P v. P

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

SUIT NO. 13264 OF 2002

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J U D G M E N T

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1. The parties are Canadian expatriates who married each other in 1983 in Canada.  They have 6 children, 3 boys and 3 girls between the age of 8 and 19, with the eldest 3 born in Canada and the rest in Hong Kong after the family moved here in 1991 when the Husband was employed by Cathay Pacific Airways as an airline pilot.

2. Like most marriages that fail, there were numerous conflicts between the parties in particularly towards the latter stage of their marriage, with matters coming to a head in November 2002 when the Wife moved out of the matrimonial home in Clearwater Bay with the children and withdrew $2 million being half of the savings from the parties’ joint account, and proceeded to file for divorce against the Husband and for custody of the children and general ancillary relief as well as for leave to remove the children out of the jurisdiction to return to Canada.

3. Shortly thereafter the parties entered into discussion about the possibility of both relocating to Vancouver, Canada with the Husband taking a basing of his employment there, where each would purchase their own property with the children going between the two households.

4. Unfortunately there was to be no settlement between the parties who went ahead with the proceedings which had descended into a long and acrimonious battle over virtually every issue, in particularly those concerning their children, and over whether the Wife was suffering from the psychiatric condition of Munchausen Syndrome, to the almost complete depletion of their liquid assets.  On 20^th October 2004 I delivered a judgment granting custody care and control of the 4 minor children to the Wife after an unusually bitter trial that lasted more than 30 days, but postponed my decision over her application for leave to remove the children, which was then also strenuously opposed by the Husband, to be dealt with together with her application for ancillary relief, which is now the matter before me, the trial of which has turned out every bit as bitter and contentious as before, lasting a further 20 days.

5. I do not propose to recite any further details of the background and history of the case here.  They could be found in my earlier judgment of 20^th October 2004.  It would however be relevant to update the situation and circumstances of the parties and their children since that judgment.

6. The Wife, who is now 42, has remained a housewife and lives with the 3 youngest children namely A (12), B (9) and S (8) at her village house in Sai Kung under a lease until early 2006 but with a break-clause which she says will allow her to leave Hong Kong for Canada as soon as she is allowed to remove the children out of the jurisdiction.  In the meantime A is in her second year at KGV School after a successful transfer from Christian Alliance International School (“CAIS”), where the 2 youngest boys have remained.

7. The other minor child, N, who is 16 and whose custody has also been granted to the Wife, is still boarding at Grenville Christian College in Ontario, Canada but shares her time with her parents while holidaying in Hong Kong.

8. The 2^nd eldest child, Y has turned 18 and, having graduated from Grenville Christian College, will be entering university at Fanshawe College in London, Ontario, Canada.

9. The eldest child C, who is now 19, used to attend the same Grenville Christian College with his 2 sisters, but left school sometime in 2004 to return to stay with his father in Hong Kong where he had worked first as a restaurant waiter and later as a chef.  In June 2005 he returned to Canada to prepare for his enrolment into George Brown College in Toronto.

10. The Husband, at 43, is still in the employ of Cathay Pacific Airways as an airline captain pilot and lives in his rented village house in Clearwater Bay.  He has now accepted that the Wife and the minor children should be allowed to leave for Canada in July 2006, but not earlier as intended by her, as he believes that it would be beneficial for the children to have a period of access with him in Hong Kong after these proceedings are over when he will no longer be occupied by the case and court attendances.  He has also confirmed that in all likelihood he will apply for a basing of his employment in Toronto, Canada in the summer of 2006 or shortly thereafter to coincide with the Wife’s move so that he may remain close to the children, and that in any event the time for applying for a basing in Canada for this year has according to him already passed.

11. In my earlier judgment I found that there was no evidence to suggest that the Wife’s application was anything other than a genuine desire to return to Canada where the parties came from and where she believes the children’s future lies.  But I also questioned whether it was realistic or practical for her to do so immediately upon the conclusion of these proceedings, and that the full spectrum of ancillary relief in particularly the needs and requirements of her and the children in Canada, if they are allowed to leave, which now seems to be the case but only a question of timing, as well as the Husband’s means and ability to make proper and reasonable financial provisions for them, need to be fully explored and investigated, which I now propose to do, before a final decision can be made of her application.

The Wife’s case

12. The Wife seeks periodical payments for herself and for the children, as well as lump sum payment and costs of the ancillary relief proceedings.  Formerly she had also sought the reimbursement of school fees and medical expenses previously paid by her but subsequently not reimbursed by the Husband, but she agreed, under cross examination, that in the interest of expediency, not to pursue this.  She had also requested that the Husband give her negatives of the children’s photographs, which the Husband has indicated that he is willing to supply to her after his visit to Canada where they are stored.  The Wife has submitted that if this is to be an undertaking by the Husband, which I understand to be the case, she will no longer seek an order for their production on her undertaking to return the negatives to him afterwards.

13. It is however the Wife’s case that the way in which the Husband has conducted himself from the very onset of the proceedings, and in relation to his basing in Canada, and the efforts he made to destablise her in order to enhance his own position and win custody, care and control of the children and to thwart her every plan, must be taken into account by the Court in making financial orders.  Had the Husband not decided to go into full scale battle with her in November 2002, the Wife says, they would both now be living in Canada, close by and financially stable, or that at the very least he could have agreed to settle the matters after she was found mentally fit by the court appointed psychiatrist Dr Lo to have custody care and control of the children, but instead he insisted on ploughing on at ruinous financial and emotional cost, with legal bills run up to the region of $6 million, of which the Wife argues that she should not have to bear the financial consequences.

14. As to her application for the removal of the children to Canada, the Wife says that now that the Husband has accepted that they be allowed to leave for Canada in July 2006, she does not see why they cannot leave right away after she has been delayed already for some considerable time as a result of the Husband’s action, and instead have to wait for another 9 months until next July for no good reason.

15. She has provided some information as to properties, school and amenities in the Ottawa area to which she would return, as it is her home area where she and the children are familiar with, and which is near her parents’ home in Cornwall, but until such time as she know when she can move and the funds she may have available to her, she cannot find a house, enrol the children into school or make arrangements for moving.  She plans to initially stay with her parents until such time as she locates a property to buy in Ottawa.

16. For as long as she remains in Hong Kong, the Wife estimates her monthly expenses, to include a domestic helper, to be HK$44,357 plus her rent of HK$33,000.  In addition she estimates the travel costs and holiday expenses for her and the children at a further HK$8,015 per month, totalling HK$85,372, which is about what the Husband has been paying, albeit she accepts quite tightly with his budget.

17. She says that the picture will change dramatically with her removal to Canada principally because of the costs of accommodation as not only is it much cheaper than in Hong Kong, but the money that is lost each month on rent here will be going to purchase a home as long-term security for herself and the children.

18. She estimates a suitable house in Ottawa would cost in the region of C$375,000 – $400,000 (HK$2.44 – 2.60 million), which would be funded by a deposit from a lump sum from the Husband with a mortgage for HK$2 million over 25 years at a rate of 6% giving a monthly mortgage repayment within HK$15,000 per month which is to be funded from the periodical payment from the Husband.

19. As for her monthly expenses in Canada including holiday expenses, the Wife estimates that a monthly sum of HK$41,500 for her and the children would be reasonable, bringing the total periodical payment which she would request from the Husband to HK$56,500 including the said mortgage repayment, which is much less than her present expenses in Hong Kong, and well within his means.

20. Initially the Wife had hoped that her financial claims could be resolved by way of a clean break with a large cash settlement funded by a loan against the Husband’s provident fund with Cathay Pacific.  When it has become apparent that this would not be possible as the regulations of the provident fund do not allow it, the Wife now seeks that she be given an immediate cash lump sum of C$100,000 for the deposit as well as setting up the house in Ottawa, which she says can be funded either by a short term loan by the Husband, or from his share of his father’s estate which she says is sufficient to meet her such need.

21. In addition the Wife seeks an on-going interest in the Husband’s provident fund which now stands at around $6 million.  She proposes that she gets 65% thereof at the date of decree absolute of divorce as a starting point, plus an additional percentage of the fund on a sliding scale that after 5 years the parties should get about equal amounts out of the fund, and thereafter it would begin to tilt in the Husband’s favour.  By then she believes that with the minor children become older, she will hopefully have acquired some earning capacity to become financially independent of the Husband.

The Husband’s case

22. The Husband says that he has long believed, even prior to the divorce, that the Wife has been suffering from a factitious disorder that has represented itself in the medical realm as a means of seeking attention to herself, which together with her other shortcomings, had caused him great suspect of her parental ability which, out of his genuine concern for his children, entitled him to challenge her application for their sole custody care and control, and hence he should not be criticised for doing so or that his such action be regarded as a financial conduct to be taken into account when considering her application for ancillary relief.

23. To the contrary, the Husband argues, it was the Wife’s conduct in dissipating the matrimonial assets by withdrawing the $2 million from their joint account, and within the next 2 years proceeded to dissipate most of it on her extravagant and unnecessary spending including moving from the matrimonial home to a more expensive house, frequent overseas trips with her boyfriend, purchasing expensive airfares, needlessly paying for breast enlargement operation, and continuing to engage expensive lawyers and incurring substantial legal costs, etc. that should be taken into account when considering her entitlement to her share of the matrimonial assets.

24. In addition to wishing to establish regular access to the children after the court proceedings before they are to leave for Canada in July 2006, the Husband maintains that without his participation in their upbringing, the Wife is simply incapable of raising the children in Canada by herself as a single parent, which makes it all the more necessary for the children to remain in Hong Kong where he can continue to participate in their upbringing until July next year when he is able to get his basing in Canada so as to coincide with their move.

25. The Husband claims that only his basic pay of $131,365 is a guaranteed amount received monthly, while his other pays such as monthly duty allowance, excess flying pay and 13^th month bonus and profit share are all irregular and non-guaranteed, whereas his travel allowances have to be used in part for air tickets, shortfall of monthly maintenance for the Wife and school fees for some of the children, which will in any event be reduced soon after the decree absolute when he will no longer be entitled to claim it for the Wife.

26. He believes that the Wife has grossly exaggerated her needs and expenses which are not supported by their historical spending during the marriage.  He proposes that while she and the younger children remain in Hong Kong, he will pay her HK$52,000 per month for their maintenance including her rent and household utilities, which is what he thinks reasonable and which he can afford, and to continue to be responsible for the children’s school fees and medical expenses as well as their airfares, and also to pay her half of any overtime, 13^th month bonus or profit share after tax that he may receive, while she should also seek employment to help out with her own finance and to meet any deficits that she may have.

