WGL v. ASB

HCMP489/2013

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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J U D G M E N T

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Introduction

1.  The litigation between the Applicant father (“Father”) and the Respondent mother (“Mother”) over their daughter ILB started almost 5 years ago.  The disputed issues over ILB over the years included her financial provision and her access issues.  I have just delivered a ruling essentially on access for the coming summer.  ILB’s financial provision is the subject of this judgment.

2.  There are two applications in this regard:

(i)   The Mother’s application issued on 12 December 2012 for financial provision for ILB, and also for ILB’s interim maintenance of not less than HK$1,460,000 per annum payable monthly by HK$121,667 per month;

(ii)   The Father’s application issued on 29 April 2013 for variation downwards of the interim maintenance order of HK$321,667 per month to HK$120,000 per month, or alternatively, upon expiry of the interim maintenance order, any fresh or new order for interim maintenance to be not more than HK$120,000 per month.

Brief Background

3.  The Mother is a British national.  She was born in Singapore in 1969, and will be 44 in July this year.  She is the eldest of three children.  The Mother’s family moved to Hong Kong when she was 3 years old, and Hong Kong was the Mother’s home until she was 17 years old.  The Mother attended schools in England and later a finishing school in Switzerland. She worked in London for about a year before returning to Hong Kong in about 1991 where she worked for a major real estate agency.  She gave up her job in 2001 to join her then fiancé in USA.

4.  That relationship did not last and she then travelled to South America where for the next four years or so she pursued a career which combined competitive mountaineering, long distance running, expeditions, charitable sponsorship and public speaking.  She was honoured by the award of an OBE for her achievements.

5.  The Mother’s father was the CEO of a major international bank based in Hong Kong and although he retired from the bank some years ago, he held various directorships of companies in Hong Kong until recently.  The Mother’s parents have their principal home here.  They have other homes in England and also in Aspen, Colorado.  The Mother’s sister L is married and lives in Hong Kong with her husband and two children, although the elder one is attending boarding school in England.  The Mother’s brother now also lives in Hong Kong.

6.  The Father is American by origin.  He was born in USA in 1965 and will be 48 in July this year.  He is a MBA graduate from a well known business school in USA and his business activities consist of managing various hedge funds.  He is based in New York.  He has a son S from a previous marriage.  S was born in May 2002, and is now about 11 years old. There was apparently substantial litigation in USA between the Father and his former wife, and now they share the care of S more or less equally.  S is at school in California where the Father now spends a considerable amount of time.

7.  The Mother and the Father met in Aspen in February 2005 and their relationship began almost immediately.  From April 2006, the Mother lived with the Father at his New York apartment.  The Father formally proposed to the Mother in December 2005 and their engagement was formally announced on in early January 2007.  It was at around this time that the Mother found that she was pregnant. 

8.  The parties separated in April 2007 and by then the Mother was about 5 months pregnant.  She later decided to return to live in London and ILB was subsequently born there in August 2007.  The parties never married. ILB will be 6 years old in August this year.

9.  When the Mother returned to London, she moved into a property in Roland Way in South Kensington (“Roland Way Property”), her parents’ family home in London. 

10.  In June 2008, the Father told the Mother that he had instructed solicitors to prepare and draft a trust deed to make financial provision for ILB, but he then seemed to change his mind.  There was to be a round table meeting between the parties and their respective solicitors to discuss further over the financial provision over ILB.

11.  The Mother had travelled from Hong Kong to London for the purpose of the meeting.  The meeting did not take place, since prior to the meeting, each of them had instituted legal proceedings.  The parties then became entangled in litigation in the following few years.  The brief chronology of the legal proceedings will be set out hereinafter.

12.  In 2011, the Mother decided to move to Hong Kong with ILB.  By then, she had formed a relationship with her present boyfriend, Mr C, and their relationship still continues.  Mr C lives in USA.  He signed a lease on 14 July 2011[1] for a town house in Strawberry Hill on the Peak (“Strawberry Hill House”) for the Mother and ILB to live in and paid the deposit and rent for the Mother until December 2012. These payments are said to be loans to the Mother, and I will go into this later in this judgment. Suffice to say at this stage, the Mother and ILB have been residing in Hong Kong since about September 2011.  ILB is now attending a school near where she lives.

Brief Chronology of Legal Proceedings

13.  The Father issued proceedings in Colarado over ILB on 13 November 2008 (“Colorado Proceedings”) without any notice to the Mother.  He sought, among other things, orders for allocation of parental responsibilities and establishment of the child support order.  Without knowledge of those proceedings having been issued, but concerned by the tone of the then correspondence and the Father’s announcement of not attending the scheduled joint meeting, the Mother decided also to issue proceedings in London for paternity and for interim maintenance for ILB on 21 November 2008.

14.  On the day scheduled for the joint meeting, the Mother was instead served on the street in London with a notice of hearing in the Colorado Proceedings.  This sparked off a series of further actions by the Mother.

15.  She issued an ex parte application for a Hermain injunction, an application for financial provision for ILB under s 15(1) and Schedule 1 of the Children Act 1989 (“Schedule 1 Proceedings”) and also proceedings for contact and residence orders in respect of ILB under section 8 of the Children Act 1989 (“s 8 Proceedings”). On 18 December 2008, the Mother obtained the Hermain injunction restraining the Father from taking any further steps in the Colorado Proceedings. 

16.  Eventually on 2 January 2009, the Colorado Proceedings were withdrawn by the Father [2], but only after a hearing had taken place in December, in breach of the Hermain injunction by the Father. 

17.  The Father was paying to the Mother US$15,000 per month for the maintenance for ILB prior to the Mother’s applications, but unilaterally reduced this to US $10,000 per month in February 2009. 

18.  The Mother later obtained an order for interim maintenance for ILB in May 2009, including a costs allowance, which was, however, not complied in full by the Father.  There was a subsequent agreement to pay in full by the Father, but apparently again he did not comply. Eventually, the Mother had to issue a request to issue a judgment summons which was fixed for a hearing in June 2010.  Six days before the hearing, the Father discharged all outstanding sums.

19.  In the midst of all the above, the Father had also issued an application in June 2010 for directions relating to a DNA test to establish paternity of ILB, and this established that he is indeed her father.

20.  So far as the Schedule 1 Proceedings were concerned, the trial took place in November 2010 before Parker J, which resulted in judgment on 3 December 2010 from Parker J of the High Court of England (“Parker’s Judgment”)[3]. There was disagreement over the drafting of the terms of the order, which was eventually only sealed on 25 March 2011 (“Parker’s Order”)[4]. Briefly, the terms of Parker’s Order are as follows:

(i)   The Father was to settle for the benefit of ILB into the trust named after her (“ILB Trust”) s sum of £2.64m for the purpose of purchasing a property for her and the Mother to occupy as their home, rent-free and to the exclusion of any other, out of which a sum not exceeding £2.5m was for the purchase price and the balance of £140,000 was to defray the purchase costs, and any sum in excess of £50,000 was to be returned to the Father;

(ii)   The sum of £2.64m was to be paid to the Father’s solicitors by 28 February 2011 to hold to the joint order of the parties or order of the court.

(iii)   The Father was to pay to the Mother a sum of £125,000 for the benefit of ILB no later than 56 days prior to completion of the purchase of the property, for the purpose of moving into, decorating, improving and furnishing the property.;

(iv)   The Father was to settle into the ILB Trust a sum of £125,000 which was to be used by the Mother for replacing her current car with a new vehicle of her choosing;

(v)   The Father was to pay to the Mother for the benefit of ILB a sum of £120,000 per annum payable monthly in advance, which shall be varied automatically by an increase linked to the Consumer Price Index , if any;

(vi)   The Father was to pay such sums for the school fees and reasonable extras for such school as ILB may attend by agreement between the parents or order of the court, which are itemized on the school bill, for such schools as ILB may attend from time to time;

(vii)     The Father was to pay such sums as are required to meet the tuition costs of ILB attending university or other tertiary education

(viii)   The Mother’s application for the above periodical payments to be secured by capitalization and payment into the ILB Trust is adjourned with liberty to restore.

21.  The Father applied for leave to appeal against Parker’s Judgment, before Parker’s Order was drawn up, and he subsequently obtained leave on 28 October 2011, but subject to payment of £50,000 as security for costs.

22.  Not long thereafter, in December 2011, the Mother took out an application for leave to relocate with ILB to Hong Kong permanently (“Relocation Application”).  She was granted interim leave to remove ILB on 19 December 2001 by Colerdige J[5].

23.  The final hearing for the Relocation Application was fixed on 14-16 May 2012 before Coleridge J.  The substantive orders on relocation and a residence order in favour of the Mother were agreed by the Father, and Coleridge J ruled on issues relating to contact, including the funding of travel, and the order was sealed subsequently on 11 July 2012[6] (“Coleridge’s Order”). 

24.  Subsequently, the parties reached an agreement and a draft consent order was filed in the Court of Appeal in England in August 2012 (“Consent Order”)[7], under which, among other things, the Father’s appeal against Parker’s Order was allowed, Parker’s Order was discharged, and the Father was to pay to the Mother periodical payments for the benefit of ILB at the rate of HK$1,460,000 per annum payable monthly in advance, to continue until the earlier of:

(i)   The making of an order in Hong Kong;

(ii)   A written agreement made subsequently between the parties as to the level of maintenance to be paid by the Father;

(iii)   31 December 2012

25.  The Mother explained that she agreed for the Father’s appeal to be allowed and Parker’s Order to be discharged due to her relocation to Hong Kong.  Thereafter, the sum of £2.64m which had been paid by the Father to his solicitors under Parker’s Order was repaid to him.

26.  The present proceedings in Hong Kong were initially commenced by the Father in November 2012, with the consent of the Mother, for a ‘mirror order’ reflecting those terms agreed by them under the Coleridge Order.

27.  The parties were not able to come to any agreement for the financial provision for ILB, notwithstanding attempts to attend mediation,  and with 31 December 2012 approaching, the Mother issued her application for the Father to make financial provision for ILB under the Guardianship of Minors Ordinance (“GMO”), including interim maintenance.

28.  The first hearing was fixed on 17 December 2012.  On that day, a mirror order was made by Judge KW Wong in the Family Court for Father and Mother to joint custody of ILB, the Mother to have ILB’s care and control, and incorporating the terms relating to detailed access and funding of travel set out in the Coleridge’s Order (“Mirror Order”)[8]. There was also an order made on that day for the Father to pay to the Mother interim maintenance for the benefit of ILB of HK$321,667 per month commencing on 1 January 2013 and thereafter on the 1^st day of each month until further order[9] (“1^st Interim Maintenance Order”).

29.  Under s 13 (3) of GMO, any interim order made under that subsection shall not have effect after the end of the 3 months from the date of that order.  Further, under s 16 (1), no appeal against any interim order is allowed under the Ordinance.

30.  Notwithstanding the Father’s protest, a further interim order was again made on 7 March 2012 by Judge Wong for the same amount, upon expiry of the 1^st Interim Maintenance order (“2^nd Interim Maintenance Order”).  On the same day, the matter was also transferred to the High Court.

31.  The Father was clearly unhappy about the two interim orders and on 24 April 2013, he filed a complaint in the District Court of New York Southern in USA against Mr C over the alleged loans Mr C had made to the Mother and alleging, among other things, a conspiracy between Mr C and the Mother to defraud the Father.  The Mother’s father was also mentioned in the US Complaint.  What followed was international press interest in the ongoing litigation between the three of them.

32.  The 2^nd Interim Maintenance Order will expire on about 17 June 2013.  On 29 April 2013, the Father applied to vary the 2^nd Interim Maintenance Order downwards to HK$120,000 per month or for any new interim order to be not more than this sum.

33.  The Mother’s Application and the Father’s Application came before this Court for a direction hearing on 10 May 2013 (“Direction Hearing”) after being transferred from the Family Court.  On that day, directions were given for the substantive trial to be expedited and trial dates were fixed for end of the month without consultation of Counsel’s diaries.  Thereafter, the Father requested for an adjournment, which was not allowed.  I will deal further with this request hereafter.

