Bksh Nee Ksh v. Jab
Read the full judgment text of FCMC 5366/2008 on BabelCite. This Family Court judgment was delivered on 14 October 2016 before HH Judge C.K. Chan.
Matrimonial Causes – Ancillary Relief – Sale of Property – Variation of Maintenance – Matrimonial Proceedings and Property Ordinance – Consent Order – Change of Circumstances – Education Fund – Lump Sum – Enforcement – House sale ordered at £2.35m private treaty then £1.5m auction – Maintenance varied to lump sum HK$1,020,000 and HK$35,000 tuition fees deducted from husband's share – UK enforcement refused.
Legal issues: Sale of Property · Variation of Maintenance · Education Fund · Enforcement in UK
Outcome: Sale of house ordered; Maintenance varied to lump sum; UK enforcement refused.
Cites 2 cases
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FCMC 5366/2008 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 5366 OF 2008 ------------------------
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----------------------- J U D G M E N T ------------------------ Applications 1.This is a hearing of the Respondent’s 2 applications both dated 7 March 2016. 2.Despite the fact that the parties were divorced quite some time ago, I shall continue to refer to the Petitioner as “the wife” and the Respondent as “the husband” in this judgment purely for the sake of convenience. 3.The first application of the husband was an application for ancillary relief in which he asked for:
4.The second application was a summons for “ORDER OF ENFORCEMENT”. I shall not repeat the wordings of the summons in verbatim as they contain some unnecessary narration of facts. As I understand it, the husband is asking for the following orders:
5.One will notice that the husband’s 2 applications concern 2 important basic issues, one concerning the sale of the house and the other the children’s maintenance. Background 6.This case has a rather long history. 7.The wife is a Korean national. 8.The husband is a British national. 9.The parties were married in 1994 and within wedlock, 2 children were born. They are:
10.On 9 May 2008, the wife issued a petition for divorce based on the behaviour of the husband and a decree nisi was granted by this court on 4 February 2009. The decree was made absolute on 26 February 2010. 11.On 19 November 2009, the parties agreed on a joint custody order of the 2 children with care and control being given to the wife. 12.As to ancillary relief, the parties also reached a settlement on the same day based on which the court granted a consent order in the following terms (“the 1st AR Order”):
13.The anticipated sale of the house did not materialise and relying on the “liberty to apply” provision, the parties came back to the court for a further order. On 9 August 2010, this court, again based on the consent of the parties, granted a further order in the following terms (“the 2nd AR Order”):
14.As at the date of this hearing, it is common ground that both parties and the 2 children have all relocated to England. The husband has remarried with 2 children (aged 11 and 9 respectively) from this new relationship. The wife used to live with the younger son, J, in the house but I was told that J has just moved to University accommodation recently. The elder son is now studying at a medical school and is living away from home. 15.It is the case of the husband that the wife has been uncooperative in the sale of the house resulting in the non-performance of the 2nd AR Order for over 6 years. Moreover, as the husband is now retired and has taken up new financial responsibilities for his new family, he now asks for the maintenance order in favour of the children to be varied. 16.The wife disputed the husband’s case and therefore, the husband’s applications have to be adjourned to today for trial. Discussion The combined effects of the 1st AR Order and the 2nd AR Order 17.Pursuant to the agreements of the parties, the court has granted 2 ancillary relief orders (ie. the 1st AR Order and the 2nd AR Order). I think it is important to have a clear understanding of the combined terms of the said 2 orders right at the beginning. 18.It is my ruling that the combined terms of the 1st AR Order and 2nd AR Order are:
Sale of the house 19.I shall first deal with the sale of the house. 20.I start off by reminding myself that the parties have already reached a full and final settlement of their respective claim for ancillary relief some 7 years ago. An important term of the settlement was for the sale of the house with the sale proceeds to be shared between the parties subject to certain deductions for the establishment of the Education Fund and from the share of the husband. This court has no power to rewrite the terms of their agreement or vary the consent orders already made, except may be for the children’s maintenance. What the court can only do is to give further directions on how the 1st AR order and 2nd AR Order are to be carried out. Estate agent 21.The first issue is which estate agent should be appointed. The husband suggested Lillicrap Chilcott. The wife does not dispute that Lillicrap Chilott is a “well known firm of estate agent”. Therefore, I have no hesitation in directing that Lillicrap Chilcott should be appointed as the estate agent to conduct the sale of the house. Agent fee 22.The husband asked for 3% of the sale price to be paid to the estate agent upon a