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FCMC 9079 of 2002
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES
NUMBER 9079 OF 2002
_________________
BETWEEN
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WKP |
Petitioner |
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and |
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LKB |
Respondent |
_________________
Coram : Her Honour Judge Chu in Chambers
Date of Hearing : 12, 13, 14 & 15 October 2005 (half day)
Date of Handing Down of Judgment : 7 November 2005
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J U D G M E N T
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A. INTRODUCTION
1. The main dispute in this ancillary relief application is over the present matrimonial home (2nd Property), which is the major asset of the Petitioner (W) and the Respondent (H) and where they still reside.
2. H and W were married in China in December 1990, and they have a child, who is now 12 years of age.
3. In March 2000, the parties started to sleep and occupy separate rooms, and they started to lead separate lives, but they have remained residing under the same roof. Their marital relationship was thus slightly over 9 years.
4. W petitioned for divorce in August 2002 based on the parties having lived apart for over two years, and obtained a Decree Nisi of divorce on 5th February 2004.
5. The parties had bought another property (1st Property) which was sold before the purchase of the 2nd Property.
6. It was W’ case that H’s beneficial interest in the 2nd Property was not more than 20%, and she was seeking an order that for H to transfer to her all his interest, on the basis that she would be fully responsible for her own maintenance, and the maintenance of their child, including all the child’s education expenses.
7. H’s case was that W should pay him a lump sum of HK$700,000, being about 30% interest in the 2nd Property, and that he would be willing to contribute HK$3,000 per month for the maintenance of the child out of the sum of $700,000 received by him.
8. The question is whether W should be entitled to all the interest in the 2nd Property and the main issues are : -
(i) In relation to a payment of HK$500,000 from H’s father to H for the purchase of the 1st property, whether this was a loan from the H’s father to H and W jointly
(ii) In relation to the sums paid by W’s mother, Madam Wong,
(a) whether a sum of about HK$2.20 million Madam Wong paid at the time of purchase of 2nd Property was financial assistance to W or a promise made by Madam Wong to H to pay the insufficient funds for the purchase of the 2nd Property
(b) whether the partial repayments made by W towards the 2nd Property with funds from Madam Wong in May 1998 and January 1999 were financial assistance to W or a promise by Madam Wong to H for a share of profits of Madam Wong’s business (“the Business”) or profits in the sale of waste materials from the Business
(c) whether the regular remittances from Madam Wong to W were financial assistance to W or a share of profits in the sale of waste materials.
(d) whether Madam Wong remitted a sum of $700,000 to W for discharge of the mortgage in about 1998 which W failed to do
(iii) In relation to contributions by the parties towards the family,
(a) what were the respective amounts of money made by H and W towards the purchase price of the 2nd Property
(b) what were the contributions made by the parties towards the welfare of the family
B. PURCHASE OF THE 1ST PROPERTY
9. The parties purchased the 1st Property in August 1993 at a price of HK$1,263,000. H paid HK$500,000, which he said was a loan from his father to both him and W, and W paid HK$170,000 towards the down payment, about HK$100,000 of which was from Madam Wong and about $70,000 from W herself.
10. The parties obtained a mortgage loan, and the monthly repayments were paid by the parties jointly, from August 1993 until the 1st Property was sold in July 1997.
11. It was not disputed that during this period, W had made 7 partial payments of a total of HK$557,537.74 towards the mortgage loan, which funds were provided to W by Madam Wong. There was also another partial payment of HK$30,000, which was paid from the parties’ joint account.
12. The 1st Property was sold in July 1997 for HK$2,090,000, and the net proceeds were used for the payment of the matrimonial home.
C. PURCHASE OF THE 2ND PROPERTY
13. The 2nd Property was purchased on 31st July 1997 in the joint names of the parties at a price of HK$5,200,000, and the payments were as follows : -
(i) The net sale proceeds from the 1st Property of $2,090,000 was used for part of the down payment.
(ii) The balance of the down payment of about HK$1,600,000 was paid by W with funds from Madam Wong
(iii) The other expenses, such as stamp duty, estate agent commission and expenses for decoration, of a total of about HK$600,000 were paid by W with funds from Madam Wong
(iv) There was a mortgage loan, initially from First Pacific Bank for a loan of HK$1.5m, and the monthly repayments were about HK$16,000 per month. Madam Wong was a joint guarantor of H & W for the mortgage loan.