The Father’s Request for Adjournment

34.  In fact, I was under the impression that both parties had wanted to have early dates for the trial, since as early as on 7 March 2013 when the parties appeared before Judge Wong at the Family Court when the 2^nd Interim Order was made, the parties had indicated that they wanted to “get on with the matter”[10]. During that hearing Mr Coleman, Leading Counsel for the Mother, had already asked Judge Wong to find dates as soon as possible in the coming couple of month and Mr Pilbrow, then Leading Counsel for the Father, had agreed there was urgency in the matter.

35.  I had understood that this was what the parties wanted during the Direction Hearing. Mr Chan, present Counsel for the Father also said at the commencement of the Direction Hearing that both parties were keen to have the matter brought forward, and depending on the trial dates, the Father might apply for video-conferencing facility be used for either part or all of the trial.  It was on this basis that I informed Mr Chan and Mr Coleman that due to the settlement of another case, I would be available for 5 days at end of May.  Mr Coleman immediately indicated that for his side, they would take those dates.

36.  I then stood the matter down for Mr Chan and his instructing solicitor to telephone the Father to take instructions. There is a 15 hour time difference between Hong Kong and Los Angles were the Father was. They were able to contact the Father who was on his way home, and the response was he would be having a lot of Board meetings around that time, but with the time difference, he could be available during the night, but subject to the Father getting back home to check his diary.

37.  It was in the above circumstances that I decided to expedite the matter and to fix the dates of the trial at end of May.  I explained to all those present that the ILB’s best interest is really the Court’s concern, and rather than have several interim hearings upon expiry of each interim order, the case should move on as soon as possible to the substantive trial.  I further gave leave for the Father to attend the trial by video conferencing.

38.  At the Direction Hearing, Mr Chan was content with those directions proposed by Mr Coleman in his note, in particular that the parties would only be allowed to each file one further affidavit, and the estimated length of 5 days for the trial was also agreed on that basis.  There was no indication at the Direction Hearing that the Father was intending to call any other witnesses or to instruct any experts.

39.  On 13 May 2013, the Father requested for an adjournment of the trial, by way of a letter from his solicitors[11]. No details or any supporting evidence was provided in that letter for the reasons as to why the Father wanted an adjournment.  His request was met with opposition from the Mother, and this Court did not allow any adjournment and the reasons were set out in a letter[12].

40.  In the Father’s affidavit, which was the only affidavit filed by him in these proceedings, he complained of not being given sufficient time to prepare and to instruct his solicitors and Counsel or the ability to call expert witness.  He provided an itinerary for a school trip with his son S in Sacremento from 14 – 17 May 2013, and notices of meetings of 3 companies, at respectively 9 am, 9:30 am, and 10 am on 21 May in a hotel at Redondo Beach.  He claimed that “extensive preparation” was prepared for these meetings, and there were matters he needed to follow up afterwards, but no details were provided.  Later during the trial, it transpires that he went to Chino Hills for the Memorial Day holiday weekend immediately prior to the commencement of the trial.  I was not able to see sufficient evidence of any “extensive business commitments” for those two weeks before the commencement of the trial, as set out in the Father’s solicitors’ letter requesting for adjournment.  Apart from the 3 meetings scheduled, all I could see were pleasure/holiday trips.

41.  According to the Father, it was impossible for him to attend personally the trial in Hong Kong, and he was thus disadvantaged.  However, according to what Mr Chan told this Court during the Directions Hearing, it seems the Father was contemplating giving evidence by video conference anyway even if the trial was to be fixed on other dates. In any event, there was also no sufficient evidence provided by the Father as to why he could not attend the trial personally the week of the 27 May, and attended to whatever business commitments/meetings he had, if any, by way of video conferencing.

42.  The Father also suddenly claimed in his affidavit that he wanted a number of individuals to be called as “experts” to give evidence to assist the Court in dealing with his financial position, including the Mother’s father.  He further complained that he did not have time to find a new leading counsel, although from his own evidence, there was one available, but only the fees were excessive.  In any event, his present Counsel, Mr Chan, is a well respected barrister in family matters.

43.  The parties’ Form Es were filed in January this year, some 4 months ago, and in February, the Father was already served with the Mother’s 1^st questionnaire.  By early afternoon on 14 May, Hong Kong time, the Father should have received the 2^nd Questionnaire from the Mother’s side.  No formal application was ever made by him for leave to file affidavits from any other witnesses or for any appointment of experts before the commencement of the trial.

44.  In fact, he did try to apply for leave to adduce expert evidence in the Schedule I Proceedings, but was refused by Baron J [13] during the PTR in September 2010.

45.  After this court’s refusal to allow the Father’s request for adjournment by letter, no further formal application was made by him. 

46.  As one can see from the chronology of litigation set out earlier, the present proceedings are not “new” proceedings as such, or that the Father was caught by surprise.  Litigation between the parties had gone on for almost 5 years.  The Father had a team of lawyers in each of 3 jurisdictions helping him.  The deadline set in the Consent Order was 31 December 2012, and with no agreement being reached between the parties over ILB’s financial provision, the Father should have anticipated the Mother’s present application would be launched before the deadline.  He had had plenty of time to put his case together.  Most of the issues had already been litigated before Parker J, as can be seen from Parker’s Judgment. 

47.  Moreover, the Father did not apply for any variation of the 1^st Interim Order.  He only decided to apply formally for a variation after the 2^nd Interim Order.  The Father’s application was not supported by any affidavit, as it should have been under the rules.  However, as that was his application, one would have thought that he should have had all the supporting evidence ready by the time it was issued at end of April.

48.  As I have said earlier, the 2^nd Interim Order will expire around middle of June, and the Father should have anticipated there will be a hearing before then.  To support the Father’s own application for variation and his own case, the same financial evidence would be required, whether for the interim or the final hearing.  In my view, the Father simply had not provided sufficient reasons to seek an adjournment and in any event as I said at the Direction Hearing, it was in the best interests of ILB to have an expedited final hearing.

Legal Principles

49.  The Mother’s application is made under s 10(2) of GMO, which is set out hereafter:

“The court may as regards 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.”

50.  I have previously set out in a judgment in the case of H and S[14] that there are some major differences between the provisions in Hong Kong under GMO and those set out in s 15 and Schedule 1 of the Children Act 1989 (“1989 Act”).  In particular, the factors set out in paragraph 4(1) of Schedule 1 of the 1989 Act do not exist in our GMO.

51.  Paragraph 4(1) of Schedule 1 of the 1989 Act sets out as follows:

“In deciding whether to exercise its powers under paragraph 1 or 2, and, if so in what manner, the court shall have regard to all the circumstances including –

(i) the income, earning capacity, property and other financial resources which each person mentioned in sub-paragraph 4 [either parent] has or is likely to have in the foreseeable future;

(ii) the financial needs, obligations and responsibilities which each [parent] has or is likely to have in the foreseeable future;

(iii) the financial needs of the child;

(iv) the income, earning capacity (if any), property and other financial resources of the child;

(v) any physical or mental disability of the child;

(vi) the manner in which the child was being or was expected to be educated or trained.”

52.  The above factors are somewhat similar to those set out in s 7 (2) of our Matrimonial Proceedings and Property Ordinance (“MPPO”), which the courts in Hong Kong are required to have to in considering the application for financial provision of a child of the family in matrimonial proceedings.  Such factors are missing from our GMO.

53.  Further, under s 3 of our GMO, in dealing with matters concerning a child’s custody and upbringing, it is mandatory for the court to regard the best interests of the child as first and paramount consideration.  This does not appear in Schedule 1 of the 1989 Act.  Although the list of factors in Schedule 1 of the 1989 Act contained no express reference to the welfare of the child, as said by Hale J in the case of J v C (Child: Financial Provision)[15], this must be one of the relevant circumstances to be taken into account when assessing whether or how to order provision for the child.

54.  Notwithstanding those differences in legislation, in relation to the financial provision of a child of unmarried parents, as I have set out in H v S, and also recently set out by Judge B Chan in his judgment in IDC v SSA[16], those principles and guidelines set out in the leading English authority of Re P (Child: Financial Provision)[17] and the line of cases thereafter have provided very helpful guidance to the courts in Hong Kong.

55.  In Re P[18], a summary of the relevant considerations was set out by Bodey J, as follows:

(i)    The welfare of the child while a minor, although not paramount, is naturally a very relevant consideration as one of ‘...all the circumstances…’ of the case

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

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

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

(v)     However, as this latter concept lends itself to demands going potentially far wider than those reasonably necessary to enable the mother properly to support the child, 'one has to guard against unreasonable claims made on the child's behalf but with the disguised element of providing for the mother's benefit rather than for the child: J v C (child: financial provision) [1998] 3 FCR 79 at 87.

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

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

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

56.  Bodey J then went on to say in Re P that from the experience of that case, he would propose three further considerations[19]:

“(i) In considering the mother's budget, at least in bigger money cases, the court should paint with a broad brush, not getting bogged down in detailed analyses and categorisations of specific items making up opposing budgetary presentations. Rather, the court should do its best to achieve a fair and realistic outcome by the application of broad common sense to the overall circumstances of the particular case.

(ii) Comparisons with the commercial cost of providing professional care are unlikely to be of great assistance and may only serve to distract.

(iii)  When setting up a budget for the sort of lifestyle a child should be enabled to have, the court should not generally attach weight to the risk that the father may reduce or withdraw his support when the child comes of age (or ceases education or training) thereby obliging the child to adapt to a lower lifestyle at that time.”

57.  In Hong Kong, this court’s jurisdiction is discretionary.  No factors having been set out in legislation, the only criteria in s 10 (2) of our GMO is what the court deems “reasonable” having regard to the means of the parent to whom the application is directed, which in the present case is the Father.  In exercising discretion, this court will have regard to all the circumstances of the case, and in my view, these should include those matters as provided in the English legislation.

58.  With the above principles in mind, I now turn to the facts of the present case.

Main Issues

59.  The main issues before this court are:

(i)   The financial resources of the Father;

(ii)   The financial resources of the Mother;

(iii)   The reasonable budget for ILB, including her accommodation;

60.  In this judgment, for easy calculations, I shall use the following exchange rates:

(i)   US$1 to HK$7.75

(ii)   £1 to HK$12.17, which was approximately the rate used in the Consent Order for converting £120,000 per annum to HK$1,460, 000

The Financial Resources of the Father

61.  The Father’s case was that his income had dropped drastically since Parker’s Judgment.  The Father had attached a document to his Form E (“Att 5.1(2))[20] to explain the changes since the financial crisis in 2008.  The Father’s primary business activities were managing various hedge funds (“SP Funds”), including but not limited to SP, LP, SP II Fund, and the SPJ Fund which is managed as a 50/50 joint-venture with another  asset management entity.  SPII Fund ceased operations on 15 July 2009, and according to the Father SPJ Fund ceased operating and continued in wind-down, except for one remaining investment in 2010.

62.  The Father said he exited the investment management business due to the 2008 financial crisis, as a result of which the assets under management dropped from a peak at US$3.9 billion in 2006 to the current value of US$459m.  As a result, the revenues from the management of these assets dropped.

63.  The Father said SPII Fund was managed by entities in which the Father had an economic interest, namely SPII GP, and SP Ltd and its subsidiaries SPL and WGL.  The Father set up a table in ATT 5.1(2) listing the net return for the SPII Fund from 2004 to 15 July 2009 (‘Table 1”).

64.  The SPJ Fund liquidated all but one of its investments and had returned the proceeds to the investors. Again, the Father set out a table in ATT 5.1(2), listing the net return from 2004 to 2012 (“Table 2”).

65.  The Father further set out in ATT 5.1(2) a list of assets held directly by him, in various limited liability companies (LLC), or limited partnerships (LP) or Ltd “entities”.  To summarise what was set out therein, these were as follows:

(i)   SSM — this was the LLC entity through which the Father held an interest in the SS LP, an investment vehicle.  This entity liquidated all its investments and made a final distribution to the Father US$227,896 in 2010, and was  liquidated in 2011;

(ii)   SPII GP — this was the LLC entity through which the Father invested in the SPII Fund, and upon cessation of operation of SPII Fund on 15 July 2009, the Father received US$1,287,773 in cash and 782,274 common units of the publicly traded holding company SPH, which was valued at US$13,520,457 or $11.68 per unit as at 31 October 2012, thus according to the Father, a loss of about US$4.38m or 32 % since 15 July 2009.

(iii)   SP II (onshore) — this was a LP entity through which the Father invested in the SPII Fund.  Same as above, the loss was US$4.38m or 32 % since 15 July 2009.

