TSS v. TPM

FCMC 791/2016

[2020] HKFC 147

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 791 OF 2016

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J U D G M E N T

(Variation of Maintenance Order)

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1.  This is a hearing of the petitioner wife’s (hereinafter called “the wife”) application for upward variation of the order made by DDJ D Cheung (“the Judge”) on 19 April 2017 for the children’s interim maintenance (“the said Order”) against the respondent husband (hereinafter called “the husband”). 

2.  After a 2-day hearing, the Judge handed down the judgment on 19 April 2017 (“Judgment”). 

3.  Pursuant to the said Order, it was ordered that

Upon the husband undertaking to the court and to the wife to be responsible for providing medical and dental insurance for the children until further order,

(a)  the husband shall pay the wife the sum of $16,800 per month as maintenance pending suit for the son, the 1^st payment to be paid on 1 May 2017 and thereafter on or before the 1^st day of each succeeding month until further order of the court;

(b)  the husband shall pay the wife the sum of $10,600 per month as maintenance pending suit for the daughter, the 1^st payment to be paid on 1^st May 2017 and thereafter on or before the 1^st day of each succeeding month until further order of the court and the maintenance pending suit of the daughter shall be adjusted to $16,800 per month after the daughter changes her school;

(c)  all the aforesaid monthly payments will be paid on account of any sum eventually received by the wife and/or the husband when the ancillary relief is determined;

(d)  the husband shall pay over the amount receivable from the mortgagee bank to the court forthwith after the proceed of the sale of Flat H had been deducted from the amount owed to the mortgagee bank, such sum shall be held by the court as security for the maintenance pending suit of the son and the daughter until further order.

Brief background

4.  The wife is now aged 48 and the husband is now 47. The son is 19 and the daughter 15.  The son admitted to the York University in Canada in September 2019 and will start the year 2 in the coming September 2020. The daughter is studying in year 10 in a Hong Kong international school.

5.  The abbreviations used in the Judgment will be adopted in this judgment unless otherwise stated.

6.  The brief history of the case has been set in paras 5 to 18 of the Judgment and will not be repeated here.

7.  The matrimonial home was eventually sold in June 2018.  Pursuant to para (d) of the said Order, the subsequent order of the Judge dated 6 June 2017, the order and amended order of Judge CK Chan dated 23 February 2018 and 7 June 2018 respectively, the balance of the sale proceeds be paid into court and be held by the court as security for the maintenance pending suit of the son and the daughter pending the trial of ancillary relief or until further order. 

8.  After deduction of the mortgage sum etc, the net balance for the sum of $11,505,311.47 was paid into court on 10 January 2019 (“Payment-In”).

9.  The husband did not honour the undertaking to provide medical and dental insurance for the children nor make any payment to the wife in compliance with the said Order.  As a result, the wife had made several applications to the court for release of part of the Payment-In to her for discharge of the children’s expenses.  The wife has not issued any enforcement proceedings of the said Order against the husband.

10.  Pursuant to the 3 orders made by Judge AN Tse Ching on 4 March 2019, 24 May 2019 and 16 September 2019 respectively, 4 payments for $336,000, $317,400, $366,860 and $268,000 were released to the wife from the court, the detail of which are set out as follows:

i.  $336,000 being $16,800 (son’s interim maintenance) for 20 months from 1 May 2017 to 31 December 2018 (ie $16,800 X 20);

ii.  $317,400 being $10,600 (daughter’s interim maintenance before her change of school) for 3 months from 1 May 2017 to 31 July 2017 and $16,800 (daughter’s interim maintenance after her change of school) for 17 months from 1 August 2017 to 31 December 2018 (ie $10,600 X 3 + $16,800 X 17);

iii.  $366,860 being the son’s university school fees and other expenses for the period from September 2019 to August 2020;

iv.  $268,800 being $33,600 (the 2 children’s interim maintenance) for 8 months from 1 January 2019 to 31 August 2019 (ie $16,800 X 2 X 8).    

11.  The wife took out this application by way of the summons dated 13 August 2019 and another summons dated 8 June 2020 asking for variation of the said Order due to the increase of the son’s expenses in Canada and the daughter’s expenses in Hong Kong and also asking for release of part of the Payment-In from the court.

