CCA v. NPCA

FCMC 1447 / 2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 1447 OF 2007

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BETWEEN

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

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Introduction

1.  The Petitioner is the Wife (“W”).  The Respondent is the Husband (“H”).  Both H and W are French nationals. This is an application by H seeking downward variation of maintenance for the 2 children of the family, namely, P who is now aged 12 and T, who is now aged 8. 

Background

2.  The parties married in 1997.  The marriage lasted for 9 years when the parties separated in 2006.  Divorce proceedings were commenced upon the fact of Unreasonable Behaviour which went uncontested.  The Decree Nisi was granted on 4 April 2007.  The Decree Absolute was granted on 5 July 2007. 

3.  Both parties were legally represented at the time of the divorce.  Parties through their respective legal representatives agreed on matters of  custody and ancillary reliefs.  A Consent Order dated 14 June 2007 (“June 2007 Order”) was granted whereby H and W are to have joint custody of the 2 children of the family with W having the care and control.  In anticipation of W moving to Brussels, Belgium, leave was granted for both children to remain outside jurisdiction of Hong Kong.  The June 2007 Order also provides for detailed defined access for H.

4.  In so far as the June 2007 Order concerning ancillary reliefs, the parties entered into a “clean break” agreement whereby W received a lump sum of €820,000 which is approximately HK$10.08 million (by adopting the then exchange rate of around €1 to HK$12.3).

5.  As for the 2 children of the family, H undertook to maintain them at a reasonable level including provisions for payment of school fees, school bus and school lunches.  Details of H’s Undertaking are set out in Clause K of the June 2007 Order as follows  :

“K. AND UPON the Respondent undertaking to the Court and to the Petitioner that he will continue to be responsible for maintaining the children of the family, namely, P, a boy, born on xxxxx 2000 and T, a girl, born on xxxxx 2004 at a reasonable level which will include the children’s school fees, school bus, and school lunches, so long as they continue to study in the French Lycee or an international school with French as the teaching medium and thereafter at such educational establishments as may be appropriate for each of the children until they complete their respective tertiary education;”   

6.  Paragraph 7 of the June 2007 Order also provides :

“For the period from 1^st September 2007 to 28^th February 2008, the Respondent shall pay €5,000 per month into a separate account in Belgium to be nominated by the Petitioner solely as a temporary measure for paying the children’s expenses (“temporary children maintenance”) until the review on 1^st March 2008. The Petitioner and the Respondent’s agreement is not to constitute their acceptance that the sum of €5,000 a month represents the appropriate level of maintenance for the children and is entirely without prejudice to the Petitioner and the Respondent’s respective rights to seek the Court’s determination of the appropriate children’s maintenance after the review on 1^st March 2008 whereupon the Petitioner and the children will have settled in Brussels for some time. The Petitioner in return will undertake to keep a monthly breakdown of all the children’s expense items, together with supporting receipts to be provided to the Respondent on the 7^th day of the following month.  The Petitioner will also give credit to any over payment arising from the temporary children’s maintenance in the ongoing children’s maintenance after 1^st March 2008 if it is found to be in excess of the appropriate maintenance in the review on 1^st March 2008 or as determined by the Court and the Respondent will also offset any under payment arising from the temporary children’s maintenance in the ongoing children’s maintenance after 1^st March 2008 if it is found to be less than the appropriate amount in the review on 1^st March 2008 or as determined by the Court.”

7.  Pursuant to paragraph 7 of the June 2007 Order, W issued a Summons on 6 March 2008 seeking review of the children’s maintenance.  Such application was adjourned with directions given under a Consent Order dated 28 March 2008 (“March 2008 Order”).  As for the children’s maintenance, it provides :

“1. The Respondent do continue to pay to the Petitioner for the benefit of the children a total sum of €5,000 per month commencing on 1^st March 2008 and thereafter on the 1^st of each succeeding month until the determination of the Petitioner’s review application by the Court by way of Summons dated 6^th March 2008, or pursuant to the agreement of the parties, such payments to be made by way of direct credit into the children’s bank account in Brussels, with the Respondent responsible for all bank charges incurred, if any;”

8.  The parties eventually reached agreement on the children’s maintenance in respect of W’s review Summons.  A Consent Order dated 2 February 2009 (“February 2009 Order”) was granted which provides, inter alia :

“1. There be a variation of the voluntarily maintenance contained in

the Custody Order dated 14^th June 2007 for the children of the family, namely, P, a boy born on xxxxx2000 and T, a girl, born on xxxxx2004 (“the Children”) until they shall respectively attain the age of 18 years old or cease full time tertiary education, whichever is the later or further order, at the rate of €2,200 per month per child, thereby making a total of €4,400 per month from 1^st February 2009 onwards, such payment to be payable quarterly in advance, index-linked and adjusted in accordance with any movement in the ‘indice de sante’ of Belgium every year with the first review date on 1^st February 2010.”