(iv)   SP Japan — this was the LP entity through which the Father invested in the SPJ Fund, and as SPJ Fund had ended all investment activities except one, and had distributed cash of $170,119 to the Father, the value of this entity is its interest in the remaining investment of the SPJ Fund. 

(v)   SPL — this is a Ltd entity, and in January 2009, the Father’s interest was 10.34% and had an estimated value of US$300,000.  Now, the Father owns 41.59% and according to the Father, SPL has a mid range value of US$92,336,044.  The increase in interest in SPL was due to SPL’s acquisition of WGL (which was previously 100% owned by the Father) on 28 March 2012 in exchange of an additional 33.18% in SPL.  Prior to SPL’s acquisition of WGL, WGL made a cash distribution and a distribution of common units of SPH to the Father.

(vi)   SPL — Notes Payable— According to the Father, in January 2009, the Father had multiple loan notes payable to SPL and in 2010 the Father acquired certain art from SPL in exchange for a note payable to SPL of US$5,264,669.  Since then, there was restructuring of the loan notes, and the Father made an repayment of US$5m on 2 October 2012.  I will deal with this alleged liability later.

66.  In the Schedule 1 Proceedings, the Father had adopted a “millionaire’s defence” (as this is sometimes called), namely that he is able to meet any order that the court might reasonably make. As a result, his disclosure was somewhat limited in those proceedings.  Parker J had at that time commented[21] that there was an element, of the Father attempting to have it both ways because he had also stated in those proceedings that since the collapse of the Lehman Brothers the world had changed around him and that his wealth was only one tenth of what it had been, and he had had to rein himself in.

67.  It seems that the Father is now trying to run the same arguments as he did before Parker J.

68.  Initially in  his  Form E filed in the Schedule 1 Proceedings , the Father apparently  had said  his net wealth was £41m, and then later in a statement filed shortly before the trial before Parker J on 27 October 2010 (“2010 Statement”), he said his net wealth had dropped to £31m.

69.  In particular, in calculating his wealth, in his then Form E, he stated that he had about US$46m in deferred tax[22]. Parker J later pointed out in her judgment that this alleged deferred tax did not relate to tax liabilities but to the value of certain investments and other assets net of tax[23]. She was unable to conclude that the Father had such a liability as set out by him, or in that figure[24].

70.  Parker J also referred to 4 trusts which the Father had set up for his son S, and ILB was only a beneficiary of one of the trusts if S was to die without issue.  It appears that the existence of 3 of those 4 trusts was only disclosed in the Father’s 2010 Statement and it transpired during the proceedings there was a total of US$43m in some or all of those trusts (“Grantor Trusts”)[25].

71.  Parker J further pointed out the Father’s budget and historical expenditure showed not only the sum that he spent on his primary residence in Aspen over a period of 18 months was US$7½m, but also his general expenditure was US$1.1m per month over the relevant 18 month period[26]. The Father was always travelling by private jet, although the Father said that was in the interest of his business. Parker J had said that the Father’s own case at that time was that his proper level of expenditure was something over US$600,000 per month per month[27].

72.  Thus, Parker J found the Father was leading an opulent lifestyle, and that notwithstanding his then allegation that his wealth had declined very significantly, Parker J found that he was at that time still a man of very considerable means[28]. This was at about the end of 2010, about two years after the financial crisis.

73.  Although the Father did subsequently obtain leave to appeal, so far as I could see in the Father’s Grounds of Appeal[29], there seemed to be no challenge of Parker J’s findings about his own income and financial resources.

74.  According to the Father’s affidavit filed in these proceedings, Parker’s Judgment was based on his financial position more than 3 years ago in 2009/2010, and that his financial position has changed dramatically since then[30]. He did not apply to vary Parker’s Order, and in fact, he paid the sum he was to settle into ILB Trust for the purchase of accommodation for her.  He also agreed to the terms of the Consent Order in August 2012[31], and he tried to explain that this was “to keep things amicable”.  Whatever his explanation was, he did agree to pay the amount of HK$1,460,000 as periodical payments for ILB, excluding her accommodation, which was in line with the Parker’s Order which according to him was made at a time when his financial circumstances were much better.

75.  At the time of the trial, Parker J had considered not only the Father’s Form E, but also his 2010 Statement.  The Father also had full opportunity to update his financial position during the trial.  The gap between Parker’s Judgment and Father’s Form E filed in January 2013 was just slightly over 2 years.

76.  In the Father’s 2013 Form E, he declared as follows:

77.  So far as his income is concerned, according to the Father, there has been a significant decline over the past years.  His 2010 personal income tax returns show an income of US12,403,048 for that year[32], and  his 2011 tax returns show  an income of US$1,283,479 for that year[33]. Up until the trial, he had not produced his 2012 tax returns, not even a draft, but yet he estimated that approximately US$4m was due and payable on 15 April 2013[34] for the year of 2012.

78.  His taxable income for 2012 clearly exceeded what he claimed to be his salary and director’s fees in his Form E if his tax liability was in the region of US$4m.  His explanations seem to be that his 2012 ‘taxable income’ included the following[35]:

(i)   Salary from SP General Services LLC of about US$500,000 (US$41,667 pm)[36]

(ii)   Director’s Fees of about US$222,504 (US$18,524pm)[37]

(iii)   One time cash distribution from WGL on 17 January 2012 of  US $500,000[38]

(iv)   100,026 common units of SPH[39]

(v)   Stock redemption from SPL treated as dividends

(vi)   ‘pass-through’ income received by the Grantor Trusts

79.  The stock redemption in (v) above referred to by the Father was a sum of US$4,999,050 he received on 15 January 2013[40].

80.  It is, however, not clear what the amount of the ‘pass-through’ income, referred to by the Father in (vi) above and received by the Grantor Trusts in the year 2012 was, nor was it clear which Grantor Trusts he was referring to. 

81.  The Father disclosed only one of the Grantor Trusts in his Form E of which he and his descendants were beneficiaries, and gave a net value of US$654,933 for his interest.  As I understand, the Father set up 3 new trusts in October 2010 during the Schedule 1 Proceedings, and properties previously held in earlier trusts were then transferred to these newly set up Grantor Trusts.  I further understand these 3 new Grantor Trusts are Trust II, Trust III and IV GST Trust.

82.  According to the Mother[41], under Trust III, ILB is a beneficiary as one of the Father’s descendants.  ILB will benefit from at 10% in the unfortunate circumstances where S passes away under the other two of the new Grantor Trusts.

83.  The assets of the Trust II and Trust III are the common units of SPH.  The IV GST Trust owns 49.61% of the stock of SPL.

84.  In the Father’s 2011 tax returns there were 3 transactions described as “Distribution in Excess of Basis - SPH” amounting to a total US$4,531,621[42], and the 3 transactions were explained by the Father to be[43]:

(i)   US$1,796,673 received by Trust II resulting from a cash distribution from SPH

(ii)   US$ 884,339 received by Trust III resulting from a cash distribution from SPH

(iii)   US$1,850,609 received by the Father resulting from a cash distribution from SPH

85.  For 2011, the Father also derived taxable capital gains from 3 transactions from SPH, totaling an amount of US$2,008,670 which the Father explained as follows[44] :

(i)   Trust III gains from SPH in the amount of US$391,989;

(ii)   Trust II gains from SPH in the amount of US$796,386;

(iii)   The Father’s gains of US$820,295 but he said these were gains in partnership interests, which were not distributions of cash, and there was no cash benefit to the Father, and the gains were reflected and built into the value of his interest in SPH.

86.  The so called “pass-through” income was clearly deemed to be the Father’s income by the US tax authorities, otherwise he would not need to pay taxes on such income.  Such income was settled into Trust II and Trust III.  Likewise, the capital gains tax on the gains of assets of these two Trusts arising from SPH had to be paid by the Father.  As I have said earlier, the details of the “pass-through” income to Trust II and Trust III in 2012 had not been disclosed by the Father, nor had the capital gains from SPH, if any.

87.  The Father confirmed that Trust II owned 1,516,552 common units of SPH, and Trust III owned 747,938 common units of SPH. He did not disclose the details of all the assets of these two trusts and only said the largest assets were the respective units in SPH.  Whatever assets there were in the Trust II and Trust III at the end of 2010, such assets would very likely have been increased by the cash distributions and capital gains from SPH, as transpired in the Father’s 2011 income tax returns, and the undisclosed amount of “pass-through” income in 2012.

88.  The Father was asked to provide further information about the 3 new Grantor Trusts in the Mother’s 1^st questionnaire in February 2013, after he filed his Form E. Some of those, he had still not provided by the time of the trial.

89.  According to the Mother, the trustees of the new Grantor Trusts are both close and longstanding personal friends of the Father’s, and it is her case that the Father could have provided the information and answers sought by her without difficulty. Also, the Father seemed to be able to borrow from these trusts.

90.  I say this because under the Parker’s Order, the Father had to settle a sum of £2,640,000 into ILB Trust for the purpose of purchasing a property for ILB and the Mother to occupy as their home, which was paid by him into the escrow account of his London solicitors, and the bulk of that sum seemed to have come through Trust III. The sum was eventually repaid to him after the Consent Order.  £125,000 was released to the Father on 20 July 2012 and was according to the Father wired to WGL’s account.  £2,664,375.13 was released on 9 August 2012 and was deposited by the Father into the Trust III account[45], as the Father said Trust III borrowed US$2m from SPL to fund the payment of £2,664,375.13 and this was repaid by Trust III to SPL.  What is clear is that although the Father is said to be not a beneficiary of Trust III, he was able to borrow sums from Trust III[46]. All in all, I find that the Father’s disclosure todate regarding the Grantor Trusts clearly unsatisfactory.

91.  The value of the Father’s declared assets in his Form E, less his pensions, was US$54,516,491.  For all the landed properties, the values he used were all net values (market value less broker commissions, taxes, outstanding mortgage and other loans).  For his shareholding in private companies, again, he gave net values, after deducting US taxes in case of sale.  This was the same for his various stocks and other investments.

92.  The Father has listed 6 Items of liabilities of some US$48.5m or about HK$376m.

93.  Item 1 is an alleged liability under a “Consolidated Promissory Note” to SPL dated 1 October 2011 for a principal amount of US$19,476,554.40 due on 30 September 2014[47] (“Promissory Note”).  According to the Father, the Promissory Note consolidated all the previous liabilities to SPL which were in existence in January 2009.  Such alleged liabilities were not disclosed in the Father’s Form E filed in the Schedule 1 Proceedings and the Father said he omitted to mention these liabilities due to an oversight.  It seems to be a rather large amount to be omitted.

94.  The Promissory Note was signed by the Father on both sides of the transaction alleged, without any witness or verification.  According to the Father, in January 2009, he had multiple loan notes payable to SPL totaling about US $20.6m, and then he said in 2010, he acquired certain art from SPL in exchange for a note payable to SPL for US$5,264,669[48]. In the schedule A attached to the Promissory Note, I was, however, not able to identify this amount.

95.  Pausing here, it seems from what the Father said, he should then owe SPL a further sum of about US$5.265m for the acquisition of some art from SPL.  It is not quite clear what this art/art collection is.  When asked for valuations, the Father seemed to have only produced some insurance policies without identifying the art relating to this acquisition.

96.  Anyway, according to the Father, the previous multiple notes were restructured and exchanged for the Promissory Note, and then he said he repaid US$5m on 2 October 2012, two years before the due date. The outstanding balance stated in his latest Form E was US$14,509,663.  Thus, between January 2009 and January 2013, the loans to SPL had therefore been reduced by some US$6m and the Father had also ended up owning some art/art collection worth US$5,264,668. This did not appear to me to indicate that the Father was in any worsening financial situation, since the Father ended up with more or less the same situation as in January 2009.

97.  Item 2 relates to a loan from Key Equipment Finance of US$8,343,966 to SP Leasing LLC, a 100% subsidiary of WGL for the financing of a private airplane for which the Father provided a personal guaranty.  The loan was executed in 2005 in the amount of US$8.3m and was not repaid, nor was interest, so that the total amount of indebtedness grew to US$8.343m.  The Father then claimed that he had received a demand letter to pay to the lender, and after negotiation with the lender, the Father said that he paid US$4.6m under his personal guarantee in full and final settlement of the entire loan, and this was 5 days after his latest Form E was filed.  According to the Father, the airplane was in the course of being sold, and no more than about US$1.5m was expected to come of the sale, and the company SP Leasing LLC did not own anything other than this airplane.  As pointed out by Mr Coleman, the Father had successfully ended up paying only about half of the loan amount and it was a good business deal.

