L v. P

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

SUIT NO. 15310 OF 2003

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BETWEEN 

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Coram : H.H. Judge Bruno Chan in Chambers

Date of Hearing :  12, 13 September, 4 November & 20 December 2005

Date of Judgment :  4 January 2006

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J U D G M E N T

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1.This is the Respondent Wife’s application for ancillary relief against the Petitioner Husband upon the dissolution of their marriage of more than 23 years.

2.The parties were married on 25^th April 1980 in Hong Kong.  The Husband was then 25 years old while the Wife was 21.  He was, and still is, a police constable, while she was then a clerk.

3.After the marriage the parties continued with their job and initially resided in the police quarter provided by the Husband’s employer, later moving into private housing at South Horizons, Hong Kong until 2000 when the Husband purchased a 650 sq.ft. flat at Tung Yuk Court,  Oi Yin Street, Hong Kong (“The Former Matrimonial Home”) in joint name with the Wife under the Home Ownership Scheme with the aid of a housing allowance from his employer.

4.There is one child of the marriage, a son born on 8^th January 1983.  He has since the age of 9 been studying in United Kingdom on the overseas education allowance provided by the Government under the terms of the Husband’s employment until the age of 19 when such allowance ceased.  He is now 22 and in his final year in a university in United Kingdom, expecting to graduate with a bachelor degree in June this year.

5.In about 2000 the Wife lost her job and thereafter had difficulties finding and holding down another job, which caused her emotional stress and some marital discord started to appear between the parties.  Matters finally came to head in late 2002 when the parties had a heated dispute over the Wife’s use of the family’s funds for purchasing certain health supplement products and reselling them for profits, resulting in her moving out of the matrimonial home without leaving behind any means of contact.

6.On 17^th December 2004 the Husband petitioned for divorce in these proceedings on the ground of the Wife’s desertion and that he had no idea of her whereabouts and subsequently obtained an order for substituted service of the divorce papers on the Wife by means of an advertisement on a newspaper.

7.Apparently the Wife was able to receive notice of the Husband’s divorce proceedings and in August 2004 returned a Form 4 to Court to indicate her intention to seek ancillary relief.  The decree nisi of divorce was granted to the Husband on 27^th August 2004 which has since been made absolute.  The Wife has obtained legal aid in her application for ancillary relief while the Husband has all along represented himself.

8.According to the Wife, after she left the matrimonial home, she tried to make a living selling health supplement products which turned out to be unsuccessful, so she lived on the $25,000 which she took when she left until the money ran out in late 2003, she then cashed in her insurance policy of about $20,000, and when that ran out too, she began to withdrew $4,000 per month from the parties’ joint bank account for her living expenses for several month, until she was granted social securities by the Social Welfare Department in May 2004 at the rate of about $4,000 per month, which has been reduced to about $2,900 since January 2005 when the Husband agreed to pay her $2,000 per month by way of interim maintenance upon which she has been relying for her living expenses because she claims to have been unable to find any job.

9.One of the main reasons for this, she says, is that apart from suffering from depression as a result of the breakdown of the marriage, for which she has been receiving counselling, she was diagnosed in May 2004 to have contracted tuberculosis for which she was hospitalised for about 2 weeks and has recently completed the medical treatment for TB.  The medical reports produced by her however show that she has also suffered from hepatitis, rash, and various orthopaedic and haematological problems, most of which the result of her tuberculosis condition, and for which she is still on medication.

10.She is now 46 and lives by herself in a very small rented premises the monthly rental of which at $1,500 is paid for with her social securities.  As set out in her Financial Statement, the rest of her expenses such as food and utilities have all been kept within the basic minimum.

11.The Husband at one time suspected that she was in fact working last year as a Human Resources Manager for the Shun Tak Group of Companies, but upon being confronted with documentary evidence to the contrary provided by the Wife, he accepted that it was a case of mistaken identity of someone who happened to have the same name of the Wife.  He also claims to have heard from third parties that the Wife is now working in some company that offers services in assisting local students to study overseas, something which he thinks she was good at when she arranged for their son to study in United Kingdom many years ago.  Although this seems to be hearsay the Wife did admit in her evidence that she had done so in the past but mainly on part time basis and was not making much money out of it.  While there is no evidence to indicate that the Wife is now earning, and with her present health and mental condition, I do not expect her to be able to return to full time work so soon after the divorce, she does have earning capacity and appears to be a capable person, and hopefully will in due course return to work upon the improvement of her health.  In the meantime she asks for a monthly maintenance at the rate of $13,000 from the Husband to meet her living expenses including the rent for a decent flat comparable with the former matrimonial home which she estimates at around $7,000 – $8,000 per month, plus a lump sum representing her half interest in the former matrimonial home for which she is willing to transfer into the Husband’s sole name, and a further lump sum being half of his commuted pension when he retires.

