Nlsp v. Nnm
Read the full judgment text of FCMC 9187/1997 on BabelCite. This Family Court judgment was delivered on 29 April 2005 before Her Honour Judge Chu.
Matrimonial Proceedings and Property Ordinance – variation of maintenance – earning capacity – mental illness – Schizophrenia – charging order – arrears – costs – Husband applied for variation downward of maintenance payments due to psychiatric illness and reduced income – Court found Husband's earning capacity to be at least HK$15,000 per month despite illness – alleged loans from sisters likely income rather than loans – Wife's expenses exaggerated and not fully supported by evidence – variation granted to HK$3,000 per month per child and HK$1.00 per annum for Wife – arrears of HK$81,000 awarded – Charging Order adjourned sine die – no order as to costs made as neither party successful.
Legal issues: Variation of maintenance payments · Validity of alleged loans from sisters · Reasonableness of Wife's expenses · Costs
Outcome: Variation of Consent Order granted; arrears awarded; Charging Order adjourned.
Cited by 1 case · Cites 1 case
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FCMC 9187 of 1997 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 9187 OF 1997 _________________ BETWEEN
_________________ Coram : Her Honour Judge Chu in Chambers Date of Hearing : 6 – 7 January, 10 January and 15 March 2005 Date of Closing Submission of the Respondent : 29 March 2005 Date of Final Submission of the Petitioner : 29 March 2005 Date of Handing Down of Judgment : 29 April 2005 _________________ J U D G M E N T _________________ 1.There are two applications before this Court :
2.The Respondent has been granted legal aid to cover his application for variation only, and therefore his solicitor, Mr Wong, only has instructions to appear for him regarding his application for variation, and the Respondent will have to deal with the Charging Order to Show Cause himself. In the circumstances, I decided to hear his application for variation first, and in any event his variation application was issued prior to the Petitioner’s application for the charging order. 3.For convenience sake, and although the parties are now divorced, I will call the Petitioner “the Wife” and the Respondent “the Husband” hereinafter. BRIEF BACKGROUND 4.The parties were married on 6th March 1986, and there are two children of the family, the elder one, being born on 22nd November 1989, now aged 15, and the younger one, being born on 4th June 1992, now aged 12. 5.The Wife petitioned for divorce on 3rd September 1997, and a Decree Nisi was granted to her on 11th February 1998. The Decree was made Absolute on 29th August 1998. 6.On 8th July 1998, there was a consent order (“Consent Order”) providing for, inter alia, as follows :
7..The Husband complied with the periodical payments terms of the Consent Order until December 2003, the November payment was, according to the Husband, made by his sister, on his behalf. The Husband now applies for variation downward of the periodical payments terms in the Consent Order, with effect from 15th December 2003. 8.On 27th July 2004, a consent order was made in relation to certain defined access terms. During the same hearing, this Court made an interim order that the Husband shall have to pay to the Wife HK$100 per month, and HK$200 per month per child, totalling HK$500 per month, commencing from 1stt August 2004 and pending the hearing of his variation application (“Interim Order”). THE HUSBAND’S GROUNDS FOR APPLICATION 9.The Husband alleges that there have been material changes in his circumstances since the Consent Order in July 1998 and the present, namely : - (i) His psychiatric illness 10.In the Husband’s application issued on 9th February 2004, he sought, inter alia, to reduce the periodical payments for the Wife from HK$4,800 per month to HK$200 per month, and periodical payments for each child from HK$5,100 to HK$900 per month, thereby making a total of HK$2,000 per month for the Wife and the two children, instead of HK$15,000 per month. 11.However, in his Closing Submission, Mr Wong submits that the Husband could not pay a sum of more than $1,000 per month for the Children’s maintenance and seeks a reduction to this amount commencing from 15th December 2003. 12.Mr Wong submits that the arrears of maintenance should be :
THE WIFE’S PROPOSALS 13.In his Final Submission, on behalf of the Wife, Mr Hout submits that the Wife is prepared to waive the HK$4,800 monthly maintenance for herself, but says that the Husband should be ordered to pay a monthly maintenance of not less than HK$6,000 for the two children, namely $3,000 each, from 1st August 2004, plus a sum of $156,500 being arrears from 15th December 2003 todate, calculated as follows : -
(It is noted that at the opening of the trial on 6th January 2005, the Wife’s position was that although she was willing to accept $1.00 per annum for herself, the Husband should pay $5,000 per month for each child, totalling $10,000 per month, with effect from 1st August 2004). 14.Further or alternatively, Mr Hout submits that this Court should make a lump sum order against the Husband. THE LAW 15.Where the court has made an order for periodical payments, it shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended under s. 11 of the Matrimonial Proceedings and Property Ordinance (“MPPO”). 16.Further, S. 11(7) of MPPO provides that : -
17.The matters to which this court was required to have regard when making the order are set out in s. 7 of MPPO. 18.I have also been referred to the latest Judgment of the Court of Appeal, CCS and LSM, CACV 126/2004 which sets out the legal principles, and Mr. Justice Tang said in paragraph 18 :