(v) W made 2 partial repayments on 29th May 1998 (HK$541,569.09) and 30th January 1999 (HK$160,541.86), which funds were from Madam Wong.
(vi) After the 1st partial repayment of HK$541,569.09, the monthly mortgage was reduced to about HK$10,900 per month, which was further reduced to about $10,300 per month after the 2nd partial repayment.
(vii) The 2nd Property was re-mortgaged to Chiyu Bank in April 2001 and the monthly mortgage repayments were further reduced to about HK$4,300 per month.
14. The parties agreed that the market value of the 2nd Property is now HK$3.05 million, and the present outstanding mortgage loan is about HK$579,480.75, i.e. about $580,000, making a net equity of about HK$2.47 million.
D. THE ISSUES
15. I now turn to consider the Issues.
16. For the avoidance of doubt, in so far as the matters set out in this judgment differ from the evidence of H & W, this is because I have preferred the evidence of the other party, because I consider that the documents produced confirmed my finding of fact and further, I have been able to observe the demeanour of the parties.
(i) Whether the sum of HK$500,000 from H’s father to H for the purchase of the 1st Property was a loan from H’s father to H and W jointly
17. This was not an issue originally raised and was only raised by H in his oral evidence and was a relatively simple and short issue. H alleged that the sum of HK$500,000 paid by him towards the purchase price of the 1st Property was a loan from his father to both him and W, and the loan is still outstanding and that W has to be responsible for the repayment of half the amount of the loan to his father.
18. This sum of HK$500,000 was paid in 1993, over 12 years ago. H agreed that his father had never pressed him for any repayment.
19. In H’s Form E filed in September 2005, under the heading of “Liabilities”, he only listed an outstanding amount of about HK$6,000 in his credit card account, although in his first affirmation of means of 7th July 2003, he referred to the loan from his father. In neither affirmation did he say it was a loan which W had a liability to repay one half of. In his mother Madam Zheng’s affirmation or oral evidence she referred to lending $500,000 to H and again she did not say it was a loan for which W had to repay half.
20. There was no other evidence to indicate that W should be responsible for repayment of one half of this loan, apart from what H said in his oral evidence. The alleged loan was made over 12 years ago and no repayment had ever been sought by H’s father from either H or W. I therefore do not find there was any evidence that W had to be responsible for repayment of one half of this loan.
(ii) In relation to the sums paid by Madam Wong,
(a) whether the sum of about HK$2.20 million from Madam Wong paid at the time of purchase of 2nd Property was financial assistance to W or a promise made by Madam Wong to H to pay the insufficient funds for the purchase of the 2nd Property
21. It was not disputed that throughout the marriage, Madam Wong had provided financial assistance.
22. It was further agreed that about HK$2.20 million, being the total of the sums mentioned in paragraph 13 (ii ) & (iii) above, came from Madam Wong.
23. Madam Wong set up a business in 1994 (“the Business”) for manufacturing paper carton boxes in mainland China for only one client, which was the brewery company of which Madam Wong’s husband (i.e. W’s father) used to be the manager. The Business ceased in 2000 after W’s father retired from the brewery company in about November 1999.
24. It was also not disputed that H started to work for Madam Wong in the Business in March 1996 for a salary of RMB10,000 per month, with free meals and accommodation, and air tickets for him to return to Hong Kong to visit his family about once a month. In H’s first Affirmation of Means, he alleged that Madam Wong had promised him a share of the profits from the Business to enable him to buy a bigger flat, namely the 2nd Property, as “a reward” for his effort in promoting the Business. In his 2nd Affirmation, H alleged that in order to make him “feel comfortable” working in mainland China for such a long time and to enable W and him to “improve their living condition”, Madam Wong offered to act as a guarantor for the mortgage loan for the 2nd Property and “to set aside part of the profits from the Business” to pay off the loan. H alleged that as a result of these promises and offers, Madam Wong had paid the various sums for the purchase of the 2nd Property, and that she did become a guarantor for the mortgage; as otherwise, there was no way that H or W could afford to buy the 2nd Property on their own. H worked for the Business from March 1996 until August 1998.
25. There were two affirmations from Madam Wong, who also attended the trial to be cross examined.
26. According to Madam Wong’s 1st affirmation, she had provided financial assistance to W, which included : -
(i) In about July / August 1993, after the birth of the parties’ child, she paid W about HK$100,000 to help her purchase the 1st Property.