27. After she moves to Canada with the children in July 2006, he proposes that they should live in Cornwall which is close to her mother’s house and where housing costs are only half that of Ottawa.  He suggests that she should first rent until he gets his basing there when his provident fund will become available, from which he will pay her 45% of such fund plus interest at 5% thereof until payment, with which she can then purchase a house for herself and the children, and that he will continue to pay for the children’s maintenance and school expenses.

The Law

28. In considering any application for ancillary relief, I am required by s. 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 to have regard to the conduct of the parties and all the circumstances of the case including the following matters : -

“	(a)	the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;
	(b)	the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
	(c)	the standard of living enjoyed by the family before the breakdown of the marriage;
	(d)	the age of each party to the marriage and the duration of the marriage;
	(e)	any physical or mental disability of either of the parties to the marriage;
	(f)	the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;
	(g)	in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring”.

29. And in relation to children of the family, to also have regard to the following matters : -

“	(a)	the financial needs of the child;
	(b)	the income, earning capacity (if any), property and other financial resources of the child;
	(c)	any physical or mental disability of the child;
	(d)	the stand of living enjoyed by the family before the breakdown of the marriage;
	(e)	the manner in which he was being and in which the parties to the marriage expected him to be educated;
	and so to exercise those powers as to place the child, so far as it is practicable and, having regard to the considerations mentioned in relation to the parties to the marriage in paragraphs (a) and (b) of subsection (1), just to do so, in the financial position in which the child would have been if the marriage had not broken down and each of those parties had properly discharged his or her financial obligations and responsibilities towards him”.

The Wife’s means

30. I shall start with the Wife’s income, earning capacity and financial resources first, which are more simple and straightforward.  There is no dispute that she has no income and has throughout the marriage been wholly dependent on the Husband.  Nor is there any question that she has any property or financial resources other than the monthly maintenance from the Husband, after having exhausted the $2 million she had withdrawn from the joint account at the start of the divorce proceedings on spending and legal costs.

31. It is however argued by the Husband that she should seek employment after the divorce proceedings to help meet her monthly expenses, as she had worked in various charity organizations towards the latter stage of the marriage until the divorce proceedings, and that she had also helped out at the reception of a fitness club in exchange for the use of the gym, and as a classroom assistant at her sons’ school during the last school term.

32. With the youngest children only at 8 or 9 years old, the Wife argues that she will have responsibilities as a mother for a long time, and that unlike the Husband, she does not have any formal qualification.  She says she is keen to rectify this as and when her responsibilities to the children lessen, but that when she returns to Canada, her first priority has to be to settle the family in the new environment.  Her intention is that thereafter she will get some sort of training, but it will take time for her to be able to find anything other than a “pin money” kind of job, and she believes she can achieve the balance of training and work far more easily in Canada than here, where she has to compete with younger bilingual people who very often also have university degrees.

33. There is no question that if a wife earns money, the court is required to take into account of the amount received by her when assessing the amount of periodical payments to be awarded to her.  On the other hand, it has been said that a wife should not be expected to go to work to reduce a former husband’s liability towards her.  In the case of Ward v Ward [1948] p. 62, 64, Div Ct, Lord Merriman P said this : -

“The justices may think that this wife, having been deserted by her behind and obliged to go out to work instead of being maintained by him in a comfortable home, is entitled at the least to feel that her exertions are not made purely for the husband’s benefit; and might feel obliged in her own interests to put money by against the day when, for example, the husband may remarry or incur other commitments”.

34. A wife’s earning capacity was considered in the case of Rose v Rose [1951] P. 29, 30 – 31, CA by Somervell LJ when he said : -

“I do not propose to lay down nay general rule or to consider whether or in what circumstances a wife’s earning capacity ought to be brought into the calculation of maintenance in the case of a wife who has not been required to earn any money during the matrimonial life. But, in my view, where during the matrimonial life the means of (in this case) the husband (it is not suggested that the wife had any means) are such that the wife has not been required to go out and earn money, then I should say that, in considering the proper sum for maintenance, it would prima facie seem to be wrong that the husband should be able to say : “Now you must go out and work, and the only sum that I can be ordered to pay is a sum based on you yourself going out to work, which you were not required to do when you were my wife, and which you would not have had to do, if I had not committed adultery and broken up the home”, as in this case. That prima facie approach seems to me to be plainly right in a case such as this, where the marriage had lasted for some twenty years; the wife is a woman of forty-one years of age, who has no normal trade or calling, though no doubt she is capable of doing domestic work, and where there is a child of some four-and-a-half years of age for her to look after”.

35. His view was shared by Denning LJ who said this in the same case : -

“I agree …… that no general rule can be laid down on the matter, but this wife is certainly under no legal duty to go out to work in order to reduce the maintenance that her husband should pay. It would be quite unreasonable to expect her to do so. She cannot be expected to do it when she has a young child to look after. Of course, if a wife does earn then her earnings must be taken into account : or if she is a young woman with no children, and obviously ought to go out to work in her own interest, but does not, then her potential earning capacity ought to be taken into account; or if she had worked regularly during the married life, and might reasonably be expected to work after the divorce, her potential ought to be taken into account. Except in cases such as these it does not as a rule lie in the mouth of a wrong-doing husband to say that she ought to go out to work simply in order to relieve him from paying maintenance”.

36. And in Le-Roy Lewis v Le-Roy Lewis [1951] P. 29, 31 – 32, CA, Barnard J said : -

“It has been suggested that because she was working before the marriage and is still young, and as there are no child of the marriage, she ought at once to go back into the position she was in before the marriage and start earning her living, with as far as I can see only one object, to reduce the amount of money which the husband should pay to her, his wife. I do not accept that view. She may have been lucky, or, at any rate thought that she was lucky at the time, in marrying someone who brought about an improvement in her financial and possibly her social position, but it has been through no fault of hers that their married life together has come to an end, and I see no reason whatever, why the wife should go back to earning in order to reduce the husband’s liability to maintain her”.

37. The statutory guidelines under s. 7 (1) however requires the court also to have regard to the earning capacity which each of the parties has or is like to have, the principles enunciated above must now be read in the light of the statutory guidelines, and that the court would now expect a wife who is not encumbered by pre-school age children to take, over a reasonable period of time, such steps as are necessary to acquire or increase an earning capacity in order that she should not be financially dependent on her former husband in perpetuity, as pointed out by Singer J in T v T (Financial Relief : Pensions) [1998] 1 FLR 1072, 1080E :

“W must be encouraged to overcome the apathy which it afflicts her, to put to one side her extremely negative attitude to any suggestion that is made, and to make real attempts to find some reasonably congenial, convenient, interesting and financially rewarding work even if the hours are not ideal, the location is not ideal, the work is not what she would prefer, and she would prefer not to have to do it. For, without for a moment underestimating the difficulties which ladies of her age face in the current employment market, this Wife is in my view a lady who, should she wish to do so, would impress a prospective employer with her qualities”.

38. It has to be said, however, that it is not always easy for married women who have not worked for a number of years to get full-time, or possibly any, employment.  I agree that this Wife, who had never performed well at school and dropped out of college soon after meeting the Husband, and had not worked throughout the bulk of the marriage, and with no formal qualification, has very little earning capacity indeed, if any, and that in moving her children back to Canada where she had not actually lived or worked in the past 15 years, and at her age of 42, she should not be expected to have to immediately launch herself into the job market.  I accept that it is her intention to go back to school or to receive proper job training and will eventually find a job in order to become financially independent of the Husband, as she is in my view a lady who, should she wish to do so, would impress a prospective employer with her qualities as evidenced from her work at charity organisations, a situation of which however it is not realistic to expect to materialise within at least the next few years.

The Husband’s means

39. The Husband is now in the ranking of a senior captain pursuant to a service agreement with Cathay Pacific on a permanent basis.  His present monthly basic salary of $131,365 will be increased to $133,291 in October this year.  In addition he also received a discretionary 13^th month bonus of $131,365 in December 2004, a profit share of $63,848 in March 2005, and a travel allowance of $192,850 in April 2005.  It is however accepted that after the decree absolute he will not be paid a travel allowance for the Wife and so the amount will be reduced by about 20%.  According to the Wife, apportioning these payments on a monthly basis will bring his monthly income to $163,702.

40. Furthermore, the Husband also received payments for hourly duty day and excess flying pay for this year in the average monthly sum of $7,487, thereby giving him a grand total of $171,180 per month on average, the Wife says, as set out in details of exhibit “P-13”.

41. The Husband however argues that save for the monthly basic salary, all the other payments either varies from month to month, or are random or unpredictable, such as the duty allowance which is not payable due to sickness or lack of flying for whatever reason, and that since September 2001 when he started to receive such payment, the average monthly sum over the years amounted to a lower figure at $3,813, less than the 2005 figure adopted by the Wife.

42. The same uncertainty, the Husband says, applies to his excess flying pay, of which last year was the highest ever in his career with Cathay Pacific, with the 2003 average only at $589 per month while the 2004 average was $3,556.

43. As regard the 13^th month bonus and profit share, the Husband argues that they were not paid or only partially paid in 2 of the last 4 years, and that the reason that they were paid this year because the company recorded its 2^nd highest profits in history, which is not expected to repeat in the near future due to the recent surge of oil prices to an all-time record high, thereby seriously affecting the future earnings of the company, which will no doubt in turn affect these payments.

44. It is clear from the evidence that all these payments vary from year to year, depending largely on the Husband’s performance as well as the company’s profits, and I agree with the Husband that it would be more appropriate to look to the average situation of these payments of the past few years, usually three, and to presume that the future average will be about the same under normal circumstances, but with a caveat over increasing oil price, for the court to then make an appropriate order.

45. Adopting this approach and based on the information from Exhibits P-13 and R-41, I have arrived at the following average monthly figures : -

46. Adding these payments to the Husband’s basic salary then brings his total average monthly income to $161,715 as from October 2006.

47. In addition to these take-home pays, the Husband is also entitled to child’s education allowance for his children between the age of 5 and 18 years, which covers the majority of their school fees, a housing allowance which covers his entire rent, as well as medical coverage for him and his children up to the age of 18, in accordance with the terms and conditions as set out in his service agreement (B1 : 151).

