OP-PS v. T (T-H) W

FCMP 163 / 2020

[2024] HKFC 117

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MISCELLANEOUS PROCEEDINGS NO. 163 of 2020

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

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Introduction

1.  This trial concerns two variation applications of an Order made in November 2021 (“2021 Order”):

1)  By the Respondent Mother (“M”) dated 30 May 2022 for an upward variation of maintenance for the child of the family and for her as carer;

2)  By the Applicant father (“F”) dated 30 January 2023 for a cessation of child maintenance of $18,000 per month and the interim carer allowance of $5,000.

2.  F was on and off represented by his lawyers and retains counsel for this hearing, M acts in person.

Brief background

3.  F is a 47 years old Dutch national and employed by a company that he co-owns which business is in online restaurant marketing platform (“Company”).

4.  M is a 49 years old Taiwanese national, she has previously worked at a hotel in Shanghai as an operations manager, and her last job was at the Company. She appears to have experience in sales and marketing, but she claims to be currently unemployed and unable to find employment.

5.  F and M met in Shanghai in 2007. They co-habited from 2010 to 2015, they never married. There is one child (“J”) born in April 2013, who was aged 10 at the time of this trial.

6.  The parties’ relationship broke down in around October 2015, M and J moved from Shanghai to Taipei.

7.  In January 2017, M moved to Hong Kong. She says this is on persuasion by F so that they can co-parent J. They lived together under the same roof until M moved out in June 2020.

8.  When M’s move to Hong Kong, F arranged for her to work in the Company, she worked there as a sales director with a monthly salary of $60,000 from early 2017 to the end of 2020. M says that she was then fired from the Company and lost her employment visa which the Company sponsored.

9.  After moving out in June 2020, M says F has failed to provide food and living expenses for J until the maintenance decision in November 2021 (“2021 Judgment”); but she says F has breached the interim maintenance Order since January 2022, resulting in her numerous applications for praecipes for Judgment Summons.

Procedural history

10.  In November 2020, F commenced proceedings to seek joint custody and shared care and control. Following a CDR hearing, the Order dated 12 April 2022 gives the parents joint custody, shared care in terms of half of weekdays and alternate weekends, as well as sharing of school holidays.

11.  In February 2021, M applied for interim maintenance for J and carer allowance for herself.

12.  In the 2021 Judgment, HH J Melloy noted that M had some limited resources that were available to her initially, and that it was her case that she needed some financial assistance from F, particularly in the short-term pending her obtaining a gainful employment. In light of the above, and on the Judge’s assessment that M has earning capacity:

1)  The maintenance Order was made on the basis that F agrees to continue to pay for J’s school fees, her medical insurance premia, and her extra tuition fees and after school related activities up to a total of $2,000 per month;

2)  M was directed to inform F and the Court once she obtained employment;

3)  F was ordered to pay interim maintenance to M for J in the sum of HK$18,000 per month, which is to be reduced to HK$13,000 per month following M’s new employment; and

4)  F was ordered to pay an interim carer allowance to M in the sum of HK$5,000 per month, to be reduced to zero following M’s new employment.

13.  On 30 May 2022, M filed a summons for upward variation of the child maintenance and carer allowance. This is the current Summons before this Court.

14.  On 29 June 2022, F filed a summons to vary down the child maintenance. This was subsequently withdrawn by F.

15.  On 30 January 2023, F filed a summons for cessation of the child maintenance and the carer allowance. This is also the current Summons before the Court.

16.  M has consistently been applying for enforcement of F’s outstanding / delayed maintenance payments, there has been almost monthly application for praecipes for Judgment Summons since December 2022.

F’s case

17.  The major ground for F’s variation application is that he does not have the financial means to pay the child maintenance because his financial circumstances are now significantly worse than the time when the 2021 Judgment was delivered. He reasons that:

1)  The Company, an online business helping restaurants generate online reservations and marketing services, has suffered financially because of the social movements and covid in the previous years. F says that his monthly income has dropped from HK$95,000 to HK$60,000;

2)  Even though he has reduced his expenses (excluding maintenance), he is still running a shortfall of HK$11,155 per month. He says he therefore has to liquidate capital resources to meet the maintenance payments and legal fees, which is not sustainable. It is of note that the numbers in F’s closing submission are slightly different claiming HK$95,000 as income, and where the Company also provides J’s insurance of HK$1,000, and he claims a shortfall of HK$8,000.

18.  F avers that M is the wealthier party, as she owns, albeit with mortgage, a real estate in Shanghai, which he claims to have an estimated value of RMB7.5 million, and should generate at least approximately HK$14,500 rental income per month.

19.  F alleges that M is in fact being employed by a company owned by her friend (“S”), supported by cash deposits averaging approximately HK$18,000 per month between September 2021 and January 2023. M was granted an employment visa since 18 August 2021.