9.  It is common ground that the elder child P suffered from anxiety and behavioural issues since 2002.  Whilst in Brussels for a few years, P’s problems ensued and escalated to a stage where both parties agreed that it would be in P’s interest to move P back to Hong Kong on a temporary basis.  A Consent Order dated 26 August 2010 (“August 2010 Order”) was granted which provides, in so far as P is concerned, inter alia :

“(C) AND UPON the Petitioner and the Respondent further agreeing and accepting that upon P returning to live with the Respondent in Hong Kong on or before 1^st September 2010 :-

(i) there will be a variation of the Original Children’s Maintenance Order to the effect that the Petitioner will be receiving for the maintenance of P only €1,502 representing half of P’s share of general expenses which is based on the Petitioner’s current monthly expenses declaration un Part 4.1 of her Form E dated 10^th April 2008 for P each month until end of December 2010 whereupon the parties have agreed to further review the children’s maintenance for 2011 onwards on or about 1^st January 2011;

(ii) in the event that P returns to live with the Petitioner in Brussels before the aforesaid review date, the Respondent will resume paying the full maintenance of €2,240 for P.

(D) AND UPON the Petitioner and the Respondent agreeing and acknowledging that :-

(i) on or before end of December 2010, the Respondent will discuss with the Petitioner on the progress of P’s settlement in Hong Kong and the Respondent will be willing to seek independent third party to assess P’s situation if it is the parties’ conclusion that P is encountering adjustment difficulty in Hong Kong;

(ii) there will be an annual review of the Children’s schooling in respect of the geographical location when the requirement of enrolment or re-registration for the new academic year has to be made which is customarily occurred in March or April 2011 and at the same time P’s situation in Hong Kong will be reviewed as well.

(E)…………..

IT IS HEREBY BY CONSENT ORDERED  that :-

(1) Paragraph (1) of the Original Joint Custody Order dated 14^th June 2007 be varied so that the care and control of the eldest child of the family, namely, P, a boy, born on xxxxx2000 to be vested in the Respondent with undefined access to the Petitioner until further order;

(2) Paragraph (1) of the Original Children’s Maintenance Order dated 2^nd February 2009 in relation to the Respondent’s obligation to pay to the Petitioner a monthly maintenance of €4,400 for the benefit of the children of the family which has since been increased to €4,480 as from February 2010 which is currently at the rate of €2,240 per child be varied with effect from 1^st September 2010 such that the Respondent’s obligation to pay to the Petitioner periodical payment for the eldest child P be varied to €1,502 as from September 2010 until end of December 2010 whereupon the monthly maintenance will be reviewed and varied accordingly as provided for in paragraph (C) as well as the annual index-linked adjustment based on the ‘indice de sante’ of Belgium.”

10.  On 6 January 2011, H sent to W an email proposing the amount of children’s maintenance.  No consensus was reached.  In March 2011, H reduced P’s maintenance from €1,502 to €231; maintenance for T was also reduced from €2,240 to €1,880.

11.  On 6 April 2011, H issued the present Summons for variation of the children’s maintenance to €231 for P and €1,880 for T to take effect from April 2011; such Summons was later amended seeking the effective date from January 2011. 

The Husband’s application

12.  Despite the fact that H was made redundant in November 2010, it is not his case for variation that he was not being able to pay the children’s maintenance.  H was given a redundancy package of 3 months’ salary around HK$800,000 in total.  He stayed unemployed for about a year when he then set up his own business in November 2011 providing online recruitment and talent management solution for those seeking career opportunities and professional organisation in evaluating staff management and developing process capability.  He had invested HK$708,875 and holding 40% of shares as one of the 5 shareholders.  He was also appointed the CEO and Founding Partner.  

13.  H’s case for variation is that, apart from time was due for further review under paragraph (C) (i) of the August 2010 Order, there has been a material change of circumstances which call for a downward variation of the children’s maintenance.  As for varying P’s monthly maintenance, it was because P has moved from Brussels back to Hong Kong and has then been living with him since September 2010.  All P’s living expenses are directly settled by him.  At present, it is expected that P will continue his stay in Hong Kong at least until summer 2013.  In his evidence in chief in the afternoon of the 1^st day of trial, H said P had adjusted well in Hong Kong including his behaviour, P’s performance at school was also good.  H said it is quite clear a right decision for P to move back to Hong Kong and P’s relocation should be considered as permanent. 

14.  As for varying T’s monthly maintenance, it was premised upon H’s decision of not having had to pay for or shoulder any of N’s salaries which had been factored by W as part of the general expenses of which H is sharing.  N is the domestic helper who had started to take care of T since T was about 2 months’ old.  N also moved to Brussels with W and the children in 2007.

15.  H raised a number of issues over N’s employment.  First, W has not been working since she arrived in Brussels.  There is no reason why W could not look after T herself.  Secondly, T is now in full time schooling.  Thirdly, N was found not working full time for W since October 2010 but W had not disclosed such fact to H.  H considered W had not been full and frank.  W only admitted such fact when H revealed to W that he had engaged private investigator to check it out.  W then amended N’s salary payment to €700 in her updated list of expenses.  Fourthly, the fact that W keeps a 4-bedroom house with a room for N and such costs, including costs of food and utilities etc for N, were factored as part of the general expenses for T which H has to share.   

16.  In response to W’s requests for upward adjustment of children’s maintenance, H in his 4^th Affirmation dated 22 August 2011 at paragraph 31 (at pages 691 to 692 of the Trial Bundle) puts W to strict proof that each and every item of expenditures are for the children’s needs. 