48. The Husband also has the following remaining assets.

Provident Fund under Cathay Pacific Airways Limited Retirement Scheme

49. The provident fund which now stands at slightly over $6 million has increased significantly from about $1 million in 2000 at the rate of about $1 million a year.  The Wife believes that it will continue to increase at similar rate and that by the time of the Husband’s retirement at 55, it will have become very substantial.  Both parties accept that this is the most significant remaining asset.

50. The Husband however does not expect this rate of increase to continue until retirement, as part of the explanation for such increase in recent years has been his upgrade to captain with corresponding significant pay increase, and as there will be no further upgrading in the foreseeable future, he believes that the increase will gradually level off and will not be as substantial as predicted by the Wife.  In any event the provident fund will become available if and when he takes a permanent basing in Canada, most likely in next summer, in which case he says that the final amount will not be a lot more than its present value.

His late Father’s Estate

51. The Husband has an interest in the estate of his late father who passed away shortly before these divorce proceedings.  The Husband admits that he and his brother, who lives in Canada and has been handling the estate, are the main beneficiaries of the will, but he also alleges that his late father had left a legacy to his 7 grandchildren of C$5,000 each and hence a sum of C$35,000 will have to be distributed to the grandchildren before he and his brother are to share the rest of the estate.

52. The Wife argues that there is no evidence to suggest that a legacy has been willed in favour of the grandchildren, and that in any event the Husband has admitted that his brother has already drawn most of his share from the account that held the estate in late 2004, she sees no reason why the Husband has not taken any step to get his share and to wind up the estate, other than the intention to keep it away from her claims.  The balance left of the account now stands at slightly over C$102,000, with another sum of C$25,729 being his half share of the proceeds of another investment of his father, bringing the Husband’s total interest to C$127,776 = about HK$830,544 at the current exchange rate of about HK$6.5.

53. There is indeed no documentary evidence to support the Husband’s alleged cash gift of C$5,000 for each of the 7 grandchildren, but even if it is true that this was indeed his father’s last wish, 6 of the 7 grandchildren are the parties’ children and hence C$30,000 of which are being held by the Husband which he says for their tertiary education, in which case they should still form part of his means, albeit designated for the children’s future education.  Anyway, given the amount and nature of the sum in dispute, I do not think it warrants any further investigation.

His Canadian Registered Retirement Savings Plan

54. This represents the proceeds from the Husband’s military pension when he joined service in 1983 until December 1990 when he joined Cathay Pacific.  He says this is a tax shelter, with no income tax yet paid on it and which defers the tax liability until his retirement, but if he were to redeem it now it would attract significant tax, and hence he has no intention to do so at this stage.  It is worth about C$32,450 = HK$210,925.

The Clearwater Bay Golf and Country Club Debenture

55. This has always been used by the family and the Husband says he intends to keep it as long as he remains in Hong Kong.  Both parties agree that if it is sold it will fetch $200,000 but a 7.5% agency fee may have to be paid.

56. There is however a more controversial sum of C$30,000 which the Husband paid to his mother in June 2004 as repayment of a loan from her more than 20 years ago for his flying lessons, but which the Wife suspects was an attempt to move funds away from her claims and which should be regarded as part of the Husband’s assets.

57. Having heard the Husband’s evidence on this issue, I have no reason to doubt him about the original loan of C$12,000 from his mother as clearly he was then in need of financial assistance to help pay for his flying lessons.  The fact that he had repaid his mother a much bigger sum, presumably to include interests thereon for all these years, and the timing of the repayment, is unfortunate and naturally caused the Wife’s suspicion.  However, in view of the relatively small amount involved, I do not believe it was an attempt to obstruct or frustrate the Wife’s claims and will not treat it as part of the Husband’s asset.

58. The remaining assets are mainly household effects most of which had been divided between the parties, with or without agreement, and are not an issue here.  I shall next consider the parties’ respective needs and requirements.

The Wife’s needs and obligations

59. I shall start with the Wife’s needs, and of the children, while they are in Hong Kong, and then when they go to Canada.

Hong Kong expenses

60. With the exception of her rental expenses at $33,000 per month for a village house in Clearwater Bay under a lease for 2 years until March 2006, almost every other item of the Wife’s monthly expenditure for herself, the children and the household as set out in her 24^th Affidavit (B9 : 3262-3) at $40,957, plus $3,400 for domestic helper, and $8,015 for travelling and holiday for the family, totalling $52,372 on average, is disputed by the Husband.

61. The Husband argues that in December 2002 shortly after the divorce proceedings, the Wife put her initial amount of expenses at $41,565 per month.  However, despite the fact that 2 of the eldest girls have since left Hong Kong for school in Canada and hence less expenses, the Wife’s figures have actually gone up over the years.  He believes that all categories of her expenditure are embellished that even utilities and petrol have gone up by as much as 60%, while the internet charges have increased as much as 7 fold since November 2002.

62. Much of these elevated expenses of the Wife, the Husband argues, have been spent on herself such as clothing and expensive cosmetic, while her telephone bill of $3,000 average per month and her purchase of air tickets in business or first class to North America are all examples of her attempt to tailor her spending to her unrealistic level of expectations which have no foundation historically, but merely to promote a high starting point for the court’s adjustment and are wholly beyond his ability to pay.

63. It is well known that the Wife removed $2 million from the joint bank account at the time she filed for divorce, which was 50% of the savings in the account and which she was allowed to use to meet her living and other expenses pending the conclusion of the proceedings which had unfortunately and unexpectedly prolonged.  1 year later, by October 2003, the bulk of the $2 million had been exhausted on the Wife’s living expenses and spending as well as her legal costs.  On 9^th November 2003 she applied and obtained an interim maintenance of $30,000 for the month of October and November 2003, plus a monthly sum of $90,000 towards her legal fees on the Husband’s undertaking to continue to pay her rent and the children’s school fees.  On 28^th November 2003 the interim maintenance was increased to $33,000 per month commencing 1^st December 2003.  At both hearings, as is common for maintenance pending suit, no oral evidence was given and the parties simply relied on the affidavits and other documentary evidence, and the ordered sums were mainly meant to be interim measure pending the final hearing on ancillary relief.

64. On 10^th May 2004 following the Wife’s application for a variation of the Husband’s maintenance obligations after her complaints of his failure to pay or to pay sufficiently for her maintenance, the Husband was ordered to pay $69,800 per month dating back to 1^st April 2004 being $33,000 for her maintenance, $33,000 for her rent, and $3,800 towards her utility charges.  In addition, his contribution towards her legal fees was increased to $150,000 per month dating back to 1^st December 2003 after it was revealed that his Cathay Pacific stock options could be used to meet such expenses.

65. The Wife has given her account of how she spent all the money she has had since separation in her 24^th Affidavit (B9 : 3255) to which she exhibited numerous receipts of more than 500 pages of her spending that she could find, from legal bills paid of more than $2.2 million down to her daily purchases at the supermarkets.  She has also produced copies of her credit card statement as evidence of her spending on groceries, clothing, restaurants meals and entertainments for herself and the children.

66. The Husband has taken issue with some of the exhibited receipts, in particularly 3 from Wellcome Supermarket in which there was a cash-back of $500 to the Wife in each case which he argues was an deliberate attempt to inflate her needs, but which she put down as a simple mistake given especially the massive number of receipts she has exhibited.

67. The Husband also takes issue with an American Express card receipt which shows amongst supermarket purchases a Chinese magazine which the Wife cannot read and therefore suspects that the receipt belonged to somebody else but used by her again to inflate or falsify her expenses.

68. There is no question that the Wife does not and cannot read Chinese, but her evidence is that it was during a period when her mother was here and paid the groceries on that occasion while the Wife repaid her in cash.  She cannot think of any reason why the magazine was purchased but denies she had been scheming to include other receipts or that she was trying to make up a story.

69. The discrepancies of these receipts certainly cast some doubt over the Wife’s case, but if she were trying to “cook the books”, as submitted on her behalf, why would there be only a few of such receipts amongst the numerous ones she has exhibited and which the Husband no doubt must have carefully scrutinize, as he has done with all her documents and exhibits throughout the proceedings ?  Having heard this Wife in evidence for weeks, whom I find generally a credible witness, I am inclined to accept her explanation as to these discrepancies.

70. However, the fact that most of these receipts go to substantiate the Wife’s expenses does not necessarily follow that such expenses must be reasonable or that they accurately reflect her needs and those of the children.

71. I agree with the Husband that it is necessary to consider the historical spendings of the family, at least for the period before the breakdown of the marriage, before one can conclude whether the Wife’s claimed expenditure is reasonable, after all, that is also the period when the standard of living of the parties should be looked at and which is also relevant to the issue, and as pointed out by Thorpe J, as he then was, in F v F (Ancillary Relief) (1995) 2 FLR 45, that in many cases the investigation of the very important issue of standard of living is one that can be conducted historically almost as an exercise in pure accounting.

72. As I have said, almost all items of her monthly expenditure are disputed by the Husband, with the most contentious ones being her groceries at $12,116, family clothing at $3,992, hairdressing and dispensary at $3,690, restaurants and entertainment at about $5,000, and telecommunications including mobile phones and long distance calls at $2,993.  It is not in dispute that the Wife has often used her only credit card, a HSBC Premier card, to pay for most of these expenses, in particularly for the groceries, and hence her credit card statements for the immediate period leading up to the filing of her petition for divorce in November 2002 should give at least a clearer picture of some of the family expenses before the breakdown of the marriage, which can then be compared with those after the separation and what she is now claiming.

73. According to the summary of her credit care usage from January 2002 to February 2005 prepared by the Husband (R-18), the figures of which were not challenged at the trial, the pre-divorce average from January to November 2002 yielded a figure of $11,000 per month, whereas the post-divorce average from December 2002 to early 2005 gave a monthly sum of $32,000, which is almost 3 times more, the difference of which is, to say the least, quite striking, in particularly when considering the fact that the Wife’s household has since become smaller with her separation from the Husband, and the eventual departure of the 2 eldest daughters for boarding school in Canada, one would expect some of her daily ordinary expenses would naturally be reduced accordingly, if not significantly.

