Lyi also known as Yil v. Jj also known as Jj
Read the full judgment text of FCMC 2960/2018 on BabelCite. This Family Court judgment was delivered on 16 August 2021 before His Honour Judge I Wong.
Matrimonial Causes – Ancillary Relief – Financial Provision – Matrimonial Home – Sharing Principle – Departure from Equality – Child Maintenance – Costs – Long marriage of 18 years with two children – FMH purchased under Home Ownership Scheme – Husband unemployed due to unrelated criminal case – Dispute over husband's alleged debts ($600,000 and $900,000) – Court rejected $600,000 debt and added $550,000 of $900,000 debt back to matrimonial pot – Sharing principle applied with 55% to wife and 45% to husband due to husband's superior earning capacity – Child maintenance assessed for son ($12,000/month) and daughter ($31,200/month) – Lump sum of $122,000 ordered to equalize shares – Nominal maintenance ordered – No order as to costs.
Legal issues: Identification of Assets and Liabilities · Application of Sharing Principle · Child Maintenance · Costs
Outcome: Ancillary relief granted; FMH sold; lump sum and child maintenance awarded; nominal maintenance ordered; no order as to costs.
Cited by 1 case · Cites 6 cases
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FCMC 2960/2018 [2021] HKFC 160 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 2960 OF 2018 ---------------------------- BETWEEN
--------------------------- Coram: His Honour Judge I Wong in Chambers (Not Open to Public) Dates of Hearing: 21 & 22 April and 4 May (half-day) 2021 Date of Judgment: 16 August 2021 __________________ J U D G M E N T ( Ancillary Relief ) __________________ 1.This is a trial on ancillary relief upon the dissolution of the marriage between the parties. The petition for divorce was taken out by the wife. 2.In this judgment, for the ease of reference, I shall refer to the petitioner as “the wife” and the respondent as “the husband”. Background 3.The wife is 48 years old and the husband is 44. They were married in September 2000. 4.They have 2 children. The elder child is a daughter, born in July 2001, and is 21 years old. The younger child is a son, born in March 2005, and is currently 16 years old. 5.The family initially lived in a public housing unit of which the wife was the tenant. Later on, they managed to purchase a flat under the Home Ownership Scheme in February 2013 by surrendering the tenancy of the public housing unit. This flat became their former matrimonial home (“FMH”). 6.Sadly, the parties broke up in 2017 as a result of which a homemade Separation Agreement was signed on 3 December 2017. It is unnecessary to refer to the terms of the Agreement; suffice to say is that both parties alleged the other side was in breach of the Agreement. 7.A few months later in February 2018, the wife, together with the 2 children, moved out of the FMH. This was followed by the wife’s petition for divorce taken out in March 2018 on the ground of the husband’s unreasonable behaviour. 8.At about the same time, the daughter left Hong Kong for Australia to further her education. 9.By an order dated 28 May 2018, the husband was ordered to pay an interim maintenance of $18,000 per month, with $6,000 each for the wife, the daughter and the son. 10.The petition was uncontested and the decree nisi was granted on 24 October 2018. 11.By an order of 3 December 2018, the custody, care and control of the 2 children of the family were granted to the wife with reasonable access to the father. 12.Since the daughter had left for Australia to further her education, upon the application of the wife and upon the undertaking of the husband that he would pay the wife a sum of $150,000 being the living and education expenses of the daughter on or before 4 March 2019, the interim maintenance for the wife was varied down to $4,000 per month and those for the two children were varied up to $18,000 (ie $9,000 each). 13.The husband failed to pay the interim maintenance as from December 2020. It was apparently due to the dismissal from his employment. I shall refer to it below. 14.Back to about February 2020, with the assistance of a mediator the parties were able to arrive at a settlement regarding their financial matters pursuant to which a Mediation Settlement Agreement was signed. Unfortunately, very soon the parties had arguments over the draft consent summons intended to embody the settlement terms prepared by the wife’s solicitors as a result of which the consent summons was never signed. Again, both are pointing their finger against each other for the failure to draw a closure of the financial matters. In light of this situation, I considered that the prospect of having a successful Financial Dispute Resolution (FDR) hearing was dim. The FDR hearing was dispensed with accordingly. The Husband’s Oral Application for Postponement of the Trial 15.In the 1st Appointment hearing of 28 May 2020, I gave directions for the parties to file their Section 7 narrative affirmation and fixed the Pre-Trial Review at 18 November 2020. The husband however did not file his narrative affirmation. 16.In the hearing of 18 November 2020, the trial on ancillary relief commencing on 21 April 2021 was fixed. 17.On 9 April 2021 a Notice of Application for Legal Aid was lodged giving notice that the husband had made an application for legal aid. 18.On 12 April 2021, I directed that the legal aid stay be lifted so that the trial could start as scheduled. 19.At the beginning of the trial, the husband made an oral application for the postponement of the trial; the reason being that he had applied for legal aid and was waiting for the outcome. 