TSOI v. CHEUNG

[English Translation – 英譯本]

CACV 559/2019

[2020] HKCA 922

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 559 OF 2019

(ON APPEAL FROM FCJA NO 332 OF 2017)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

Background facts

1.  Mr Tsoi, the 1^st applicant, was born in Hong Kong and is currently 60.  Madam Cheung, the 2^nd applicant, was born in Harbin and is currently 51.  They met in 1989 and were married in Harbin in the same year.  They had operated an apparel store together and later engaged in the business of selling mobile phone accessories until 2015.

2.  In November 2002 the elder daughter Y (hereinafter as “Y”) was born to Mr Tsoi and Madam Cheung.  Y was prematurely born with rare congenital defects and severe disabilities.

3.  In December 2006, Madam Cheung gave birth to the younger daughter C (hereinafter as “C”).  C was born to Madam Cheung and an unknown male, so she is not Mr Tsoi’s natural daughter. C has been in good health, and not long after she was one month old Mr Tsoi moved out of the matrimonial home at Tsing Yi.  Since then, he separated from Madam Cheung, who remained in the matrimonial home with the two daughters.

4.  Despite the separation, Mr Tsoi and Madam Cheung continued the business of mobile phone accessories together until its closure in 2015.  During that period, Mr Tsoi did provide certain family expenditures for Madam Cheung.

5.  In November 2008, a son was born to Mr Tsoi and a woman.  In July 2015, another son was born to him and another woman (whom became the fiancée at the time of trial).

6.  On 24 January 2017, Mr Tsoi and Madam Cheung made a joint application to the District Court for a divorce.  On 20 June 2017 the Family Court ordered a decree nisi.  On 13 September 2017 Madam Cheung applied for ancillary relief through a Form 25.  By mutual consent, the court ordered on 23 May 2018 that the custody, care and control of the two daughters be granted to Madam Cheung, with reasonable access to Mr Tsoi.

The Judgment of the District Court

7.  After the trial on 12 March 2019, Deputy District Judge Pang (as he then was) handed down judgment on the claim to ancillary relief ([2019] HKFC 98) on 18 April 2019, with the following orders:

(1)   after the granting of the decree absolute, both parties shall put up the matrimonial home for sale immediately, at a minimum price of HK$8,200,000;

(2)   in not less than 4 weeks before the completion of the sale of the matrimonial home, the 2^nd applicant shall vacate the property and deliver vacant possession;

(3)   the proceeds from the sale of the matrimonial home shall be used in the following order:

(i)  payment of expenses arising out of the sale of the property, including but not limited to the agent’s commission and legal fees;

(ii)  34.76% of the remaining proceeds shall go to Y, 30.77% to the 1^st applicant and 34.47% to the 2^nd applicant;

(iii)  Y’s share of the proceeds shall be collected and kept in custody by the 2^nd applicant on the former’s behalf;

(4)   upon compliance with the above paragraphs, any claims which each party may have against the other or their estates for capital, income or other property adjustments, including periodical payments, secured periodical payments, lump sum or sums, transfer or settlement of property and order for sale, whether under the Matrimonial Causes Ordinance, Matrimonial Proceedings and Property Ordinance, Married Persons Status Ordinance, Inheritance (Provision for Families and Dependents) Ordinance or any other relevant Ordinances be dismissed;

(5)   both parties shall keep the assets under their respective names;

(6)   there shall be liberty to apply in relation to the execution of this Order; and

(7)   no order as to costs, including any costs reserved.  This order for costs is an order nisi.  If no application is lodged by any party within 14 days from the date of this Order, the order nisi shall be made absolute.

8.  Neither party produced any evidence on Y’s estimated future life expectancy and the expenditure required for daily life care at trial.  In paragraph 37 of his judgment, Judge Pang decided to adopt a future life expectancy of 15 years for the calculation of Y’s needs, and monthly expenditure of HK$15,835 as the basis to rule that the expenditure for the future care of Y shall be HK$2,850,300, to be paid from the family assets, and the balance to be equally shared between Mr Tsoi and Madam Cheung.

9.  In paragraph 31 of his judgment, Judge Pang also ruled that Mr Tsoi does not have the responsibility to provide for the younger daughter, therefore C’s expenditure is not a matter for consideration in the allocation of family assets.

The appeal

10.  Madam Cheung was not satisfied with the decision of the District Court on ancillary relief and applied to this Court for leave to appeal.  On 28 November 2019, leave was granted to Madam Cheung to proceed with her appeal and it was directed that the execution of the order made on 18 April 2019 be stayed until a decision on this appeal is made.

11.  On 5 December 2019, Madam Cheung filed and served a Notice of Appeal by post.  In her Notice of Appeal and written submissions, the main grounds of appeal and arguments are as follows:

(1)   Y’s remaining life expectancy is at least 25 years instead of just 15.

(2)   C is a child of the family because, despite Mr Tsoi’s knowledge that C was not his natural daughter, he still went along to the hospital for the delivery of C and hosted a red egg and ginger party.  Mr Tsoi has also been named as the father in the birth certificate (Register of Births).  Moreover, C had been living in this family and spending every Sunday in the mobile phone store jointly operated by Mr Tsoi and Madam Cheung until 2015, and the friends and kaifongs all knew that C was the younger daughter of the family.

(3)   Madam Cheung has heart disease and requires long-term medication.  She must also look after Y, so she hopes to stay in the matrimonial home to take care of the two daughters with the help of a domestic helper.

(4)   From 2008 to 2015, Mr Tsoi only contributed $2,500 as household expenditure, and no such expenditure has been paid since 2015.  Maintenance has been in arrears for years.

Experts commissioned for assessment of children’s actual needs

12.  Despite Y’s severe disability, the trial judge decided on Y’s remaining life expectancy and the expenditure required for future care solely by hearing the submissions of the unrepresented parties without obtaining any report from any expert or Social Welfare Officer.  The judge’s approach is unsafe.