74. Granted that the pre-divorce period used by the Husband in his exhibit R-18 is far shorter than the post-divorce period, and hence contains fewer data to show a more accurate picture of the Wife’s spending prior to divorce, and that the Husband might have paid for some of the family’s expenses during that period such as those of the children and the family outings including restaurants and entertainments, as well as holiday expenses overseas which would not have shown up in the Wife’s credit card statements, and which may explain the relatively lower figure in March and July 2002 during which the family might have gone on holiday, as they have habitually done so, and that the Wife had in the course of the proceedings moved out of the matrimonial home and spent more than $100,000 setting up her new home, still the disparity in her spending between these 2 periods is in my view too great to be reconciled easily.

75. The Wife has other explanations.  She accepts that there was some reduction to food costs when the older children left home, but with the other 3 growing children in the house it does not work in a simple proportional way as suggested by the Husband, and also she has at least Natasha home for holidays during which there would naturally be additional expenses including purchasing new cloths and shoes for her.  She denies that she had “cooked the books” in order to keep her expenses consistently at the figure she decided on soon after separation at $41,000 per month.  She argues that in fact the overall grocery expenses for supermarket and wet market have actually come down by $1,251 since the divorce.

76. There is another explanation apparent from both the Wife’s affidavits and her testimony.  There is no question that the Husband had been quite strict with the family’s budget during the marriage, and that due to his religious belief, he would not allow cosmetic to be used by either the Wife or any of the daughters, or for them to wear trendy or fashionable clothes such as jeans or T-shirts usually favoured by teenagers.  Hence such expenses were never within the family budget, but have now become part of the Wife’s regular expenses for herself and the elder daughters which she says account for the relatively higher amount for clothing and dispensary, as well as hairdressing as she and the children now have their hair cut at barber shop instead of at home by her as before.  All these expenses, she argues would not have shown up in her pre-divorce credit card statements as they did not exist then.  But still they cannot fully explain away such high expenses.

77. I suspect there may yet be a further reason for the Wife’s increased expenses after the separation.  It was all along her evidence that the Husband had been domineering and controlling of her throughout the marriage including keeping a tight monitor of the family budget and her spending.  With her separation from him in November 2002 and the subsequent decree of divorce granted in her favour, when she felt that she was no longer under his control and with $2 million at her disposal, I believe she might have decided to somewhat indulge herself and the children, and to change her lifestyle as well, as evidenced by her use of cosmetic and the replacement of her entire wardrobe, her increased participation in sporting activities and the joining of a fitness club, and her eventual relationship with her present boyfriend, all of which no doubt have contributed to a much higher figure for many of her spending such as on groceries, clothing and personal grooming, and entertainments and holidays.  All these, I believe, together with the other reasons referred to above, account for the Wife’s much higher spending since the divorce, and therefore do not truly or accurately reflect the historical spending of the family or the standard of living enjoyed before the breakdown of the marriage.

78. Of course not all these higher spending were the result of the Wife’s indulgence.  Some, I am sure, were necessary or reasonable such as the purchasing of mobile phone for the older children, or regularly talking with them on long distance telephone.  But others such as first class air tickets, holiday expenses in Canada and bicycle equipments, for example, as rightly pointed out by the Husband that they were either unnecessary, or should have been better budgeted in particularly in view of her proposal to leave Hong Kong for Canada as soon as possible and hence the purchase of, for example, bicycles or camping equipments could perhaps have been postponed until she and the children have settled in Canada.

79. This is all the more pertinent as she has all along been expressing her concern, and quite rightly so, both in her affidavits and through her lawyers, about the family’s deteriorating financial situation caused by these proceedings, and that even though in her mind all the faults lie with the Husband, she has, as all divorcing couples do, and has the Husband, a duty and obligation to properly and carefully budget her expenses during the course of their litigation, so as to minimise the financial impact on the family or the children’s future.

80. For these reasons, while I do not agree with the Husband that the Wife has deliberately exaggerated, inflated or falsified her expenses since divorce, I agree that they do not accurately reflect the true standard of living of this family before the breakdown of the marriage, and that a somewhat lower figure in particularly for groceries, clothing, and entertainment expenses would be more appropriate given the tight financial circumstances of the parties.

81. Upon considering all the other documents including the credit card statements of the Husband for the similar period prior to the separation, as well as the evidence of the parties before me, and taking a broader approach instead of a microscopic analysis, I find it appropriate and reasonable to reduce some $4,000 from the Wife’s groceries, $2,000 from both clothing and entertainments, and to adjust somewhat downward her various miscellaneous expenses to bring her regular monthly expenditure to $31,000, to which I would allow the provision of $3,400 for her domestic helper, and an adjusted figure of $4,000 for both her transportation and holiday expenses including her own airfares for the short period that she and the children may remain in Hong Kong.  Her monthly requirements is therefore rounded up to $39,000, to which must be added her rent of $33,000, bringing her total expenditure to $72,000 per month.  This of course does not include the children’s school fees and airfares for which the Husband has all along been willing to be responsible.  I shall next consider the Wife’s needs and expenses in Canada.

Canada expenses

82. The Wife’s proposals for maintenance in Canada were first set out in her 24^th Affidavit (B9 : 3275) when she asked for a lump sum of $8 million by way of a clean-break with the Husband, with which she would purchase a house and to support herself, and periodical maintenance payments at $6,000 per month for each of the 4 younger children, totalling $24,000 which she believed as reasonable in view of the reduced living expenses in Canada.

83. When it became apparent that it would not be possible for the Husband to pay such a lump sum upfront and as a clean-break settlement of her claims, and that she would require the assistance of a mortgage for the purchase of her house, the Wife then set out her new proposals in her 28^th Affidavit (B13 : 4772) in which she asked for periodical maintenance payment of $41,500 per month being $11,500 for herself and $30,000 for the 3 youngest children, now that Natasha is also in boarding school, plus a further sum of $15,000 per month for the mortgage instalments, bringing the total periodical payment from the Husband to $56,500 per month.

84. Whilst he had not challenged the Wife’s items of her expenditure in Canada as vigorously as he did with her Hong Kong expenses, the Husband nevertheless disputes the total amount of her claim by arguing that she has based her perceived requirement for normal day to day Canadian expenses with supporting receipts that basically covered only the period of her vacation in the summer of 2004, hence many of her underlying figures are unreasonably high, and that she has sought to inflate them in order to ensure that she reaches the same pre-determined level of $41,000 as before.

85. He cited the example that as the Wife’s cousin and her family of 8 children, who also live in Canada in their own home not far from where her mother lives, can live on the equivalence of less than $22,000 per month, it is preposterous for the Wife to claim that she would require $41,500 per month for her household of only 3 or 4 children.

86. The Wife acknowledges that without having actually resided in Canada, she could only estimate her monthly needs and expenses based partly on holiday expenses, and partly on her own parents’ living expenses and other information.  She also accepts that expenditure during holiday such as household items and entertainment as well as transportation are likely to be higher, and has already adjusted downwards or discounted them accordingly in her estimation.

87. I accept that the Wife can only give an estimation of her needs and expenses in Canada without having actually lived there for any lengthly period, and that it would not be appropriate to compare her needs with those of her cousin as their respective needs, requirements, financial situation and standard of living may well be very different from each other.  It is however also common ground that living in Canada is generally much less expensive than in Hong Kong, hence the items of her expenditure in Canada should accordingly be less than those in Hong Kong.  A comparison of the 2 sets of expenses however reveals that it is not always the case.

88. Whilst the figures for groceries, hair dressing, entertainments, dispensary and telecommunication have come down somewhat, those for family clothing, household and restaurants have actually gone up.  The total amount of monthly expenses has in fact only been reduced by some $6,000 without including the domestic helper, which is no longer applicable.  This, according to the Husband, is still unreasonably high in view of the much lower living expenses in Canada.

89. I believe when the Wife gave her estimation of her expenses in Canada, she must have used her Hong Kong expenses as the basis, which is only natural for her to do so, but as I have found that her claimed Hong Kong expenses do not truly or accurately reflect the normal ordinary expenditure of this family, and have adjusted such expenses accordingly, it would be appropriate to do the same with some of her estimations for her Canadian expenses by reducing her groceries to $7,000, family clothing to $3,000, holiday expenses to $3,000, and some of her other miscellaneous expenses to a more realistic monthly sum of $32,000, or the equivalence of C$5,000.  This is of course on the basis that the Husband shall continue to be responsible for the children’s school fees and their holiday airfares.  I must stress that this estimation is the best one can arrive without concrete information of actual expenses, and can if necessary be looked at again after the Wife and the children have settled in Canada.

90. As for her estimation for mortgage payments, it is on the basis that she requires a mortgage for $2 million to fund her purchase of a house in Ottawa, at a rate of 6% over 25 years and hence at about $12,886 per month.  While the Husband makes comments about it being ill-advised to take a long-term loan as most of the repayments in the first year of a mortgage goes to interest, and suggests that she should rent first, the Wife believes that the purpose of the mortgage is to fund the purchase of the house in the most cost-effective way, which a long-term mortgage does, given that the capital amount of the mortgage will be paid off once the Husband’s provident fund is paid out.  A shorter term loan, she says, would be too expensive to raise the sum needed to buy a house of her choice.  She argues that there is no reason why she should be limited to the very cheapest option available, especially given that there is exchange rate and interest rate vulnerability, it is therefore appropriate for her to be awarded a sum in the region of $15,000 per month towards a mortgage, which is considerably less than her present monthly rental in Hong Kong.

91. The Wife’s choice of her house in Ottawa would cost in the region of C$375,000 – $400,000 (HK$2.38 – 2.54 million), but the Husband wants her to live in Cornwall where her parents and cousin live, and where property prices are much cheaper, as Ottawa is the second highest city in housing prices in the province of Ontario, second only to Toronto, and from her exhibit “P-20”, he points out that the average price in Ottawa is less than C$220,000, whereas the Wife is seeking to purchase a house some 60 – 70% high than the average, which he finds excessive and unreasonable.

92. The Husband also believes that it would be premature for the Wife to commit any funds, or take the liability for a mortgage, before the hearing on costs in these proceedings, where she may be held responsible for the debt of more than $1.2 million in costs incurred by her to her team of lawyers since he has been representing himself, and that should the court award her finances for the purpose of funding a mortgage, such amounts should be set against her eventual entitlement to his provident funds.

93. I do not think it is for the court, and certainly not for the Husband, to dictate to the Wife where she should live after the divorce, provided that such choice of hers is not in conflict with the welfare and interest of the children, and I certainly do not think Ottawa is, in particularly in view of the fact that it is a major city in Canada with many similarities to Hong Kong where the family has made their home for the past 15 years, with possibly a lot more and better opportunities in terms of education and career available to the Wife and the children than at Cornwall.