20.The application was opposed to by Ms Kwong, counsel for the wife. 21.The husband’s application was refused. As I said in the oral ruling, the husband was present in both of the hearings of 28 May and 18 November 2020 when the case was being prepared for trial. He was fully aware of the progress of the proceedings, specifically of the fact that the trial dates were fixed about 5 months ahead. As referred to above, the husband also failed to file his narrative affirmation as directed. The divorce proceedings started in March 2018 but it was not until 3 years later and shortly before the trial that the husband approached the Legal Aid Department. While I accepted there were some delays due to the Covid-19 pandemic back in 2020, nevertheless it is clear that the husband should have had sufficient time to seek legal advice, apply for legal aid or prepare for the trial. There was no reason why he had not acted earlier. The Parties’ Current Situation 22.The wife works as a Clerical Assistant for the Government. She and the son are living in a rented flat in Kowloon City. This is also the daughter’s home when she returns to Hong Kong. 23.The daughter is attending Year 2 at a university in Sydney, majoring in Actuarial Science and the son is attending Form 4 in a local school on IB curriculum. 24.The husband was unemployed at the time of the trial. He used to work as an IT Manager for a local university. It is somewhat unclear as to where the husband is living now. The wife said since July 2020 the husband has been living with his parents at the latter’s village house in the New Territories. At trial, the husband said he is living in the FMH alone. 25.Both parties filed a Form A seeking ancillary relief against the other. The Wife’s Open Offer 26.The wife’s open offer of 1 April 2021 was that the FMH should be sold with the entire proceeds of sale be given to her. Additionally, the husband should pay, on a clean break basis, a sum of $1,500,000 by instalments. This is to settle the parties’ respective claims and costs. 27.Ms Kwong said in her Opening Submissions that the proceeds of sale are intended for the maintenance of the children of the family. At the same time, the wife revised her position and was seeking:
28.At Closing, Ms Kwong, on behalf of the wife, has further revised the orders to be sought. I do not think it is necessary to set them out here. The Husband’s Open Offer 29.The husband set out his open offer in his Opening Submissions that was lodged at the commencement of the trial. He said there was a loan of $600,000 from his mother for the purchase of the FMH. This loan should be repaid to his mother first and then the husband would pay $1,000,000 to the wife for her share in the FMH. 30.At Closing, provided that he has a job, the husband agreed to pay a total of $22,000 per month as maintenance - $9,000 for each of his children and $4,000 for the wife. 31.It is clear that the husband all along kept himself at a distance from the proceedings. He filed 2 Form E (being dated 23 May 2018 and 21 November 2018) but the 1st one was unsworn. Notwithstanding that the husband had filed his own Form A seeking ancillary relief against the wife and despite the order of the court, the husband did not make any narrative affirmation for the purpose of the trial. The one and only affirmation was a short one dated 15 October 2020 stating that he borrowed $600,000 from his parents for the purpose of purchasing the FMH. Further, the husband elected not to give oral evidence at the trial. In the absence of his oral evidence, the truthfulness of his affirmation evidence and the veracity of his case could not be tested by way of cross-examination. In the circumstances, little regard should be given to his affirmation or any statements in the guise of evidence: see LWTC v PTH and Anor, FCMC 1648/2011 (unreported, 28 May 2012) at [47] to [49]. The Law and Legal Principles 32.The jurisdiction of the court in granting financial provision for a party and for a child of the family is governed by sections 4 and 5 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”). Pursuant to sections 6 and 6A of the same legislation, the court has the power to grant orders for transfer, settlement or sale of properties. 33.The principles upon which this case is to be considered are the conventional ones, namely those set out in section 7 of MPPO which confers a broad discretion on judges dealing with ancillary relief. That said, these principles are to be interpreted in the light of the Court of Final Appeal judgment in LKW v DD (2010) 13 HKCFAR 537. In that case, Riberio PJ referred to the four principles which are applicable to all ancillary relief proceeding, viz, (1) the objective of fairness: [56], (2) rejection of discrimination: [57], (3) the yardstick of equal division: [58] – [61] and (4) avoidance of ‘minute retrospective investigation’: [62] – [69]. 34.Ribeiro PJ further set out the steps to be taken by the courts in undertaking the exercise. In brief, they are:
35.Lastly, I do bear in mind the reminder given by Thorpe LJ in Parra v Parra [2003] 1 FLR 942 at [22] that the proper judicial task of the court is to exercise a singularly broad judgment that obviates the need for the investigation of minute detail. Identification of Assets Matrimonial Assets 36.The FMH is undoubtedly the only major liquefiable asset of the family. The FMH, being under the Home Ownership Scheme, was purchased in the joint names of the parties in 2013 for $2,730,000, with a mortgage finance of $2,184,000 from HSBC. The monthly mortgage repayment is currently about $11,300. The sale of the property would have to be subject to the consent of the Hong Kong Housing Authority and the payment of premium. Currently, the outstanding mortgage loan is about $1,400,000. The parties have not obtained any expert valuation on the market value of the FMH. According to the on-line valuation of HSBC, the Hang Seng Bank and the Standard Chartered Bank, the current market value of the FMH is about $7,620,000; and according to the information provided by the wife, after payment of the premium and repayment of the mortgage loan, the net value of FMH is about $2,684,000. There is no objection from the husband in this regard. The Wife’s Assets 37.It was put to the wife by the husband during cross-examination that the wife has a property in the joint names with her former husband. That was denied by the wife. In my assessment, it was a bare assertion unsupported by any evidence on the part of the husband. It was not stated on any documents submitted by him nor was this assertion supported by any particulars. The husband did not raise this by way of his Questionnaire. Indeed, no Questionnaire was ever issued by him. The husband was not sure of the location, saying that the property was either in Yuen Long or Fanling. It should be noted that the parties’ relationship lasted for about 18 years. If there was really such a piece of property that was owned by the wife during their entire marital life, it is hard to believe that the husband knew nothing about it. 38.The wife admitted under cross-examination that she has had a joint account with her father. She explained that her name was added to her father’s account after her mother had passed away. It was to facilitate the father’s handling of her mother’s estate. The account has a few thousand dollars only. The wife however denied she had a joint account with her mother. 39.The wife had about $199,000 in her accounts back in August 2020 when she made her section 7 narrative affirmation. At trial, she testified she only had $3,500 left since she had transferred AUD 43,000 to the daughter for her living expenses and tuition fees. This part of evidence was not challenged by the husband. 40.The wife’s job with the Government is pensionable. Upon her retirement at the age of 60, she would be entitled to a lump sum of $1.28 million and be paid a monthly pension of about $7,600. 41.I need to consider that by the time when the wife retires, she will have worked with the Government for about 40 years, of which roughly about half of the time (to be exact 18 years) are within the duration of this marriage. Another factor I need to consider is that the entitlement to this $1.28 million is 12 years away from now. In other words, she has yet to run the full term of 12 years. As such, part of the $1.28 million is post-separation accrual and is non-matrimonial. Doing the best I can, I think it is appropriate to give a 60% discount of the sum. This comes down to $512,000. 42.The wife testified that the stocks of about $46,000 were bought with the daughter’s red-pocket money and they are for her education. As I see it, the daughter has been receiving education with the support of her family without the need to resort to this sum of money. This is clearly part of the family assets. There is no reason why it should not be included. The Husband’s Assets 43.The husband’s MPF was reported in his Form E to be $500,000 upon retirement. The same treatment as that of the wife’s pension should be given to this piece of asset. Without condescending into the meticulousness and applying the same discount rate, the figure is discounted to $200,000. 44.At the time of the trial, the husband was unemployed. Before December 2020 the husband was working as an Information Technology Manager for a local university. In late 2020 he was involved in a criminal case unrelated to the present proceedings and was remanded by the police. This made him not being able to report duties and for this reason he was dismissed. I was told by the husband during his Opening that the police dropped the charge in February this year. 45.Ms Kwong contented that upon his dismissal, the husband should have been paid severance payment (or payment of like nature) in the region of $390,000. There is however no evidence showing whether that was the case or for that matter, its amount. 46.As regards the other assets, their values are either largely undisputed or their differences are insignificant. 47.The valuable personal possessions should be kept by the parties. In any event, there are only two items, both in the possession of the wife, and their values are not really substantial. The wife has agreed to return the Rolex watch to the husband. Liabilities The Wife’s Liabilities 48.After the parties had separated, the wife borrowed a total of $1.1 million from her father for funding the daughter’s education in Australia. This is supported by some transfer slips and the husband does not challenge the genuineness of the debt. Indeed, in his Opening, he admitted that at the relevant time the family did not have the necessary finance. His only objection is that he never agreed to the loan. 49.In my view, the loan was for the benefit of the daughter, hence, for the family; if it had not been for loan, the wife would not have been able to make ends meet. As such, it is part of the family’s liabilities. The Husband’s Liabilities Debts of $600,000 and $900,000 50.The husband submitted in his Opening that he owes the Dah Sing Bank $600,000 and the Hang Seng Bank $900,000. As regards the latter debt, there was already a Charging Order Absolute registered against the FMH in July 2020. 51.The husband said these liabilities could be traced back to as early as 10 years ago when the parties were together as a family and so they are liabilities of the family. He attributed these to the extravagant spending of the wife in buying luxurious brand bags and clothes. He referred to his Form Es of 23 May 2018 and 21 November 2018 where he had already disclosed his credit card liabilities of $420,000. 