Tsoi v. Cheung
Read the full judgment text of CACV 559/2019 on BabelCite. This Court of Appeal judgment was delivered on 18 November 2020.
1. Mr Tsoi, the 1 st applicant, was born in Hong Kong and is currently 60. Madam Cheung, the 2 nd applicant, was born in Harbin and is currently 51. They met in 1989 and were married in Harbin in the same year. They had operated an apparel store together and later engaged in the business of selling mobile phone accessories until 2015.
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[English Translation – 英譯本] CACV 559/2019 [2020] HKCA 922 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 559 OF 2019 (ON APPEAL FROM FCJA NO 332 OF 2017) _______________________
_______________________ Before: Hon Lam VP, Hon Yuen JA and Hon Chu JA in Court Date of Hearing: 8 September 2020 Date of Judgment: 18 November 2020 _________________ JUDGMENT _________________ Hon Lam VP (giving the Judgment of the Court): Background facts 1.Mr Tsoi, the 1st applicant, was born in Hong Kong and is currently 60. Madam Cheung, the 2nd applicant, was born in Harbin and is currently 51. They met in 1989 and were married in Harbin in the same year. They had operated an apparel store together and later engaged in the business of selling mobile phone accessories until 2015. 2.In November 2002 the elder daughter Y (hereinafter as “Y”) was born to Mr Tsoi and Madam Cheung. Y was prematurely born with rare congenital defects and severe disabilities. 3.In December 2006, Madam Cheung gave birth to the younger daughter C (hereinafter as “C”). C was born to Madam Cheung and an unknown male, so she is not Mr Tsoi’s natural daughter. C has been in good health, and not long after she was one month old Mr Tsoi moved out of the matrimonial home at Tsing Yi. Since then, he separated from Madam Cheung, who remained in the matrimonial home with the two daughters. 4.Despite the separation, Mr Tsoi and Madam Cheung continued the business of mobile phone accessories together until its closure in 2015. During that period, Mr Tsoi did provide certain family expenditures for Madam Cheung. 5.In November 2008, a son was born to Mr Tsoi and a woman. In July 2015, another son was born to him and another woman (whom became the fiancée at the time of trial). 6.On 24 January 2017, Mr Tsoi and Madam Cheung made a joint application to the District Court for a divorce. On 20 June 2017 the Family Court ordered a decree nisi. On 13 September 2017 Madam Cheung applied for ancillary relief through a Form 25. By mutual consent, the court ordered on 23 May 2018 that the custody, care and control of the two daughters be granted to Madam Cheung, with reasonable access to Mr Tsoi. The Judgment of the District Court 7.After the trial on 12 March 2019, Deputy District Judge Pang (as he then was) handed down judgment on the claim to ancillary relief ([2019] HKFC 98) on 18 April 2019, with the following orders:
8.Neither party produced any evidence on Y’s estimated future life expectancy and the expenditure required for daily life care at trial. In paragraph 37 of his judgment, Judge Pang decided to adopt a future life expectancy of 15 years for the calculation of Y’s needs, and monthly expenditure of HK$15,835 as the basis to rule that the expenditure for the future care of Y shall be HK$2,850,300, to be paid from the family assets, and the balance to be equally shared between Mr Tsoi and Madam Cheung. 9.In paragraph 31 of his judgment, Judge Pang also ruled that Mr Tsoi does not have the responsibility to provide for the younger daughter, therefore C’s expenditure is not a matter for consideration in the allocation of family assets. The appeal 10.Madam Cheung was not satisfied with the decision of the District Court on ancillary relief and applied to this Court for leave to appeal. On 28 November 2019, leave was granted to Madam Cheung to proceed with her appeal and it was directed that the execution of the order made on 18 April 2019 be stayed until a decision on this appeal is made. 11.On 5 December 2019, Madam Cheung filed and served a Notice of Appeal by post. In her Notice of Appeal and written submissions, the main grounds of appeal and arguments are as follows:
Experts commissioned for assessment of children’s actual needs 12.Despite Y’s severe disability, the trial judge decided on Y’s remaining life expectancy and the expenditure required for future care solely by hearing the submissions of the unrepresented parties without obtaining any report from any expert or Social Welfare Officer. The judge’s approach is unsafe. 13.Section 18 of the Matrimonial Proceedings and Property Ordinance, Cap 192, Laws of Hong Kong, provides as follows:
14.Therefore, in matrimonial causes involving children of the family, the court is obliged to consider on its own motion whether the welfare arrangement of such children is in compliance with section 18(1)(b). In unrepresented cases where children have special needs, the judge should actively consider giving directions to the Social Welfare Officer to investigate and submit reports on welfare arrangement, in accordance with the actual circumstances of the child in question. In cases where further in-depth follow-up is necessary or the proper care of the child’s welfare has to be ensured, the court can also consider appointing the Official Solicitor to represent the child so that the court can discharge its function effectively. 15.In the present case, although Y was 16 in November 2018, in view of her severe disabilities and the need for long-term special care, the court should have directed that she is a child to whom section 18 applies pursuant to section 18(5)(b). 16.After he decided on the ancillary relief, Judge Pang made a section 18 declaration on 7 August 2019. In paragraph 35 of his judgment dated 18 April 2019, however, the judge also mentioned that Y would be leaving the boarding school in 2021. Obviously, the court had to seriously consider her arrangements by then. In paragraph 37 of his judgment, Judge Pang only gave a brief account as follows:
17.Judge Pang used the period of 15 years in the calculation of Y’s future needs without obtaining any relevant medical expert reports, but simply relying on a one-page doctor’s report which does not give a full account of Y’s condition and her future needs, and on the submissions from both sides. We are of the view that Judge Pang has not duly discharged the court’s duty. 18.In paragraphs 35 and 36 of his judgement, Judge Pang calculated Y’s future monthly needs on the assumption that she would return home to stay. Nevertheless, in the absence of any medical experts’ report, he arrived at the base number of $15,835 based on only Madam Cheung’s current expenditure of Y staying in the hostel, the salary of the domestic helper and 1/3 of the rent. As mentioned below, the reports obtained by this Court show that apart from the expenditure Judge Pang has factored in, Y also has to pay for home care services and expenditure on other support. 19.Therefore, we are of the view that Judge Pang should not have given the judgment on ancillary relief and the section 18 declaration without an adequate grasp of Y’s future needs. 20.After the commencement of the appeal, on 5 December 2019 the court directed a Social Welfare Officer to conduct an investigation with respect to Y and C, particularly a detailed assessment of Y’s various needs, and to submit a report to the court by 20 March 2020. 21.On 23 December 2019 both parties filed a Request for Dismissal of Appeal by Consent. The court gave the following directions on 2 January 2020:
22.On 20 March 2020, this Court received the Social Welfare Report, dated 18 March 2020, on Y and C. 23.In view of the fact that both parties were unrepresented, on 25 March 2020 the court appointed the Official Solicitor to represent Y in this appeal so as to safeguard her interests, assist the court in obtaining further information and evidence on Y’s future medical, therapeutic, support, diet, living and care arrangements and Y’s life expectancy from the medical point of view, and provide the court with solutions that suit Y’s needs and interests in relation to the decision on the allocation of assets in this case and make submissions. 24.Subsequently, on 23 April 2020 the court directed a Social Welfare Officer to submit a supplemental report before 15 May 2020 on the following two points:
25.On 13 May 2020, the Social Welfare Officer submitted a supplemental report, which was also provided to the Official Solicitor for her reference. 26.The Official Solicitor submitted her report on 14 August 2020, together with a paediatrician’s medical report, a dietitian’s report, information on average life span from Census and Statistics Department and that on certain disability allowances from Social Welfare Department. Y’s current situation 27.The medical report by Dr. Yam Ka-ling (“Dr. Yam”) of the Department of Paediatrics, Queen Elizabeth Hospital shows that Y suffers from Goldenhar Syndrome, severe mental retardation, bilateral hearing loss, severe visual impairment, left lung pneumothorax and bronchiectasis, chronic dysphagia, constipation, etc. 28.According to the Social Welfare Report, the supplemental report and the report of the Official Solicitor, Y cannot take care of herself in her daily life and is entirely reliant on others’ help. She cannot speak or eat solid food, and must eat by way of gastrostomy and excrete with the help of diapers and medication. Y will exhibit certain improper behaviour from time to time in her daily life, such as pulling out the gastronomic tube, spitting onto the floor at will, pinching others for communication or seeking attention, scratching her own face or forehead for venting out emotions, patting and hitting the carer occasionally. Y requires special care, attention and continued guidance. Hence, Y has attended certain courses on behaviour modification. 