LCHJ v. SYMA

FCMP 28 / 2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS

NUMBER 28 OF 2014

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J U D G M E N T

(Interim maintenance for child)

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Introduction

1.  This is an application under S.13 of the Guardianship of Minors Ordinance Cap 13 (“GMO”) taken out by the Applicant (“Mother”) for interim maintenance for her daughter who was born in August 2004 (“Child”) out of her relationship with the Respondent (“Father”).

2.  The Mother issued an Originating Summons on 28 January 2014 for financial provision under S.10 of the GMO.  At the same time, she took out an Inter-Partes Summons pursuant to S. 13 of the GMO for interim maintenance from the Father, at the rate of $57,616.77 per month or such amount to be determined by the Court.

3.  On 4 March 2014, Her Honour Judge Melloy made an Order, inter-alia, that the parties do file and exchange their respective Form Es and the Father do pay interim interim periodical payment for the Child  of $11,000 per month until pending order.  The substantive hearing of the Mother’s application for interim maintenance was adjourned to 14 April 2014, with half day reserved.

The Legal Principles

4.  There is no dispute between the parties as to the general legal principles.

5.  The Court has power under S.10(2) of the GMO to make financial provision for a minor, which includes periodical payments towards such minor’s maintenance as the Court thinks reasonable having regard to the means of the parent to which the order is imposed.

6.  There are no specific factors under the GMO which the Court has to have regard to, in exercising the discretion in making financial orders for a child, such as those set out in S.7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”).  The overriding consideration for such application is reasonableness.

7.  However, notwithstanding the absence of the factors set out in S.7 (2) of the MPPO or paragraph 4(1) of Schedule 1 of the Children Act 1989 in the GMO, the Courts in Hong Kong have found the principles and guidelines set out in the English cases very helpful, particularly in Re P (Child: Financial Provision) [2003] 2 FLR 865, in considering what financial orders are reasonable for the benefit of a child born out of wedlock.

8.  In Re P, [2003] 2 FLR 865 paragraph 47, Thorpe LJ stated that the Court should discourage undue bickering over the budgets.  What is required is a broad common sense assessment. 

9.  Bodey J further stated in Re P, [2003] 2 FLR 865 paragraph 77 (i), that in considering the mother’s budget, the court should adopt a broad brush approach,

“(i) in considering the mother’s budget, at least in bigger money cases, the court should paint with a broad brush, not getting bogged down in detailed analyses and categorisations of specific items making up opposing budgetary presentations. Rather, the court should do its best to achieve a fair and realistic outcome by the application of broad common sense to the overall circumstances of the particular case...”

10.  In determining the amount of interim maintenance of a child under the GMO, Her Honour Judge B Chu also adopted a broad brush approach in LCTK v TKKP [FCMP 173/2009, unreported, 25 June 2010],

“This being an interim application, and not having the benefit of seeing the parties in the witness box with their evidence tested, the Court will have to adopt a broad brush approach. The Court will not take a long term view and what matters is the immediate and reasonable financial needs of the child.”

11.  Under S.13(3)(a) of the GMO, the Court has power to make an interim order, but such interim order shall only have effect of 3 months from the date of the order, and shall cease to have effect on the making of a final order or on the dismissal of the application.

12.  The Court in making interim orders under S.13 of the GMO has to balance the reasonable needs of the Child and the ability of the paying parent to pay on an interim basis.

The Main Issues

13.  Thus, in undertaking this balancing exercise, the Court will adopt a broad brush approach in determining a) the immediate and reasonable financial needs of the Child, including housing needs as claimed by the Mother; and b) the apportionment of the Child’s said needs to be paid by the Father and his ability to pay on an interim basis.

14.  A detailed examination of the parties’ means may be considered later at the final hearing, if no agreement is reached in the meantime. If there is any overpayment or underpayment, the figures can be put right in the final order.  [see AEL v MRL [2009] HKFLR 131]

Brief Background

15.  The Mother was born in Taiwan and domiciled and living in Hong Kong since 1994.  She is 38 years old and currently working as a Senior Business Manager at X Group Limited. According to the latest tax return, her average income is approximately $31,000 per month.

16.  The Father was born in Hong Kong.  He is aged 41 years old and currently working as a Senior Vice President in the Private Wealth business in Y Private Wealth.  His average income in the past year is approximately $190,000 per month.

17.  The parties met in January 2002 and soon developed an intimate relationship.  They never got married and in August 2004, the Applicant gave birth to the Child out of their relationship.  However, shortly after the birth of the Child, the parties separated in around March 2005.