12.The Husband has continued to live in the former matrimonial home since the divorce.  He is now 50 and is said to be retiring from civil service in 5 years’ time.  His present average monthly income including housing allowance amounts to about $25,000.  There is also a sum of about $1,000 being payment received by him as the chairman of the incorporated owners committee of the building in which the matrimonial home is located, but he claims that this payment would normally be spent on the meetings and other sundries expenses of the committee and hence does not benefit him personally at all.

13.In his Financial Statement filed 13^th October 2004, the Husband put his total monthly expenditure at more than $33,000, some $8,000 in excess of his stated income.  The major items of his expenses were then the mortgage instalment of the matrimonial home at $14,836.56 for a term up to 2014, and the son’s expenses in United Kingdom of more than $6,400 average per month.  In his oral evidence, the Husband updated his mortgage payment to more than $16,000 per month due to the several increments in interest rate the past year or so, but he admits that as the son will be graduating in June 2006, barring any possibility of going on to graduate school, his burden for his expenses in United Kingdom will be gradually reduced and eventually discharged.  His other expenses appear to be normal and were not seriously challenged by the Wife.

14.She does, however, challenge his allegation that he has to pay for all his household expenses by himself as she believes that he is cohabiting with his girlfriend who works as a teacher and should therefore be sharing his expenses.  It is in fact only under cross-examination that the Husband admitted that he has since the divorce married his girlfriend who is also known to the Wife, that she earns more than $20,000 per month as a primary school teacher, although he claims not to know exactly how much it is, and that she has not been contributing any fixed or regular amount towards their household expenses other than some occasional payments for food or utilities charges of his household, as she is required to support her parents, of which there is absolutely no evidence or information save for his bare assertion.

15.Mr Clancy for the Wife has produced a copy of the master pay scale of civil servants and argues that his present wife, who has been a school teacher for more than 14 years, should be earning more than $36,000 per month according to the pay scale, to which the Husband says he cannot agree as he simply does not know how much she earns as he has not found it necessary to ask her.

16.While I cannot say that the civil servants pay scale must necessarily apply to the case of the Husband’s present wife, I find his reluctance to disclose anything about her income suspicious, and I agree with Mr Clancy that his present wife must have been sharing his household expenses or providing financial assistance to enable him to meet his monthly deficits, and if she has not, she should, thereby reducing his financial burden and freeing up part of his monthly income to meet the Wife’s claims.  This also explains, in my view, about his savings account with the Police Credit (Cooperative) Union Savings Plan into which he has been able to put $6,000 per month, the details of which however he has been vague in his evidence.

17.There is no dispute that the Husband will retire in 5 years, at which time his income will be reduced to a monthly pension of only about $15,000 – $16,000, which he says is not even sufficient to meet his present mortgage payments, and which is why he says he will not consider commuting part of his pension to any lump sum as he needs his entire monthly pension to meet his expenses.  In the meantime, however, with the son completing his university education in June, thereby releasing his further financial obligation towards him, and with his present wife sharing his household expenses, I believe the Husband can afford to pay a lot more than the monthly sum of $2,000 which he has offered for the Wife, but before deciding on how much it should be, I need to consider one more item of the Husband’s future expenses.

18.The Husband has agreed to pay the Wife a lump sum representing her half share in the matrimonial home in return for her transfer thereof into his sole name.  It is common ground that such lump sum shall be calculated on the basis of 50% of the net value of the property being the agreed market value of $2,010,000 less the outstanding mortgage, giving a net value of $661,961.12 and 50% thereof gives a figure of $330,980.56 which I would round down to $325,000 after taking into account of the other relevant costs and expenses of the transfer.

19.To come up with this sum, however, the Husband claims that he will have to raise a new mortgage on the matrimonial home for which his mortgage instalment will increase significantly, possibly to around $20,000 per month, if not more.  This would of course bring his then total monthly expenses to more than $28,000, with household expenses at about $23,000, and personal expenses at about $5,000.  As I have observed before, his present wife who is sharing his household is financially well capable of contributing equally towards his such household expenses, which would then put the Husband’s own share of his total expenses at about $17,000 per month, thereby leaving $8,000 to spare from his monthly income to meet the Wife’s reasonable needs.

