Lyp v. Ysy
Read the full judgment text of FCMC 403/1995 on BabelCite. This Family Court judgment before Her Honour Judge Chu.
Matrimonial Causes – Variation of Maintenance Order – Matrimonial Proceedings and Property Ordinance s.7 and s.11 – Earning Capacity – Financial Needs – Children’s Maintenance – Petitioner LYP vs Respondent YSY – Court varied interim maintenance order – Respondent’s earning capacity found to be at least HK$12,000 per month – Petitioner’s earning capacity accepted at HK$5,000 per month – Nominal maintenance for Petitioner maintained – Children’s maintenance set at HK$3,000 per month each from November 2004 – Costs reserved
Legal issues: Variation of Maintenance Order · Respondent's Earning Capacity · Petitioner's Maintenance
Outcome: Variation of maintenance order granted. Respondent to pay nominal maintenance to Petitioner and periodical payments for children.
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FCMC 403 of 1995 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 403 OF 1995 _________________ BETWEEN
_________________ Coram : Her Honour Judge Chu in Chambers Date of Hearing : 20th September 2005 and 28th November 2005 Date of Handing Down of Judgment : 4th January 2006 _________________ J U D G M E N T _________________ INTRODUCTION 1.This is an application by the Petitioner (W) against the Respondent (H) for periodical payments for the children of the family. Although they have been divorced for some time, I shall refer them as W and H in this Judgment. 2.The parties were married on 24th July 1987, and there are two children of the family, a son, now 17 years old, and a daughter, now 16 years old. 3.W petitioned for divorce on 16th January 1995, based on the fact that she and H had lived apart since February 1992, and a Decree Nisi of divorce was granted to W on 6th July 1995, with custody of the children being granted to H, and reasonable access being granted to W. There was also a nominal maintenance order for W. The Decree was made absolute on 18th August 1995. During this ancillary relief trial, it transpired that the parties had not in fact been living apart since February 1992. The parties gave different reasons as to why they both agreed to go through the formalities of a divorce in 1995. 4.Whatever the reasons, it is now clear that H and W did not live apart in February 1992, and they continued their husband and wife relationship, notwithstanding the formalities of the divorce, and their relationship only broke down around the middle of June 2001. According to W, in June 2001, H told her that he had a girlfriend in mainland China, and the parties had a quarrel, as a result of which W told H to leave, which he did. 5.After H moved out of the former matrimonial home, it would appear that the children were placed under the care of W’s friend or as H said, his sister, for a period of time until January 2002. 6.In December 2001, W sold the former matrimonial home, which was registered in her name. 7.On about 12th January 2002, the children moved to live with W, and since then they have been under the care of W. In February 2002, W was granted Comprehensive Social Security Assistance (CSSA) for herself and the children. 8.On 4th June 2002, W applied for a variation of the custody order made in July 1995, and she also applied for maintenance for herself and the children. On 24th January 2003, an order was made by consent granting W custody of the children. Technically, W is now in fact seeking a variation of the previous nominal maintenance order made on 6th July 1995, in respect of the maintenance for herself. 9.On 27th October 2004, an order was made by this court whereby H was to pay HK$3,750 per month for the interim maintenance of each of the children, totalling HK$7,500 per month, as from 1st November 2004. 10.H failed to comply with the interim maintenance order, as a result of which W issued a Judgment Summons in April 2005 to enforce the arrears. 11.In August 2005, I ordered that W’s Judgment Summons to be adjourned to be heard after W’s application for ancillary relief has been determined. In September 2005, H issued a summons to vary the interim maintenance order. These are the two matters which are now before me. THE LAW 12.The matters which I will need to have regard to in W’s application for ancillary relief are set out in s. 7 of the Matrimonial Proceedings and Property Ordinance (MPPO), which is as follows :
13.The power by this court to vary an order in relation to periodical payments is set out in s 11 of the MPPO. The relevant subparagraphs (1) and (7) are set out hereafter : -