18.  The Child has been residing with Mother since birth and since December 2008 they have been residing in a 3 bedroom apartment with a gross floor area of about 1150 sq ft with a 900 sq ft balcony in XX Court, Bonham Road (‘the Bonham Residence’), which is owned by the Mother’s father (‘the maternal Grandfather’). 

19.  It is not disputed that the Child, who will be turning 10 in August 2014, maintains a close and intimate relationship with both the Mother and Father.  The Mother is the main carer of the Child since birth and the Father spends Saturdays with the Child regularly.

20.  The Child attends a well established local school in Hong Kong and has been accustomed to a relatively comfortable lifestyle with at least 3-4 overseas trips (which includes 1 school trip per year), access to exclusive clubs, hotels and nice restaurants for meals with either parents, and engaging in extra tutorial lessons, private extra-curricular activities such as playing the flute, piano, drawing and swimming lessons etc.

21.  There is some dispute regarding access at the beginning of the hearing and the Father has taken out an application on 8^th April 2014 for joint custody with care and control to the Mother with generous flexible access to the Father. 

22.  In gist, the Father wishes to have a one-hour dinner with the Child in mid-week in addition to Saturday access and regular telephone contacts, whereas the Mother is concerned that dinner in mid-week would cause disruption to the daily schedule of the Child. Like many local primary students in Hong Kong, the Child’s schedule during the week is packed with homework, tutorial lessons and extra-curricular activities. As such, the Mother suggested dinner on Friday evenings instead.

23.  Since this hearing is for interim maintenance only, I will not deal with the access arrangements, save as to note that both parents have been involved in the upbringing of the Child and have a loving relationship with the Child.  The Father, who has regular weekly access, is familiar with the weekly, if not daily, activities and needs of the Child, whereas the Mother is the main carer of the Child on a daily basis, albeit with the assistance of a domestic helper who resides with her and the Child.

24.  I sincerely hope that both parents will be able to sensibly work out the access arrangements with their daughter’s best interest in mind without having to resort to unnecessary litigation which would only cause additional stress to a child who will have to deal with, if not already facing, loyalty conflict towards both parents, at this tender age.

Immediate and Reasonable Needs of the Child

25.  It is not disputed that the Child has accommodation needs as well as specific needs.  Mother claims that Father should pay for 100% of all the Child’s needs whereas the Father is willing to contribute to 50% of the Child’s “real’ expenses which he accepts to be between $22,000 per month or as submitted by Father’s Counsel at the hearing, around $25,000 per month, in addition to the actual accommodation needs.

26.  I will deal with what is the immediate and reasonable accommodation need of the Child first and then turn to what is the Child’s reasonable specific monthly needs.

The Mother’s Case on Child’s Immediate Accommodation Needs

27.  It is not disputed that the Child has been residing with the Mother in the Bonham Residence for the past 6 years. 

28.  Initially in 2008, the Bonham Residence was occupied by 7 persons, namely, the Mother’s grandmother, elder sister, younger sister, two domestic helpers in addition to the Child and Mother.  However, the grandmother passed away in September 2010 and the domestic helper dedicated to look after the grandmother was laid off, leaving 5 persons residing there.   In 2011, the Mother’s elder sister and younger sister also moved out, so the Mother, the Child and their domestic helper have since been occupying the entire Bonham Residence.

29.  However, according to the Mother, the maternal Grandfather now intends to renovate and rent out the Bonham Residence at the prevailing market rent to support his own living expenses.  In fact, renovation to the balcony has already started and the Mother and Child will have to move out latest by July 2014, when renovation to the living room and bedrooms will commence. 

30.  The Mother claims that she is under financial pressure in respect of accommodation needs since the costs relating to the rental of a new property will normally include 3 months’ rental deposit, estate agent commission fees, moving costs etc. 

31.  At the hearing, Counsel for the Mother put forward two alternative scenarios.  Ideally, the Mother would like to remain at the Bonham Residence after the renovation works are completed and be able to pay the prevailing market rental. 

32.  Alternatively, she is prepared to move to a 700 to 1,000 sq ft apartment in Apleichau area which should be located in a relatively new building with clubhouse facilities to compensate for the Child’s loss of enjoyment of a 900 sq ft balcony at the Bonham Residence.  The Mother has identified YY Tower in Apleichau as a suitable alternative accommodation. 

