TKLK v. WKJ

FCMP 38/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT MISCELLANEOUS PROCEEDINGS NO 38 OF 2007

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  ______________________

DECISION
(Variation of Maintenance)

______________________

1. This is the Applicant’s application by way of a summons issued on 14^th September 2015 for an order that the Respondent shall increase his periodical payment for their 2 minor children born out of wedlock from the current monthly rate at HK$28,000 to HK$59,000 or more and for a lump sum of HK$356,356 for meeting the minors’ capital expenditure such as purchasing and/or replacing various household furniture, appliances and other immediate or non-recurring expenses.

2. Although he may not have stated so clearly in his affirmations filed in response, it is my understanding that the Respondent opposes the application on both the amount of increase sought and more particularly his alleged insufficient means to meet either of the Applicant’s claims, which is unsurprisingly not acceptable to the Applicant as she believes he does have ample means to do so but has deliberately failed or refused to be forthcoming as to his true financial resources. As will be apparent below, one can see why the Applicant holds that view with even a causal glance of the Respondent’s Form E and his various affirmations filed in response to the application  

Background

3. The background of the parties’ tumultuous relationship and their equally tumultuous litigation in these proceedings have already been set out in full in my earlier judgment dated 26^th August 2008, and I do not propose to recite them here, certainly not with any desire to remind the parties of that most unhappy episode of their life, other than those that are necessary or relevant to the application now before me.

4. The Applicant, now aged 39, was a secretary earning a monthly salary of HK$17,000 in an accounting firm back in 2003 when she first met and subsequently formed a relationship with the Respondent, now aged 50, who was then a married man with a family of 2 children of his own and who had a law degree but worked as a financial advisor in corporate finance and banking then earning about HK$100,000 per month.

5. In early 2006 the Respondent ended that relationship but not before the Applicant had become pregnant with the said minors who turned out to be twins, a boy and a girl, subsequently born in October of the same year. As a result the Applicant resigned from her employment to look after the minors and in February 2007 launched these proceedings against the Respondent for various financial provisions for the minors.

6. Whilst the custody of the minors was never an issue and was granted unopposed to the Applicant when the Respondent was not even interested in having any access to them, the trial of the financial claims made on their behalf turned out to be particularly bitter and acrimonious, and on 26^th August 2008 I delivered the said judgment and ordered the Respondent to pay the Applicant HK$34,000 per month for the minors’ maintenance until 1^st October 2008 when the maintenance was to be reduced to HK$28,000 per month on the basis that the Applicant would be expected to return to full-time employment upon hiring a domestic helper to look after the minors, and a lump sum of HK$290,000 to reimburse her for various expenses incurred on the minors as well as certain set-up costs for accommodating the minors.

7. That was some 8 years ago and the twins are now almost 10 and in primary school, but the monthly maintenance has remained the same at HK$28,000 although it is the Respondent’s case that he did from time to time make additional payments and at one time increased the monthly maintenance to almost HK$30,000 to keep pace with the Applicant’s rental increment, which was however later withdrawn according to the Applicant when she allegedly refused to accede to his request to abandon her present application.

8. As noted above the Applicant’s summons was issued on 14^th September 2015 together with her Form E and an narrative affidavit setting out her reasons for the application. In response the Respondent filed a short affirmation on 2^nd November 2015, just one day before the scheduled hearing of the application, in which he complained of not being properly served by the Applicant of all the relevant court documents, that he was informed by the Applicant by SMS message of the hearing only a few days ago, hence he could not make a detailed response to the application but objected to any variation, that he no longer worked for his previous employer since September 2015 and instead now worked on a free-lance basis with no fixed salary, that he had periodically paid the Applicant more than the amount under the maintenance order of no less than HK$50,000 – 70,000, and that he would not be able to attend the hearing due to other prior commitments but without further details or documentary evidence in support of any of the above allegations.

9. True to his words the Respondent did not appear at the hearing on 3^rd November 2015, and as expected the Applicant sought, and I granted as necessary, an order requiring the Respondent to attend the next hearing and more importantly to file his Form E within 14 days. The Applicant’s summons was as a result adjourned to 27^th November 2015.

10. However, when the Respondent still failed to appear on that hearing on 27^th November 2015 or to file his Form E without giving any explanation, a penal notice was therefore attached to the order to ensure his compliance of the said order, with the hearing as a result again had to be adjourned to 11^th December 2015.

