CKM formerly known as CHY v. SKL

FCMP 67 / 2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MISCELLANEOUS PROCEEDINGS NO. 67 of 2011

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BETWEEN

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J U D G M E N T
(Financial provision)

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Introduction

1.  This is an application by a mother for financial provision for the parties’ 2 year old son, A, pursuant to s.10 Guardianship of Minors Ordinance, Cap 13. The mother has filed two summonses in support of her claim. In the first dated the 21 March 2011 she seeks maintenance plus a lump sum payment including a sum of money for the reimbursement of expenses. She also asks for a settlement of property order, a transfer of property order and a variation of settlement order. In the second summons dated the 23 September 2011 she seeks interim financial support and further particularizes her claim. It was only at trial however that the mother further clarified the situation. It seems that she is now claiming maintenance for A to include the cost of renting a property for herself and A, funds to cover his educational expenses, a mother’s allowance and a lump sum. It was originally suggested that a property should be transferred to the mother to hold on trust for A, until he reaches the age of 18 years or ceases full time education. This option was not seriously pursued at trial. The parents are not married and for convenience sake I will refer to them as mother and father in this judgment. Other issues pertaining to access will be dealt with in a separate ruling to be handed down at the same time as this judgment.

2.  The central issue here is what level of financial support should be provided for a young child, A where there is no dispute that the father is a man of great wealth. There is also no dispute over paternity or of the father’s ability to pay. The father has said that he is willing to pay whatever amount the court deems to be reasonable. He does not however accept that it is either fair or reasonable to expect him to financially support the mother longer term. In other words he opposes the mother’s claim for a “mother’s allowance”. He says that he did support her for a period of time immediately following the birth – but that there was never an intention that this should be on a long term basis. He says that the mother should go back to work. He believes that this sets a better example for his son in any event. 

The issues

Issues

3.  There are a number of issues that now require determination namely:

(1) What is a reasonable level of monthly maintenance for the father to pay for A? To what extent should the father provide for A by way of undertakings?

(2) Should there be a mother’s allowance and if so in what amount?

(3) Should the father pay the mother a lump sum and if so how should that lump sum be calculated?

(4) How should the issue of costs be determined?

Background

4.  As I have said there is no dispute that the father is an extremely wealthy man. He is the Chairman and CEO of B, a listed company in Hong Kong, Frankfurt and the United States.

5.  The parties met in March 2009 when the mother began to work for the father as his executive secretary. The parties are not in agreement with respect to many aspects of their relationship and the premise upon which A was conceived. Suffice it to say however that the parties quickly formed an intimate relationship and that A was conceived almost immediately thereafter. Just as quickly as the relationship was formed however, it faltered and effectively ended altogether a few months after A’s birth. A was born in December 2009. He is now 28 months old.

6.  The father is a Chinese national. He has studied in both the PRC and the United States. He is 44 years old. He has a daughter by a previous marriage who is now 8 years old and a second daughter by his partner, who was born at about the same time as A. A is the father’s only son.

7.  The mother is originally from Hong Kong. She studied in the United Kingdom and has both a Bachelor of Science in Management Studies and a Master’s of Science in Business Information Systems. She is 36 years old. Prior to the commencement of the relationship with the father the mother had, when living in Hong Kong, always lived with her own mother. During the trial she produced a schedule which showed how much she earned prior to giving birth to A whilst in employment. According to this she began work in July 1999 and from then until March 2010 she earned from between HK$12,000 – HK$30,000 per month save for a two month period when the father paid her HK$50,000 per month. Since the birth of A the mother has returned to university. She is presently studying for an LLB and a LLM part time. She wishes to retrain as a lawyer. She has not worked since the birth of A save for a stint in a friends new shoe business venture. This was in November 2010 and she worked for 6 days per week for 4 hours per day.

The financial arrangement between the parties             

8.  As I have said the mother began working for the father’s company in March 2009. She was initially paid HK$22,000 per month. This sum was increased in May 2009 to HK$50,000 per month. She was paid this amount for two months. In July 2009 this was then reduced to HK$30,000 per month seemingly because of complaints from other members of staff that she was being over paid. The mother continued to receive this sum until April 2010. From February - April 2010 she also received HK$55,000 per month for A’s expenses. Thus in total she received HK$85,000 per month during this period. In April 2010 the mother stopped receiving a salary from the father’s company and instead received HK$200,000 in three monthly tranches or c. HK$66,667 per month. Thus she received HK$200,000 in May, August and November 2010. In February 2011 all payments ceased. When asked about this in the witness box, the father said that this was because the mother “didn’t respect him”. He further said that it had been proving difficult to see A and that he thought that the mother should go back to work. The father subsequently resumed payment at a reduced rate of HK$75,000 in three monthly tranches or HK$25,000 per month.

The litigation to date

9.  Consequently the mother issued the first Originating Summons in March 2011. By order of the court on the 12 July 2011 the father agreed to continue to pay interim interim maintenance of HK$25,000 per month in three monthly tranches of HK$75,000. This was increased to HK$35,000 per month in three monthly tranches of HK$105,000 from November 2011 to date.

