WGL v. ASB

HCMP 489/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 489 OF 2013

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D E C I S I O N

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Introduction

1.  This court handed down a judgment in these proceedings over 4 years ago, on 28 June 2013 (“Judgment”), ordering, among other things, that the Father do pay the Mother a sum of HK$290,000 per month for the periodical payments for the benefit of their daughter, ILB, commencing on 1 January 2013, with credit for amounts already paid, until ILB reaches 18 years of age or completes full time education, whichever shall be later (“28.06.13 Order”).

2.  Save otherwise indicated, the abbreviations in this decision will follow those in the Judgment.

3.  The 28.06.13 Order also provided that the periodical payments should be index-linked.

4.  In November 2016, the Mother took out a summons for the Father to pay her the differences between the ordered amounts and the index-linked amounts.  In April 2017, the Father took out two summonses, one for downward variation of the amount of periodical payments ordered, and the other for re-imbursements by the Mother for overpayments by him. These 3 summonses (collectively “Variation Summonses”) have now all been fixed for a substantive trial in May 2018.

5.  The present application before this court is the Father’s summons issued on 26 May 2017 for an immediate interim variation of the monthly sum of HK$290,000 to HK$149,522, without prejudice to the Variation Summonses.

6.  Mr Jeremy Chan appeared for the Father, and Mr Richard Todd appeared for the Mother.

7.  The background facts leading to these proceedings being instituted in 2012 have been set out in the Judgment, and I will not repeat them here.  Suffice to say, ILB, was about 5 years 10 months old at the time of the Judgment and she has now just turned 10 years old.

The Father’s reason for the interim application

8.  The Father’s main reason for seeking the immediate downward adjustment in the interim pending trial is based on an email dated 21 February 2017 sent by the Mother (“21.02.17 Email”).  In this email, which was copied to the Family Court, the Mother informed the Father that as of the end of February 2016, she had terminated the lease of the house where she was living with ILB and they would be moving into the house of her current boyfriend (“K”), and that K would not asking for any rental payment or contribution towards the utility bills for the Mother or ILB[1].

9.  As HK$150,000 of the monthly sum of HK$290,000 was for the Father’s contribution for housing for ILB and HK$4,000 was estimated by the Father for utilities, the Father asks that these amounts to immediately cease to be payable by him. 

The Mother’s grounds for opposition

10.  The Mother’s opposition to the Fathers’ interim application is based on the following:

(i) The Father is in contempt, paying neither the index-linked increase nor the full amount provided in the 29.06.13 Order;

(ii) The Father has rejected the Mother’s offer of a global reduction in the maintenance by HK$150,000 to account for the reduction in her outgoings after termination of the rental payments;

(iii) The Mother’s above offer was made on the condition that the Father would issue no further financial summonses, and that having rejected that offer, the Father cannot “cherry pick” it now for an interim application;

(iv) ILB’s actual expenses each month now amount to approximately HK$175,000 (less rent and school fees) and will only increase as she gets older, and if she had the proper sums available she would have been able to spend more.

(v) The Father’s goal of HK$80,000 per month for ILB is simply not enough to cover her expenses each moth;

(vi) There is no urgency in this application and the Father’s interim application should be adjourned to be heard at the trial, together with the Variation Summonses;

(vii) There is a lack of merit in the Father’s interim application.

Discussion

11.  At the hearing, Mr Todd emphasized that there was no urgency for any immediate downward adjustment, as the Mother’s Form E was not yet due to be filed and there was no sufficient evidence before the court to conduct a full investigation at an interim hearing (even on a broad-brush approach), and further even if there were, the Mother’s present budgetary requirements of HK$175,000 per month would already be greater than the figures ordered under the 28.06.13 Order.

12.  It is clear from the 21.02.17 Email that as from March 2017 onwards, the Mother no longer needs to pay rent or utilities for ILB. The Mother said she voluntarily notified the Father of this.  However, I note that the email was only sent by the Mother about a week before the termination of the former lease and 3 or 4 days before she and ILB were due to move into Ken’s home.  The Father had in fact complained that the Mother had decided to move ILB into the home with another man  without the Father’s prior approval[2].  

