Dc v. Azf
Read the full judgment text of FCMC 13675/2015 on BabelCite. This Family Court judgment was delivered on 24 September 2020 before District Judge A. Tse.
Matrimonial Causes – Ancillary Relief – Child Maintenance – Children’s Reasonable Needs – Ability to Pay – Backdating of Order – Costs – District Judge A. Tse – FCMC 13675/2015 – Petitioner (Husband) absent – Respondent (Wife) represented – Husband relocated to US – Breach of interim maintenance – Full disclosure duty – Adverse inferences drawn – Maintenance order backdated to September 2017 – Periodical payments HK$13,969.50 per child per month – Tuition expenses to be paid by Petitioner – Costs reserved – Res Judicata applies to outstanding school fees claim – Husband’s litigation conduct noted
Legal issues: Children’s reasonable needs · Husband’s ability to pay · Backdating of the order · Outstanding school fees · Costs
Outcome: Maintenance order made for children. Backdated to September 2017.
Cites 4 cases
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FCMC 13675/2015 [2020] HKFC 181 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 13675 OF 2015 ---------------------------- BETWEEN
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----------------------- J U D G M E N T ----------------------- 1.This is the Respondent (Wife)’s application for maintenance for the two children of the family. Background Marriage and Divorce 2.The Petitioner (Husband) was born and raised in the United Kingdom. He did not complete tertiary education and has always worked in business consulting. The Wife was born in the United States. She received a Degree in Communications in the United States in 1994. 3.The Husband left the United Kingdom in his early 20s. The parties met in Hong Kong in 1994 and went to the United States in 1996. They were married on 5 January 1997. There are two children of the family, a son (E), born in 2004 and a daughter, (S), born in 2005 (the Children). In 2008, the whole family came to live in Hong Kong because the Husband wanted to take up employment here. He worked as the Associate Director of Business Development with a monthly salary of $85,000 per month and he was given 13 months’ salary each year. 4.The Wife was originally a full-time care-giver to the Children. However, after they moved to Hong Kong, she realized that they could not afford the costs of living on the Husband’s salary alone. In 2009, the Wife started working in a well-known international school. 5.The family has been living in a well known suburban area since their arrival in Hong Kong. They moved into the rented former matrimonial home (the FMH) in 2010. The Wife and the Children are still living in the FMH. The current rental is $28,500. 6.The Husband moved out of the FMH in August 2013. The relationship between the parties has been very strained since then. On 26 October 2015, the Husband petitioned for divorce on the ground of two years’ separation. The Petition was uncontested and a Decree Nisi was granted on 3 August 2016. 7.On 30 August 2016 the Court ordered the Husband to continue to pay to the Wife, interim periodical payments of $4,000 per month for each child until 1 January 2017 or further order [1A/1-2]. Costs were reserved [A1/001-002] 8.By a summons dated 26 October 2016, the Husband applied for permanent relocation of the children to the United States. Messrs. Stevenson, Wong & Co started acting for the Husband since 15 November 2016. 9.On 22 November 2016 and upon the Husband’s undertaking to continue to pay for the school fees of the Children and their extra-curricular activities up to a limit of HK$5,000 per month until the end of the school academic year of 2016/2017, a number of orders were made by consent, including inter alia:
10.In January 2017, the Husband relocated to the United States. 11.On 17 March 2017 and upon the parties’ undertaking to comply with the Mediation Agreement dated 17 March 2017, the following orders were made by consent [1A/009-1-009-7], inter alia:
12.The FDR was subsequently adjourned to 27 June,18 July 2017 and 17 October 2017 for a call over to enable discussions between the parties. Costs were reserved. 13.In breach of the order dated 22 November 2016, the Husband failed to pay the interim maintenance for the Children. Further, in breach of his undertaking on the same date, he failed to pay the Children’s school fees for the academic year of 2016/2017. As a result, the Wife had to take out enforcement proceedings in the United States. The arrears of interim maintenance were garnished against the Husband’s retirement (401K) fund. However, the last 2 months of the school fees for the 2016/2017 academic years, in the amount of HK$47,364 is still outstanding. The Wife is seeking to recover this from the Husband. 14.On 6 September 2017, the Husband filed a Notice to Act in Person and has been unrepresented since then. 15.The Husband failed to attend the hearing on 28 February 2018. At that hearing, the orders included, inter alia:
16.Not only did the Husband fail to appear at the hearing on 8 June 2018, yet again no updated Form E or narrative Affirmation were filed. The Court ordered, inter alia:
17.The Husband again failed to attend the hearing on 26 September 2018. He also failed to comply with the order for the filing of his updated Form E ad narrative Affirmation. The Court ordered, inter alia:
18.The Husband did not attend the trial. For the reasons set out below, the trial proceeded in his absence. The Husband’s “Requests” June 2018 19.In about early June 2018, the Husband wrote to the Court [3A/172-173]:
20.On 4 June 2018, the Court directed the Husband to approach the Wife’s solicitors for written consent regarding adjournment of the 8 June 2018 hearing [3A/171]. 21.On 6 June 2018, the Husband wrote to the Wife:
22.The Husband’s last minute requests were rejected by the Wife. 23.With respect to the Husband, his “requests” made no sense. In his letter to the Court, he stated that he was unable to attend the hearing on 8 June 2018 because of “work unavoidable commitments and not being able to take time off”. However, according to the offer letter of employment from his previous employers, the Husband was considered a participant of the “Highly Compensated Employee” (HCE) program. As such, he was eligible to take unlimited Paid Time Off (PTO) subject to prior authorization of his manager, his performance and performance priorities. In addition, he was entitled to “enhanced Leave of Absence benefits” [ 2B/504]. According to the offer letter from his current employers, the Husband is also entitled to paid time off [2C/645]. The 8 June 2018 hearing was fixed on 28 February 2018. In other words, the Husband had 3 months’ prior notice of the hearing. It is inconceivable that he was unable to arrange to take time off and for the Court to be only informed a few days before the hearing. 