11. The Respondent did make his appearance at the adjourned hearing on 11^th December 2015 but still without his Form E, of which he claimed to require more time to prepare, hence the hearing had to be adjourned, for the third time, to 28^th December 2015 to accommodate his request.   

12. The Respondent eventually filed his Form E on the day before Christmas with practically just one working day before the adjourned hearing on 28^th December 2015, in which he claimed to have a monthly income of HK$40,000 – 50,000 but a monthly expenditure of HK$75,000. As noted above his Form E contained what seems to me the barest minimum information with no supportive documents save for 4 pages of his bank account record and his salary tax demand note for 2014/15. He did however disclose to have held directorships in some 13 companies in the past 2 years, some of which are publicly listed in the Hong Kong Stock Exchange, and with 100% shareholding in 4 of these companies. 

13. Not surprisingly the Applicant asked for time to consider those documents and more important to enable her to issue a summons for further and better particulars and/or questionnaire against the Respondent in respect of his disclosure in particularly as to his interests in those companies mentioned in his Form E. Accordingly the hearing was adjourned pending the issue of the Applicant’s summons.

14. It was however not until 9^th March 2016 when the Applicant issued her summons for an order requiring the Respondent to provide salary pay slip and employment contracts of all his directorships for the past 2 years, his Tax Return Form issued by his employers for the past 2 years, complete copies of his bank statements for the past 12 months, and details of his life insurance.

15. At the hearing of the Applicant’s summons on 25^th April 2016, the Respondent again failed to appear, but he did file an equally bare affirmation on 21^st April 2016 opposing the summons by claiming to have no fixed salary or full-time income, but somehow suggested the Applicant to take out medical insurance for the minors and a life insurance for him with the minors as beneficiaries with total premium not more than HK$1,000 – 1,500 per month.

16. This affirmation of the Respondent was of course unacceptable to the Applicant, and as I found that the information and documents sought under the summons as both reasonable and necessary, and that I was unable to find any valid ground of opposition in the Respondent’s affirmation, I therefore allowed the Applicant’s summons and ordered the Respondent to provide the documents as sought within 14 days.

17. However, immediately after that hearing the Applicant issued another discovery summons on 26^th April 2016 returnable on 23^rd May 2016 for an order requiring the Respondent to provide his salary pay slips specifically of a company known as VMS Securities Ltd from September 2015 onward as well as his employment contract with that company. 

18. On 10^th May 2016 the Respondent filed a 2-pages affirmation purportedly to comply with the said order, in which he again claimed to have no salary slips or employment contracts for any of his directorships, for which he asserted that payments would be made by the companies into his bank account, with copies of some of the statements thereof attached as exhibit for a period of 5 months from December 2015 to April 2016. He also added that he has now divorced his wife but as he no longer has any fixed salary, it has been agreed between them that he would pay his ex-wife maintenance from time to time rather than on a fixed date, although he did not refer to any amount. Perhaps also purportedly to comply with the said order, he revealed to have taken out a life insurance with Sun Life Insurance for HK$2 million in favour of his former wife and children as beneficiaries.

19. At the returned hearing of the Applicant’s second discovery summons on 23^rd May 2015, the Respondent again failed to appear without any explanation, and apparently not willing to put up with any further delay to her variation application, the Applicant decided to leave the outstanding matter to cross-examination of the Respondent at the trial, which I allowed to be set down for 2 days to start on 6^th September 2016, with an order directing both parties to attend. 

20. On 5^th September 2016, just one day before the scheduled trial, the Respondent filed yet another short 2–pages affirmation to state that he had just received his director’s fee as an independent non-executive director for a company known as PA Securities Group (Holdings) Ltd in the amount of HK$95,000 for the period of January to June 2016, and that he had transferred HK$20,000 into the Applicant’s bank account for the “medical and other expenses” of the minors, and concluded by simply asking that the hearing on 6^th September 2016 be vacated.

21. As expected, the Respondent failed to appear in court on 6^th September 2016, but even if one were to ignore the fact that realistically his affirmation would not have reached the Applicant in time for her to consider his request to vacate the trial on 6^th September 2016, given the amount of the sums offered by the Respondent in that affirmation, it seems quite clear and obvious to all that they would not have been acceptable to the Applicant, but in the absence of the Respondent and hence could not be cross-examined, the Applicant asked for the trial to be postponed for 3 weeks in order that she could file further affidavit to provide documentary evidence as to the Respondent’s true financial resources, to which I allowed as inevitable in the circumstances and therefore postponed the trial to 28^th September 2016.