THE ISSUES 19.The main issues here appear to be : (i) The Husband’s present earning capacity THE HUSBAND’S EARNING CAPACITY 20.The Husband has filed several affirmations, including two Form Es and a number of answers to the Wife’s Requests for Further and Better Particulars. 21.The Husband currently continues to reside in the Property together with his mother. Having paid the lump sum of HK$600,000 to the Wife to buy out her interest in the Property, under the terms of the Consent Order, the Property has been transferred into his sole name on 22nd February 2001. According to a memo dated 5th January 2005 from the Commissioner of Rating and Valuation, the valuation of the Property was HK$1.4m on a vacant possession basis. There is a discount rate of about 38% for the premium payable to the Housing Authority. Further, there is still an outstanding mortgage loan, of about $176,835.28, and the Husband has to pay HK$2,993.43 per month towards the repayment. 22.The Husband also holds 50% interest in a property in Dongguan China (“Donggaun Property”). His younger sister (“NHF”) holds the other 50%. This property was purchased in May 1996. He says that this property is now not worth much, as there is no title certificate, and the agents’ asking price is about RMB130,000. The purchase price plus decoration expenses came to about $306,844. The Husband gave a market value of about $305,926 in his affirmation of means filed in April 1998 and a then outstanding mortgage of about $98,797. The mortgage was paid off in 2000 by the Husband and NHF. The Husband explained that as the developer had failed to pay the necessary taxes to the Government, the Government has withheld the issue of the title certificate and as there is no title certificate this has affected the re-sale value. There is no sufficient evidence from the Wife to contradict what the Husband said and I would therefore accept his valuation of this property to be RMB130,000. 23.The Husband has been an insurance agent for about 14 years since 1990. He is now 43 years old. He is an agency manager with an insurance company and it is not disputed that he receives no basic salary, only commission payments. 24.The Husband was also an auxiliary policeman from about 1989/1990 but since October 2003, he has been suspended from service due to his mental illness. 25.It is not disputed that the Husband was first admitted to the Tai Po Hospital due to psychotic disorder on 23rd October 2003, and remained there until 26th November 2003, but was later re-admitted the next day, i.e. on 27th November 2003 and was hospitalized there until 19th January 2004. 26.According to a medical report dated 24th March 2004 from the Prince of Wales Hospital Psychiatric Clinic the Husband was suffering from Schizophrenia. This Court asked for an updated medical report during the earlier part of the trial and a further report dated 22nd January 2005 from the Tai Po Hospital (“Medical Report”) was subsequently produced by the Husband, which states that the Husband has been suffering from Paranoid Schizophrenia since October 2003. He has to attend follow-up treatment, at approximately intervals of 3 to 4 months and the last one he attended was on 9th March 2005. 27.Neither party has provided this Court with any explanation and effects of “Schizophrenia. According to the Oxford Concise Medical Dictionary (4th Edition) “Schizophrenia” is described as “a severe mental disorder (or group of disorders) characterized by a disintegration of the process of thinking, of contact with reality, and of emotional responsiveness. Delusions and hallucinations (especially of voices) are usual features, and the patient usually feels that his thoughts, sensations, and actions are controlled by, or shared with, others. He becomes socially withdrawn and loses energy and initiative. The main types of schizophrenia are simple, in which increasing social withdrawal and personal ineffectiveness are the major changes; hebephrenic, which starts in adolescence or young adulthood (see hebephrenia); paranoid, characterized by prominent delusions; and catatonic, with marked motor disturbances. The latter form is now rare. Schizophrenia commonly – but not inevitably – runs a progressive course. The prognosis has improved with antipsychotic drugs and with vigorous psychological and social management and rehabilitation. There are strong genetic factors in the causation, and environmental stress can precipitate illness”. 28.According to the Medical Report, the Husband’s mental state was found to be improving and was found to be settled with stable mood, with no active psychotic or depressive symptom. He has to take psychiatric medications, namely 5 mg of Haldol every night and 2 mg of Artane twice every day. In the Medical Report, the prognosis of his psychiatric problem is stated to be likely to be good provided that he takes the medication and attends the follow up treatment regularly. 29.When he was first hospitalized, the Husband says his younger sister lent him money to pay the maintenance sum of HK$15,000 to the Wife for the month of November 2003. 30.Since 15th December 2003, he says he has been unable to comply with the periodical payments provisions in the Consent Order. 