98.  Item 3 consisted of ‘charitable pledges’ for schools and JCC, in the sum of US$1,450,000/HK$11,237,500.  Item 4 consisted of ‘professional fees’ of US$287,848/HK$2,230,822.  These did not seem to be challenged by the Mother.

99.  Item 5 was ‘current tax liabilities due early 2013’ of US$4m/HK$31m.  Notwithstanding that he had not produced any 2012 tax returns, nor even a draft, he went and paid US$3.83m on account.  Anyway, the amount outstanding would only be about US$0.17m, if any.

100.  Item 6 was described as ‘Deferred tax liability- Grantor Trust’ of almost US$20m.  The Father referred to a document called Proskauer Memo[49]. As mentioned earlier, the item of deferred tax liability was raised during the Schedule 1 Proceedings before Parker J, which seemed to be claimed by him to be some US$46m initially.  The Father then said that his deferred tax liability was not $46m but $21m.”[50]. Whatever the amount, Parker J did not accept the alleged liability was a deferred tax liability.  The Father did not appeal against her finding on this item.

101.  I accept what Mr Coleman has submitted, that upon reading the Proskauer Memo, it is clear that such a liability is in fact a ‘contingent’ liability, contingent upon the Grantor Trusts selling all the trust assets, which is unlikely.

102.  The Father included in his Form E another ‘contingent’ liability under a personal guaranty with respect to a loan of WGL for another aircraft.  There are altogether two private aircrafts.  For this one, the Father has provided a personal guarantee of US$13,582,577/HK$105,264,972. This is clearly only a contingent liability.

103.  The Father also included his continuing maintenance obligations to his former wife, as a liability.  I am of the view that these are not capital liabilities.

104.  I do not find that item 1 to be a liability immediately payable, or even payable in the forseeable future, although there is a due date in a year’s time.  These loans had in effect been in existence for over 4 years by now, and the Father did not even remember to include them in his Form E or his 2010 Statement in the Schedule 1 Proceedings.  Item 2 is now gone. There is no sufficient information as to when the Father will be called on his charitable pledges in item 3.  Most of item 5 of his ‘current tax liabilities’ had already been paid, namely US$3.83 out of US$4m.  I find item 6 to be only a contingent liability. Thus, his net assets according to his Form E should at least be US$52m, as follows:

Assets stated in Form E, less pensions    US$54,516,491

Less:

Item 3   US$1,450,000

Item 4   US$287,848

Balance of Item 5   US$170,000

Total    US$1,907,848

Net Assets   US$52,608,643

105.  After the Father filed the recent Form E, according to the Father, he had the following receipts and payments:

Receipts:

(i)   US$4,999,050 received on 15 January 2013 for stock redemption

(ii)   100,026 common units of SPH ( the date of receipt by the Father not clear)

Payments:

(i)   US$4.6m repayment to Key Equipment Finance

(ii)   US$3.83 on account of 2012 taxes

Net:

Receipts less Payments = US$3,430,950 (Deficit)

106.  Thus, even if one takes into account the above deficit of US$3,430,850, the Father is still worth at least about US$49 m, on his own figures.  This is almost HK$380m. 

107.  It is not clear how the Father financed the payment of his expenses of US$242,441 per month or about US$2.9m a year, and on his stated earned income and director’s fees totaling US$60,209 per month or US$722,508 a year, he would have a deficit of at least US$2m a year, totaling about US$4m for the two years of 2011 and 2012, after the Parker’s Judgment.

108.  However, the sum which I arrived at of about US$49m seems to come to about the same amount of £31m which the Father declared was his net worth in October 2010[51], and which Parker J found was the minimum worth of the Father’s net wealth at that time, and she had further said it “may well be more”[52].

109.  Anyway, even assuming that my calculations of US$49 m were wrong, the value the Father gave for his assets in his Form E of about US$54.5m was based on the value of his 41.59% interest in SPL being US$17,462,353 net.  The Father had relied on a report called the Ronin Report[53]. This seems to be only a one page brief report giving low to high equity value of SPL, on a “going concern” basis and on “orderly liquidation” basis.  There were no supporting documents/details.

110.  Mr Coleman submitted that the value(s) in the Ronin Report were gross undervalue(s), based on the redemption value of some of his shares in October 2012.  The Father said in his Form E he received US$3.1m net for this redemption, but as seen above, he received a total of almost US$5m.  Even say this amount at net of taxes came to US$3.1m, according to Mr Coleman’s calculations, if 1.9% was redeemed for US$3.1m net, then 1% was worth US1.623m, and the Father’s 41.59% should be US$67.4m net of tax, considerably more than the US$17.5m alleged by him.  In fact, almost US$50m more.  There were no explanations in the Ronin Report as to such discrepancies and further the Ronin Report clearly states that the valuations(s) therein should not be considered in whole or in part as investment advice by anyone.  In view of all this, I accept Mr Coleman’s submission that the Father has more likely than not understated the value of his interest in SPL.

111.  I would also like to point out in the ATT 5.1(2), what the Father said about the SPII Fund and the SPJ Fund took place before the trial before Parker J.  Further, there was no mention in ATT 5.1(2) of the performance of his other hedge funds.  It is also not clear how many hedge funds there are in total.

112.  To conclude, whatever picture the Father may now try to paint, I find him still a very wealthy man.  I do not see any real changes in his financial situation since Parker’s Judgment.  Whether there were changes or not, I find that he can well afford to pay the amounts ordered by this court.

The Mother’s Financial Resources

113.  Mr Chan has submitted that I should take into account the Mother’s financial resources, even though this was not a requirement specifically stated in GMO, and that the Hong Kong legislation is different from that of the 1989 Act.

114.  The Mother has not been engaged in any regular gainful employment since she quit her job in about 2001.  According to Parker’s Judgment, the Mother did manage to do some work during ILB’s first 18 months and for 5 months had employment as a motivational speaker, being paid pro rata £80,000 a year.

115.  She had received trust income from time to time in the past but said this had stopped.  She used to receive an allowance from her father of £24,000 pa, or £2,000 per month, but said such allowance had also stopped since April 2013.

116.  Apart from monies the Father owed her for legal costs, the Mother disclosed in her Form E in these proceedings cash at bank of about HK$1.28m, and personal items of HK$2.335m, totaling about HK$3.616m.  She, however, claimed that she owed Mr C a total of HK$27,489,000, and a Mr D a total of HK$2,625,000.  Other than these, she owed some HK$150,000 for amounts incurred with her credit cards.

117.  In the Schedule 1 Proceedings, the Father had challenged in particular the Mother’s need for accommodation.  His then case was that he did not need to provide for separate accommodation for the Mother and ILB, as they could continue to stay in the Roland Way Property.

118.  The Roland Way Property is owned by a trust (“B Trust”) established by the Mother’s parents in 1999.  The Mother and her sister are beneneficiaries under B Trust which rented the property to the Mother’s parents who paid the rent, and the rent was then paid out to the Mother and her sister.

119.  The B Trust was set up at end of October 1997, with a Jersey trust company as trustees, and afterwards, the Mother’s parents settled the beneficial interest of the Roland Way Property into the B Trust.  Originally, the Mother’s parents were the life tenants, although their children and their issue were also beneficiaries.  In 2006, the Mother’s parents executed a deed of appointment by which they were removed as beneficiaries.  The Mother and her sister and their respective children have become the only beneficiaries, and the Mother is a life tenant as to income. After the execution of the deed of appointment, the Mother’s parents, as freeholders, granted a lease to themselves at a market rent in September 2006, for three years, which ran from June 2009.  A fresh lease was subsequently executed to the Mother’s parents, at a rent of £78,000 per annum.  This lease was to expire in June 2011.

120.  The Father’s initial position in the Schedule 1 Proceedings was that the Roland Way Property was the Mother’s in spite of the terms of the B Trust.  His position then seemed to change and that he said the Mother should ask the trustees whether they would be prepared to allow her to occupy the property upon the expiration of the lease in June 2011, and that the Mother’s application for housing should be adjourned pending the trustees’ response.  Parker J found this suggestion untenable[54]. Parker J found that the reality was that the trustees could not act independently, and that the position was that the family treated the Roland Way Property was the family home, and the Mother’s parents as being in control.

121.  Parker J also found that it was nonsense to suggest that the Roland Way Property be treated as the Mother’s home to the exclusion of others, since the Mother’s sister was also a beneficiary.  Parker J found that the Father’s argument that the property was the Mother’s was not justified on the evidence.  Although Parker J accepted that the Roland Way Property was a resource to the Mother because the Mother was a beneficiary of B Trust, she found that it was not a resource which would meet the Mother’s housing needs.

122.  There was another BVI trust settled by the Mother’s parents in 2001 (“A Trust”), which owns a property in Aspen worth about US$12-$14m, a property in Florida with an estimated valued of about US$15m.  A Trust rented the properties to the Mother’s parents and the rental income was used for running expenses.  The Mother is equal life tenant with her siblings as to income, but it seems there had been no income as there had been no distributions[55].

123.  The Mother’s parents also own a Bermudian company AC Inc which holds two houses on Strawberry Hill in Hong Kong, one is now being occupied by the Mother’s sister and her family, and the other one is occupied by the Mother’s parents when they are in Hong Kong.  The Mother has no interest in AC Inc, or the two houses on Strawberry Hill.

124.  Parker J found that the Mother was entitled to distributions, subject to the trustees’ need to retain monies for the upkeep, from the rent of the Roland Way Property.  As of October 2009, according to a letter from the trustees, the only distributions to the Mother made in the previous three years were £15,000 in December 2008 and a further £7,324 in April 2009.  However, subsequently, upon the Mother being recalled by the Father’s Leading Counsel, it turned out that she had received additional income from the B Trust.  The calculations put forward by the Father’s Leading Counsel at that time were that  the Mother’s income was a total of £49,000 per annum, being £24,000 paid by her father, and £25,000 being income from B Trust[56].

125.  Parker J accepted that the Mother was entitled to expect that the Father should bear the financial responsibility for ILB in the light of the discrepancy in their financial resources but she did not accept that the Mother’s own resources were irrelevant in the context of her own support.[57]

126.  Parker J found that the figure of the Mother’s trust income should be overall, year on year, somewhere in between £25,000 and £49,000 per annum[58]. Parker J also found that the Mother had some resources and may be able to start earning at the point at which ILB starts to go to school, which will coincide with the point at which the Mother’s father stops paying her[59].

127.  Parker J then went on and found that a more than manageable budget for the Mother and ILB was £155,000 per annum[60], and after taking into account the mother’s resources, Parker J ordered the Father to pay £120,000 per annum.

128.  Thus, it would appear that the resources the Mother was found to have in 2010, which were taken into account by Parker J, were about £35,000 per annum.

129.  To summarise, the Mother did receive some income from B Trust at the time of the Schedule 1 Proceedings.  There was no income/distributions received by her from A Trust, or from AC Inc.  The only other resource of the Mother at that time was the £24,000 per annum paid to her by her father.

130.  The Mother has stated in her Form E that the value of the Roland Way Property held by the B Trust was £2m, and the value of the properties held by the A Trust was US$10.8m.  She has said her right to capital is at the discretion of the trustees.

131.  The Mother has produced an email from the trustees that she will no longer receive any income from B Trust[61]. The rental from the Roland Way Property stopped as there was no further need for that particular tax device under which her father rented notionally the Roland Way Property and for that rent to be paid into the trust and distributed to the Mother and her sister.[62]  The income from her father of £2,000 also stopped in April 2013[63] upon his retirement from the last board on which he was a director. 

132.  Whatever was the situation at the time of the Schedule 1 Proceedings, by now, all income from B Trust and from her father has stopped.  There was no sufficient evidence from the Father to indicate otherwise.  I accept the Mother’s evidence that the income from B Trust and from her father has stopped.  There is no sufficient evidence that she is receiving income from the other trusts or companies set up by her parents.