The Wife’s application

17.  W has not issued any Summons seeking variation.  However, in her 6^th Affidavit dated 26 July 2011 opposing H’s variation and at paragraph 30 (at page 669 of the Trial Bundle), she worked out the children’s expenses to be €3,578 for P and €3,708 for T.  The breakdown was set out in exhibit “CCD-6” (at page 672 of the Trial Bundle).  At paragraph 31 of the same Affidavit, she sought an Order to reflect such children’s needs whilst opposing H’s downward variation application.  This is, in substance, seeking an upward adjustment of P’s and T’s maintenance from those of the agreed amounts of €1,502 for P and €2,240 for T under the terms of the August 2010 Order.

18.  W in exhibit “CCD-6” sets out the breakdown of the amount of intended maintenance claim for P and T as follows :-

Maintenance for P

(i)	€1,923 + €31(rental increase) + €50 (food)	€ 2,004
(ii)	Medical/dental – Dr. B	€ 341
(iii)	Entertainment (25%)	€ 20
(iv)	Holidays (50%)	€ 505
(v)	Clothing/shoes (33%)	€ 207
	Sub-total :	€ 3,077

Plus access visits in Hong Kong :-

(vi)	Flight €183/month
(vii)	Accomodation & expenses €318/month
	Total :	€ 3,578

Maintenance for T

(i)	€1,923 (1/3 household excluding food) + €31(rental increase) + €350 (food)	€ 2,304
(ii)	Extra curricula activities	€ 197
(iii)	School books	€ 89
(iv)	Medical/dental	€ 62
(v)	Entertainment	€ 60
(vi)	Holidays (50%)	€ 505
(vii)	Clothing/shoes (67%)	€ 414
(viii)	Travel	€ 28
(ix)	Child minding fees	€ 30
(x)	Haircut	€ 19
	Total :	3,708

19.  At trial, W produced an updated Part 4 format of Form E with a calculation of children’s monthly maintenance for T at €3,584 and P at €3,454 (at pages 184 to 190 of the Trial Bundle).  Comparing the children’s monthly expenses, there is a reduction of €124 for T and also a reduction of €124 for P on the item of household and general expenses.  The other items remain unchanged.  

The Law

20.  The jurisdiction of the Court in applications for variation of maintenance order is under section 11 of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”) which provides :

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

(2) ………

(3) ..……..

(4) ……….

(5) ……….

(6) ……….

(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates……..”

21.  The approach of the Court has been summarised in the case of

AEM v. VFM (Variation of Maintenance) [2008] HKFLR 106 :

“The power to vary a periodical payment order was expressly provided for by s.11(1) of the MPPO. The modern approach as required by s.11(7) was for the Court to have regard to all of the circumstances of the case. It was not required to proceed from the starting point of the original order but to look at the matter afresh. An increase in the wealth of the Husband was a relevant factor to be taken into account. At the same time the basis and effect of the original order were relevant factors to which the court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order”

22.  Further, in an earlier English case of Boylan v. Boylan [1988] 1 FLR 282 at 289D where Booth J said :-

“………..the court should not adopt an approach which differs radically from the approach taken by the parties themselves in assessing quantum of maintenance when the original consent order was made”

23.  I was referred to a number of cases by Miss Rattigan, Counsel for W, such as  Flavell v. Flavell [1997] 1 FLR 353);  Primavera v. Primavera [1992] 1 FLR 16;  Cornick v. Cornick (No.2) [1995] 2 FLR 490;  M v. M [2006] 1 HKFLR 22;  J v. C (Child: Finanical Provision) [1999] 1 FLR 152;  Lewis v. Lewis [1977] 1 WLR 409.    Miss Irving, Counsel for H, referred me to cases of Boylan v. Boylan [1988] 1 FLR 282; Garner v. Garner [1992] 1 FLR 573. 

Disclosure under Part 4 format of Form E

24.  Miss Rattigan at paragraph 16 of her written Closing Submission referred to this Court being constrained in not having the full picture of H’s financial position since H has been resisted in providing same.   Miss Irving at paragraph 6 of her Reply Closing Submission referred to the Order dated 16 May 2011 whereby Part 4 format of Form E disclosure was granted by the Court.  Part 4 of Form E only relates to ‘current monthly expenses’.  W had not appealed against such Order and therefore H should not be blamed by W for resisting full disclosure.  H provided disclosure pursuant to the court order.

25.  In the case of Lewis v. Lewis [1977] 1 WLR 409 which is a case where an application was brought by the wife for an upward variation of periodical payments for the children on the basis of increased means of the husband and her increased expenses in looking after the children. Ormrod LJ at page 412H had said :-

“I would only add one thing. In these cases where the quantum of these orders is being challenged, particularly in relation to children, it is essential that the position of each party, after tax has been paid, should be worked out and be available to this court. Nothing is more unsatisfactory than to be trying to decide whether an order is too high or too low without knowing the precise impact on the net incomes of the parent (my emphasis), particularly in relation to children. It is also relevant in relation, of course, to husbands and wives, but it is particularly important that where children are concerned the court should be able to see what the father has left and what the mother has to maintain the children on in relation to the expenses which she has to meet……”

26.  Accordingly and in my view, the fact that H upon proper legal advice sought an order from this Court to make such ‘expenditures only’ Part 4 format of Form E disclosure would be placing himself in the position of not allowing the Court to decide the precise impact, if there is any, when there was an upward variation of children’s maintenance, upon the net income of H.  This would also prevent the Court from knowing what H would be left with had there been an increase of maintenance upon the children’s needs.  Such peculiar way of ‘expenditures only’ disclosure sought by H to also take into account of his open stance of being financially capable to meet any reasonable level of maintenance, provides basis for drawing a reasonable inference that H has accumulated post divorce wealth which he is unwilling to disclose.  This is exactly what W had submitted.  In such circumstances, this Court could only consider the impact, if any, that any revised amount of maintenance with reference to the children’s needs would have upon W only.   