20.  In his closing submission, F puts forward his open offer:

1)  He gives an undertaking that he will continue to be solely responsible for J’s school fees and medical insurance until J attains the age of 18 or completion of tertiary education, whichever is later;

2)  The child maintenance shall be varied down from HK$18,000 per month to HK$10,500 per month; and

3)  The carer allowance of HK$5,000 to cease forthwith.

M’s case

21.  M does not accept what F claims. She alleges that the Company was already worth US$10 million back in 2015. During covid, the Company was able to keep all the employees and even hired a new manager. It also expanded business to other countries in Asia.

22.  M avers that F has a stock portfolio of HK$3.2 million and investments in cryptocurrencies. F also receives additional income from different sources, such as dividends and bonus from the Company and dividends from the stocks that he invests. She also says he profits from trading in his investment; and that F has hidden bank account or credit card as there were large withdrawals, and she could not trace where the money has moved.

23.  M states that F is not running any shortfall, as he is still able to travel frequently and stayed in 5-star hotels; he hires his own body coach, pays for his private piano lessons and substantial legal fees.

24.  M says she has not been able to find any employment since December 2020. She maintains that notwithstanding the work visa, she has no job and no income. She says that she has applied for many jobs but all got rejected because she does not speak Cantonese. And she has depleted her savings.

25.  M contends that circumstances have changed since the 2021 Judgment, in that J’s expenses has increased with age. She proposes the way forward for the benefit of J that:

1)  The child maintenance shall be varied from $18,000 per month to $30,248 per month;

2)  The carer allowance shall be varied from $5,000 per month to $9,500 per month;

3)  Both the child maintenance and carer allowance shall automatically be increased by 10% annually for inflation; and

4)  The carer allowance shall cease to be payable only when M’s monthly income is above $48,001.

Issues

26.  Both parties have submitted their own lists of issues. I will summarize the issues as follows:

A.  Have there been material change of circumstances that justify a variation of the maintenance

B.  F’s financial ability to pay

C.  M employment status, earning capacity and financial status

D.  J’s needs

E.  M’s carer allowance

F.  Will there be any backdating of the maintenance payments

Applicable law

27.  The jurisdiction to vary a maintenance order made under the Guardianship of Minors Ordinance is pursuant to section 10(4) therein, which provides as follows:

“An order under subsection (1) or an order under subsection (2) (other than an order for a lump sum payment in one amount, for a lump sum to be paid in instalments where all such instalments have been paid or for the transfer of property) may be varied, discharged, suspended or revived after being so suspended, by a subsequent order made on the application of either parent or after the death of either parent on the application of any guardian under this Ordinance, or (before or after the death of either parent) on the application of any other person having the custody of the minor by virtue of an order under subsection (1).”

28.  In the case of AEM v VFM [2008] 3 HKLRD 36, Cheung JA explained the modern approach in dealing with an application for variation of maintenance at para 14 of the judgment, in particularly the following sub-paragraphs:

“3. The traditional approach to variation was not to re-fix afresh the amount of maintenance but to consider the amount of change in the actual means of the parties so that the new order should merely be increased or decreased roughly in proportion to the change in the means : Foster v. Foster [1964] 3 All ER 541, Jackson’s Matrimonial Finance and Taxation 7^th Ed. Ch. 3. 131.

4. The modern approach, as required by section 11(7), is for the Court to consider all the circumstances of the cases. The Court is not required to proceed from the starting point of the original order but look at the matter afresh: Flavell v. Flavell [1997] 1 FLR 353 at 357B following Lewis v. Lewis [1977] 1 WLR 409 and Garner v. Garner [1992] 1 FLR 573.

5. Any change in any of the matters to which the Court was required to consider when making the original order was one of the circumstances to be considered.

…

8. At the same time the basis and intended effect of the original order are relevant factors to which the Court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order: Boylan v. Boylan [1988] FLR 282.” (emphasis added)

29.  This theme was reiterated in a later Court of Appeal decision on variation, WNWG v PBF [2012] HKCU 675, where the Hon Lam J quoting in part from another important judgment on this issue, HCTT v TYYC [2008] 5 HKC 86, added that:

[12] As regards the approach that the court should adopt in considering an application for variation and the weight to be attached to the original order, Tang V-P said in HCTT v TYYC [2008] 5 HKC 86 at paras 15 to 16,

“15. But as Garner v Garner [1992] 1 FLR 573 shows that does not mean that the earlier order, whether made by consent or not, carries no weight. How much weight should be given to the earlier order must depend on the circumstances. Cazalet J said in the English Court of Appeal:

Almost invariably, an application to vary an earlier periodical payments order will be brought on the basis that there has been some change in the circumstances since the original order was made, otherwise, except in exceptional circumstances, the application will, in effect, be an appeal. If it was correct when made, then there will usually be no justification for varying it unless there has been a material change in the circumstances. However, because of the impact of continuing inflation, because children grow older and cost more to support and because, for example, the cost of living in its increase may hit one party harder than another, it will usually follow that, if time has passed, there will inevitably have been some changes in the circumstances, and in particular in the financial circumstances, of the parties concerned.