13.  Section 18 of the Matrimonial Proceedings and Property Ordinance, Cap 192, Laws of Hong Kong, provides as follows:

“Restrictions on decrees for dissolution, annulment or separation affecting children

(1)  The court shall not make absolute a decree of divorce or of nullity of marriage, or make a decree of judicial separation, unless the court, by order, has declared that it is satisfied­—

(a)  that for the purposes of this section there are no children of the family to whom this section applies; or

(b)  that the only children who are or may be children of the family to whom this section applies are the children named in the order and that—

(i)  arrangements for the welfare of every child so named have been made and are satisfactory or are the best that can be devised in the circumstances; or

(ii)  it is impracticable for the party or parties appearing before the court to make any such arrangements; or

(c)  that there are circumstances making it desirable that the decree should be made absolute or should be made, as the case may be, without delay notwithstanding that there are or may be children of the family to whom this section applies and that the court is unable to make a declaration in accordance with paragraph (b).

…

(5)  This section applies to the following children of the family, that is to say—

(a)  any minor child of the family who at the date of the order under subsection (1) is—

(i)  under the age of 16, or

(ii)  receiving instruction at an educational establishment or undergoing training for a trade, profession or vocation, whetheror not he is also in gainful employment; and

(b)  any other child of the family to whom the court by an order under that subsection directs that this section shall apply;

and the court may give such a direction if it is of opinion that there are special circumstances which make it desirable in the interests of the child that this section should apply to it.

(6)  In this section welfare (福利), in relation to a child, includes the custody and education of the child and financial provision for him.”

14.  Therefore, in matrimonial causes involving children of the family, the court is obliged to consider on its own motion whether the welfare arrangement of such children is in compliance with section 18(1)(b).  In unrepresented cases where children have special needs, the judge should actively consider giving directions to the Social Welfare Officer to investigate and submit reports on welfare arrangement, in accordance with the actual circumstances of the child in question.  In cases where further in-depth follow-up is necessary or the proper care of the child’s welfare has to be ensured, the court can also consider appointing the Official Solicitor to represent the child so that the court can discharge its function effectively.

15.  In the present case, although Y was 16 in November 2018, in view of her severe disabilities and the need for long-term special care, the court should have directed that she is a child to whom section 18 applies pursuant to section 18(5)(b).

16.  After he decided on the ancillary relief, Judge Pang made a section 18 declaration on 7 August 2019. In paragraph 35 of his judgment dated 18 April 2019, however, the judge also mentioned that Y would be leaving the boarding school in 2021.  Obviously, the court had to seriously consider her arrangements by then.  In paragraph 37 of his judgment, Judge Pang only gave a brief account as follows:

“On 1 February 2018, the court ordered that W give an account of the elder daughter’s medical condition in a narrative affidavit. W only produced a one-page doctor’s report, which says that the elder daughter is suffering from Goldenhar Syndrome, severe mental retardation, bilateral hearing loss, pneumothorax and bronchiectasis in the left lung, complete reliance on others’ help in daily living. W reported that the doctor said the elder daughter’s lifespan could be like what a normal person could have. H reported that the doctor said the elder daughter would have a short lifespan. Neither one submitted any evidence in relation to one’s own versions. Taking into account their different versions, I would adopt 15 years in the calculation of the elder daughter’s future needs. If the elder daughter has a lifespan of more than 15 years, W can, in accordance with the elder daughter’s needs and the financial status of the parties by then, consider whether it is necessary to make further requests to H for the elder daughter’s maintenance. In case both parties are financially unsound at that time, W may have to consider having recourse to public assistance if there are no other options available. Using 15 years as the basis of calculation, the elder daughter requires $15,835 x 15 x 12 = $2,850,300.”

17.  Judge Pang used the period of 15 years in the calculation of Y’s future needs without obtaining any relevant medical expert reports, but simply relying on a one-page doctor’s report which does not give a full account of Y’s condition and her future needs, and on the submissions from both sides. We are of the view that Judge Pang has not duly discharged the court’s duty.

18.  In paragraphs 35 and 36 of his judgement, Judge Pang calculated Y’s future monthly needs on the assumption that she would return home to stay.  Nevertheless, in the absence of any medical experts’ report, he arrived at the base number of $15,835 based on only Madam Cheung’s current expenditure of Y staying in the hostel, the salary of the domestic helper and 1/3 of the rent.  As mentioned below, the reports obtained by this Court show that apart from the expenditure Judge Pang has factored in, Y also has to pay for home care services and expenditure on other support.

19.  Therefore, we are of the view that Judge Pang should not have given the judgment on ancillary relief and the section 18 declaration without an adequate grasp of Y’s future needs.

20.  After the commencement of the appeal, on 5 December 2019 the court directed a Social Welfare Officer to conduct an investigation with respect to Y and C, particularly a detailed assessment of Y’s various needs, and to submit a report to the court by 20 March 2020.

21.  On 23 December 2019 both parties filed a Request for Dismissal of Appeal by Consent. The court gave the following directions on 2 January 2020:

“As the case involves the welfare and care of children, the court will not give any judgment before receiving the Social Welfare Officer’s investigation report, nor will it give any order in accordance with the Request for Dismissal of Appeal by Consent dated 23 December 2019.

Unless the court, upon the receipt of the investigation report, directs otherwise, the appeal shall proceed in accordance with the directions given on 5 December 2019.”

22.  On 20 March 2020, this Court received the Social Welfare Report, dated 18 March 2020, on Y and C.

23.  In view of the fact that both parties were unrepresented, on 25 March 2020 the court appointed the Official Solicitor to represent Y in this appeal so as to safeguard her interests, assist the court in obtaining further information and evidence on Y’s future medical, therapeutic, support, diet, living and care arrangements and Y’s life expectancy from the medical point of view, and provide the court with solutions that suit Y’s needs and interests in relation to the decision on the allocation of assets in this case and make submissions.

24.  Subsequently, on 23 April 2020 the court directed a Social Welfare Officer to submit a supplemental report before 15 May 2020 on the following two points:

(1)  Will Y still require physiotherapy, occupational therapy and speech therapy after she leaves the boarding school in July 2021?  If she has needs for such therapies, who will be providing the related services?  How much is involved?  How long can it last?  Will the Social Welfare Department provide financial support or referrals to other subvented agencies providing the relevant services?  If it is the latter case, how much do those subvented agencies in question charge? 