Open proposals

The Father’s Proposal

10.  Prior to trial the father made the following open proposals in his solicitors letter dated the 26 March 2012:

In an attempt to resolve the financial issues, we are instructed to put forward the following proposals:-

1. Monthly rental which our client will settle, directly, of between HK$25,000 and HK$30,000 per month of a property in the vicinity of A’s present school, namely X Kindergarten in Kowloon Tong.  Our client will make enquiries and provide a list of properties for your client to choose.  Our client expects this sum to be reviewed once your client returns to work and we see no reason why this should not be on a full time basis by the time A is in primary school;

2. He will settle A’s school fees, school bus and school uniform directly upon mutual agreement as to the choice of school.  The school fees currently stand at HK$4,950.00 per month;

3. He will pay for A’s school books and stationery upon this being agreed between the parties in advance and deemed necessary by the school;

4. He will further pay for A’s extra-curricular activities and extra tuition classes directly, upon prior agreement with a budget of HK$2,000 to HK$3,000 per month;

5. He will continue to pay the premiums of A’s medical and dental policy covered under our client’s medical insurance in the sum of HK$21,156 per annum (HK$1,763 per month); and

6. In addition, he will provide periodical payments in the sum of HK$14,150 per month to your client for the benefit of A, the particulars of which are set out in “Schedule 1” attached.  This Schedule is prepared based upon the expenses claimed in paragraph 70 of your client’s 1^st Affirmation filed on 21^st March 2012 (A1/26-28), to which your client’s Counsel has referred at paragraph 28 of your client’s Opening Submissions.

In addition to the above, our client has already paid for the premiums of A’s life insurance policy in the total sum of US$138,265 (HK$1,078,467).

Based on items 1 to 6 above, our client will contribute a monthly sum in the region of HK$50,000 to HK$56,000 per month, which should adequately and reasonably cover A’s accommodation, education, medical and other daily expenses.

11.  A schedule was attached showing where it seemed that the parties were in agreement and where they were apart.

The Mother’s proposals

12.  Unfortunately it proved a little difficult to follow the mother’s open proposals. In trial she produced a schedule, which differed from the schedule of expenses referred to in her first affirmation and also differed from the figures referred to in her counsel’s opening submission. In it she claimed HK$56,641.87 per month for A’s general expenses plus rental of HK$50,000 per month, school fees of HK$15,000 per month and a mother’s allowance of HK$30,000 per month. This equates to HK$151,641.87 per month (say rounded down to HK$150,000 per month). This is about three times what the father is offering. In addition she asked for a lump sum of HK$564,838.

The Law

13.  The Guardianship of Minors Ordinance, Cap 13 and the Guardianship of Minors (Amendment) Ordinance 2012 governs this application and for completeness sake I have set out in full the relevant sections below.

3. General principles

(1)  In relation to the custody or upbringing of a minor, and in relation to the administration of any property belonging to or held in trust for a minor or the application of the income of any such property

(a)  in any proceedings before any court (whether or not a court as defined in section 2) the court –

(i)  shall regard the best interests of the minor as the first and paramount consideration …      

10. Orders for custody and maintenance on application of either parent

(1)  

(2)  The court may as regards a minor, on the application of a person with whom, whether by virtue of an order under subsection (1) or otherwise, custody of the minor lies at law, make in respect of the minor any one or more of the following orders-

(a)  an order requiring payment to the applicant by the parent or either of the parents of the minor of such lump sum (whether in one amount or by installments) for the immediate and non-recurring needs of the minor or for the purpose of enabling any liabilities or expenses reasonably incurred in maintaining the minor before the making of the order to be met, or for both, as the court thinks reasonable having regard to the means of that parent;

(b)  an order requiring payment to the applicant by such parent or either of such parents of such periodical sum towards the maintenance of the minor as the court thinks reasonable having regard to the means of that parent;

(c) an order requiring the securing to the applicant by such parent or either of such parents, to the satisfaction of the court, of such periodical sum towards the maintenance of the minor as the court thinks reasonable having regard to the means of that parent;

(d) an order requiring the transfer to the applicant for the benefit of the minor, or to the minor, by such parent or either of such parents, of such property, being property to which the parent is entitled (either in possession or reversion), as the court thinks reasonable having regard to the means of that parent;

(e) an order requiring the settlement for the benefit of the minor, to the satisfaction of the court, of such property, being property to which such parent or either of such parents is so entitled, as the court thinks reasonable having regard to the means of that parent. (Replaced 80 of 1997 s. 78)

14.  In general terms then I must have in mind the best interests of the minor as being of paramount consideration. In so far as any maintenance to be awarded, I am governed by the reasonableness of that award having regard to the means of the parents.