33.  The Mother has not been able to provide any independent valuation on the prevailing market rental of Bonham Residence, apparently due to the fact that there are no recent rentals of comparable units in XX Court or nearby with a 900 sq ft balcony.  She therefore relied on the rateable value as stated in the Demand for rates for the Bonham Residence for January to March 2014 which is $488,400, and came up with the estimation of about $40,000 per month ($488,400/12 months).  

34.  As regards the rental valuation of YY Tower, she has produced some information from Centaline Property Agency which shows that the monthly rental of various apartments in YY Tower is between $25 to $35 per gross sq ft. [C:222]  

35.  Thus, the Mother claims that the Father should pay 100% of the Child’s accommodation which is $20,000 per month based on 50% of her estimation of the prevailing market rental of Bonham Residence at $40,000 per month.

36.  It is noted that the Mother also wishes to claim a lump sum of $120,000 for removal costs and an unspecified amount of ‘arrears’ of rental for the past six years.  However, Counsel for the Father objected to the same being dealt with at this interim maintenance application in the absence of details and supporting evidence of such claims in the Mother’s Summons.   I accept that it is not appropriate for the Court to consider these claims in this interim application and hence will not deal with the same in this judgement.

The Father’s Case on Child’s Immediate Accommodation Needs

37.  The Father acknowledges that the Child’s maternal Grandfather has out of his kindness provided the Bonham Residence for the Child and Mother since 2008.

38.  Although the Father doubts whether the Mother is actually paying a nominal rental of $3,000 per month to the maternal Grandfather and whether the Child and Mother would be “evicted” from the Bonham Residence by July 2014, he is willing to contribute to a reasonable amount towards a suitable apartment for the Child to stay which would be in her best interest including convenience to her school and activities.

39.  The Father claims that he should only contribute to ¼ of the rent of such residence (being half of the Child’s share) and the Mother should also contribute to her own share in addition to half of the Child’s share, since she is a working mother as opposed to a full time homemaker.

40.  At the hearing on 16 April 2014, Counsel for the Father produced rental valuations from Centaline Property Agency on various properties including YY Tower which the Mother has considered as a  suitable alternative accommodation for the Child.  According to one rental valuation of a 782 sq ft gross area 3-bedroom apartment in YY Tower is about $24,000 per month. [Exhibit R1]

41.  Also at the hearing, Counsel for the Father submitted orally that according to the Father’s online enquiries, the monthly rental of a 1,000 sq ft apartment (without a 900 sq ft balcony) in XX Court, which is the same building as the Bonham Residence, is around $25,000 per month.

42.  Alternatively, if the Mother and Child continued to reside at the Bonham Residence, the Father would agree to pay $5,000 per month directly to the Child’s maternal Grandfather.

The immediate and reasonable accommodation needs of the Child

43.  For the purpose of this interim maintenance application, I am of the view that irrespective of whether the Child and Mother remains at the Bonham Residence or moves to an alternative accommodation, say in YY Tower, it is only fair and reasonable that the Father should contribute towards the Child’s immediate and reasonable accommodation needs.

44.  It is worth noting that according to the Form E filed by the Father, he and his wife are currently residing in a 500 sq ft property apparently owned by his mother and he is paying of $12,800 per month to his mother. [B: 120 &132].

45.  Having considered all the circumstances, including the evidence from the Father and Mother on the prevailing market rental of a suitable accommodation for the Child with regard to the standard of living that the Child is accustomed to, I am of the view that on a broad brush basis, a sum of $25,000 per month as the accommodation needs for the Child and Mother (with the Child’s share being half ie. $12,500 per month) is fair and reasonable at this interim stage.

The Child’s Immediate and Reasonable Specific Monthly Needs

46.  I now turn to look at the specific monthly needs of the Child.  The parties referred to the table set out by the Mother in her affirmation dated 24 January 2014 regarding the specific monthly expenses for the Child which amounts to $37,616.77 excluding the rental. [C: 33-34] 

47.  The Father argued that the said table of expenses is exaggerated, without basis and do not reflect the “real” expenses of the Child. At the hearing, Counsel for the Father helpfully informed the Court of the items which are disputed and those items which can be agreed either in its entirety or upon against production of receipts. I will set out the said table together with the Father’s comments herein below:

Item	Mother’s case Amount per month	Father’s case
Meals at home (fresh food)	4,500	]  agree to $3-4,000
Dining out	1,200	]  per month in total
School fees (inclusive of the quarterly miscellaneous fees)	7,025	agreed
Extra tuition fees and Extra Curricular Activities	8,233.3
	Flute 1,333	Agreed
	Piano 1,160 but increased to 1,950	Agreed
	S Tutorial  2,550	Agreed
	Drawing lessons   360	Agreed
	Swimming 1,200	Agreed against production of receipts
	Others 1,630	Not agreed
School books and stationary	350	Agreed
Transport to school (including school bus)	1,850	Agreed
Medical / Dental / Eye glasses	350	Agreed against production of receipts
Entertainment / presents (outings and presents)	1,000	]  Agree to 1,000
Holidays	1,000	]
Clothing / Shoes	500	]  in total
Insurance premia	340	Agreed
Other transport	550	Agree to 100
Domestic helper (salary, insurance, airfare and food)	6,316.67	Agree to 4000
Uniform	200	Agree against production of receipts
Other (piano books, exam fees, presents)	500	“
Other – other daily necessities (eg. Tooth pastes, shampoo, grooming utilities etc)	100	“
Other (School bus for extra-curricular activities)	400	“
Utilities eg. Electricity gas telephone/internet & water	834.3	“
Household goods, management fees, rent and rates	2,367.5	“
Total:	37,616.77	$23,858 - $24,858 plus $5,951.20 against production of receipts

48.  Broadly speaking, the Father’s main dispute is on a) meals at home/dining out claimed at $5,700 per month; b) Extra-curricular activities claimed at over $8,200 per month; c) Entertainment presents/holidays and clothing of $2,500 per month and d) Domestic Helper expenses of over $6,000 per month.

49.  Counsel for the Mother urged the Court to consider the sacrifice of a single mother who should not be placed under financial anxiety and referred to Re P [2003] 2 FLR 865 paragraph 49 quoting Thorpe LJ,

“Thus in my judgement the Court must recognise the responsibility and often the sacrifice, of the unmarried parent (generally the mother) who is the primary carer for the child.... The carer must have control of a budget that reflects her position and the position of the father, both social and financial.”

50.  Counsel for the Father asked the Court to be mindful against any exaggerated claims made by the Mother for her own benefit and referred also to Re P [2003] 2 FLR 865 paragraph 76 quoting Bodey LJ,

“...one has to guard against the unreasonable claims made on the child’s behalf but with the disguised element of providing for the mother’s benefit rather than for the Child.”

51.  Taking a broad brush approach at this interim stage, I am of the view that a sum $5,000 per month for meals and dining out is reasonable for the Child in this case, bearing in mind the social and financial position of both parents.  With regard to extra-curricular activities, I find that $7,400 per month is reasonable taking into account of what activities have been agreed and I accept the Mother’s case that the Child will resume swimming lessons shortly.  However, regarding entertainment and holiday expenses, I accept the Father’s view that at this interim stage, $2,500 per month may be on the high side and accept that $1,000 per month is reasonable. I also accept at this interim stage that $4,000 per month would cover the basic salary of a domestic helper.

52.  Thus, at this interim stage and without looking at the long term views and needs of the Child, I am of the view that the sum of $27,000 per month is a reasonable amount covering the immediate and specific needs of the Child, having regard to the educational needs and lifestyle that the Child is accustomed to.

The apportionment of the Child’s needs to be paid by the Father

53.  What then is the appropriate apportionment/amount to be paid by the Father towards the Child’s aforesaid needs on an interim basis?

54.  Since the Father has already indicated his willingness to contribute to the reasonable accommodation and specific needs of the Child, the answer to this question is, to quote Counsel for the Father, “whether the Father should pay half, all or somewhere in between”. 

55.  The Mother argued that having regard to the large discrepancy between the Father’s earning capacity of about $190,000 per month and the Mother’s earning capacity of about $31,000 per month, it is unfair for the Father to be responsible for only 50% of the Child’s accommodation and other specific needs. 

56.  Counsel for the Mother referred to the case of WGL v ASB [HCMP 489 of 2013, unreported, 28 June 2013 para.188], whereby Deputy High Court Judge B Chu found that the Father’s proposed 50% contribution is arbitrary, there being no basis for suggesting there should be only a 50% contribution,

“I find the Father’s proposal of $25,000 per month completely inadequate, and further his proposed 50% contribution is arbitrary. There is no basis for suggesting there should be only a 50% contribution. I do not find that there was any sufficient evidence that the Mother’s earning capacity or financial resources were equal to that of the Father’s, assuming that this was the basis for the Father to propose 50% contribution.”