Issues

27.  It seems to me the only issues are what should be the amount of maintenance for P and T from January 2011 onwards ?

Discussion

28.  It is trite law that in applications for variation of maintenance, the Court is entitled to consider the matter de novo and to make an award which is fair and reasonable (see Flavell v. Flavell [1997] 1 FLR 353)).   The absence of a Summons by W, therefore, would not prevent the Court from exercising such jurisdiction to see what would be a fair and reasonable award in light of all the circumstances of the case to meet the needs of the children.  

29.  Accordingly, in determining H’s application for downward variation, I can also consider W’s requests for upward adjustment of the children’s monthly maintenance. 

30.  Under the original terms of the June 2007 Order, it was agreed that W would have the care and control of the 2 children (that is, P and T) who would move with her to Brussels, Belgium after the divorce.   Leave for the children to stay out of the jurisdiction of Hong Kong was granted.  W and the 2 children, taking with her the domestic helper N, left for Brussels, Belgium.  

31.  What had happened was that in April 2010 an event had occurred involving P’s behavioural problems which had caused the parties to come to an arrangement for P to move back to Hong Kong on a temporary measure.  This resulted in the parties entering into the terms of the August 2010 Order.  Parties agreed that upon P returning to Hong Kong on or before 1 September 2010, the amount of P’s maintenance would be reduced from the then existing €2,240 to €1,502 until end of December 2010 which would then have to be further reviewed.  T’s maintenance would remain unchanged.

32.  I will first deal with H’s downward variation application. 

33.  H testified in Court that P’s stay in Hong Kong to be considered permanent whereas W’s evidence is that P would stay in Hong Kong not later than summer 2013 and may return to Brussels even earlier depending on P’s situation.  It is undisputed that when the decision in August 2010 was made for bringing P back to Hong Kong, it was a temporary arrangement solely because of P’s behavioural issues.  During re-examination in the afternoon of the 4^th day of trial, W was referred to her email dated 3 May 2010 responding to H’s email of 2 May 2010 (as exhibit “CCD-7” in 7^th Affidavit of W at page 677 of the Trial Bundle), it can be seen that W required H to add into the written agreement to be signed that H would have care and control of P for one year, renewable and renegotiable each year (my emphasis).  W then said in Court : “I want it to be written that it was not a definitive relocation, that it was a temporary one” (from 3:03:48 pm to 3:03:56 pm)

34.  At present, P is still meeting the psychologist Dr. B on a regular basis which H said about twice a week.  There is no direct evidence at this hearing from Dr. B that P’s behavioural issues, which triggered P’s moving back to Hong Kong, had now been completely resolved or settled.   The evidence on P’s conditions at the moment simply comes from H that P has been doing well all along both on his behaviour and at school.  In my view, it is premature, if not incorrect, for H at this stage to determinatively say P’s stay in Hong Kong would or should be considered as a permanent relocation.  

35.  In my judgment, even if the parties in this case consent, there might still need a full hearing before the Court, probably with the assistance of social welfare officer or even psychologist, to determine whether P’s continuous stay in Hong Kong would be in his best interest.  It is always the duty of the Court to oversee and ensure that any children’s arrangement would be in the child’s best interest.  This is the law.  Such hearing would, however, only be meaningful if P’s behavioural problems have been resolved or well settled.  It would then be the right time to consider P’s future arrangement.  In the absence of such finding of the Court, it is incorrect for H to rely upon his personal perception or assumption that P’s stay in Hong Kong would be permanent and then proceed to work out himself the amount of P’s maintenance by reference to the number of days or weeks that P would be expected to stay with W during visits in Brussels.  H seems to have overlooked the consensus behind the August 2010 Order is that P’s moving back to Hong Kong is temporary subject to further review.  H’s misconception that P would stay in Hong Kong permanently can be seen at paragraph 17 of his 4^th Affirmation (at page 687 of the Trial Bundle) where he said :

“….. I am not required to concern myself with the Petitioner’s ownstandard of living and so long as T is reasonably provided for, there is no reason why her living standard cannot be changed with a smaller accommodation as a result of P no longer living with them permanently (my emphasis).” 

36.  I find H’s application to vary P’s maintenance down to €231 fails.

37.  The next question then is how much H has to pay for P’s maintenance ?  Should H be bound to continue to pay the €1,502 under the terms of the August 2010 Order or at other amount ?

38.  Applying the principle in AEM v. VFM (Variation of Maintenance) [2008] HKFLR 106, the answer depends on the reasonable needs of the children by considering all the circumstances of the case.  I will deal with the figure later in this Judgment.