29.At present, Y boards at school on weekdays and returns home at weekends on vacation. When she finishes school in July 2021, she will have to leave the school dormitory. Y's life expectancy 30.Dr. Yam is of the view that Y’s medical condition is going to last, with no hope of a full recovery. She is also of the view that as Y is suffering from chronic lung disease, her life expectancy will be shorter than that of the general population. 31.From the information on population estimates from the Census and Statistics Department the Official Solicitor has quoted in her report, generally females in Hong Kong have an average life expectancy of 88.1 years. For the sake of working out Y’s needs after she leaves school, the Official Solicitor assumes Y has a life expectancy of 78 years, meaning that a period of 60 years is used to work out Y’s future needs. 32.We accept that this is a proper method, by which Y’s life expectancy is assumed to be 78 years, meaning that a period of 60 years is used to work out her future needs. Support Y needs 33.Quoting from Dr. Yam’s medical report and the information provided by Ms Chan Sau-fung, the Social Work Officer at Y’s school, the Official Solicitor submitted that Y received speech therapy (once a week), occupational therapy (once every fortnight) and physiotherapy at school (collectively “the therapies”). She had to go to the hospital for follow-up consultations regularly, and the Department of Paediatrics as well as the Special Paediatric Nutrition Department of Queen Elizabeth Hospital were following up on her condition. 34.Dr. Yam is of the view that Y has already exerted her utmost potential, and there is little likelihood of any further improvement in her self-care ability. The therapies are just to keep up with Y's usual training. Dr. Yam suggests that the carer, having received proper training, can assist in integrating the therapies into Y’s daily life after she has left school, and there should be professionals who will perform periodic supervision, give guidance and suggest arrangements for the gradual decrease in the therapies. The carer will also receive proper training in handling Y’s behavioural problems. 35.The Hospital Authority, NGOs or private organizations do provide the services in question. The charge each time is from HK$135 (Hospital Authority) (which can be waived for Higher Disability Allowance recipients) to about HK$1,000 (private organizations). 36.In relation to Y’s nutrition intake, according to the medical report by Ms Jacqueline Tam, dietitian at the Department of Nutrition of the Queen Elizabeth Hospital, Y mainly relies on a nasal-gastric tube to consume milk powder. Ms Tam also suggests that soluble dietary fibre powder be added to Y’s daily diet to improve her constipation problem. The nutritionist will perform periodic examination and observation on Y’s weight change, growth rate and intake carrying capacity, and will make corresponding adjustments to Y’s diet in accordance with her physical condition. Ms Tam estimates that Y’s monthly expenditure on milk powder and dietary fibre powder is about HK$2,376. Option One: Infirmary 37.Ms Wong, a Social Work Officer, suggests in her Social Welfare Supplemental Report that after Y leaves the boarding school, she can apply for an infirmary bed at Siu Lam Hospital. The charge for residential service is HK$100 per day, which includes professional care services provided by specialists, nurses, occupational therapists and physiotherapists. 38.At the hearing on 8 September 2020, Ms Wong expressed that Y could apply for a waiver of hospitalization charges, but Y would have to be responsible for the remaining expenditure. Ms Wong also informed this Court that the social worker stationed at Y’s boarding school had already prepared for Y an application for a bed at Siu Lam Hospital, but Madam Cheung’s signature for consent would be required. Given the recent demand and supply of infirmary beds at the hospital, if the application was lodged within a short period of time, there should be no difficulty for Y to move in there in August 2021. 39.The Official Solicitor’s Report has provided further details by submitting that if Y moves to an infirmary bed at Siu Lam Hospital, her family may have to purchase and/or pay additionally for milk powder, other consumables for feeding (for instance, feeding bags, feeding tubes, syringes, hand sanitizers with alcohol, lubricants, collectively known as “feeding tools”), diapers, etc. The amount of such self-paid expenditure will be similar to that currently required by the school. 40.The Official Solicitor’s Report also quotes the confirmation from Ms Chan, the Social Worker at school, that Madam Cheung will need to purchase and/or pay additionally for milk powder, feeding tools, diapers and follow-up consultations at the hospital. According to the information submitted by Madam Cheung at trial, the monthly expenditure on Y’s milk powder, diapers, feeding tubes, etc. was about HK$4,000. Option Two: Home Care 41.In her Social Welfare Supplemental Report (paras. 