133.  So far as the Mother’s earning capacity is concerned, Parker J had taken the Mother as having minimal earning capacity at the time of the trial.  She was aware that the Mother had been able to earn a little from ad hoc activities such as to undertake a specific speaking engagement if asked, but Parker J discounted that as being material[64].

134.  The Mother last held regular employment more than 12 years ago in 2001 as a director of residential leasing at for an international property agent in Hong Kong.  The Mother said her last contract from a sponsor ended in 2005, and that was for a limited period, and although she did have some speaking engagements, she said she had not earned any income for working outside her home since 2007.  Since the birth of ILB, she had not undertaken any expeditions.  Although she has recently carried out some speaking engagements in Hong Kong but none of these had been paid engagements and a number were for charitable causes. 

135.  ILB started going to school in September 2012, and the Mother disclosed that she had recently been approached to work as an intern in a small start-up company.  She said she was not paid a salary in respect of this work, and that she had only able to do very limited work for them just before the trial.  This was because she had to take time off to take ILB out of town due to the publicity and press intrusion when the Father started the action in USA against Mr C, and then she became busy with the trial. She thus said she had not been able to go in to work, and she was hoping that they had not fired her already.

136.  I accept that the Mother has some earning capacity but realistically speaking, she will only be able to start working after these proceedings are over, and it will also take time for her to get back into the work force to be able to earn any significant amount.  If and when this happens, no doubt the Father, if so advised, may decide to apply for a variation, but at the moment I regard the Mother’s earning capacity as not being significant.

137.  The Father also said that the Mother’s father had provided accommodation for each of his children in the past and could not understand why her father would suddenly cut the Mother off from his financial assistance since she and ILB moved back to Hong Kong by not providing her with accommodation or other financial assistance or allowance.  It is not clear what other financial assistance he was referring to, other than the income mentioned above.  If the Father is referring to provision of accommodation for the Mother and ILB, this in my view is his primary responsibility, and not the Mother’s father’s.  The fact that the Mother’s father had allowed the Mother and/or ILB to stay in the family homes in the past should not be relevant, nor is the fact that the Mother’s father may at present be providing accommodation to her siblings.  In any event, it seems from the Father’s latest position that he has now accepted that the Mother and ILB would require separate accommodation for themselves.

138.  Further, I do not find that there is sufficient evidence that the capital assets of A Trust or B Trust or any other trusts or companies of the Mother’s parents are financial resources available to the Mother now or in the forseeable future.

139.  I then come to Mr C, which is, according to the Father, the other main financial resource of the Mother. 

140.  In Parker’s Judgment, she had mentioned that the Mother owed £560,000 to a friend and to her boyfriend[65]. Parker J also mentioned that the boyfriend paid for ILB’s nanny. Parker J was of the view that the boyfriend had no responsibility for ILB and therefore Parker J did not take his contribution as a resource for the Mother, although she accepted that it was reasonable to temper the Mother’s entertainment and eating out budget by reference to the fact that when the boyfriend was in London and when they went out he paid[66].

141.  The boyfriend referred to in Parker’s Judgment is Mr C, with whom the Mother has formed a relationship since about 5 years ago.  The friend referred to by Parker J is Mr D, the Mother’s former boyfriend.

142.  In the Mother’s Form E filed in January 2013, she stated that she owed Mr C the following sums:

(i)   US$2.5m/HK$19.25m — legal fees

(ii)   US$470,000/HK$3.619m — housing costs in Hong Kong + car purchase

(iii)   US$600,000/HK$4.62m — for purchase of furnishings for the house the Mother is now living in (“Strawberry Hill House”)

143.  The above added up to about US$3.57m/HK$27.49m, or over £2m.

144.  The Mother had produced a letter from Mr C dated 21 May 2013 addressed to her solicitor in support of the alleged loans (“Mr C’s Letter”)[67]. The loans set out by Mr C were as follows:

(i)    Legal fees (as at 3 May 2013) approx	US$2.6m
(ii)   Housing – August 2011 to December 2012 (prior to the Mother’s order for relocation but the property was used as a holiday home by her prior to that time	US$442,000
(iii)   Furnishing of house	US$524,037
(iv)   Purchase of car	US$ 96,357
(v)   Miscellaneous living expenses including but not limited to ILB’s nannies and their travelling expenses and the Hong Kong property management company, and the Mother’s and ILB’s travel expenses during 2011 todate, Approx	US$4,122,394

145.  One can see from above that according to Mr C as at 3 May 2013, the debts owed by the Mother under ‘legal fees’ were US$2.6m.

146.  The Mother said she had spent US$2.6m/about HK$20m on legal costs, and her evidence was that everything recovered from the Father would immediately be repaid to Mr C.

147.  The Mother obtained an order for indemnity costs from Parker J for part of the Schedule 1 Proceedings[68]. The amount of UK costs which the Father owed her as at date her Form E was £338,436/HK$3.969m, and in her affidavit, she mentioned £322,000.

148.  The Mother’s legal costs in Hong Kong prior to 10 May 2013[69] were HK$2.545m, and it was estimated that HK$2.613 would be spent after 10 May 2013 for the trial, totaling HK$5.159m.

149.  Mr Chan submitted that the above came to only about HK$9.128m, and thus more than HK$10m went unaccounted for.  Further, there was also another HK$2m, being a £160,000 loan from Mr D, which was also said by the Mother to be for ‘legal fees’.  The Mother was asked to explain in the Father’s 1^st questionnaire in March 2013 about all her legal costs, but it seems that until the trial, the Mother had not provided any further documents.

150.  From the Mother’s answers, it seems that these loans from Mr C for so called ‘legal fees’ were not paid into the Mother’s account, and were paid direct to the Mother’s lawyers as and when necessary. As pointed out by Mr Chan, it should therefore not be difficult for the Mother’s lawyers to produce receipts or payment records as evidence of the alleged legal expenses.

151.  Mr Chan has asked this court to draw the inference that much of the amount was not spent on legal costs and was simply money given by Mr C to the Mother.

152.  Then there was the loan from Mr C for housing.  As submitted by Mr Chan, the figure given by the Mother of US$470,000 did not seem to tally with Mr C’s own figure of US$442,000.  The lease for the Strawberry Hill House was signed on 14 July 2011, and HK$1.2m deposit was paid, and the lease runs from 1 August 2011.  The Father started paying the rent under the 1^st Interim Order from January 2013.  According to Mr Chan’s calculations, the amount paid by Mr C should in fact  be US$592,504, which did not tally with either the Mother’s figure in her Form E of US$600,000, or Mr C’s figure.

153.  As for the alleged loan from Mr C for furnishing, this seems to be a rather large amount of money spent on decorating a rental property.  Anyway, Mr Chan said the Mother’s figure in her Form E of US$600,000 again did not tally with Mr C’s of US$524,037.  The Mother did produce some invoices in this regard.

154.  The Mother frankly admitted that she had not asked Mr C for his records on these loans, and simply took Mr C’s word for it.  She herself did not keep any record of these loans. 

155.  I note from Mr C’s Letter that although there had been already a substantial recovery of costs from the Father for various costs orders made during 2010, 2011 and 2012, Mr C had agreed with the Mother’s UK lawyers that those sums recovered could be applied by them against some of the Mother’s bills rather than return to Mr C.  Thus, notwithstanding the Mother’s evidence that whatever was recovered from the Father would be repaid to Mr C, this did not seem to have happened.

156.  In the Schedule 1 Proceedings, in relation to the alleged loans from Mr C, there was a loan agreement produced by the Mother dated 10 November 2010[70] which was headed “Legal Costs Loan”, for a further sum of £200,000 for costs accrued by Manches, the Mother’s then London solicitors.  This was described as a second loan, in addition to £100,000 advance to Manches on 14 May 2010, totaling a total of £300,000.  The loans were said to be “on demand” and repayable with not less than 28 days notice.  No interest was mentioned or payable. The loans from Mr C have now run up to about £2m, over 6.7 times more, in 3 years time.

157.  As for the loan from Mr D, in her Form E, the Mother said the loan was a total of £210,000, of which £160,000 was for legal fees.  The Father alleged this was a good-bye gift from Mr D which was denied by the Mother.  She had produced a letter during the Schedule1 Proceedings dated 5 December 2009[71] from Mr D for the loan which stood as of 4 November 2009 at £140,549, to be repaid when the Father “was forced by the courts to meet his obligations”.  Again, no interest was payable.

158.  The Mother admitted during the trial that there was no deadline in the repayment of these loans from Mr C or Mr D[72]. She had not yet repaid even the first loan from Mr D.

159.  I am of the view that the loans from Mr D and Mr C, if they are indeed loans, are really “soft” loans and there is no sufficient evidence that the Mother is likely to be taken to court now or in the forseeable future for non-repayment of these loans.  In relation to the loans from Mr C are concerned, the Mother clearly was vague on the actual amounts she was supposed to owe him, and it seems even Mr C himself was not certain, as he referred to “approximate” amounts, for the loans for legal fees and for miscellaneous living expenses in Mr C’s Letter.

160.  Mr Chan submitted that in considering ‘financial resources’ the courts have regard not only to ‘earned income’ or for that matter ,‘de facto income’, and has referred this court to the Court of Final Appeal decision in KEWS v NCHC [73], where third party assistance was considered. It was held in that case that in every case involving between ancillary relief between marital couples, where third party assistance is involved, there are two critical evidential questions for the court to consider: (1) What is the extent of the financial assistance provided by the third party to the husband or wife; (2) What is the likelihood of such financial assistance continuing in the foreseeable future?[74]

161.  So far as Mr C is concerned, the alleged loans to the Mother have become much more substantial since Parker’s Judgment, with no sufficient evidence of any actual repayment so far I can see.  Notwithstanding Mr C saying that he cannot guarantee to continue to provide the current level of support indefinitely, there is no sufficient evidence that it is going to cease shortly.  I would, on my part, regard these ‘loans’ as resources available for the Mother in the foreseeable future, since it seems that the relationship between Mr C and the Mother has now been going on for about 5 years and there is no evidence of it ending.   

162.  As there have been continuous legal proceedings since Parker’s Judgment, I accept some part of those loans from Mr C would have gone to legal costs.  I accept these have not been accounted in full, and it may well be there were some part of the loans could have gone to the Mother.  However, I am of the view that whatever resources the Mother received or may continue to receive from Mr C in future by way of  “loans” should not go towards reducing the primary legal responsibility of the Father to provide reasonable maintenance for ILB along the guidelines set out in Re P.  In my view, the Mother should be entitled to keep any resources from Mr C for her own use, whether to supplement the expenses of herself and ILB over and above what the Father is ordered to pay, or to meet the Mother’s personal needs/expenses which she is not seeking from the Father and which amount to almost HK$158,000 per month according to her Form E, or for her own savings.  So far as Mr D is concerned, it seems the last advance was in 2009 and there is no sufficient evidence that this is a continuing resource.

The Parties’ Respective Proposals

163.  The Mother’s claims for periodical payments for ILB are[75]:

164.  The Mother asks that the periodical payments awarded be index linked as per Parker’s Order.

165.  The Mother further seeks the following lump sums for ILB:

166.  The Father’s proposed periodical payment is HK$100,000 per month inclusive of 50% for the rent and property related expenses, and all other items.  In addition to this, the Father is agreeable to pay school fees of about HK$5,508 per month directly to ILB’s school and the invoices/bills should be sent to him by the school.  The Father is also agreeable to pay directly for ILB’s “Extra-Curricular Activities” of his proposed figure of HK$7,500 per month and “Extra Tuition Fees” of his proposed figure of HK$7,500 per month, and the invoices/bills should be sent to him directly.

167.  He does not agree to pay any of the above lump sums (i)-(v) as sought by the Mother.

Periodical Payments for ILB

Housing

168.  The starting point set out in cases such as Re P and those cases which followed is to decide what housing provision a wealthy father should be called on to make. Thorpe LJ said as follows[76]:

“The starting point should be to decide what housing provision the father should be called on to make. From there, one can go on to consider what budget the mother may reasonably require and what, if any, provision is appropriate by way of lump sum… The value, the size, and the location of the home all bear upon the reasonable capital cost of furnishing and equipping it as well as upon future income needs, directly in the case of outgoings but also indirectly in the case of external expenditure such as travel, education, and perhaps even holidays. The home will ordinarily be transiently required during the child's minority or until further order. The appropriate legal mechanism is therefore a settlement of property order. Since the respondent is entitled to the reversion, which in certain circumstances may fall in before the child's majority, the respondent must have some right to veto an unsuitable investment.”