94. The same reasoning should apply, in my view, to how much the Wife should spend in the purchase of her own home, if she were to use her lump sum to finance it.  However, since she is asking the Husband to fund her mortgage at the rate of $15,000 per month, at least until she receives her full share of his provident fund, the Husband is entitled to raise the issue of whether it is necessary or reasonable for her to require a house that costs so much more than the average price.

95. There is no question that the family has lived in a house bigger than the average size in Hong Kong throughout the majority of their time here.  Although the Wife will no longer have as many children in her household as before as the elder ones would either be in boarding school or in university, she would still need a house bigger than average with at least 3 bedrooms to accommodate her children, in particularly when some of those elder children may also be spending more time at her home after her relocation back to Canada.  Taking into account of the standard of living this family was able to enjoy, i.e. a fairly comfortable expatriate lifestyle prior to the breakdown of the marriage, I agree that that the Wife is entitled to look for a house bigger and more expensive than the average house in Ottawa.  However, before making up my mind on this issue, it is necessary for me now to consider the Husband’s needs, as it would be relevant to see how much he can afford to contribute towards the funding of the Wife’s house, or the mortgage thereof, after taking into account of his expenses, including his own housing needs in Canada, should he take a basing there.

The Husband’s needs and expenses

96. Since it is the Husband’s intention to remain in Hong Kong until probably July 2006 when he is likely to get a basing in Canada, it would therefore still be necessary to consider his needs and expenses of his stay for the time being in Hong Kong.

Hong Kong expenses

97. The Husband has set out his needs and expenses in his 20^th Affidavit (B12 : 4348) under what he calls the Schedule of Monthly Expenditure for the family, in which he calculates his own monthly needs at $57,815, and those of the Wife at $57,519 which include her rent of $33,000, whilst his rent of the same amount will be reimbursed by his employer, putting his net living expenses less rental at $24,815 which he says is his basic minimum without any provision for vacation and travel for himself and the children which will have to be covered by his travel allowance.

98. The Wife however argues that given that the children spend the vast majority of their time with her, it is hard to see how the Husband can, in his calculation, allow the same amount for their food, transport, stationery, entertainment, computer costs, etc when they are with him, or how he can justify his total monthly expenses actually being greater than hers.

99. While I accept that the Husband might have been more involved with the children throughout the marriage than most fathers who have regular working hours, and that due to his flight schedule, he may be able to spend more time and more frequently with his children during his days off, and that some of them may even be spending significant time with him during their major school holidays, the reality is that the minor children do not live with him the majority of their time, and therefore I do not accept, as rightly pointed out by the Wife, that the Husband should have similar expenses such as groceries, utilities or other household expenses as the Wife for his household which is basically himself and his domestic helper, in particularly when he would be out of Hong Kong flying for about half of the time in any event.  Making the appropriate adjustment to his various expenses accordingly, I find that $22,000 per month would be a reasonable sum for his living expenses.

100. The Husband of course has other monthly expenses which are job-related such as income protection insurance of $1,307, union duces of $3,638, pilot licence of $300, retirement scheme contribution of $6,569, and provision for income tax which he puts at $39,806 per month, totalling $51,620 which he believes will go up next year in view of the increment to his basic salary commencing October.  There is also the possibility that he may have to assist his eldest son Chris with his school fees should he go to university as he is already 19 and no longer covered by his education allowance.  In the meantime the Husband’s total ascertained expenses amount to $73,620 per month on average.

Canada expenses

101. If the Husband takes a basing in Canada in July 2006, which he now accepts most likely to be the case, be believes that it is wholly appropriate that he has equal finances to fund the purchase and mortgage of his own property equal in value to the Wife’s, as the children will continue to spend as much time as possible with him during access and they require a suitable dwelling place during these times, as it is important for them to not in any way feel inhibited while spending time with him, and that he should be able to provide for them in a manner no less equal to that of the Wife.

102. If for whatever reason a basing is not immediate possible, the Husband says, he would still endeavour to apply for as many temporary basing as possible so that he could be close to the children, in which case he does not think he can depend on any of his relatives in Canada to accommodate him and the children during his access to them, as their places are not large enough to do so, nor is a hotel room a suitable place to meet the children.  As such he proposes that a recreational property in the range of C$160,000 to C$200,000 be purchased with the assistance of a mortgage at C$1,300 (HK$8,450) per month, or to rent such a property, which should therefore be taken into account when considering his needs in Canada.

103. For the same reasoning I have given about the Wife’s housing needs, if the Husband changes his basing to Canada in July 2006, he will receive his provident fund calculated up to then with which he can then purchase his accommodation, and while it is also not for the court nor the Wife to dictate to him whether he should rent or purchase or how much it should be so long that he pays from his share, and accepting that he should have his own home in Canada where he can provide a comfortable place for the children during access instead of relying on his relatives or staying in a hotel, again the reality is that he would not be spending as much time with them as the Wife and hence may not need exactly the same type of house as the Wife in terms of size and cost.

104. As for his other living expenses, the Husband has not given much details, probably for the same reason of lack of sufficient information, but based on my observation of his expenses in Hong Kong, and taking into account of generally lower expenses in Ottawa, I believe that a monthly sum of HK$18,000 would be a reasonable estimation subject again to review if necessary upon his settlement there, which together with his job-related expenses aforesaid should bring his total requirement to at least HK$70,000 per month, possibly more as his income tax liability in Canada will certainly be significantly more, although this issue was unfortunately not fully explored by the parties at the trial, possibly due to the uncertainty of the Husband’s basing in Canada at that time.

The Standard of Living

105. There is no question that the family enjoyed a comfortable standard of living during the marriage, with nice house, good food, club membership, private school for the children, and overseas holidays.  The Wife however says that the Husband kept a very tight rein on finances and that there was penny-pinching in ways that were unnecessary, given the high income of the family.  She acknowledges that some of her spending, and as I have found, for example, in going to a hairdresser rather than have a friend cut her hair, spending more on food, having the air conditioner on more in summer, is different now from during the marriage.  Similarly, she says, if one looks at the household purchases the Husband made for himself in the last year, he has certainly decided to treat himself to many things that were denied her during the marriage, and that if anything he has adopted for himself a standard of living higher than that which he afforded the family during the marriage.

106. I agree that the spending of both parties since the breakdown of the marriage has been higher than it was during the marriage, partly because there are now 2 households instead of only one as before, which is common for most divorcing couples, in particularly when both parties have changed houses in the course of the proceedings necessitating extra spending for refurnishing their respective home.  What the statute requires, however, is to look at the standard of living enjoyed by the family before, and not after, the breakdown of the marriage, and that although allegations have been made by the Wife of the Husband’s “penny pinching” in the past, which he denies and explains as proper family budgeting, there is no evidence to suggest that the family had been deprived of anything or that the standard of living had been kept lower than what should have been, and the fact that the Wife and the daughters were not allowed to use cosmetics and were restricted to certain type of clothing during the marriage was more to do with the Husband’s religious belief rather than his tight rein on finances.

Contributions

107. The Wife became a full-time home-maker shortly after the birth of the eldest child.  The other children soon followed as there are 6 in total as it was the Husband’s intention to have a big family.  As a result the Wife had always remained the home-maker while the Husband the income earner.  Within Canada the family moved several times due to the Husband’s job in the military.  The family come to Hong Kong in early 1991 as a result of the Husband’s job with Cathay Pacific which required him to be away from home much of the time.  The Wife says that she performed the duties of mother as well as took responsibility on many occasions when the Husband was away both on flying duties, on his personal holidays, and when he elected to stay in the Headland Hotel.  She believes that the contribution she had made for the duration of the marriage are to be valued and given recognition by the court, as indeed they have been in the custody judgment, and that she will be making on-going contributions in her care of all of the children.

108. While recognising her role as a mother was important, the Husband argues that the Wife did not contribute directly financially and that putting into balance the fact that he was the sole financial provider for the family and that he was also very deeply involved in the children’s lives, the scales should tip in overall term that he was the one who had made greater contribution to the family.

109. The Husband further argues that the successes of his career had not been dependent on the Wife and that she had at no time delivered him from any problem that might have hampered, his success as a commercial pilot, and that in fact the opposite is true when she struck him on the face 3 times and withdrew $200,000 from the joint account in September 2000, which was just 4 months before he was to begin his upgrade training to captain, thereby causing unnecessary stresses to him during his training.  The fact that he succeeded in his training, he says, was not because of the Wife, but rather in spite of her.

110. I do not think there is any dispute that the Wife’s main contribution to the marriage and the family was never financial but rather her looking after the home and caring for the family, including 6 children.  This contribution is not only clearly and properly recognised in the statute under s. 7 (1) (f), but also in the authorities and precedents, with the leading one in White v White (2000) 2 FLR 981, 989 when Lord Nicholls said : -

“…… there is one principle of universal application which can be stated with confidence. In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles. Typically, a husband and wife share the activities of earning money, running their home and caring for their children. Traditionally, the husband earned the money and the wife looked after the home and the children. This traditional division of labour is no longer the order of the day. Frequently both parents work. Sometimes it is the wife who is the money earner, and the husband runs the home and cares for the children during the day. But whatever the division of labour chosen by the husband and wife, or forced upon them by circumstances, fairness requires that this should not prejudice or advantage either party when considering paragraph (f), relating to the parties’ contributions. This is implicit in the very language of paragraph (f) : “ …… the contribution which each has made or is likely …… to make to the welfare of the family, including any contribution by looking after the home or caring for the family”. If, in their different spheres, each contributed equally to the family, then in principle it matters not which of them earned the money and built up the assets. There should be no bias in favour of the money-earner and against the home-maker and the child-carer. There are cases, of which the Court of Appeal decision in Page v. Page (1981) 2 FLR 198 is perhaps an instance where the court may have lost sight of this principle …… The discretionary powers, conferred by parliament 30 years ago, enable the courts to recognise and respond to developments of this sort. These wide powers enable the courts to make financial provision orders in tune with current perceptions of fairness. Today there is greater awareness of the value of non-financial contributions to the welfare of the family. There is greater awareness of the extent to which one spouse’s business success, achieved by much sustained hard work over many years, many have been made possible or enhanced by the family contribution of the other spouse, a contribution which also required much sustained hard work over may years. There is increased recognition that, by being at home and having and looking after young children, a wife may lose forever the opportunity to acquire and develop her own money earning qualifications and skills”.