9 to 12), Ms Wong expresses that since Y requires round-the-clock, close attention in every aspect of her daily life, this exerts quite a high demand on the carer. Apart from having an adequate understanding of Y’s capabilities, the carer has to be equipped with nursing knowledge to a certain extent and with sufficient compassion and patience to be qualified for such work. 42.Ms Wong has also expressed in her report that if Y stays home to receive care, Madam Cheung will plan to arrange for Y to have home care services specifically for persons under severe disabilities, including nursing care, rehabilitation training, carer support service, home respite service, etc., and to have periodic assessments for Y to formulate training programmes and to determine the goal for Y’s therapies and the length of the training. The monthly service charge is capped at HK$1,002. 43.Both the Official Solicitor’s Report and the Supplemental Social Welfare Report mention Madam Cheung’s claim of having a heart disease which requires an operation and regular medication. Therefore, if Madam Cheung takes care of Y at home alone, she will encounter difficulties caused by mental and physical stress to a certain extent. The Official Solicitor’s Report also quotes that Ms Wong has agreed that apart from the arrangement of the above home care services, Madam Cheung may also need to have family member(s) or hire a domestic helper to take turns taking care of Y’s needs in her daily life and those during the night. 44.The view expressed in Dr. Yam’s medical report is that, if Madam Cheung and/or the domestic helper receive proper nursing training on taking care of Y’s lungs and feeding, it is still feasible to take care of Y at home. Dr. Yam also suggests that Y should be in a wheelchair while going out, while a special chair suitable for Y’s use at home should also be procured. Y's future disability allowance 45.The Official Solicitor’s Report quotes further details supplied by Ms Wong, that if Y stays home to be taken care of after she has finished her studies, she will then be eligible for higher disability allowance. The information which the Official Solicitor has quoted shows that the higher disability allowance is HK$3,670 per month from 1 February 2020 onwards. However, if Y moves to an infirmary bed at Siu Lam Hospital, she will only be given a normal disability allowance at a monthly sum of HK$1,835. A projection of Y’s future expenditure 46.According to the information supplied by the Official Solicitor and the Social Welfare Department above, if Y moves to an infirmary bed at Siu Lam Hospital, the future expenditure she will require is as follows:
47.The above calculation has not taken into account the expenditure on Y’s home breaks. Madam Cheung remarked that even if Y moves to Siu Lam Hospital, her circumstances should be similar to the present when she is boarding at school, in that she will have home breaks to meet with her family. We agree that an appropriate number of home breaks is conducive to Y. Considering the current situation of Y’s home breaks, we are of the view that it is appropriate to have 2 home breaks each month. 48.If Y returns home 2 times each month, the additional expenditure required will include two-way travelling expenses, the wheelchair and the special chair she needs when she returns home, personal care or nursing services, etc. With reference to the calculation below concerning Y’s expenditure under the home care option, we adopt a monthly figure of HK$2,000 as the base in this regard. 49.Regarding the number of years, considering Madam Cheung’s current age and the actual difficulties with Y’s home breaks when Madam Cheung becomes older, we have decided to adopt 20 years for the calculation:
50.To sum up the above projected expenditure, the total projected expenditure for Y to move to an infirmary bed at Siu Lam Hospital and to have her monthly home breaks are:
51.If Y stays for home care, the projected monthly expenditure includes (see para 35 of the Official Solicitor’s Report):
52.The expenditure on the wheelchairs and special chairs Y requires (using 60 years for the projection) is HK$180,000. 53.Deducting the monthly higher disability allowance of HK$3,670, and using 60 years for the calculation, the projected expenditure required for Y to stay for home care will be:
54.In paragraph 38 of the Official Solicitor’s Report, the following recommendation is put forward:
55.It was mentioned in paragraph 40 of the judgment of the trial court that the then market value of the matrimonial home (the most valuable family asset) was HK$8,200,000. Even if all the proceeds from the sale of the matrimonial home went to Y, it would still not be sufficient to pay for the projected expenditure of Y’s future home care. 56.Considering the limited family assets, the current financial status of Mr Tsoi and Madam Cheung and the practical future needs of the parties, we are of the view that in the present circumstances, the best possible arrangement to be made is the option for Y to move to an infirmary bed at Siu Lam Hospital. Both Madam Cheung and Mr Tsoi in court expressed their consent to the above arrangement, and Madam Cheung also hoped that Y would continue to have home breaks. 57.Therefore, on the assumption that Y will move to an infirmary bed at Siu Lam Hospital immediately after leaving the boarding school, this Court projects that the future funds that Y will require will be HK$2,038,800. C as child of the family 58.Judge Pang ruled that C is not a child of the family, which is obviously erroneous. This is because it does not conform to the objective facts and evidence, and the principles derived from the relevant case law. 59.In paragraph 31 of his judgment ([2019] HKFC 98), Judge Pang sets out his reasons in this regard as follows:
60.Judge Pang has made the following mistakes in the above ruling:
61.Section 2 of the Matrimonial Proceedings and Property Ordinance (Cap 192, Laws of Hong Kong) defines “child of the family” as follows:
62.Section 52(1), Matrimonial Causes Act 1973 c. 18, which is the equivalent UK provision, adopts a similar definition for “child of the family”:
63.In Teeling v Teeling [1984] FLR 808 at p.809 (CA), the English Court of Appeal held that when assessing whether a child who was born out of wedlock is a “child of the family”, the court should adopt an objective test to assess whether the parties to the marriage have deemed or treated the child in question as a child of their family. 64.Moreover, in W (RJ) v W (SJ) [1971] 1 All ER 303, having taken into consideration the history of the relevant provisions and the other provisions in the Act, Park J held that the crux of this issue lied with how the parties to the marriage treated that child; therefore, whether a person knew or thought that he or she was not the natural parent of the child was immaterial to the issue. He endorsed the comments in Rayden on Divorce[1] in this regard:
65.In the present case, Mr Tsoi knew before C’s birth that he was not C’s natural father. According to the principles in the above English authorities, however, the issue of the child of the family mainly depends on how, from an objective point of view, the parties to the marriage treat the child. The subjective view of the non-natural parent is immaterial to the decision on the issue. 66.Hence, Judge Pang should not have ruled that C is not a child of the family simply based on Mr Tsoi’s claim that he did not intend to provide for C, and that he put on a show reluctantly in front of the friends and relatives when C reached one month old. The court must take into consideration the objective behaviour of the parties to the marriage to assess whether C is a child of the family. 67.We do not think that the General Form of Joint Application (Form 2C) and the Statement as to Arrangement for Children (Form 2D) filed by both parties on 24 January 2017 could be extended to mean that Madam Cheung in fact accepted Mr Tsoi had not deemed C a child of the family. The General Form of Joint Application (Form 2C) has clearly set out Y and C as the children of the family. The Statement as to Arrangement for Children (Form 2D) has also set out the condition on living and education as well as arrangements for provision and access for Y and C. Madam Cheung would raise the two daughters and at the same time Mr Tsoi would give up on access to them. Judge Pang has not explained how he managed to arrive at different conclusions in relation to Y and C based on the same arrangements. 68.By objectively considering the behaviour of the both parties to the marriage, one can see there is sufficient evidence to show that C is a child of the family. No doubt Madam Cheung has all along deemed C a child of the family. In accordance with the relevant authorities, Mr Tsoi’s objective behaviour over the years has also shown that he has treated C as a child of the family. 69.In Teeling above, the couple was married in 1967 and had two natural daughters. The couple separated in 1971, and during that time the wife embarked on a relationship with another man. In 1973 she gave birth to a boy with that man. Soon afterwards, the wife ran into difficulties, and the husband did not count against her and brought her and the baby boy back to the matrimonial home. The whole family – i.e., the couple, their two daughters and the baby boy born out of wedlock – lived a family life of 6 months, until the wife brought the baby boy away from the matrimonial home. During those 6 months, the husband did certain things for the purpose of taking care of the baby boy. Since the husband brought the baby boy to the matrimonial home after he had been born, the baby boy had lived in the matrimonial home for 6 months as a family member. Moreover, the husband was willing to register himself as the baby boy’s father in the latter’s birth record and took care of the latter as if he was his own. The English Court of Appeal held that the baby boy was a child of the family even though the baby boy never saw the husband again after the wife had brought the boy away from the matrimonial home. 70.C’s circumstances in the present case bear material similarities to the facts in Teeling. Although Mr Tsoi knew that C was not his own before her birth, he still accompanied Madam Cheung to the hospital for delivery and brought C to the matrimonial home after she was born[2]. C has been residing at the matrimonial home until now. At C’s red egg and ginger party, both Mr Tsoi and Madam Cheung did tell the friends and relatives present that C was the younger daughter of the family. After C’s red egg and ginger party, Mr Tsoi continued to reside at the matrimonial home with Madam Cheung, Y and C, before moving out in February 2007. 