24.In his letter to the Court, the Husband “proposed” that the Trial be postponed and “pushed out to early September or later”. However, in the last part of the same paragraph, the Husband stated that he hoped to be able to mediate an agreement without Trial being necessary [3A/173/§8]. It is evident that the Husband knew that no trial dates have yet been fixed at that stage. Further, according to paragraph 2 of his letter to the Court [3A/172], he clearly knew that the hearing on 8 June 2018 was a pre-trial review. 25.The Court assumed that the Husband was asking for an adjournment of the Pre-Trial Review hearing. Firstly, the Husband was clearly in breach of the Order dated 28 February 2018. Not only was he allegedly unable to attend the hearing on 8 June 2018, no Form E or narrative Affirmation has been filed and he made no attempt to agree any directions for the proposed adjourned hearing. It was therefore unsurprising that the Wife refused to accede to his request. Further, despite the Wife’s refusal to an adjournment, no proper application was made by the Husband. 26.The Husband did suggest attending the hearing on 8 June 2018 by “Skype or other technology tools”. At that time, the only possible digital means to conduct a hearing was by video link. Skpye or FaceTime are not acceptable. Video Conferencing hearings are governed by Practice Direction 29, which provides as follows:-
13.It is evident from the above provisions that an application has to be made to the Court for directions before the Technology Court can be made available. Applications are made by summons, to be supported by Affirmation. Applications are not made by correspondence or emails. No application for use of the Technology Court was ever made by the Husband in this case. 14.Technology equipment is now available in the District Court. However, the equipment has to be set up by the technology team. The team of technicians are not housed in the Court building and their availability has to be ascertained. In addition, the applicant must provide the Court with a video-conferencing link. This link will be tested by the team of technicians prior to the date of the hearing in the presence of both parties’ representatives. Normally, the link is provided by lawyers or a video-conferencing centre in the foreign jurisdiction. From experience, the process of setting up a video-conferencing hearing in the District Court requires 2 to 4 weeks of advance notice. Because the Husband only asked for a digital hearing 4 days before the Pre-Trial Review, there was insufficient time to set up a digital hearing even if the Husband had taken out a proper application and complied with the Practice Direction. 15.The Husband was clearly aware of his duty to file an updated Form E and narrative Affirmation. He appeared to suggest in his letter that his ability to file his updated Form E was hampered by the enforcement proceedings in the United States. This suggestion is wholly untenable. 16.The Order dated 22 November 2016 was made by consent. He has all along known about his liability to pay interim maintenance. He was in breach of the order and yet he blamed the Wife for taking out enforcement proceedings. He also appears to blame the Wife for incurring costs. In fact, the divorce was uncontested and very little costs would have been incurred. The bulk of the costs arose out of the Husband own relocation application. Even then, it is clear from the chronology above that apart from a single order of “no order as to costs”, all costs have been reserved. 17.The Husband has been acting in person since September 2017 and no further costs would have been incurred on his part in these proceedings. His liability for costs to his own solicitors would have crystallized by late 2017. According to the Husband’s letters, none of the legal or mediation costs have been paid. In paragraph 10 of his letter that his financial status has not changed since the 2015/2016 financial year. The Court notes that this is in direct contradiction to what he told the Wife on 6 June 2018. However, if what he told the Court were true, then there was no reason for his failure to file his updated Form E or narrative Affirmation. 18.Despite the above, on 8 June 2018, the Court gave the Husband a second chance to attend the Pre-Trial Review and file his evidence. The 2nd Pre-Trial Review hearing was fixed on 26 September 2018 because of the Husband’s indication in his letter that he would be available after early September 2018. By that time, the enforcement proceedings have been concluded and there was no reason why his updated Form E and narrative Affirmation could not be filed. Notwithstanding the Court’s accommodation, not only did the Husband fail to attend the 2nd Pre-Trial Review hearing, again no documents were filed. August 2018 19.By a letter dated 27 June 2018, the Wife’s solicitors informed the Husband that the Wife “has no objection to your intended application to the court to attend the hearing on 26 September 2018 by way of video link, subject always to the Court’s direction” [3A/186]. 20.It was clear from the wording of that letter that an application has to be made to the Court by the Husband and was subject to the Court’s approval. 21.The Husband replied on 28 June 2018, stating that he will inform the Court of the agreement [3A/188]. Despite that, the Court heard nothing from the Husband. No application for video-link facilities was made. 22.The Court heard no further from the Husband until 30 August 2018, when he again wrote again:
Adjournment/Hearing by Video-link 23.It was unclear from the Husband’s letter whether he wanted to ask for an adjournment of the Pre-Trial review or the Trial. It seems that he was asking to attend the Pre-Trial Review hearing by video link. Again, he made no application or arrangements in accordance with Practice Direction 29 for the hearing to be conducted by video-link. 24.The Court has already accommodated his previous request by fixing a hearing date after early September 2018. The Husband was given over 3 months’ notice of the hearing and yet he still says he was unable to attend. He says that he had work commitments and was unable to afford coming to Hong Kong. His purported reasons have been proven to be untrue by reason of the matters referred to below. In continuous breach of previous orders, no updated Form E has been filed for the Court to consider his financial situation. 25.Trial dates are milestone dates, which are not to be moved without very cogent reasons. If he was asking for an adjournment of the Trial, no reasonable explanation was given. In fact, the Husband subsequently demonstrated that he could have taken time off and could financially the trip to Hong Kong. Withdrawal of Proceedings 26.The Husband informed the Court that he would like to withdraw these proceedings. 27.For matrimonial proceedings, a petitioner may file a notice of discontinuance before the petition is served [See section 7 of the Matrimonial Causes Rules]. Otherwise, leave is required for withdrawal. Yet, no application from the Husband was forthcoming. Transfer 28.In both is letters dated June and August 2018, the Husband has suggested a transfer of these proceedings to San Francisco, where he is now living. He appears to be confused as to the nature of the proceedings in the United States. Those were enforcement proceedings taken out by the Wife. The sole question for the San Francisco Court was enforcement of the orders of the Hong Kong Court. 