13.  No doubt the Father would have found out from ILB anyway, that she and her mother would be moving out of the house they were living and, from the history of this matter, when he found out, he would no doubt be asking the Mother for a copy of the new lease and documentary evidence of payment of rent.   

14.  In fact, by February 2017, the parties were already having various arguments over the maintenance payments.  Since early 2015, the parties have been disputing as to whether the entire amount ordered, which is HK$290,000 per month, should be index-linked, or only the non-accommodation portion of it, namely HK$140,000.  Further, the Father was also seeking a detailed breakdown of the ILB’s expenses with receipts to show how the sum the Mother was then receiving from the Father was being utilized[3].  There were also disputes as to whether the Father had over-paid or under-paid. 

15.  As mentioned earlier, in November 2016, the Mother issued her summons seeking an order that the Father do pay her the differences between the ordered amount and the index-linked amount and this summons was supported by her 19^th affidavit.  In the Father’s 20^th affidavit filed at about end of December 2016, he indicated that he had been advised by his lawyers to consider applying for a downward variation of the maintenance payments, and was proposing to seek a direction from the court for the Mother to file an updated Form E to reflect her income, expenses and her actual spending on ILB.

16.  Thus the Mother’s proposals in the 21.02.17 Email have to be seen in the light of the above disputes.  The Mother’s then proposals were:

(i) The monthly maintenance to ILB be reduced from a monthly sum of HK $290,000 (plus the relevant CPI increases) to HK$140,000 (plus the relevant CPI increases), even though the Mother considered ILB’s expenses to be actually higher than that amount, and this proposal was made by the Mother on the undertaking of each party not to bring any court proceedings against the other to vary ISB’s maintenance for next two years;

(ii) The Father to pay a sum of HK$182,138.50 for reimbursements over travel expenses allegedly owed by the Father.

17.  The Father did not accept the Mother’s above proposals and later in April he issued his summonses for a substantive downward variation and for reimbursements.

18.  Much has been said about the Father “cherry picking” from the Mother’s proposals, namely the Father having rejected the Mother’s offer of a reduction in the maintenance by HK$150,000 to HK$140,000 per month, he cannot now “cherry pick” it for an interim application without having accepted the conditions imposed by her.

19.  However, there are really two different matters.  The Mother’s proposal was for an overall settlement in relation to her own summons for underpayments and the Father’s then threatened variation application.  What the Father is now asking has nothing to do with any overall settlement and the Variation Summonses are going to trial next May.  The Father is seeking a substantial reduction to HK$80,000 per month at the trial.  The present interim application is simply based on the fact that no rent and utilities are in fact being paid or payable by the Mother from March 2017 onwards.  I do not see that this is “cherry picking” on the part of the Father.

20.  Mr Todd referred the court to HJFG v KCY [2012] HKLRD 95, CACV 127 of 2011 as to what was said by Hartmann JA, as he then was, on the general approach on an application for interim maintenance being a broad brush basis and Mr Todd submitted that such departure from the usual principles governing a fair hearing are justified only on the basis of urgency and there is no urgency here for a broad brush approach.

21.  As Mr Chan submitted, there is no need for the Father to prove urgency.  It is not disputed that the rent and utilities are no longer payable after February 2017.  Mr Chan had referred to paragraph 226 of the Judgment where it was set out a total reasonable budget for ILB was HK$290,000 consisting of the following[4]:

Housing	HK$150,000
General	HK$60,000
ILB’s Personal	HK$ 80,000

22.  The amount of HK$150,000 is a specific amount, and is a substantial part of almost 52% of the monthly sum of HK$290,000.  This was a hotly disputed item at the time, with the Father proposing HK$25,000 per month and the Mother asking for HK$200,000 per month for the rent. HK$150,000 was ordered as a contribution towards the Mother’s then actual rent of HK$200,000 per month.