successful sale. I note that the husband has produced no evidence justifying such an agent fee, but at the same time I do not see any strong objection from the wife on the amount to be paid. Therefore, I accept that an agent fee of not more than 3% of the sale price should be paid at sale. Solicitors 23.Next is the firm of solicitors to be engaged to conduct the sale. The husband suggested the firm of Foot Anstey. I understand that this is a local firm and I have no reason to question its integrity and competency and therefore, I direct that the firm of Foot Anstey is to be engaged for the sale of the house. Selling price 24.As to the selling price, the parties indicated at trial that the reserved price of £2.35 million (as previously agreed in the 2nd AR Order) should be adhered to. However, they cannot agree on the issue of public auction in case that the house could not be sold by private treaty. 25.On this issue, my view is that in the event that the house could not be sold after a period of 6 months by private treaty, such sale should be effected by public auction. The husband asked for a reserved price of £1.5 million. The wife said it was too low but did not give any alternative proposals. Under these circumstances, I will adopt the proposals of the husband and set the reserved price of the public auction at £1.5 million. This is only a reserved price and I am sure that if the market is right, a much higher price can always be fetched for the benefit of both parties. Time for sale 26.As to the timing of sale, I think it is reasonable for the house to be sold by private treaty within 6 months from the order, failing which by public auction within 4 months thereafter. Personal and private effects 27.There does not seem to be any strong objection from the wife and therefore, I will order that the parties’ personal and private effects in the house to be distributed between the parties by agreement, failing which the removal specialist of “Britannia Lanes of Cornwall” should make a full inventory and store the same in their warehouse pending further order of the court. The children’s maintenance Variation of maintenance 28.The next issue is the husband’s application for variation of the children’s maintenance. The legal principles 29.The Court’s power to grant an order for variation is governed by s11 (1) and (7) of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”) which provides as follows:
According to the said provision, the court, in considering such an application for variation, has to consider all the circumstances of the case and in particular, any changes in the matters to which regard has been made in reaching the original order. 30.In the case of AEM v. VFM[1], Cheung JA has explained the modern approach in dealing with such an application at paras 14.4-8 of the Judgment:
31.As to the weight to be attached to the original order, Tang VP (as he then was) said in the case of HCTT v. TYYC [2008] 5 HKC 86 at paras 15-16:
32.I shall bear the above principles in mind when I come to consider the facts of this case. The case for the husband 33.The husband relies on the following submissions in support of his application:
34.Based on the above, the husband now asks for the children’s maintenance to be stopped as from the date of this hearing and the establishment of the Education Fund to be set aside. My views 35.Despite the objections from the wife concerning some of the figures relied upon by the husband, I am satisfied that those figures should more or less represent the present financial situation of the husband. In other words, I am satisfied that the husband has recently retired and his monthly income will largely be restricted to the state pension that he is currently receiving. 36.As to the wife’s financial position, I understand that she may be running some business ventures but I do not think she is enjoying the financial affluence as the husband would like to believe she is. This is largely due to the fact that she had suffered from cancer and the fact of her relocation to the UK with the younger son in about 2014. 37.After considering all the circumstances of this case, I have decided that it may not be appropriate for the children’s maintenance to be terminated as from the date of this hearing. However, I am of the view that the husband’s responsibility to pay the children’s maintenance should end at the completion of their present university degrees. 38.These are my reasons. 39.I note that when the parties reached their agreement in 2009 and 2010 (the 1st AR Order and the 2nd AR Order), the husband had already formed an intimate relationship with his present wife. His 2 young children were born sometimes in 2005 and 2006. Therefore, the fact that the husband had a new family and 2 young children were circumstances already prevailing at the time of agreement. They cannot be regarded as something new or being a change of circumstances justifying a variation of the maintenance order. 40.On the other hand, I do accept the fact that the husband is getting older due to the lapse of time and he has retired from full time employment recently. However, that does not mean that he is not in a position to continue to pay the children’s maintenance because he still holds half of the equity in the house. It seems that both parties have no strong objection that the house is worth about £2.35 million. Half of that being £1.175 million, ie. about HK$12,000,000 (by adopting an exchange rate of £1: HK$10.20). Even with the deductions under the 1st AR Order and the 2nd AR Order, I think there is still a not insubstantial amount of money being left to the husband. 