31.What the Medical Report failed to address was whether the Husband’s condition has affected his ability to work or earning capacity in any way. As the Husband only left hospital on 19th January 2004, in my view the earliest time that he could return to work would be around February 2004. While he was in hospital, I note that commission statements produced by him showed that he received $8,606 for November 2003, $8,301 for December 2003, $19,400 for January 2004 and after his discharge, $11,210 for February 2004 and $11,293 for March 2004. It would appear that the commission payments were made to him without him having to undertake any active work. 32.According to the Husband, although he was earning about HK$43,497 per month at the time of the Consent Order, which was in July 1998, he started to earn much less i.e. about HK$14,000 per month from May 2002 onwards. He changed jobs in July 2000, leaving his previous employer and joining his present one, but his commissions dropped thereafter. The Husband’s explanation was that he had to change jobs together with members of his team as part of the team, and after changing, they could not bring their old clients with them, and therefore, the team members had to re establish themselves and to find new clients. The Husband’s commissions were previously paid to his company BN & Co, which later ceased business, and for the year of assessment of 2000 / 2001, the assessable profits of BN & Co were $667,801 and for 2001 / 2002, $210,756. From his previous employer’s tax return, one could see that from 1st April 2000 to 7th July 2000, he earned $130,099 i.e. about HK$43,366 per month. From 1st April 2001 to 31st March 2002 his commissions were $342,254, which was about $28,500 per month. From 1st April 2002 to 31st March 2003, his commissions were HK$168,776 i.e. about $14,000 per month. From 1st April 2003 to October 2003, his commissions were $99,832, which was about $8,300 per month. It is clear that the commission payments were dropping over the years. 33.The Husband was educated to secondary school level, and after leaving school, he has undertaken a variety of jobs, working as a waiter in restaurants, a TV station cameraman, a construction site worker, a garment worker, a taxi driver and further was a licenced Grade II worker registered with the Housing Department. The Husband, however, denies that he was working part time as a taxi driver in 2000, when put to him in cross examination. He said he was wealthiest at that time as his commissions as an insurance agent were then about $43,000 per month and there was no need for him to work as a taxi driver as well. 34.On cross examination, the Husband admitted that he had also been a sales agent for “swinging machines” a kind of exercise machine, and a sales agent for health food with Nu-Life. Regarding the “swinging machines”, he said he did not formally carry out such work, and only sold 2 or 3 machines, and that it was his family members who had been selling these machines and that he did not know the details. He claims that it was his younger sister who used his name for registration, in order to obtain a broader network. The Wife, however, alleged that he knew everything as he put the Wife’s name as his subordinate without her knowledge or consent, causing her to have to later write to the Inland Revenue Department and HTE (HK) Ltd in relation to commission allegedly received by her for selling the “swinging machines” in order to clarify that she did not carry out such work nor did she have any knowledge thereof. The Husband claimed that it was his younger sister who put the Wife’s name down as a subordinate and that the Wife knew. It also appears that the Husband acted briefly as a distribution agent for Nu-Life selling health food in 1997 but he stopped in 1998, although he said he did not receive any income and the selling was carried out by his family members. He had not disclosed his income from such sources, to the Inland Revenue, in the past. 35.On cross examination, the Husband further admitted that he had worked as a tour guide at about end of 2000, but only on a casual basis, having gone on 3 trips. He was not able to recall exactly when his last trip was but he did renew his tour guide licence immediately upon his discharge from hospital, and paid $160 for his licence fee, and his licence has been renewed until about 2006 or 2007. His income from this source was also not disclosed to the Inland Revenue. 36.Since his psychiatric illness, the Husband’s duty as an auxiliary police has been suspended. According to a letter dated 25th February 2005 from the Commissioner of Police, the Husband last reported to duty on 18th October 2003 and has been suspended since 24th October 2003, and will only be allowed to resume duty if evidence is presented confirming his recovery from the diagnosed illness. It is therefore uncertain as to whether the Husband will be able to eventually rejoin the auxiliary police. In any event, the Husband’s income from this source was only about HK$1,000 per month prior to October 2003. 37.Since the Husband joined the insurance profession in 1990, I accept that this has been his main job. He said he received about $200,000 at the time of leaving his previous employer and he also received a sum of money when joining his present employer. This was in 2000. He said these sums helped him pay the lump sum to the Wife pursuant to the Consent Order. 38.The Husband is an agency manager and heads a team of 4, one of whom is his sister NLF who joined his team in about 2001. He also works for two other insurance companies. The total income he receives, according to him, is reflected in his commission statements. It seems that the structure of the commission payment is quite complicated, depending whether it is a new policy or renewal of existing policies and also whether the policy is brought in by his other team members. As stated in the commission statement, there is also a monthly bonus and an expense allowance. 39.The Husband produced a letter dated 4th February 2005 from the Inland Revenue Department indicating that his income for 2003 / 2004 was $175,112 and therefore no salaries tax was payable. He has further produced his Commission Account Statements for December 2004 and for January 2005 indicating his commission payments for December 2004 were HK$6,708 and for January 2005 were $7,023.10. 40.The Husband further says he has obtained a security guard licence and that he might also return to work as a taxi driver, if he is unable to earn much as an insurance agent. He still holds a taxi driver licence and claims that he could earn only $7,000 per month or $8,000 per month as a taxi driver. 