15.  The parallel provision in England and Wales is to be found in Para 1 (1) of Schedule 1 to the Children Act 1989. Although the schedule is not a mirror image of our own it does allow for a parent, as here, who may not be married, to apply for periodical payments, secured periodical payments, a lump sum, a settlement of property or a transfer of property order for the benefit of a child. Instead of a reference to reasonableness a more detailed checklist is provided in paragraph 3 of the schedule.

16.  Both parties have referred me to a number of cases both from the United Kingdom and Hong Kong. When looking at the issue of a mother’s allowance the mother referred me to the leading case of Re P (Child: Financial provision) (2003) 2 FLR 865). This confirms the general proposition that where there is a child born outside of marriage as here, it is permissible to include in any maintenance award for that child, an allowance for the mother. The maintenance may not, depending on the circumstances, be limited to simply the expenses for the child, but a broad brush approach may be adopted in determining what would be a reasonable level of maintenance overall, in any given set of circumstances. Having dealt first with the provision of a home, Thorpe LJ went on to say at p. 875 para 47 and 48 as follows:

[47] Those issues settled the judge can proceed to determine what budget the mother reasonably requires to fund her expenditure in maintaining the home and its contents and in meeting her other expenditure external to the home, such as school fees, holidays, routine travel expenses, entertainments, presents, etc. In approaching this last decision, the judge is likely to be assailed by rival budgets that specialist family lawyers are adept at producing. Invariably the applicant’s budget hovers somewhere between the generous and the extravagant. Invariably the respondent’s budget expresses parsimony. These arts have been developed in Matrimonial Causes Act 1973 claims, particularly where the budget is advanced to found the calculation of the price of the clean break. But it is worth emphasising the trite point that, by contrast, an order for periodical payments is always variable and will generally have to be revisited to reflect both relevant changes of circumstance and also the factor of inflation. Therefore, in my judgment, the court should discourage undue bickering over budgets. What is required is a broad common-sense assessment. What the court first ordains may have a comparatively brief life before a review is claimed by one or other party.

[48] In making this broad assessment how should the Judge approach the mother’s allowance, perhaps the most emotive element in the periodical payment assessment? The Respondent will often accept with equanimity elements within the claim that are incapable of benefiting the applicant (for instance school fees or children’s clothing) but payments which the respondent may see more for the benefit of the applicant than the child are likely to be bitterly resisted. Thus there is an inevitable tension between the two propositions, both correct in law, first that the applicant has no personal entitlement, secondly that she is entitled to an allowance as the child’s primary carer. Balancing this tension may be difficult in individual cases. In my judgment, the mother’s entitlement to an allowance as the primary career (an expression which I stress) may be checked but not diminished by the absence of any direct claim in law.

[49] Thus, in my judgment, the court must recognise the responsibility, and often the sacrifice, of the unmarried parent (generally the mother) who is to be the primary carer for the child, perhaps the exclusive carer if the absent parent disassociates from the child. In order to discharge this responsibility the carer must have control of a budget that reflects her position and the position of the father, both social and financial anxiety or have to resort to parsimony when the other parent chooses to live lavishly. On the other hand whatever is provided is there to be spent at the expiration of the year for which it is provided. There can be no slack to enable the recipient to fund a pension or an endowment policy or otherwise to put money away for a rainy day. In some cases it may be appropriate for the court to expect the mother to keep relatively detailed accounts of her outgoings and expenditure in the first and then in succeeding years of receipt. Such evidence would obviously be highly relevant to the determination of any application for either upward or downward variation.

17.  In Re P the Mother had never worked in any serious capacity and the Father was very wealthy. The award was made on the assumption that the mother would continue to be the primary carer of the child. Thorpe LJ added at paragraph 54:

[54] ... . I have regard to the fact that the mother is to be L’s primary carer. I would not relate that to the cost of a Norland nanny. That would be to demean the mother’s role. Mothers provide 24-hour care for children. That level of care would be difficult to buy in, even for a father as rich and resourceful as this. In the real world even professional nannies come and go. In the real world nannies are entitled to days off, weekends off and holidays. I consider that Mr S’s figure of £100,000 is put too high, if only because I accept Miss P’s submission that it is unreasonable to suggest that the father should pay for the most extensive nursery school placement as well as a part-time professional nanny.

18.  The mother also referred to a subsequent first instance decision F v G (Child: Financial Provision) [2004] EWHC 1848 (fam); (2005) 1 FLR 261, where it was held as follows:

Held – ordering the father to provide up to £900,000 plus annual charges in respect of accommodation and periodic maintenance of £60,000 pa, on the basis that he would meet school fees and expenses and medical insurance, but not childcare costs –

……

(2)      In setting the amount to be paid as periodic maintenance, the cost of the nanny should in this case be notionally allocated to the mother’s salary, leaving the mother with about one third of her net salary for her own use, and the father was to pay the mother the full primary carer’s allowance.  This would allow the mother to make her own decisions about employment: she would have either to make her own financial contribution from employment, or accommodate her lifestyle choices to the money received from the father. (see paras [50], [51], [53]).