71.In C’s birth record registered by Madam Cheung at the Births and Deaths Registry on 19 January 2007 (i.e., 38 days after C’s birth), Mr Tsoi is listed as the father, to which he has never objected. C has also taken up Mr Tsoi’s surname. 72.According to paragraph 2 of Madam Cheung’s Notice of Appeal dated 5 December 2019, after Mr Tsoi had moved out of the matrimonial home, C would spend every Sunday in Mr Tsoi and Madam Cheung’s shop. Before 2015 (the year in which the shop ceased business), friends and kaifongs deemed C the younger daughter of the Tsois. Mr Tsoi had never denied or rectified their views. In other words, years after Mr Tsoi and Madam Cheung separated, he still met up with C frequently. Separately, there is no evidence to show that Mr Tsoi has mentioned to friends or kaifongs that C is not a child of his family. 73.In paragraph 6.1 of his Financial Statement (Form E) dated 12 October 2017, Mr Tsoi also claimed that he was responsible for all of C’s expenditure during those 10 years. Later on, Mr Tsoi amended paragraph 6.1 of his Financial Statement dated 6 June 2018 to say that he was responsible for most of C’s expenditure during the same period. 74.Therefore, in accordance with the objective test laid down in Teeling and the definition in section 2 of Matrimonial Proceedings and Property Ordinance, and based on the behaviour of both parties to the marriage, we are of the view that legally C has long been a child of the parties’ family. 75.However, even though a non-natural child is deemed a child of the family, at the time of divorce the court does not necessarily rule that the non-natural parent shall assume the responsibility for maintenance of the child in question. Section 7(3) of the Matrimonial Proceedings and Property Ordinance provides as follows:
76.In Teeling, having ruled that the baby boy was a child of the family, the English Court of Appeal directed the court below to consider whether the husband should assume any responsibility for the child’s maintenance pursuant to the equivalent provision in England[3]. Ormrod LJ said in the judgment (pp.809-810):
77.Apart from Teeling, we have also referred to the judgment of Hartmann J (as he then was) in F v F [2003] 1 HKLRD 836. Hartmann J said the following in paragraph 109 of his judgment:
Hartmann J, however, obviously took the view that the court must consider all the relevant factors set out in section 7(3) of the Matrimonial Proceedings and Property Ordinance in order to determine whether the power in sections 5, 6 and 6A on the party who is not a natural parent in relation to the child in question should be exercised. Therefore, he goes on to say in paragraph 109 of his judgment:
He also explained that in that case, although the non-natural parent had committed to providing for the daughter in question for 5 to 6 years[4], the court would not make any order for her future maintenance because the way she and the non-natural parent got along had changed and she moved away from him to live with her natural father. 78.From this one can see that, in accordance with section 7(3) of the Matrimonial Proceedings and Property Ordinance, the court must take into account the maintenance for the child of the family over the years against the relevant factors set out in the Ordinance for an overall assessment to arrive at a fair and proper decision. 79.In the present case, there is not much dispute over the factors set out in sections 7(3)(b) and (c): that Mr Tsoi was aware that he was not C’s natural father before C’s birth; nothing is known about C’s natural father; and there is no evidence to show that C can depend on her natural father for provision. 80.The key consideration in this case is the matter in section 7(3)(a), which consists of 3 limbs:
81.Regarding limb (i), the evidence clearly shows that Mr Tsoi has previously assumed the responsibility for C’s maintenance. 82.In paragraph 73 above, we have mentioned the evidence in Mr Tsoi’s Form E, which he affirmed on 6 June 2018. Together with the management fee invoices, public utilities bills such as water, electricity, gas, telecommunication, etc. of the matrimonial home attached, these show that he kept on paying these household expenses until the end of 2007. 