39.  H’s reduction on T’s maintenance from €2,240 to €1,880 mainly because of N’s services.  I agree with W that there being no change of circumstances pertaining to T which warrant a downward reduction of €360 (that is €2,240 minus €1,880) per month.  N has always been there to take care of T since T was 2 months’ old.  Whether there are grounds for an upward adjustment will be dealt with later in this Judgment.

40.  I accept W’s evidence that she has attempted finding suitable employment in Brussels over the years but unfortunately with no fruitful results.  I also accept W’s evidence that she did manage to find a job with a production company and had worked for about 18 months from April 2009 to December 2010 which she eventually only received about one-tenth of what she was supposed to receive.  As a single parent mother having had the care and control of 2 children, also taking into account of the standard of living she and the children had enjoyed during the marriage, I believe it is fair and reasonable for W to retain N to look after T so that she may be able to go for job opportunities whenever they come along.  I disagree with H on his first contention that since W was not working, she should be able to take care of T without having had to retain N’s services.

41.  The fact that T is now in full time schooling would not relieve W had she been able to get employment.  Throughout the marriage and during those early years when at one stage H was unemployed in France, there was also a part time nanny assisting them.  I disagree with H on his second contention that N’s services would not be needed because of T’s full time schooling.  N’s services would still be needed although the extent may be lesser than before.

42.  W admitted that she should have disclosed to H that N was not working full time and she apologised in Court for her failure to do so.  I agree with H that W was short of full and frank disclosure.  It has all along been W’s case that N’s salaries are part of the general expenses for taking care of T in particular which H has to share a portion.  It is thus on all fairness that H should know exactly how much W was paying for N’s services to take care of T.  H had spent €11,000 on private investigator’s fees to find this out.  I do not accept W’s statement that H could have asked her before engaging the private investigator.  It is always parties’ duty on full and frank disclosure and such being a continuing duty.  How could H be reasonably expected to cast doubt over N’s services not being full time when all along W’s case is that N’s services are needed to take care of T ?  It is reasonable for H to expect full and frank disclosure has always been complied with.

43.  Following my finding of justification for W to retain N to take care of T, H’s contention of W herself having to provide costs of living for N thus falls apart.

44.  All in all, H’s application for downward variation of T’s maintenance from €2,440 down to €1,880 fails.  There will, however, be some adjustment when it comes to calculate the amount of maintenance of T payable by H to take into account of H sharing N’s full time salaries when actually N was only paid at part time rate without the knowledge of H.  

W’s rented house in Belgium

45.  H raised queries over the need of W renting a 4-bedroom house and not resorting to some smaller accommodation of say, 3-bedroom house.  W was also challenged for not purchasing a property which was once the intention when she received the lump sum of €820,000 in 2007 so as not to have spent years of rental payments.

46.  I accept W’s explanation.  Whether P would continue to stay in Hong Kong or back to Brussels in summer 2013 or even sooner has

yet to be ascertained.  When the decision in August 2010 was made for P to move to Hong Kong, it was expected to be a short term of a couple of months only.  Somehow, it turns out to be longer than initially expected.  Year 2011 had now been passed.  If W is now going to shift to a 3-bedroom house, W, T and N each will be having a room, it is certain that no room would be retained for P.  As W had testified which I agreed, this might cause P to feel having lost his home with T and his mother.  I agree that for practical reasons W should not be moving to a 3-bedroom house and only find out to have to move again if P returns to Brussels. 

47.  On money issue, there is no evidence as to how much costs savings would have been achieved by such a ‘moving around’ exercise bearing in mind there would also be moving costs and incidental expenses in such a move.  There is no suggestion either that H is going to bear those moving costs in order for H to temporarily reduce his liabilities for P’s maintenance.  Whilst P’s future arrangement has yet to be ascertained, I do not see the basis how H can seek W for such a move at her own costs and expenses at this stage nor such an idea can be logically and practically justified.   In my view, the costs and expenses for moving around would certainly have an impact upon W who is now staying unemployed and living upon her capital resources.   I also accept W’s evidence that even with P now living in Hong Kong, she would still have to pay those routine expenses such as electricity, gas and utility expenses for the house in Brussels although the amount may be lesser.

48.  W had never been able to secure a stable and steady income in Brussels.  There is no evidence that with the lump sum of €820,000 received in 2007, she could purchase a house more or less of the same standard as the living condition during the marriage without having to raise moneys by way of mortgage.  I accept her evidence that she would not be able to afford paying off monthly mortgage instalments without having a job and steady income.  She may not even be able to raise a mortgage without a job.  As Miss Rattigan rightly pointed out, W’s situation is not the same as H who had been gainfully employed around the time of divorce and also, admittedly, promoted after divorce. 

Present situation of W

49.  Although W had received a lump sum of €820,000 as a ‘clean break’ settlement, she claimed to have eaten up into her capital in maintaining the children’s expenses over the years.  W testified that she had started to look for work since January 2008.  She admitted in her evidence in chief of not having realised the importance of knowing Flemish as about 80% of working people in Brussels speaks Flemish.  She was only able to find an opportunity of working for a web design production company, which for her is a completely different field of work.  Her expertise is in the finance sector.  She was paid by business she brought in.  After about 18 months of work, she only managed to bring in one customer when she was supposed to receive about €7,000.  However, at the end, she was only paid €700 and this caused her to quit the job.  At present, she is thinking of moving to Paris but the living costs there are higher than in Brussels.  Depending on circumstances, she might be commuting if there are job opportunities in Paris.