169.  The above was said in the context where in cases in England under Schedule 1 of the 1989 Act, a wealthy father is usually ordered to settle a sum of money for the purchase of a property for the child and the child’s mother, to reside in until the child reaches majority. 

170.  In England, there is undoubted jurisdiction to order the capital purchase of a home to be held on trust for a child and the child’s mother to live in, and this was what Parker J ordered.  The situation in Hong Kong is not quite clear as seen in a recent case of IDC v SSA[77] which is now on appeal.  Since in the present case the Mother is only seeking a monthly sum for rental for the accommodation for ILB, I do not need to deal with the jurisdictional issue on capital purchase of a home for ILB.

171.  Parker J had said in her judgment when she started with the question of housing, that “the Mother and ILB need a home which is exclusively theirs where the Mother can establish her own household to bring up her daughter.  She does not herself have any resources with which she can establish or help to establish that home.”  Parker J then went to list 6 criteria which she consider reasonable for accommodation[78] (“Criteria”):

(i)   a flat or apartment suitable for the Mother, a nanny and ILB;

(ii)   in Kensington or its environs;

(iii)   a safe and pleasant environment fairly near to Roland Way Property;

(iv)   three good-sized bedrooms and two proper bathrooms, no less than 1,800 square feet, not on the ground floor for security reasons and not too high up;

(v)   Near an open space; and

(vi)   In good condition

172.  It is the Father’s case that the present accommodation of the Mother and ILB, namely Strawberry Hill House far exceeds the Criteria and is far too extravagant for ILB.  There is a wide gap between what he proposes to pay, namely a monthly sum of HK$25,000, and the monthly sum of HK$200,000 being sought by the Mother, which is the current rental of Strawberry Hill House.

173.  According to the Father, the proper rental for a flat for ILB in the mid levels of Hong Kong would be HK$50,000 per month, and that he and the Mother should each be responsible for half of this, and thus his contribution should only be HK$25,000 per month.

174.  Mr Coleman has asked this court to take into account the Father’s own homes, particularly the one he lives with S when S is in his care.  Mr Coleman has referred the court to the English case of F v G[79], where Singer J stated that [80] “I am, therefore, anxious that my award should, to an extent which I regard as reasonable in all the circumstances of the case, mitigate the disparity which inevitably will remain between the father’s spending power and that of the household where S will grow up.  I can do that by adopting a level of award which should enable the mother to provide S with a fabric of home life not too brutally remote from that which the father’s hard work enable him to sustain.”

175.  The Father’s primary residence is in Aspen[81] is extremely spacious by Hong Kong standard.  It has 12,500 sq ft, with 6 bedrooms and 7 bathrooms.  One room is 3,540 sq ft, one bedroom is 2,360 sq ft, and there is 2,173 sq ft of garaging. Guest houses are separate.  He has another lot next to the lot of his primary residence.

176.  Apart from his primary residence, he has an apartment in New York of 3,058 sq ft, with 3 bedrooms and 3 bathrooms, which is apparently in a building with many well-known neighbours[82]. He has rented a “part-time” home at Redondo Beach in the south Los Angeles where he can be with his son S on the alternate weeks.  This is a sizeable property of 10,200 sq ft, with 25 rooms, 5 bedrooms, 9 bathrooms, and a 41,000 sq ft plot, although the Father has said he also uses part of it as his office.

177.  Parker J was fully aware of the Father’s various homes and properties when she set out the Criteria for ILB’s reasonable accommodation[83].

178.  Strawberry Hill House is 2,800 sq ft net in area, and is a house, not a flat, albeit a town house.  It is also at least about 1,000 sq ft larger than the 1,800 sq ft minimum stated in the Criteria.

179.  Hong Kong is very different from Colorado or Redondo Beach in that land is scarce and expensive here, particularly on the island, and it is a very densely populated place.  I accept that houses on the island are rare and command a premium as confirmed by the Jones Lang LaSalle Report[84] (“JLL Report”) produced by the Father.  I also accept what Mr Chan has submitted, that houses on the island are out of reach for the vast majority of the population, much more so in Hong Kong than in London.  As pointed out by Mr Chan, the Criteria referred specifically to a flat, not a townhouse or a mews house. 

180.  One of the Criteria is that the flat should be near to the Roland Way Property, which is the home of the Mother’s parents. The reasons why the Mother wants to live in Strawberry Hill include that there are two other houses in the same development owned by AC Inc, as mentioned earlier, which is controlled by her parents, one of which is occupied by her sister and her family, and the other is occupied by her parents when they are in Hong Kong.  ILB is now attending a school within walking distance.  The Strawberry Hill House is also in a gated development with good security.

181.  There are, however, flats in other developments or buildings around or near Strawberry Hill or slightly lower down or higher up the Peak which are in a safe and pleasant environment and they will be only 10 or 15 minutes away from Strawberry Hill, or ILB’s school.

182.  The Father accepted in his evidence that he should support ILB, but said he did not need to support the Mother’s exorbitant lifestyle, and that if she would like to live in Mr C’s apartment, then that would not be his responsibility[85]. The lease of the Strawberry Hill House was entered into on 14 July 2011 in Mr C’s name with 6 month’s rent of HK$1.2m as security[86]. The Mother explained that this was because she had no income, and Mr C had paid for the deposit and that this was a loan to her.

183.  Loans or not, I can understand why the Father regarded Strawberry Hill House as being Mr C’s, although the Father knew as early as April 2012 that the lease was entered into by Mr C. The Father also came to Hong Kong in 2012 and had seen the Strawberry Hill House.

184.  Having said this, Mr C is the only named tenant on the lease and it is stated in the lease that the premises shall only be used and occupied by the tenant and his family and domestic servant(s).  Although I understand Mr C does not live in Hong Kong, he clearly has the legal right to occupy the Strawberry Hill House if he wishes to if and when he visits Hong Kong.  In Mr C’s Letter, he had referred to the Strawberry Hill House being used as a ‘holiday home’ by the Mother prior to her obtaining the order for relocation, and the Mother had explained in answer to questions on this from Mr Chan “I mean, to him, it is.  He comes to visit --- it’s holiday for him when he comes to see us”.

185.  From the Mother’s explanation, it seems that Mr C will stay in the Strawberry Hill House whenever he visits the Mother, although the evidence tends to indicate that he has only done so infrequently. Notwithstanding this, Strawberry Hill House cannot be really be said to be for the occupation of the Mother and ILB, to the exclusion of any other, as Mr C clearly has the legal right to stay there.

186.  In this connections, I note that Parker’s Order states specifically that the property to be purchased is for ILB and the Mother to occupy as their home, rent-free and to the exclusion of any other (emphasis added).

187.  The Mother has made it clear that she wishes to continue to reside in the Strawberry Hill House, and she may indeed continue to do so, with the help of Mr C, regardless of whatever this court’s order may be.  She is entitled to, but if so, in my view, it is not reasonable for the Father to contribute to the full rental of the Strawberry Hill House.  What is then an appropriate amount for the Father to contribute towards housing?

188.  I find that the Father proposal of HK$25,000 per month completely inadequate, and further his proposed 50% contribution is arbitrary.  There is no basis for suggesting there should be only a 50% contribution.  I do not find that there was any sufficient evidence to say that the Mother’s earning capacity or financial resources were equal to that of the Father’s, assuming that this was the basis for the Father to propose 50% contribution. 

189.  The JLL Report was prepared at the instruction of the Father’s solicitors and submitted on his behalf in April 2012 in connection with the Mother’s Relocation Application in London.  It was suggested in the JLL Report that a comparable apartment to one in Kensington as ordered by Parker J would be in the range of rental of HK$100,000 to HK$150,000 per month, and it was stated therein that a house in Strawberry Hill at that time would be in the region of HK$150,000 per month, although no size was stated[87]. Examples of properties of HK$101,000 to HK$150,000 were given, and rental of those in lower Mid Level would be HK$128,000 – HK$135,000 per month[88]. The area given in the report was gross area of between 2,370 sq ft to 2,830 sq ft.  I note among the properties in the JLL Report, there was a flat in a 1991 block Montebello on Plantation Road, with no facilities, of gross area of 3,040 sq ft, was asking HK$160,000 per month. It is not clear what the net area was.

190.  The Father’s solicitor, Mr Cohen, filed an affirmation shortly before the trial, with some updated rental properties.

191.  The Father has not seen any of those properties put forward by him, as being of rental value of HK$50,000 per month.

192.  Although I am not bound by Parker’s Judgment, I have found the Criteria helpful as a reference, and having considered all the information before me, I find that reasonable accommodation for ILB and the Mother in Hong Kong would be:

(i)   A flat or apartment, fairly near to Strawberry Hill and ILB’s school, and not too lower down the Peak;

(ii)   Three good-sized bedrooms and two proper bathrooms, no less than 1,800 sq ft in net area;

(iii)   In good condition and preferably has some facilities

193.  Having considered the above, I am of the view that a reasonable sum for the Father to contribute towards housing for ILB and the Mother is HK$150,000 per month.

Carer’s Allowance

194.  The case of Haroutunian v Jennings[89] established the principle that it is not wrong for the court to augment the periodical payments order for a child to include an allowance for the mother, especially if the mother has to give up work or is unable to work because she has to look after the child. 

195.  Then followed the case of A v A (A Minor) (Financial Provision)[90] where in fixing the level of periodical payments to the child, Ward J included an allowance for the mother, applying the principle established in Haroutunian v Jennings. 

196.  This has now come to be known as the “Carer’s Allowance”, or “Mother’s Allowance”, and on the calculation of this allowance, Thorpe LJ has said that a more generous approach to the calculation of the mother’s allowance is not only permissible but also realistic[91].

197.  Thorpe LJ has also said in Re P that once the housing issue has been dealt with, the judge can proceed to determine what budget the mother reasonably requires to fund her expenditure in maintain the home and its contents and in meeting her other expenditure external to the home, such as school fees, holidays, routine travel expenses, entertainments, presents etc, and in this connection, he has said that an order for periodical payments is always variable and will generally have to be revisited to reflect both relevant changes of circumstance and also the factor of inflation, and therefore in his judgment, the court should discourage “undue bickering over budgets”, and what is required is a broad common-sense assessment[92].

198.  Thorpe LJ has also emphasized that the court must recognize the responsibility, and often the sacrifice, of the unmarried parent (generally the mother) who is to be the primary carer for the child, perhaps the exclusive carer if the absent parent disassociates from the child, and in order to discharge this responsibility the carer must have control of a budget that reflects her position and the position of the father, both social and financial.[93]

199.  Thorpe LJ, then went on to say:

“On the one hand she (the mother) should not be burdened with unnecessary financial anxiety or have to resort to parsimony when the other parent chooses to live lavishly. On the other hand whatever is provided is there to be spent at the expiration of the year for which it is provided. There can be no slack to enable the recipient to fund a pension or an endowment policy or otherwise to put money away for a rainy day. In some cases it may be appropriate for the court to expect the mother to keep relatively detailed accounts of her outgoings and expenditure in the first and then in succeeding years of receipt. Such evidence would obviously be highly relevant to the determination of any application for either upward or down variation.”

200.  Mr Coleman has also reminded me the following of what I have said in H v S[94]:

“In deciding what is a reasonable budget, although it seems that Re P emphasised the need to treat the mother’s allowance as a primary carer as an independent item, in addition to the direct costs of the child, District Judge Million in Re C [95] has said he did not read those remarks to mean that an actual separate sum had to be identified; rather, the court should bear in mind that factor when looking at the overall budget. “The court in Re P took an explicitly broad brush approach in arriving at an overall budget (in that case) of 70,000 pounds a year.” It was also held in N v D that it was not realistic simply to apportion items of budget as referable only to the child’s needs because financial provision had to make for the mother to enable her to meet those needs…”

201.  On the other hand, Mr Chan referred me to the judgment of Judge Melloy in CKM and SKL[96] where no separate allowance was made for the mother in that case by the judge after taking into account that the mother would be benefitting from the rent and general household expenses being paid by the father.