29.There is no procedure for the transfer of these proceedings to the San Francisco Court. If the Husband wishes to proceed in San Francisco, he has to apply to this Court for leave to withdraw the proceedings. Contrary to what the Husband appears to believe, there can be no “smooth transition” or extension of the ancillary relief trial in the San Francisco Court. If leave were granted for him to withdraw these proceedings, he will have to take out fresh proceedings in San Francisco. In other words, these proceedings will have to start again from square one. 30.In addition, if leave to withdraw were granted, the Husband would normally have to bear all of the Wife’s legal costs so far incurred in these proceedings. It is difficult to see how such a course would help either of the parties to save any costs. 31.The Husband clearly knew this as he filed divorce proceedings in San Francisco on 5 December 2018 under Case Number FDI-XX-XX842 (the US Proceedings). Forum Conveniens 32.The Husband appears to be suggesting that San Francisco is the proper forum for these proceedings. He was the Petitioner. He chose to commence proceedings in this Court. There is no room for him to argue forum conveniens. 33.By reason of the above mentioned matters, the 2nd Pre-Trial Review hearing proceeded in the Husband’s absence. The Husband was ordered to file and exchange his updated Form E and narrative Affirmation in February 2018. He has had 7 months and yet no documents have been filed. In those circumstances, the Court made the following orders:-
34.On 2 October 2018, the Court wrote back to the Husband, making it clear that applications should be made by way of summons and no unilateral requests by email would be entertained. The Husband was also urged to seek independent legal advice. 35.On 10 October 2018 (i.e. the first day of trial), the Husband called the Court clerk. He told the clerk that he was ready to attend trial, that he was unable to attend trial in person and again demanded to participate by phone. 36.The Husband bears the burden of making arrangements to attend the hearing by video-link. He clearly knew that applications have to be made by filing a summons and supporting affirmation. He filed a summons for relocation when he was acting in person. The Court has already told him in no uncertain terms that “requests” by letter or email would not be entertained. Yet no application was made, no arrangement for the use of equipment was made and no video-link has been given to the Court. 37.The Husband subsequently told the clerk that he will not attend the trial. In fact, in his letters, the Husband has only requested to attend the Pre-Trial review hearings by Skype or other technology means. Those letters did not even include any request to attend trial by digital means. 38.The Husband knew from February 2018 that trial dates were fixed for 10 and 11 October 2018. It was incredible that he could not make arrangements to attend the hearing. In fact, on 22 September 2018, he wrote an email to the Wife, stating that he was “…hoping and likely to be in HK to see E’s triathlon on 21 October [2018]. Much depends on your agreement to attending Court trails [sic] dates – I’d rather not be there in person for 10-11 Oct” [3A/59/269]. It was clear from this email that he was able to take time off work and afford the trip to Hong Kong. In fact, the Husband came to Hong Kong in October 2018 and had access with the Children on 17 to 19 October 2018. He failure to appear was deliberate. 39.In breach of the above mentioned orders, the Husband failed to file his updated Form E or narrative affirmation within the stipulated time (i.e. on or before 3 October 2018). He provided some financial information to the Court by way of a letter dated 30 August 2018 but the same was not provided to the Wife’s solicitors until 18 September 2018 [3A/58]. The Form E enclosed in the Husband’s letter was incomplete and unsworn. On 4 October 2018, the Husband provided additional financial documents [3B/313-520] without leave. 40.In all the circumstances, the Court proceeded with the trial in the Husband’s absence. However, since he was absent, the Court ensured that the Husband was given a transcript of the trial to enable him to make final submissions. 41.On 15 February 2019, the Wife obtained an ex parte injunction restraining the Husband from proceedings on the divorce proceedings in Sa Francisco. A return date was fixed for 1 March 2019 and the order was endorsed with a penal notice. The Court ordered the injunction to stand on 1 March 2019. 42.The hearing of the Wife’s application for ancillary relief for the Children resumed on 3 June 2019 for closing submissions. The Husband filed a written submission but failed to attend the hearing. Issues 43.The Wife is not asking for any form of ancillary relief for her own benefit. She is only asking for maintenance for the Children. In her submissions, the Wife also asked the Court to deal with arrears of maintenance. The Court is not certain what the Wife means by arrears of maintenance. If she means the arrears of interim maintenance, there is a specific procedure for enforcement. It is wholly inappropriate for the Court to deal with that in this Trial. If the Wife is asking the Court to back-date the order to the date of her ancillary relief application, that is a matter within the Court’s discretion. 44.The main issues at trial are:
Applicable Legal Principles 45.Claims for maintenance for Children are governed by section 5 of the MPPO, which provides as follows:-
46.Matters to which the Court is to have regard in respect of such applications are set out in section 7 of the same Ordinance. In respect of maintenance for children, Section 7(2) provides:-
47.The sole test for periodical payments is “reasonableness”. This is measured against the standard of living during the marriage. This is of course, subject to the payer’s ability to pay must also be considered. 48.In respect of the parties’ respective contribution towards the Children’s expenses, Her Honour Judge Melloy said the following in MMM v OCC [2016] HKEC 2842:
49.This was reiterated by the learned judge in KS v YP FCMC 2649/2016:
50.In order for the Court to come to a fair decision, both parties are under a duty to make full and frank disclosure of their financial information. If a party were to fail to make full and frank disclosure, the Court will adopt a robust approach and draw adverse inferences against his or her ability to pay. The Evidence The Wife’s Income, Assets and Liabilities 51.The Wife is now 48 years old. She received a Bachelor Degree in Communications from a University in the United States in 1994. She now has a new partner (A) who has moved into the FMH to live with her and the 2 Children. A is making a contribution of HK$15,000 per month towards his share of the rental, the domestic helper and household expenses. 52.The Wife has been employed by the school where the Children are studying for a number of years. She is now a Communications Manager at the school [1B/412], and her net monthly salary is HKHK$46,325 (i.e. salary of HK$47,625 less HK$1,500 for MPF contribution) [R1]. 53.The Wife is a support staff (as opposed to teaching staff) at the school and is not entitled to gratuity, housing allowance or subsidy. Paragraph 4.3.1 of her Condition of Service [2B/352] provides as follows:
54.Apart from her monthly income and according to her updated Form E filed on 28 March 2018, the Wife had HK$129,135.47 in her bank accounts. She also had a sum of HK$268,348.06 in her MPF account and the equivalent of HK$32,459.77 (i.e. US$4,156.18) in her Fidelity RA Rollover account. These will not be available until she reaches retirement age. Her liabilities amounted to HK$566,381.22. The bulk of her liability in the amount of HK$341,138, is made up of personal loans from the Wife’s father and A to pay for the school fees and other expenses of the Children. The next largest item of liability in the sum of HK$128,804.70 are outstanding legal fees [1B/425]. Originally, she had agreed to repay the legal fees by instalments of HK$10,000 per month. She was unable to cope with the repayments and the monthly instalments were reduced to HK$8,000 per month at the time of the trial. The Wife’s Monthly Expenditure 55.According to the Wife’s evidence, her monthly general household expenditure is HK$36,238. This consists of rental of the FMH, utilities, food, household expenses and domestic helper. She says her share of the household expenses is HK$12,079.33 (i.e. HK$36,238/3) whilst the Children’s share is HK$24,158.67. 56.The current rental of the FMH is HK$28,500 [2D/1015]. Because the Wife’s partner, A is now living with her, he is contributing towards a quarter of the rent, thereby reducing the Wife’s payment of rental to HK$21,375 per month. 57.The Wife spends around HK$2,885 per month on utilities [1B/429]. This is calculated on a 4-person household basis. After taking A’s quarter share into account, the Wife’s share is HK$2,163.75. Since electricity, gas and water were treated by the Wife as household expenses, the Court will assume that “utilities” mean soap, shampoo, detergent, cleaning utensils and general repairs. 58.The Wife says that household expenses for herself and the Children includes electricity, gas, water, Now TV (which is now cancelled) and internet expenses amount to HK$3,900 per month. 59.The Wife has a full time domestic helper, whose monthly salary is HK$6,000. The Wife pays HK$3,800 and the remainder is paid by A. 60.The Wife’s personal expenses are approximately HK$15,000, i.e. living expenses of HK$7,000 per month [1B/429/§24] and HK$8,000 per month towards overdue legal fees. Reasonable Monthly Expenditure for the Children 61.From the outset, the Husband made it clear that the accommodation and education expenses are disputed. 62.As explained above, the reasonableness of the expenditure is considered by reference to the standard of living during the marriage. This does not mean to say that the previous standard of living will necessarily be replicated. The Court also has to consider the Husband’s ability to pay. 63.The standard of living during the marriage does not appear to be in dispute. The family has been living in the FMH since 2010. This is an apartment of just over 1,000 sq. ft. with three bedrooms. The family would routinely travel and have at least 1 short-haul trip in Asia and 1 long-haul trip to the United States each year [1A/432/§12]. The Husband describes the previous standard of living as “2x long weekend trips per annum, resident/private club access, 2 international vacations per annum, domestic helper f/t, dinners outside family home, sinner dates, savings plans, sports program enrolment, frequent attendance at musicals, plays and concerts” [1B/351/§17]. Accommodation 64.Throughout these proceedings, the Husband has argued that they are no longer able to afford the rental of the FMH. He has asked the Wife and the Children to move to more affordable accommodation. He suggested a rental of about HK$20,000 per month would be reasonable [1A/35/§2]. Firstly, the Wife has the daily care of the Children, who are teenagers of opposite genders. Even if A were to be disregarded, this is a 3-member household. 65.The Wife’s rental is HK$28,500 per month. On the other hand, the Husband is allegedly living alone in rented premises with rental of HK$19,578 per month. In his closing submission, he says that his rent “is fair and reasonable and accommodates the children in a safe and secure location…A reduction proposed on 25% is a ridiculous ask given San Francisco is one of the most expensive cities to live in the world…” [Husband’s closing submission §24]. The Children’s home is in Hong Kong. The Husband has spent very little time with them since he moved to the United States. Upon comparison with the Husband’s rental, the Wife’s rental is more than reasonable. 66.In any event, A has now moved in with the Wife and is contributing to a quarter of the rental of the FMH, thereby reducing the Wife’s payment of rental to HK$21,500 per month, which is close to what the Husband has suggested. 67.In the light of the above, the Wife’s rental expenses are reasonable. Education 68.All along, the Children have been studying in the same international school. They are on an IB program in this school. Apart from Mathematics, they were doing very well at school. The school has already arranged for assistance with the Mathematics [1A/82-83]. In the initial stages of these proceedings, the Husband applied for relocation of the Children. During that application, he also suggested a change of schools to a local school. However, he subsequently withdrew those applications. It appears that he accepted that it was reasonable for the Children to remain in the same school. 69.In his letters and closing submissions, the Husband has again suggested relocation on the ground that education in the United States is more affordable. He cannot revive his application by correspondence or submission. The Husband knew that he has to apply for relocation by summons. He previously issued a similar summons when he was unrepresented. No such application has been made. 70.By reason of the above, the education expenses of the Children are reasonable. 71.When the Husband withdrew his relocation application, he undertook to pay for the Children’s school fees for the year 2016/2017. According to the Wife, the Husband is in breach of that undertaking. He also failed to pay the interim maintenance pursuant to the Order dated 30 August 2016 [1A/002]. The Wife had to take out enforcement proceedings in San Francisco. The arrears of interim maintenance were eventually paid but the last 2 months of school fees for the 2016/2017 academic year in the amount of HK$47,364 is still outstanding. 