41.The Husband’s sister NLF was introduced by him to become an insurance agent and to be his subordinate in 2001. She was previously working in a factory. The Wife alleges that the Husband has been introducing clients to NLF, and the commission income would be transferred to NLF, who would then return such income to the Husband by way of alleged loans, as she had allegedly lent the Husband over $100,000 in loans. I will deal with these alleged loans later in this judgment. The Husband denied this, and he said had he been doing this, he would then lose his “override” income and the commissions receivable would be reduced. There is then the risk of losing his position as the agency manager. Although I find it odd that his subordinates were earning more than he did, there was no sufficient evidence to show that the Husband was diverting clients to NLF. 42.The Husband says that due to his psychiatric illness, he cannot now concentrate on work and has lost confidence in introducing insurance policies to his clients, and as his income is dependent on his commissions, his income has dropped drastically. He also blamed the economic downturn in Hong Kong for his decreased income. The Wife gave evidence that a mutual friend contacted the Husband recently concerning an insurance claim, and said the Husband did not appear to her to be suffering from any illness, and appeared to be confident and aggressive. 43.The Wife alleges that the Husband has been filing incorrect tax returns by claiming dependent parent allowance for his father and his mother, when his father did not live with him, and that his mother resides mainly with his two sisters. Much time has been spent on cross examining the Husband on this issue, and to me the main relevance is really the Husband’s credibility. 44.The Husband was observed to be calm, stable and coherent when giving evidence over two days. His evidence was, however, conflicting on a number of occasions. 45.From the letter dated 4th February 2005 from the Inland Revenue Department, the Husband’s income for 2003 / 2004 was $175,112 which averaged about $14,592 per month and for 2002 / 2003, his income was about $14,000 per month and yet he managed to continue to pay the Petitioner $15,000 per month until at least October 2003. He did not seek a downward variation until February 2004 which was after his discharge from hospital. He said he was borrowing money from his sisters to meet his maintenance payments and his expenses. I find it strange that he would rather borrow for about 2 years than applied for a reduction. For reasons set out later in this judgment, I do not accept the alleged loans from his sisters. In the circumstances, I find that before his hospitalisation, even though his main job was being an insurance agent, he must have been receiving income from other sources to meet his own expenses and to meet the maintenance payments and later in this judgment, I find his income from other sources were about $17,000 per month. However, Schizophrenia is a serious mental illness. According to the Inpatient Case Summary on 19th January 2004, the Husband had expressed to the doctor at the hospital that he had stress from work before being admitted since he needed to meet the quota of insurance. I find that the Husband’s psychiatric illness must have some effect on him mentally thus affecting his earning capacity in that I believe a patient recovering from such serious illness should not be subjected to any further mental stress. Notwithstanding this serious illness, I do not accept that the Husband’s earning capacity has been reduced to the extent as claimed by him. By all accounts, he has always been an enterprising and hard working man. He has renewed his licence as a tour guide licence and has further obtained a security guard licence. He could also work as a taxi driver or as a sales agent. Even if he has less clients from the insurance area and I accept his commissions have gone down, he could still work in these other fields, particularly when some of the commissions were payable even though no active work was carried out by him such as when he was in hospital. I therefore find that, with the economic situation and job market in Hong Kong improving from 2004 onwards, the Husband should be able to earn at least HK$15,000 per month after his discharge from February 2004, from commissions plus other sources. THE HUSBAND’S ALLEGED LOANS FROM HIS SISTERS 46.The Husband has produced large bundles of IOUs in support of alleged loans of about HK$322,000 and about HK$160,000 respectively from his sisters NHF and NLF. The Husband claimed he started to borrow on a very frequent basis from both his sisters since May 2002. He claimed he had repaid most of the loans to one of the sisters NLF. Although he alleged the loans from NLF were in cash but some were in fact credited into his HSBC saving account. The alleged repayments to NLF were from his own HSBC savings account and a joint account between him and NHF (“Joint Account”) at the Bank of China. 47.The Husband said he had repaid nothing to NHF yet, as he said it was better to repay all to one sister first, and also NHF never chased him for repayment. 48.NLF is the Husband’s subordinate at the same insurance company where he is now working. NLF was earning more than the Husband, and as indicated above, it is the Wife’s allegation that the Husband had transferred most of his clients to NLF and that these payments from NLF were in fact income of the Husband, and the loans were sham. 49.Mr Hout, on behalf of the Wife, has prepared a Summary of Alleged Loans (P2). It appears that in May 2002, when these alleged loans started, the Husband had sufficient money in his HSBC savings account. On many occasions, the Husband appeared to have made repayments to NLF a few days after allegedly borrowing from her or NHF. When the Husband was cross examined as to why these loans were needed, his replies in most cases were that he was not able to recall, or he would borrow when there was such a need, or borrow in anticipation of certain expenses, such as to pay maintenance to the Wife and thereafter, he would repay to NLF the unused balance. The Husband explained that he would make repayments to NLF because she told him she was in need of cash. Two of the alleged repayment sums to NLF were transferred from Joint Account at Bank of China. 