50.  I do not intend to venture into those figures and calculations put forward by respective Counsel in their written Submissions to decide whether W’s capital resources had actually been depleted over the years and; if so, to explore the cause for those depletion.  Miss Rattigan acting for W submitted that it is H’s duties and responsibilities to look after the children’s maintenance and expenses especially where H has given an Undertaking (Clause K in the June 2007 Order) to maintain the children at a reasonable level and also H is a man of wealth which, amongst others, owned 5 properties for investment and with rental income. 

51.  Since the central issue here being what should be the amount of children’s maintenance from January 2011 onwards and also taking into account the fact that H’s and W’s respective rights on financial reliefs against each other had been completely resolved by a ‘clean break’ Order in 2007, whether there had been and if so, the cause for depletion of W’s capital resources over the years preceding 2011 may not assist much on the determination of the reasonable needs and maintenance for the children from January 2011.  The parties have agreed between themselves on the amount of the P’s and T’s maintenance up until end of December 2010 under the August 2010 Order. 

52.  I will directly approach the matter by looking into each item of expenses which W now claims to be the reasonable needs of P and T and which should be payable by H.  In so doing, I will also consider the terms of the Undertakings given by H in Clause K in the June 2007 Order.   I also bear in mind the established legal principles are that the overall award should be of fairness between the parties (see Primavera v. Primavera [1992] 1 FLR 16; Cornick v. Cornick (No.2) [1995] 2 FLR 490).

One-third or 50/50 split ?

53.  In calculating the children’s expenses, W had adopted a one-third (1/3) split on household and general expenses.  In her evidence in chief in the morning of the 3^rd day of trial, she explained the reason for accepting a 50/50 split on household and general expenses between herself (50%) and the 2 children together (50%) previously was because she wished to reach an agreement and not a court hearing.  She could now no longer afford such 50/50 split calculation and also she was informed that it is a norm for the household and general expenses to be divided by the actual number of persons affected.  This is the way how she had worked out the amount of maintenance for P and T in her lists of children’s monthly maintenance.  The children’s expenses for food were then added separately on top of the 1/3 split of the household and general expenses and to form part of it.

54.  Miss Irving for H opposed to such one-third (1/3) split.  During cross-examination on W before lunch time on the 4^th day of trial, W repeated her reasons for adopting the 50/50 split and accepted that such approach was agreed by her whilst she was legally represented.

55.  It is plain and obvious that the difference between using the 1/3 split and 50/50 split in calculation, as Miss Irving pointed out at paragraph 36 of her Closing Submission, is that the amount of maintenance W would be receiving for the children is greater in the 1/3 split and not the 50/50 split.  She would be receiving two-thirds (2/3) for 2 children.

56.  The 50/50 split apportionment had been used all along when the parties reached agreement in those previous Orders. The present variation is still a temporary one pending P’s future arrangement to be ascertained.  In my Judgment, I see there is no basis that W can now change the approach of using 50/50 split to 1/3 split in her calculation of the children monthly expenses.  I find against W on this 1/3 split issue and will adopt the 50/50 split in calculation.

Deciding the monthly maintenance amount

(i)   Household and general expenses (excluding food)(for P and T)

57.  This is a common item for P and T.  W had used the figure of €1,829.76 but, say, €1,830 in the updated list at page 190 of the Trial Bundle.  According to W’s calculation, this represents 1/3 of the total amount for herself, P and T (i.e. 3 persons).  As I have found the 50/50 split approach to be used, this item for P and T individually should then be calculated as follows :

 

€1,830 x 3 persons = €5,490 x ½ ( i.e. 50/50 split)	= €2,745
Sharing the 50% of €2,745 between P and T	=€2,745 x ½
	= €1,372.50
(for each child per month)

Food (for P and T)

58.  W apportioned the total costs for food of €750 at Page 664 of the Trial Bundle for P at €50; for T at €350.   H disputed the allocation of €350 out of the total sum of €750 to T who is an 8-year old girl.  H has no dispute over €50 for P.

59.  There are 2 adults in the household, namely, H and the domestic helper N.  I agree the sum of €350 out of €750 to T may be excessive.  I find and allow €200 for T which I believe to be fair and reasonable.  I allow €50 for P.

(ii)   Extra curricula activities (for T only)

60.  I accept the figure of €197 to be fair and reasonable.

(iii)   School books (for T only)

61.  I accept the figure of €89 to be fair and reasonable.

(iv)   Medical/dental (for P and T)

62.  I accept the figure of €62 for T to be fair and reasonable.

63.  W agrees she was not paying for P’s consultation by Dr. B and therefore the €341 would have to be excluded from P’s expenses.

