H v. H

FCDJ 10877/97

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

DIVORCE JURISDICTION NO. 10877 OF 1997

---------------------

----------------------

-------------------------

J U D G M E N T

-------------------------

1. This is a trial on the Respondent's summons for variation of 2 previous orders made by Her Honour Judge Wong and Deputy Judge Levy on the respective dates of 28 June 1999 and 10 September 2001.

2. Although the parties have divorced long ago, I shall continue to refer to them as “the Wife” and “the Husband” in this judgment for the sake of convenience.

Background

3. The case has a rather long history. As I can glean from the case files, the parties were married on 31 December 1989 in the United Kingdom. They stayed there for a few years but later decided to move to Hong Kong in 1994 when the Husband was able to obtain employment here.

4. There are 2 children of the marriage: a daughter (“N”) who is now aged 15 and a son (“S”) who is now aged 11. Both of them are studying at the EFS Schools, N as a Secondary student in Shatin and S as a Primary student in Kowloon Tong. I am informed that S will be promoted to the Secondary section in the coming September and he will attend the same school with N in Shatin. 

5. Divorce proceedings were taken out by the Wife in 1997 and a decree nisi was granted on 11 March 1998. In an order dated 18 May 1998, the custody of the 2 children were granted to the Wife with the questions of access and ancillary relief be adjourned for trial.

6. The trial on the issues of access and ancillary relief were conducted before Her Honour Judge Wong and her judgment on 28 June 1999 (“the Access Order”) included the following orders on access:

(1)  Staying access to the Husband on alternate weekends from 1:00pm on Saturday to 7:00pm on Sunday;

(2)  Day access to the Husband from 6:00pm to 8:00pm every Friday; and

(3)  Any other weekday access the parties may agree to.

7. In another judgment dated 26 July 1999, the learned Judge made various orders concerning capital division and the maintenance of the children, the details of which are no longer relevant to this application. Both parties were dissatisfied with those orders and appealed. On 25 October 2000, the Court of Appeal made an order adjusting the maintenance of the children downward to a combined sum of $20,000 per month plus the Husband being required to pay all the school fees, medical and dental expenses.

8. Again, the terms of the Court of Appeal order are now no longer important because that order was varied by Deputy Judge Levy on 10 September 2001 (“the Maintenance Order”), upon the application of the Wife. The learned Deputy Judge, after a contested hearing, adjusted the maintenance of the children upward to a combined sum of $23,500 per month plus the payment of the children's school fees, medical and dental expenses.

9. On 22 June 2005, the Husband issued a summons before me asking for the Access Order and the Maintenance Order be further varied.                                            

Access

10. At the beginning of this trial, the parties informed me that they have sorted out the issue of access among themselves (both accepting the latest recommendations of the Social Investigation Officer). The agreed access arrangement now is as follows:

(1)  Staying access to N on alternate weekends with the start and end times to be agreed between the parties;

(2)  Staying access to S on alternate weekends from the end of his school day on Fridays to the start of school on Mondays;

(3)  Access to both children on alternate Fridays for 2 hours in the evening;

(4)  Any other access the parties may agree to; and

(5)  The children be allowed to attend dinners for birthdays, Mid-Autumn Festival, Chinese New Year Eve, Christmas Eve/Christmas and Winter Solstice celebration organised by the Wife and/or the Wife's family as well as to attend any other events organised by the children's friends whenever the children are happy to attend during the Husband's staying access, as agreed between the parties prior to the arrangements being confirmed, with such agreement not to be unreasonably withheld. 

Maintenance of the Children

11. What remains in the summons for the Court's adjudication is the Husband's application for a variation of the children's maintenance.

The Law

12. I think it is always convenient to start with the law governing the variation of maintenance orders. That can be found in Section 11of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”)which is as follows:

“11. Variation, discharge, etc. of orders for financial provision

(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.

---------

---------

(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.