52.While the wife accepted she had bought some luxurious items, she said these were all paid by her. Given the high level income of the husband, he should have been able to save up part of his wages; there was no reason for him to have consistently suffered from deficits and incurred these liabilities. However, in evidence, the wife admitted that in about 2014 / 2015 she found out the husband was in debt of about $100,000 to the Dah Sing Bank. The husband told her that since the interest rate was low, he had made use of the money for investment. The husband also mentioned that borrowing money could ‘force’ him to save up money. 53.On that basis, it is Ms Kwong’s submission that the husband has had the practice of “Getting Money with Money” (以錢搵錢). This explains the husband’s borrowings. He might well have hidden the money away from the reach of the wife. 54.With respect, I do not find the submission convincing. I have two reasons. 55.First, the notion that one borrows money in order to force one to save up money is not only difficult to understand but is contrary to common-sense, too. In any event, this submission, as conceded by Ms Kwong, is unsupported by any documentary evidence. 56.As for the second reason, I need to digress to refer to the wife’s application for discovery of the husband’s bank statements. 57.On 14 May 2019, the wife took out an application seeking disclosure of bank statements as from 1 May 2017 by the Bank of East Asia (“BEA”) and HSBC, the banks at which the husband maintained his accounts. The wife’s application was mainly premised upon her accidental “discovery” when she returned to the FMH on a day in February 2018 for picking up her personal belongings. She said at that time the husband was operating his bank accounts online with his computer in the living room. Upon closer look when the husband was briefly away in the washroom, she noticed the computer screen showed as at 10 January 2018 the husband’s BEA account had a deposit of $9.2 million. She immediately took a photograph of the screen and subsequently adduced it as evidence in support of her application. The wife said while the very bank account had been disclosed by the husband in his Form E, the deposit was not. The wife complained that despite her repeated requests, the husband failed to give a satisfactory answer. 58.The application was granted on 14 August 2019 and the relevant bank statements were duly provided. However, perhaps to the great disappointment of the wife, the relevant bank statement did not show the enormous sum of money that she had been expecting. The fact of the matter is the statement showed as at 10 January 2018, there was about $492,800 only. Hence, at trial, it was alleged by the husband that the wife had adduced false evidence in support of her application. That, of course, was strenuously denied by the wife. 59.I must say this incident is intriguing and the truth remains a mystery. 60.That said, there was one discovery as a result of the exercise: one of the statements (being the statement dated 10 May 2018) provided by BEA was different from that produced by the husband in his unsworn Form E dated 23 May 2018. The one produced by the husband showed as at 10 May 2018 he had a deposit of $151,661 only but the one authenticated by BEA showed a total deposit of $401,700; hence, a difference of $250,039. In the absence of any explanation from the husband, I incline to believe that the statement attached to his 1st Form E was a forgery. That said, I am aware that the “correct” one, which was the same as the one produced by BEA, was produced by the husband under cover of his 2nd Form E dated 21 November 2018. Thus, the “same” statement but with different contents was produced twice by the husband. In any event, this, I must say, does not put the husband in a very good light. 61.There is also an allegation that the husband failed to disclose a HSBC No. 833 account. With respect, I do not think this is material even if for any reason the husband indeed failed to make a disclosure. It is clear that this account was for repayment of the monthly mortgage payments of the FMH and there was no substantial sum of money in it. 62.To conclude, despite the fact that the husband’s bank accounts had been scoured by the wife’s legal team, there was not a trace of any hidden assets. It is also not the wife’s attempt to request the court to draw adverse inference against the husband as regards his financial situation on the basis of the “forged” statement or non-disclosure of any bank statements. 63.Turning back to the alleged debt of $600,000, it is true the husband stated in his Form Es that he had credit card liabilities of $420,000 but there were no particulars in support. It is unclear whether any of this $420,000 is related to the Dah Sing Bank. I have been taken by Ms Kwong to some analyses on the bank / credit card statements of the husband. I accept that the bank / credit cards statements did not show the $420,000 debt that the husband had stated in his 2 Form Es or for that matter, how the $420,000 was incurred. 64.As for the $900,000 that was owed under the Charging Order Absolute, the husband relied upon the Hang Seng Bank credit card statement of February 2017 to say that the family owed as much as about $152,700 at that time in support of his assertion that this continuous liability has had a history of 10 years. 