23.  Mr Chan had clarified at the hearing that the interim application was made under section 10(4) of the Guardianship of Minors Ordinance, Cap 13 (“Ordinance”), which provides 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 …”

24.  Having considered the above section, I am of the view that the Father’s application should perhaps be more appropriately termed as an application for suspension of the 28.06.13 Order, since although the Mother does not at the moment need to pay any rent or utilities, in future, the rent or utilities may become payable again.  In my view, this is akin to a situation when a father pays for the school fees of a child, and if the child then drops out of school for a year before returning to school, any order for payment of school fees will be suspended during the year of the drop out.

25.  Mr Todd submitted that how the maintenance amount is spent is in the “gift of the donee”, and a key component of the amount of HK$290,000 at the time was HK$20,000 per month for travel.  The Mother has spent considerably more than this and it is her choice that she has spent less on rent, provided the overall liability is unchanged and the Mother acts reasonably then the maintenance should not be varied, and that she is the master of the detail of her overall budget.

26.  However, in so far as I can see, from after the 28.06.13 Order until end of February 2017, there was no evidence that the Mother was spending less than HK$150,000 per month on housing or that she was using any unspent portion of the housing budget on travel.  Even though that there was no provision in the 28.06.13 Order that the Mother must spend HK$150,000 a month on housing, this was certainly the understanding of the Father, and indeed this Court at the time.  If Mr Todd’s submission is correct, this would mean that after obtaining a total award of HK$290,000 per month, and provided the overall liability is unchanged, the Mother could then choose to spend only, say much less on housing and much more on travel.  This in my view cannot be right.

27.  The Father’s solicitors had sent a letter dated 7 July 2017 to the Mother proposing a reduction to HK$136,000 per month from March 2017.  In the Mother’s reply email dated 10 July 2017 to the Father’s solicitors,  the Mother was insisting that the Father must continue to pay the full sum of HK$290,000 in accordance with the 28.06.13 Order, and  that she would only agree to a variation to HK$180,000 per month not indexed link, to cover all of ILB’s expenses except education subject to conditions sent out in the 10.07.17 Email[5].

28.  She now says her current expenditure on ILB is HK$175,000 but she says this is the result of the Father’s breach of orders and that if she had the proper sums available she would have been able to spend more.  At the direction hearing on 3 August 2017, this court had given the Mother time to file her evidence and yet she had not provided any supporting evidence of her current expenditure on ILB, not even, say for July and August.

29.  The Mother pointed out on numerous occasions that the Father is a billionaire and that he flies around on private jets.  However, this does not mean that the Mother is entitled to a blank cheque for ILB.  As for the contempt alleged by the Mother, as I understand it, this complaint arises out of the Father not having paid the index-linked amount, and this matter will be resolved at the trial.

30.  Having considered all the present evidence, I cannot see any grounds in the Mother’s opposition. 

31.  In any event the Father in fact had paid the full amount of HK$290,000 for 5 months March to July 2017.  Although the Father is seeking a credit be given for the over payment, this is a matter to be resolved at trial, and in the meantime, the Mother has a buffer of extra cash of HK$750,000. 

32.  As for the monthly sum of HK$4,000 for utilities, this is only an estimate on the part of the Father, and this was part of the monthly budget of HK$60,000 for “General” expenses.  I am of the view that the proper time to deal with any variation of “General” expenses should be at the trial.

33.  Thus, the amount the Father should pay now is HK$140,000 plus the CPI increases over the years.  I will leave the parties to work out the exact amount. 

Conclusion

34.  As I have indicated earlier, the Father’s application should be one for suspension, and there is no objection from Mr Chan to treat the application as such.  The effect of my order is as follows:

(i) The payment of a monthly sum of HK$150,000 for housing for ILB, being part of the monthly periodical payments of HK$290,000 under the 28.06.13 Order, shall be suspended from 1 August 2017 until further order, on condition that the Father continues to pay the Mother the sum of HK 140,000 per month plus the CPI increases for ILB’s general and personal expenses until further order.

(ii) Costs be reserved.