Following Lewis v Lewis, by which decision this court is bound, a court on the hearing of an application to vary is fully entitled to look at all the relevant matters set out in s. 25 of the Matrimonial Causes Act 1973. On occasions, the court may be slow to accede to an application to vary a consent order, not least because the parties’ solicitors might otherwise be deterred from either seeking to negotiate such a provision or to achieve finality. Another factor which may influence a court will be the time that has passed since the original order was made. If an application consequent on an order is brought very soon after that order has been made, the court, in normal circumstances, is likely to attach more weight to the earlier order than if it had been made some years previously. Likewise, the court would expect to pay full regard to any special terms agreed between the parties at the time the original order was made – as, for example, when endorsements on briefs or contemporaneous correspondence show that an agreed order has, for some particular reason, been set at an artificially low figure. Shortly stated, the court must decide what weight it should attach to the original order and all the surrounding circumstances. However, once an application to vary is before it, the court is fully entitled to make an order considering all the circumstances afresh, paying such regard to the old order as may be thought appropriate.”

16. Thus although the jurisdiction to vary is untrammelled, normally the earlier order would not be varied unless there has been a material change in circumstances. (emphasis added)

30.  Counsel for the F also referred me to the case of H v S (Financial Provision for Child of Unmarried Parents) [2010] HKFLR 236, paragraph 40 is of relevance:

Also in Re P, Bodey J has provided a very helpful summary of the relevant considerations at paragraph [76], page 882, as follows:

“The welfare of the child while a minor, although not paramount, is naturally a very relevant consideration as one of 'all the circumstances' of the case.

(i) Considerations as to the length and nature of the parents' relationship and whether or not the child was planned are generally of little if any relevance, since the child's needs and dependency are the same regardless: J v C (child: financial provision) [1998] 3 FCR 79 at 81.

(ii) One of the 'financial needs of the child' (to which by para 4(1)(c) the court must pay regard) is for him or her to be cared for by a mother who is in a position, both financially and generally, to provide that caring. So it is well established that a child's need for a carer enables account to be taken of the caring parent's needs: Haroutunian v Jennings [1980] FLR 62 at 66; and A v A (financial provision for child) [1995] 1 FCR 309 at 317.

(iii) By paras 4(1)(a) and (b) of Sch 1, the respective incomes, earning capacities, property and other financial resources of each of the parents must be taken into account, together with their respective financial needs, obligations and responsibilities. So 'the child is entitled to be brought up in circumstances which bear some sort of relationship with the father's current resources and the father's present standard of living': J v C (child: financial provision) [1998] 3 FCR 79 at 87 per Hale J.

(iv) However, as this latter concept lends itself to demands going potentially far wider than those reasonably necessary to enable the mother properly to support the child, 'one has to guard against 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': J v C (child: financial provision) [1998] 3 FCR 79 at 87.

(v) In cases where the father's resources permit and the mother lacks significant resources of her own, she will generally need suitable accommodation for herself and the child, settled for the duration of the child's minority with reversion to the father; a capital allowance for setting up the home and for a car; and income provision (with the expense of the child's education being taken care of, generally, by the father direct with the school).

(vi) Such income provision is reviewable from time to time, according to the changing circumstances of the parties and of the child.

(vii) The overall result achieved by orders under Sch 1 should be fair, just and reasonable taking into account all the circumstances.”

31.  It is also well established that under general principles, both parties have the positive duty to make full and frank disclosure.

Discussion

Credibility of the witnesses

32.  I will start with a brief observation on this topic. This is a case where I find neither of the witnesses credible. This finding comes from the evidence from me, the historical development of this case, and most importantly, their oral evidence and demeanour in court.

33.  I am therefore not convinced that F is in the financial position he says he is in; nor do I believe that M is not working.

A.  Have there been material change of circumstances to justify a variation of the maintenance

34.  F relies on his change in financial condition and therefore argues that he is unable to pay for the maintenance. This will be further analysed below.

35.  M’s bases for her variation application for increase of J’s maintenance and her own carer allowance are that she continues to fail to find a job, J’s expenses have increased, and inflation. I will make a note here that the M’s application came half a year after the 2021 Judgment, and less than one year after the maintenance hearing in August 2021.

36.  It is accepted that a child’s expenses will increase with age, which is why child’s maintenance are always opened to be reviewed on application and evidential support. Often the Court will find that there needs to be a broad-brush assessment of the reasonableness of the claim and exercise the necessary discretion.

B.  F’s ability to pay

F’s position

37.  In brief, F says that his income has been reduced, his expenses constantly more his income, and he has to draw from capital.