Law on variation

12.  The principles governing the application for variation can be found in AFM v VFM [2008] HKFLR 106. The Court of Appeal said:

“14.  1.   The power to vary a periodical payment order is expressly provided for by section 11(1) of the Matrimonial Proceedings and Property Ordinance (Cap. 192) (‘MPPO’) :

‘(1) Where the court has made an order to which this section applies, then, subject to the provisions of this section, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.’

     2.   How this power is to be exercised is stated in section 11(7) :

‘(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates and, where the party against whom that order was made has died, the changed circumstances resulting from his or her death.’

     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.

     6.   Almost invariably, an application to vary an earlier periodical payment order will be brought on the basis that there has been some changes in the circumstances since the original order was made, for example, continuing inflation; the increased costs in supporting a growing child and that one party may be more adversely affected than another by the increase in the costs of living : Garner v. Garner.

     7.   An increase in the wealth of the husband was a relevant factor to be taken into account : Primavera v. Primavera [1991] 1 FLR 16 and Cornick v. Cornick (No. 2)[1995] 2 FLR 490.

     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.”

Discussion

13.  The said Order was made on an interim basis. Even there is a change of circumstance as alleged by the wife, my assessment of the children’s expenses is still based on a broad brush approach.  It is noteworthy that the Judge accepted in the Judgment[1] that the children’s expenses should be equally shared by the parties and that the parties have no objection for the present purpose.

14.  The parties also agreed at the hearing that the current children’s monthly expenses to be assessed by me will be shared equally and that the amount assessed will be paid by the court out of the Payment-In as the husband claims that he is unable to pay. 

15.  The wife sets out the son’s expenses in Canada in her affirmation for the total sum of $541,600.  Putting aside the son’s university fees, his expenses claimed eg air tickets (2 trips per year), food, transport, books, pocket money etc are $281,600 per year.  However, apart from the fares of air tickets and the university fees for 2019-2020, the wife cannot produce any documentary proof for other expenses of the son in Canada. 

16.  The husband accepted that air tickets (2 trips per year) are reasonable and that he has no idea of living standard in the city of Toronto, Canada although he said that he had lived in the USA before. On the other hand, there is no evidence produced by the wife as to the general standards of living in Toronto, Canada comparing with that in Hong Kong. 

17.  The wife said that since there was no kitchen in the dormitory of the son’s university, the son has to go out for 3 meals a day.  On a broad brush approach, I accept that the fares of air tickets (2 trips per year) are $31,000 and assess the son’s other expenses in a year as follows:

i.  Food expenses are $127,750 (ie $350 a day X 365);

ii.  Transport, mobile, books[2] and stationery expenses are $12,000 (ie $1,000 X 12);

iii.  Clothing and pocket money are $36,000 (ie $3,000 X 12).

18.  Putting aside the university fees, the son’s expenses are $206,750 (ie $127,750 + $12,000 + $36,000 + $31,000) for a year or $17,230 per month on average.

19.  For the daughter’s expenses, the wife said that after the sale of the matrimonial home, she and the daughter have moved to a new apartment, monthly rental of which is $25,000. As the mortgage instalment of the matrimonial home assessed according to para 56 of the Judgment is $10,433, there is an increase in the accommodation for the sum of $14,567 in the general expenses.  On one hand, I accept such an increase but on the other hand, I think that the utilities of the new apartment shall be lower than that of the matrimonial home since the new apartment is much smaller in size than the matrimonial home.  On a broad brush approach, I will reduce it from $5,000 to $2,500.  I also reduce the food and household expenses from $10,000 to $7,000 after the son left Hong Kong in September 2019. The wife also agreed that no management fee for the new apartment is payable by her as a tenant.  Hence, the revised general expenses are $39,710 per month, breakdown of which is as follows:

i.     Rent	$25,000;
ii.     Utilities	$2,500;
iii.     Domestic helper	$4,210;
iv.     Food and household expenses	$7,000;
v.     Other expenses eg internet etc	$1,000.

20.  In para 67 of the Judgment, the Judge divided the general expenses by 3 ie the wife and the 2 children (excluding the domestic helper).  In my view, as the son has gone to Canada for study and only comes back twice a year, the revised general expenses shall be divided by 2 after 1 September 2019 on a broad brush approach. Thus, the daughter’s share of the revised general expenses is $19,855 per month (ie $39,710 / 2).

