Cheung Man Choi Yuk v. Cheung Ping Yan

CACV000197/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No. 197 & 201
(Civil)

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Coram: Hon Nazareth, V.-P., Liu & Mayo, JJ.A. in Court

Date of Hearing: 15 January 1998

Date of Judgment: 15 January 1998

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J U D G M E N T

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Liu, J.A.:

1. Both parties are represented. I shall call them "husband" and "wife". On 15 August 1991, an Order of His Honour Chism was made by consent. The Consent Order required the husband to pay periodical payments to the wife, initially for the last three months in 1991 at the rate of $3,000 per month, thereafter, for a year at $3,500 per month and as from 1 January 1993 at $4,000 a month. The husband was to pay an additional monthly sum on every15 January, near Chinese New Year. The husband allowed the periodical payments to fall into arrear. By 1995 they had accumulated to some $175,500. Therefore, before the wife took action against the husband, the total sum due from the husband to the wife stood at $175,500.

2. In 1995, by Judgment Summons the wife took the husband to court on the arrears. It was returned before Deputy Judge Hung. The wife was legally represented. The husband was not. At the conclusion, Deputy Judge Hung encouraged the husband to pay by an Order in these terms: the husband be committed to prison for a period of 4 months but his Committal Order be suspended on condition that the husband paid to the wife the judgment debts of $190,500 in all i.e. $175,500 arrears and $15,000 costs, by monthly instalments of $1,000 from 1 September 1995 and of $3,000 from 1 September 1996. These monthly instalments were to continue until the whole outstanding sum of $190,500 was paid in full. No separate order to pay was made against the husband.

3. The husband felt aggrieved by the Order of Deputy Judge Hung, but he did not pursue the matter in court until he had served his four months' prison term for failure to meet any of the allocated monthly instalments. Having served his term, the remainder of the Order of Deputy Judge Hung no longer placed the husband under any compulsion to pay; it lapsed.

4. Later, the husband, this time legally represented, came before Deputy Judge Carlson who decided on 11 March 1997 that the husband was to pay reduced periodical payments at the rate of only $2,000 a month instead of $4,000 and the Deputy Judge purported to reduce the then $3,000 monthly repayment towards the outstanding $190,500, being arrears and costs, to $1,000 per month. The husband was, therefore, ordered to pay a total of $3,000 per month, $2,000 per month under the Consent Order of His Honour Judge Chism as varied and a reduced $1,000 monthly instalment towards repayment of the then outstanding $190,500 in the Committal Order of Deputy Judge Hung.

5. Pursuant to leave granted, the husband appeals against the Committal Order of Deputy Judge Hung, which was granted in the wife's application by Judgment Summons. The wife appeals against the Order made by Deputy Judge Carlson, complaining that the ordered variation made to reduce the monthly sum the husband had to pay under the Consent Order was not supported by a sufficient change of circumstances. There is a Respondent's Notice which does not take the matter further.

6. I propose to deal with the wife's appeal first. When the parties appeared before Deputy Judge Carlson, the husband was obliged to pay $4,000 a month as periodical payments to the wife under the Consent Order made by Judge Chism on 15 August 1991. In addition, so the Deputy Judge erroneously believed, the husband would be well advised to pay $3,000 per month to the wife on pain of imprisonment under the Committal Order made by Deputy Judge Hung on 25 August 1995. In total, the husband was thought, at first glance, to have to pay to the wife $7,000 per month. The husband was then represented. The global monthly sum of $7,000 which the husband was believed to have to meet, would appear to be an unaffordable drain on his resources. Deputy Judge Carlson must have been overwhelmed by this large total monthly payment of $7,000 and in his consideration of the factors which he was required by law to take into account, he allowed himself to be persuaded by the husband's solicitor to reduce what he thought was a $7,000 monthly liability to $3,000. This is how he set out to achieve it: the Deputy Judge reduced the $3,000 per month for the arrears and costs under the Committal Order of Deputy Judge Hung to $1,000 per month and the $4,000 monthly periodical payment in the Consent Order made by Judge Chism to $2,000 per month. Apparently, Deputy Judge Carlson must have regarded $3,000 per month as being within the husband's means to pay.

7. Standing back from the large global sum of $7,000 a month, it is evident that but for what appeared to the Deputy Judge to be a sum which the husband could ill afford to pay, there was no sufficient evidence of any change of circumstances for reducing the $4,000 monthly periodical payments to $2,000 per month. The relevant circumstances before the Deputy Judge were telling: First, in 1991, the husband's indebtedness stood well over $500,000. When Deputy Judge Hung seized upon the matter in 1995, the husband's indebtedness was less than $100,000. By the time, the husband returned to Deputy Judge Carlson in 1997, his indebtedness slightly increased but was below $120,000. It was less than a quarter of what it was in 1991. The husband's liability had come down appreciably from 1991 to 1995 and 1997. Secondly, after the party had fallen apart, the husband had custody of the two children of the marriage. In the evidence of the husband, they took slightly over $7,000 per month to maintain. The elder daughter ceased to be supported by the husband as from March 1994. Thereafter, the younger son alone was being maintained by the husband at between $3,000 to $4,000 per month. The husband also stopped supporting the son some time in 1996. The children of the marriage are now 21 and 20 respectively. They are not parties who need be taken into account in these appeals. Therefore, on this alone the husband should have at least $7,000 to spare, so to speak. Thirdly, the husband had, in the interim, remarried but was soon separated from his last wife. To her, the husband paid $3,000 per month during cohabitation. Shortly after separation, the husband volunteered $1,500 per month. It would leave an extra $1,500 per month in the husband's reserves. It is not quite clear whether the husband still maintains this $1,500 monthly payment to his last wife.