38.  F says that at the time of the 2021 Judgment, he had a salary of $95,000 with allowances. According to F’s updated Form E dated 22 May 2023 (“May 2023 Form E”), he is currently employed by the Company, with monthly remuneration of $91,740, made up of a salary of $60,000, housing allowance of $21,500 and education allowance of $10,240 (which will increase with time). His total expenses stand at $102,895. Thus, there appears to be a shortfall of $11,155 (or $8,000 per his closing submission).

39.  Notably, the May 2023 Form E records that in addition to the pensions of $558,691, F has $3,466,470 worth of assets including bank savings, investments, and shareholding in private companies. There are declared liabilities of unpaid debts of $3,380,434, including a loan from his father of EUR249,252 and outstanding student loan and legal fees. Thus, his net assets are $644,727.

40.  In the May 2023 Form E, F avers that he has a reduced financial ability to pay, and says:

1)  The value of his assets is steadily declining because he has to liquidate his assets to pay for his expenses;

2)  Some stocks in his investment portfolio are being suspended from trading due to the companies’ financial issues;

3)  He already suffered a significant loss because of the collapse of various digital asset trading platforms; and

4)  The Company will continue to be tight financially, the housing allowance and education allowance were suspended during May to November 2022, and may be suspended again.

41.  In his oral evidence, F states that in order to make some more income, he is now setting up a consultancy business but as at the date of this hearing, it is not yet in operation and therefore generates no income. He further states that he cannot re-negotiate with his business partners in the Company for a higher income now so he has to shuffle his assets to meet the expenses.

42.  F’s current monthly expenses are as follows:

General expenses	$37,500.00
Personal expenses	$44,905.00*
J’s expenses	$20,490.00
Total:	$102,895.00

            *Including the maintenance order of $23,000

43.  F avers that in order to reduce his expenses to mitigate the shortfall, he has sold his car, reduced his rental expenses from $23,000 to $19,000, cancelled J’s summer camp and ECA, and reduced his health insurance from $4,000 to $2,000.

44.  F states that his expenses are modest compared to those of M, and that there is minimal room for further reduction. He further states that liquidating his assets to subsidise his expenses is not sustainable.

M’s contention

45.  However, M disagreed with F and contends that:

1)  He is not in the deficit he claims, on this she relies on his bank balances;

2)  He has more income than he declares, on this she relies on the exhibits R1- R3 charts, which will be further elaborated below;

3)  He is in breach of his duty of disclosure;

4)  F spent HK$350,000 to retain lawyers in Hong Kong and Taiwan for matters in relation to establish his paternity of J; and a further HK$90,000 to retain a law firm in Hong Kong for matters in relation to the current case;

5)  F hired an expensive private detective to follow her movement;

6)  F hires a body trainer, has private piano lessons, and keeps his Discovery Bay Recreation Club membership;

7)  M alleges that F travels extensively. He stayed at five-star hotels for staycations with J and his girlfriend, and at five-star hotels during his frequent overseas trips and quarantine hotels during covid.

46.  In his oral evidence, F concedes that from April to December 2022, he was on business trips to Thailand, Vietnam and Indonesia to look for opportunities for the Company, despite the Company was experiencing a cash flow shortage at the time. F says the Company reimbursed him for the expenses incurred.

Exhibits R1 – R3

47.  During F’s cross-examination, M adduced three charts attempting to analyse the transactions in his bank statements. As these charts prepared by M was lacking in cross references, she was given a chance to produce a version with proper cross references to the court after the hearing. These came in 4 August 2023, whereupon F was given a chance to file a supplemental submission to respond to M’s revised exhibits, this was dated 11 August 2023.

48.  R1 deals with F’s financials from July 2021 to April 2022, R2 deals with F’s financials from May 2022 to April 2023, R3 is a table showing F’s income and expenses with comments, where M tries to show that F has more income than declared and more than sufficient to cover his declared expenses and her request for increase maintenance.

49.  M says according to her calculation, F’s average monthly income was $549,110 in 2021 to 2022, and $249,626 in 2022 to 2023.

Non-Disclosure

50.  M allegation of non-disclosure includes the following:

a.  No full statements of F’s ABN AMRO account (only unclear random screenshots of bank transfer)

b.  No full statements on his Cryptocurrencies (only some trade records)

c.  Incomplete information on the Company

d.  Incomplete information on S&B HK (his employing entity)

e.  Incomplete information on JJ Limited Cayman, Seychelles, BVI

51.  In particular, M says F owns a 100% of company (JJ Limited) which he uses as a holding company for 50.6% in the Company; which in turns hold other companies in Asia including Singapore, Vietnam, Indonesia and Thailand. M says some of these Asian businesses should produce franchise fee which the F has not disclosed. She also says there were no details of these underlying companies as H has not produced any information or account.

52.  With regard to the companies, M claims that she has conducted a revenue calculation based on F’s statement that the Company hold stakes in the Asian companies, and came to the conclusion that F should have an income of $15,230,000 based on his 50.6% ownership. She then submits valuation of some of the underlying companies based on a website for “valuing e-commerce business” and concludes that the F is worth between $43-64 Million. She also gives estimates of the revenue of an underlying Singapore company based on the HK company’s revenue.