50.The alleged loans from NHF were transferred from NHF’s own account with Bank of China to the Joint Account. When asked what was his share in the joint account, the Husband claimed that it was not specified, whoever needed to use the money would inform the other and when NHF deposited the money which he then withdrew, she would write out the IOU, and he would sign. However, for many withdrawals from the account, the Husband claimed that he did not know what they were for, and that they were made by NHF for her own use. There was no evidence produced by him that the amounts were withdrawn by NHF. 51.According to the IOUs and P2, the Husband started borrowing monies on 13th May 2002 from NHF and between this date and 7th August 2002, there were 5 “loans” totalling $85,000, and on 25th July 2002, he bought 1500 shares in Bank of China in his name. These shares were not initially disclosed in his affirmations. But it is clear if he could buy shares, then he was not really in need of any loan. 52.I must say I find that the Husband’s evidence in respect of the loans quite confusing and conflicting. 53.Neither sister was called to give evidence on behalf of the Husband and to explain these “alleged loans”. 54.During the period of 19 months between 13th May 2002 until 11th November 2003, when the Husband was hospitalised, a total of about HK$322,000 was “allegedly” lent by NHF to the Husband and most, if not all, were transferred from NHF’s account at BOC to the Joint Account and then the transfers abruptly stopped at about the time the Husband was in hospital. NHF appears to be a housewife and that her husband a Drainage Department worker and they have two children to support. The Husband said the NHF had previously worked as a part time domestic helper. And yet, NHF had lent him HK$322,000 and not even asked for repayment, whereas, on the contrary, NLF, who is working under the Husband had to be repaid first. Two cheques, each for $15,000, one withdrawn on 14th April 2003 and one withdrawn on 11th November 2003 from the Joint Account were for the payment of maintenance to the Wife. I do not find that there has been sufficient evidence that these transfers from NHF were indeed loans and I believe that more likely than not they should be the Husband’s income from other sources. As submitted by Mr Hout and I find that the funds in the Joint Account belonged to the Husband and this would mean that the Husband had received on average of about $17,000 per month over the 19 month period, from other unknown sources. 55.So far as the alleged loans from NLF are concerned, there were a total of $160,329 transferred by NLF to the husband and a total of $128,440 transferred from the Husband to NLF. Up until the end of 2003 when the Husband was hospitalised, a total of $104,329 was transferred from NLF to the Husband and a total of $56,440 was transferred from the Husband to NLF. After the Husband’s hospitalisation until 7th December 2004, amounts totalling $56,000 were transferred from NLF to the Husband and amounts totalling of $92,000 was transferred from the Husband to NLF, out of which the Husband said $20,000 was to repay NLF as she needed cash for the Chinese New Year, $12,000 was because NLF needed cash after her medical examination and $35,000 was to NLF as she required cash for an operation and the Husband sold his MTR shares and BOC shares to raise the money. The Husband further allegedly “repaid” NLF $25,000 on 19th October 2004 which he borrowed from DBS. After the Husband was ill, and his income, according to him being greatly reduced, he managed to transfer to NLF more amounts then before he was ill and yet he claimed he was not able to pay any maintenance for the Wife and the children. Having considered his evidence, although there is no sufficient evidence to indicate what these transfers from NLF were related to, I do not accept that they were loans from NLF or the transfers from the Husband to NLF were repayments from the Husband. In any event, according to the Husband, most of these alleged loans were repaid, leaving a balance of $31,889 only. THE WIFE’S AND THE CHILDREN’S CURRENT SITUATION, ALLEGED LOANS AND EXPENSES 56.Since the parties’ divorce in 1998, the Wife has been living with the two children. She received the lump sum of $600,000 by instalments over 2 years and monthly maintenance of about $15,000, under the Consent Order, until December 2003, the last payment being for November 2003. 57.The Wife’s present income is about $15,000 per month. 58.The Wife claimed that since the divorce, she had been having difficulties in making ends meet, even with the maintenance and her own income. Over the years, the Wife claimed that she had to incur considerable sums in buying furniture and household and electrical appliances as she had to move out of the Property and there were a number of moves. On top of all this, she had to pay her legal fees, in addition to a loss of $100,000 in foreign exchange investment in 1999 and 2000. 59.The Wife claims that she now has no assets, and her alleged debts of $317,000 in July 2004 had gone up to about $358,485 in December 2004. 60.The Wife should have received a total sum of approximately HK$975,000 between 8th July 1998 (date of Consent Order) and 15th July 2000 (date of last instalment of HK$600,000 lump sum), namely monthly maintenance of $15,000 from July 1998 to July 2000, a total of 25 months, totalling $375,000 plus the lump sum of $600,000. 