65.The court is not in a position to do an auditing for the parties as to how much the husband borrowed and where the monies have gone. On the statements, it seems during the relationship the husband obtained some instalments loans from the Dah Sing Bank the amount of and the purposes for which, in the absence of any explanation from the husband, remain unknown. It is also unknown whether the loans have been repaid. It also seems to be the case that during the marriage (in 2017) the husband owed some monies to the Hang Seng Bank. In closing, Ms Kwong fairly conceded that up to the breakdown of the relationship about $350,000 were owing and these should be counted as family liabilities. As for the remaining debts, they were apparently incurred after the parties’ separation and the husband failed to explain how they were incurred, specifically why the liabilities rose steeply to $900,000. 66.The husband claimed in his 2nd Form E of 21 November 2018 that he needed to spend $60,923 per month. Of this, $19,323 was claimed to be general expenses. $29,600 was set out to be personal expenses (including credit card repayment of $10,800 per month) and the remaining $12,000 was children’s maintenance, presumably pursuant to the then order of the court. I agree with Ms Kwong that even on the husband’s own figures there was no reason why the husband would have the need to borrow post-separation. 67.On the above analysis, I reject the alleged debt of $600,000 owed to the Dah Sing Bank. As for the $900,000, I accept that out of this sum, $350,000 should be attributed as family liabilities. The remaining $550,000 has to be borne by the husband and should be added back to the matrimonial pot. Loan of $600,000 for the Purchase of FMH 68.In his Opening Submissions, the husband said there was a loan of $600,000 from his mother for the purchase the FMH. That is denied by the wife. The husband’s allegation is unsupported by any documentary evidence and since he declined to give evidence, there is not any oral evidence in support of the assertion too. What is more, it is significant to note that in his cross-examination of the wife, the husband was mindful of putting questions to the wife regarding an alleged loan of $50,000 that she had borrowed from his family members for the renovation of the FMH but did not mind at cross-examining her on this alleged loan of $600,000. Lastly, this $600,000 loan was not disclosed in the husband’s 2 Form Es. The husband’s claim has to be rejected. 69.On the basis of the above analysis, the family’s assets are set out below.
Parties’ Earning Capacity 70.The wife, currently 48 years old, has a stable job of working as a Clerical Assistant for the Government. This is a pensionable job that she has been working for the last 28 years. Her current salary is about $23,200 plus local education allowance for the son at about $2,460 per month, hence a total of $25,660. In the ordinary course of event, she still has 12 more years to go before retirement at the age of 60. 71.The husband has a doctorate degree awarded by an Australian university in 2006 through part-time study / distance learning in Hong Kong. 72.Ms Kwong said the husband’s monthly remuneration when he was with the local university was as high as $130,000. This figure, as a monthly average, is definitely on the high side. It was not the case where the husband was able to receive that much on a regular basis. I accept the husband’s explanation that it was in extraordinary times when he was paid Acting Allowance and some other allowances that he was able to reach that figure. On the evidence before me, I accept that the husband used to have a remuneration package of at least about $70,000 to $80,000 per month. 73.Whatever the situation was, the fact is the husband is not in that position anymore. The husband is highly educated and has a good deal of experience in information technology. I agree with Ms Kwong that in due course the husband should be able to return to a job of similar position and with commensurable remuneration. As a matter of fact, the husband also accepted, in his written Opening, that he has a higher earning capacity than that of the wife. That was the reason why he used to foot 70% of the family expenses during the relationship. At closing, the husband mentioned that he was interviewing jobs and there were a lot of potential offers. 74.It should not be forgotten that the husband is a few years younger, too. As such, even if the husband is going to retire at the age of 60 (the same as that of the wife), he still has a working life of 16 years. If the normal retirement age of 65 is taken, the husband still has 21 years to go. 75.On the evidence before me, doing the best I can, I find the husband has an earning capacity of at least $60,000 per month. Of note is that at closing the husband mentioned that if he has a job he is willing to pay a maintenance of $22,000 per month. Parties’ Financial Needs The Wife and the Son 76.The wife said in her Form E dated 18 May 2018 (in Part 5.2) that the husband usually gave her $40,000 per month as maintenance for her and the children but a few months later in her Form E of 14 November 2018 she said the sum given to her was $22,000 to $24,000 per month. There was no explanation for this discrepancy. 77.As referred to above, the wife and the son are living at a flat in Kowloon City. This flat is owned by her elder brother. She only has to pay a concessionary rent of $4,000 per month. 78.The son will be promoting to Form 5 in a local school on IB curriculum after the summer vacation. He has the aspiration of following his elder sister in furthering his education overseas. He intends to major in computer science. There are still about 6 years to go before the son graduates from university. 79.The wife provided the following particulars of hers and her son’s monthly expenses.