22. The Applicant filed her affidavit on 13^th September 2016 exhibiting, inter alia, certain information and materials which according to her were public company documents in relation to the Respondent’s disclosed directorships. On 19^th September 2016 the Respondent responded with an affirmation of his claiming that the Applicant’s application was unreasonable and unfounded, repeating that he had no full-time income and that he would not be in Hong Kong from 26^th September to 6^th October 2016 but without giving any further details, he asked that the hearing on 28^th September 2016 be vacated.

23. The Respondent’s proposal to vacate the hearing was of course not acceptable to the Applicant who believed that it was yet another attempt of his to delay her application. Given the fact that her application had been dragged on for almost one year due mainly, though not entirely, to various defaults on the part of the Respondent as to disclosure, and with the welfare and interests of the minors in mind and of paramount consideration, I decided that there should not be further delay to the trial, and that even if the Respondent may indeed have valid reason for not being able to attend the hearing on 28^th September 2016 and may have to be afforded another opportunity to make out his case and/or to challenge the Applicant’s claims at a later date, the hearing should still go ahead as scheduled so that at least some interim order or measure, if necessary, be put in place to meet what the Applicant claims to be the more urgent needs and expenses of the minors.

24. Accordingly the trial went ahead on 28^th September 2016 in the absence of the Respondent during which the Applicant gave evidence in support of her claims as well as what she believed to be the Respondent’s financial means on the information and documents before the court.    

The Applicant’s Case

25. Essentially the case of the Applicant is that the anticipation of her being able to return to full-time employment upon hiring of a foreign domestic helper to look after the minors while she works did not materialise due to the fact that financially she was not qualified under the requirements of the Immigration Department to hire a foreign domestic helper without the Respondent’s assistance or sponsorship, hence she claimed to have carried out only the occasional odd part-time jobs with little income while the minors were at school, and that in view of inflations including the inevitable rental increments of her rented apartment every two years and the minors’ increased needs and expenses over the intervening years especially private tuitions and extra-curricular activities which were not necessary when they were just infants in 2008, she believes it is time for the court to review their current needs and expenses so as to properly adjust their maintenance to a more reasonable and realistic level, and having regard to the current much improved financial circumstances of the Respondent since 2008, whom she now believes to be a director of several major companies with much higher income than before.

The Respondent’s Case

26. As noted above the Respondent’s case is never clear from his various affirmations and of course was not present at the trial to confirm, but as I can see from those affirmations, whilst he has labelled the Applicant’s claims as unreasonable, he has never been specific as to any of her many items of expenses of the minors, and it seems to me essentially his case is that with his current financial situation he simply cannot afford to meet those claims.   

27. Before I am to proceed to consider the evidence of the parties’ respective case, given the fact that neither of them is legally represented, it would be relevant for me to first set out the law and principles applicable to the application now before me.  

Applicable Principles

28. The powers of the court to make orders for a parent to make various financial provisions for a minor and to vary such orders are set out in Section 10(2) of Guardianship of Minors Ordinance, Cap. 13 (“GMO”) as follows:

“(2) The court may as regard 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 instalments) 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.”   

29. Section 10(4) of the Ordinance also empowers the court to vary some of the orders made under Section 10(2) above as follows:

“(4) 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 the 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).”

30. Accordingly the Applicant’s present application for increase of the monthly maintenance would come under Section 10(4), whilst her claim for a lump sum to meet the immediate and non-recurring needs of the minors would be under Section 10(2)(a) of the Ordinance.

31. Of the latter claim and the court’s power to deal with it under the relevant subsection, it would be useful to remind myself of what Lam VP said in the Court of Appeal in IDC v SSA, CACV 91 of 2013 at §20 of his judgment:

“From the examples given in the legislative materials (expenses for medical treatment, school uniform and equipment), it could not have been the legislative intent that this power can only be exercised once as in the case of lump sum award in favour of a spouse under MPPO. A child may need to have non-recurring medical treatment on more than one occasion. Having regard to the statutory context, we are also of the view that the power under Section 10(2)(a) can be exercised more than once. First, there is no explicit wording in the statutory provision which limits the power to be exercised on one occasion only. Second, the power is to cater for the needs of a child which may span over a long period of time. The concept of clean break as between a husband and wife which underlies the lump sum award under the MPPO in such context has no application to the relationship between a parent and a child. Third, the sub-paragraph refers to “immediate need”. Thus, in each application, the court can only make a lump sum award for needs within the immediate future. In the case of a child of tender age (like Z in the present case who is only 5 years old), there must be non-recurring needs several years down the road which cannot be covered by a lump sum award made today. We cannot see any sound policy reason for denying a second or a third application being made some time in the future with regard to such future non-recurring needs when they become immediate.”