72.Because the Husband was not paying for the school fees and the building levy, the Wife has had to apply for financial aid from the school since 2017. Applications have to be made every year and there is no guarantee that it would be granted. Even if granted, the financial aid is provided on a decreasing scale. The Children received 100% financial aid for the 2017/2018 academic year and 80% financial aid for the 2018/2019 academic year. In other words, for the 2018/2019 academic year, the total school fees and building levy for each Child was HK$2,851.50 per month [R5]. A total of HK$68,436 was paid by the Wife. 73.For the 2019/2020 academic year, the school has projected that the school fees will be increased by a further 6%. Unless financial aid is again given, the Children’s school fees and building levy will be HK$30,242 per month [1A/306/§15]. Other Expenses 74.As stated above, the Husband has been given repeated opportunities to file his narrative affirmation, where he can set out his resources and needs, as well as clarify his stance on the Wife’s claims. In breach of the Orders, he has failed to file any narrative affirmation. However, in his closing submissions, he challenges the Wife’s alleged household expenses for the very first time. In paragraph 16 of his closing submissions, the Husband says that “it makes clear that [the Wife’s] evidence on page 8, item 32, shows hugely overstated costs]. He did not specify which expenditure was in dispute. 75.This is in stark contradiction to what the Husband said in his 1st affirmation [1A/34]. In that Affirmation, under the title “Finance Deficit”, he stated that “income versus outgoings in the past 3-years has seen a significant imbalance and [the Husband/the §financial solvency. [The Wife] claims a deficit of between $10-12,000 per month. [The Husband] claims a deficit of $2,500 per month…’. The Wife’ denies that she had a monthly deficit of HK$10,000 to HK$12,000 per month. She stated that they were living within their means. In other words, it was the Husband’s case that the parties’ entire earnings were spent on family expenses. At the time, the Husband was earning over HK$90,000 per month [1B/347]. The Wife was earning just over HK$44,000 per month [1B/375]. If what the Husband stated were true, the family expenditure was between HK$146,500 and HK$148,500 per month (i.e. HK$90,000 + HK$44,000 + HK$10,000/HK$12,000 + HK$2,500]. The Wife’s current total expenditure (inclusive of full scale school fees and building levy) only amount to HK$73,274 (i.e. general household expenses HK$36,238 + HK$15,000 personal expenses + children’s expenses exclusive of school fees HK$22,036 with financial aid at 80% [The Wife’s closing submissions §§32-35, 39]. 76.The Wife lives with 2 teenage Children. He contribution to the rental is HK$21,375. The Husband lives alone but his rental is HK$19,578. The Wife spends HK$2,885 on utilities for herself and the Children, whilst the Husband’s utilities for a one-person household is HK$2,802. The Wife’s food expenses at home for a 3-person household is HK$5,000 whilst the Husband spends the same amount on himself. The Wife’s contribution towards the domestic helper is HK$3,800 for herself and the Children whilst the Husband spends HK1,298 for a one-person household. 77.By reason of the above mentioned matters, it is difficult to see how the Wife’s expenditure could be said to be overstated or exaggerated. 78.In my Judgment, the Children’s reasonable needs are HK$40,195 exclusive of school fees (i.e. HK$24,159 as general household expenses + HK$16,335 as Children’s expenses) to HK$46,195.50 inclusive of school fees with 80% financial aid (HK$24,159 as general household expenses + HK$22,036.50 as the Children’s expenses). Husband’s Income, Assets and Liabilities Disclosure 79.As explained above, both parties have a duty to make full and frank disclosure of their finances. The duty is explained in Rayden & Jackson on Divorce and Family Matters 18th Edition at paragraph 17.28:
80.The Husband has failed to comply with various orders (including an unless order) under which he was required to file and serve an updated Form E. Since the Husband was in breach of the unless order, he was debarred from producing any evidence. He then purported to “file” his unsworn updated Form E without leave. The Court is entitled to ignore those documents. Even if the Court were to take those documents in account, his disclosure of financial information was piecemeal and incomplete. His purported disclosure was described by the Wife as “an information dump”, meaning that he has simply provided a bundle of documents with no explanation whatsoever, leaving the Court and the Wife to search for information and work out his financial circumstances. It is trite law that provision of information in this manner is no disclosure at all. 81.In his letters to the Court, the Husband alleged that his financial situation was unchanged since 2015. This was clearly untrue. In 2015, the Husband was still living and working in Hong Kong. By the time of the trial, he had relocated to San Francisco and had different employment. It was his case in the relocation application that employment in the United States would produce a higher net income. 82.The entire Part 1 of the Husband’s purported updated Form E was missing. In other words, he has not told the Court whether he was employed, where he was working, his previous income, whether he was living with anyone or intended to live with anyone within the next 6 months. This Form E was unsworn and the Husband deliberately chose not to attend Court to be cross-examined. No documents were attached to this Form E. It is next to impossible for the Court to place any weight on this document. 83.The Husband’s case in respect of his income is very inconsistent. He has given the Court a number of different and wide-ranging figures in his letters. According to the documents provided by the Husband, he is now working as a Regional Project Director at a company called CWUS. According to the offer letter dated 21 August 2017 [3B/391], his annualized salary was US$170,000 and is paid in bi-weekly instalments. He is also entitled to a discretionary bonus award of 20% of his base salary. 84.On 21 March 2018, the Wife asked the Husband about his bonus. This was followed by a letter from the Wife’s solicitors on 28 March 2018 with the same request. The Husband never provided an answer [1A/225, 257, 258]. 85.In his purported updated Form E, he stated that his monthly income is the equivalent of HK$120,000 [3A/207], (i.e. a base salary of HK$108,000 and a bonus of HK$12,000) per month. 86.Initially, the Husband failed to provide any pay slips which were required by Form E. A total of 4 salary slips were subsequently and reluctantly produced pursuant to the Wife’s requests. The latest pay slip for the period between 10 September to 23 September 2018 [3B/433] shows that the Husband is paid US$ 6,538.46 biweekly (i.e. an annual salary of US$ 170,000). The Husband also pays US$784.62 biweekly into his 401k/retirement fund. This is not a mandatory contribution. 87.As at 23 September 2018, the total amount of tax paid was US$53,192.84. In other words, the Husband’s net income as at 23 September 2018 was US$100,937.94. 88.According to the Wife, the payment on 23 September 2018 should be the 19th payment by CWUS to the Husband in 2018. According to those figures, the Husband’s net income (net of all deductions and tax) is HK$90,126.96 per month. If the Husband were to cease his contributions towards the 401K fund, he would have an additional HK$13,311.08 per month. This means that his monthly net income will be increased to HK$103,311.08. 89.The Husband’s disclosure of bank accounts was evidently wrong [3B/200]. The HSBC Current Savings account number he provided (i.e. xxxx xxxx 8633) was in fact his Visa Card number. The Wife also discovered that there were a number of undisclosed bank and credit card accounts, namely:
90.The Husband has not provided any evidence in respect of a BOA account xxxx xxxx xxxx 0241. He stated at the Summary of Part 2 of his purported updated Form E that his interest in his bank account as at 30 August 2018 was HK$ 0. As at 14 September 2018, he had US$ 3,998.65 in his BOA account [3B/483]. He also had HK$2,690.78 in his HSBC xxx-xxxxxx-833 account [3B/519]. 91.In his first Form E filed on 27 September 2016, the Husband admitted that he had a MPF account with a current value of HK$120,000 [1B/344]. The Wife asked about the whereabouts of the MPF funds in a Questionnaire. In his Answer dated 23 December 2016:
92.In his purported updated Form E, there is no longer a MPF account [3A/204]. There has been no explanation to the Court as to the whereabouts of these funds. In correspondence, the Husband stated through his solicitors that the bulk of his MPF payout had been used to repay credit card debts of over HK$220,000 that he ran up for his own entertainment over a period of 6 months. He was asked to explain the whereabouts of the remaining HK$88,853.89 [3A/43]. This was not answered [3A/49]. 93.In his purported Form E, the only valuable personal items disclosed were wedding rings estimated to be worth HK$20,000 [3A/202]. There was no mention of a car. Yet, in the same Form E, the Husband says that he incurs HK$4,788 on car expenses and transportation [3A/209]. In fact, the Husband’s previous solicitors admitted that he had purchased a car in the United States in correspondence [3A/49]. 94.In his purported updated Form E, the Husband alleged that he spends an average of HK$31,714 on the Children each month [3A/210]. In fact, in 2017, the Husband only spent a total of 44 days with the Children. According to his closing submissions, apart from the interim maintenance, the Husband only paid for E’s boxing lessons at HK$3,000 per quarter and digital devices of US$2,500. Not only was this not in the form of an Affirmation, it is a bare allegation wholly unsupported by evidence. The assertion that he spends an average of over HK$30,000 on the Children each month is clearly untrue. 95.The Husband’s entertainment expenses at HK$11,500 were criticized by the Wife. The Husband argued that:
96.The Husband’s assertion is evidently untrue. Apart from entertainment and presents at HK$11,500, he also claimed that he had the following expenditure in his purported updated Form E:
97.The assertion that the costs of access visits to the United States were not included elsewhere in the Form E was an attempt to mislead the Court. The Wife says that the Husband has refused to pay for the Children’s flight from Hong Kong to San Francisco. The Wife’s parents have had to subsidize the trip. The Husband only paid for the air fares from Oregon to San Francisco which costs US$200. Despite being given a chance to reply to the Wife’s Affirmation, the Husband filed no evidence. The Wife’s evidence on air fares was unchallenged. 98.The Husband has consistently alleged that the risk of loss of employment was very high. He stated that he was terminated from his position by his previous employer in Hong Kong. This is disputed by the Wife. She says that he resigned of his own accord to find better employment in the United States. In fact, the Husband secured a better position in the United States prior to his relocation. This was the basis of his relocation application. Although he has changed employment since then, there was no suggestion or evidence that he had difficulty finding alternative employment. In fact, his income has only increased through the years. 99.According to the Wife, the Husband received a tax refund from the IRS in the United States. He has kept all of it but this was never disclosed by the Husband. 100.The Husband has clearly failed to make full, frank and clear disclosure. The Court will draw adverse inferences against his ability to pay. 101.The Husband also accuses that the Wife is guilty of non-disclosure. She is now living with her new partner, A, in the FMH. She is obliged to disclose his assets and income. However, in her updated Form E, her answer to the relevant questions was “none” [1B/433]. 102.Paragraph 18.22 of Rayden & Jackson on Divorce and Family Matters has the following to say about cohabitation with a new partner:
103.The Husband argued that because A is now living with the Wife in the FMH and is acting like a parent towards the Children, A should be responsible for at least 50% of the household expenses. 104.In KEWS v NCHC [2013] HKCFA 1. In dismissing the Husband’s appeal, the Court held:
105.In the present case, the Wife has disclosed that A has been contributing HK$15,000 per month. However, this was paid by A towards his own share of the rent and household expenses, and not for her support or the support of the Children. A has no legal duty to provide for the Children nor is there any evidence that he has been providing for them. In those circumstances, the 2 critical evidential questions set out in the KEWS case have not been satisfied. The Husband’s Ability to Pay 106.The Husband’s case on his income is very inconsistent. He provides the Court with a different figure in each of his letters. 107.According to the offer letter of employment dated 21 August 2017, the Husband’s annualized salary was US$ 170,000 and is paid in bi-weekly instalments. He was also entitled to a discretionary annual bonus award of 20% of his base salary [3B/391]. According to his purported updated Form E, his average monthly income is HK$120,000 (base salary of HK$108,000 and bonus of HK$12,000) per month [3A/207]. 108.The latest pay slip for the period between 10 September to 23 September 2018 [3B/433] shows that the Husband is paid US$ 6,538.46 biweekly (i.e. an annual salary of US$ 170,000). The Husband also pays US$784.62 biweekly into his 401k/retirement fund. This is not a mandatory contribution. 109.As at 23 September 2018, the total amount of tax paid was US$53,192.84. In other words, the Husband’s net income as at 23 September 2018 was US$100,937.94. 