Laka v. Wj

FCMP 154/2014

[2020] HKFC 74

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 154 OF 2014

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Before: Deputy District Judge R So in Chambers (Not open to public)

Dates of Hearing: 20 January 2020

Date of Judgment: 23 March 2020

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J U D G M E N T

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1.This is an application taken out by the Applicant mother (“Mother”) by way of summons dated 30 July 2019 (“Summons”), supported by affidavit, for variation of interim maintenance payable by the Respondent father (“Father”) for the benefit of the minor, WRK (“Child”), which is supported by the 8^th Affidavit of the Mother.  The Mother asks for variation upwards to an amount as the Court thinks fit and reasonable, commencing from 1 August 2019 until further order of the Court.  

2.Father opposed to the application.  Affidavits of opposition and of reply had been filed by the parties.

3.The Father offered, and in the hope of fully settling this case, that the amount of interim monthly maintenance or monthly maintenance for the Child be varied and increased to HK$40,000, in addition to the continuation of the undertaking that he shall pay for the school fees of the Child (details of the undertaking refers to paragraph 17 below).

4.The offer was not accepted by the Mother.

5.Pursuant to s.13(3)(a) of the Guardianship of Minors Ordinance, Cap. 13 (“GMO”), the Court has the power to make an interim order, but such interim order should only have effect for three months from the date of the order, and should cease to have effect on the making of a final order or on the dismissal of the application.

6.The interim order granted by the Court, upon the joint application of the parties, that the Father shall pay interim maintenance in the sum of HK$35,000 per month was made on 6 September 2018 (“Interim Maintenance Order”).  Parties have confirmed with the Court that despite that three months had lapsed from the date of the Interim Maintenance Order, the Father has continued paying HK$35,000 per month and he has also been paying for the school fees of the Child (details of the undertaking refers to paragraph 17 below).

7.From the submissions of Mr. Chan, Counsel acting for the Mother, I take it that the Mother is now asking for interim maintenance to be varied to a sum higher than HK$35,000.  Although no specific sum is stated in the Summons, Mr. Chan submitted at the hearing that the Mother is asking for a sum of about HK$90,000 per month or any amounts the Court thinks fit.

8.The trial for the financial provisions for the Child had been fixed to commence on 5 May 2020.

Background

9.The Mother is now 43 years old.  She is a Hong Kong resident.  As stated in her Form E, she was an executive director in the investment banking industry.  She was made redundant by her employer and ceased working since August 2019.  She and the Child reside in Hong Kong.

10.The Father is now 51 years old.  He is a citizen of the United States of America and he works there as an attorney.  He earns about HK$195,000 per month (subject to profit/loss adjustments and taxes) as stated in his Form E.

11.The Mother and the Father has each filed their respective Form E, setting out their assets, income, means, financial resources and financial obligations as at the date of filing.

12.The parties met in January 2007.  In November 2007, the Child was born out of the wedlock.  She is now 12 years old, studying Grade 8 in an international school in Hong Kong.

13.The Mother has always been the main carer of the Child since her birth.

14.The Father initiated the present proceedings by way of originating summons in 2014, asking for access of the Child, which the parties subsequently reached agreement without resorting to trial.

15.The Mother took out application by way of summons filed on 18 September 2017, asking for financial provisions for the Child pursuant to s. 10 of GMO.

16.The Mother was married to her husband (“Husband”) in January 2018.  The Husband has 2 children with his ex-wife and he got staying access for his 2 children. After marriage, the Husband and the Mother have lived together with the Child and maid(s), with the 2 children of the Husband staying with them during the staying access.  The Husband works as a pilot in an airline company.

17.By the order dated 12 March 2018, the undertaking by the Father was embodied in the preamble therein that “Upon the Respondent undertaking to the Court and to the Applicant that he will pay for the school fees (including the building levy) of the minor, namely, [the Child], a girl, born on XXX 2007 until the Child completes her education at XXX College”.