(ii) In 1993, after the birth of the parties’ child, she had provided financial assistance to W ranging from several tens of thousands to over a hundred thousand dollars.
(iii) In 1997, as W hoped to move to a bigger flat nearer to Madam Wong’s home, she paid W over HK$2.2 million for the purchase of the 2nd Property, and also she agreed to be a guarantor to the mortgage as H & W had insufficient income.
(iv) There were two partial repayments towards the mortgage loan in 1998 and 1999 of about HK$500,000 and HK$150,000 respectively which came from her.
27. Madam Wong said the payments of about HK$2.2 million were financial assistance to W and had nothing to do with H. She denied that she made any promises or offers to H in relation to paying any insufficient funds for the purchase of the 2nd Property or to pay off the mortgage loan.
28. H’s mother, Madam Zheng, also made an affirmation, and attended the trial for cross examination.
29. Madam Zheng said before H went to China to work for Madam Wong, on one occasion when they were both at the 1st Property, Madam Wong had told her that she was making a lot of money in the Business, and that she was very busy, and as her health was not good, she needed a trustworthy person to help her. She therefore asked H to go and help her, and according to Madam Zheng, at a meeting at the 1st Property, Madam Wong had said to her that so long as H was willing to work hard, she would pay for any insufficient funds required for the parties to change to a bigger flat, and according to Madam Zheng, on the same occasion, Madam Wong later took Madam Zheng to the Belvedere Garden estate to look at properties there. Madam Wong denied making any promises or took Madam Zheng to look at properties but the meeting she described about in her 2nd affirmation appeared to me to be another occasion and not the one referred to by Madam Zheng.
30. Madam Wong said in oral evidence that she had a bank account in Hong Kong to which W had signing authority, and whenever W needed money during the marriage, she would inform her mother, and with Madam Wong’s agreement, W would withdraw sums from this account. It was from this account from which a sum of $1,140,000 was withdrawn and transferred to the parties’ joint account and this sum was part of the HK$2.2 million. When giving evidence, initially Madam Wong seemed to be vague about the transfer of the sum of $1,140,000 and further Madam Wong in her oral evidence said that that she was not clear or she did not know that the 2nd Property was going to be in the parties’ joint names. She later, however, seemed to have contradicted herself by saying words to the effect that “of course the 2nd Property was jointly owned by the parties as they sold their jointly owned 1st Property to buy it”.
31. Since the parties’ marital relationship at the time of the purchase of the 1st Property and the 2nd Property was by all accounts harmonious, I do not think at that time it was on any one’s mind whether the sums from Madam Wong were to be for W, or for H and W jointly. I find that Madam Wong was fully aware that the funds of about $2.2 million were used for purchase of the 2nd Property, and that she was also fully aware that 2nd Property was to be purchased in joint names, and in fact she even agreed to be a joint guarantor with H and W, and that was why the initial mortgage bank account was opened in the joint names of all three of them, namely H, W and Madam Wong.
32. I accept Madam Zheng’s evidence in relation to the meeting between her and Madam Wong as it does not seem likely that Madam Zheng would make up the part about going with Madam Wong to look at properties in the Belvedere Garden estate. Madam Wong might have forgotten or was confused about the meeting referred to by Madam Zheng. I therefore find that Madam Wong did say to Madam Zheng that if H was willing to work hard, she would help the parties to pay any insufficient funds for the purchase of a bigger property, which she in fact did, and further acted as a guarantor. Further, since H knew that he and W did not have sufficient funds to pay for the 2nd Property, he would not have agreed to change to a bigger flat without Madam Wong making a promise to pay.
(b) whether the partial repayments made by W with Madam Wong’s assistance in May 1998 and January 1999 were financial assistance to W or a promise by Madam Wong to H for a share of profit of the Business or profit in the sale of the waste material
33. As set out above in his 1st affirmation H had alleged Madam Wong had promised him a share of the profits of the Business. In his subsequent affirmation, he was slightly more specific in that he alleged that apart from the salary, free meals and accommodation, and air tickets for him to visit his family, Madam Wong had promised him a share in the profits in the sale of waste material from the production of the carton boxes by the Business. According to H, the share of these profits were remitted direct to W by Madam Wong almost every month. Madam Wong denied that H she ever promised H a share in the profits of the sale of waste material.