110.According to the Wife, the payment on 23 September 2018 should be the 19th payment by CWUS to the Husband in 2018. According to those figures, the Husband’s net income (net of all deductions and tax) is HK$90,126.96 per month. If the Husband were to cease his contributions towards the 401K fund, he would have an additional HK$13,311.08 per month. This means that his monthly net income will be increased to HK$103,311.08. 111.After consideration of their tax returns, the Wife is prepared to assume that the current level of financial aid from the school (i.e. 80%) would be maintained. In that event, the Children’s monthly needs amount to HK$46,195 [The Wife’s Closing Submission §58]. The Children’s education expenses will increase substantially if the amount of financial aid is further reduced. In the light of the disparity in their income, the Wife is asking the Husband to pay for the Children’s school expenses and contribute towards 69% of the Children’s living expenses, i.e. HK$33,642 per month (HK$5,703 as school fees with 80% financial aid + HK$27,939 as living expenses). If the parties were to share the Children’s total expenses at a ratio of 69:31, the Husband’s share would be HK$31,874 [The Wife’s closing submissions at §§58-59]. 112.The Court agrees with the Wife that the Husband’s alleged monthly expenditure are extraordinarily high. He complains about the Wife’s utility expenses of under HK$2,200 per month for a 3-person household and yet he says that he spends HK$2,802 on utilities each month on a 1-person household. 113.The Husband takes Uber up to 4 to 5 times a day running up transportation costs of HK$4,788 per month when he has a car. 114.The Husband set out 2 loans in his Form E dated 27 September 2016, namely USA Mortgage Loan (also known as the “Dreyfuss Loan”) and the “Fannie Mae Student Loan [1B/345]. The student loan should have been fully repaid by now. The Dreyfuss loan has been repaid. The Husband says that he has a “legal debt” in the sum of HK$250,000 in his purported updated Form E [3A/205]. According to an email from his previous solicitors dated 20 December 2017, the overdue amount as at 30 April 2017 was HK$209,157. It appears that the Husband has not repaid his former solicitors at all. The Husband also reported a “Mediation Debt” in the sum of HK$20,000 in his purported updated Form E. This has not been paid at all. It was therefore unclear what the monthly debt repayments in his purported updated Form E [3A/209] of HK$4,492 refer to. 115.The Husband says he spends an average of HK$3,876 per month on clothing and shoes. This includes an average of HK$1,000 on clothing for the Children each month. According to the Wife, the Husband spent very little time with the Children since his relocation and he has hardly purchased any clothing for them. 116.According to the Husband, his monthly entertainment costs amount to HK$11,000. He has filed no Affirmation to explain this. He then tried to give evidence in his Closing Submissions which is unacceptable. In his submissions, he stated that the alleged amount included air fares for the Children’s visits. According to the Wife, the Husband has refused to pay for the Children’s long-haul flight from Hong Kong to San Francisco. He only paid for the domestic flight between Oregon and San Francisco, which is US$200. Further, the Husband alleged that he spent an average of close to HK$26,000 per month on the Children’s “CDR visits” [3A/210]. This is ridiculous. Even if the Husband had to pay for the air fares, it would not be HK$26,000 per month. The Wife has already included the estimated costs of the Children visiting the Husband in the United States in her proposed budget. The bulk of the alleged entertainment expenditure and the alleged HK$26,000 for “CDR visits” per month could be used to pay for the Children’s maintenance. 117.The Husband alleged that he spent an average of HK$1,765 per month on medical/dental and HK$1,412 per month on tax. The Wife’s calculation of the Husband’s net income has also taken tax into consideration. The cost of medical/dental insurance was also automatically deducted from his salary. 118.In his list of expenses, he has included HK$14,412 per month as “Interim Maintenance Proposed Amount” [3A/209]. In Part 4.1 to 4.3, the Husband was asked to list out his current expenditure. In fact, he has only been paying HK$12,000 per month. 119.In his list of current expenditure, the Husband stated that he spends HK$8,595 on “Retirement Funds & College Funds”[3A/209]. The parties did not have any retirement fund during the marriage. In his Form E, the Husband has only disclosed his Fidelity Fund. No evidence was produced in respect of the alleged “College Funds”. The Husband has failed to pay the Children’s school fees since the last two months of the 2016/2017 academic year. As a result, the Children had to be suspended from school. A college fund would be useless if the Children are unable to finish secondary school. This amount could be used for the maintenance of the Children (including the payment of school fees). 120.It is more than evident that the Husband’s alleged expenditure is hugely exaggerated. The alleged “CDR visits” and “college funds” expenditure alone amount to HK$34,595 per month, which is more than enough to cover the HK$33,642 per month requested by the Wife. This is in fact much less than his alleged current spending on the Children which amounts to at least HK$47,126 (HK$1,000 per month on clothing + HK$14,412 on proposed interim maintenance + HK$31,714 on the Children’s expenses, exclusive of any part of the HK$11,000 entertainment costs spent on the Children). The Husband cannot expect to live a bachelor lifestyle whilst reducing the Children’s standard of living to a subsistence level. 121.The Wife is asking the Husband to pay for the Children’s school fees (which at the time of the trial was HK$5,703 after 80% financial aid). The Wife undertakes to continue to use her best endeavours to apply for financial aid [Wife’s Closing Submissions §60]. In addition, she is asking the Husband to contribute towards 69% of the Children’s living expenses of HK$40,492 (i.e.HK$ 27,939 per month). In my Judgment, the Husband clearly has the ability to meet those needs. Outstanding School Fees for 2016/2017 122.The Wife says that the Husband has failed to comply with his undertaking to pay the Children’s school fees for the 2016/2017 academic year. The last 2 months of school fees in the sum of HK$47,364 is still outstanding. There is copious correspondence from the school in support of this allegation prior to the enforcement proceedings in San Francisco. The Wife is asking for a lump sum order as repayment of the school fees. 123.In her 3rd Affirmation dated 28 March 2018, the Wife says that the Husband failed to pay interim maintenance and school fees for the Children. She ought the assistance of the San Francisco Department of Child Support Services (DCSS). Enforcement proceedings intituled FDI-XX-XX842 were commenced in San Francisco. She stated that 2 sums of HK$13,844.69 were paid through the DCSS in December 2017 and January 2018 by garnishing the Husband’s wages. In February 2018, a sum of HK$44,241.60 was paid by the DCSS by garnishing the Husband’s wages and 401K fund. She provided a table of interim maintenance due and payments made. According to that table, between August 2016 and March 2018, the Husband should have paid HK$220,000 as interim maintenance. However, he only paid HK$184,919.97. The school fees for the last 2 months of the 2016/2017 school year are still outstanding[1A/237-239]. At the end of that Affirmation, she asked the Court for an order that the Husband repays the arrears of interim maintenance and school fees. 124.Firstly, the Husband informed the Court that the Child Social Services could reopen the case at any time. This is clearly untrue. The San Francisco Court only reserved jurisdiction over enforcement for 90 days. The Husband’s allegation that a “seamless transition” to the San Francisco Court was clearly an attempt to mislead this Court. 