18.The Mother took out application on 15 May 2018 to adduce expert evidence from an accountant, returnable on 13 June 2018, which was not allowed by the Court.  By consent, leave was granted to the Mother to file an affidavit of a Mr. Hung, who is an accountant by occupation (“Affidavit of Mr. Hung”).  Mr. Hung is not to file the affidavit as an expert, but, according to the Mother, to assist her to support her claim in organising and sorting out the relevant receipts of expenses and to compile the information into a meaningful summary or report.

19.By the Interim Maintenance Order dated 6 September 2018, and upon the joint application of the parties, it was ordered in paragraph 1 therein that the Father shall pay an interim maintenance in the sum of HK$35,000 per month to the Mother for the benefit of the Child. 

20.In the Interim Maintenance Order, the agreement by the parties is also included in the preamble therein :-

“Upon the parties agreeing and acknowledging that any overpayment or shortfall of interim maintenance referred to in Paragraph 1 below shall be taken into account in the final determination of the Applicant’s application for child maintenance”

21.The trial for the financial provisions for the Child had been fixed to be heard on 19 August 2019.  The Father applied for adjourning the trial, which was granted by the Court on 29 July 2019, as the Court accepted there were exceptional circumstances, with costs of the adjournment to be paid by the Father. 

22.The Mother took out the present application by way of Summons dated 30 July 2019, returnable on 19 August 2019.  The Mother asked for an urgent determination of interim interim maintenance for the Child in the sum of HK$62,000 per month to be granted at the hearing on 19 August 2019.  After hearing parties’ submissions, the Mother’s application for interim interim maintenance for the Child in the sum of HK$62,000 per month be dismissed.  Parties were directed to file and serve affidavits in opposition and in reply, and the argument hearing was adjourned to 20 January 2020. 

23.The trial for the financial provisions for the Child had been re-fixed and shall commence on 5 May 2020.

The legal principles

24.The powers of the court to make orders for a parent to make various financial provisions for a minor and to vary such orders are set out in section 10(2) of GMO as follows :-

“(2) 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.”

25.The power of the Court to make an interim order is based on s.13(3)(a) of GMO. 

Discussion

26.The main reasons the Mother takes out this application are summarised as follows :-

(a)  The Mother had been made redundant since August 2019, which has a significant impact on her finances, as she used to earn about HK$240,236 per month as stated in her Form E.  She has no income since then.

(b)  There is shortfall of the Child’s maintenance, with the Father only paying HK$35,000 per month on an interim basis.  Before losing her job, the Mother has been making up the shortfall from her own resources and she will claim for reimbursement from the Father, which is to be decided by the Court at trial. However, because of the change of circumstances of having lost her job, the Mother requires interim financial assistance.

(c)  There is great disparity in income and wealth between the Father and the Mother. While the Mother is making up with the shortfall in the Child’s maintenance, she has lost out on investment opportunities and interest.

(d)  With the Affidavit of Mr. Hung being made available since at least July 2018, the Father has not sought to introduce evidence to rebut or challenge the information therein.

(e)  As the Father should be running the “millionaire’s defence”, he should be sufficiently wealthy and his income sufficiently lucrative that he can afford to pay any reasonable amount as assessed and determined by the Court.

(f)  There are still a few months away from trial, and there may be some waiting time after trial until judgment is handed down.

27.The Father opposes to the Mother’s application.  It is the Father’s case that he has always been willing to pay for and has been paying reasonable expenses for the Child.

28.Ms Irving, Counsel acting for the Father, submits that “to suggest the Father should be taking the millionaire’s defence is ridiculous.  He is a working man who makes his own living.  He earns well by dint of hard work, but pays 55% tax on his earning.  He is certainly not in the league of WGL v ASB.”

29.The main reasons for the Father’s opposition for the Mother’s present application are summairsed as follows :-

(a)  The Father has been paying maintenance in the sum of HK$35,000 per month to the Mother for the benefit for the Child, in addition to the school fees of the Child, which the Father is of the view that the amount should be sufficient.

(b)  The Mother’s alleged expenses for the Child have been inflated and exaggerated.  Therefore, the Husband is of the view that there is no shortfall in the expenses for the Child.