(2)  In paragraph 35 of his judgment, the judge states that the 2nd applicant can hire a domestic helper to take care of Y and she can go out to work.  Considering Y’s needs, is this feasible when Y returns home in July 2021 to receive care?  Will the Social Welfare Department provide financial support or referrals to other subvented agencies providing relevant services?  If it is the latter case, how much do these subvented agencies in question charge?

25.  On 13 May 2020, the Social Welfare Officer submitted a supplemental report, which was also provided to the Official Solicitor for her reference.

26.  The Official Solicitor submitted her report on 14 August 2020, together with a paediatrician’s medical report, a dietitian’s report, information on average life span from Census and Statistics Department and that on certain disability allowances from Social Welfare Department.

Y’s current situation

27.  The medical report by Dr. Yam Ka-ling (“Dr. Yam”) of the Department of Paediatrics, Queen Elizabeth Hospital shows that Y suffers from Goldenhar Syndrome, severe mental retardation, bilateral hearing loss, severe visual impairment, left lung pneumothorax and bronchiectasis, chronic dysphagia, constipation, etc.

28.  According to the Social Welfare Report, the supplemental report and the report of the Official Solicitor, Y cannot take care of herself in her daily life and is entirely reliant on others’ help.  She cannot speak or eat solid food, and must eat by way of gastrostomy and excrete with the help of diapers and medication.  Y will exhibit certain improper behaviour from time to time in her daily life, such as pulling out the gastronomic tube, spitting onto the floor at will, pinching others for communication or seeking attention, scratching her own face or forehead for venting out emotions, patting and hitting the carer occasionally. Y requires special care, attention and continued guidance.  Hence, Y has attended certain courses on behaviour modification.

29.  At present, Y boards at school on weekdays and returns home at weekends on vacation.  When she finishes school in July 2021, she will have to leave the school dormitory.

Y's life expectancy

30.  Dr. Yam is of the view that Y’s medical condition is going to last, with no hope of a full recovery.  She is also of the view that as Y is suffering from chronic lung disease, her life expectancy will be shorter than that of the general population.

31.  From the information on population estimates from the Census and Statistics Department the Official Solicitor has quoted in her report, generally females in Hong Kong have an average life expectancy of 88.1 years.  For the sake of working out Y’s needs after she leaves school, the Official Solicitor assumes Y has a life expectancy of 78 years, meaning that a period of 60 years is used to work out Y’s future needs. 

32.  We accept that this is a proper method, by which Y’s life expectancy is assumed to be 78 years, meaning that a period of 60 years is used to work out her future needs.

Support Y needs

33.  Quoting from Dr. Yam’s medical report and the information provided by Ms Chan Sau-fung, the Social Work Officer at Y’s school, the Official Solicitor submitted that Y received speech therapy (once a week), occupational therapy (once every fortnight) and physiotherapy at school (collectively “the therapies”).  She had to go to the hospital for follow-up consultations regularly, and the Department of Paediatrics as well as the Special Paediatric Nutrition Department of Queen Elizabeth Hospital were following up on her condition.

34.  Dr. Yam is of the view that Y has already exerted her utmost potential, and there is little likelihood of any further improvement in her self-care ability.  The therapies are just to keep up with Y's usual training.  Dr. Yam suggests that the carer, having received proper training, can assist in integrating the therapies into Y’s daily life after she has left school, and there should be professionals who will perform periodic supervision, give guidance and suggest arrangements for the gradual decrease in the therapies.  The carer will also receive proper training in handling Y’s behavioural problems.

35.  The Hospital Authority, NGOs or private organizations do provide the services in question.  The charge each time is from HK$135 (Hospital Authority) (which can be waived for Higher Disability Allowance recipients) to about HK$1,000 (private organizations).

36.  In relation to Y’s nutrition intake, according to the medical report by Ms Jacqueline Tam, dietitian at the Department of Nutrition of the Queen Elizabeth Hospital, Y mainly relies on a nasal-gastric tube to consume milk powder. Ms Tam also suggests that soluble dietary fibre powder be added to Y’s daily diet to improve her constipation problem.  The nutritionist will perform periodic examination and observation on Y’s weight change, growth rate and intake carrying capacity, and will make corresponding adjustments to Y’s diet in accordance with her physical condition.  Ms Tam estimates that Y’s monthly expenditure on milk powder and dietary fibre powder is about HK$2,376.

Option One: Infirmary

37.  Ms Wong, a Social Work Officer, suggests in her Social Welfare Supplemental Report that after Y leaves the boarding school, she can apply for an infirmary bed at Siu Lam Hospital.  The charge for residential service is HK$100 per day, which includes professional care services provided by specialists, nurses, occupational therapists and physiotherapists.

38.  At the hearing on 8 September 2020, Ms Wong expressed that Y could apply for a waiver of hospitalization charges, but Y would have to be responsible for the remaining expenditure.  Ms Wong also informed this Court that the social worker stationed at Y’s boarding school had already prepared for Y an application for a bed at Siu Lam Hospital, but Madam Cheung’s signature for consent would be required.  Given the recent demand and supply of infirmary beds at the hospital, if the application was lodged within a short period of time, there should be no difficulty for Y to move in there in August 2021.

39.  The Official Solicitor’s Report has provided further details by submitting that if Y moves to an infirmary bed at Siu Lam Hospital, her family may have to purchase and/or pay additionally for milk powder, other consumables for feeding (for instance, feeding bags, feeding tubes, syringes, hand sanitizers with alcohol, lubricants, collectively known as “feeding tools”), diapers, etc.  The amount of such self-paid expenditure will be similar to that currently required by the school.

40.  The Official Solicitor’s Report also quotes the confirmation from Ms Chan, the Social Worker at school, that Madam Cheung will need to purchase and/or pay additionally for milk powder, feeding tools, diapers and follow-up consultations at the hospital.  According to the information submitted by Madam Cheung at trial, the monthly expenditure on Y’s milk powder, diapers, feeding tubes, etc. was about HK$4,000.