21.  The present daughter’s school fees are $166,000 a year or $13,833 a month on average.  According to para 57 of the Judgment, her school fees were assessed to be $14,060 per month.  In my view, there is a small decrease rather than increase or no significant change.

22.  The husband gave undertaking to the court and to the wife to be responsible for providing medical and dental insurance for the children under the said Order. Nonetheless, no insurance has ever been provided by the husband.  The wife said at the hearing that the university has provided the relevant insurance for the son.  Hence, the husband does not have do so.  Regarding para 14 of her written submission that “The quote attached is HK$8,000 per year per child which should be shared equally”, she clarified at the hearing that no quotation is indeed attached.  In my view, there can be different kinds of plans for medical and dental insurance for the daughter, price of which may vary greatly depending on the protection given.  I do not accept that even on a broad brush approach, the wife has proved $8,000 per year is the reasonable amount for medical and dental insurance of the daughter. 

23.  According to paras 101 to 103 of the Judgment, the daughter own expenses are assessed to be $22,859.8 (ie $33,507.5[3] - $10,647.7[4]).  As the wife has not produced any evidence alleging any other change or material change of the daughter’s expenses, I revised the total daughter’s monthly expenses to be $42,714.8 (ie $19,855 + $22,859.8) rounding up to $42,720.

24.  The wife has received 3 payments (ie $336,000, $ 317,400 and $268,800) from the court which is equivalent to the husband’s liability under the said Order up to 31 August 2019.  She further received $366,860 being the son’s university fees for 2019/2020 and other expenses pursuant to the order made by Judge AN Tse Ching on 24 May 2019.  She agreed that originally the son planned to admit to the University of Toronto but later changed to the York University, school fees including dorm fees of which is $241,472.69[5].  She said that the balance of $125,387.31 was used for the son’s other expenses eg student visa fee, air-ticket, medical report fee, buying a laptop etc.

25.  As the wife has not yet received the invoice from the son’s university for 2020/2021, I consider that the court will only release such payment to her upon her filing of an affirmation producing the relevant invoice from the university.

26.  Since the husband fails to pay the children’s maintenance from 1 September 2019 to 31 August 2020 pursuant to the said Order, the parties accepted that the wife should be allowed to receive the payment of $403,200 (ie $16,800 X 2 X 12) out of the Payment-In covering the husband’s liability under the said Order up to 31 August 2020. I will make such order.

27.  From 1 September 2020 onwards, I consider that the entire children’s expenses shall be paid out of the Payment-In, which are in fact the family assets.  I therefore order that a monthly payment of $17,230 (ie $206,750 / 12) for the son’s expenses and another monthly payment of $43,220 for the daughter’s expenses be released to the wife from the court.  The said Order against the husband can be then discharged or varied to the effect that he does not have to pay any interim maintenance of the children to the wife until further order.

28.  In the circumstances, I make an order as follows:

i.  the sum of $403,200 shall be paid out of the court to the petitioner covering the respondent’s liability under the order made by DDJ D Cheung on 19 April 2017 from 1 September 2019 up to 31 August 2020;

ii.  a monthly payment of $17,230 for the son’s interim maintenance and another monthly payment of $42,720 for the daughter’s interim maintenance be paid out of the court to the petitioner on the first day of each calendar month commencing from 1 September 2020 until further order;

iii.  a sum equivalent to the son’s university fee be paid out of the court to the petitioner once a year upon her filing of an affirmation producing the relevant invoice issued by the university in Canada;

iv.  the said Order against the respondent be discharged or varied to the effect that he does not have to pay any interim maintenance to the petitioner until further order.

29.  As to the question of costs, since both parties are unrepresented, I exercise my discretion to order that no order as to costs of this application be made.

30.  Last but not least, as the proceedings have been dragged on for more than 4 years and the pre-trial review for the ancillary relief has been fixed with various case management directions such as the filing of the forensic report to be prepared by a single joint expert regarding the companies owned by the parties, they are strongly encouraged by the court to try mediation again for the purpose of reaching a full settlement of the ancillary relief matters so as to save time and costs.