32. It is therefore with these principles in mind that I shall now proceed to consider the application, starting with the Applicant’s financial situation.

Applicant’s Financial Situation

33. As noted above, the Applicant claims to have not been able to return to full-time employment after the trial in 2008 as anticipated in my said judgment, as she was not financially qualified under the Immigration Department’s regulations or requirements to hire a foreign domestic helper to look after the minors while she works, hence she claims to have worked on part-time jobs only when the minors were at school and could therefore earn limited income, such as her last job at Caritas Local Service up to June 2014 at HK$5,000 per month, but which she has since resigned when she was unable to accede to the employer’s request to change to full-time employment at regular hours which she said would prevent her from taking care of the minors after they get off school in the afternoon. Hence she claims to have no jobs or income since 2014.

34. Given the fact that the minors were then less than 8 years old and are now almost 10 but still not old enough to take care of themselves in the absence of any adult and the Applicant’s inability to formally employ a domestic helper to look after them, I accept her explanation that until they are in secondary school and old enough to dispense with full-time adult supervision, it is simply not feasible or practical to expect her to be able to return to full-time employment until perhaps 4 – 5 years later, never mind about her future jobs prospect given her limited earning capacity and would by then be out of the job market for well over 10 years.

35. Whilst it seems that the Respondent does not take any issue over any other resources which the Applicant may have, of which she disclosed none in her Form E other than a Hang Seng Bank account into which the Respondent pays the monthly maintenance for the minors, it is noted that she has not produced, as required by the Form E, any copies of her bank statements, for which she claimed to have none as she would normally operate that account only with a ATM card but that she would try to obtain its statements for the past 12 months from the bank and to produce them in due course, and that in any event she claims to have almost always exhausted all the maintenance from the Respondent at the end of every month and hence there would not be any savings to show for in those statements. I mentioned this here because it is also an issue over the Respondent’s disclosure of his bank statements of which the Applicant believes to be much more serious and significant as far as the true financial position of his is concerned.

Needs & Expenses of the Minors

36. As for the monthly expenditure of the minors, rather than following the format of Part 4 in the Form E, the Applicant set out the various items in her own way as Exhibit 1 to her Form E filed on 14^th September 2015, and which she updated one year later in her affidavit filed on 13^th September 2016, of which I propose to summarise by following the much more familiar Form E format and in broad brush as follows:

General Household:	September 2015	September 2016
Rent	HK$17,000	HK$19,700
Utilities	HK$ 2,600	HK$ 2,600
Food	HK$8,370	HK$8,370
Sub-total:	HK$27,970	HK$30,670

Minors

Son SCJ

Private tuitions & activities	HK$ 7,060	HK$10,260
School books & stationary	HK$ 500	HK$ 500
School bus & transportation	HK$ 700	HK$2,900
Clothing & shoes	HK$1,400	HK$1,400
Medical/dental	HK$ 400	HK$ 400
Holidays	HK$1,700	HK$1,700
Sub-total:	HK$11,760	HK$17,160

Daughter FNJ

Private tuitions & activities	HK$7,620	HK$11,670
School books & stationary	HK$ 500	HK$ 500
School bus & transportation	HK$1,090	HK$1,650
Clothing & shoes	HK$1,575	HK$1,575
Medical/dental	HK$ 400	HK$ 550
Holidays	HK$1,250	HK$1,250
Sub-total:	HK$12,435	HK$17,195
Total:	HK$52,165	HK$65,025

37. In both her Form E and her latest affidavit, the Applicant has also claimed for various other items which I have not included in the above summary for the present exercise, as either because they are regarded as future expenses not yet materialised or not urgent, such as provisions for insurance policies or hiring of part-time helper which should more appropriately be dealt with at a later date when the Respondent would be able to participate.

38. From the summary it is clear, as far as the Applicant is concerned, that firstly the average monthly expenses for the minors have gone up quite significantly from HK$34,000 as I found in 2008 to HK$52,000 in 2015, an increase by HK$18,000 over the intervening 7 years which may well be expected when it comes to the needs of 2 fast growing children, but just one year later there was another substantial increase to HK$65,000 in 2016, for which the Applicant would no doubt have to justify with more elaboration and supporting documents, especially when such alleged increases came only 2 weeks before the re-scheduled trial, which may not have given the Respondent sufficient time to consider and/or to challenge them.

