for the Child as she thought it was in the best interests of the Child. She only acknowledged during the trial that she was obliged to honor her undertaking and was not at a liberty to surrender the policy.

26.  In the light of all the matters mentioned above, it is clear that the Wife was in deliberate and flagrant breach of Recitals F and H and K.

Whether the Wife had deliberately chosen not to work

27.  There was no dispute that at the time of the 2^nd Order, the Wife knew that she was expected to seek employment and that the Husband would apply to vary the order for maintenance to her when her income exceeds HK$10,000. She admitted that she was fit and able-bodied and had the ability to work. She also stated that she had the experience of working as a dental nurse and that there were plenty of openings for dental nurses in the job market. The Wife is still unemployed although the Child has been living with the Husband since August 2012. The Wife denied that she had deliberately chosen not to work. 

28.  The Wife alleges that she had made a genuine effort to find employment. However, despite queries raised in a Questionnaire, the Wife has failed to provide any details of her attempts to seek employment. She says that she has not kept any records of her job applications. In her testimony, she was unable to inform the Court the number of applications she had made, the nature of the employment sought or any names of the potential employers she applied to. She was only able to give an example of an interview at a night club. She told her potential employers that she would not be available for work every Thursday afternoon and every other Friday and Saturday. As a result, her application was rejected on every occasion. She explained that she would like to find employment. However, she has yet to find employment that would accommodate her access schedule.  She was unwilling to give up her access as she treasured the limited time she had with the Child.

29.  The Wife admitted that she knew that no one would employ her if her access schedule had to be accommodated. She also agreed that she knew that the access schedule could be varied. However, she had not contacted and would not contact the Husband to discuss a variation of the access schedule unless and until she found employment. The Wife’s assertions are self contradictory. She would not have to vary the access schedule if the employer was willing to accommodate her access schedule

30.  It is manifest even from the Wife’s evidence that she had made no or no genuine attempt to find employment and that she has no intention of doing so. If she had sought employment as a dental nurse, she would earn at least HK$10,000 per month.

Whether the Wife is in an Ongoing and Long term relationship with Mr. C

31.  The Husband argues that the evidence indicates that the Wife is in an ongoing and long term relationship with Mr. C and that she has in effect formed a new family with him. This is denied by the Wife. She says that she does not live with Mr. C and that they had broken up after the incident in August 2012. The Wife explained that she and Mr. C had made several attempts to maintain their relationship after the incident in August 2012. However, their efforts were in vain and they eventually separated in December 2012.

32.  In her Answer to the Husband’s Questionnaire (PB3, p.1251, para 9, the Wife stated that she broke up with Mr. C after the incident in July and August 2012. She told the Court at a hearing on 21 January 2014 that the relationship only ended in December 2012.

33.  Between August 2012 and August 2013, both Mr. C and the Wife made constant references to their permanent and ongoing relationship. Mr. C has freely admitted to writing the Wife’s correspondence with the Husband. There is no dispute that the Wife has been grocery shopping for Mr. C and his family even in mid 2013. The Wife had and still has free access to Mr. C’s home. The Wife admits that she and the Child went to Phuket with Mr. C and his family in August 2013 and all holiday expenses (excluding shopping) was paid for by Mr. C. When the Husband discovered that the Child was in Phuket, he sent an email to the Wife referring to her and Mr. C as a family unit. That statement was never denied. Prior to August 2013, Mr. C stated in his Facebook profile page that he was in a relationship with the Wife. After the Husband discovered that the Child was in Phuket, Mr. C suddenly deleted the reference to the Wife.

34.  According to the report from Dr. Levy Bandeira in September 2012, the Wife was living with Mr. C and Mr. C described their relationship as solid even after the August incident. The Wife was assessed by Professor Peter Lee in October 2012. Mr. C who was stated to be the Wife’s boyfriend also attended an interview, Both of them admitted to Professor Lee that there were problems with their relationship. They lived together but the Wife would return to her mother’s residence after arguments. Despite that they were still planning to have a future together. In her most recent Form E dated 13 September 2013, the Wife stated that she intended to cohabit with another person in the next 6 months.

35.  On 18 April 2013, the Wife spent HK$1.920 at S.T. Dupont. She alleged that she had purchased a present for her sister to celebrate the birth of her sister’s daughter. S.T. Dupont is a men’s boutique and it is difficult to see what the Wife could have purchased for her sister. Further, the purchase appeared to be around the time of the Wife’s anniversary with Mr. C on 16 April.

36.  There was no dispute that the Wife was purchasing groceries for Mr. C’s household up until at least June 2013, i.e. the month before she left for the holiday in Phuket with Mr. C. The Child was enrolled by the Wife at a school in Pokfulam in 2012. The initial payment for the enrolment was paid by Mr. C. Subsequently, the Court ordered that the Child should attend a school in Tung Chung and the Pokfulam school agreed to return the initial payment. There was no dispute that the final balance of HK$7,470 was paid by cheque to the Wife. Although the Wife agrees that this sum should be returned to Mr. C, she has to date failed to tell the Court whether it has in fact been returned to Mr. C.