83.On the other hand, in relation to the provision by Mr Tsoi over the years, Madam Cheung says in paragraph 4 of her written submissions for the appeal that from 2008 to 2015, Mr Tsoi only paid HK$2,500 as household expenditure, and none has been paid from 2015 to now. 84.For limb (ii): regarding the extent of the responsibilities Mr Tsoi has assumed and the basis upon which he assumed the responsibilities, neither party has put them in clear terms. We are of the view that according to the facts of this case, this limb can be taken into consideration jointly with limb (iii). Obviously, ever since Mr Tsoi left the matrimonial home, his provision to C was very limited. From 2015 onwards, he did not contribute any household expenditure. The only provision, which was indirect, was the residence which he provided jointly with Madam Cheung to C. 85.After the sale of the matrimonial home, the above indirect provision will end. According to Judge Pang’s ruling, C’s housing needs would amount to HK$20,000 ÷ 3 = HK$6,666. 86.We have also considered that Mr Tsoi has grown apart from C in recent years; the two of them do not often meet, especially after the mobile phone accessory shop has ceased business. 87.Taking the above considerations into account, we are of the view that, on one hand, Mr Tsoi did assume the responsibilities of provision for C to a limited extent, but the two have grown apart in recent years, and C does not have her natural father to depend on. On the other hand, after the mobile phone accessory shop ceased business in 2015, Mr Tsoi’s income clearly decreased. The court should also consider the fact that Mr Tsoi has his new family to look after (as he has two other sons, aged 12 and 5 respectively). After considering each relevant factor for an overall assessment, we find that a fair and appropriate treatment is that a portion of the proceeds from the sale of the matrimonial home equivalent to C’s 3-year basic housing needs shall be set aside to satisfy her welfare relief:
88.As the above provision will come from the sale proceeds of the property, Mr Tsoi is in fact only responsible for half of it, i.e., HK$119,988, and the other half will come from the sum payable to Madam Cheung. This is to reflect the indirect provision by way of a residence for C in recent years, which is jointly provided by Mr Tsoi and Madam Cheung. Calculation and apportionment of family assets 89.In view of the fact of the present case, we concur with Judge Pang’s ruling that a fair and appropriate arrangement for all parties is to sell the matrimonial home and to apportion the proceeds in accordance with the needs of both parties as well as the children of the family. In paragraphs 48 to 52 of his judgment, Judge Pang adopted HK$8,200,000 as the then market value of the matrimonial home to calculate the shares of Y, Mr Tsoi and Madam Cheung. We consider this an incorrect approach. In principle, the court has already ruled on the amounts for the children’s provision, and they should be deducted in a lump sum from the proceeds of the property sale instead of using those amounts as the basis for calculating the shares in the sale proceeds to which the children are entitled. 90.We are of the view that the correct calculation for apportionment is to deduct the projected expenditure of Y and C from the net proceeds of the sale of the matrimonial home at market value (i.e., HK$2,038,800 + HK$239,976 = HK$2,278,776), with the balance together with both parties’ other assets to be equally shared between the parties to the marriage. 91.Regarding the other family assets under both parties’ names, Judge Pang held in paragraph 41 of his judgment that Madam Cheung had HK$19,000 and Mr Tsoi had HK$322,897.98. Regarding Judge Pang’s decision that both parties shall keep the other assets under their own respective names, this arrangement shall remain. In order to have an equal share of the family assets, Madam Cheung and Mr Tsoi should each have HK$170,948.99. 92.In paragraphs 49 to 51 of his judgment, Judge Pang dealt with the differences between the other assets held under both parties’ names by adjusting the share in the proceeds of the sale of the property to which each party is entitled. 93.We are of the view that the above approach is also incorrect because at present the amount of property sale proceeds is still unknown while the amount of the other assets each party keeps under each own name is known. 94.The correct calculation is as follows: assuming that a balance of HK$x remains after deduction of the expenses incurred in the property sale (including legal fees and agent’s commission) and the provision for the projected needs of Y and C, Madam Cheung and Mr Tsoi should each have HK$170,948.99 as each of them would get an equal share, in addition to half of HK$x. 95.Owing to the difference in the other assets that are currently held under both parties’ names, Mr Tsoi shall pay Madam Cheung HK$151,948.99 in order to achieve equal division. The amount of HK$151,948.99 should be paid from Mr Tsoi’s half share of HK$x. 96.Therefore, after the sale of the property, the expenses for the sale (including legal fees and agent’s commission) and the provision for the projected needs of Y and C should be deducted first, leaving the balance of HK$x. Madam Cheung is entitled to HK$x÷2 + HK$151,948.99, and Mr Tsoi is entitled to HK$x÷2 – HK$151,948.99. 