202.  Having considered the circumstances of the present case, I propose to adopt a broad brush approach in assessing what is a reasonable budget to cover general needs of ILB and her direct needs, and as Judge Melloy has said in the above case, the Mother will be benefitting from the provision of the general needs, and I do not intend to add another separate amount for the Mother’s carer allowance.

203.  Mr Chan has criticized the Mother for not bothering to provide necessary documents in support of her monthly expenses.  The Mother had frankly admitted that she did not keep records of anything, and said during the proceedings in England, she was not told by her legal advisers there that she should be keeping records, and that she had never before at any time in her life been asked to keep records of her cash spending until she sought legal advice in Hong Kong[97]. She disclosed that she had instructed a financial consultant, a qualified accountant, to help her professionally to keep records and to assist her finances.

204.  The Mother’s solicitors came on record towards the end of November 2012, and from what the Mother said above, her financial consultant should have started putting together records since at least about January 2013.  It seems notwithstanding the questionnaires served from the Father’s side, there seems to be not that many documentary evidence from the Mother.

205.  Having said this, not all expenses can be evidenced by receipts, and what this court has to decide is what is reasonable in light of the parties’ evidence on their respective lifestyles and commensurate with what this court has found reasonable for accommodation.

206.  I would also like to say this, the Mother’s approach seems to be that the amount in the Consent Order was HK$1,460,000 per annum, ie HK$121,667 per month.  She then said at the time of the Parker’s Judgment, her income of about HK$48,000 per month was taken into account, and now that she has lost this income, the loss of income should be added back. Further, she should also receive an additional housing costs of HK$6,797 in addition to rent as an alternative to the housing fund in Parker’s Judgment.  All in all, she now claims a sum of HK$176,474 per month, excluding rent.  This is notwithstanding monthly expenses set out in her Form E being a total of slightly over HK$410,000 per month, excluding rent of HK$200,000 per month. 

207.  Firstly, I have mentioned earlier in this judgment that the amount of income of the Mother which Parker J took into account was £35,000 per annum and this would come to about HK$35,500 per month only and not HK$48,000.  Secondly, when the Consent Order was agreed by the parties in August 2012, it was on the basis that this was pending the making of an order in Hong Kong or parties’ agreement on the level of maintenance, and in any event until 31 December 2012.  It was clearly not anticipated to be a final order.

208.  I have already indicated during the trial that I am not bound by the amount in Parker’s Order, although it would be helpful to compare the budgets put forward by the parties for ILB living in London, and ultimately what was ordered, and now the budgets put forward by the parties for ILB living in Hong Kong.

209.  As for the Father, what he proposes is that he pays a total sum of HK$100,000, inclusive of a monthly sum of HK$25,000 per month for rent.

210.  One could immediately see that the parties are at opposite ends of the extreme. The Mother has also referred to what the Father has been providing for S and this was mentioned in Parker’s Judgment. In particular, the Father is now paying S’s mother US$10,000 per month for his maintenance, notwithstanding S spends half of his time in the care of the Father.  S is however an older child of 11 years old.

General Expenses

211.  Mr Chan submitted a schedule of the expenses claimed by the Mother, and the proposed figures from the Father, giving his reasons for such proposals[98]. In her Form E, apart from rent, the Mother set out other ‘general expenses’ amounting to a total of about HK$84,600 per month.  These include utilities, management fees, Christmas/CNY bonus, food, PCCW, air-conditioning maintenance, pest control, carpet cleaning, other maintenance, car expenses including petrol, repairs, insurance, autotoll & packing, wages and flight and bonuses for helper, wages and flight and bonuses for driver.

212.  The Mother then amended her figures on management fees, Christmas Bonus, lai sees, air conditioning maintenance and pest control to HK$6,797 per month[99], which she said were additional housing costs which should be added to the sum of ILB’s monthly maintenance of HK$121,677 per month in the Consent Order, making a total of HK$128,474.

213.  The Father proposed a figure of HK$30,617 per month, less rent, and that he should only contribute half, being about HK$15,300 per month for all the above items. I have already said earlier this proposal of splitting expenses 50/50 is arbitrary.

214.  Mr Chan pointed out that with most leased properties in Hong Kong, the management fees would be inclusive in the rent, ie the tenant does not need to pay.  However, it seems that the Mother has been employing separately the services of a property management company called Habitat, and she has been paying this company HK$4,500 per month, for paying monthly bills for her, and dealing with everything for the house, such as problems with the water pump, air condition filters, carpet cleaning, because the Mother says she does not speak Cantonese.  In answer to Mr Chan’s further questions on this item of expense, her response was initially Mr C wanted her to have one as he saw how stressed out she was, and he was trying to alleviate stress in her life to help her so that she could spend as much time as possible with ILB, and then she tried to change her answer to say she wanted to have a manager[100]. Anyway, I do not regard this amount is reasonable since I do not see why the Mother cannot pay her own bills every month and to seek help from caretakers of the building or estate, when dealing with household repairs, even if she does not speak Cantonese.

215.  As I have formed the view that the Mother and ILB do not need to live in a townhouse or accommodation of the size of Strawberry Hill House, some of her expenses may be less.  Overall, I find a monthly budget of about HK$12,000 reasonable for all the items such as utilities, PCCW, pest control, carpet cleaning, and other household maintenance, and also Christmas/CNY bonuses, laisees for building staff/caretakers etc, save for (i) food expenses, (ii) car expenses, and (iii) expenses for domestic help.

216.  The Mother claims HK$26,500 per month for (i) food expenses.  Mr Chan put it to her that her credit cards and bank statements indicated only about HK$10,000 per month spent on such items.  I accept what the Mother said, that there would be cash payments as well and that she and ILB maintain very healthy diet, and she would go to buy at health shops. The Mother has said that everything they eat is organic and freshly cooked, and even ILB’s lunch box is freshly prepared for her each morning. Bearing in mind that the Mother and ILB travel frequently, I find a reasonable budget for this item to be HK $15,000 per month.

217.  As for (ii) Car expenses, the Mother has a Range Rover, and she claims HK$19,565 a month for total car expenses, and among such expenses, the petrol is HK$12,000.  The Mother says she and ILB would go to the Country Club in Shek O, and she would give the driver HK$1,000 whenever the driver needs to put petrol in, and this would be about HK$2,500/HK$3,000 a week.  The Mother did not produce any documentary evidence for this amount, nor for car service/repairs of about HK$5,456 per month, except for an accident related bill.  According to Mr Chan’s calculation, HK$12,000 per month would be over 100km being covered a day.  I accept that Hong Kong is not a very big place and ILB has been walking to and from school every day with the Mother.  However, if they were to move from Strawberry Hill House, ILB may have to be driven to and from school.  Having considered all the Mother’s evidence, I think a budget of HK$12,000 per month for all car expenses would be reasonable.

218.  For (iii) expenses for domestic help, namely the domestic helper and the driver, I accept the Mother’s evidence in this regard and would allow a budget of about HK$20,200 per month for this item.

219.  In total, a reasonable budget I find for general expenses for the Mother and ILB would be HK$59,200 per month, or in the region of HK$60,000 per month.

ILB’s personal expenses

220.  The amounts set out by the Mother in her Form E for ILB’s personal or direct expenses came to HK$168,411.41, inclusive of the school fees of about HK$5,508 per month. 

221.  The Father has undertaken to pay for ILB’s school fees direct to the school, and I accept his undertaking in this regard. The Father has also undertaken to pay for ILB’s other tuition/extra-curricular expenses direct, but this was not accepted by the Mother.  There are different tutors for these, and the Mother has always been the parent who has organized these tuitions/activities for ILB.  I agree practically speaking, it is best for such items to continue to be paid by the Mother out of the budget for ILB.

222.  One of the biggest items included in the Mother’s budget concerns the nanny, which include her wages, flight, Christmas and/or CNY bonus, which alone came to about HK$40,000 per month.  It seems that this foreign nanny does not even have a work permit in Hong Kong, and after the Father raised this, the Mother said she had been in touch with the Immigration Department to try and sort this out.  According to the Mother, the nanny actually did not want to be in Hong Kong and it was the Mother who was “begging” her to stay, as the nanny had been in ILB’s life for 3 years and ILB was completely devoted to her.

223.  ILB will be 6 years old soon.  She has now started attending school and seems to have quite a lot of extra-curricular activities, arranged for her by the Mother.  According to the Mother, during the school term, ILB goes to school from 8:30am to 3:00pm and has tuition lessons and other activities planned every day for at least another 1½hours. She also has activities planned on Saturday mornings.  ILB also travels quite a lot.  I am of the view that the time has really come for the nanny to be phased out of ILB’s life completely.  In any event, the Father needs not pay for this item.

224.  Without the nanny and the school fees which the Father will be paying direct, the Mother’s proposed budget for ILB’s personal expenses in her Form E will reduce to about HK$122,749.41 per month.  There seems to be some over budgeting or duplication for certain items, such as extra-curricular activities, summer boating trips, birthday present for ILB and for others, toys/eating out, hair/toiletries, clothes/shoes, bearing in mind that there are no sufficient supporting documentary evidence for quite a lot of such items.  For the extra-curricular and summer boating, I will round it up to HK$15,000.  For birthday party/presents for ILB and Others/Toys/Eating Out, I will round up to HK$15,000, and hair/toiletries/clothes/shoes to HK$12,000.  For travelling, Parker J allowed £20,000 a year, with 2 trips to Hong Kong, and 2 trips to USA.  The Mother says in fact she now travels more with ILB over long weekends.  The access travels for ILB and the Mother will be paid separately by the Father, which for this year is at least two trips to USA.  6 long haul flights a year seem to be somewhat excessive for ILB.  ILB has now started formal schooling and has many scheduled activities during term time, realistically, the long haul travel can only take place during her longer school holidays/term breaks.  It is also not necessary to fly off somewhere every long weekend.  For her travel, I think HK$240,000 per annum/HK$20,000 per month would be reasonable to cover both her long haul and short haul travels, excluding access travels. 

225.  For overall direct expenses, bearing in mind what Thorne LJ said that this should be a broad common-sense assessment, I find a reasonable budget for ILB all such expenses for will be around HK$80,000 per month.  

Total periodical payments for ILB

226.  To summarise, a total reasonable budget for ILB is HK$290,000 per month, consisting of the following:

227.  The above is the amount of the periodical payments which I will order for the benefit of ILB as from January 2013.  The amounts overpaid by the Father, namely HK$31,667 per month from January to June 2013, totaling HK$190,002, can be deducted by him from the lump sum I will be ordering.  The periodical payments will be index linked.

Lump sum/s

228.  The Mother has claimed a total of HK$8.78m being made up as follows:

229.  I have mentioned in the case of H and S that in Hong Kong the court’s power to order a lump sum is very different from those set out  in paragraph 1 (1) and (2) of Schedule 1 of the 1989 Act[101].  Our power is only limited to ordering such lump sum (whether in one amount of 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 (emphasis added).

Set Up and Decoration Costs

230.  The Father’s case was that he had already paid for the setting up of Roland Way Property.  At the time when the Mother moved back to London, the Father had paid £30,000 for some works on the Roland Way Property to make it suitable for the baby, including creating ILB’s bedroom, and a new or refurbished bathroom.  Parker J, however, pointed out that the Father’s payment was not in the context of any understanding that the Roland Way Property would be the long-term home for the Mother and ILB as the Father was at that time proposing that he should fund a house purchase through a trust structure for ILB.

231.  In the end Parker J ordered a housing fund, and in addition a lump sum of £125,000 for the purpose of moving into, decorating, improving and furnishing the property to be purchased.  This is equivalent to HK$1.4m, which is now being claimed by the Mother as set up and decoration costs.

232.  In Mr C’s Letter, the amount claimed to have been spent on furnishing on the Strawberry Hill House was US$524,037, but according to the Mother’s Form E[102], it was US$600,000, or HK$4.62m, and this she said during the trial was “actually very, very low key.”

233.  Mr Chan had described this as ludicrous, since this is only a rented property, and the amount ordered by Parker J was for a more permanent home.

234.  To spend an amount of HK$4m or more for a rented property with only a two year lease seems indeed very high.  Having said this, the Mother and ILB would need an amount to move into a home of their own in Hong Kong and to furnish the same and a contribution in an one off amount in the sum of HK$1.4m for expenses already incurred is in my view reasonable. 