61.The Wife’s average income in May 1998 was about HK$8,880 and from July 1998 she started to receive the maintenance $15,000 per month, making a total of $23,880 per month. Even assuming her expenses were higher then and were about $30,000 per month, her deficit by July 2000 would be about HK$153,000. 62.The Wife claimed that she lost a total of $100,000 in foreign exchange investments made through a Mr Shi, her sister’s boyfriend. 63.The Husband’s solicitor Mr Wong, submits that assuming there was a deficit of HK$153,000 and assuming the loss of $100,000 is true there should still be a sum of about $722,000 left. 64.The Wife’s income from 1st April 2003 to 18th November 2003 was $105,192, as indicated in her employer’s return for 2003 / 2004, and this averaged about HK$12,375.50 per month. By March 2004, which was 3 1/2 month after the Husband stopped paying maintenance, her liabilities had increased to HK$270,000 including debts owing to various financial institutions and alleged loans from her elder sister. She claimed in July 2004 that she had to repay $9,373 per month towards her outstanding debt. 65.The Wife now says she is prepared to accept $6,000 per month for the children and is prepared to waive the monthly maintenance for herself. She will then have to maintain herself and the children on about $21,000 per month, notwithstanding that in December 2004 she claimed her general and personal expenses were about $23,400 per month and another $16,214 for the children, totalling $39,630 per month. She said she has since stopped paying the $5,000 child minding fee and $4,000 private tuition fees for the children, thereby reducing the children’s expenses to about $7,214 per month. 66.So far as the Wife’s alleged loans are concerned, she says she started incurring debts as early as 1994, before the divorce, as the monthly maintenance then paid by the Husband was not sufficient. She said under cross-examination, she had already owed $20,000 in debts in 1994. She claimed she was withdrawing cash with her credit cards and the amount of credit card liabilities built up and she used the lump sum to repay these debts and also purchase of household items when she and the children moved out. However, in her affirmation filed in 1998, she stated she only owed $20,000 in credit card debts. Later, on cross examination she admitted to the loss of $100,000 in foreign exchange investments. She said she then again incurred credit card debts and in April 2003 HSBC asked her to repay all outstanding balance of her HSBC credit card and she had to borrow $7,970 from her elder sister, to repay HSBC and later had to borrow a further $150,000 from her elder sister to pay off all her other credit cards and loans. In October 2003, when the Husband’s younger sister told her that the Husband could no longer afford to pay the monthly sum of $15,000, she then withdrew cash from her credit cards and later in December 2003, she borrowed another loan from AEON Credit in the sum of $25,000. 67.The Wife had purchased a flat in Guangzhou in 1993 before the divorce, together with her two sisters. She claimed that in 1994 as she could no longer afford her share of the mortgage repayments and she asked her elder sister to take up her share and claims she does not have any interest therein anymore. 68.The Husband paid the Wife the last instalment of $400,000 in 2000 and by March 2004, she claimed she had spent it all and further owed debts of $270,000. The Wife claimed she owed her elder sister about $180,000, including $30,000 alleged interest in May 2003 and the rest were loans from AEON Credit, Standard Chartered Bank, Hang Seng Bank and Industrial and Commercial Bank. She said she was required to repay a monthly sum of HK$14,000 towards these debts. By December 2004, she allegedly still owed her sister $163,769 and by December 2004, she owed AEON and DBS Bank a total of $47,000 and credit card companies $147,080. 69.The Wife’s elder sister did not file any affirmation in support of the alleged debt to her. 70.For all the credit card liabilities, the Wife says she has been paying off the minimum payment each month. 71.It would appear that if the Wife were to be believed, her expenses just before February 2004 were almost $40,000 per month, if one adds up her income plus the maintenance payments plus the credit card liabilities. Prior to February 2004, the Wife and the children were living in a rented flat of about 800 sq ft, and of rent of $8,000 per month. After deducting the rent of $8,000, her expenses, including the children’s, would then be about $32,000 per month. 72.The lease of the 800 sq ft flat was for 2 years from 5th October 2002 to 14th October 2004. After the maintenance payments stopped, the Wife negotiated for an early surrender of the lease and she and the children have since moved to a smaller flat of 400 to 500 sq ft, of rental of $4,200 per month. 73.In the Wife’s affirmation of 6th March 2004, the expenses of her and the children were then stated to be about $37,170 per month, excluding the rent of $4,200. 74.In the Wife’s affirmation of 8th July 2004, she said some of the items in her earlier March 2004 affirmation were inaccurate, and she then gave a figure of a total of $43,819 for the expenses for herself and the children, and excluding the rent of $4,200, their living expenses would come to about $39,679, which was even higher than the figures given in March 2004. 75.In the Wife’s affirmation of 22nd December 2004, she gave yet another figure, namely a total of $39,630 for their expenses, and after excluding the rent of $4,200, the total for their expenses would be about $35,430 per month. 