57.  Counsel for the Father on the other hand argued that it is fair and reasonable for him to be responsible for 50% of the Child’s needs since this is a case where both parties are working and in fact, he has been paying 50% of the Child’s expenses based on very detailed “excel” charts that he has prepared over the years, although the Mother now denies that the calculations in these charts have never been agreed.

58.  According to the Form E of the Mother, her average monthly income is about $31,000 and her own current monthly expenses are about $28,000 per month in addition to the Child’s specific expenses of about $32,000 per month.  Adopting a broad brush approach and considering the Mother’s claim that she is receiving financial support from her father and has not been paying him $3,000 per month as nominal rental, I am of the view that her own current expenses are more likely to be less than $25,000 per month.  Without any detailed examination of Mother’s means, I note that the Mother does not appear to have substantial assets or savings.

59.  According to the Form E of the Father, his average monthly income is between $170,000 to $210,000 or $190,000 per month, and he receives rental income from another property (“C Garden”) of $12,500 per month. Thus, his total income is about $202,500 per month.  He claims that his monthly expenses are about $220,702 which included mortgage for C Garden of $14,500. However, as Counsel for the Mother pointed out, Father’s said expenses also included a rental of $12,800 per month (on his mother’s rented property) in addition to payments to his parents of $27,300 per month (including mortgage of his mother’s property) and what appears to be double counting of interim maintenance of $11,000 per month under Father’s personal expenses and $12,450 per month under Child’s expenses [B:132-133]. 

60.  Counsel for the Mother also doubted whether it was reasonable for the Father to spend $25,500 per month solely for his Wife’s food, car, holiday and other expenses when his Wife is also working and has her own salary of $27,000 per month [B:135].

61.  According to the Father, he spends $16,500 per month for meals and $10,000 per month for entertainment and presents.  I accept the Father’s claim that the nature of his business would require him to entertain and dine out with his clients.  However, whether or not these expenses along with his other personal expenses are reasonable will be dealt with at the final hearing, where a careful and detailed examination of the parties’ means will be conducted.

62.  On a broad brush basis and considering all the circumstances, I am of the view that the Father’s own current expenses (having discounted the apparent double counting of the child’s interim interim maintenance, his payments to his parents for mortgage/rental, his alleged spending on his wife and part of his meals and entertainment expenses) are more likely to be less than or in the region of $170,000 per month instead of $220,702 per month.

63.  In determining the appropriate apportionment to be made by the Father towards the Child’s needs on an interim basis, I am conscious of the fact that the Father’s monthly salary of $190,000 is roughly 86% of the Father and Mother’s combined monthly salary of $221,000 (ie.$31,000 + $190,000). 

64.  Having regard to the large discrepancy in the earning capacity of the parties, this is not a case where an approach of 50-50 share in the Child’s total monthly expenses would be fair and equitable.  The Father should be responsible for a proportionately higher percentage of the Child’s total monthly expenses.

65.  Thus, on a broad brush basis, considering the overall net available income of the parties and their respective earning capacities, I am of the view that it is fair and reasonable for the Father to be responsible for 75% of the Child’s specific monthly expenses and immediate and reasonable accommodation needs.

Conclusion

66.  To conclude, I am of the view that, having regard to all the circumstances including the standard of living, education and lifestyle to which the Child is accustomed, the immediate and reasonable accommodation and specific needs of the Child at this interim stage is $12,500 per month and $27,000 per month respectively.

67.  Adopting a broad brush approach and without going into any detailed examination of the parties’ means, I find it fair and reasonable for the Father to pay 75% of the Child’s immediate and reasonable needs ie. $12,500 x 75% = $9,375 rounded up to $9,500 per month plus $27,000 x 75% = $20,250 rounded up to $20,500 per month, totalling $30,000 per month (ie. $9,500 + $20,500).

68.  Having regard to the current financial resources of the Father including his overall net available income, I consider that he has the ability to pay the said interim maintenance to the Child in the total sum of $30,000 per month.

69.  My order is thus:

The Respondent do pay to the Applicant for the Child’s interim maintenance the sum of $30,000 per month, commencing 1^st May 2014 and thereafter payable on the 1^st day of each calendar month, until further order.  The above payment shall be credited by the Respondent into a bank account designated by the Applicant.

Costs

70.  Given that the Mother has had no alternative but to make this application and has been more successful than not, costs should follow the event. There shall be an order nisi to be made absolute in 14 days time that the Respondent do pay the Applicant’s party and party costs to be taxed if not agreed, with certificate for Counsel.