41.I understand that B has another 3 years before he will finish his medical degree. According to the wife, he wants to do another PhD which may take another 3 years. It is my view that the husband’s duty to support B should end in 3 years’ time, ie within the time that would allow B to complete his medical degree. If he should decide to pursue further studies after that, I think he has to find his own way to do it. Assuming that the sale of the house could be effected within the coming 12 months, ie. on or before 1 October 2017, the husband’s future liability towards B after that date would be restricted to 2 years only, ie. HK$408,000 (HK$17,000 x 24 = HK$ 408,000). 42.As for J, he has another 4 years before he finishes his first degree upon which the husband’s duty to support him should end. As from 1 October 2017, the husband has to pay another HK$612,000 (HK$17,000 x 36 = HK$612,000). 43.In other words, the total sum of B and J’s future maintenance as from 1 October 2017 amount to HK$1,020,000 (HK$408,000 + HK$612,000 = HK$1,020,000). It is a sum well within the husband’s ability to pay. 44.As a further step to achieve certainty and finality between the parties, I think it is preferable to fix the date of increase of maintenance (from HK$30,000 to HK$34,000) now, instead of waiting for the sale of the house. Again, assuming that the sale of the house could be achieved in about 12 months, I would vary the maintenance order and fix the increase of maintenance to start from 1st October 2017 and such payments would end on the children finishing their first university degree or by 31 August 2019 for B and 31 August 2020 for J, whichever is earlier. 45.I understand that the wife would like to have all future maintenance for the children to be converted into a lump sum and paid out from the husband’s share of the sale proceeds. In view of the husband’s claim of impecuniosities, I think it is fair to make such an order so as to achieve something akin to a clean break. Therefore, it is my ruling that the periodic payment order for the children’s maintenance is to be replaced by a lump sum order of HK$1,020,000 which is to be deducted from the husband’s share of the net sale proceeds. Education Fund 46.The provision for the establishment of the Education Fund (HK$3,000,000) was contained in the 1st AR Order. There is no dispute that the purpose of such a fund was to cater for the children’s future educational needs. There are 2 important points to note here. First, the use of the Education Fund was restricted to the payment for “school or university tuition fees” of the children. Therefore, I do not accept the wife’s arguments that the children’s living expenses should also be paid out from this fund. Second, there was no provision in the 2nd AR Order setting aside the establishment of this Education Fund. It is clear from the 2nd AR order that it only deals with the issue on how to carry out the sale of the house and to calculate the sums being owed by the husband to the wife, but leaving the establishment of the Education Fund untouched and intact. 47.The husband is now arguing that he should not be responsible for the children’s future university tuition fees as the children could have financial assistance from the UK government making the establishment of Education Fund unnecessary. I do not agree. It is true that needy students in the UK can apply for financial assistance from the government but they have to be repaid upon employment after graduation. I agree with the wife’s view that if the parents can afford to pay for the tuition fees, which I believe is the case here, there is no reason why they should not shoulder such responsibilities and require the children to repay the student loans upon graduation. After all, it was the parties’ unequivocal agreement that the children’s school and university tuition fees should be paid out from their joint assets, there is no reason why any of them should renege on such agreement, especially when they are financially able to do so. 48.Having said the above, one also has to bear in mind that only a small part of the Education Fund needs to be utilized. Given that I have already restricted the husband’s payment of the children’s maintenance to 3 and 4 years respectively (ie not beyond their present university education) and if the husband’s estimation of the children’s university tuition fees at £9,000 per annum is correct, that means the total future university tuition fees amount to £63,000 only (£9,000 x 3 + £9,000 x 4 = £63,000, ie about HK$642,600). In other words, only about 20% of the Education Fund needs to be used and the balance will go back to the parties in equal shares. Under these circumstances, I think it is fair to reduce the Education Fund to £70,000, allowing some room for future increase or inflation, which should be enough to pay for the 2 children’s university tuition fees for the coming 3 to 4 years. The division between the 2 children should be £30,000 for B and £40,000 for J. 49.In principle, this sum should come from the Education Fund to be established after the sale of the house. This arrangement means that