76.It therefore appears from the above figures provided by the Wife in her various affirmations that the expenses of herself and children, excluding rent, went up after the maintenance payments stopped, namely from about $32,000 per month just before February 2004, to $39,679 per month in July 2004 and $35,430 per month in December 2004, notwithstanding her move to a much cheaper flat, and particularly when in Hong Kong there was a dramatic economy downturn between 2000 to about end of 2003. 77.The Wife gave evidence that she had moved several times since she and the children moved out of the former matrimonial home : (i) firstly to a 400 sq ft flat of rental $6,500 per month, where there were no furniture / appliances. 78.The Wife claimed that when she first moved out, she needed to spend money on the payment of the rental deposit, on buying furniture, a television, washing machine, electrical appliances, and had used an overdraft for the moving expenses, which she had to pay back after she received part of the lump sum. She said the first instalment of the lump sum of $50,000 was subject to the legal aid first charge for legal costs incurred by her. The 2nd instalment of $50,000 which she received in January 1999 had to be repaid to her younger sister, for private tuition fees for the children, which her younger sister lent her before they moved out of the former matrimonial home. She also said she had borrowed about $20,000 to $25,000 from her uncle at the time of the purchase of the former matrimonial home and that she had to repay him when she received the lump sum. However, according to her affirmations of means filed in May 1998, the loan of $23,000 from her uncle had already been repaid then. Further she claimed she had lost $100,000 on foreign currencies. As to the remaining balance of the lump sum, she said she had used the funds to subsidize the household expenses. 79.In any event, according to the Wife, by April 2003, the entire $600,000 was gone, and in addition, as above mentioned, she said she had incurred credit card debts for which she had to borrow money from her elder sister, first a sum of $7,970 borrowed in about April 2003 and then a sum of $150,000 on 9th May 2003 in order to clear off all her then outstanding debts and credit cards. Copies of cheques written by her elder sister in favour of the credit card companies and transfer slips were produced by the Wife. Since then, the Wife said when she was told in November 2003 that the Husband would stop the maintenance, she took out another loan from AEON Credit in the sum of $25,000, and further borrowed $15,000 from her elder sister for legal costs and $8,000 for her living expenses. 80.I find the Wife’s explanation of the spending of the entire $600,000 rather vague and not convincing. She would not need to spend too much on furniture and furnishing a flat of 400 sq ft where she first moved to, or even later to the 800 sq ft flat. There was no sufficient evidence provided by her in support of her alleged expenditure. There was also no sufficient evidence to support the alleged repayment of debts to her younger sister or to her uncle. In any event, if the Wife had chosen to spend unwisely or fritter away her assets, she had herself to blame if she is now left without savings. Between July 1998 to March 2004, the $600,000 allegedly spent plus $270,000 in debts, the Wife in effect was saying she spent $870,000 in about 5 1/2 years. I accept there was a charge by Legal Aid out of the first $50,000 she received out of the lump sum. She would need to spend some money on moving expenses and even assuming she did lose $100,000 on foreign currencies and her using some money on living expenses and legal costs, I cannot accept all these would amount to $870,000. 81.Regarding the loans from her sister in April 2003, again I do not accept she needed to borrow any money from her sister as there was no evidence as to how she managed to incur such large credit card debts. 82.So far as the Wife’s expenses are concerned, she did not seek any increase upward in the maintenance payments before October 2003. I am of the view that the alleged expenses of about $40,000 per month allegedly before February 2004 were exaggerated. As she did not seek any increase in the maintenance payment, I find her able to maintain herself and the children out of a total sum of $30,000, being her own income plus the maintenance. In any event, since then, the rent has been reduced to $4,200 per month, i.e. by $3,800 per month, and now, by her own account, the alleged payments to the mother of $5,000 per month for child minding fees have ceased, and also the private tuition fees of $4,000 per month have also ceased, thus the total expenses should have by now been greatly reduced to about $17,200 per month. Even if one allows some of the private tuition fees, a reasonable amount for the expenses of the Wife and the children, including rent should be about $20,000 per month. S.7 FACTORS 83.I now turn to consider the s 7 factors. INCOME EARNING CAPACITY, PROPERTY AND OTHER FINANCIAL RESOURCES WHICH EACH PARTY HAS OR IS LIKELY TO HAVE IN THE FORESEEABLE FUTURE 84.I have already considered the Husband’s earning capacity and that I am of the view that that he should be able to earn about $15,000 per month. The Wife is now earning $15,000 per month. 85.The Wife said her employer has established an office in Shanghai, and some staff has been moved there, as the company intends to move to Shanghai eventually and close their Hong Kong office. She is concerned that she may lose her job. This has not happened yet. 86.In December 2004, the Husband said his assets were approximately : -
87.I have considered the Husband’s liabilities, and as indicated above I do not accept that the payments from his two sisters were loans. The credit card liabilities are minimal. The only liabilities are the two personal loans to DBS, totalling $45,000. 88.In December 2004 the Wife’s assets were approximately : -