125.However, the Wife’s version is also inaccurate. According to an order from the San Francisco Court filed on 7 May 2018 and produced by the Wife in her 4th Affirmation [1A/374-384], the order made by that Court was as follows:-
126.According to that Order, the Court in San Francisco made a judicial determination that there was no interim maintenance in arrears. To the contrary, there was overpayment by the Husband in the sum of US$ 5,474 (which is equivalent to HK$42,587.72 at an exchange rate of HK$7.78) as of 30 April 2018 (i.e. 1 month after the Wife filed her 3rd Affirmation). Under that Order, the overpayment of US$5,474 was to be applied towards the balance of the school fees for the 2016/2017 school year. 127.It appears that the Court in San Francisco found as a fact that there was an overpayment by the Husband. The issues of arrears of interim maintenance and school fees have been determined between the parties by a Court of competent jurisdiction and the parties are bound by that finding. This issue is Res Judicata and the Wife is not at liberty to reopen it in this Court. 128.Paragraph 2 of the Order from the San Francisco Court stated that there was an agreement between the parties that an expected tax refund in the sum of US$ 12,566.00 was to be divided so that the Husband would receive US$ 5,000 and the Wife would receive US$ 7,566. The Husband had to apply the US$5,000 to the “Dreyfuss debt”. The Wife explained that the tax refund was only US$ 2,820.66 and not US$12,566. She argued that the Husband was in breach of the settlement agreement as he had already repaid the “Dreyfuss debt” in full at the time of the settlement and he retained the entire tax refund. She submitted that because of the breach, she was entitled to renege on the agreement. She stated that after the application of the US$ 5,474 (i.e. HK$42,587.72), the Husband still owes school fees in the sum of HK$34,776.28 for the 2016/2017 school year. 129.This Court does not understand why there was reference to the tax refund and “Dreyfuss loan” in the San Francisco Court Order. According to both parties, the proceedings in San Francisco were enforcement proceedings for arrears of interim maintenance and school fees. The reference to a division of assets between the parties by the San Francisco Court is particularly puzzling in view of the fact that there is no ancillary relief claim by the Wife in existence. 130.No expert evidence has been called on American law as to the effect of this agreement in the absence of any ancillary relief claim by the Wife. The tax refund was a mere fraction of what was expected by the parties and no explanation has been given to this Court. The amount refunded was clearly insufficient to enable the parties to proceed with the agreement in paragraph 2 of the San Francisco Order. I do not know when the tax refund was effected. The San Francisco Court reserved jurisdiction over the enforcement of its Order for 90 days after formal service. No explanation has been provided as to why no application was made to that Court in the light of the unexpectedly disparity between the amount expected and the actual amount received. 131.The Wife’s case on the amount of the outstanding school fees is wholly self-contradictory. In her 3rd Affirmation, the Wife stated that she had paid a total of HK$77,364 as school fees for the 2016/2017 school year with the assistance of a personal loan from A. On 6 October 2017, the Husband paid her HK$30,000 and this was applied to repay A. She went on to state that after the payment of HK$30,000, the outstanding school fees were HK$47,364 [1A/239-241]. If that were true, after the overpayment of HK$42,587.72 was paid, the balance of outstanding school fees would be HK$4,776.28. 132.However, in her 4th Affirmation dated 2 October 2018, the Wife stated that the amount of outstanding school fees for the 2016/2017 school year was HK$34,776.28 after the application of the overpayment of HK$42,587.72 [1A/303]. This was wholly inconsistent with her 3rd Affirmation. 133.She further contradicted herself in her Closing Submissions, where she is asking for repayment of HK$47,364 [Wife’s Closing Submission §63]. 134.The Wife has given no explanation as to the inconsistencies in her evidence in respect of the school fees. Moreover, there is no dispute that the “Dreyfuss debt” was a joint debt and that the Husband has repaid it in full on his own, thereby releasing the Wife from liability. No credit has been given by the Wife for that repayment. 135.In the light of all the matters mentioned above, this Court is not satisfied that the amounts of school fees stated by the Wife are outstanding. Backdating of the Order 136.The Wife is asking the Court to backdate the order for periodical payments to September 2017 [See draft order attached to the Wife’s Closing Submissions]. The interim payment made by the Husband since September 2017 was clearly inadequate to meet the Children’s needs. The Wife has been forced to pay for the Children’s expenses by taking personal loans. The Husband has a much higher disposable income than the Wife. 137.At the interim maintenance stage, the Court does not have the benefit of hearing evidence and is unable to make findings of fact. Such applications are dealt with on a broad brush basis. Any overpayment or underpayment could be taken into account in the final ancillary relief trial. In the present case, the Court sees no reason why the underpayment of maintenance for the Children should not be taken into consideration in the Order for periodical payment. The Order will be backdated to September 2017, with credit to be given to the Husband for payments already made by the Husband. 138.By reason of all the above mentioned matters and upon the Wife’s undertaking to continue to use her best endeavours to apply for bursary/financial aid from the Children’s school.
Petitioner : Acting in person (Absent) Respondent : Representing by Ms. J. Brown of M/S Tanner De Witt
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Cases cited in this judgment
Further hearings and rulings under FCMC 13675/2015