Option Two: Home Care

41.  In her Social Welfare Supplemental Report (paras. 9 to 12), Ms Wong expresses that since Y requires round-the-clock, close attention in every aspect of her daily life, this exerts quite a high demand on the carer.  Apart from having an adequate understanding of Y’s capabilities, the carer has to be equipped with nursing knowledge to a certain extent and with sufficient compassion and patience to be qualified for such work.

42.  Ms Wong has also expressed in her report that if Y stays home to receive care, Madam Cheung will plan to arrange for Y to have home care services specifically for persons under severe disabilities, including nursing care, rehabilitation training, carer support service, home respite service, etc., and to have periodic assessments for Y to formulate training programmes and to determine the goal for Y’s therapies and the length of the training.  The monthly service charge is capped at HK$1,002.

43.  Both the Official Solicitor’s Report and the Supplemental Social Welfare Report mention Madam Cheung’s claim of having a heart disease which requires an operation and regular medication.  Therefore, if Madam Cheung takes care of Y at home alone, she will encounter difficulties caused by mental and physical stress to a certain extent.  The Official Solicitor’s Report also quotes that Ms Wong has agreed that apart from the arrangement of the above home care services, Madam Cheung may also need to have family member(s) or hire a domestic helper to take turns taking care of Y’s needs in her daily life and those during the night. 

44.  The view expressed in Dr. Yam’s medical report is that, if Madam Cheung and/or the domestic helper receive proper nursing training on taking care of Y’s lungs and feeding, it is still feasible to take care of Y at home.  Dr. Yam also suggests that Y should be in a wheelchair while going out, while a special chair suitable for Y’s use at home should also be procured.

Y's future disability allowance

45.  The Official Solicitor’s Report quotes further details supplied by Ms Wong, that if Y stays home to be taken care of after she has finished her studies, she will then be eligible for higher disability allowance.  The information which the Official Solicitor has quoted shows that the higher disability allowance is HK$3,670 per month from 1 February 2020 onwards.  However, if Y moves to an infirmary bed at Siu Lam Hospital, she will only be given a normal disability allowance at a monthly sum of HK$1,835.

A projection of Y’s future expenditure

46.  According to the information supplied by the Official Solicitor and the Social Welfare Department above, if Y moves to an infirmary bed at Siu Lam Hospital, the future expenditure she will require is as follows:

Monthly expenditure: HK$4,000 (milk powder, diapers, feeding tools, doctors’ fees)

Monthly income: HK1,835 (normal disability allowance)

On the assumption of 60 years

HK$(4,000 – 1,835) x 12 months x 60 years = HK$1,558,800

47.  The above calculation has not taken into account the expenditure on Y’s home breaks.  Madam Cheung remarked that even if Y moves to Siu Lam Hospital, her circumstances should be similar to the present when she is boarding at school, in that she will have home breaks to meet with her family.  We agree that an appropriate number of home breaks is conducive to Y. Considering the current situation of Y’s home breaks, we are of the view that it is appropriate to have 2 home breaks each month.

48.  If Y returns home 2 times each month, the additional expenditure required will include two-way travelling expenses, the wheelchair and the special chair she needs when she returns home, personal care or nursing services, etc.  With reference to the calculation below concerning Y’s expenditure under the home care option, we adopt a monthly figure of HK$2,000 as the base in this regard.

49.  Regarding the number of years, considering Madam Cheung’s current age and the actual difficulties with Y’s home breaks when Madam Cheung becomes older, we have decided to adopt 20 years for the calculation:

HK$2,000 x 12 months x 20 years = HK$480,000

50.  To sum up the above projected expenditure, the total projected expenditure for Y to move to an infirmary bed at Siu Lam Hospital and to have her monthly home breaks are:

HK$(1,558,800 + 480,000) = HK$2,038,800

51.  If Y stays for home care, the projected monthly expenditure includes (see para 35 of the Official Solicitor’s Report):

Home care services: HK$1,002

Y’s share of the general household expenses, which include rent and management fee, miscellaneous expenses on mutual facilities and miscellaneous household expenses: HK$8,300

Milk powder, diapers, feeding tools, doctors’ fees: HK$4,000

Domestic helper (including salaries and various sundry expenses): HK$5,500

Total: HK$(1,002 + 8,300 + 4,000 + 5,500) = HK$18,802

52.  The expenditure on the wheelchairs and special chairs Y requires (using 60 years for the projection) is HK$180,000.

53.  Deducting the monthly higher disability allowance of HK$3,670, and using 60 years for the calculation, the projected expenditure required for Y to stay for home care will be:

HK$(18,802 – 3,670) x 12 months x 60 years + HK$180,000 = HK$11,075,040

54.  In paragraph 38 of the Official Solicitor’s Report, the following recommendation is put forward:

“According to the calculation, analysis and the limitations of the family assets of both sides stated above, the option for Y to move to an infirmary bed at Siu Lam Hospital is more appropriate and feasible. Y has spent years in a boarding school and is accustomed to a regular life, and the professional nursing services provided by the hospital is also conducive to improving Y’s behavioural problem continually. This option also spares Madam Cheung from the mental and physical fatigue arising from providing Y with care over a long period of time, thereby affecting her own health. For Y to receive more family care and attention, Madam Cheung may consider making more frequent applications to the hospital for Y to have home breaks to make up for it.”

55.  It was mentioned in paragraph 40 of the judgment of the trial court that the then market value of the matrimonial home (the most valuable family asset) was HK$8,200,000.  Even if all the proceeds from the sale of the matrimonial home went to Y, it would still not be sufficient to pay for the projected expenditure of Y’s future home care.

56.  Considering the limited family assets, the current financial status of Mr Tsoi and Madam Cheung and the practical future needs of the parties, we are of the view that in the present circumstances, the best possible arrangement to be made is the option for Y to move to an infirmary bed at Siu Lam Hospital.  Both Madam Cheung and Mr Tsoi in court expressed their consent to the above arrangement, and Madam Cheung also hoped that Y would continue to have home breaks.

57.  Therefore, on the assumption that Y will move to an infirmary bed at Siu Lam Hospital immediately after leaving the boarding school, this Court projects that the future funds that Y will require will be HK$2,038,800.