--------“

13. The proper approach that the court should take in exercising its discretion under this section can be found in the English Court of Appeal case of Lewis v. Lewis [1977] 1 WLR at 409 in which it was held:

“----- that the powers of the court when dealing with an application to vary a periodical payments order were not confined to considering the alteration in the actual means of the parties; that under section 31(7) of the Matrimonial Causes Act 1973 [equivalent to our section 11 (7) MPPO] the court was required to have regard to changes in any of the matters mentioned in section 25 of the Act of 1973 [equivalent to our section 7 MPPO] and therefore, the judge was right to look at all the circumstances as they were when the case was before him and to make an order that was reasonable in those circumstances.”

14. A similar approach was adopted and developed upon by the local court in a more recent case of K v. K, DJ No. 5 of 1986, 11 December 1997 in which Deputy Judge Hartmann (as he then was) had the following to say at paragraph 12:

“In considering an application of variation, I am not required to proceed from the starting point of the original order but must look at the matter de novo although obviously any material change in the matters to which the Court was required to have regard when the original order for maintenance was made are of relevance. In my judgment, therefore, in matters of this kind I should adopt the approach in Flavell v. Flavell [1997] 1 FLR 353 (at 357G); namely, to look first at the present situation, examine the basis of the original order, consider events since that order was made and decide what is fair in the light of those matters.”

15. I do not think the principles as expounded in the above cases are disputed by the parties.

The Husband's Present Financial Position

16. According to the Husband, he has been working as an engineer for quite sometime. He has recently been promoted to a senior position as from 1 January 2006. His average monthly income has been increased to the following level: 

(1)	Salary	$51,000
(2)	13th month Pay	$ 4,250	($51,000/12)
(3)	Housing Allowance	$21,000
(4)	Contract Gratuity	$ 8,287	(51,000 x 13 x 15% /12)
	Total:	$84,537

17. In his Financial Statement (which was updated by exhibit R2 at the trial), the Husband has listed out his monthly expenses as follows:

General
(1)	Rent (shared with his present wife)	$ 8,000
(2)	Utilities	$ 1,519
(3)	Food	$ 3,895
(4)	Household expenses	$  316
	Sub-total:	$13,730
Personal
(5)	Meals out of home	$ 3,917
(6)	Transport	$  708
(7)	Clothing/Shoes	$  583
(8)	Personal grooming	$  140
(9)	Entertainment/presents	$ 2,128
(10)	Holidays	$ 2,348
(11)	Medical/Dental	$  147
(12)	Tax	$13,442
(13)	Insurance premia	$ 1,000
(14)	Others (professional institutions, training, cats, newspaper, misc. and MPF)	$ 3,369
	Sub-total:	$27,782
Children (Excluding the maintenance payment)
(15)	School fees (after deducting reimbursement of $10,449 from the Company)	$ 2,141
(16)	School books and stationery	$   23
(17)	Medical/Dental	$  760
(18)	Entertainment/presents	$ 1,911
(19)	Holidays	$ 1,197
(20)	Clothing/Shoes	$  183
(21)	Lunches and pocket money	$  340
(22)	Other Transport	$  101
(23)	Child-minding fees	$  300
	Sub-total:	$ 6,956

18. If the present monthly maintenance of $23,500 paid by the Husband is added to the above figures, the total monthly expenses incurred by the Husband amount to $71,968 ($13,730 + $27,782 + $6,956 +$23,500 = $71,968).

19.  It is the further evidence of the Husband that some of the expenses will be increased in the near future.

20.  According to him, the school fees of S will be increased by an average monthly sum of $532 after his promotion to the secondary school. The airfare of S for his annual trip to the UK will also be increased by an average monthly sum of $147 after S attaining the age of 12. Lastly, as to his present accommodation, since the tenancy will be renewed in April this year, he expects that his contribution to the monthly rental to be increased by a monthly sum of $3,000. All these add up to an extra sum of $3,679.   

21.  In short, the total monthly expenses of the Husband will become $75,647.

22. I have considered the Husband's evidence carefully. Despite a few challenges put forward by the Wife's counsel during cross- examination, I am satisfied that the above figures represent a fair assessment of the Husband' income and expenditure positions.