34. The two large partial repayments were on 29th May 1998 and 30th January 1999. Although H said he had continued to help Madam Wong sometimes even after he left the Business, there was no sufficient evidence of this and I am satisfied that H worked for Madam Wong only from March 1996 to August 1998. There was no evidence to say whether these two payments were from profits of sale of waste materials or not. The two payments were, however, from Madam Wong. Even though there were some allegations from W about H having affairs in China in 1998 he started working for W’s elder brother soon after ceasing to work for the Business, and the marriage had at that time not yet broken down irretrievably. Again like the initial sum of $2.2 million, I find that the payments were not merely for W but for joint benefit of H & W.
(c) whether the regular remittances from Madam Wong to W were financial assistance to W by Madam Wong or a share of profits of the Business or profits in the sale of the waste materials
35. After the purchase of 2nd Property in 1997, H’s income from the Business was at that time RMB10,000 and W’s income was HK$14,000 per month. The mortgage repayments were then over $16,000 per month. W said in her oral evidence that the monthly mortgage repayments of $16,000 were paid by Madam Wong, as financial assistance to W only.
36. As stated above, H had alleged that each month he was to receive a share of proceeds from the sale of waste material which he said was $20,000 to $30,000 per month and these sums were remitted to W direct by Madam Wong. W admitted in her oral evidence that Madam Wong was remitting to her the sale proceeds of waste material for her to pay for the monthly mortgage repayments as the joint income of H & W was not sufficient to meet the mortgage payments in addition to the child’s and the household expenses but W claimed that Madam Wong was only helping W only and not H. Leaving aside the question as to whether Madam Wong had promised H a share of the profits from waste material, which I would deal with later, W had admitted in her oral evidence that the monthly mortgage payments from Madam Wong were indeed from the sale proceeds of waste material. I find that these payments were for the benefit of both H and W until at least the time when the parties started living apart.
(d) whether Madam Wong remitted a sum of $700,000 to W for discharge of the mortgage in about 1998 which W failed to do
37. H had alleged that Madam Wong remitted a sum of HK$700,000 to W for discharge of the mortgage at about end of 1998 but W failed to apply such sum towards the discharge and that when asked by H, she refused to give H any explanation as to the whereabouts of this sum. Both W and Madam Wong denied that there was any such payment of $700,000. After hearing their evidence, I am satisfied that there was no evidence of such a payment and that H might have been confused since the 2 partial repayments in May 1998 and January 1999 added up to about $702,110.95 and he could be referring to these amounts, which were in fact applied towards the mortgage loan.
(iii) Contributions by parties towards the family
38. I will first of all look at the work history of the parties and their respective earnings during their marriage.
39. After the parties’ marriage, both H and W obtained a working permit to come to work in Hong Kong as imported labourers, and they then came and worked for a company run by the elder brother of W, earning HK$5,000 per month each, with food and accommodation provided. They worked here until March 1993 when they returned to China, and applied to come to settle in Hong Kong in May the same year.
40. After they settled in Hong Kong, H’s work history was as follows :
(i) From May 1993 to about April 1994, he worked for W’s elder brother’s company, earning about HK$10,000 per month.
(ii) From May 1994 to March 1996, he worked for a cosmetics company as a warehouse assistant, earning about HK$6,500 per month.
(iii) From March 1996 to August 1998, as above mentioned, H worked for the Business in mainland China, earning RMB10,000 per month plus free meals and accommodation and tickets to visit W. I have also set out above that in addition to the RMB10,000 per month, H claimed he was also to receive a share of the profits of the profits from the sale of waste materials of HK$20,000 to HK$30,000 per month, which was remitted to W direct by Madam Wong. I will now deal with H’s allegation in this respect. Although W admitted that the monthly mortgage repayments of the 2nd Property had come out of the profits of sale of waste material remitted by Madam Wong, there was no sufficient evidence provided by H to prove that it was a term of his employment or that there was any promise on the part of Madam Wong that he was to receive a share of these profits. H was not able to say what the percentage of the share was or how this alleged share was to be calculated. He was not able to provide any details. As H’s evidence was vague and unclear in this respect, I find that there was no sufficient evidence that Madam Wong ever promised H a share of the profits of the sale of waste material or any share of the profit of the Business.