37.  It appears that the Wife has been less than frank in respect of her relationship with Mr. C.

Whether the Wife has made Full and Frank Disclosure

38.  There is no dispute that the Wife took out another insurance policy for the benefit of the Child in the Wife’s name after she surrendered the Manulife policy. There was no mention of this policy in her Form E.

39.  The Wife also said that she had received cash gifts from her friends and family. The amounts have not been disclosed. She further admitted that she has received cash as “reimbursement of expenses” from Mr. C. The alleged reimbursements were all in round figures. Apart from the HK$9,000 alleged reimbursement for groceries (out of over HK$17,000 spent) reflected in her bank account, the frequency, the amounts and basis of reimbursement is unclear. Given the Wife’s alleged habit of disposing of receipts and her inability to distinguish expenses incurred for the benefit of the Child and E, it is also unclear whether such “reimbursements” had any correlation to the sums actually spent by the Wife on Mr. C’s family.

40.  The Wife alleges that the periodical payments from the Husband is her only source of income. She also says that she pays a sum of HK$2,000 in cash to her mother as rental. According to her bank statements, she spent beyond the total periodical payments paid to her in most months. However, in some of those months, there was no cash withdrawal. It is difficult to see how she had paid her mother.

41.  In all the circumstances, the Wife’s disclosure of her financial position is less than satisfactory.

Whether the Periodical Payments were used for the Benefit of the Child

42.  Only very few of the expenses reflected in the Wife’s bank statements were solely child related. Initially, the Wife alleged that all the child related expenses reflected in her bank account were used on the Child. However, when she was confronted with her access dates, she admitted that some of those expenses might have related to E. She was unable to point out which expenses related to the Child.

43.  The Wife explained that she was not in the habit of keeping receipts. She also had no idea that the Husband would query the expenses incurred for the benefit of the Child. That allegation is contrary to the Wife’s undertaking to the Court on 7 December 2009. At that hearing, the Wife gave an undertaking to the Court and the Petitioner that she would provide details of the breakdown of the Child’s expenses. In order words, she had always been aware of the Husband’s concerns as to whether the periodical payments were used for the benefit of the Child.

44.  Even according to the Wife’s receipts for the month of February 2014 during which the Child stayed with her for an extended period, only a total of $2,577.30 was spent for the benefit of the Child. This included non recurring expenses of going to Disneyland (total cost of HK$1,020). It is noted that during that month, there was a dramatic reduction in the Wife’s own expenditure. The inference is that during the previous months (especially when the Child was not staying with the Wife for an extended period), very little, if any of the periodical payment of $3,500 was actually spent on the Child.

Whether the Husband should be released from his Undertaking in all the Circumstances and whether the Wife’s periodical payments should be reduced

45.  This was a marriage of about 11 months. The Wife is young and able-bodied. There is no dispute that she has working ability and could easily find employment as a dental nurse. Apart from a period during his unemployment, the Husband has been supporting the Wife since their separation. The Child has been living with the Husband since 2012. The Wife alleges that she has to pay HK$2,000 as rental to her mother. This is not supported by her bank statements. She also agreed that it was a very loose arrangement. The Wife also admitted that she does not have to pay for her food. It appears from her bank statements that the periodical payment from the Husband is used as pocket money and not for essential living expenses.

46.  I note that the Husband earns over HK$128,000 per month. However, he has remarried and has another child. He has taken out 2 loans to pay for the legal expenses in these proceedings and those 2 loans alone are in excess of HK$1million (out of current liabilities of over HK$1.5 million). The monthly repayment of those loans are almost HK$32,000).  

47.  There is no dispute that the Wife was expected to find employment. In the light of all the above mentioned matters, it would be wholly unfair for the Wife the hold the Husband ransom by her refusal to work. The Husband should be released from his undertaking and the Order for payment of periodical payments to her will be varied. However, since the Wife is still unemployed, I order that the Husband shall continue to pay a sum of HK$4,500 to the Wife as periodical payments for a further 3 months (i.e. for the months of June to August 2014, inclusive). Thereafter, the order for periodical payments to the Wife shall be discharged.

Whether the periodical payments for the Benefit of the Child should be reduced

48.  The Order for the payment of periodical payments for the benefit of the Child is not subject to the undertaking. As explained above, the amounts spent for the benefit of the Child is questionable. Further, if the Wife had chosen to work, she would not be in need of these periodical payments from the Husband. In those circumstances, the order for payment of periodical payments for the benefit of the Child will be varied to HK$1,000 per month for the following 3 months (i.e. for the months of June to August 2014, inclusive). Thereafter, the order for payment of periodical payments for the Child will also be discharged.

Orders

49.  The Husband shall be released from his undertaking in Recital J;

50.  The Husband shall continue to pay the Wife a sum of HK$4,500 per month as periodical payments for the months of June to August 2014 (inclusive), after which the Order for payment of periodical payments to the Wife shall be discharged;

51.  The Order for periodical payments to the Child shall be varied to HK$1,000 per month for the months of June to August 2014 (inclusive), after which the order for periodical payments to the Child shall be discharged.

52.  No order as to costs.