23.  As one can see from the above figures, it seems that the Husband is able to make his ends meet. However, it is the Husband's case that the present level of his payment towards the monthly maintenance of the children at $23,500 should be adjusted downward for 3 reasons:

(1)Some of the expenses of the children are no longer in existence or being unreasonable in nature and therefore should be cut to a more reasonable level;

(2)With the present level of maintenance payment, the Husband is not in a position to save up sufficient funds for his retirement; and

(3)In comparison, the Wife is in a much better financial position and so her contribution to the children should be increased so as to lessen the Husband's burden. 

24.  In order to complete the picture on the Husband's financial position, it is also necessary to set out the other assets held by the Husband. They include:

(1)	Armed Forces Preserved Pension	$  667,824
(2)	Alsthom Preserved Pension	$  120,469
(3)	Mandatory Provident Fund	$  134,015
(4)	Bank deposits	$  426,770
(5)	Stocks	$   80,130
(6)	Interest in insurance policies	$  322,035
	Total:	$ 1,752,243

25.  In considering these assets, one has to bear in mind that items (1), (2) and (3) in the preceding paragraph are only realisable when the Husband reaches the age of retirement, which should be more than 20 years from now.

The Wife's Present Financial Position

26.  The Wife is currently working as an Officer with a consultancy.  She has to work on site (“the Project”) which will be completed very soon. Her present average monthly income include:

(1)	Salary	$56,100
(2)	Housing Allowance	$14,823
(3)	Gratuity ($56,100 x 15%)	$ 8,415
	Total:	$79,338

27.  As for the other assets of the Wife, they include the following:

(1)	Cash in Bank	$1,193,083
(2)	Stock and Investment Funds	$1,150,017
(3)	Interest in Insurance Policies	$  26,898
(4)	Car	$  20,000
(5)	MPF	$ 123,874
	Total:	$2,513,872

28.  As to the Wife's monthly expenses, they are listed in her Financial Statement as follows:

General
(1)	Rent	$17,000
(2)	Utilities	$ 1,122
(3)	Food	$ 3,500
(4)	Household Expenses	$ 2,864
(5)	Car Expenses	$ 3,980
(6)	Domestic Helper	$ 5,600
(7)	Internet	$  155
	Sub-total:	$34,221
Personal
(8)	Meals out of Home	$ 1,820
(9)	Transport	$  128
(10)	Clothing/Shoes	$ 4,032
(11)	Personal Grooming	$ 1,707
(12)	Holidays	$  950
(13)	Medical/Dental	$  171
(14)	Tax	$ 9,025
(15)	Insurance Premia	$ 2,034
(16)	Contribution to Parents	$ 3,000
(17)	Others	$ 4,640
	Sub-total:	$27,507

29.  At the hearing, the Husband has cross-examined the Wife on some of her expenses. I do not intend to go into the details of those items but overall speaking, I am satisfied that the Wife did have incurred the monthly expenses as stated above.

Children Expenses Incurred by the Wife

30.  It is common ground that the monthly expenditures on the children are no longer the same as compared to those incurred when Deputy Judge Levy made the order on 10 September 2001. Whilst it is the case of the Wife that those expenditures have actually gone up and therefore the application for adjustment of the maintenance payment by the Husband should not be entertained, the Husband contends that some of those expenses as quoted by the Wife are not reasonable and therefore should not be shared by him.                                                             

31.  During the hearing, the parties have spent quite some time in arguing on the changes in the children's expenses since 2001. However, I do not intend to go into those changes in this judgment as it is inevitable for the children's expenses to change as they grow up. There might have been further changes from the time of the hearing to the time when this judgment is delivered. What seems to be a reasonable expense at a particular point of time might have become irrelevant very shortly. In this judgment, what I am going to do is to take a broadbrush approach to see what are the reasonable expenses of the children as of now and to determine how that should be shared between the parties after considering all the circumstances of the case.