39. There are also items of expenses which seem to me questionable as to their necessity, such as for psychological counselling at HK$1,640 per month for both minors allegedly for some emotional problems exhibited by the son at school since about 2011 partly due to things that the Respondent is said to have said or done in his social media activities as alleged in the Applicant’s 1^st affidavit, when there is no documentary evidence at all in support, such as a report or recommendation from school teachers, social worker or psychologist, or why is such counselling also necessary for the daughter when she has not exhibited such problems.

40. I should also note that the general household expenses such as rent and utilities also included the Applicant’s own share or portion which cannot form part of her present claim against the Respondent under the Ordinance. However, given the fact that she has been prevented from returning to work to support herself for the reason already referred to above, and since she has not made any claim for carer’s allowance for herself as a result, to which she would certainly be entitled, it would in my view be both fair and practical in the circumstances and for the present purpose to allow the entire household expenses to be so included in her application, at least when the Respondent has never raised any issue over this matter. In the premises and by using a broad brush, I find a round sum of HK$50,000 per month to be the reasonable expenses of the minors which need to be met or addressed at this stage without any further delay.   

41. As noted above, in addition to her request for substantial increase to the current periodical payment for the minors, the Applicant also seeks a lump sum from the Respondent to meet the immediate and non-recurring needs of the minors, mainly for purchasing or replacing furniture or household appliances for the use or benefits of the minors totalling about HK$354,000 with detailed breakdowns in both her Form E of 2015 and her latest affidavit of 13^th September 2016.

42. There is however an item in this lump sum claim which the Applicant has in fact already included in her application for increase to the periodical payments, which is for 12 months of rental deposit totalling HK$234,000 which in fact made up the bulk of the lump sum sought, but which seems to me therefore double-counting in her claims. In any event, while the Respondent has never in any of his affirmations properly addressed such claims of the Applicant, it is plain that his case is that he is financially incapable of meeting them either by way of monthly payment or by a lump sum, which thus bring me to the next issue: what exactly are his current financial means and resources?   

Respondent’s Financial Situation

43. As noted above the Respondent now claims to be a free-lance corporate finance adviser earning much less than before at only HK$40,000 - 50,000 per month, but I can say right away that his disclosure of his financial situation has been far from satisfactory, and that in many aspects as evidenced by his very sketchy Form E and unhelpful affirmations, which can simply be described as woefully inadequate and defective, while his attitude towards the Applicant’s claims and the whole legal process in particularly as to complying with court orders and attending hearings, of when he had actually attended less than half of them, which can be said to be pathetic or even downright contemptuous, best illustrated by his payment of HK$20,000 into the Applicant’s account on the day before the trial on 6^th September 2016 so as to dispose of her application.

44. In addition to the many examples of defects or shortcoming as to the Respondent’s financial disclosure, more can be found in particularly his Form E: his statement in Part 1 at 1.4.1 that he has since September 2015 been unemployed is clearly inaccurate when he is clearly a director in many of those companies mentioned therein, his failure to produce the full-set of 12 months statements of his bank account, and none whatsoever of any financial documents or audited reports of any of the 4 companies in which he disclosed 100% shareholdings or of those 13 companies in which he disclosed directorships over the past 2 years as required under Part 2.4 & 2.5 respectively, or any income proof under Part 3 and tax return for only one year instead of the last 2 years as required by Part 3.1, or any details of annual net profit or loss for the last 12 months or copies tax return of his disclosed self-employed or partnership income under Part 3.4, etc.

45. Neither has the Respondent thereafter made any attempts to rectify the defaults save for the occasion on 23^rd May 2016 when the Applicant had to come to court to seek further disclosure including his outstanding bank statements, in view of his denial to have any pay slips of his director fees, but he did subsequently produce further bank statements for 5 months which is in the circumstances still far from complete or satisfactory, and which just goes to fuel the Applicant’s suspicion that he is hiding his true financial position.