19.  In Re C (Financial Provision) [2007] 1 FLR 13 a more broad brush approach was adopted

(5)   In determining what was a reasonable budget, it was necessary to treat the mother’s allowance as a primary carer as an independent item, in addition to the direct costs of the child.  This did not mean that an actual separate sum had to be identified; rather, the court should bear in mind that factor when looking at the overall budget.  Allowing for inflation, the cost of a live-in au pair and trips abroad, the annual income provision should be £72,000 (see paras [73], [79]).

20.  In addition reference has been made to two Hong Kong cases - H v S FCMP 70 of 2008, unreported dated 29 April 2009 and T v J FCMP 38 of 2007 alsounreported dated the 26 August 2008. In the first of those cases HH Judge Chu analyses the differences between the way in which the law has developed in Hong Kong and England and Wales.

47.  The only test set out in s.10(2) of GMO appears to be what the court thinks is reasonable having regard to the means of the parent against whom an order is being sought.

48.  Further, the power to make orders regarding lump sums in Hong Kong appears to be different from that in England.  In Hong Kong, the Court only has power is to order a lump sum for the immediate and non-recurring needs of the minor or for the purpose of enabling any liabilities or expenses reasonably incurred in maintaining the minor before the making of the order to be met, or for both under s.10(2)(a) of GMO.  However, under paragraph 1(2)(c) of Schedule 1 of the Children Act 1989, the court can make an order for “such lump sum as may be so specified”. …There also appears to be power for the courts in England to make more than one lump sum (paragraph 1(5)(a), Schedule 1), which is not the case in Hong Kong. …

21.  Judge Chu went on to consider two other Hong Kong cases i.e. K v W (Children – Removal from Jurisdiction) [2006] 2 HKFLR 292 and T v J, referred to above, where a “mother’s allowance” was factored into the maintenance for the child.

Judge Chu concludes at paragraph 51 that

51. … notwithstanding the omission in our GMO of the factors set out in paragraph 4(1) of Schedule 1 of the Children Act 1989 and the differences between paragraph 1(1) and (2) of the said Schedule 1 and our s.10(2), it appears that the Courts in Hong Kong have been guided by the principles and guidelines set out in the English cases, particularly Re P, in considering what financial orders are reasonable for the benefit of a child born out of wedlock.

22.  Thus it would seem that prima facie Hong Kong does have the ability to make a maintenance order which allows for a “mother’s allowance”. As stated in T v J FCMP 38

(2) Whilst the Court must always guard against unreasonably claims made on behalf of child with the disguised element of providing for the mother’s benefit, it is well established that a child’s need for a carer enables account to be taken of the caring parent’s financial needs.

Discussion

23.  I must now turn to consider the issues, the law and the parties evidence as set out in their affirmations and as given orally by them during the hearing. For the avoidance of doubt, in so far as the matters set out in this judgment differ from the evidence of the mother or father, that is because I have preferred the evidence of one or other of the parties or because I do not find the evidence given credible, or because I consider that the documents produced confirmed my findings of fact.

What is a reasonable level of monthly maintenance for the father to pay for A? To what extent should the father provide for A by way of undertakings?

24.  As intimated there was some confusion over the mother’s case on expenses as her later evidence did not tally with her original affidavit evidence. In the trial however she produced a schedule in which she claimed the following expenses for or on behalf of A:

FINANCIAL PROVISION FOR A

PARTICULARS	TOTAL EXPENSES	EXPENSES CLAIMED FOR THE BENEFIT OF A
ACCOMODATION
Rental	HK$50,000 (current HK$11,000)	HK$50,000 (current HK$11,000)
TOTAL:	HK$50,000	HK$50,000
EDUCATION EXPENSES
School Fees (to commence in September 2012)	HK$15,000	HK$15,000
Total:	HK$15,000	HK$15,000
REASONABLE BUDGET FOR A (Periodical Payment)
Now TV (cartoon channels)	HK$143	HK$143
Broadband	HK$226	HK$226
Utilities (Electricity, water, gas, rates, telephone)	HK$3,000	HK$3,000
Management fees	HK$1,000	HK$1,000
Interim Renovation and home appliances	HK$1,000	HK$1,000
Household expenses	HK$1,500	HK$1,000 (two-thirds of total amount)
Car expenses	HK$6,000	HK$3,000 (half of total amount)
Home Insurance	HK$100	HK$100
Domestic Helper including: - Domestic Helper Insurance (in Philippines) - Medical Insurance - Flight Ticket - Transport allowance - Annual Leave allowance - Agency Fee	HK$4,260 + 1200	HK$4,260 + 1200
Extra Tuition Fees and Extra-curricular activities	HK$5,000	HK$5,000
School Books and Stationary	HK$3,000	HK$3,000
Transport to School	HK$2,000	HK$2,000
Medical and Dental (includes Chinese herbalist and tonic food)	HK$2,000	HK$2,000
Entertainment / presents / toys	HK$4,000	HK$4,000
Holidays	HK$2,000	HK$2,000
Clothing / Shoes / Uniforms	HK$3,000	HK$3,000
Education Fund	HK$5212.87	HK$5212.87
Lunch and pocket money	HK$6,000	HK$6,000
Personal Grooming	HK$1,000	HK$1,000
Skincare (including baby products)	HK$500	HK$500
Fresh Food and daily necessities	HK$7,500	HK$5,000 (two-thirds of the total amount)
Diapers	HK$500	HK$500
Meals out of home	HK$3,750	HK$2,500 (two-thirds of total amount)
Total:	HK$63,891.87 per month	HK$56,641.87 per month
“MOTHER’S ALLOWANCE”
	HK$30,000	HK$30,000
Total:	HK$30,000	HK$30,000
LUMP SUM
A’s maintenance from February 2011 to October 2011		(HK$65,729 - HK$25,000) x 9 = HK$366,561
A’s maintenance from November 2011 to March 2012		(HK$65,729 – HK$35,000) x 5 = HK$153,645
A’s medical expenses from 13 January 2010 to 31 January 2011		HK$12,182
A’s Playgroup from January to December 2011		HK$36,890 - $4,440 (Nov – Dec 2011 paid) = $32,450
Total:		HK$564,838