111. I have found the Wife to be a loving and caring parent throughout the marriage in the parties’ custody trial and granted her sole custody care and control of the 4 minor children.  As I have observed in my earlier judgment on custody, the parties experienced marital problems almost at the beginning of their marriage, partly due to the Husband’s domineering and controlling nature which contributed to the Wife’s health problems which the Court-appointed psychiatrist later diagnosed to be the cause of the psychiatric condition Somatoform Disorder.  It was under these difficult situations that I found the Wife to have done a remarkable job in caring for the children and the family, and I do not agree that whatever stress the Husband might be experiencing while going through training for captain can be blamed on the Wife, but rather in reality the consequence of the breakdown of their marriage, although I do accept that she has made no financial contribution to the Husband’s assets.

112. In conclusion I am satisfied that both parties have properly discharged their respective duties in the 20 years of their marriage, with the Wife as a home-maker and the Husband as a financial provider, and that although their marriage has now come to an end, their respective duty will continue for years to come for their children, with the Wife as their primary carer, and the Husband financially.

The value to either of the parties of any benefit which may be lost by divorce

113. The Wife will lose concessionary travel with Cathay Pacific as well as her health insurance and medical coverage which she was entitled to during the marriage under the Husband’s employment.

114. More importantly, she argues, she will lose the benefit of the income that accrues from the Husband’s employment, which skills were largely obtained during the marriage, and that there can be no denying that his employment with Cathay Pacific was wholly within the marriage.  She therefore asks the Court to view his pilot’s training and the earning capacity it produces as “something of value” acquired during the marriage which will be lost by divorce from which he will continue to benefit after divorce, as this has been a long marriage, his Cathay Pacific earning capacity has been acquired by virtue of her being wiling to move to Hong Kong with 3 children then under the age of 5, and that his wish to have both a flying career and 6 children has been achievable only because of her role as a mother and wife, it would be unjust, she argues, that the future benefits of this employment are exclusively to the Husband, an argument she says is especially strong now that he claims to have repaid a debt for his pilot lessons to his mother out of matrimonial assets, and if I may add, with substantial interests included.

115. The Husband does not agree that he gained his ability, therefore an asset, as a professional pilot during the marriage, as he had already gained his professional pilot’s license before their marriage which enabled him to fly a wide variety of aircrafts including jet turbine types.  By way of evidence, he refers to exhibit “R-38” which shows that in addition to his Canadian license, he also held a U.S. Commercial Pilots licence before the marriage, and that his application to the Canadian Military and his officer training were all completed before the date of the marriage, therefore his ability and training as a pilot is an asset that he developed before the marriage and not an asset that was acquired during the marriage as alleged by the Wife.

116. There is no question that there are a number of benefits which a wife may lose the chance of acquiring by virtue of the dissolution of the marriage, such as the loss of a chance of benefiting from the husband’s pension, in particularly where the parties are near retirement age, in which case a pension entitlement may represent a substantial asset of the family, as in this case and readily accepted by the Husband, and where the Wife can be compensated by a proper share therein, as well as her loss of insurance and medical coverage which can and will be properly considered as part of her future needs and requirement, which can be met by an order for periodical payment in her favour.  I therefore do not think it is relevant or appropriate to consider whether the Husband’s earning capacity should be considered as an asset the benefit of which she will lose upon the divorce, as I do not believe it was so intended by this particular statute.

Conduct of the parties and circumstances of the case

117. As referred to earlier in my judgment, it is the intention of both parties to argue that the conduct of the other should be taken into account when considering the Wife’s financial claims, and in particularly as to the division of the matrimonial assets.

118. The Wife’s case is that at the date of her petition for divorce, the plan that was in place was for the family to relocate on a basing of the Husband to Vancouver, but his conduct thereafter in the litigation has brought about the situation the parties now find themselves in where the substantial matrimonial liquid assets are depleted, and that the Wife should not have to suffer as a result of it.

119. It is clear, the Wife says, from looking at a chronology of events how the Husband’s strategy was to operate, that it was almost from the start an attempt to pull the rug out from under her feet, by alluding to the fact that he might not, after all, take the basing in Vancouver, and while he referred to her plan to move to Canada, pointedly did not mention that the children would be going with her, and leaving her uncertain as to the leasing situation of the matrimonial home, and at the same time using his access to the children to make the situation untenable to her, and later confirming that he would not take the basing, thereby putting her in more uncertainty, who was forced to reappraise her own future plans in the light of his unilateral decision.

120. It is submitted on her behalf that all these were simply the beginning of the Husband’s plan to “wrong foot” the Wife rather than try to co-operate with her.  His decision to remain in Hong Kong was to thwart her plan to return to Canada and to enhance his chance of gaining custody of the children, and to do whatever he could to make life difficult for her.  His conduct of the litigation since that time makes this clear, with allegation after allegation, all dismissed by the Court in the custody hearing, yet he still does not accept the Court’s findings, and insists he was right about all his allegations against her.  Had he not had this attitude from the very start, that he and only he is right, she says, this matter would not have run up legal bills in the region of more than $6 million, as she would have agreed to a joint custody order at the earlier stage of the proceedings, from the emotional and financial toll would have been spared.

121. While it is her position that the Husband should never have fought in the first place, and that they should all have relocated to Canada as planned, the Wife says, at the very least he could have agreed to settle the matter after the psychiatric report by Dr Lo was received.  Yet he insisted on ploughing on, at ruinous financial and emotional cost, which cannot be in the best interests of the parties as the children.  The Wife therefore submits that she should not have to bear the financial consequences of the Husband’s conduct.

122. The Husband denies that he is guilty of any conduct in wasting matrimonial assets and insists that he was entitled to conduct the proceedings in the way he was advised.  He says he could not have engineered the accusation of Munchausen Syndrome in the Wife in view of the evidence from the doctors who saw, treated or were aware of her complete medical history.

123. As to Dr Lo’s report, he says there were so many shortcomings that it would not provide a credible position to alleviate his concerns that the Wife continues to suffer from a psychiatric disorder.  In any event, the Husband says most of the costs of the proceedings were incurred prior to Dr Lo’s evidence, and that the Wife had also made numerous applications that he deems to be unnecessary such as the one for interim maintenance despite the fact that she had already withdrawn $2 million from the joint account, and which was subsequently adjourned due to her deficient affidavit in support.  In considering the full responsibility as to the conduct of the parties during these proceedings, he says, one should look at the manner in which the Wife carried out her action, by removing the children from him and half of the money in the joint, which cannot be considered as reasonable.

124. As regard the Husband’s case against the Wife on conduct, he believes that she is guilty of needless loss of matrimonial assets including her excessive or unnecessary spending since the divorce, as evidenced in her credit card bills and cash withdrawals, on sharp increase on living expenses, expensive airfares, frequent overseas vacations, unnecessary breast enlargement, bicycle and camping equipments, etc. as well as additional rental expenses by moving from the matrimonial home to a more expensive house in the course of the proceedings, and unnecessarily running up further legal costs in excess of $1 million since the custody trial by retaining a team of solicitors and counsel despite the fact that he has since been representing himself in the ancillary relief hearing.

125. The relevant parts of section 7 (1) on conduct are :

“It shall be the duty of the court in deciding whether to exercise its powers …… in relation to a party to the marriage and, of so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say ….. ”.

126. The reference to conduct under the section appears to be general in nature.  It does not specify in what manner that conduct should be regarded, leaving it therefore entirely in the court’s discretion.  It has however been suggested that conduct should be treated differently at least chronologically, from the specified criteria, as was recognised in Wachtel v Wachtel [1973] 1 ALL ER 113 where Ormrod J said :

“As section [25] stands, conduct is to be taken into account as a factor which may modify the result which is arrived at after consideration of all the other factors specified in the section. The court can only approach this issue in a broad way. It should bear in mind the new basis of divorce which recognised that, generally speaking, the causes of breakdown are complex and rarely to be found wholly or mainly on one side, and that the forensic process is not well-adapted to fine assessments or evaluations of behaviour, and that it is not only conduct in relation to the breakdown which may have to be considered. Conduct subsequent to the separation by either spouse may affect the discretion of the court in many ways, e.g. the appearance of signs of financial recklessness in the husband or of some form of socially unacceptable behaviour by the wife which would suggest to a reasonable person that in justice some modification to the order ought to be made. In my experience, however, conduct in these cases usually proves to be a marginal issue which exerts little effect on the ultimate result unless it is both obvious and gross”.

127. On appeal of that case, in delivering the judgment of the Court of Appeal (1973) 1 ALL ER 829 Lord Denning MR said :

“It has been suggested that there should be a “discount” or “reduction” in what the wife is to receive because of her supposed misconduct, guilt or blame (whatever word is used). We cannot accept this argument. In the vase majority of cases it is repugnant to the principles underlying the new legislation, and in particular the Act of 1969. There will be many cases in which a wife (though once considered guilty or blameworthy) will have cared for the home and looked after the family for very many years. Is she to be deprived of the benefit otherwise to be accorded to her by section [25](1)(f) because she may share responsibility for the breakdown with her husband ? There will be no doubt be a residue of cases where the conduct of one of the parties is in the judge’s words …… “both obvious and gross”, so much so that to order one party to support another whose conduct falls into this category is repugnant to anyone’s sense of justice. In such a case the court remains free to decline to afford financial support or to reduce the support which it would otherwise have ordered. But, short of cases falling into this category, the court should not reduce its order for financial provision merely because of what was formerly regarded as guilt or blame. To do so would be to impose a fine for supposed misbehaviour in the course of an unhappy married life. [Counsel] disputed this and claimed that it was but justice that a wife should suffer for her supposed misbehaviour. We do not agree. Criminal justice often requires the imposition of financial and indeed custodial penalties. But in the financial adjustments consequent upon the dissolution of a marriage which has irretrievably broken down, the imposition of financial penalties ought seldom to find a place”.

128. It was however said by Davies LJ in a later case of Rogers v Rogers [1974] 2 ALL ER 361 in the Court of Appeal :

“But I do not think that Lord Denning M R could possibly have meant that in any and every case conduct was quite irrelevant unless (to use his words) it was “obvious and gross”. I think he could not have meant that in the light of the wording of section [25 of the Matrimonial Causes Act 1973] and it does seem to me that in ancillary proceedings it is right that by and large the court should, in the words of the statute, have regard to their conduct”.