8. I should mention in passing that when the husband was incarcerated, he applied by letter to Deputy Judge Hung to be released from prison. In his letter dated 23 April 1996, he offered to pay $75,000 with the remainder to be satisfied by 36 equal monthly instalments. The husband would also continue to pay his $4,000 monthly periodical payments. I would give little weight to an offer such as this, made in distress and I am prepared to accept that the offer cannot be taken as reliable evidence of the husband's true means.

9. But from these three items of outlay viz. indebtedness, expenses for the maintenance of the two children of the marriage and payment to the husband's last wife, unused funds would now become available for meeting the husband's obligations and his personal expenses. I need not deal with peripheral features. In the main, it would seem that there was insufficient evidence to support the alleged change of circumstances for a reduction of the $4,000 monthly periodical payments in the Consent Order made by Judge Chism in August 1991. Whilst the husband had a slightly more modest income of a taxi driver, his liabilities and commitments had greatly reduced. There was no warrant for varying the monthly rate of $4,000 in the Consent Order of the judge. As to the arrears, the duration for which and the rate at which they may be ordered to be paid up by the husband are matters for future consideration if and when the wife seeks enforcement. The wife's appeal should therefore succeed and I would allow it.

10. The husband is a wilful defaulter. Also, there was no justification for the additional annual sum payable close to Chinese New Year to be reduced.

11. I turn next to the husband's appeal. By the time the husband came before Deputy Judge Carlson, he had been to prison and released. The Order of Deputy Judge Hung had lapsed because the remainder of his Order was overtaken by events. Under that Order, the husband would not risk further penalty if he should continue to refuse to pay any of the outstanding $190,500. As to the Order of Deputy Judge Hung, nothing called for adjudication in the application to Deputy Judge Carlson. Save for matters of academic interest, there was nothing left to be decided. Mr Hung, counsel for the husband submits that the questions of costs, future consequences and the stigma of a defaulter remained to be the substantive issues for the husband's application to Deputy Judge Carlson and for his appeal and that hence the husband's application to Deputy Judge Carlson and this appeal are not exercises of futility, involving sheer academic debates.

12. Costs would, subject to counsel's arguments, follow set rules after appeal. An appeal doomed to failure would only give rise to what adverse consequences the husband deserves. On the view I take in the wife's appeal, the husband is a wilful defaulter. The stigma of a wilful defaulting husband is no longer a live issue. Apart from the three matters Mr Hung raises for our consideration, he agrees with counsel for the wife, Mr Chain, that there exists no substratum in the husband's appeal. On the analysis I have endeavoured to make, Mr Chain, counsel for the wife, is clearly right. The husband's appeal is misconceived and should be dismissed and I would dismiss it.

13. It is quite unnecessary to deal separately with the Respondent's Notice. Subject to what counsel have to say, costs in both appeals should, in my view, follow the event in each case. I would order the husband to pay costs to the wife in both appeals.

Mayo, J.A.:

14. I am satisfied that the wife should succeed on her appeal.

15. Mr. Hung, on behalf of the husband, informed us that he could not resist an order for payment of $4,000 per month. It was hardly surprising that this should be the case. Virtually all of the available evidence indicated that if any variation should be made to Judge Chism's order, the amount ordered should be increased and not reduced as sought by the husband. It would appear that Deputy Judge Carlson had regard to the overall financial situation rather than addressing his mind to whether or not it was just that a variation should be made to Judge Chism's order. In addition to this, it was agreed by both parties for different reasons that Deputy Judge Hung's order should not continue to have effect. This being the case, I consider that Deputy Judge Carlson's order should be set aside.

16. The position concerning the husband's appeal is not quite as simple. Mr. Hung contended that Deputy Judge Hung's order should be set aside as this might have various implications concerning a claim he anticipated the wife might make for arrears of maintenance to be payable. This was not, however, a matter of which we were seized. I do not consider that it can be right that we should be expected to make an adjudication on a matter which is essentially hypothetical. Deputy Judge Hung's order has been spent. In my view, the husband's appeal should be dismissed. I also consider, subject to any submissions which may be made, that the wife should be allowed her costs on both appeals and that the respective party's own costs should be taxed in accordance with the Legal Aid Regulation.

Nazareth, V.-P.:

17. For the reasons given by my Lords, I agree that the wife's appeal should be allowed.

18. As to the husband's appeal, I also agree with my Lords' views. I would add that what the husband seeks in his appeal is that the committal order now spent be set aside. He seeks that because he fears that at some time in the future the order may be regarded as a determination that at the time it was made he had sufficient means to make the payments concerned, and that such an issue may arise in the future for determination. This does not seem to me to afford a sufficient basis for an appeal to this Court. I would accordingly also dismiss the husband's appeal.

19. I also agree with the costs orders my Lords propose.

20. Accordingly, the wife's appeal is allowed. Deputy Judge Carlson's order of 11 March 1997 is set aside. The wife is to have her costs before Deputy Judge Carlson and of her appeal. The husband's appeal is dismissed, and the wife is to have her costs of his appeal. The wife's and the husband's own costs in each appeal are to be taxed in accordance with the Legal Aid Regulations.

Representation:

Mr Andy Hung inst'd by M/s S T Poon & Co. for Petitioner/Appellant.

Mr Benjamin Chain inst'd by M/s Knight & Ho for Respondent/Respondent.