(c)  Even if the Mother’s work was terminated, the Husband alleges that there is much earning capacity of the Mother, given her background and experience.  The fact that the Mother has been travelling a lot also shows that she is not genuinely looking for a job.  

(d)  The Father is of the view that, given the background of the parties, both the Father and the Mother should be supporting the expenses of the Child. 

30.The Father offered to increase the monthly sum to HK$40,000, as explained in paragraph 5 above, but was not accepted by the Mother.

31.For this application, I have to consider what is reasonable in the circumstances, having regard to the means of the Father, which can be reflected in his Form E filed.  As no witnesses’ credibility are not tested at this interim stage for argument hearing, I can only adopt a broad brush approach. 

32.The Mother has stated the expenses of the Child in her Form E and she further explains in her affidavits how the expenses are reasonable.  The more updated table of expenses of the Child has been summarised by Mr. Hung, contained in a report exhibited in his Affidavit, as follows :-

For general expenses:-   

Items		Monthly expenses	Monthly expenses for the Child
		HK$	Weight	HK$
Rent		88,000	25%	22,000
Utilities		3,122	50%	1,561
Food		9,737	50%	4,869
Household expenses		7,322	50%	3,661
Domestic helper		6,979	50%	3,490
Total:				35,581

For Child expenses :-
Items					Amount HK$
School fees					10,192
Extra tuition fees					3,234
School books and stationery					880
Medical / Dental					3,306
Extra-curricular activities					8,487
Entertainment / Presents					2,881
Holidays					21,066
Clothing / Shoes					4,224
Lunches and pocket money					5,128
Other transport					1,442
Uniform					479
Others (dogs expenses)					2,048
Total:					63,367

33.It should be noted that the above figures are taken from the Affidavit of Mr. Hung [TB-B:526-527].  These figures, instead of amended figures, are used and quoted for consistencies.  There are some amended figures in the Affidavit therein, including HK$290 less for the total general expenses, and HK$4,360 less for the total Child expenses (in which the more significant items are HK$5,075 less for holidays and HK$1,152 more for clothing / shoes).

34.Therefore, the total expenses for the Child is about HK$98,948 (HK$35,581 + HK$63,367) or a lesser sum of HK$94,298 (HK$35,291 +  HK$59,007).  Mr. Chan explains that the amounts stated justify the Mother asking for interim maintenance of HK$90,000 per month.

35.Ms Irving submits that the alleged expenses are much inflated.  The monthly sum of HK$40,000 as suggested by the Father should be the reasonable sum.  Ms Irving justifies her submissions by the illustrating of a table for the expenses of the Child, which I quote :-

Items	Mother’s claim (HK$)	Father’s comments
School fees	-	Paid by Father
Extra tuition fees	3,234	OK
School books and stationery	880	OK
Medical / Dental	-	On Husband’s company scheme
Extra-curricular activities	8,487	Excessive
Entertainment / Presents	2,881	Should not be included
Holidays	-	Excluded
Clothing / Shoes	4,224	Excessive
Lunches and pocket money	5,128	OK
Other transport	1,142	OK
Uniform	479	Sometimes Father pays
Others (dogs expenses)	2,048	Not his responsibility
Total:	28,503

36.In relation to the Child’s share of general expenses, Ms Irving is of the view that the reasonable amounts should be 1/5 for utilities, household expenses and domestic helper making it HK$3,484 ((HK$3,122 + HK$7,322 + HK$6,979) / 5) and 1/2 for food making it HK$4,868 (HK$9,737 / 2).

37.By adding the sub-total together, ie. direct expenses for the Child of HK$28,503, food of HK$4,868 and other general expenses of HK$3,484, the total is HK$36,855 (bearing in mind that includes some direct expenses of the Child not agreed and the Father is of the view that some are either excessive or should not be included at all).  Therefore, a monthly sum of HK$40,000 is more than sufficient.

38.I have to point out that leave had not been granted for Mr. Hung to give expert evidence.  His Affidavit is not an expert report.  He is an accountant by occupation, and all he does is compiling a summary or report based on the receipts provided by the Mother regarding the expenses of the Child. 