C as child of the family

58.  Judge Pang ruled that C is not a child of the family, which is obviously erroneous.  This is because it does not conform to the objective facts and evidence, and the principles derived from the relevant case law.

59.  In paragraph 31 of his judgment ([2019] HKFC 98), Judge Pang sets out his reasons in this regard as follows:

“…H said he had never accepted the younger daughter as a child of the family; only that when W was pregnant, he did not have the heart to move out. After the younger daughter had been born, he did not intend to provide for her. W said that H attended the younger daughter’s red egg and ginger party. H said he was hiding from his mother the fact that he was not the girl’s natural father; therefore, he reluctantly put on a show. Although the two daughters were included as children of the family in the General Form of Joint Application dated January 2017, it was noticed that in relation to the custody of the two daughters, both parties stated in the General Form of Joint Application that they had reached an agreement. The arrangement was for W to provide for both daughters, and both parties also prayed to the Court to award custody of both daughters to W. Both parties also stated in the Statement as to Arrangement for Children (Form 2D) filed on the same day that the two daughters would be provided for by W out of her savings and by her working, and it was also said that H planned to give up access to the two daughters. Taking the content in the aforementioned General Form of Joint Application and Statement as to Arrangement for Children together, this Court is of the view that, not only that H did not intend to provide for the younger daughter as he mentioned, but also that W accepted H’s not deeming the younger daughter a child of the family; otherwise she would not have given consent in the General Form of Joint Application and Statement as to Arrangement for Children and prayed that the Court make an order for the two daughters to be provided for by her entirely. Having considered all the evidence carefully, this Court accepts his submission H says, that he does not have the responsibility to provide for the younger daughter.”

60.  Judge Pang has made the following mistakes in the above ruling:

(1)  there was no analysis of all the relevant objective behaviours of both parties; and 

(2)  there was an erroneous extension of the content in the General Form of Joint Application (Form 2C) and Statement as to Arrangement for Children (Form 2D) filed on 24 January 2017 by thinking that the 2nd applicant accepted the 1st applicant’s not deeming C a child of the family.

61.  Section 2 of the Matrimonial Proceedings and Property Ordinance (Cap 192, Laws of Hong Kong) defines “child of the family” as follows:

“child of the family(家庭子女), in relation to the parties to a marriage, means -

(a)  a child of both those parties; and

(b)  any other child who has been treated by both those parties as a child of their family”

62.  Section 52(1), Matrimonial Causes Act 1973 c. 18, which is the equivalent UK provision, adopts a similar definition for “child of the family”:

‘… “child of the family”, in relation to the parties to a marriage, means -

(a)  a child of both of those parties; and

(b)  any other child, not being a child who has been boarded-out with those parties by a local authority or voluntary organization, who has been treated by both of those parties as a child of their family’

63.  In Teeling v Teeling [1984] FLR 808 at p.809 (CA), the English Court of Appeal held that when assessing whether a child who was born out of wedlock is a “child of the family”, the court should adopt an objective test to assess whether the parties to the marriage have deemed or treated the child in question as a child of their family.

64.  Moreover, in W (RJ) v W (SJ) [1971] 1 All ER 303, having taken into consideration the history of the relevant provisions and the other provisions in the Act, Park J held that the crux of this issue lied with how the parties to the marriage treated that child; therefore, whether a person knew or thought that he or she was not the natural parent of the child was immaterial to the issue.  He endorsed the comments in Rayden on Divorce[1] in this regard:

“Now, under the provisions of the 1970 Act, to establish that a child is a child of the family it is sufficient to show that the child was treated by both parties as a child of the family. The knowledge, or lack of knowledge, possessed by one or both parties of the facts relating to the child, for example, as to the identity of its parents, would seem to be no longer material in determining whether it is a child of the family. It follows that a child who is the child of a wife and a man other than the husband would be a child of the family if it had been treated as such by both husband and wife, although the husband erroneously believed he was the father, and it would seem to be equally immaterial that the wife deliberately deceived the husband into such a belief. The child must, however, be treated as a child of the family by both parties.”

65.  In the present case, Mr Tsoi knew before C’s birth that he was not C’s natural father.  According to the principles in the above English authorities, however, the issue of the child of the family mainly depends on how, from an objective point of view, the parties to the marriage treat the child.  The subjective view of the non-natural parent is immaterial to the decision on the issue.

66.  Hence, Judge Pang should not have ruled that C is not a child of the family simply based on Mr Tsoi’s claim that he did not intend to provide for C, and that he put on a show reluctantly in front of the friends and relatives when C reached one month old. The court must take into consideration the objective behaviour of the parties to the marriage to assess whether C is a child of the family.

67.  We do not think that the General Form of Joint Application (Form 2C) and the Statement as to Arrangement for Children (Form 2D) filed by both parties on 24 January 2017 could be extended to mean that Madam Cheung in fact accepted Mr Tsoi had not deemed C a child of the family.  The General Form of Joint Application (Form 2C) has clearly set out Y and C as the children of the family.  The Statement as to Arrangement for Children (Form 2D) has also set out the condition on living and education as well as arrangements for provision and access for Y and C.  Madam Cheung would raise the two daughters and at the same time Mr Tsoi would give up on access to them.  Judge Pang has not explained how he managed to arrive at different conclusions in relation to Y and C based on the same arrangements.

68.  By objectively considering the behaviour of the both parties to the marriage, one can see there is sufficient evidence to show that C is a child of the family.  No doubt Madam Cheung has all along deemed C a child of the family.  In accordance with the relevant authorities, Mr Tsoi’s objective behaviour over the years has also shown that he has treated C as a child of the family.