25.  As a general comment, the difficulty with much of the mother’s evidence on this was that it simply did not come up to proof. I will now turn to each of the items in turn.

Rental

26.  The mother claims a rental allowance of HK$50,000 per month based on properties in the catchment area for schools on Hong Kong Island in school net 11 or 12. The difficulty with this is that until shortly before the trial the father had been completely unaware of the mother’s desire to live on Hong Kong Island given that A is presently attending kindergarten in Kowloon Tong. His offer was based on the mother’s perceived desire to live reasonably close to A’s present school. This, it seems to me, was a perfectly acceptable assumption to make. The mother now says that A has been offered a place at pre nursery at a kindergarten on Hong Kong Island to commence in August 2012. Again this was rather sprung on the father. In any event the father says that it should be possible for the mother to find something suitable in the HK$25,000 – HK$30,000 price range on Hong Kong Island. He points out that this is over double what the mother is currently paying in rent and will inevitably lead to a higher standard of living for both A and the mother.

27.  The mother produced lists of properties in her price range of HK$50,000 per month. The father did likewise with respect to properties in the HK$25,000 – HK$30,000 price range. There is no doubt that properties can be found at both ends of the spectrum. It is really a matter of what is the appropriate standard of living to be adopted. I accept that it would be usual for a child living in the net 11 or 12 catchment area to be living a fairly middle classed neighbourhood. Clearly the father is in a position to pay for such a life style – which is also more in keeping with the life style that he also enjoys. Neither party produced a list of properties in the HK$35,000 – HK$40,000 price range. Nevertheless it seems to me that this is likely to be a bit more realistic given that the mother will most likely be living on Hong Kong Island and possibly near to A’s school in Y Road. Properties are generally quite expensive in and around that area. The father has said that he is prepared to pay whatever amount the court deems reasonable. A rental allowance of up to HK$40,000 including management fee seems to me to be reasonable in the circumstances. I will therefore hold the father to his agreement as set out in paragraph 10 above. This should be expressed as an undertaking in the order i.e. that the father will undertake to pay a monthly rental of up to HK$40,000 per month inclusive of management fee directly to the Landlord for a property on Hong Kong island. The father is to provide a list of properties for the mother to review within 14 days. I accept that this sum of HK$40,000 is for both A’s and the mother’s benefit and therefore that it includes an element of the “mother’s allowance” within it. Generally speaking as I go through the expenses, where I allow all of the mother’s claim or where it seems to me that a reduced amount would in any event cover all of the expenditure for both the mother and A, then that must also include some element of a mother’s allowance within it.  

Education

28.  The mother asks for HK$15,000 per month as an educational allowance to be paid directly to her. The difficulty with this is that such sum is far in excess of any of the fees for the schools so far identified by her in the net 11 and 12 catchment area as potential schools for A. She has produced no evidence in support of her assertion. I do not accept the suggestion that she wants to be responsible for payment so as to ensure that there is no stigma attached to the fact that she and the father are not married. This is simply not credible.

29.  I will accept the father’s offer to settle A’s school fees and school bus fees directly upon mutual agreement of the choice of schools such payment to be made the stakeholders directly. This too is to be expressed as an undertaking. The school uniform will be dealt with under the provision of clothes generally.

Now TV, Broadband

30.  The father offers to pay half of these items based on the original estimate provided by the mother. These are small amounts. The mother seeks a reduced amount in her schedule but she also asks for the whole amount. There is no evidence to support what she says. I will allow the full amount but on the premise that this also should also be taken into account when considering the mother’s allowance.