Analysis

53.  M’s analysis of the numbers and production of the detailed charts are commendable, but her concepts are wrong and misconceived.

54.  F says the charts looks different to the ones produced in Court. On a quick perusal, some numbers are different, but the major additions were the cross references. These charts appear to be an attempt at some forensic accounting of the F’s bank statements. F comments that some of these are incorrect, which I agree:

a.  The analysis of income, including allowances from the Company more or less align with that declared by the H.

b.  M focuses on a $290,000 in cash deposit in 2021 calling it extra income. This was explained by F under cross examination to be emergency money he took out during covid, his counsel submits that this was withdrawn in May 2021, and replaced in September. It was not extra income.

c.  M has a column called “investments income”, this totals $3,506,689 in R1 and $1,062,016 in R2. Admittedly some of these looks like dividends from his investments and F says that there were payments from Paypal which he explains was money transaction from his crypto platforms. However, these numbers are also mixed with proceeds of sale from his investments, which are capital sums, not income; nor is it clear whether he profited or suffered loss from these transactions. At best, these may have been amounts available to him during the relevant period, but it could not be treated as an ongoing regular amount available to F.

d.  M’s charts show columns named “Investment money out”, and “Cash transferred out of HSBC”. These come to $1,108,613 and $1,710,349 in R1; and $183,132 and $894,814 in R2 respectively. M says these transfer out are not seen corresponding elsewhere in F’s bank statements. F’s retort is that withdrawals are not income. However, F says that at best M is asking for an inference to be drawn that the withdrawals are stashed elsewhere but “there is no evidential basis for such inference and [M] has not identified a single unexplained account or recipient or beneficiary.” F says that some of these withdrawals are for equity purchases and he has suffered losses.

e.  R3 is also wrong. This includes wrongly treating an allowance payment as bonus, counting reimbursement as income, and omitting rental payments and school payment from his expenses.

55.  Her charts cannot be relied on to support her case that F has substantial and/or regular income in the amount she says he has.

56.  Furthermore, with regard to the companies with which F has connection, he did produce audited reports for JJ Limited, the Company, and S & B Limited; on which M relies to do her assessment of revenue and value. But her valuation of companies, and assessment of companies’ revenues have no sound basis; it was not done by a proper professional and gave no chance for H’s counsel to challenge. Her assessments are therefore not accepted. F also denied the existence of certain companies and also says that M has mistook a brand name for a company name. In this regard, I am of the view that M has not come up to proof in terms of these companies’ revenue, valuation and profits, and how these translate into any additional income for F.

57.  That said, R1 and R2 do show that he trades extensively; and it also shows that he has other financial resources in the form of trading profits and investments income which he has failed to disclose. Looking at the two Forms Es produced at this hearing, he has only declared his work income in his two Form Es. As for “other income” in section 3.6, in his August 2022 Form E, he says that dividend and small interests’ payments will not be counted as income as he has reinvested them but made losses in his investments; and in the May 2023 Form E, he puts “nil”.

58.  I have also perused the F’s bank statements and related exhibits and will make the following observations:

1)  Regarding his statement that he has transferred his assets in his ABN AMRO account from Denmark to HK, it is not clear when this happened and whether he transferred stocks or investments therein were disposed and cash remitted over, no paper trail was provided. There were a number of transfers labelled as Paypal entries which he says were his cryptocurrency transactions.

2)  M’s criticisms of his ABN AMRO account is not incorrect, F produced a number of transaction record which shows his trading in this account; limited statements produced for 2023 shows there were amounts credited into his account, part of which appears to be dividend payment from his investment.

3)  There are also a number of foreign exchange transactions within his bank statements, and at times amounts in foreign currency were withdrawn.

4)  There were dividend payments into his current account in the bank statements.

59.  I am not of the view that F has come up to proof that he is constantly making losses in his investments, and that he has no investment income from his stock portfolio. I also accept M’s argument that money has left his bank account on a number of occasions which were unexplained.

60.  In the light of the above, on a balance of probabilities and a broad-brush basis, I shall draw adverse inferences against F, in that he has more financial resources than he claims.

61.  I will add here that, despite the fact that M is acting in person and has displayed a commendable ability to present her case with a lot of details; she appears, however, to be unaware that documents attached to her list of issues, her submissions, or her frequent correspondences to the Court are not evidence, and will not be treated as such unless contain in her affidavits and exhibits filed with the Court.

F’s payment of maintenance

62.  It is of note that M in her correspondences, notes and submissions often questions F’s ability to pay on time when maintenance was due and there was money in his account. This is not incorrect. It is also worth mentioning here this has resulted in continuous and almost monthly applications by M for enforcement proceedings.

63.  One really needs to look at the way F made payment to M to understand why M took out numerous praecipes for enforcement. The following came from one of F’s affidavit exhibit where he extracts numbers from M’s bank statements to calculate money going into her account between December 2021 and January 2023; and what I found in some subsequent bank statements.