129. In another case, Armstrong v Armstrong (1974) 4 Fam Law 156, Buckley LJ said that the relevant question was not so much whether the conduct was obvious and gross but whether the conduct was such that it would be repugnant to anyone’s sense of justice to say that it ought not to be taken into account.

130. In England the original Section 25 of the Matrimonial Causes Act 1973, upon which our Section 7 was based, was amended in 1984 to require conduct to be taken into account where it would be inequitable to disregard it.  It is not clear how far if at all the changes effected by this amendment have altered the way in which conduct should be taken into account.  However in K v K (Financial Provision) (1988) 1 FLR 469, Purchas L J said in the Court of Appeal : -

“It may well, therefore, be argued that the 1984 Act, being an amending Act, should in the first instance be read so as to give effect to the ordinary meaning of the words used. These are not the test of gross and obvious conduct as developed in Wachtel v Wachtel [1973] Fam 72, or conduct such as to make it repugnant to ignore it as between the parties. It may well be that the use of the words “it would in the opinion of the court be inequitable to disregard it [the conduct of each of the parties]” may give a broader discretion to the court than that envisaged hitherto under the authorities …… “ …… I see no restricting words or meaning to be inferred in the wording of the subsection. The court is entitled, in my judgment, to look at the whole of the picture, including the conduct during the marriage and after the marriage which may or may not have contributed to the breakdown of the marriage or which in some other way makes it inequitable to ignore the conduct of each of the parties”.

131. Amongst the kind of behaviour that may amount to conduct under section 25 as amended, the way in which the parties conduct themselves in relation to the family resources is a relevant factor according to Butler-Sloss LJ, as she then was, in Primavera v Primavera (1992) 1 FLR 16 when she said :

“…… the conduct of a spouse in relation to financial matters, both those during the marriage and those taking place subsequent to the marriage, are capable of being considered as conduct which comes within s. 25 (2) (9). The question is whether or not this is in fact conduct which should come within that section, in that it should be inequitable to disregard it”.

132. So if a party is reckless or fritters away family resources the court will endeavour to see that the other party does not suffer thereby or, at any rate, to reduce as well as it can the effect of such financial misconduct, as in the case of F v F (Ancillary Relief : Substantial Assets) (1995) 2 FLR 45.

133. In the leading case on financial conduct of Martin v Martin (1976) Fam 167 where the parties married in 1942, ran a farm business and separated in 1969 when the wife stayed in the farm and improved it, whereas the husband entered into a series of transactions one of which resulted in a large loss.  In the court below, Purchas J said :

“Conduct of a gross and obvious nature which would render it repugnant to grant financial relief or complete financial relief is, in my judgment, to be distinguished from the way in which the parties have dealt with what used to be the family assets and the route by which they each respectively find themselves in the contemporary situation. The judgment of Lord Denning M R in Wachtel v Wachtel [1973] Fam 72, 90 refers to a financial penalty being imposed as a punishment for pre-separation misbehaviour. Section 25 (1) of the Matrimonial Causes Act 1973 enjoins the court to exercise its powers under sections 23 and 24 having regard to all the circumstances of the case including the specific matters set out in paragraphs (a) to (g) so as to place the parties so far as it is practicable in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities to the other. This hypothetical concept must, in my judgment, import a consideration of how the parties have in fact conducted themselves in relation to the family assets after the separation against the standard of conduct envisaged by section 25 (1) of the Act of 1973, namely, that each had properly discharged his or her obligations and responsibilities towards the other”.

134. In the appeal (1976) 3 All ER 625, CA, Cairns LJ said in the Court of Appeal : -

“Another question which arose was as to whether the husband’s conduct in relation to the financial matters after the separation was relevant. In my opinion, nothing that was said in Wachtel v Wachtel [1973] Fam 72, [1973] 1 ALL ER 829 was intended to apply to any conduct either during or after cohabitation which has the effect of reducing the funds available to provide for the needs of both parties after divorce. Such conduct must be taken into account because a spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left as he would have been entitled to if he had behaved reasonably ……
These are matters which are properly to be taken into account by the court in complying with the final words of section 25 (1) of the Act of 1973. It is the court’s duty to make such an order as will place the parties, so far as practicable, and having regard to their conduct just to do so, in the financial position in which they would have been if each had properly discharged his or her financial obligations and responsibilities to the other”.

135. In Tavoulareas v Tavoulareas (1998) 2 FLR 1131, Thorpe LJ made the distinction between marital and litigation conduct in his judgment : -

“…… A clear distinction must be drawn in all these cases between what might loosely be described as marital conduct and what might conveniently be descried as litigation conduct.  It seems to me as a matter of construction that section 25 (2) (g) is plainly aimed at marital misconduct.  If the applicant’s misconduct is limited to misconduct with within the ancillary relief case long after the separation of the parties, it is, in my judgment, questionable whether that factor should go to diminish the quantum of the financial award.
This question arose in the case of P v P (Financial Relief : Non-Disclosure) [1994] 2 FLR 381.  In that case the applicant wife had been exposed …… to have been guilty of considerable misconduct of the financial case.  [Counsel] relied upon a decision of Lincoln J in B v B (Real Property : Assessment of Interests) [1988] 2 FLR 490 in submitting that, as a result of that misconduct, the court should reduce the wife’s award on the application of the section 25 (2) (g) criterion.  In ruling on that submission, I said (at 39H) :
“It seems to me that in that case such price as is to be paid by the dishonest litigant is a price in costs, not in reduction of the appropriate share of the available assets.  The suggestion contained in the last sentence of Lincoln J’s judgment that maxims of equity should be applied to deny or reduce relief I cannot follow.  It seems to me that the court has a duty to discharge a statutory function on the application of statutory criteria, and maxims of equity have nothing to do with it”.

136. Thorpe LJ emphasised the same distinction between marital and litigation conduct in the case of Young v Young (1998) 2 FLR 1131, CA where he said : -

“….. a clear distinction must ordinarily be drawn between marital misconduct which affects the quantification or orders and litigation misconduct which shall be penalised in costs and not in the quantification of orders. Only in the rarest cases will litigation misconduct have so squandered assets as to require reflection in quantification (as an example see M v M (Financial Provision : party Incurring Excessive Costs) [1995] 3 FCR 321). Of course there will also be cases in which the court discerns both marital misconduct and litigation misconduct. In those cases it is open to the court to reflect the marital misconduct in the quantification or orders and the litigation misconduct with costs penalty. But here the misconduct was only marital”.

137. In a more extreme case such as M v M (Financial Provision : Party Incurring Excessive Costs) (1995) 3 FCR 321, where the wife petitioned for divorce in a county court in 1991, and after the decree nisi was pronounced in January 1992, she filed an application for ancillary relief for herself and the 2 children, but over the next 2 years the husband made numerous applications to the Court, which were usually either adjourned or dismissed with costs, and included pointless and expensive proceedings in the Chancery Division.  Eventually the ancillary relief proceedings were transferred to the Family Division before Thorpe J., as he then was, and the wife was subsequently awarded a greater share of what remained of the matrimonial capital after the husband was held to have dissipated his capital on litigation.  Thorpe J gave his reason as follows : -

“Conduct is only relevant in so far as the wife relies upon the matter in which the husband has conducted these proceedings. Ordinarily speaking, it seems to me that the manner in which proceedings are misconducted is to be reflected in orders for costs rather than directly in the scale of the awarded sum. However, this seems to me to be quite exceptional case where the husband’s strategy has been so gross and so extreme that it would be inequitable to disregard it. It seems to met hat it is appropriate to look to the qualification of the wife’s share not of what remains today but of what would remain today had that policy of waste and destruction not been pursued”.

138. Although our Section 7 has not followed the English 1984 amendment requiring conduct to be taken into account where it would be inequitable to disregard it, I believe that the various statements made in these cases remain good authorities in relation to financial conduct.

139. I have set out the chronology of the custody proceedings in details in my earlier judgement and I do not propose to repeat it here, suffice it to say that not all the applications, and there were many, were by the Husband and none, in my opinion, can be said to be totally unnecessary, pointless or manipulatively.  A few of his applications such as the one for all of the Wife’s medical reports and records dating back 5 years, or one for an order for her to give her authorization to a doctor in Cathay Pacific to give his view on her psychological condition, were refused with costs against him, but there were also others that had merits or were successful, and while he can be clearly said to be obsessive about his litigation with his wife, in particularly his views over her psychological condition which, as he rightly points out, the Court eventually found necessary to look into and that the resultant psychiatric assessment did confirm his concern, albeit a different kind of disorder.

140. I accept that the Husband did at the beginning of the proceedings change his mind about taking a basing in Vancouver which might have led to the breakdown of the parties’ negotiation, but I am unable to say, taking his conduct in the proceedings as a whole, that it has been so gross or obvious, or so extreme that it would be inequitable to disregard it in considering the entitlement of the Wife, whose situation is after all not as one-sided as it was in M v M.

141. As regard the Wife’s conduct with her spending since the divorce, I have already sufficiently dealt with them earlier in this judgment and do not propose to repeat here, suffice it to say that although some of the them may be called over indulgence or unnecessary, they were not in my view as a whole so excessive or extreme to amount to a waste of matrimonial assets.  There are however 2 points raised by the Husband that need to be commented on.

142. The first is over the Wife’s leaving the former matrimonial home at a lower rent and moving into another property at $33,000 per month, some $4,000 higher than the former matrimonial home, and in an area which he believes to be generally less expensive than where the matrimonial home is located.  There was also significant duplication of rent, he argues, due to the haphazard manner in which the Wife negotiated the new lease which resulted in funds needlessly dissipated, together with unnecessary agency’s fees.

143. There is no question that rental expenses of her home would have been saved if the Wife had remained in the former matrimonial home.  She left because the Husband had moved into her neighbourhood without any prior warning or notice in the middle of their litigation which caused her concern that he was there to spy on her.  The Husband had denied this and explained that this move was to be closer to the children and to facilitate access.

144. I accept that the Wife’s action might have been somewhat impulsive, but given the circumstances of how she first found out about the Husband’s move, and the way she had been under his domination and control during the marriage and the stress and pressure she was undergoing at that time, I can understand why she felt the need to move away from him and although it resulted in higher rental and other expenses which is unfortunate, I do not regard such behaviour as gross or exceptional that should be taken into account against her.