(v)   Entertainment (for P and T)

64.  W stated €60 (75%) for T; and €20 (25%) for P.  I find these figures fair and reasonable.

(vi)   Holidays (for P and T)

65.  W claimed a total of €1,010 in total equally splitted between P and T at €505 each.  W admitted this was a projected figure to cover holidays with the children who had enjoyed holidays during the marriage.  There is a disparity not only in accommodation between living with W and H, there is also disparity when it comes to benefits of travel and holidays.  H disputed such claim for T as he was the one who paid for T’s access travel. 

66.  In assessing the children’s needs, I am entitled to consider all the circumstances of the case objectively and, in appropriate cases, to assess those needs in a way so as to achieve a result which is fair to all parties without undermining the interests of the children in question.  On the available evidence, it can be seen that the family’s standard of living was very high during the marriage with club memberships, cars and holidays in Europe and Asia flying business class and staying in 4 to 5 stars hotels. 

67.  I agree with Miss Rattigan that the children’s standard of living with their Mother (W) should not have to fall below that which they enjoy with their Father (H) and certainly not below the standard that was enjoyed during the marriage.  Applying J v. C (Child: Financial Provision) [1999] 1 FLR 152, I accept that in considering reasonable needs of P and T, they are entitled to be brought up in circumstances which bore some sort of relationship with their Father’s (H) current resources and standard of living.  The present application is not based upon H’s financial change that his resources and standard of living had been decreased or had there been a full and complete Form E produced by H to show his assets was diminished.  I am therefore entitled to consider H’s current resources and standard of living had not been changed.

68.  In the exercise of my discretion, I allow this item of Holiday’s expenses but not at the figure claimed.  I assess and allow €330 for P and the same figure of €330 for T.  I believe it is fair and reasonable.

(vii)   Clothing/shoes (for P and T)

69.  H disputed the figure of €414 (around HK$4,554) a month to be excessive for an 8-year old child.  H claimed W had allocated a bigger portion for T as she realized that P was not under her care and control.  The end figure remains the same as what she had claimed at the beginning.  Furthermore, the receipts produced by W did not add up to the amount claimed.

70.  W agreed there was no change on the amount claimed.  Her explanation is that quite often she would purchase clothing for T from private sales in houses which are less expensive where only cash payments are accepted.  There are no receipts in these purchases.  W said if asked for receipts, they would simply write on a piece of blank paper without any machine print or chops.  W said the receipts produced to H were purchases made at shops when there were no private sales. 

71.  I accept W’s evidence.  In western countries private sales are not uncommon.  Nowadays in Hong Kong, private sales on line and sales by hawkers on the street are equally common.  No receipts are available either for these sales.  

72.  I find and allow this item of expenses.  I take an average of €250 per month for T and €125 per month for P to be fair and reasonable.  What I wish to add is that for necessities such as clothing and shoes for children, it is always difficult to keep track of purchases to every single nickel and dime.      

(viii)  Travel (for T only)

73.  I accept the figure of €28 to be fair and reasonable.

(ix)   Child minding fees (for T only)        

74.  I accept the figure of €30 to be fair and reasonable.

(x)    Haircut (for T only)

75.  I accept the figure of €19 to be fair and reasonable.

Access visits in Hong Kong (for P only)

76.  Such item relates to expenses worked out on a monthly average for W to visit P whilst P remains in Hong Kong.  W worked out the average sum of €183 per month for flight and €318 per month for accommodation and expenses.  The total is €501 (i.e. €183 + €318) per month. 

77.  The basis for such claim is that there need to be face to face access with P.  Since holidays are alternated, there are long periods throughout the year when P does not see his Mother (W) which is not in P’s best interest.  W claims that it is reasonable to expect H to make provisions in P’s maintenance to enable W to come to Hong Kong.

78.  I have 2 observations.  First, a parent who is vested with the care and control of a child is obliged to facilitate and provide the other parent with right of access unless the Court otherwise orders.  Secondly, right of access should not be taken as a unilateral right.  In law and in fact it is a reciprocal right.  What this means is that the right of access embraces the right of the parent seeing the child and the child’s rights to see that other parent. 

79.  The August 2010 Order was granted upon the parties’ agreement reached upon the terms of the Consent Summons drafted by H’s Solicitors.  At one stage W contended that she was being misled by H to use H’s lawyer believing that H’s lawyer was able to provide advice to both parties and look out for their respective interests.  Suffice is to say that the Consent Summons was drafted by H’s Solicitors which W had signed and acknowledged her right to seek independent legal advice on the contents thereof.

80.  I have checked and compared the terms of the August 2010 Order which was granted upon the exact terms of the Consent Summons drafted by H’s solicitors.  I must say that the contents of the Consent Summons are rather comprehensive.

81.  Clause (E) of the August 2010 Order reads :-

“AND UPON the Petitioner acknowledging and accepting that the undertaking given by the Respondent in paragraph (B) in the Original Children’s Maintenance Order be withdrawn insofar as they relate to the Respondent’s obligations to pay for the education related expenses in relation to P and in return the Respondent agreeing to continue to pay for P’s reasonable travelling expenses to visit the  Petitioner in Brussels so long as he remains living in Hong Kong.”   