(iv) In August 1998, H returned to Hong Kong, and started to work for W’s elder brother in September 1998, earning HK$10,000 per month. Although he was working initially in Hong Kong, he was later transferred to work in W’s elder brother’s business in mainland China, until early 2000.
(v) After H returned to Hong Kong in early 2000, he was unemployed for over a year until about March / April 2001, when he was employed by a company as a truck driver. He worked as a truck driver until August 2001, earning about HK$8,000 per month.
(vi) He was then again unemployed for about 3 months and he started to work for another company as a warehouse assistant from 26th November 2001 until 3rd February 2005, earning HK$6,300 per month.
(vii) H has been unemployed from February 2005 until now.
41. W’s work history was as follows :
(i) W worked for her elder brother’s company from March 1991 to April 2000, earning initially RMB5,000 per month, but later her salary was increased to HK$10,000 per month in March 1993, and to HK$14,000 per month in March 1995.
(ii) In April 2000, W said she ceased working to look after the child and that she had not worked since.
(a) what were the respective payments made by H and W
42. It was common ground that both H and W contributed towards the mortgage repayments for the 1st Property, and also there was a partial repayment of HK$30,000 which came from the parties’ joint account. It was also not disputed that the parties held equal share in the sale proceeds in the 1st Property.
43. After the purchase of the 2nd Property in July 1997, W said that H was paying her a monthly sum of HK$5,000 until about February 2000 when the parties started living apart but H claimed W received remittances from HK$5,000 to HK$30,000 to W as his contributions to the household and for mortgage loan repayments. As I have found that there was no evidence that as part of the term of his employment nor was there any promise from Madam Wong that H was to receive a share of the profits of the sale of waste materials, I accept what W had said, namely his monthly payment was only HK$5,000 until February 2000 when H ceased this monthly payment.
44. After February 2000, and for another two years until 2002, it was agreed that H paid only about HK$16,590.70 towards management fees, rates, Government rent, water and electricity charges, which totalled about HK$66,000. It was further agreed that from November 2001, H was paying the school bus fees for the child, until February 2005 when he was laid off, totalling about HK$13,000. Apart from these payments, H did not contribute any other sums.
45. There was initially a claim by H for the return of some jewellery consisting of 6 rings and a pair of bangles, which W took from the parties’ safe deposit box. H and Madam Zheng seemed to be alleging they were heirlooms and not gifts to W and therefore W should return them to H when the marriage broke down. W said she sold the items in May / June 2005 for a total sum of HK$11,600 to pay rates and other expenses, and she produced a receipt in support of the same. I am of the view that the jewellery were assets belonging to the parties jointly, and therefore the sale proceeds should be regarded as a joint contribution towards the household expenses.
46. Since February 2000 until the present when H’s monthly payments stopped, W has been paying for all the expenses of the mortgage repayments, and he maintenance expenses for herself and the child, again she says with the financial assistance from her mother.
(b) what were the parties’ respective contributions towards the welfare of the family
47. As I have indicated during the trial, I need to consider not only monetary contributions, but also non monetary contributions by the parties towards the welfare of the family under s. 7 (1) of the Matrimonial Proceedings and Property Ordinance (MPPO).
48. From the parties’ marriage until their living apart in March 2000, the marital relationship was over 9 years. The parties settled in Hong Kong in 1993 and the child was born in 1993. From about July 1993 to August 1995, the child was looked after by Madam Zheng in China while the parties lived and worked in Hong Kong.
49. H was contributing financially for the family until February 2000 even though his contribution was limited in view of his income.
50. Having considered the circumstances, I am satisfied that until the marriage broke down irretrievably in about March 2000, both parties had worked and contributed towards the welfare of the family and I am of the view that their contribution was equal up until March 2000.
E. S.7 MATTERS
51. I have dealt with contribution of the parties to the family and I now deal with the other matters which are set out in s. 7 (1) and (2) of MPPO.
(i) Parties’ income and earning capacity, both present and in the foreseeable future
52. H was 37 and W was 35. There was no evidence of any disability, whether physical or mental on either party. They appeared to me to be both young and healthy.
53. W was educated to Form 4 level in China, and had worked throughout the marriage until March 2000 when the parties started living apart. From 1st March 1993, W was the Financial Director of her elder brother’s company. From 8th February 1995, W’s title in her elder brother’s company was Assistant Managing Director (副總裁) and General Manager of the Purchasing Centre (採購中心總經理). She was obviously holding a senior position in her elder brother’s company.