69.  In Teeling above, the couple was married in 1967 and had two natural daughters.  The couple separated in 1971, and during that time the wife embarked on a relationship with another man. In 1973 she gave birth to a boy with that man.  Soon afterwards, the wife ran into difficulties, and the husband did not count against her and brought her and the baby boy back to the matrimonial home.  The whole family – i.e., the couple, their two daughters and the baby boy born out of wedlock – lived a family life of 6 months, until the wife brought the baby boy away from the matrimonial home.  During those 6 months, the husband did certain things for the purpose of taking care of the baby boy.  Since the husband brought the baby boy to the matrimonial home after he had been born, the baby boy had lived in the matrimonial home for 6 months as a family member. Moreover, the husband was willing to register himself as the baby boy’s father in the latter’s birth record and took care of the latter as if he was his own. The English Court of Appeal held that the baby boy was a child of the family even though the baby boy never saw the husband again after the wife had brought the boy away from the matrimonial home.

70.  C’s circumstances in the present case bear material similarities to the facts in Teeling. Although Mr Tsoi knew that C was not his own before her birth, he still accompanied Madam Cheung to the hospital for delivery and brought C to the matrimonial home after she was born[2]. C has been residing at the matrimonial home until now.  At C’s red egg and ginger party, both Mr Tsoi and Madam Cheung did tell the friends and relatives present that C was the younger daughter of the family.  After C’s red egg and ginger party, Mr Tsoi continued to reside at the matrimonial home with Madam Cheung, Y and C, before moving out in February 2007.

71.  In C’s birth record registered by Madam Cheung at the Births and Deaths Registry on 19 January 2007 (i.e., 38 days after C’s birth), Mr Tsoi is listed as the father, to which he has never objected.  C has also taken up Mr Tsoi’s surname.

72.  According to paragraph 2 of Madam Cheung’s Notice of Appeal dated 5 December 2019, after Mr Tsoi had moved out of the matrimonial home, C would spend every Sunday in Mr Tsoi and Madam Cheung’s shop.  Before 2015 (the year in which the shop ceased business), friends and kaifongs deemed C the younger daughter of the Tsois.  Mr Tsoi had never denied or rectified their views.  In other words, years after Mr Tsoi and Madam Cheung separated, he still met up with C frequently.  Separately, there is no evidence to show that Mr Tsoi has mentioned to friends or kaifongs that C is not a child of his family.

73.  In paragraph 6.1 of his Financial Statement (Form E) dated 12 October 2017, Mr Tsoi also claimed that he was responsible for all of C’s expenditure during those 10 years.  Later on, Mr Tsoi amended paragraph 6.1 of his Financial Statement dated 6 June 2018 to say that he was responsible for most of C’s expenditure during the same period.

74.  Therefore, in accordance with the objective test laid down in Teeling and the definition in section 2 of Matrimonial Proceedings and Property Ordinance, and based on the behaviour of both parties to the marriage, we are of the view that legally C has long been a child of the parties’ family.

75.  However, even though a non-natural child is deemed a child of the family, at the time of divorce the court does not necessarily rule that the non-natural parent shall assume the responsibility for maintenance of the child in question.  Section 7(3) of the Matrimonial Proceedings and Property Ordinance provides as follows:

“It shall be the duty of the court in deciding whether to exercise its powers under section 5, 6 or 6A against a party to a marriage in favour of a child of the family who is not the child of that party and, if so, in what manner, to have regard (among the circumstances of the case) -

(a)  to whether that party had assumed any responsibility for the child’s maintenance and, if so, to the extent to which, and the basis upon which, that party assumed such responsibility and to the length of time for which that party discharged such responsibility;

(b)  to whether in assuming and discharging such responsibility that party did so knowing that the child was not his or her own;

(c)  to the liability of any other person to maintain the child.”

76.  In Teeling, having ruled that the baby boy was a child of the family, the English Court of Appeal directed the court below to consider whether the husband should assume any responsibility for the child’s maintenance pursuant to the equivalent provision in England[3]. Ormrod LJ said in the judgment (pp.809-810):

“The husband’s best answer to that application is contained in s.25(3) which specifically imposes on the court the duty in such cases of considering additional matters in relation to a child who is not a child of both parties, before making any order for periodical payments, and the most important of those are set out in paras. (a) and (b): para. (a) requires the court to consider whether the husband in this case has assumed any responsibility for the child’s maintenance and, if so, the extent to which and the basis upon which he assumed such responsibility and the length of time that he discharged the responsibility; and para. (b) requires the court to consider whether, in assuming or discharging such responsibility, he did so knowing that the child was not his or her own. The last matter is liability of any other person to maintain the child.”

77.  Apart from Teeling, we have also referred to the judgment of Hartmann J (as he then was) in F v F [2003] 1 HKLRD 836.  Hartmann J said the following in paragraph 109 of his judgment:

“As to the law, it is plain that, having accepted a child into the family as a child of the marriage, it is not for a party thereafter to decide unilaterally that the child should no longer hold that position. The responsibility, once assumed, is not to be manipulated.”

Hartmann J, however, obviously took the view that the court must consider all the relevant factors set out in section 7(3) of the Matrimonial Proceedings and Property Ordinance in order to determine whether the power in sections 5, 6 and 6A on the party who is not a natural parent in relation to the child in question should be exercised.  Therefore, he goes on to say in paragraph 109 of his judgment:

“In the present case, however, the circumstances were different.”

He also explained that in that case, although the non-natural parent had committed to providing for the daughter in question for 5 to 6 years[4], the court would not make any order for her future maintenance because the way she and the non-natural parent got along had changed and she moved away from him to live with her natural father.

78.  From this one can see that, in accordance with section 7(3) of the Matrimonial Proceedings and Property Ordinance, the court must take into account the maintenance for the child of the family over the years against the relevant factors set out in the Ordinance for an overall assessment to arrive at a fair and proper decision.

79.  In the present case, there is not much dispute over the factors set out in sections 7(3)(b) and (c): that Mr Tsoi was aware that he was not C’s natural father before C’s birth; nothing is known about C’s natural father; and there is no evidence to show that C can depend on her natural father for provision.

80.  The key consideration in this case is the matter in section 7(3)(a), which consists of 3 limbs:

(i)  whether Mr Tsoi has assumed C’s maintenance;

(ii)  if he has, the extent of the responsibilities Mr Tsoi has assumed and the basis upon which he assumed the responsibilities;

(iii)  the duration in which Mr Tsoi discharged his responsibilities.