46. The importance of the duty of the party to make full and frank disclosure of their financial means cannot be over emphasised, as stated in Rayden and Jackson on Divorce and Family Matters, 18^th edition at Chap 17.28, and although it was made in the context of post-divorce ancillary relief proceedings between husband and wife, the duty clearly applies also to proceedings between unwed parents over financial provisions for their children, as in the present case before me:

“The importance of the duty of both husband and wife to make disclosure of their assets which is full, frank and clear cannot be over emphasised. Unless a court is provided with correct, complete and up-to-date information on the matters to which, under s 25 of the MCA 1973, it is required to have regard, it cannot lawfully or properly exercise its discretion in the matter ordained by that section. The duty of each party is absolute, and it must be discharged regardless of whether the application for ancillary relief is adjudicated upon by the court after full evidence has been heard, or settled after an exchange of financial information between the parties leading to a consent order. The duty is also a continuing one; a party must not mislead the other party and the court into assuming that his financial situation is unchanged if it in fact has changed. Any material changes in the financial situation of either party occurring between the filing of their Form Es and the final dispatch of the claims by the court must be brought to the notice of the other party and the court at the earliest opportunity. A party who seeks to negotiate and secure a settlement without informing the other party about material change in his or her financial circumstances runs the risk that, if a settlement is reached and a consent order is made, the consent order will be set aside by the failure to provide full, frank and timely disclosure. Shortcomings in disclosure will be visited by orders for costs against the offending party, often on the indemnity basis. Furthermore, deviation from the standard of disclosure required may be visited by the court drawing adverse inferences against the party in default.”

47. This obligation to make full and frank disclosure has been repeatedly emphasised by the court, and with the consequence of any such failure or shortcomings therein succinctly stated by the English Court of Appeal in the case of J-P C v J-A F [1995] P215, [1955] 2 All ER 617, CA:

“The obligation of the husband in maintenance proceedings is to be full, frank and clear in his disclosure of his means to the court, and any shortcomings in this respect can and normally should be visited by the court drawing inference against him on matters the subject of shortcomings.”

48. In Baker v Baker [1995] 2 FLR 820, where the Court of Appeal held that the trial judge was entitled to draw adverse inference against the husband and the standard of proof in a case where material non-disclosure was alleged was the ordinary balance of probabilities, Otton LJ emphasised at 837B that failure of such duty to make full and frank disclosure would severely undermine the integrity of the legal process:

“ … I wish to add a passage only by way of emphasis. Under statute and from authority … there is a duty upon a party in proceedings such as these to make a full and frank disclosure of all matters relevant to the assessment of the financial position of the parties and the relief to which a spouse is entitled. The integrity of the legal process would be severely undermined if a party were permitted (and seen to be permitted) to evade that duty by a deliberate and stubborn refusal to make such disclosure to the other party and , more important, to the court.”

49. This is particularly so when it is clearly stated under s 10(2) of GMO above that the court is required to have regard to the means of that parent (my emphasis) against whom the court is to make an order in each and every one of the financial provisions applied by the other parent for the benefit of the minor. Where the court has been prevented from having proper regard to the means of that parent due to his failure to make full or frank disclosure or to such shortcomings, and hence from properly assessing or measuring possible awards to the other parent for the maintaining of their children, the sole responsibility for this dilemma thereby encountered is the defaulting party, and in such circumstances it is better that any unfairness occasioned by the court’s necessarily imprecise assessment of the extent of the parties’ financial resources should fall on that party rather than the innocent one, as so stated in J-P C v J-A F supra by Sach J at p227:

“In cases of this kind, where the duty of disclosure comes to lie on a husband; where a husband has – and his wife has not – detailed knowledge of his complex affairs; where a husband is fully capable of explaining and has had opportunity to explain those affairs, and where he seeks to minimize the wife’s claim, that husband can hardly complain if, when he leaves gaps in the court’s knowledge, the court does not draw inferences in his favour. On the contrary, when he leaves a gap in such a state that two alternative inferences may be drawn, the court will normally draw the less favourable interference – especially where it seems likely that his able legal advisers would have hastened to put forward affirmatively any facts, had they existed, establishing the more favourable alternative.”

50. In F v F [1994] 1 FLR 359, where the husband was said to have presented his financial position in a fraudulent manner and had deliberately failed to disclose assets including those located abroad, Thorpe J (as he then was) ordered him to pay a lump sum far exceeding what he claimed to be capable of, and explained at 367C:

“So if he has conducted his affairs throughout the marriage in such a covert fashion as to relieve him of the ordinary obligations of citizenship to support the state through tax contribution, if he has conducted these proceedings in a vain endeavour to maintain that camouflage, if in consequence the obscurity of my final vision results in an order that is unfair to him it is better that than that I should be drawn into making an order that is unfair to the wife. If at the end of this case he feels that the lump sum that I order is unfair in reflection of his present retrenchment then he should remember that he has brought that consequence upon himself by the fashion in which he has chosen to arrange his affairs over the course of the last decade, coupled with the fashion in which he has chosen to conduct these proceedings.”