Month	Day	Amount transferred to M by F ($)
Dec 2021	1	13,000
	1	5,000
	1	5,000
Jan 2022	10	23,000
Feb	7	22,500
Mar	14	23,000
April	11	500
	12	23,000
May		Nil
Jun	6	3,000
	8	10,000
	21	13,000
	27	5,000
	27	5,000
Jul	28	5,000
	28	5,000
	30	13,000
Aug	1	5,000
	1	5,000
	3	13,000
	6	5,000
Sep		Nil
Oct	17	5,000
	17	13,000
	25	5,000
	25	5,000
Nov	1	13,000
	7	13,000
Dec	2	13,000
	13	5,000
	13	5,000
Jan 2023	16	13,000
Feb	15	13,000
	15	5,000
	15	5,000
March	7	5,000
	7	5,000
	7	5,000
	7	5,000
	13	10,000
	13	10,000
Apr	1	10,000
	4	13,000
	4	13,000

64.  Pursuant to the November 2021 Judgment, payment was ordered to be made on the 1^st of each month. The pattern is obvious in that F’s payment is almost always delayed, so M can never get the maintenance support she needs for J at the time that is expected in compliance with the November 2021 Court order. F has on his own accord decided that he could pay as and when and how much he pleases, somehow payments would catch up but never at the court ordered time.

65.  This is nothing short of financial harassment, regardless of what F thinks of M’s possibility of employment, or that she should be making some sort of income, this is not the way to comply with a court order. This explains also why the Court receives almost monthly application for praecipe from M, resulting in wastage of time and costs on M’s part and of the Court. Looking at F’s bank statements, it is not like he does not know how to set up standing instruction for payments. Furthermore, at all times, he has a healthy balance in his savings account and in his investment portfolio, it is beyond reason that he has continuous failed to make his maintenance payment on the 1^st of each month. So clearly, this is deliberate conduct on his part; and could have adversely impacted J.

C.  M’s employment, earning capacity and financial status

M’s financial position

66.  According to M’s Form E dated 22 May 2023, she is currently unemployed and therefore has no income.

67.  Notably, the said Form E records that in addition to the pension of $36,997, M has $2,608,484 worth of assets including bank savings and investments of $252,538; and a property in Shanghai which she valued at $2,800,000 and subject to a mortgage of $447,437 (as at May 2023); and for which she pays RMB5,387 monthly for mortgage and management fees. There are declared liabilities including outstanding credit card payments of $9,523, and a loan from a friend of $1,130,000. Thus, she has net assets of $1,505,958.

68.  M relies on the 2021 Judgment to say that the Shanghai property was difficult to sell. F says this is no longer the case, as the covid crisis in China is now over, the Shanghai property is an asset which puts M in a financially stronger position than F. F contends that the value of the Shanghai property is worth more than $2.8M; relying on a realtor’s website, he says that the property should be between $5.8 - $9.2M, and hence an average of $7.5M. Furthermore, F says this property could rent for as high as RMB29,000 per month, which is much more than the RMB7,500 that M’s tenant is now paying.

Employment

69.  As mentioned above, M claims she is unable to find employment since December 2020 despite her attempts. She says this is due to her inability to speak Cantonese.

70.  F alleges that M’s employment visa was renewed on 18 August 2021 and was permitted to remain in Hong Kong until 16 November 2024. In her oral evidence, M admits that she has signed an employment contract with a company owned by her friend S. She says that she cannot provide the employment contract because S has not given a copy to her.

71.  F further alleges that M receives a monthly salary of approximately $18,000 for her employment with S or her company. F tracked payment into W’s bank account over the period from September 2021 and January 2023, and points out that she deposited cash averaging $18,000 each month.

72.  In her oral evidence, M maintains that the deposits at issue were not salary payments but loans from S. However, she cannot provide any signed loan agreement nor recall how she signed it.

M’s expenses

73.  Per her May 2023 Form E, she claims her monthly expenses to be a $72,590. F contends that her net position in her HSBC statements from August 2021 to January 2023 shows that she did not need to dip into her savings and has maintained a steady $230,000 across the period. She has credit card debts, usually under $10,000 which was paid off every month.

74.  F has also tracked her expenses and says she spends an average of $31,000 per month; he says that M has failed to explain the discrepancy between this amount from her claimed expenses when asked under cross examination.

Analysis

75.  M admits that she has an employment visa, this was since August 2021, and before the 2021 Judgment. This issue did not come up in the 2021 Judgment. Looking at the date of the hearing of 3 August 2021, against the date of issuance of M’s employment visa on 18 August 2021, it is not clear whether the topic of M having applied for an employment visa around that time was explored on not. Regardless, as the application for the employment visa must be supported by an employment contract, F says that M has misled the Court in her letters in October 2021 wherein she confirmed that she was still unemployed.