80.There was no challenge from the husband on any particular items, specifically there was no suggestion from the husband that the wife should have reduced the son’s extra tuition fees that are currently standing at $3,300 per month. 81.On the basis that the wife consumes half of the general expenses, her monthly needs would accordingly be $10,747 ($4,120 + $6,627). I round it up to $10,750. 82.I attribute the remaining half of the general expenses to the son. The son’s total monthly expenses should be $12,990 ($4,120 + $8,870). I round it up to $13,000. 83.Having considered the standard of living that the family enjoyed during the marriage was one of the middle-class or lower middle-class, I take the view that the current expenses as reported by the wife are reasonable. The Daughter’s Financial Needs 84.The wife said in her narrative affirmation that the daughter needed on average $41,330 per month. At trial, she up-dated it to $45,233 per month. The increase was due to the exchange rate and Covid-19 that necessitated the purchase of more personal protection equipment such as masks. Of $45,233, $19,390 is general expenses (inclusive rental of $11,890) and $25,843 is personal expenses (inclusive tuition fee of $23,083). This has not met with any challenge from the husband. The wife adopted an exchange rate of AUD 1: $ 6.0745, which I regard is apparently on the high side. I round down the figure to $43,000 (AUD 1: $5.7485). 85.The daughter is due to complete her first degree in about 2 years’ time. I am told the daughter has been allowed to work on part-time basis and she would try to earn some moneys. Having due regard to the financial situation of this family, I take the view that the daughter should work and earn some moneys for herself. I give a modest monthly sum of $3,000 as her earnings. The daughter’s monthly needs therefore come down to $40,000. 86.The wife also said the daughter intended to proceed to a 1.5 year or a 2-year masters’ degree course in order to gain accreditation for Parts 1 and 2 exemptions from the relevant Australian professional bodies. This would enable her to progress to Part 3 of the training stage. Future Financial Needs 87.I must not lose sight of the growing needs of the son. According to the wife, the son’s tuition fees will increase to $6,500 in Form 5 and $9,300 in Form 6 (both net of the local education allowances to be paid by the Government). 88.The wife reckoned that for Form 5 and Form 6, the son’s personal expenses would be about $15,000 and $18,600 respectively. If the son goes to a local university, the monthly tuition fees will be about $3,500 and his monthly needs could be reduced to about $13,000. If the son goes overseas, the monthly expenses would be about those of his elder sister’s. The wife’s assessment has not met with any challenge from the husband. Taking a board brush approach and given the standard of living enjoyed by the parties during the marriage, I consider the overall figure and the figures for particular items fall within the range of reasonableness. 89.On that basis, assuming that the son is going to receive his education entirely locally up to his bachelor degree, it would mean on average his monthly personal expenses would be about $14,266 (ie ($15,000 + $18,600 + ($13,000 X 4 years) ÷ 6 years). On the top of this should be added his share of general expenses of $4,120, making a total of $18,386. I round it up to $18,500. The Financial Needs of the Husband 90.As said above, the husband claimed in his 2nd Form E of 21 November 2018 that he needed to spend $60,923 per month. His figures have not been subject to test since the husband declined to give evidence at trial. Doing the best I can I assess the husband’s monthly needs on the basis of the following:
91.I assess the husband’s monthly needs as follows.