51. That principle has been endorsed by the Court of Appeal in Baker v Baker supra, when Butler-Sloss LJ (as she then was) stated at p835:

“ … I agree … that if a court finds that the husband has lied about his means, lied about other material issues, withheld documents, and failed to give full and frank disclosure, it is open to the court to find that beneath the false presentation, and the reasons for it, are undisclosed assets. Willmer LJ said in Payne v Payne [1968] 1 WLR 390, at 396:

  ‘In such circumstances it is well established that the court is entitled to draw inference adverse to a husband who has not made a proper disclosure of his available resources.”

  The judge carefully considered the relevant criteria set out in s 25(2) of the Matrimonial Causes Act 1973, including the shortness of the marriage. In my judgment, there was ample evidence upon which the judge was entitled to draw inference adverse to the husband and to make findings that there were assets available to meet the order he made. To accept Mr Holman’s alternative proposition that, unless the assets can be shown positively to be available an order cannot be made, flies in the face of the principles enunciated in the judgment of Sach J and would send a clear message to spouses unwilling to make full and frank disclosure. It would indeed, as Mr Posnansky said, be a cheat’s charter …”  

52. The same view was expressed in Al-Khatib v Masry [2002] 1 FLR 1053, where it was held that there was a compelling case for drawing adverse inference against the husband in the light of his utterly misrepresentative and untruthful disclosure of his means, when Mumby J said:

“[89] I accept, of course, that part of Mr Deacon’s submission, based on the passage from Butler-Sloss LJ’s judgment (in Baker v Baker above), to the effect that I can properly draw adverse inference only if there is some proper basis for them in findings of fact correctly arrived at in the light of admissible evidence. I reject, however, Mr Deacon’s further submission that, even in there is proven non-disclosure, inferences as to the existence of ‘must be based on credible evidence as to the existence of such assets.’ That submission, if I have correctly understood it, seems to be in reality but a repetition of the submission from Mr Holman (as he then was) which Butler-Sloss LJ was at such pains to reject. Indeed, put in these terms Mr Deacon’s submission seems to me, with all due respect to him, to fly in the face of the lady Justice’s acceptance in the passage quoted that ‘it is open to the court to find that beneath the false presentation, and the reasons for it, are undisclosed assets’.”

53. In the present case, whilst there is no suggestion, at least not at this stage, that the Respondent has committed the kind of serious fraudulent misrepresentations or conducts as in those cases cited above, I agree with the Applicant that his disclosure so far has fallen well below even the minimum requirements, that there is simply no valid proof or information as to his income and resources to meet the Applicant’s claim, and that his failure to attend most of the hearings in particularly the trial originally scheduled for 6^th September 2016 or its subsequent adjourned hearing on 28^th September 2016 without any valid reasons nor supported by any documentary evidence certainly do not help his case.

54. As already noted above, the Respondent’s income disclosed in his Form E was not, and according to him could not be corroborated by any of his employers which seems to me simply incredible given the fact that they are apparently reputable or publicly listed companies, while the stated amount even in its entirety would not be sufficient to meet the Applicant’s present claim, let alone its net amount after taking into account of the Respondent’s own needs and spending. Furthermore, his unexplained absence at the trial has obviously robbed the Applicant the right to cross-examining him and to extract further information as to his true income position. In the premises this court is left with no alternative but to draw such adverse inferences against him, where appropriate, from the very limited evidence available before it, starting with those limited bank statements produced by him.

55. These bank statements of his only disclosed account with HSBC, which were well short of the preceding 12 months as required by Form E, and were incomplete for some of the months with only the first or second pages of the full set for the month and were provided on 2 separate occasions, show the following limited information as to payment-in or deposits:

Month	No. of Deposits	Total Amount
September 2015 (2 of 3 pages)	3	HK$207,765
October 2015 (1 of 2 pages)	2	HK$ 17,125
November 2015 (1 of 3 pages)	4	HK$ 49,500
December 2015	6	HK$106,000
January 2016	5	HK$ 67,917
February 2016	6	HK$132,918
March 2016	5	HK$120,917
April 2016 (2 of 3 pages)	7	HK$186,917
	Total:	HK$889,059
	Average/Month:	HK$111,132

56. If one were to discard the unusually low figure for the month of October 2015 when only the first page of the statement was produced and may be regarded as statistically inconsistent or inaccurate, the average monthly total of the deposits would be even higher at HK$124,562. One cannot of course conclude with certainty that all of these deposits were all or part of the Respondent’s income, or for that matter were all related to him as this was as noted above a joint account with his wife, but if the Respondent has chosen to disclose his financial details in such a vain and sketchy fashion, and if as a result the court is to assess or attribute a much higher income or earning capacity to him to be able to meet the Applicant’s claims, then he would have to accept that he has brought this consequence upon himself by his own conduct.