39.Ms Irving has correctly pointed out that the finding of facts of what is reasonable is for the Court’s determination, and Mr. Hung’s evidence as shown in his Affidavit is subject to be cross-examined and challenged.  The Father should not be criticised for not seeking to introduce evidence to rebut or challenge the report. 

40.The Father is of the view that the amounts of reasonable expenses claimed by the Mother has been exaggerated.  For example,

(a)  In the Mother’s Form E dated 1 November 2017, she claimed the food bill for her and the Child alone was HK$27,700 per month, which the Father is of the view that is an enormous sum for just an adult and one child.  The Mother claimed HK$14,086 for household expenses and almost HK$10,000 for the Child’s entertainment.  After Mr. Hung had assessed the actual receipts, the figures for food was HK$9,737, household expenses at HK$7,322 and for the Child’s entertainment was just HK$2,861.  Ms Irving submits that the Mother had vastly inflated her claims.

(b)  For the claim for holiday expenses for the Child, the Mother claims HK$21,066 per month, which the Father is of the view that it is outrageous.  Ms Irving submits that it is apparent that the Mother has taken every travel receipt and attributed it in its entirety to the Child.  To support her submissions and to quote as examples, Ms Irving has referred to some documents in the bundle, with the following items quoted in her submissions, indicative of the Mother’s approach in inflating the expenses of the Child :-

(i)  Claim for three people on the Heathrow Express, with two adults and one child

(ii)  Claim for Macau hotel in the sum of HK$14,819 all attributed to the Child

(iii)  Claim for car hire, hotel costs, car parks, petrol, restaurant meals for four people, even cash withdrawals are all put down as holiday expenses for the Child

(iv)  Claim for HK$560 as holiday expenses of the Child, which was paid to the Hong Kong Licensing Office of the Transport Department for the retention of a vehicle registration mark

41.I remind myself that at this stage, without witnesses’ credibility being tested under cross-examination, it is not an appropriate forum to make finding of facts.  But some analysis could be made on a broad brush approach, in view of the documents before the Court.

42.Considering submissions and the documents before the Court, I am of the view that the matters as stated in paragraph 40(a) and (b), which are examples for illustration, are for the Mother to explain when giving evidence at trial, to justify the reasonableness of the amounts claimed.

43.Mr Chan submitted that the offer of HK$40,000 per month proposed by the Father is way too low and unreasonable, and he drew the Court’s attention to the following :-

(a)  With the offer of HK$40,000 per month, here is no provision at all for accommodation and holiday.

(b)  About medical expenses, the Father had not challenged the receipts.

44.About accommodation, Mr. Chan submits that accommodation should be included for consideration.  Ms Irving submits that it is not a hard and fast rule that accommodation has to be paid to a Child.

45.I am well aware of the legal principles in relation to financial provisions for children as cited in Re P (Child: Financial provision [2003] 2 FLR 865, as adopted in the Hong Kong cases including WGL v ASB [2013] HKFLR 391 in relation to accommodation and other matters.  In WGL v ASB, Chu J. had succinctly summarised the legal principles in paragraphs 55 to 57, which I quote below only the relevant parts for this application, :-

“55. In Re P, 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……

(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……

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

46.In relation to accommodation, it is yet to be determined whether the Mother in this case is lack of significant resources of her own.  I have also considered the 4^th Affidavit of the Mother, especially paragraph 12 where she says “I am not sure about the details of any housing allowance received by [the Husband] after our move to the New Home.  However, since [the Husband] is under no legal obligation to maintain [the Child], I feel obliged to at least repay [the Child]’s share of rent to him”.  They are living together and if the Husband is receiving housing allowance from his employer anyway, it is arguable whether it is still reasonable for the father to pay for accommodation, and if yes, how much. 

47.Regarding matters of :- (a) whether the Husband is receiving housing allowance from his employer and if yes, how much; and (b) whether under the circumstances, it is reasonable and fair for the Father to pay for accommodation for the Child and if yes, how much, so that the amounts can eventually be “repaid” to the Husband, I am of the view that it is more appropriate to be resolved at trial, after hearing of evidence and cross-examination of witnesses.