97.To assist both parties with an understanding of the above calculation and apportionment, we shall explain using the example below. However, we must make it clear that this is only an example based on an assumed property sale price and expenses. The actual figures can only be accurately worked out after the property has been sold. 98.Assuming that the sale price of the property is HK$8,200,000 and the expense for the sale is HK$200,000, then HK$x (i.e., the balance after deduction of property sale expenses and the provision for the projected needs of Y and C) is HK$8,200,000 – HK$200,000 – HK$2,278,776 = HK$5,721,224. Half of HK$x is HK$2,860,612. 99.Since Madam Cheung could have HK$x÷2 + HK$151,948.99, according to the calculation in this example, she could obtain HK$3,012,560.99 from the balance. 100.By the same token, Mr Tsoi could obtain HK$x÷2 - HK$151,948.99. Therefore, according to the calculation in this example, he could obtain a share of HK$2,708,663.01 from the balance. 101.As explained further below, because both parties are unrepresented, the Court shall direct both parties to appoint a solicitor to handle matters concerning the sale of the property to ensure that the proceeds from the sale will be apportioned in the way mentioned above and that HK$1,558,800 out of the provision for Y be deposited into court. How to handle the children’s future funds 102.In trial, Mr Tsoi objected to handing over the provision for Y’s future needs to Madam Cheung for her management. Having considered the views of both parties, the suggestions from the Social Work Officer and the Official Solicitor as well as Y’s future needs, we are of the view that it is appropriate to give directions on the way to deal with the provision for Y’s future needs in accordance with Order 80, rule 12 of the Rules of the High Court. 103.As explained above, the provision for Y’s future needs consists of two major parts:
104.Regarding (b), we are of the view that the amount can be paid to Madam Cheung because she is Y’s main carer when Y goes on for home breaks. 105.As the provision in (a) is for Y’s long-term care in an institution, which may outlast the number of years in which Madam Cheung is capable of taking care of Y actively, we are of the view that it is appropriate to deposit the amount of HK$1,558,800 into court for an annual appropriation to the Director of Social Welfare for management so as to facilitate an appropriate sum to be withdrawn from that amount each month to pay for Y’s medical expenses and those related to her stay in the infirmary of Siu Lam Hospital. 106.To facilitate the Director of Social Welfare paying for all the expenditure relating to Y’s stay in Siu Lam Hospital, the Director of Social Welfare is directed to open a bank account for Y within 14 days upon notice from the court of the sale of the matrimonial home to receive the annual appropriation from the court for Y’s hospital charges. Upon opening the bank account, the Director of Social Welfare shall inform the Registrar, Civil Appeal of the High Court within 7 days. 107.Regarding the provision for C’s future needs, it can be collected by Madam Cheung on C’s behalf for safe custody. Vacating the matrimonial home 108.In trial, Madam Cheung said that it would take time to find another residence, and there would be difficulties if she was to vacate the matrimonial home at least 4 weeks before the completion as per the order made at trial. She suggested selling the matrimonial home within 6 months after an order was made by this Court, and vacating the premises 3 months after the transaction was completed. 109.We are of the view that the time periods Madam Cheung suggested are long and impractical. This is because, generally, after the sale and purchase agreement has been executed, Madam Cheung and C will have to vacate the matrimonial home before the transaction is completed and to deliver vacant possession to the purchaser. We are of the view that the provisional agreement for sale and purchase on the matrimonial home shall be executed within 6 months after this Court has made the order, and the matrimonial home be vacated in not less than 14 days before the transaction is completed. Costs 110.As the decision on this appeal is to ensure that there is sufficient provision for the future needs of Y and C, there shall be no order as to costs. 111.We would like to take this opportunity to thank the Official Solicitor, the Social Welfare Officer and the medical experts for their assistance to the Court in the appeal. Orders 112.We allow the appeal of Madam Cheung, and order that the orders given by Deputy Judge Pang on 18 April 2019 be varied as follows:
1st Applicant acting in person 2nd Applicant acting in person Ms Ip Lai Yee, Senior Legal Aid Counsel of the Official Solicitor, for Y, the elder daughter Translated by the Judgment Translation Unit of the Judiciary and vetted by Ms. Jenny Chung, Solicitor. |
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