89.I have also considered the Wife’s alleged loans, and I do not consider she needed to borrow any money from her sister. In any event in December 2004, the Wife still had about $18,000 in her own account with Hang Seng Bank. The loans from AEON and DBS come to about $47,000 and her credit card loans were $147,080, totalling $194,080. 90.It is clear that the Husband’s capital position is much better than the Wife’s but I have already said that I do not accept the Wife could have spent all her money. PARTIES’ FINANCIAL NEEDS, OBLIGATIONS AND RESPONSIBILITIES AT PRESENT OR IN THE FUTURE 91.In his Form E in December 2004, the Husband claimed his monthly expenses were $10,900, including the mortgage payment of $2,993.43 per month. He was cross-examined on his expenses. I am of the view a sum of $700 per month would be reasonable for his utilities; a reasonable sum for the expenses for food and meals out of home would be a total of $2,400 per month; the transport expenses can be reduced to about $600 per month; a total of $350 per month should be reasonable for clothings / shoes and personal grooming. The insurance premia has been reduced to $500 per month as some policies have been cancelled. All in all, I think a reasonable sum for his living expenses would be $6,000 per month and including the mortgage repayments, a total of about $9,000 per month. 92.So far as the expenses of the Wife and the children are concerned, I have indicated that $20,000 per month should be a reasonable sum. STANDARD OF LIVING ENJOYED BY THE FAMILY BEFORE THE BREAKDOWN OF THE MARRIAGE 93.There was not much evidence on this aspect but the parties were living in self owned accommodation before the divorce and seemed to lead a fairly comfortable lifestyle. Unfortunately, the lifestyle will now have to be reduced in light of the circumstances. AGE OF PARTIES AND DURATION OF THE MARRIAGE 94.The Wife was born on 12th April 1964, and she is now 41. The Husband was born on 13th May 1961 and will soon be 44. 95.The parties were married on 6th March 1986 and the Wife petitioned for a divorce in September 1997. Their marital relationship was about 11 years, which was of medium length. The Decree Nisi was granted and was made absolute on 4th August 1998. PHYSICAL AND MENTAL HEALTH OF THE PARTIES 96.The Wife claims she is suffering from gout and thyroid problems and she has to consult Chinese herbalists. She also claims to be suffering from mental stress because of the litigation. There is no medical report as to her condition. 97.The Husband, as mentioned above, is still attending follow up treatment and taking medication for his mental illness. CONTRIBUTIONS TOWARDS THE WELFARE OF THE FAMILY 98.There was no evidence on this aspect but I assume that the Wife’s contribution as a mother and wife would be equal to that if the Husband’s in this marriage. LOSS OF ANY BENEFIT 99.There was no evidence on any loss except each has a pension, the Husband’s being higher than that of the Wife’s. CHILDREN 100.The children are now 15 and 12. There is no evidence that they are not in good health. They are attending Primary 6 and Primary 4 respectively. COMPARISON 101.I set out a comparison table at relevant times as follows : -
CONCLUSION 102.Having taken into account the Husband’s mental illness, and the earning capacity I find he has and the children’s reasonable needs and all the circumstances of this case, I am of the view that the Husband should be able to pay the Wife HK$3,000 per month for the maintenance of each child, totalling $6,000 per month. 103.As the Husband was hospitalised in October 2003 and last paid maintenance in November 2003, I will allow the reduction to take effect from 15th December 2003. The arrears are thus :
104.There was already a lump sum order in the Consent Order and save for my order for repayment of the arrears, I will not make any other lump sum order. ORDER 105.My Order is therefore : -
COSTS 106.In this case, the Husband’s opening position was that he would pay only $1,000 per month as from 15th December 2003 and the Wife’s opening position was that he should pay $10,000 per month, and only in her final submissions, she proposed $6,000 per month, as from 1st August 2004. In my view, neither can be said to be a successful party. I would therefore make an order nisi that there be no order as to costs, in relation to the Husband’s application for variation, including all costs reserved. 107.In Mr. Hout’s Final Submissions, he has asked this Court to make an order for costs against the Husband in relation to the part of his application relating to access. The Husband did not pursue this part of his application, after reading the social investigation report. It is accepted practice not to make any orders for costs in relation to matters concerning children unless one party has been unreasonable in his conduct of the litigation. I cannot say that the Husband has been unreasonable in relation to his access application, and therefore, I would also make no order as to costs in relation to this application, including all costs reserved. 108.Both the above costs orders are orders nisi, and, in absence of any application for costs by either party, the costs orders will be final after 21 days. 109.The Wife’s own costs will be taxed in accordance with the Legal Aid Ordinance. CHARGING ORDER TO SHOW CAUSE 110.In relation to the Charging Order to Show Cause, the amount will now have to be amended in view of my above order in relation to arrears, and that the Husband has been given two months to pay. I will therefore order that the Charging Order to Show Cause to be adjourned sine die with liberty to restore after two months. Upon full payment by the Husband, the Charging Order Nisi should be discharged.
Mr Hout of Messrs Rene Hout & Co for Petitioner Mr Wong of Messrs Hobson & Ma for Respondent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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