92.Both parties appeared to have no dispute that the son should go to university and that he has the ability to do so. I do not have a crystal ball before me. No one knows where the son will end up for his tertiary education. If the son is to go overseas (which may happen 2 years later), the additional financial burden would be at least $20,000; this would be way beyond their monthly receipts. It also has to be borne in mind that if the daughter’s aspiration of obtaining a master’s degree is to be fulfilled, by then the daughter would still be receiving her education in Australia. 93.On the evidence before me, it seems clear to me that even if the husband were to have his university job kept, hence earning as much as $80,000 per month, his income would virtually be absorbed by the 2 children’s overseas education if they are to go together and with this situation the family could hardly maintain their present establishment in Hong Kong with just the income of the wife. On that view, I can see why the husband was not in favour of the daughter’s plan back in 2018. I can appreciate the wife has had high expectation of her children’s education and so decided to borrow from her family for funding the daughter’s education. Back then, she could never have foreseen that the husband would have lost his job. Yet, by doing so she has been living beyond the means of the family. 94.The reality is there is simply not enough money for funding both the daughter and the son’s education overseas at the same time. As can be seen from the above assessments, the daughter’s expenses in Australia already occupy nearly half of the family’s expenses. Indeed, Ms Kwong conceded that if the daughter is to proceed to a masters’ degree, the high side of the 2 children’s future needs are already more than the net value of the FMH and almost equivalent to the actual net value of the parties’ matrimonial assets. As the situation now stands, the daughter has been in Australia for over 2 years, this is somewhat an irreversible situation that the wife has created. I think it is to the best interest of the daughter that she is to continue her study for the bachelor degree. I am aware of what the wife said about the daughter’s intention to proceed to a 1.5 year or a 2-year masters’ degree course. It seems to me that a masters’ degree would enable the daughter to gain some exemptions for examinations. My understanding is instead of getting accreditation the daughter could still sit for the examinations in order to proceed to the training stage. The cruel reality that this family has very limited financial resources has to be accepted. 95.Following the above assessments, on the basis that the son is to receive his tertiary education locally, it can be seen that the monthly needs of this family are about $86,050 per month; the breakdown is as follows.
96.The wife’s Government job is very secured and under normal circumstance it enjoys annual increase commensurate with inflation. By the time when she retires, not only that she will be paid a lump sum of over a million dollars, she would also be entitled to a monthly pension. I have no doubt that she would be able to be financially independent. The husband is highly educated and is capable of getting a job with much better remuneration package and promotion prospect. Equally, the husband is capable of being financially independent. In my view, it is fair that both should be responsible for the maintenance of the 2 children. 97.As of now, the total income is estimated at $83,200 (The wife’s $23,200 + the husband’s $60,000); as far as arithmetic goes it means a shortfall of $2,850 or thereabout (86,050 - $83,200). 98.Viewed from another perspective. The wife’s monthly income is about $23,200. With a monthly need of $10,750 for herself, she would have $12,450 to spare. As for the husband, he would have $43,200 to spare ($60,000 - $16,800). The total sum available for the children is thus $55,650 ($12,450 + $43,200). 99.The son’s monthly needs as assessed above are $18,500. The husband should be responsible for about 2/3 of it, hence a monthly sum of $12,000 for his maintenance. The remaining $6,500 is to be borne by the wife. 100.As for the daughter, the husband should pay a monthly sum of $31,200 while the wife should be responsible for $5,950. This would still result in a shortfall of $2,850 ($40,000 – ($31,200 + $5,950). The daughter has about 2 years to go for her bachelor degree. It means the shortfall would be for a period of about 2 years, hence, a total of $68,400 ($2,850 X 24 months). 101.Thus analysed, it seems clear to me my task is to make use of the financial resources – in the form of the family assets - to meet the financial needs of the family members; specifically, to meet the shortfall of $68,400. Deciding to Apply the Sharing Principle 102.It appears that after the parties’ and their children’s daily needs have been taken care for, there are still assets of modest value available for division. The court generally decides, at this stage, that the sharing principle applies to the total assets, so that they should be divided equally between the parties unless good reason exists to the contrary: WLK v TMC (2010) 13 HKCFAR 618, at [82] Whether good reasons for a departure from equality exist Duration of the marriage 103.This is doubtless a long marriage lasting for 18 years with 2 children. 104.Initially, in her opening submissions, the fact that the wife made contribution by way of housing allowance of about $4,000 per month from her employer for about 2 years had been relied upon as a special contribution on her part so as to warrant a departure from equal division. Ms Kwong subsequently withdrew it as a ground. I consider it was a right move. I failed to see how this could have been a special contribution on the part of the wife. At that time, the wife was just contributing what she was able to do so. This is what husband and wife were meant for. With respect, there was nothing extraordinary. The housing allowance in any event would have to be foregone when the FMH is sold. Equally, the husband’s reliance upon the fact that he footed the renovation costs of the FMH (even if it were true) and was responsible for the monthly mortgage payments cannot be regarded as a special contribution. In short, each party contributed his or her due share in this 18-year long matrimonial partnership. 