54. W claimed she stopped working as she had to look after the child. However, I have pointed out to her solicitor that she did work when the child was much younger. The child is now 12 and attending secondary school. The child’s school hours are now from morning to about 3:30 pm in the afternoon, and she has private tutorial lessons on some days. W had worked in her elder brother’s company for a long period of time, and her last salary was HK$14,000 per month. Although W was not really cross examined on her assertions, I find that she is an intelligent person and there is no reason why she could not return shortly to full time work.
55. Since March 2000 when W claimed she stopped working, I notice in her Nanyang Bank Account 043-494-1-0210518 she had regular credit transfers of $10,000 to $15,000 almost every month. During a 17 month period from 2nd November 2004 to 12th July 2005, the total credits were $408,383.63. Apart from 2 payments with “Citibank card” written against totalling $47,800, the other payments totalled about $360,000 which was about $21,000 per month. W said these payments were from her mother but no documentary evidence was produced to support this apart from what she and her mother said. It would not have been difficult to show the source of the transfers. Anyway whatever the source was, W was receiving about $21,000 per month.
56. So far as H is concerned, his work career appears to be more chequered than W, and his salary had been much lower than W’s since May 1994. Before H started to work for Madam Wong in 1996, he was earning about $6,500 per month while W was earning $14,000 per month.
57. H had also worked throughout the marriage, apart from a period of about a year in 2000 / 2001. I accept what W’s solicitor Mr. Au has submitted, namely that now the economy in Hong Kong is better than 2000 / 2001, H should be able to find work soon. His salary as a truck driver was about $8,000 per month and last salary was about HK$6,700 per month. Mr. Au says he should be able to earn about HK$7,000 per month, which I accept.
(iii) Parties’ other assets and financial resources, both present and in the foreseeable future
(a) W’s assets , liabilities, and financial resources
58. According to W’s Form E of 20th September 2005, apart from her interest in the 2nd Property, her other assets consist of :
| *
cash at bank |
about
HK$10,000 |
| *
insurance policies
|
about
HK$89,200 |
| (surrender
value) |
|
| *
stocks and shares |
about
HK$14,220 |
59. Apart from the above, I believe that W will have the continuous financial assistance from Madam Wong. Although I accept Madam Wong is under no legal duty to support W and / or the child but her financial assistance is a financial resource for W.
60. In her Form E, W claimed she had credit card liabilities of about HK$60,600 in September 2005 but the September statement of her Citibank credit card only showed a balance of $4,940 and not $21,196.70 as claimed by W. As a result, her credit card liabilities appeared to be only about $44,300. This means W has net assets of about $60,000, apart from her interest in the 2nd Property. I further note that the credit card limit of W’s Citibank credit card account was increased to $110,000 from $80,000 since 2003 even though she claimed she was not working and had no income of her own.
61. W’s estimate of legal costs were HK$207,000 as at 5th October 2005. It is not clear whether any portion had been paid.
(b) H’s assets, liabilities and financial resources
62. According to H’s Form E of 22nd September 2005, apart from his interest in the 2nd Property, his other assets consist of :
| *
cash at bank |
about
HK$93 |
| * MPF
(in 2031) |
about
HK$3,000 |
63. As set out in his Form E, he had credit card liabilities of about HK$6,000.
64. H’s estimate of legal costs were HK$211,000 as at 4th October 2005. Again, it is not clear whether any portion had been paid.