81.  Regarding limb (i), the evidence clearly shows that Mr Tsoi has previously assumed the responsibility for C’s maintenance.

82.  In paragraph 73 above, we have mentioned the evidence in Mr Tsoi’s Form E, which he affirmed on 6 June 2018.  Together with the management fee invoices, public utilities bills such as water, electricity, gas, telecommunication, etc. of the matrimonial home attached, these show that he kept on paying these household expenses until the end of 2007.   

83.  On the other hand, in relation to the provision by Mr Tsoi over the years, Madam Cheung says in paragraph 4 of her written submissions for the appeal that from 2008 to 2015, Mr Tsoi only paid HK$2,500 as household expenditure, and none has been paid from 2015 to now.

84.  For limb (ii): regarding the extent of the responsibilities Mr Tsoi has assumed and the basis upon which he assumed the responsibilities, neither party has put them in clear terms.  We are of the view that according to the facts of this case, this limb can be taken into consideration jointly with limb (iii).  Obviously, ever since Mr Tsoi left the matrimonial home, his provision to C was very limited.  From 2015 onwards, he did not contribute any household expenditure. The only provision, which was indirect, was the residence which he provided jointly with Madam Cheung to C.

85.  After the sale of the matrimonial home, the above indirect provision will end.  According to Judge Pang’s ruling, C’s housing needs would amount to HK$20,000 ÷ 3 = HK$6,666.

86.  We have also considered that Mr Tsoi has grown apart from C in recent years; the two of them do not often meet, especially after the mobile phone accessory shop has ceased business.

87.  Taking the above considerations into account, we are of the view that, on one hand, Mr Tsoi did assume the responsibilities of provision for C to a limited extent, but the two have grown apart in recent years, and C does not have her natural father to depend on.  On the other hand, after the mobile phone accessory shop ceased business in 2015, Mr Tsoi’s income clearly decreased.  The court should also consider the fact that Mr Tsoi has his new family to look after (as he has two other sons, aged 12 and 5 respectively).  After considering each relevant factor for an overall assessment, we find that a fair and appropriate treatment is that a portion of the proceeds from the sale of the matrimonial home equivalent to C’s 3-year basic housing needs shall be set aside to satisfy her welfare relief:

HK$6,666 x 12 months x 3 years = HK$239,976

88.  As the above provision will come from the sale proceeds of the property, Mr Tsoi is in fact only responsible for half of it, i.e., HK$119,988, and the other half will come from the sum payable to Madam Cheung.  This is to reflect the indirect provision by way of a residence for C in recent years, which is jointly provided by Mr Tsoi and Madam Cheung.

Calculation and apportionment of family assets

89.  In view of the fact of the present case, we concur with Judge Pang’s ruling that a fair and appropriate arrangement for all parties is to sell the matrimonial home and to apportion the proceeds in accordance with the needs of both parties as well as the children of the family.  In paragraphs 48 to 52 of his judgment, Judge Pang adopted HK$8,200,000 as the then market value of the matrimonial home to calculate the shares of Y, Mr Tsoi and Madam Cheung.  We consider this an incorrect approach.  In principle, the court has already ruled on the amounts for the children’s provision, and they should be deducted in a lump sum from the proceeds of the property sale instead of using those amounts as the basis for calculating the shares in the sale proceeds to which the children are entitled.

90.  We are of the view that the correct calculation for apportionment is to deduct the projected expenditure of Y and C from the net proceeds of the sale of the matrimonial home at market value (i.e., HK$2,038,800 + HK$239,976 = HK$2,278,776), with the balance together with both parties’ other assets to be equally shared between the parties to the marriage.

91.  Regarding the other family assets under both parties’ names, Judge Pang held in paragraph 41 of his judgment that Madam Cheung had HK$19,000 and Mr Tsoi had HK$322,897.98.  Regarding Judge Pang’s decision that both parties shall keep the other assets under their own respective names, this arrangement shall remain.  In order to have an equal share of the family assets, Madam Cheung and Mr Tsoi should each have HK$170,948.99.

92.  In paragraphs 49 to 51 of his judgment, Judge Pang dealt with the differences between the other assets held under both parties’ names by adjusting the share in the proceeds of the sale of the property to which each party is entitled.

93.  We are of the view that the above approach is also incorrect because at present the amount of property sale proceeds is still unknown while the amount of the other assets each party keeps under each own name is known.

94.  The correct calculation is as follows: assuming that a balance of HK$x remains after deduction of the expenses incurred in the property sale (including legal fees and agent’s commission) and the provision for the projected needs of Y and C, Madam Cheung and Mr Tsoi should each have HK$170,948.99 as each of them would get an equal share, in addition to half of HK$x.

95.  Owing to the difference in the other assets that are currently held under both parties’ names, Mr Tsoi shall pay Madam Cheung HK$151,948.99 in order to achieve equal division.  The amount of HK$151,948.99 should be paid from Mr Tsoi’s half share of HK$x.

96.  Therefore, after the sale of the property, the expenses for the sale (including legal fees and agent’s commission) and the provision for the projected needs of Y and C should be deducted first, leaving the balance of HK$x.  Madam Cheung is entitled to HK$x÷2 + HK$151,948.99, and Mr Tsoi is entitled to HK$x÷2 – HK$151,948.99.

97.  To assist both parties with an understanding of the above calculation and apportionment, we shall explain using the example below.  However, we must make it clear that this is only an example based on an assumed property sale price and expenses.  The actual figures can only be accurately worked out after the property has been sold.

98.  Assuming that the sale price of the property is HK$8,200,000 and the expense for the sale is HK$200,000, then HK$x (i.e., the balance after deduction of property sale expenses and the provision for the projected needs of Y and C) is HK$8,200,000 – HK$200,000 – HK$2,278,776 = HK$5,721,224.  Half of HK$x is HK$2,860,612.

99.  Since Madam Cheung could have HK$x÷2 + HK$151,948.99, according to the calculation in this example, she could obtain HK$3,012,560.99 from the balance.

100.  By the same token, Mr Tsoi could obtain HK$x÷2 - HK$151,948.99.  Therefore, according to the calculation in this example, he could obtain a share of HK$2,708,663.01 from the balance.