48.After considering the circumstances of this case and the welfare of the Child, who is now living with the Mother and the Husband, together with maid(s), at a rented place of HK$80,000 rental per month, I am of the view that it is reasonable not to include accommodation expenses at this interim stage.

49.In relation to holiday expenses of the Child, Ms Irving is of the view that as both the parents should be maintaining the Child, and while the Child is with the Father, he is the one paying for holiday expenses, the Mother should be paying for her part for the Child and therefore no provisions under that head. I am not convinced by Ms Irving in this regard.  As the Mother is the main carer and as the Father lives in the United States and only stays with the Child mainly on some holidays, it is reasonable to have some amounts spent on holiday to be included.

50.However, at the same time, I have considered the submissions in relation to holidays (refer to paragraphs 40(b) above), and I have reservation as to the amounts of holiday expenses claimed by the Mother.  I am of the view that the amount for holiday expenses of the Child claimed by the Mother is excessive.  One or two thousand dollars per month is reasonable under this head.

51.In relation to medical / dental expenses, it is yet to be looked into whether the Child’s expenses under this head can be covered by insurance and in any event, the Mother confirms that the Child is no longer seeing the psychologist, the amount claimed can be reduced.

52.For other items of expenses of the Child, having considered all the circumstances of the case and on a broad brush approach, I agree with Ms Irving’s submissions that the amounts claimed for extra-curricular activities of HK$8,487, entertainment / presents of HK$2,881 and clothing / shoes of HK$4,224 are excessive.  The amounts for these items should be adjusted downwards.

53.For the general expenses, I am of the view that household expenses of HK$3,661 and domestic helper of HK$3,490 be attributable to the Child’s expenses are on the high side, and should be adjusted downwards slightly with a broad brush approach.

Conclusion

54.To conclude, this is not the type of case where the Father has not paid anything for the Child.  In this case, the Father has been paying HK$35,000 per month (which the Father has agreed to increase the amount to HK$40,000 per month), in addition to the undertaking to pay for the Child’s school fees.  Besides, the trial will commence soon and there is the agreement by the parties that any overpayment or shortfall of interim maintenance shall be taken into account in the final determination for the Child’s maintenance.  I have also considered the parties’ background, means and financial resources and also all the circumstances of this case.      

55.With the reasons aforesaid, there are matters concerning credibility of the witnesses to justify the amounts claimed by the Mother, which should best be dealt with at trial.  Other matters, like earning capacity of the Mother, the standard of living of the Father and a more detailed analysis of the means of the Father etc, are also more appropriate to be canvassed at trial, for the Court’s determination of a fair, just and reasonable sum of maintenance and/or reimbursements after trial. 

56.For this application for interim maintenance, I can only adopt a broad brush approach based on the available documents before me to make an analysis and to decide what is reasonable and fair in the circumstances.

57.For the reasons aforesaid and having considered the welfare of the Child, the means of the Father, the circumstances of the case, affidavits and Form E filed, and also counsel’s submissions, I am of the view that HK$40,000 per month is a reasonable sum as interim maintenance for the Child based on the documents before the Court with a broad brush approach.

Orders

58.I order that the Mother’s Summons dated 30 July 2019 be dismissed.

Costs

59.Generally, costs should follow the event.  However, the basis of my ruling is that I could not, at this stage, make factual determination as to whether some of the amounts claimed by the Mother is unreasonable as alleged, before assessing the credibility of the witnesses and before the evidence to be tested under cross-examination.  The ruling herein is based on analysis of what is reasonable on a broad brush approach.  Therefore, I am of the view that it is fair to have costs be in the cause.  This is a costs order nisi, which shall be made absolute within 14 days.

Mr Jeremy Chan, counsel, instructed by Messrs. Chaine, Chow & Barbara Hung, for the Applicant

Ms Frances Irving, counsel, instructed by Messrs. Withers, for the Respondent