(iii) Parties’ Financial needs, obligations and responsibilities, both present and in the foreseeable future
(a) W’s monthly expenses
65. In her Form E, W’s set out her expenses to be as follows :
|
General Expenses |
|
|
| Item
|
Amount |
|
| Mortgage instalments
|
$4,298.28 |
|
| Utilities
(electricity, gas, rates,Telephone & water)
|
$1,800.00 |
|
| Management
fees
|
$982.00 |
|
| Food
|
$3,000.00 |
|
| Household
expenses |
$1,000.00 |
|
| Insurance premia
|
$2,003.50 |
|
| |
__________ |
|
| Total
monthly household expenses |
$13,173.78 |
per month |
| |
|
|
|
Personal Expenses |
|
|
| Item |
Amount |
|
| Meals out
of home |
$3,000.00 |
|
| Transport |
$500.00 |
|
| Clothing /
Shoes |
$700.00 |
|
| Personal
grooming |
$800.00 |
|
| (including
haircut and cosmetics) |
|
|
| Holidays |
$1,000.00 |
|
| Medical /
Dental |
$200.00 |
|
| |
_____________ |
|
| Total
monthly personal expenses |
$6,200.00 |
per month |
| |
|
|
| The child’s monthly expenses |
|
|
| Item |
Amount |
|
| Extra
tuition fees |
$1,280.00 |
|
| School
books and stationery |
$600.00 |
|
| Transport
to school |
$320.00 |
|
| (including
school bus) |
|
|
| Medical /
Dental |
$1,000.00 |
|
| Entertainment
/ presents |
$500.00 |
|
| Holidays |
$500.00 |
|
| Clothes /
Shoes |
$500.00 |
|
| Lunches and
pocket money |
$1,000.00 |
|
| Uniform |
$120.00 |
|
| |
______________ |
|
| Total of
the Child’s Expenses |
$5,820.00 |
|
| Grand total
for W and the child |
=
$25,193.78 |
|
66. H’s solicitor, Mr Lee, had asked W to explain her expenses and pointed out some expenses such as holiday expenses can be saved / or on the high side. I agree, particularly as compared to H’s expenses. Certainly, if W is not working, I do not understand why she needs to spend $3,000 per month on meals out of home in addition to the general food expenses of $3,000 per month and another $1,500 per month on her clothes / shoes and personal grooming. I am of the view that the “general expenses” could be reduced to about $11,000 per month and W’s personal expenses could be reduced to about $5,000 per month.
(b) H’s monthly expenses
67. Although H claimed previously his monthly expenses were HK$5,365, after he lost his job, he said his expenses were reduced to HK$4,270 per month.
68. H says if he has to move out of the 2nd Property, he will need to rent a place to live, and his monthly rental will be another HK$3,000 to HK$4,000. There was no challenge to this amount.
(iv) Other s. 7 (1) matters
(a) Previous standard of living, and value of any benefits either party will lose by reason of the marriage
69. The parties led a good lifestyle during their marriage, considering their own income, and mostly thanks to Madam Wong’s payments. The area of 2nd Property is about 896 sq feet and the saleable area is about 785 sq ft. No doubt, after the divorce, H’s life style would be greatly affected.
70. Apart from this, there were no other benefits which either party would lose as a result of the divorce.
(b) Conduct of the parties
71. W’s petition was based on separation for over two years. In relation to marital conduct, she has made allegations about H having affairs in 1998, and also in 2000, which led to the parties living apart, but there was no allegation or any evidence of any “obvious and gross” conduct on the part of either party (See Wachtel v. Wachetl [1973] 1 ALL ER 829 and paragraph 21.59 of Rayden 17th Edition p 645).
72. From statements of H’s bank account, however it can be seen and as admitted by H that, there were sums frittered away by him on gambling and drinking. H said from 2000 to 2001 when he was unemployed, he gambled and lost $50,000 or $60,000. In February 2005, he received a total of almost $30,000 when he left his last employment and he said he had spent money on drinking as he was upset at having been told to resign after working for the company for over 3 years. It could also be seen in his bank statements during 2000 / 2001 when H was unemployed, there were various credits in his bank account which he could not recall the source of. H had income from at least March / April 2001 onwards, and he was living rent free in the 2nd Property, but the contributions he made towards the expenses of the family and the child since February 2000 were minimal and yet he frittered away assets on gambling and drinking. Even though he said he was upset at becoming unemployed, in my view, this was not an excuse for not trying to save as much as possible and his financial conduct is a matter which I should have regard.
(vi) The Child & s 7 (2) Matters
73. The child has no physical or mental disability. W says she would like the child to attend university. This appears to be what was contemplated by the parties, as it is H’s case that Madam Wong had once said that after the 2nd Property was paid off, she would set aside $500,000 to HK$1m for the future education of the child. However, H should not rely on Madam Wong to provide for the child. Both he and W have the responsibility to maintain the child.
F. CONCLUSION
74. I have already pointed out to the parties that this court looks at not only monetary contribution, and that I have to consider the contributions made by each party by looking after the home or caring for the family.