57. The only other disclosed evidence relevant to the Respondent’s income is his Salary Tax Assessment issued by the Inland Revenue Department for 2014/15 as follows:

Final tax payable for 2014/15		HK$193,523
Less: Net provisional tax charged for 2014/15		HK$223,910
Balance of tax payable		HK$ 30,387
Less: Provisional tax for 2015/16		HK$107,599
Total tax payable		HK$ 77,212

58. From these figures and assessment one can gather that the Respondent was indeed earning a lower income in 2014/15 than the previous year and hence was assessed a lower salary tax liability for 2015/16 after taking into account the higher provisional tax paid in that year, which may go to support his assertion of earning less and/or irregular income than before, but they also show a gross income in excess of HK$1 million which seems to dovetail with the average monthly figure arrived at §55 above.  

59. On these figures and even allowing in full of what he stated to be his own monthly needs and expenses totalling HK$47,000 which were again unsupported by any documentary evidence, but after setting off this sum from the average deposits of almost HK$125,000 per month referred to above, it is clear that the Respondent would still have more than sufficient income to meet what I have assessed above the more urgent needs of the minors at HK$50,000 per month on an interim basis.

60. As regard his capital position to meet the Applicant’s claim for a lump sum to meet her capital spending in purchasing various furniture and household appliances for the minors, the information disclosed by the Respondent is however inadequate even by using the most broad brush approach, with virtually none whatsoever as to capital or liquid assets and with a negative overdraft balance in his HSBC account, while he may have put the value of his shareholding in one of his companies namely TCF Ltd at HK$300,000 and a life insurance policy for HK$2 million with his own 2 children named as the beneficiaries, neither of which is sufficiently liquid to meet any lump sum payment, not to mention his alleged bank and/or overdraft loans of HK$800,000.

61. It seems that the only asset available that can be utilised to meet her claim for a lump sum, according to the Applicant, is his share option disclosed in his Form E which he put its value at HK$150,000 but again without any further details or information, not to mention any document in support.

62. The Applicant has however been able to obtain, allegedly from the internet, information publicly posted by some of those companies in which the Respondent is interested either as a shareholder or director, such as AIH Ltd whose shares are listed in the Hong Kong Stock Exchange and which on 4^th November 2015 issued a document known as “Next Day Disclosure Return” and exhibited to the Applicant’s last affidavit of 13^th September 2016 as “Exhibit B” which revealed that 7.48 million of new shares of AIH Ltd were issued to the Respondent at HK$0.184 per share, equivalent to a total worth of more than HK$1.37 million. But that was of course in November 2015, and there is no evidence that they are still with the Respondent, or if so how much would they be worth now.

63. In the circumstances while the Applicant has every reason to suspect that the Respondent has been far from being full or frank as to his financial disclosure, for which certainly he should be required to come to court to fully explain himself and to redress the many shortcomings or defects of such disclosure to avoid any further adverse inferences to be drawn against him, there seems to be no other alternative but to adjourn this part of the Applicant’s application to the next earliest available day with an order for the Respondent to attend that hearing with a penal notice and a stern warning of the consequences he is at risk to face should he fail to do so, but in the meantime there is no reason why I should not make an interim order for him to increase the periodical payment for the minors to HK$50,000 per month to start from this month in October 2016, with any payment already made to be set off, and thereafter on the 1^st day of each month until the next hearing, which is 18^th January 2017 at 10 am with one day reserved for the hearing.

64. My order is therefore as follows:

(1)  The application is adjourned to 18^th January 2017 at 10 am with one day reserved;

(2)  Both parties to attend the hearing;

(3)  The Respondent shall increase the periodical payment for the minors to HK$50,000 per month commencing October 2016 and thereafter on or before the 1^st day of each month until further order;

(4)  Penal notice to be endorsed to this order;

(5)  Costs reserved.