76.  M only disclosed tax assessment for 2020-2021, but did not disclose her tax assessments from 2021-2023, but instead chose to provide a letter from the Inland Revenue Department to try to prove that she does not have a job and have no income. However, the letter dated 9 February 2023 only shows that she does not have any unpaid tax. This could not be relied on to prove that she has no job and no income.

77.  F’s closing submission also reminds me that M was given two opportunities to deny that she was employed. On both occasions, I agree that her answers were evasive, she in fact never said that she is not working.

78.  I do not find it believable when M says she signed an employment contract but did not have a copy. Nor do I accept M’s version of event that despite the employment visa and the alleged existence of an employment contract, that she is not working.

79.  According to F’s analysis, M has at least an average income of $18,000 cash deposit, I do not accept that this is loan from S. There is no proof as to the existence of any alleged loan from S. Furthermore, it is incredulous that her loan of $700,000 in her November 2022 affidavit was increased to $1.13M by May 2023 (per M’s May 2023 Form E). This represents a further loan of $430,000 over 7 months, averaging $61,428 per month. There does not appear to be in evidence how this amount of loan went into the M’s bank balances over this 7 months’ period.

80.  From all the evidence before me, I make a finding that M is currently working and is making at least $18,000 per month.

81.  M has confirmed that she has completed a master’s degree in Global Digital Marketing, and under cross examination acknowledged that it will increase her earning capacity. Given her previous income when employed by the Company, and this additional qualification, I will adopt HHJ Melloy’s finding in the 2021 Judgment that M has an earning capacity of $50,000.

82.  With regard to the Shanghai property, I accept F’s argument that M is under-utilizing this asset. F argues that the rental income should be higher; if I were to adopt the F’s proposal of a more average income of RMB14,500 and taking into account her claim to pay mortgage and management fees, she could at least be netting RMB9,000 per month. This was not contested by M, and I do not accept her reliance on the 2021 Judgment position which was based on the covid situation in Shanghai back in 2021. This clearly implies that M can make more income from this property; and if need be, she can sell this property to improve her financial condition.

J’s Needs

83.  Given J is a pre-teenager and her needs will gradually increase during adolescence and after, I consider it fair and reasonable to assume that J’s expenses will only go up over time.

84.  M’s current monthly expenses are as follows:

General expenses	$34,296.00
Personal expenses	$27,794.73
J’s expenses	$10,500.00
Total:	$72,590.73

85.  The following table shows the M’s position on two occasions and the Court’s assessment:

	Per M’s Form E  22 May 2023	Per M’s Opening submission 16 June 2023	Court’s assessment
General Expenses
Rent	14,000	14,000	14,000
Utilities	1,300	1,300	1,300
Food	10,500	1.	6,000
Household expenses	2,000	2,000	2,000
Domestic helper	6,196	6,196
Others	300		300
Subtotal	34,296	23,496	23,600
J’s Expenses
School fees	Paid by F	Paid by F	F’s undertaking
Food		8,000
Extra tuition	600	600	600
School books and stationery	300	300	300
Transport to school	500	500	400
Medical / Dental		Paid by F	F’s undertaking
ECA	1000	1,000	1,000
Entertainment	3,200	3,200	1,000
Holidays	(Covid)	Lump sum 23,004	1,500
Clothings/shoes	4,000	4,000	1,000
Lunch / pocket money	250	250	250
Other transport	350	350	350
Uniform	300	300	300
Domestic helper			6,200
Subtotal	10,500	18,500	12,900

86.  Based on the numbers from M’s opening submission, she asks for $30,248 for J, being ½ of the general expenses of $23,496, that is $11,748 + $18,500.

87.  In assessing the needs for J, I have taken into account the following factors:

a.  I have moved the costs of the domestic helper from general expenses to J’s expenses on the basis that M is unlikely to need this expense item but for J; but the domestic helper would enable her to attend full time employment.

b.  M’s numbers for food, clothes and entertainment are excessive, and have been reduced on a broad-brush basis.

c.  I have formed the view that F’s financial resource is more than what he claims, and will draw the adverse inference on his ability to pay; I have concluded that M’s earning capacity is what I adopted from the 2021 Judgment. I therefore will allocate a 2/3 - 1/3 share of J’s expenses between the parties.

d.  In this assessment, I am mindful that this is a shared care arrangement. Although M did say that F would travel, and J ends up staying with her more than half the time. I have also taken into account that per F’s updated Form E, he has also declared the expenses that he is paying for J.

88.  J’s share of general expenses shall be 50% of $23,600, hence $12,000 (rounded up), the proportion to be shared between the parents are: F is to pay $8,000 and M to pay $4,000.

89.  As for J’s expenses, which by my assessment is $12,900; I will apply the same proportion above: F is to pay $8,600 and M to pay $4,300.

90.  On this calculation, F is to pay for $16,600 further to his undertakings. In assessing this amount, I am mindful that the 2021 Judgment has expected F to pay $13,000 for J after M has found employment. This upward adjustment is not an unreasonable amount in the light of J’s increasing needs.

