C, M v. G, R P
Read the full judgment text of FCMC 1915/2019 on BabelCite. This Family Court judgment before Deputy District Judge P. Barnes.
Matrimonial Causes – Interim Maintenance – Reasonableness – Earning Capacity – Husband's Financial Capacity – Danish Rental Income – Application Granted – $8,000 per month maintenance ordered – Costs awarded to Petitioner
Legal issues: Amount of interim maintenance · Wife's earning capacity · Husband's capacity to pay · Danish property income
Outcome: Application granted.
Cites 2 cases
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FCMC 1915 / 2019 [2019] HKFC 298 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 1915 OF 2019 ________________________ BETWEEN
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________________________ J U D G M E N T ________________________ Introduction 1.This is the Petitioner’s application by Summons dated 23 May 2019 for interim maintenance for the two children of the marriage, both girls: L, who is 4 and E, who was 6 months old at the time of the hearing. The Petitioner (wife) seeks $8,000 per month by way of interim periodical payments to her for the benefit of the children, comprising the following:
2.The Respondent (husband) opposes the application. He has been paying the majority of the general and children’s expenses, including the mortgage on the former matrimonial home, utilities, the salary of the domestic helper and school fees for the elder child, and he will continue to meet these payments. He says that the current level of additional periodical payments, at $5,000 per month, is sufficient, having regard to these other direct payments, the needs of the children and his inability to pay any more. Background 3.The parties were married in Hong Kong on 28 March 2013. As noted, there are two children. L attends K1 at ICHK, Hong Lok Yuen in Tai Po. The younger child was born after the Petition was filed, and, according to the wife, after the parties separated. The husband has weekly defined access to the children pursuant to the Court’s order of 27th May 2019. 4.At the time of separation, the wife was employed as a part-time office manager at the Danish Chamber of Commerce earning $10,400 per month, with a yearly bonus equivalent to one month’s salary. On 30th May 2019 she gave notice to her employer and left that position on 30th June 2019. She has not worked since and is not planning to return to work in the near future, until the younger child is older. It is relevant to note that the letter of employment with the Chamber of Commerce confirmed her starting date as 1 January 2017, when the older daughter was 19 months old. 5.The husband, who is 41, is head of sourcing for M S International Limited (MSI). He receives a basic salary of Euros 6,800 or approximately HK$58,900 at present exchange rates, together with bonus payments averaging $14,750 per month, a housing allowance which he has elected to take in cash of HK$35,000 per month, and a “Home Leave Allowance” which at the time of his Form E was $14,968 per month but which has increased by a further HK$3,440 per month with the birth of the second child. According to the income statement for the month of April 2019, he also received from his employer a school fee allowance of $37,784. The husband affirmed that the Home Leave Allowance and school fee allowance are paid to him by reimbursement after providing his employer with receipts demonstrating payment: R affirmation, [10]. 6.The Court was informed at the hearing that the husband had been employed by his present employer since 2013, on a three-year contract renewed in 2016 and again in 2019 and that the terms of his employment had been set out in formal letters of employment. None of the letters of employment were provided with the husband’s Form E, Answers to P’s Questionnaire or with his affirmation. Instead, the husband exhibited to his affirmation a letter from his employer dated 28 May 2019 confirming his position, salary and housing allowance. 7.It is not in dispute that during the marriage the husband was the main breadwinner and that the standard of living was commensurate with his income. The matrimonial home is some 850 square feet in size, with clubhouse and swimming pool. The parties enjoyed yearly long-haul holidays. The employment benefits enable the elder child to attend a prestigious kindergarten. The Law 8.Section 5(2)(a) of the Matrimonial Proceedings and Property Ordinance (Cap 192) (“MPPO”) provides that the Court may make an order that “a party to the marriage shall make to such person as may be specified in the order for the benefit of a child of the family, or to such a child, such periodical payments and for such term as may be so specified.” Such orders may be made in divorce proceedings “before or on granting the decree of divorce, of nullity of marriage or of judicial separation, as the case may be, or at any time thereafter”: s 5(1). 9.In HJFG v KCY [2012] 1 HKLRD 95 at [37]-[38] the Court of Appeal outlined the approach to be taken by the Court in determining applications for interim maintenance and maintenance pending suit:
The issue 10.The question, therefore, is how much the husband should pay to the wife for the benefit of the children, having regard to all relevant considerations including the children’s needs, the income and expenses of the parties and recognizing the obligations the husband is already shouldering. Other income 11.I have set out above the husband’s income from his current employment and the wife’s from her previous employment. In her Form E the wife disclosed that she was also receiving rental income of DKK6,500 per month from an apartment she owns in Denmark, at Diget 28, DK-7500 Holstebro (“Holstebro”). She listed monthly outgoings which she says exceed the rental income, being mortgage of DKK6,300, property tax DKK582, owners insurance DKK334, and income tax on the rental of DKK667 per month. Her Answers to the husband’s Questionnaire on her Form E attached a statement confirming mortgage payments were being made via a Danish bank account on a quarterly basis of between DKK18,456 and DKK18,513. Her affirmation in support of the Summons stated this:
12.In his affirmation dated 30th May 2019, the husband did not contest this statement or the figures given, but said that the wife was also receiving income from another property, Centerparken 16, 2 TV 2500 Valby, Copenhagen (“Centerparken”), which the parties co-own:
13.In his Questionnaire dated 28th May 2019 he asked about the depletion of funds:
14.In her Answers dated 5th July 2019, the wife responded:
15.In her 2nd affirmation dated 4 September 2019 in reply to the husband’s affirmation, she added this:
16.At the hearing on 3 October 2019, the debate as to whether the Centerparken property was producing an income for the wife continued. At the end of the hearing, and in order to assist the Court to navigate the papers and locate relevant documents supporting each party’s position, the Court gave directions for each party to file brief further notes on the issue. 17.On 14th October 2019 the wife filed a 7-page Note to which she attached a number of exhibits, including additional bank statements and other documents not previously disclosed with her Form E, her Answers or her affirmations. On 21st October 2019, in reply, the husband lodged Submissions objecting to the disclosure of these new materials which he asserted was “belated” and in any event “incomplete”. Inter alia, the husband asserted that the Centerparken flat had been re-leased at below market value. To these further Submissions, the husband attached three documents – again not previously provided – showing potential rental for both properties in the location of the Centerparken and Holstebro properties. 18.The Court did not grant leave for either party to adduce new evidence on the wife’s interim maintenance Summons. To be clear, Court asked by the direction for brief notes from each party with bundle references to assist in identifying the documents already in the hearing bundles relevant to the question as to whether and if so how income net of expenses was being generated by the rental of either Danish property and how it was being put to use. I have, however, read both additional submissions – being the Note of the Petitioner dated 14th October 2019 and the Reply Submissions of the Respondent dated 21st October 2019. I have not had regard to any additional documents attached to the Note and Reply Submissions, and this judgment is based on the materials in the evidence filed at the time of the hearing. 19.It is apparent that there are disputes of fact over these two properties and the income they generate from being rented out. In essence, the wife says that in respect of Holstebro the expenses including tax have exceeded the rental income and that in respect of Centerparken, the income, net of expenses, remains in the Danish bank account to allow for future contingencies. The husband disputes at least the assertions in relation to Centerparken and claims that the wife has been guilty of re-leasing the property at a lower-than-market rental: DKK6,975 per month compared with the previous rental of DKK8,975 per month. He also claims that the wife has inflated the expenses and included in her list of deductions unrelated expenditure, such as a fee paid to the Danish Government for E’s passport. 20.These issues of fact cannot be resolved at a hearing of this nature: see paragraph 11.79, Rayden and Jackson on Divorce and Family Matters (18th Edn). For the purposes of the present application, I am not satisfied that either Danish property is generating a net income which the wife is accessing to support her expenses and those of the children. If subsequently this is shown to be in error, the matter can be corrected as part of the broader determination of the claims for ancillary relief. 21.There were other disputed elements relating to income and earning capacity. For the husband, it was said that the wife can, and should return to work to help support herself and the children. The husband’s counsel submitted this should happen “immediately”. He argued that the wife could do some language teaching or translation work, as she is trilingual, perhaps producing an income of $3,000 per month. No documents were provided to support this assertion. It is noted that this amount is the difference between the parties on how much should be paid per month in interim maintenance. 22.For the wife it was submitted that spending time away from work taking care of the new daughter and the elder daughter was reasonable. She pointed to the fact, noted above, that she did not return to work with the Danish Chamber of Commerce until January 2017 when the older daughter was 19 months old. To say the least, it is in my view reasonable for her to take some time away from work to take care of her newborn and the elder daughter who is still of tender years, particularly so given the stress arising from the breakdown of the marriage. To be fair, it did not appear to be the husband’s position that the wife should not have resigned her position with the Chamber of Commerce, but that she should be engaging in some part-time translating or tutoring work at home. 23.For the purpose of this application, I think that it is reasonable for the wife at present not to doing work of the kind suggested and I will not attribute to her a nominal income. 24.The wife for her part asserted in her affirmation that the husband had misrepresented his income by failing to disclose the education allowance in his Form E. 25.The husband denied this:
Needs 26.In her Form E (dated 25 April 2019) the wife set out her expenses as follows:
27.To her 2nd affirmation the wife exhibited receipts for “food and general household expenses” for May to July 2019. These amounted to HK$7,485.46 for May 2019, HK$7,404.84 for June 2019 and HK$13,438 for July 2019 (which included a trip to Denmark). I accept that in addition to these she is likely to have incurred other expenses for herself and the children for which she did not keep receipts. 28.I further accept that those receipts she did provide are in respect of expenses not solely relating to the children. 29.The question is whether the sums set out in paragraph 1 of this judgment are reasonable, and in my view, they are. In some months the food bill for the children may be less than HK$5,000, and in other months it may be more. Similarly, the amount spent on baby products including nappies and other necessities such as clothing and shoes will fluctuate. It is reasonable to include a small amount for entertainment/presents and for miscellaneous expenses, and this she has done. I have taken into account the existing support by the husband for general and child-specific expenses which is considerable. I allow the amount as claimed. Capacity 30.Does the husband have the capacity to pay an additional $3,000 over and above what he is already paying? 31.In his Form E, filed 10 May 2019 the husband listed his expenses as follows: Part 4 Current Monthly Expenses
32.In his affirmation, the husband refined his expenses as, firstly, those he was paying since the beginning of the marriage and was continuing to pay (paragraph 11):
33.Secondly, rental/hotel expenses of $16,089.92 per month for his own accommodation (paragraph 12). 34.Thirdly, his own personal expenditure (paragraph 13) of $17,000 per month. 35.Fourthly, the school fees, which are paid out of his pocket and then reimbursed by the employer:
36.He therefore affirmed that his total monthly expenditure, aside from the school expenses, is approximately $90,500 per month (paragraph 14). 37.It is apparent from the husband’s list of expenses at §32 above that the claimed expense of $6,761.88 in respect of the Denmark tax and management fees is not in fact an expense the husband is required to pay each month from his income, but is being settled out of the Denmark account into which the rental income is received. The exhibited bank statement GRP-8 was the same statement already produced by the wife with her Form E. Deducting this amount revises the total to HK$50,622. The wife submitted during the hearing that the health insurance was in fact reimbursed by the employer. This was not clear on the papers as, as noted, the Court was not supplied with a copy of the husband’s terms of employment. For the purposes of this application I am not prepared to assume that the husband does receive reimbursement. I also accept there may be months in which the expenses are perhaps slightly higher than he lists, and will proceed on the basis that he has unavoidable expenses of $52,000 in addition to his own rental and personal expenses. 38.As to these, I note that his “rental” is for hotel accommodation, which seems reasonable as the affirmation was filed within a fairly short period after separation. I was told at the hearing he has now found a studio apartment at $12,000 per month, and was required to pay a deposit equivalent to 2 months’ rental. 39.In addition, he affirmed that he spent $17,000 per month on other personal expenses, including $9,000 for food. 40.As to food the husband explained in his affirmation that
41.At the hearing, counsel for the husband said that the entire sum of $9,000 was for meals out of home. This was not quite the husband’s evidence which was that this amount was for “eating out of home and at home”. It also represented quite a shift from his Form E, which was affirmed earlier in May 2019 (10th May 2019), in which he said that he spent only $2,000 on meals out of home and $7,000 at home. The Court was not taken to any receipts or credit card or bank transactions to substantiate the revised estimate. 42.Further, and connected with the fact the husband did not produce his employment contract/letter of employment, it is not possible to know whether the husband is reimbursed by the employer for the proportion of the $9,000 which relates to his business travel. There is some indication in the papers that he does receive reimbursement for business travel expenses: the husband attached updated bank statements of his HSBC Premier Account 491-520961-833 and the statement for 26th March 2019 shows a payment from MSI on 22nd March 2019 for “Trip to Shanghai” of HK$14,081.25. This trip seems to have taken place earlier in March 2019: statement of HSBC Premier Credit Card dated 12th March 2019 attached to the husband’s Answers to the wife’s Questionnaire. The reimbursed sum might well be an airfare, or hotel accommodation (which might also include meals at such a hotel). For the purpose of the broad brush assessment I am required to make, I am not satisfied that the husband is paying the $9,000 out of his own pocket each month and not being reimbursed for at least some of the amount. 43.I also consider that he has the capacity to reduce his spending on some of the items making up the $17,000 personal expenses, including on clothing. I have already noted that he has reduced his accommodation costs. 44.Taking these matters into account, it seems to me that the husband has the capacity to afford the additional $3,000 per month over what he is presently paying to the wife for the children. Costs 45.The wife has been successful in her application and I see no reason why she should not have her costs. I therefore make an order nisi to be made absolute in 28 days that the husband do pay the wife’s costs of and arising out of her Summons dated 23rd May 2019, on a party and party basis and to be taxed if not agreed. Order 46.I therefore make the following Order on the Summons:
Ms. G Mak of Yu Sun Yau Mak & Lawyers for the Petitioner Mr. Sunny Chan instructed by David Ravenscroft and Co for the Respondent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMC 1915/2019