Utilities (electricity, water, gas, rates and telephone)

31.  The mother failed to come up to proof on this item. She originally sought HK$3,000 for water, gas and electricity and asked for a half share. The only evidence that was produced was a bank statement which showed payment for a bi monthly bill for HK$1,008. She appeared to be claiming for rates when she is no longer required to pay rates. She frankly admitted that the amount of HK$3,000 was an estimate allowing for a buffer. The father offered to pay HK$1,500 for utilities plus HK$100 for the telephone. It is unclear what amount the mother might be expected to pay in her new abode. No evidence was produced on that aspect of the case either. In the circumstances I will allow HK$2,000 per month. It seems to me that this sum should be sufficient to cover all of the mother’s costs under this head.

Management fee

32.  I accept that provision for any management fee should be included in the rental payment.

Interim renovation and home appliances

33.  Again the mother seeks the whole of this item. Originally she estimated HK$3,000 and asked for HK$1,500. Now she asks for the whole reduced amount of HK$1,000. Again no evidence is produced in support of this request. It appears to have been plucked from the air. Given also that the mother will be moving into a new abode this item will not be allowed.

Household expenses

34.  Rather strangely given the mother’s approach to other items, the mother seeks on this occasion to apportion the expense between herself and A. She apportions 2/3 of the household expenses to A. It is not clear on what basis she has done so. Again no supporting evidence is produced. However I would accept that she will have some household expenses – although again this will also form part of the mother’s allowance. I will allow HK$1,000 per month for this item on a broad brush basis. This should cover all of the expenditure under this head.

Car expenses

35.  The mother claims HK$3,000 for car expenses – which are half of the total claim. Again her evidence was somewhat confused on this point. She said that the car belonged to her mother but notwithstanding that it seems that she was responsible for things like the licence fee etc. The mother was simply not credible on this point. She produced copies of petrol receipts that were very high.

36.  The father has agreed to pay for A’s school bus and other transport of up to HK$1,000 per month although the additional offer of transport is not referred to in paragraph 10 above. Given that the mother will be living on Hong Kong Island and taxis will be plentiful and reasonably priced I will accept the father’s proposal in this respect.

Home insurance

37.  The father has agreed to pay HK$100 per month for this item as claimed.

Domestic helper

38.  The mother asks that the father pay for the whole of this item including the cost of all related expenses. In essence the father has offered to pay slightly over half of the amount claimed. It seems to me however that it would be appropriate to allow all of this expense. Full time help is generally permitted when considering the care arrangements for a small child – especially in the middle to upper echelons of Hong Kong society. This will also be taken into account when looking at the mother’s allowance. I will therefore allow for the whole of the amount at HK$5,460 per month.   

Extra tuition and extracurricular fees

39.  The father offers to pay for A’s extracurricular activities and extra tuition upon prior agreement with a budget of HK$2,000 – HK$3,000 per month. The mother asks for HK$5,000 per month. Given that A is just over 2 years old this seems to be rather on the high side. I will accept the father’s offer at the upper end of up to HK$3,000 per month for extracurricular activities and extra tuition. This is also to be expressed as an undertaking.                     

School books and stationery

40.  The father offers to pay for this as necessary and in full. The mother is asking for an allowance of HK$3,000 per month. This also seems excessive given A’s age. I accept however that such small sums may be difficult to deal with and could cause further friction between the parties. I will allow HK$1,000 per month under this head. 

Transport to school

41.  I accept the father’s proposal as set out above. There will be no further provision for transport.         

Medical and dental

42.  The mother seeks HK$2,000 per month for medical and dental and tried to argue in court that the provision of a gold Bupa card was not sufficient and that extra funds were needed for example to cover the cost of Chinese medicine. This was shown to be untrue. The father’s proposal as set out in paragraph 10 is accepted. Again this offer is to be expressed as an undertaking in the order.           

Entertainment, presents and toys

43.  The mother sought an extraordinary high figure of HK$5,000 per month for entertainment, presents and toys for A. This is excessive. Again it was unsubstantiated. The father offers HK$1,000 per month – which conversely seems a little on the low side. I will allow HK$2,000 per month.

Holidays

44.  The husband has agreed to pay the mother the full amount sought of HK$2,000 per month. 

Clothing, shoes and uniform

45.  The mother asks for HK$3,000 per month, the father offers HK$1,000 per month upon production of receipts. In addition he offers to pay for A’s school uniforms. Again it seems to me that such small amounts of money may increase the friction between the parties. I will allow a figure of HK$2,000 per month. This shall include provision of a school uniform for A.        

Education fund

46.  The mother seeks the cost of this item in full notwithstanding the fact that the father has taken out the exact same policy. This is a duplication. Upon the father’s undertaking to continue to pay for his own policy for A this item will not be allowed.

Lunch and pocket money

47.  The mother sought HK$6,000 per month as a separate item for lunch and pocket money not withstanding A’s tender age. She was simply not credible on this point in the witness box. No evidence was produced in support of her claim. It will not be allowed.       

Fresh food and daily necessities/Meals out of the home

48.  The mother claims HK$7,500 for fresh food etc and an additional HK$3,750 for meals out of the home. She has apportioned these expenses. They are still excessive – HK$7,500 in total for A. Again she produced very little documentary evidence in support of her claim. Conversely the father’s offer of HK$2,500 per month seems a little on the low side. I will allow HK$5,000 per month under this head for both items to include provision for diapers referred to below.