91.  In reviewing this against the respective parent’s ability to pay. I look at F’s declared expenses (paragraph 42 herein refers), from which I deduct his rent, school fees and medical insurance for J which are items paid for by the Company, and the interim maintenance order of $23,000. This is without challenging the reasonableness of his numbers.

$102,895 – $21,500 (rent) – $10,240 (school fees) – $1,000 (medical insurance) - $23,000 (interim maintenance order) = $47,155

Adding the above assessed amount to this: $47,155 + $16,600 = $63,755. Taking into regard F’s declared income of $60,000, and even without my assessment of his financial resources, he can pay this amount with some economizing on his part. I am of the view that F has the ability to pay this amount base on his income and the adverse inference I have drawn.

92.  As for M, I have adopted the earning capacity of $50,000. Without challenging the reasonableness of her personal expenses, M pays as follows:

General expenses $12,000 (her share) + $4,000 for J = $16,000

Personal expenses = $27,794 (per her May 2023 Form E)

Her share of J’s expenses = $4,300

The total rounds up to $48,094 and is an amount M can afford based on my assessment of her earning capacity, also taking into regard better utilization of her Shanghai property.

M’s Carer allowance

93.  M asks for an increase from $5,000 to $9,500, and to increase 10% annually for inflation. She says that this carer allowance will only stop once her salary is above $48,001.

94.  I am of the view that M is no longer entitled to a carer allowance. J is now 10 years old, M has a full time domestic helper. I have made a finding that she is in employment, and probably has been for some time, which appears to be working for her in this shared care scenario. I have also made a finding that she has failed to maximize the utility of the Shanghai property, this to be in the form of more net income or a capital asset which she can liquidate and bring to Hong Kong. By all accounts, the carer allowance shall cease.

Backdating

95.  In F’s closing submission, he argues that there should be backdating to 19 February 2022, which is three months after the 2021 Judgment, claiming that this is the automatic expiration under section 13(3) of the GMO. HHJ Melloy in the 2021 Judgment, made reference to the judgment of LCTP v TKKP FCMP 173 of 2009 with regard to the duration of interim orders under the GMO, she then made it clear as follows:

“Although this order is for a three month period, I will nevertheless expect this sum to be paid pending further order of the court.”

96.  F has appeared on a number of occasions in court before me, and been repeatedly told that the maintenance order made in the 2021 continues to run until further Order. I therefore do not accept his counsel’s backdating argument on the basis of a statutory limitation of the interim order.

97.  He also said that this is in “just recognition of the fact that M has been enjoying her increased financial resources since at least then, has been working since then, lied or misrepresented her circumstance to the Court, and … failed to comply with the direction to inform the court of her employment.” This argument seems to suggest that backdating is for punitive reasons, which cannot be correct. I do not accept these are the bases for backdating maintenance payment either.

98.  Although I have found that M is actually working, and likely to have at least an average of $18,000 income per month (albeit fluctuating); there is no evidence before me that she is currently making more than that.

99.  However, It is important for M to be in funds in J’s best interest. I am of the view that F should contribute the previously ordered amount until May 2024. Hence the previous Order made of $18,000 for J should continue until May 2024.

100.  The new Order for J’s maintenance shall run from June 2024.

101.  As for the carer allowance, on the basis that M’s income should be applied towards her own expenses, and taking into account that it appears to be fluctuating payment, I shall allow backdating to the date of hearing in June 2023, hence the carer allowance of $5,000 is to cease from July 2023. It is therefore expected that if payments have been made for carer allowance to M, that adjustments will have to be made.

102.  It is imperative that M should take the necessary actions to ensure that her expenses for herself and her share of J’s expenses shall be covered going forward.

103.  The Order to be made herein shall be treated as a maintenance order despite both parties applied for variation of interim maintenance in their respective Summons. This matter has been fully argued and considered, and it is intended that the order to be made shall be a longer-term maintenance order for the child, and not one of an interim nature.

Costs

104.  Neither party has given me a proposal that is close to my final Order. F started off his Summons with his application to cease all payments to M other than his undertaking, and only on his closing submission proposed to pay $10,500 in addition to his undertakings. M asks for $30,248 in addition to F’s undertakings.

105.  I have decided to make no Order as to Costs.

106.  In making this Order, I have taken into account F’s conduct with regard to his maintenance payments; and M’s conduct with regard to her employment status.

Order

107.  I shall make the following Orders upon the continual undertaking by F to pay for J’s school fees and medical insurance.

a.  F do pay $16,600 maintenance each month to M for J, the first payment to commence on 1 June 2024, and thereafter to be payable on the 1^st of each succeeding month until further Order.

b.  The carer allowance to cease with effect from July 2023.

c.  There be no Order as to Costs including all costs reserved, this to be a costs order nisi to be made absolute within 14 days hereof.