105.It has been submitted by Ms Kwong that the husband’s conduct of forging the bank statement (see [60] above) and unfrank disclosure about his financial situation justifies a departure from equal division. With respect, I do not agree. First, as I said above, despite a meticulous specific discovery exercise on the part of the wife, there was not any evidence upon which adverse inference could be drawn against the husband’s financial situation. Secondly, a sum of $550,000 has already been added back to the family’s assets; there is a risk of double counting if there is a departure here. 106.That said, I recognize that the husband has a more superior earning capacity than the wife. His monthly income used to be at least 3 times more than that of the wife. At the same time, given the enviable credentials of the husband, he certainly enjoys much better career prospects. It also has to be borne in mind that he is a few years younger. At the same time, I do bear in mind that the wife’s job is more secure. Considering all these, I take the view that the balance must go in favour of the wife. 107.The English Court of Appeal, in Waggott v Waggott [2018] EWCA Civ 727, [2018] 2 FLR, held that earning capacity is not capable of being a matrimonial asset to which the sharing principle applied entitled the wife to share but earning capacity, in appropriate cases, may be relevant to a fair distribution of the assets pursuant to the sharing principle. Moving forward, I accept that after the divorce the husband would still be taking up a substantial portion of the children’s needs. This situation, however, would only be for a couple of years. Upon the completion of the son’s university education, whether locally or overseas, the husband in all likelihood should be able to make more savings than the wife. In my view, the disparity in the parties’ earning capacity is a relevant consideration in the present case and accordingly, it is a departing factor that I should take into account: see also SSLT v SMFC (Ancillary relief; Non-matrimonial Assets) [2019] HKFLR 458, at [124] – [127]. 108.Taking a board brush approach, I would tentatively allow the wife an extra 5% of the total matrimonial assets. Deciding the Overall Outcome 109.It has to be borne in mind that a finding that one or more of the departing factors are engaged does not necessarily mean that a departure must occur. The court is required to give an examination of the overall picture. 110.I have come to the tentative view that the wife should be given an extra 5% of the net matrimonial assets. If the tentative adjustment discussed above is given effect, it would give the following result. 111.The net value of the family assets is $2,580,500. After having a sum of $68,400 reserved for the daughter, the net sum comes down to $2,512,100. On the basis that the wife is to take 55% of the net sum and the remaining 45% goes to the husband, the wife would have $1,381,655 ($2,512,100 X 55%) and the husband would have $1,130,445 ($2,512,100 X 45%). Since the husband is already in possession of $1,240,000, he should pay the wife an equalization money of $109,555 ($1,240,000 - $1,130,445).
112.In my view, given the circumstances of this case and on the basis of the above analyses, I believe this is a fair financial outcome. 113.There is another modest sum to be reimbursed by the husband. Initially, the wife sought the repayment of $25,607, being the student loan and the outstanding management fee she paid on behalf of the husband after their separation. As I see it, there was no reason for the wife to have claimed for the whole sum. Ms Kwong fairly conceded that the wife is claiming for half of that sum only. Half of $25,607 is $12,804. 114.Thus, the total sum that the husband is to pay the wife is $122,359 ($109,555 + $12,804). I round it down to $122,000. 115.A clean break is to be encouraged wherever possible: VP v JP [2008] EWHC 112 (Fam), [2008] 1 FLR 742, at [59]. At the same time, I do bear in mind the remarks made by Baroness Hale in Miller v Miller and McFarlane v McFarlane [2006] 2 AC 618 that too strict an adherence to equal sharing and the clean break can lead to a rapid decrease in the primary carer's standard of living and a rapid increase in the breadwinner's: [142]. 116.According to my analysis, both parties should be able to achieve financial independence. However, an 18-year marriage is undoubtedly a long one nowadays and given the modest sum available for division, I am not convinced that this case is one that a clean break should be ordered. In future, there may well be material changes in the circumstances. I consider it is fair that both parties be granted a nominal maintenance Orders 117.For the above reasons, I make the following orders:
Costs 118.Hartmann J (as he then was) mentioned in F v F (No 2) [2003] 3 HKLRD 976 at [22] that “the long-established principle that costs are determined not by dividing litigation into quantifiable subjects and figures, like a profit and loss account, but rather by way of overall impression”. 119.In terms of the awards given neither party can be considered as successful in his or her application. All in all, on any view, neither party can be regarded as the overall winner. Taking a broad-brush approach, I consider that the appropriate costs order should be no order as to costs. In coming to this decision, I have already taken the conclusion reached by me that the wife should be given 55% of the matrimonial pot (which accords with Ms Kwong’s proposal) into consideration. 120.I make an order nisi that there be no order as to costs of the ancillary relief proceedings (including all costs reserved) with counsel certificate. Section 18 Declaration 121.Lastly, I am satisfied that the arrangements made in respect of the children of the family to whom section 18 of MPPO applies for their welfare are satisfactory or are the best that can be devised in the circumstances and I accordingly make a declaration to this effect.
Ms Claris Kwong, instructed by Cheung & Co, Solicitors, appeared for the petitioner JJ also known as JJ, the respondent, appeared in person | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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