Car expenses

235.  The Mother purchased a Range Rover Sport for an amount of US$96,357 which was lent by Mr C.  The Father said this was a gift from Mr C.  The Mother sought a sum of HK$1.48m, which she said was equivalent to the quantum awarded by Parker J, and the Mother said she would repay Mr C the sum of US$96,357 out of this sum.

236.  Mr Chan submitted that the Father had already bought a car, a Mercedes in the sum of £45,000 in London for the Mother’s use and the car is still kept there.

237.  Parker J ordered the Father to be settled into the trust to be set up for ILB a sum of £125,000 for the use of the Mother to replace her then car with a new vehicle of her choosing or at a time of her choosing, and thereafter for further replacements at intervals of not less than 3 years thereafter during the period of ILB’s trust, and this was what was described as the “Car Fund”, and upon the occurrence of the determining event of ILB’s trust, whatever residue in the Car Fund was to revert to be the absolute property of the Father, or the Mother and/or ILB would have the opportunity to purchase the car then in existence.

238.  The Car Fund ordered by Parker J was not for the purchase of one car, and was for replacements over the course of several years, and further the car was not meant to be owned beneficially by the Mother, but would revert to the Father, subject to the terms of the ILB’s trust.

239.  What the Mother now seeks is of a different nature.  She is seeking an outright amount to be paid to her not only for the payment of the car already purchased and also to cover future purchases/trade in for a new car every 3 years.  There is no proposal from the Mother that this sum of HK$1.48m is to be held by a trust set up for ILB.

240.  In my view, any future purchases, not being immediate, would not fall within the ambit of section 10(2)(a) of GMO.

241.  Having said this, it is reasonable for ILB to have the use of a car upon her move to Hong Kong, and I find the sum of US$96,357 or about HK$750,000 to be an expense reasonably incurred in maintaining ILB before the making of the order. 

Arrears of Rent

242.  The Mother is claiming arrears of rent that amount to HK$3.4m if calculated to July 2011, and according to her, this sum would be reduced to HK$1.6m if calculated back to May 2012, the date of Coleridge’s Order, and that this amount will be repaid to Mr C.

243.  I have said earlier that a reasonable amount for housing costs is HK$150,000 per month, and in my view, if calculated back to May 2012 until December 2012, totaling 8 months, then the amount of ‘arrears’ is HK$1.2m.  This was an expense reasonably incurred in maintaining ILB.

Fighting Fund

244.  There was no reference to any claim for a ‘fighting fund’ in the Mother’s affidavits or in Mr Coleman’s opening submissions, and this was only raised in his closing submissions.  Mr Coleman said the Father has failed to show sincerity to meet the award this court is likely to make and that it seems an appeal is inevitable, and in light of the kind of enforcement hurdles raised by the Father in the past, the Mother would require a ‘fighting fund’, and she seeks a sum of HK$2.5m.

245.  Mr Coleman has relied on two cases.

246.  The first of these cases is Al-Khatib v Masry[103] where a sum of £2,500,000 was ordered to the wife for funding litigation relating to the abduction of the parties’ 4 children to Saudi Arabia.  It was held that the husband’s conduct in abducting the children had been very grave, it was appropriate to furnish the wife with an additional sum of £2.5m to be used solely for the purpose of funding further litigation in securing the return of her abducted children.  This was described as a ‘war chest’ or ‘fighting fund’ for further litigation.

247.  In the second of the cases referred to this court, Ben Hashem v Al Shayif [104], in which the wife claimed, as part of her capital lump sum, a ‘fighting fund’ to enable her to pursue enforcement proceedings overseas, which according to her, would be resisted tooth and nail. In view of the findings of the husband’s litigation misconduct, Munby J was of the view that the wife would need a ‘fighting fund’.

248.  In both cases, the ‘fighting fund’ was awarded as part of the capital financial provision for the wife or a party to a marriage.  The courts in England, or indeed in Hong Kong, have power to include this fund as part of the lump sum order for a spouse.  In Hong Kong, this power can be found under s 4 of the MPPO.

249.  It is not quite clear, however, whether such a fund can be awarded as part of a lump sum for the benefit of a child of the family, to be paid by  a party to a marriage under s 5(2)(c)of MPPO, although arguably it may be possible since the wording of s 5(2)(c) of MPPO is quite wide, and also it seems that in Al-Khatib’s case, Munby J, as he then was, said that the wife had both a ‘need’ to take, and indeed the ‘responsibility’ of taking, all appropriate steps, for their own benefit (emphasis added) as much as for hers, to recover the children from the husband who had abducted them, and therefore a fund, the interest and capital of which could be used by her but only for the purpose of funding future litigation directed to her recovery of the children, and whatever was left would be returned to the husband so soon as the children’s return to the wife or to the jurisdiction[105].

250.  What was contemplated by Munby J was that any unused fund would be returned to the husband.

251.  In the Ben Hasham case, the husband did not appear in the ancillary proceedings and was not represented, and he only participated as a witness in the Chancery proceedings commenced by the company and the adult children, which were consolidated with the ancillary relief proceeding.  The husband in that case had completely failed to engage properly in the ancillary relief proceedings and had disregarded and disobeyed numerous court orders, and completely failed to make any financial provision for the wife and had attempted to put assets beyond the jurisdiction of the court.  In the ancillary relief proceedings, the wife was basically granted the total amount of lump sum as sought along the lines suggested by her Counsel, including the ‘fighting fund’ as part of her lump sum.

252.  Mr Chan has submitted that this court has no jurisdiction to order any ‘fighting fund’ in the present case. 

253.  Although in principle I accept that there should be no discrimination between a child born within a marriage and a child born without, but unfortunately the wording of s 10 (2)(a) of GMO is quite different from s 5 (2)(c) of MPPO, and is quite restricted.

254.  As I understand it, the fund is for covering the Mother’s litigation costs in possible appeals by the Father and enforcement proceedings overseas.  There is no evidence of how the amount of HK$2.5m is arrived at.  Notwithstanding Mr Coleman’s persuasive arguments that a ‘fighting fund’ is part of the ‘immediate and non-recurring needs’ of ILB and that I have jurisdiction to make such an order under s 10 (2)(b), I am not so convinced. 

255.  Further, even though there is evidence that the Mother had to apply for a penal notice to be attached to the interim maintenance order and that subsequently the Mother had to apply to issue a judgment summons in London to enforce arrears in payments, these all took place before Parker’s Judgment.  So far as I could see, the Mother did not make any claim for a ‘fighting fund’ during the trial before Parker J, nor was there such an award in Parker’s Judgment.  Although the Father did apply and obtain leave to appeal, after failing to obtain a stay, he complied with Parker’s Order, and paid the fund ordered to be settled for ILB’s housing. 

256.  Mr Coleman has submitted that the Father’s litigation conduct thus far has been appalling, and that his strategy from the beginning has been to continue litigating with the Mother until she is exhausted financially and emotionally and has no choice but to give into his demands, and that he was involved in 5 years of litigation with his former wife.

257.  To certain extent, this seemed to be reflected in the Parker’s Judgment.  During the trial before Parker J, the Mother’s Counsel had contended that the Father’s conduct was to wear the Mother down tactically and financially, and it was asserted on the Father’s behalf that there was hostile litigation on both sides, but Parker J did not think that fairly described the Mother’s conduct.  Parker J said the only criticism that could be made against the Mother, which might be serious criticism but not such as to be categorized as hostile, was that originally she asked too much.  Parker J did further comment that the Father, being a businessman acting in a world where hard bargains need to be struck, might have thought at one time that such tactics might get him somewhere. She said she did not regard the Father as in any way chastened, but she thought there was some hope that he had by the time of the trial before her was prepared to cooperate.

258.  Some of those proceedings in London were s 8 Proceedings and were mainly over contact/access issues, particularly after Parker’s Judgment.  There was also an order on contact made by District Judge Malik in April 2011 which the Mother herself had applied to appeal against.

259.  Ultimately, the parties did seem to come to some agreement over relocation although initially the Father was opposing it. Anyway, the Father’s appeal against Parker J was allowed by consent due to the Mother’s own wish to relocate.

260.  Parker J ordered part of the Mother’s costs in the Schedule 1 proceedings to be paid by the Father on indemnity basis up until 27 October 2010, and thereafter, including the hearing on standard basis.  In her Costs Judgment[106], she listed her most important factors for her costs orders were:

(i)   The Father made no offers to settle at all prior to 11 October 2012;

(ii)   The Father’s conduct of the litigation was, at least until June 2010, highly unreasonable, based on an aggressive litigation stance of pressuring the Mother, wearing her down and obstructing the process;

(iii)   The Father’s litigation conduct led inexorably and inevitably to the Mother’s request for secured provision;

(iv)   The Father’s conduct in withdrawing his proposal in relation to housing, and in putting forward inadequate housing proposals was significantly unreasonable;

(v)   The other aspects of the case took almost no time to investigate;

(vi)   The Father’s success in relation to maintenance in accordance with his 11 October 2010 proposals could not be ignored.

261.  It seems that certainly until June 2010, the Father’s litigation conduct was found to be highly unreasonable.  Having considered the circumstances of this case, overall speaking, I do not, however, find that the husband’s conduct is to the extent of the husband in the Al-Khatib or the husband in the Ben Hashem case to justify a ‘fighting fund’ in the present case, even if I were to have the jurisdiction to make such an award.

Total of Lump Sum

262.  To summarise, the total amount of lump sum which I will order is HK$3.35m, made up as follows:

Security

263.  The Mother has asked for the periodical payments to be secured under s 10(2)(c) of GMO.  She seeks the equivalent of the sum of £2.64m or about HK$32.13m which is equivalent to the amount ordered by Parker J for the purchase of a home for ILB, and which the Father did pay to his solicitors and subsequently returned to him by consent.  The Mother proposes that the monthly periodical payments be withdrawn from this sum.

264.  The Mother also made an application for security before Parker J who did not in the end make an immediate order for any security.  She had said that she had to balance the risk of non-compliance with the onerous requirement to provide security.  She also pointed out that in the case of A v A (A Minor: Financial Provision)[107] to which she was referred to, the security ordered was against the father’s death as the father in that case lived a precarious life and was domiciled outside UK and the daughter would have no claim under the Inheritance Act if anything happened to the father.

265.  In the end, Parker J decided to adjourn the Mother’s application for security and said that if there had been non-compliance, then inevitably consequences would follow, which might include an order for security.

266.  What the Mother seems to be proposing is for the Father to pay a sum equivalent to £2.64m in cash into an account from which the monthly periodical payments can then be withdrawn.  This is almost akin to ask the Father to settle this sum in trust for ILB, rather than a security, and seems quite onerous.  Further, the housing fund Parker J had ordered was for a property to be purchased with a reversionary interest to the Father and the property was not meant for ILB or the Mother absolutely.

267.  I have only been referred to the case of A v A (A Minor: Financial Provision).  As I have mentioned during the final day that there should be more authorities[108], and a security may take many forms, as the purpose is only to secure the compliance of the order.

268.  Although it seems at one stage the Father was reluctant to comply with the 2^nd Interim Order, and there seemed to be late payments, he clearly thought better of it, or had been so advised to do so, and he had kept up with all his payments under the 2^nd Interim Order.

269.  Having considered the above, I propose to adjourn this application, with liberty to restore, if and when there is non-compliance of this order on the part of the Father.

Order

270.  The effect of my order is:

(i)   Subject to the Father’s undertaking to settle all ILB’s school fees direct to her school within 14 days upon receipt of the invoice by email and to provide within the said 14 days a notification to the Mother of his payment, the Father shall pay to the Mother a sum of HK$290,000 per month as periodical payments for the benefit of ILB, as from 1 January 2013, with credits for amounts already paid, on the 1^st day of each calendar month until ILB reaches 18 years of age or completes full time education, whichever shall be later;

(ii)   The periodical payments shall be index-linked;

(iii)   The over payment of a total of HK $190,002 from January to June 2013 (HK$31,667 x 6 months) can be deducted by the Father from the lump sum ordered below;

(iv)   Subject to the above deduction, the Father shall pay a lump sum of HK$3.35m to the Mother within 14 days hereof.

Costs

271.  As the Mother has succeeded substantially with her claims, I will order the Father to pay her costs of and incidental to these applications. There be certificate for two Counsel.  This is an order nisi, and shall be made final after 21 days. 

272.  Finally, I would like to thank all Counsel for their assistance in this case.