82.  Paragraph (1) of the Order then reads :-

“(1) Paragraph (1) of the Original Joint Custody Order dated 14^th June 2007 be varied so that the care and control of the eldest child of the family, namely P, a boy, born on 25^th June 2000 to be vested in the Respondent with undefined (my emphasis) access to the Petitioner until further order;”

83.  There is no reference anywhere in the Consent Summons, whether by way of undertaking or acknowledgement or as part of the orders sought, as to who is going to bear the costs of W to exercise her undefined right of access by coming to Hong Kong to see P.  Following my two observations on right of access above, it is my decision that H should be paying W’s reasonable costs of travelling to visit P in Hong Kong.  My reasons are :-

(a)  H as the care giver of P having the obligation to provide access and having agreed to undefined access between P and his Mother (W), the costs for such access whether it be for P to fly out or for W to fly in, should not be considered differently.  Since H had agreed to bear costs of P flying out, my view is that it should also cover costs of W flying in for exercising right of access.  Since right of access is reciprocal, the exercise of which should not be restricted to P to fly out, it could be the Mother (W) flying in.  Having P to meet his Mother (W) is certainly something in the best interest of P.

(b)  Had H wished W to bear such costs herself, I believe         there would be express provisions embodied in the comprehensive Consent Summons drafted by H’s lawyers to protect his client’s interest. Without any disrespect, I do not believe this is something which was missed out by H’s lawyers in the drafting exercise.  

(c)  I agree with Miss Rattigan’s paragraph 18 of the Reply to Closing Submission that no good reasons are given by H why such costs not to be a legitimate part of P’s maintenance. The only reason of H not agreeing, presumably, to be that he does not want to pay as he thinks this is a benefit to W. 

84.  Accordingly, I find and allow these expenses as part of P’s maintenance payments.  I also accept the figures of €183 and €318 to be fair and reasonable.  The total amount of €501 per month will be allowed.

Conclusion

85.  The total amount of monthly expenses for T will be €2,637.50.    

86.  The total amount of monthly expenses for P will be €2,398.50.  

87.  As I mentioned in paragraph 44 of this Judgment, there may need some adjustment on payments made by H to W when N was actually paid by W at the reduced rate of €700 in October 2010.  I have not been assisted by Counsel on the extent and amount of adjustment which need to be made.  I will assess the adjustment by reference to the 6-month period from October 2010 to March 2011 (when it was revealed to W) at €100 per month, making a total of €600.  Such sum would have to be offset from T’s maintenance which was found due and payable by H under this Judgment. 

88.  Miss Rattigan’s Opening Submission at paragraph 15 referred to W seeking actual expenses at €3,708 for T and €3,578 for P.  I have adopted W’s updated claim of expenses at €3,587 for T and €3,454 for P.

Judgment

89.  In my Judgment, the amount of maintenance for T and P which H and W had agreed to be reviewed under paragraph (2) of the August 2010 Order is now determined by this Court at € 2,637.50 for T and € 2,398.50 for P.  Such maintenance to take retrospective effect from 1 January 2011 onwards until further Order and be payable quarterly in advance, index-linked and adjusted in accordance with any movement in the “indice de santé” of Belgium every year with the next review date on 1^st February 2013.

90.  Any excess or arrears of T’s and P’s maintenance, also taking into account of the adjustment of €600 under paragraph 87 above, to be settled by the parties direct or through their legal representatives within 14 days from the date of this Judgment.   

Costs

91.  The amount of the children’s maintenance which has now been determined by this Court is €2,637.50 for T and €2,398.50 for P.  This  defeated H’s intended amount of €1,880 for T and €231 for P.  However, it also falls short of W’s intended amount of €3,587 for T by 26.50 % and €3,454 for P by 30.60 %. 

92.  In my decision on costs, I see no reason for not following the normal rule of costs to follow the event.  Considering the extent of W’s success, I will order H to pay 70% of W’s costs, including all costs reserved, to be taxed if not agreed on a party and party basis.  I will also grant Certificate for Counsel.

Other Matters

93.  As I have said at paragraph 35 of this Judgment, P’s future as to where he should be living in still need to be reviewed when his problems have been resolved or fully settled. 

94.  Since P is now under the temporary care and control of his Father (H), H should be looking forward to P’s well-being as the first and paramount concern rather than his financial interest which he is now seeking to achieve at the expense of substantial legal costs.  Such an exercise can always be taken after P’s problems have been fully tackled.  The legal costs incurred by H, leaving aside the 70% party and party costs which H has to pay, have already disproportionately exceeded the results intended by H, namely, a reduction of €360 a month (i.e. €2,240 minus €1,880) for T; and a reduction of €1,271 a month (i.e. €1,502 minus €231) for P.   The total amount of H’s intended reduction is €1,631 a month (i.e. €360 + €1,271) or HK$15,494.50 a month adopting the current exchange rate of €1 to approximately HK$9.50.

95.  As per H’s lawyers estimation of costs dated 22 May 2012, it was HK$960,558.  As per W’s lawyers estimation of costs dated 21 May 2012, it was HK$639,047.   It is unfortunate to see the parties are unable to act sensibly as they did in those earlier occasions to try and agree on the revised maintenance for the children and have to resolve their differences by way of a 4-day trial engaging Counsel to incur a total sum of around HK 1.6 million legal costs.

96.  Last but not least, I wish to express my gratitude to both Counsel and the lawyers for their assistance in this case.