Diapers

49.  This will not be allowed as a separate item – but should be included under item 48 above as a “daily necessity”. Given A’s age it is anticipated and accepted that this is a short term expense in any event.

Personal grooming

50.  The father offers HK$200 per month under this head which is accepted.

Skincare

51.  The mother seeks HK$500 per month – which is accepted by the father. 

52.  Thus in summary the following expenses will be allowed:

PARTICULARS		TOTAL EXPENSES
ACCOMODATION
Rental		Undertaking (Up to Hk$40,000 per month inclusive of management fee)
TOTAL:		HK$40,000
EDUCATION EXPENSES
School Fees (to commence in September 2012)		Undertaking accepted (School fees currently HK$4,950 per month)
Total:		Unknown
REASONABLE BUDGET FOR A (Periodical Payment)
Now TV (cartoon channels)		HK$143
Broadband		HK$226
Utilities (Electricity, water, gas, rates, telephone)		HK$2,000
Management fees		Nil
Interim Renovation and home appliances		Nil
Household expenses		HK$1,000
Car expenses/Other transport		HK$1,000
Home Insurance		HK$100
Domestic Helper including: - Domestic Helper Insurance (in Philippines) - Medical Insurance - Flight Ticket - Transport allowance - Annual Leave allowance - Agency Fee		HK$4,260 + 1200
Extra Tuition Fees and Extra-curricular activities		Undertaking (up to HK$3,000 per month)
School Books and Stationary		HK$1,000
Transport to School		Undertaking
Medical and Dental (includes Chinese herbalist and tonic food)		Undertaking
Entertainment / presents / toys		HK$2,000
Holidays		HK$2,000
Clothing / Shoes / Uniforms		HK$2,000
Education Fund		Nil (Undertaking with respect to the father’s policy)
Lunch and pocket money		Nil
Personal Grooming		HK$200
Skincare (including baby products)		HK$500
Fresh Food and daily necessities		HK$5,000
Diapers
Meals out of home
Total:		HK$22,629 per month

53.  For the avoidance of doubt, in addition to the above, I will accept the father’s undertakings as set out in paragraph 10 to pay for the premium on A’s life insurance policy together with the other undertakings referred to in this discussion. Thus the father will be paying in excess of HK$49,713 per month by virtue of the undertakings that he has given. This is made up of the rental and management fee (HK$40,000), school fees (presently HK$4,950), extra tuition and extracurricular activities (up to HK$3,000), school bus (?), medical and dental (HK$1,763), education fund (?), life insurance policy premiums (?). This totals at least HK$49,713 – rounded up to say HK$50,000 per month. In addition he will be required to pay for the additional items set out in the schedule totalling HK$22,630 per month by way of a periodical payments order. Thus in total he will be paying in the region of at least c HK$72,630 per month for A’s maintenance. In addition there is the matter of the mother’s allowance to consider.  

Should there be a mother’s allowance and if so in what amount?

54.  The mother gave evidence that she had always lived with her own mother and that consequently she had always contributed towards their household expenses by paying her mother between HK$5,000 – HK$10,000 per month. In addition she had on occasions been responsible for payment of various mortgages. The mother’s personal finances were often tight as a result.

55.  The mother bases her request for a mother’s allowance on her previous income without taking into account her actual expenditure at that time.

56.  Whilst accepting that the mother is entitled to a “mother’s allowance” I also accept that this is not an exact science and that on occasion a broad brush approach is called for. In this instance the mother is benefitting from the full provision of her rental, Now TV, Broadband, utilities, household expenses, home insurance, and provision for a domestic helper. In addition all of A’s direct expenses will be met. She is not at present required to contribute to any of them. If the general expenses are apportioned equally between the mother and A the mother could be said to be receiving a mother’s allowance of approximately HK$24,500 per month (rounded up). I do not accept that in addition the mother is entitled to a further HK$30,000 per month. I agree that this would amount to a significant degree of double accounting.

57.  The father argues that the mother should return to work and that it was never his intention that she should do otherwise. The mother for her part argues that as A’s primary carer it is very difficult for her to return to the workforce, at least for the present. In the father’s letter of offer it is suggested that at the very least the mother should return to full time work when A starts primary school. I would accept that. If the mother decides not to and to continue her legal studies that is really a matter for her. The father cannot be expected to fund her in this endeavour.  

58.  Notwithstanding that I accept that in addition to the general expenses itemized above that the mother will in the interim need to provide for her own personal expenses including provision for food, eating out, travel, holidays, clothes and entertainment. It seems to me that in time that the mother should be able to pay her own way and to provide for her own expenses in that regard, especially given that she has a full time maid paid for by the father. I would also expect her to contribute towards A’s own expenses in time. I will though allow her a grace period of just over 2 years. In the interim the father will pay a further sum of HK$10,000 per month for the mother’s allowance. This will cease in September 2015, when A should be about to start full time school. By that stage I would expect the mother to be in a position to work in a part time or full time capacity and to earn the equivalent of at least HK$10,000 per month. In the event that the mother requires a more lavish lifestyle then she should return to work now – at least on a part time basis. I have noted that she has worked in the past and as I have said she also has full time domestic help.                      