both parties will share the future tuition fees equally. In order to simplify the matter, I think it is better for the husband just to bear half of this sum, ie. £35,000. In other words, instead of establishing such an Education Fund, I would direct that a sum of £35,000 is to be deducted from the husband’s share of the net sale proceeds to satisfy his liability towards the 2 children’s future university tuition fees. Past maintenance and up keep charges of the house 50.At the beginning of trial, there were some disputes on the expenses being incurred by each party on the maintenance of the house. Each claimed reimbursement from the other party. During the course of trial, the husband proposed, which was later accepted by the wife, that they would regard each party’s past financial contribution to the upkeep of the house to be more or less the same and so they will not make any further claim of reimbursements from the other party. Therefore, there is no need for me to make any order in this regard. However, for the way forward and in order to avoid any future disputes, I would direct that the wife should be responsible for future outgoings as long as she is enjoying the use of the house. 51.Just to complete the discussion, the husband did ask for the wife to pay for half of the accommodation costs since September 2014. It is not clear whether he is still pursuing that claim, but even if he is, it is my view that the wife being a joint owner has every right to reside in the house with the sons until its sale. Arrears of maintenance to be deducted from the husband’s share 52.It is one of the husband’s applications that there should be a “resolution of the amount of past maintenance to be deducted from the sale of the house”. 53.There is no dispute that the husband has defaulted in the payment of maintenance since 1 December 2009. However, it is the husband’s case that certain sums of money should be deducted from the said arrears of maintenance, including education fees (meaning the school or university tuition fees after the children have relocated to the UK), housing allowance (meaning the fee payable by the wife when she started staying in the house), holiday expenses (meaning the money that he has paid for the children’s past holidays). 54.I have already ruled that the children’s school and university tuition fees should continue to be paid by the husband. I have also ruled that the wife needs not pay anything for her previous stay at the house in England. As to past holiday expenses allegedly paid by the husband, apart from the fact that there is no evidence to prove the actual amount spent on the children, I am not convinced that such sums, even if proved, should be deducted from the monthly maintenance payable by the husband. 55.However, there are some other items that I think should be deducted from the maintenance payable by the husband. They include the school fees paid by the husband or through his former employer, the details of which are contained in §22 of the husband’s supporting affidavit (pp19-20 of the Trial Bundle). The total amount of such payments is HK$942,581.50. I understand that most if not all are related to school fees of the children, which according to §2 of the 1st AR Order, should be paid out from the Education Fund, meaning that they should be borne by the parties equally. Therefore, it is my ruling that the wife should bear half of that amount and the easiest way to achieve that is to deduct half of that sum at HK$471,290.75 (HK$942,581.50 x ½ = HK$471,290.75), to be rounded up to HK$470,000, from the arrears of maintenance owed by the husband. 56.Based on the above, the total arrears of maintenance until the sale of the house should be:
Leave to enforce the order in the UK 57.In both of his applications, the husband asked for leave so that he could enforce this court’s order in the UK. At trial, I asked for the legal basis upon which this court has power to grant such an order but the husband cited the provisions of the Maintenance Orders (Reciprocal Enforcement) Ordinance, Cap.188 instead, which are clearly irrelevant to our present situations. On the second day of trial, the husband then applied for an adjournment so that he could seek legal advice by making an application to the Legal Aid Department. As we were already in the middle of the trial and more importantly, I do not think the husband’s application for legal aid would have assisted his case in any way, I refused his application for adjournment. 58.Going back to the merits of the husband’s application for leave to enforce a Hong Kong order in the UK, I am not aware that this court has such a power. Obviously, whether the UK courts would enforce such an order is a matter for that jurisdiction. Therefore, the husband’s application in this regard is refused. Conclusion on the maintenance and deductions 59.Based on the above discussion, these are the rulings on the children’s maintenance:
Orders 60.The orders to be made are:
Costs 61.As both parties are unrepresented, I think a fair order is that there shall be no order as to costs, including all costs reserved. This will be in the form of an order nisi to be made absolute upon the expiry of 14 days from the handing down of this judgment.
Representation: Petitioner acting in person Respondent acting in person | |||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMC 5366/2008