20.To the Wife this sum of course may not be sufficient to meet her needs, but it is, in my view, all the Husband can afford under the circumstances and given the fact that she will also receive a lump sum of $325,000 from him and my belief that she will eventually return to gainful employment, something which she had done throughout most of the marriage, and which I think she is well capable of upon the improvement of her physical and mental health, which she must do not just for her own sake but also of the reality that whatever maintenance she is getting from the Husband as a result of these proceedings, there will come a time when it will no longer be available when he retires.

21.Mr Clancy has argued for the Wife that she is entitled to the same style of living as she enjoyed immediately prior to the divorce, which included the enjoyment of the comfortable former matrimonial home, overseas holidays and nice spending on clothing, and hence upon the divorce, she should be compensated financially to acquire the same standard of accommodation which the Husband is able to enjoy.

22.This is persuasive argument but for the fact that prior to the divorce, the parties were able to maintain such standard of living under one household because both of them were then gainfully employed.  Now that there are 2 households to support but with only the Husband earning, the reality is that the parties can no longer afford to maintain the same standard of living as in the past.  I do not agree that the Wife needs a 650 sq. ft. flat for herself, which she cannot afford in her present unemployed situation, but with monthly maintenance of $8,000 and the lump sum from the Husband, she should have no difficulty renting a decent and comfortable home for herself within the budget.

23.The Wife also claims half of whatever lump sum pension that the Husband may receive when he retires.  Although the Husband has in his evidence indicated that he has no intention of commuting any part of his pension into a lump sum, something which is entirely his prerogative under the terms of his employment with the government and not within my power to interfere, it is however possible that he many change his mind in future and decide to opt for a lump sum pension, and if that happens, I agree that the Wife should also be entitled to a half share thereof, as I have found that she has properly discharged her duty as a wife and a mother in this lengthly 23 years marriage, and that had it not ended in a divorce, she would have been able to share and enjoy the Husband’s pension when he retires.  This is in fact accepted by the Husband at the trial, and I should also add that he has equally discharged his duty as a husband and father throughout the marriage and in fact beyond that by seeing his son completing his university education.

24.It has also been submitted on behalf of the Wife that if the Husband decides not to commute any part of his pension upon retirement, he should now pay the Wife a bigger lump sum than her half share in the matrimonial home by way of compensation by taking out a further mortgage on the property.  However there is no evidence as to how much more the Husband would be able to raise than the Wife’s half interest in the property, or whether he can then afford with the new mortgage repayments.  There is also the possibility, albeit remote, that he may not receive his pension after all, in which case it would not be fair to order him now to pay the Wife her share of something which he may not receive.  The proper order as to the Wife’s claim against the Husband’s future lump sum pension should be, in line with the established authorities, for the Husband to pay the Wife a lump sum equivalent to 50% of his commuted lump sum pension only when he retires and receives the same.

25.Having considered all the relevant factors and circumstances of this case, I have come to the conclusion that the above financial arrangements are both fair and reasonable for the parties and are which the Husband can afford.  He may feel that such arrangements will leave him in a very tight budget without much provision for any savings, but as I have already observed, his financial burden towards his son will be discharged soon, if not already so, and with the support of his new wife, financially and otherwise, and with his present job and the former matrimonial home, I believe he is financially secured.  As for the Wife, she will continue to receive financial support from the Husband by way of periodical payment which can be adjusted in future by the Court if and when necessary, and with the lump sum from the Husband now and a possible further lump sum in future, and with her own earning capacity, the Wife will equally be financially secured.  Finally there was this matter about the Wife’s personal belongings which she would like to retrieve from the matrimonial home but which I now understand have been resolved between the parties.  My order is therefore as follows : -

1.   The Petitioner shall pay the Respondent periodical payment at the rate of $8,000 per month commencing 1^st February 2006 and thereafter on the 1^st day of each month until she dies or remarries or until further order;

2.   The Petitioner shall within 3 months pay the Respondent a lump sum of $325,000 whereupon the Respondent shall transfer all her share and interest in the former matrimonial home to the Petitioner absolutely;

3.   Upon the Petitioner retirement from civil service and receipt of a lump sum pension, he shall pay a further lump sum equivalent to 50% of such lump sum pension to the Respondent if she is still alive;

4.   On the question of costs, I shall reserve it at the parties’ request for argument.

The Petitioner acting in person.

Messrs Ho, Tse Wai & Partners for the Respondent.