101.  As explained further below, because both parties are unrepresented, the Court shall direct both parties to appoint a solicitor to handle matters concerning the sale of the property to ensure that the proceeds from the sale will be apportioned in the way mentioned above and that HK$1,558,800 out of the provision for Y be deposited into court. 

How to handle the children’s future funds

102.  In trial, Mr Tsoi objected to handing over the provision for Y’s future needs to Madam Cheung for her management.  Having considered the views of both parties, the suggestions from the Social Work Officer and the Official Solicitor as well as Y’s future needs, we are of the view that it is appropriate to give directions on the way to deal with the provision for Y’s future needs in accordance with Order 80, rule 12 of the Rules of the High Court.

103.  As explained above, the provision for Y’s future needs consists of two major parts:

(a)  expenditure for Y moving to an infirmary bed in Siu Lam Hospital: HK$1,558,800

(b)  expenditure for Y’s home breaks: HK$480,000

104.  Regarding (b), we are of the view that the amount can be paid to Madam Cheung because she is Y’s main carer when Y goes on for home breaks.

105.  As the provision in (a) is for Y’s long-term care in an institution, which may outlast the number of years in which Madam Cheung is capable of taking care of Y actively, we are of the view that it is appropriate to deposit the amount of HK$1,558,800 into court for an annual appropriation to the Director of Social Welfare for management so as to facilitate an appropriate sum to be withdrawn from that amount each month to pay for Y’s medical expenses and those related to her stay in the infirmary of Siu Lam Hospital.

106.  To facilitate the Director of Social Welfare paying for all the expenditure relating to Y’s stay in Siu Lam Hospital, the Director of Social Welfare is directed to open a bank account for Y within 14 days upon notice from the court of the sale of the matrimonial home to receive the annual appropriation from the court for Y’s hospital charges.  Upon opening the bank account, the Director of Social Welfare shall inform the Registrar, Civil Appeal of the High Court within 7 days.

107.  Regarding the provision for C’s future needs, it can be collected by Madam Cheung on C’s behalf for safe custody.

Vacating the matrimonial home

108.  In trial, Madam Cheung said that it would take time to find another residence, and there would be difficulties if she was to vacate the matrimonial home at least 4 weeks before the completion as per the order made at trial.  She suggested selling the matrimonial home within 6 months after an order was made by this Court, and vacating the premises 3 months after the transaction was completed.

109.  We are of the view that the time periods Madam Cheung suggested are long and impractical.  This is because, generally, after the sale and purchase agreement has been executed, Madam Cheung and C will have to vacate the matrimonial home before the transaction is completed and to deliver vacant possession to the purchaser.  We are of the view that the provisional agreement for sale and purchase on the matrimonial home shall be executed within 6 months after this Court has made the order, and the matrimonial home be vacated in not less than 14 days before the transaction is completed.

Costs

110.  As the decision on this appeal is to ensure that there is sufficient provision for the future needs of Y and C, there shall be no order as to costs.

111.  We would like to take this opportunity to thank the Official Solicitor, the Social Welfare Officer and the medical experts for their assistance to the Court in the appeal.

Orders

112.  We allow the appeal of Madam Cheung, and order that the orders given by Deputy Judge Pang on 18 April 2019 be varied as follows:

(1)  Within 6 months from the date this Order is granted, both parties shall sign a provisional agreement for sale and purchase to sell the matrimonial home at a base price of HK$8,200,000.

(2)  Within 3 days from the signing of the provisional agreement for sale and purchase, both parties shall jointly appoint and instruct a solicitor to handle the sale and to apportion the sale proceeds in accordance with the orders herein, and inform this Court and the Director of Social Welfare in writing of the names of the solicitor and the firm.

(3)  In 5 days after the appointment, the jointly appointed solicitor shall give a written undertaking to the Court to apportion the sale proceeds in accordance with the orders herein.

(4)  The 2nd applicant and the children of the family shall vacate the matrimonial home in not less than 14 days before the completion of the sale transaction.

(5)  The proceeds from the sale of the matrimonial home shall be allocated in accordance with the following directions:

(i)  settlement of the expenses arising out of the sale, including but not limited to the agent’s commission and legal fees;

(ii)  payment of HK$2,038,800 as the expenditure for Y’s future needs, to be arranged in the following manner:

a)  HK$1,558,800 to be deposited into the High Court, and each year the Registrar of Civil Appeal shall, based on the information provided by the Social Welfare Officer, assess the annual appropriation which shall be transferred from the court to the Director of Social Welfare in payment of Y’s medical expenses and other needs;

b)  A bank account be opened for Y by the Director of Social Welfare in accordance with paragraph 106 above, who shall submit an annual budget to the Registrar of Civil Appeal by the year in order to receive the annual appropriation from the court in payment of all the related expenditure for Y’s stay at an infirmary bed in Siu Lam Hospital (including milk powder, diapers, feeding tools, medical expenses);

c)  HK$480,000 to be paid to the 2^nd applicant for the related expenditure on Y’s home breaks;

(iii)  payment of HK$239,976 as C’s future needs, such amount to be collected by the 2^nd applicant on C’s behalf for safe custody;

(iv)  the balance to be split into two equal halves, each to one applicant, but HK$151,948.99 shall be paid out of the 1^st applicant’s share to the 2^nd applicant in order to deal with the differences in the other assets held under their names.

(6)  Upon compliance with the above paragraphs, any claim which each party may have against the other or their estates for capital, income or other property adjustments including periodical payments, secured periodical payments, lump sum or sums, transfer or settlement of property and order for sale whether under the Matrimonial Causes Ordinance, Matrimonial Proceedings and Property Ordinance, Married Persons Status Ordinance, Inheritance (Provisions of Family and Dependents) Ordinance, or any other relevant Ordinance be dismissed.

(7)  Both parties shall keep other assets under their respective names save and except the matrimonial home.

(8)  There shall be liberty to apply in relation to the execution of this Order.

 

 

Translated by the Judgment Translation Unit of the Judiciary and vetted by Ms. Jenny Chung, Solicitor.