Should the father pay the mother a lump sum and if so how should that lump sum be calculated?

59.  On the mother’s case the father has provided the following monetary support for A since birth

Monetary support provided by F since A’s birth

Period	Amount
April 2010	HK$55,000.00
May 2010-January 2011	3 month instalments of HK$200,000.00 (amounting to HK$66,666.00 per month)
February 2011-October 2011	3 month instalments of HK$75,000.00 (amounting to HK$25,000.00 per month)
November 2011-Present	3 month instalments of HK$105,000.00 (amounting to HK$35,000.00 per month)

60.  This totals HK$1,090,000. In addition she received HK$30,000 for four months from the father’s company. I not add this to the sum received – given that she would most probably have been entitled to maternity leave in any event and that she was employed by the father’s company and therefore it could be argued that she was entitled to some or all of that money as of right.   

61.  The mother’s claim for a lump sum is as follows:

LUMP SUM
A’s maintenance from February 2011 to October 2011	(HK$65,729 - HK$25,000) x 9 = HK$366,561
A’s maintenance from November 2011 to March 2012	(HK$65,729 – HK$35,000) x 5 = HK$153,645
A’s medical expenses from 13 January 2010 to 31 January 2011	HK$12,182
A’s Playgroup from January to December 2011	HK$36,890 - $4,440 (Nov – Dec 2011 paid) = $32,450
Total:	HK$564,838

62.  Part of the mother’s claim is based on alternative accommodation that is to be provided for her on Hong Kong Island. Although the rental is a legitimate expense going forward I do not accept that it should be backdated. The mother lived in alternative accommodation for a while including a short period with her brother. She has lived in Tsuen Wan since June 2010 and has paid HK$11,000 per month since then. Given this it is only possible to approach this is a very broad brush way. Thus in round figures the mother will be entitled to approximately HK$82,630 per month (inclusive of undertakings and the mother’s allowance) less the difference in rental from June 2010 of HK$29,000 per month [HK$40,000 – HK$11,000]. There is also the period before then to take into account. In the absence of any precise information it seems to me that the mother should have been able to live quite comfortably on HK$50,000 per month. Thus the mother will be entitled to HK$50,000 x 28 months = HK$1.4 million.

63.  Any payments made to her shall also be deducted. This has been calculated at HK$1,090,000. This leaves a balance of HK$310,000 to be paid by the husband. In addition the husband will pay for the medical expenses in the sum of HK$12,182 and A’s play group expenses of HK$32,450 referred to above as these are additional expenses reasonably incurred by the mother. I will therefore make an order nisi to be made absolute in 28 days time that the father shall pay a lump sum of HK$355,000 to the mother. (HK$354,632 rounded up)   

Costs

64.  Lastly, on the question of costs, it is fair to say that the mother had no option but to issue the originating summons given that the father stopped paying her and then subsequently unilaterally reduced the amount to be paid for A. Unfortunately the mother’s case has lacked consistency throughout and she has also failed to come up to proof on many aspects of her case at trial. But the mother has beaten the father’ open offer and to that extent she has been successful. Given that I intend to exercise my discretion and to make an order nisi to be made absolute in 28 days time that the father do contribute towards 50% of the mother’s party and party costs to be taxed if not agreed.  

Order

65.  Upon the Respondent’s undertakings to

a) pay a monthly rental of up to HK$40,000 per month inclusive of management fee direct to the Landlord for a property on Hong Kong Island. The father to provide a list of properties for the mother to review within 14 days;

b) pay for A’s school fees and school bus fees directly to the school and the school bus company concerned upon mutual agreement as to choice of school;

c) pay for A’s extracurricular activities and extra tuition classes directly to the stakeholders concerned upon prior agreement in the total sum of not more than HK$3,000 per month;

d) pay for the premiums of A’s medical and dental policy covered by the father’s medical insurance;

e) Pay for the premiums on A’s life insurance policy;

f) Pay for the premiums on his own educational policy for A.  

IT IS ORDERED THAT

1) The Respondent shall pay periodical payments to the Applicant for A in the sum of HK$32,630 per month, the first payment to be made on the 1 May 2012 and thereafter to be paid on the 1st day of each succeeding month until the 1 September 2014 whereupon the periodical payments shall be reduced to HK$22,630 per month until A reaches the age of 18 years or ceases full time education whichever is the later or until further order.

2) There shall be an order nisi to be made absolute in 28 days time that the Respondent shall pay a lump sum to the Applicant in the sum of HK$355,000.

3) There shall be an order nisi to be made absolute in 28 days time that the Respondent do contribute towards 50% of the Applicant’s party and party costs to be taxed if not agreed.