145. The second point of the Husband is over the Wife’s continuous running up of legal costs which he deems unnecessary and wasteful of matrimonial assets since late last years when he was no longer represented by lawyers which he could no longer afford and has been representing himself, and hence he does not believe it is right for her to retain a team of solicitors and counsel for the ancillary relief hearing and to run up further legal costs in excess of $1 million.

146. It is true that the Husband has since the custody trial been representing himself and has so far acquitted himself quite well in these proceedings, which is not surprising in view of his good educational background and high intelligence.  But even if I were to put aside the Wife’s fundamental right to be represented by lawyers in litigation, which cannot be argued as a wasteful behaviour if it is properly conducted, I do not think that this Wife is capable of conducting this litigation on her own, not after what she had been through for years under the control of the Husband during the marriage, and certainly not when the Husband has accused her that she could not even balance a cheque book, let alone conducting these proceedings.

147. The remaining matters under Section 7 (1) such as the age of the parties and the duration of the marriage are not in issue, nor does physical or mental disability of either party have any particular bearing now that the Wife has been certified by Dr Lo to be free of any psychological disorder.  Lastly, although she as a close relationship with her boyfriend, who is a teacher of the English School Foundation in Hong Kong, there is no indication of any marriage plan in future, nor any evidence to suggest that he would leave Hong Kong to join her in Canada.

148. Having considered the means of the parties, I shall now return to the original question : when should the Wife be allowed to remove the children to Canada.  She wants to do so as soon as possible, while the Husband prefers it to be in July 2006 when he in all likelihood will also take a basing in Canada.  Although I can understand the Wife’s urge to leave Hong Kong away from her fight with the Husband so that she can settle down to a new life in Canada, and that I accept that once the children are allowed to go, ordinarily the earlier they are able to do so and to adjust to a new life and environment, the better it will be for them, other than these there is really no evidence of any urgency for them to go right away, and I do not think it is realistic or practical in this case as the relocation of a family of such size requires proper planning, not just to find a suitable school for the 3 youngest children, one of whom may have learning difficulty and require additional support, which the Wife will no doubt have to discuss with the Husband, but also to look for a suitable home for which funding will have to be made available, all of which cannot be done at the drop of a hat but instead require proper planning and timing, very often months instead of weeks to implement.  With the children having already started the school term in Hong Kong, it will simply not be in their best interest to be disrupted from their normal life and schooling in this manner.

149. I agree with the Husband that it makes sense under the circumstances for the children to leave only upon completion of the whole school year by June or July 2006 when they will start their summer holiday, not just to preserve continuity of their schooling and to allow the Husband to re-establish his relationship with them, but also to give both parties, hopefully with proper professional help and counselling, to learn to co-operate with each other again over their children if nothing else, and to return to normal parenthood, which is vital for their children’s future interest for which I will hold both parties responsible, in particularly the Husband.

150. In conclusion I allow the Wife to remove the children upon their completion of their present full school year and in any event not later than 1^st July 2006.  While they remain in Hong Kong, the Husband shall pay the Wife HK$72,000 per month including her rent, to be apportioned at $54,000 for her and $6,000 for each of the 3 youngest children upon the Husband’s undertaking to continue to be responsible for all the children’s school fees and medical / dental expenses as well as their airfares for overseas vacation for which he will be reimbursed by his employer.

151. To enable the Wife to at least pay for the deposit or down payment for her home in Ottawa, which she will probably make use of her Christmas trip to do so, the Husband shall on or before 1^st December 2005 pay her a lump sum of C$100,000 from his share of his father’s estate, being an advanced payment to her for the said purpose.

152. Upon the Wife and the children’s arrival in Canada, the Husband shall pay them C$5,000 (about HK$32,500) per month being C$2,000 for the Wife’s maintenance, and C$1,000 for each of the 3 youngest children, and an additional sum of C$2,000 per month being his contribution towards the mortgage payment of her house, which payment shall cease upon payment of her share of his provident fund if and when he takes a basing in Canada.  His undertaking for the children’s other expenses referred to in Paragraph 150 above shall of course continue.

153. If the basing takes place in July 2006, as the Husband has proposed, his provident fund calculated up to then which is believed to be in the vicinity of around HK$7 million will become payable, from which the Wife should be given 55%, giving her about HK$3.85 million, which together with the C$100,000 from the Husband’s share in his father’s estate, should enable her to purchase her new house without any mortgage, or to pay off any existing mortgage thereby rendering the Husband’s mortgage contribution unnecessary.  At which time the Husband’s tight budget will very much ease off and that he should be able to start making some savings from his monthly income.

154. With the remaining 45% of the provident fund together with the rest of his assets such as his Clearwater Bay Club Debenture and his father’s estate and as he will no longer have to contribute towards the Wife’s mortgage payment, the Husband will also have sufficient fund to set up his own home in Canada as well as to cater for the future university expenses of the elder children.

155. Under this arrangement the parties’ respective shares of the matrimonial assets are as follows : -

The Wife :
(i)	55% share of provident fund estimated at $7 million	$3,850,000
(ii)	C$100,000 from the Husband’s share of his  father’s estate	$650,000
	Total	$4,500,000
		=============
The Husband :
(i)	45% of provident fund	$3,150,000
(ii)	C$27,776 from the remaining share of his father’s estate	$180,544
(iii)	C$32,450 from his Canadian Registered Retirement Savings Plan	$210,925
(iv)	Clearwater Bay Club Debenture less agency fees	$185,000
	Total	$3,726,469
		=============

156. I give the Wife a slightly larger share, about 55% of the then available matrimonial assets not only because I believe she has a greater housing need for herself and the children, but also because of her more vulnerable situation with virtually no or little earning capacity at least for the next several years, and with the great disparity between hers and the Husband’s, and hence a greater need for financial security, as well as for her greater responsibilities towards the 3 youngest children as their primary carer for the next 8 to 10 years in view of the fact that the 2 youngest boys are only 8 and 9 years old respectively.  In the long run, the Husband should however be able to pull even with the monthly savings he will be able to make from his income in view of the reduced monthly maintenance for the Wife as well as his own reduced expenses in Canada.

157. It is also for these reasons and for her contribution towards the family in their 20 years marriage, that I agree that she should also have a share of 40% in the future provident fund of the Husband for as long as he remains with the Cathay Pacific, which he is expected to do so until the retirement age of 55, some 12 years from now.

158. I accept that after the divorce, the Wife will not have made any direct contribution toward the Husband’s career and hence his future provident fund, but as I have already said, she will continue to contribute by being the primary carer of the younger children for years to come which should not be disregarded.  Furthermore, if the Husband were not to take a basing in Canada in July 2006, and thereby liquidating part of his provident fund for distribution, the Wife would still have been entitled to a fair share of his entire provident fund when he retires.  I am therefore unable to agree with the Husband’s argument that she should not have any share in his future provident fund after the decree absolute.

159. I do however agree that he should be given a somewhat larger share at 60% of his future provident fund with Cathay Pacific because he has a much greater financial responsibility to his children including their future university education expenses which could be substantial in view of the number of children involved, all of whom the parties have expected to go on to university.  I also agree with the Husband that if he were to leave Cathay Pacific for another employment, in view of the uncertainty of any provident fund / pension that he may have with his new employment, the Wife should not be entitled to any share therein.  This point may well be academic only as there is no indication to suggest that the Husband would leave Cathay Pacific, considering the good salary and benefits that he is receiving at present from this company.

160. In conclusion I believe that this financial arrangements for the parties and the children are the most fair and equitable under the circumstances of this case, which leave both parties with sufficient fund to live a comfortable life at a standard of living not less than before, and with security to see the children through their education in the way as expected by the parties, as well as for the parties themselves when they retire.

161. Finally, on the question of costs, I propose to make a nisi order for the Husband to pay half of the Wife’s costs of the ancillary relief application to be taxed if not agreed, such order to be made absolute at the expiration of 21 days.  I make this order on the basis that the Husband has in fact already settled most, if not all of the Wife’s costs of the custody application through his monthly contribution, and that given the outcome of the ancillary relief application and the financial award that I have outlined above, I think it is fair for the Husband to pay for only half of the Wife’s costs, presumably out of his share of the provident fund, with the other half to be paid out of her own share thereof.

162. Lastly, I should not end without the following observation.  With the exception of the issue over the Wife’s health problem, there was essentially nothing complicated or difficult with this case, which was no more different than many other families with several children and a wife who was essentially a home-maker and a husband the sole financial provider with a fixed income and known assets.  The facts that this case has lasted almost 3 years, with 2 major trials that required more than 50 days in total in court, not to mention the numerous interlocutory applications in between, with total legal costs well in excess of $6 million which have essentially depleted and exceeded the family liquid assets, with incalculable emotional and psychological ruins to the parties and their children, are to say the very least wholly unacceptable.

163. Most of the blame must of course lie with the parties who had repeatedly failed to heed the court’s warnings from the very early stage of the proceedings of the dire consequences that they now find themselves in, but I also cannot help to feel that they have been failed by the system which was of course designed to get to the truth and justice, both in the consideration of what is in the best interest of any children of the family, and of what is fair and reasonable in the financial claims between the parties, based of course on the assumption that the parties can be trusted upon to litigate their cases sensibly and with due regard to proportionality.  But, as Lord Justice Thorpe has once commented, that trust has ignored the reality that litigants are frequently psychologically or emotionally ill-equipped to conduct their cases sensibly and economically, and so the requirements of setting out their cases first by way of affidavits and later in oral testimony at the trial, very often become convenient and effective means to attack, abuse, insult and humiliate each other which only serve to bring out the worst of their emotion, while the rules allowing parties to seek further and better particulars and discovery become effective tools to extract each and every minutiae from each other of documents and information which are very often of little or no evidential value, sometimes aided and abetted by overzealous lawyers trained to win for their clients at any costs.  All of these, I very regret to say, have conspired to transfer the parties’ battlefield from their home to the court at great cost of time and expenses in the name of truth and justice.

164. Although the present system does allow mediation service to be provided to the parties, it is used only at their pleasure, and the court does not have any power to direct them to receive mediation even if it appears most desirable or appropriate to do so, which I am truly convinced would have benefited the parties in this case at the very early stage of the proceedings when they were actually discussing the possibility of having joint custody of their children with the Husband taking a basing in Canada, and that with the assistance of a mediator whom they could trust, before any angry words were uttered or put down in any court papers, the end result would have been very much different.  It is too late for the parties in this case, but certainly not for many of those who are contemplating divorce proceedings and who will infinitely be better served by mandatory or compulsory mediation rather than litigation.