32.  In her Financial Statement, the Wife set out the expenses of the 2 children being borne by her as follows:

(1)	Extra tuition fees	$ 3,871
(2)	School books and stationery	$  117
(3)	Transport to school (including school bus)	$ 2,420
(4)	Medical/Dental	$   80
(5)	Entertainment/presents	$  598
(6)	Holidays	$ 1,783
(7)	Cloth/Shoes	$ 1,753
(8)	Lunches and pocket money	$ 1,390
(9)	Other Transport	$   50
(10)	Uniform	$  120
(11)	Camp/school trip/PTA	$ 1,119
(12)	Haircut/care products	$  130
(13)	Meals outside	$  394
(14)	Other books/magazines	$   95
(15)	Sports	$  173
	Total:	$14,093

33. At the hearing, the Husband raised objections to some of the above items.

Transport to School ($2,420)

34.  For the item of “Transport to school (including school bus)”, the Husband contends that such sum is unreasonable. He said the Wife and the children used to live in Shatin, that is in the same location of N's school. However, it was the deliberate choice of the Wife to move to the Yuen Long District and therefore, incurring extra transportation costs for the children's daily trips to the schools. He said he should not be held responsible for these extra costs. He only agrees to bear $ 1,500 under this item. 

35.  The Wife explained that there were 2 reasons for the move from Shatin to Yuen Long. The first reason being that she was able to secure a better living environment for the children because she could rent a bigger house in Yuen Long with more or less the same rent as in Shatin. The second reason was that the Wife was, and still is working at [the Project] in north-west New Territories. By moving to a nearer place to her work, she was able to shorten her travel distance to work and therefore, be able to spend more time with the children.

36.  In matters concerning minors, the welfare of the minors is the first and paramount consideration: S.3 Guardianship of Minors Ordinance, Cap. 13. I am satisfied that the move was in the interest of the children and so I do not think the complaint of the Husband in this regard is justified.

Entertainment/Presents and Holidays ($598 and $1,783)

37.  It is the Husband's view that for these 2 items, each parents should provide them as they see fit and so the expenses incurred should not be included in the calculation of the maintenance for the children. He further contends that since he will take the children to the UK every summer for holidays, no more allowances should be made for holidays in view of the rather tight family finances.

38. In considering this contention, I think it is important to take note of the fact that both children are teenagers now. I see nothing wrong for a mother to spend a monthly sum of less than $600 in providing some kind of entertainments or buying some presents for her children. Furthermore, I see that the Husband in listing out his expenditures on the children, he has also included a sum of $1,911 for this item (see paragraph 17 above). Therefore, there is no justifiable reason to exclude this item from the calculation of the Wife's expenditures on the children.  

39. As to the holiday expenses, again, if the Husband is allowed to take the children to an annual trip to the UK, I see no reason why the Wife should not be allowed to do the same thing with the children.

Lunches and Pocket Money ($1,390)

40.  Again, it is the argument of the Husband that each parent should provide pocket money as he or she sees fit, implying that this sum should not be counted in calculating the total expenses of the children. I see no reason why this item should not be counted and I do find that a sum of $1,390 as lunch and pocket money for 2 teenage children is reasonable. Afterall, when I calculate the Husband's total monthly expenses in Paragraph 17 above, there is also provision for a similar item.                     

Camp/school trip/PTA ($1,119)

41. The Husband argues that this figure of $1,119 per month (i.e. 13,428 per annum) includes a one-off trip by N to Malaysia in 2005 at the cost of $7,000. As this is not a yearly event, the Husband contends that a sum of $350 per month under this head is more reasonable.

42. I think there are some merits in the Husband's argument, bearing in mind that I have already allowed expenses for an annual overseas trip by each parent every year. For this item, I will allow $600 per month (i.e. $7,200 per annum) only.

Meals outside home/Books/Magazines ($95 and $173)

43.  The Husband also argues that for these items, each parent should provide them as they see fit.

44.  I see nothing wrong in the provision of those items and I do not think the figures are unreasonable.

Sports ($173)

45. The Husband argues that this item should have been included in the item of extra tuition and therefore, it should not be allowed as a separate item.

46. I accept that the Wife did incur such expenses for the children. Whether this item should be included under separate headings is really not that important. I will allow this item of $173.