75. The parties did not dispute that they held equal interest in the 1st Property even though Madam Wong provided financial assistance for the partial repayments of the mortgage loan. Both W and Madam Wong knew that even with the sale of the 1st Property, the parties would not have sufficient assets to purchase the 2nd Property, and further the combined monthly income of W and H would not have been sufficient to pay for the mortgage repayments plus the family expenses. I have already found that Madam Wong was aware of this. Further I have found that Madam Wong knew that those payments made by her towards towards the 2nd Property were payments made towards a property to be held jointly by H and W. I have also found that at least until the parties lived apart, Madam Wong had intended her payments be to H and W jointly, i.e. for the joint benefit of both H and W. I am further of the view that it was the intention of H and W that they were to be joint equal owners of 2nd property at the time of purchase.
76. When the parties started living apart in March 2000, I believe the situation would change, and that I would accept that the payments made by Madam Wong thereafter would be “financial assistance” for W only. Since March 2000, H has made no payments towards the mortgage loan, only small amounts towards utilities and for the child’s school bus fees. He has lived in the 2nd Property rent free, kept whatever income he had for his own spending, including gambling and drinking, and now he says he has spent it all. H has not demonstrated himself to be a financially responsible father after the separation.
77. Whatever the parties’ intention was at the time of the purchase of the 2nd Property as to the ownership of the property, this court has the power to adjust their interest in ancillary relief applications, after taking into account all the s. 7 matters and the circumstances of the case.
78. The child is now 12, and her present monthly expenses are $5,820, exclusive of the general household expenses. A portion of the general household expenses should also be attributed to the child. Assuming this to be another $4,000 per month approximately, the child’s monthly expenses will be about $10,000 per month. Even excluding the future university expenses, her financial needs up to, say 22, will be at least $1.2 million. As set out in s. 7(2) of MPPO, having considered all the matters, I would need to have regard as to whether it is practicable and just to place the child in the financial position in which the child would have been if the marriage had not broken down and each party had properly discharged his or her financial obligations and responsibilities towards the child.
79. In view of H’s lack of financial responsibility for the past 5 1/2 years as demonstrated by his frittering away of assets and making only minimal contributions and in view of the W’s contributions since, I am of the view that W should be given a larger share of the equity of the family assets in order for her to provide for the child’s future financial needs.
80. Apart from his interest in the 2nd Property, H now has no other financial resources except from himself. He should be able to support himself out of his own income once he has found work. Apart from her interest in the 2nd Property, W had about $60,000 worth of assets. W should also be able to support herself once she has resumed working, even with any additional mortgage repayments. As H has made contributions in the past towards the welfare of the family, he should receive a lump sum which represents his beneficial interest in the family assets. On the other hand, W will have the ongoing responsibility of providing and caring for the child. Taking into account the child’s future financial needs of about $1.2 million and the fact that since March 2000, W has been the one who was mainly responsible for the mortgage and majority of the expenses and on the basis that W is to be fully responsible for the child’s maintenance and education expenses, I am of the view that W should pay H a lump sum of HK$350,000 and that H should transfer to W all his interest in the 2nd Property upon W paying him the sum of HK$350,000. W should be able to raise this sum on a remortgage of the 2nd Property, or from the financial assistance from Madam Wong, within 2 months. All costs and disbursements of the transfer, including stamp duty should be paid by W.
81. H should move out of the 2nd Property upon receipt of the sum of $350,000. Prior to his moving out, H is entitled remain in the 2nd Property free of rent and outgoings.
ORDER
82. The effect of my order is as follows :-
(i) W shall pay to H a lump sum of $350,000 within 2 months.
(ii) H shall transfer to W all his interest in the 2nd Property, subject to present mortgage and encumbrances, upon receipt of the lump sum of $350,000.
(iii) W shall be responsible for all costs and disbursements of the transfer, including any stamp duty payable.
(iv) H shall move out of the 2nd Property upon receipt of the lump sum of $350,000 and prior to his moving out, he is entitled to remain in the 2nd Property free of rent and outgoings.
(v) W shall be responsible for all the child’s maintenance and education expenses until the child is 18 or completes her full time education, whichever shall be the later.
83. In relation to costs, as neither party can be said to have succeeded in full their respective claims, I make no order as to costs. This is an order nisi which will be made final after 21 days.
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( Bebe P Y Chu )
District Judge |
Mr Au of m / s Au, Thong & Tsang for Petitioner
Mr Lee of m / s Chan, Leung & Co for Respondent
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