General Household Expenses Attributable to the Children

47. Apart from the above figures, it is not in dispute that some of the Wife's general expenses should also be attributable to the children. The Wife is now paying the general household expenses at $34,221 per month. I think it is fair to attribute half of that sum to the children. Therefore, a sum of $17,110 should be counted as the expenses of the children.

48.  By way of summing up, I am satisfied that the Wife is spending a total sum of $30,684 on the children each month ($13,574 + $17,110 = $30,684).

Total Monthly Expenditures on the Children by the Parents

49.  By adding up the children expenses incurred by both parents, it has come to a figure of $37,640 ($6,956 + $30,684 = $37,640). 

Wife's future employment

50.  At the trial, the Wife asked the court to take into consideration of the lack of security in her present employment.

51.  The Wife is an Officer of a consultancy which is a sub-contractor in the Project. Her present contract will come to an end by 31 July 2006 (Exhibit P6). It is the case of the Wife that since the project will be completed sometime by the end of this year, the chances of her contract to be renewed for another full term is rather slim. According to a letter issued by the Managing Director of the consultancy (Exhibit P1), they are seeking from [the corporation] to extend the Wife's contract up to 31 October 2006, but any further extension beyond that time will be unlikely.

52.  Whilst the chances of the Wife losing her present well paid employment by October 2006 can not be dismissed as totally unrealistic, I am afraid that I can not give too much weight to this factor for the present application. 

53.  First of all, we still have a few months to go to see whether the Wife's present employment can be retained or not. If her present employment really can not be renewed by October 2006, I think it is still too early for one to speculate, as at today, whether the Wife can find any alternative employment with a similar package of remuneration. Afterall, if there should be a substantial drop in the Wife's income after the completion of the Wife's present contract, she is always entitled to come back for a further variation of the maintenance order.

Variation of the Maintenance Order

54.  I am of the view that it would be fair for the Husband to bear a higher percentage, say at 60%, of the children's total expenses, despite the fact that the present overall financial well being of the parties are more or less equal. I come to this conclusion after taking into account of all the above considerations, and in particular the following facts: 

(1)   The Husband is 4 years younger than the Wife;

(2)   The Husband has a more secured employment (and also a better prospect) than the Wife;

(3)   The Husband has re-married with his present spouse having some level of earning power (about $25,000 per month) while the Wife is still single and having the sole custody of the 2 children; and

(4)   In terms of salary and fringe benefits, the Husband does have a higher monthly income than the Wife.

55. As the total monthly expenses on the children amount to $37,640, 60% of it would be $22,584. Since the Husband has already been paying $6,956 for the children's expenses per month, the net contribution that he has to make towards the Wife's expenses on the children would be $15,628 ($37,640 x 60% - $6,956 = $15,628). For the sake of convenience, I would round it up to $16,000 per month.

56. As the children are now in their teens, I think it is also time for the Court Order to specify their respective shares in the Husband's monthly maintenance payment. As N is older, I would allow her a sum of $9,000 per month and for S, his share would be $7,000 per month. 

Judgment

57.  Based on the above reasons, I will grant the following orders:

(1)  By consent, the Access Order be varied in terms of paragraph 10 above;

(2)  Paragraph 2 of the Maintenance Order be varied and replaced by the following orders:

(i)   The Husband shall pay a monthly sum of $9,000 to the Wife as the maintenance for N;

(ii)   The Husband shall pay a monthly sum of $7,000 to the Wife as the maintenance for S;

(iii)   The above total sum of $16,000 per month be paid on or before the 1^st day of every month, starting from 1 May 2006;

(iv)   The Husband shall continue to pay directly the school fees, medical and dental expenses for the children as they fall due; and

(v)    All the above payments shall continue until the children reach the age of 18 years or finish their full time education, whichever is the later or until further order of the Court.

Costs

58.  The usual rule is for costs to follow the event and there does not seem to be any special reason for departure in this case. Since the Husband has succeeded in getting a reduction of the maintenance payment, I will grant an order nisi that the Husband shall have the costs of this application, such costs to be taxed if not agreed. The order nisi will be made absolute upon the expiry of 14 days from the handing down of this judgment.