S. 7 MATTERS 14.I now turn to consider the s. 7 matter. For the avoidance of doubt, insofar as the matters set out in this judgment differ from the evidence of H or W, this is because I have preferred the evidence of the other party, as I have been able to observe the demeanour of the parties when they gave evidence during the trial, or because I consider that the documents produced confirm my finding of fact. (a) INCOME, EARNING CAPACITY, PROPERTY AND OTHER FINANCIAL RESOURCES OF THE PARTIES (i) W’s Income / Earning Capacity 15.Since February 2002, W and the children have been dependent on CSSA, and the amount received in November 2005 was HK$11,093. 16.W came to Hong Kong from China in 1979 when she was about 14 years old. She finished primary 4 in China, and after she arrived in Hong Kong, she worked in a garment factory for a short period of time, and thereafter, she helped out in her maiden family’s textile shop, which was owned by her father, by doing simple routine work such as sweeping the floor. She was helping out in her father’s shop until she married H. 17.During the marriage, W had helped H in his businesses, by carrying out some duties, such as answering the telephone, and faxing documents for H. It appeared that during the marriage, there were two businesses, one which I shall call FHC which is in the textile field, and one which I shall call STC, a transportation company. Both these businesses were apparently registered in W’s name, at the request of H. 18.W said she had been suffering from depression and had attended Yau Ma Tei Psychiatric Clinic for consultation since 2001. On 23rd September 2005, she was transferred to South Kwai Chung Psychiatric Centre, and a Dr. Pao there issued a medical report to the effect that W’s depression was in remission, and that she is “suitable and capable to work”, and in fact, the doctor was of the view that work would further stabilize her mental state, as it would give a structure to her daily routine. 19.H’s counsel, Ms Lee, suggested to W during cross examination that she could work, and in answer hereto, W said she believed that she could work, but she was not sure as to what she could do. 20.W has not been employed during the marriage, and she has limited education, with no formal qualifications or experience. However, as the children are almost both grown up, I am of the view that W should try and find some work. During the marriage, W had helped H in his businesses. In her affirmation filed in January 2003, W had said that she had kept the business accounts for H for many years until they separated in June 2001. Taking into account all the circumstances, I am of the view that W could at least seek work as an office attendant. Ms Lee has submitted that W could earn a reasonable income of HK$5,000 per month, which I accept. (ii) W’s Property / Other Financial resources 21.W has very little assets, apart from some cash in her bank account, totalling about HK$7,600 on 25th November 2005, as she had just received the sum of about HK$11,000 from CSSA on the 11th November. The former matrimonial home was registered in her name, but as she could not afford the mortgage payments after H left, she had to sell the property in January 2002. After deducting the outstanding mortgage loan, and expenses relating to the sale, the balance of sale proceeds received by her was only about HK$10,000. 22.Before the sale of the former matrimonial home, respectively in about July 2001 and September 2001, W had borrowed two sums totalling about HK$80,000 from the Government Building Department to pay for the expenses for the renovation and maintenance works of the matrimonial home. She was supposed to repay such sums by monthly instalments of about HK$1,000 but she had lapsed in such repayments, and thus a sum of about HK$64,703 is now still owing to the Building Department. The payments have now lapsed since at least about January 2003, but there is no evidence that the Building Department has taken any steps to pursue repayments. 23.W claimed that she also had the following liabilities :
24.There were, however, no sufficient evidence / supporting documents in relation to the above alleged loans from her father or from her friend. There was also no evidence that she was required to repay these alleged loans now. 25.W is under legal aid, and her estimate of legal costs in respect of these applications was about HK$30,000. (iii) H’s Income / Earning Capacity 26.H was the sole proprietor of a trading and transport company, which I shall call YW, carrying on business of goods delivery. YW commenced this business on 28th April 2003, almost two years after he left home. YW was a small business. H was the only truck driver in his business, and there was no other staff. His business mainly provided services of delivering goods from factories in China to the container terminal in Kwai Chung, Hong Kong, for export. H said as one of his major clients started to use the container terminal in Yim Tin Kong in Shenzhen instead of the container terminal in Kwai Chung in November 2004, his business started to decline sharply in November 2004, and eventually YW ceased business in about April 2005. 27.H had produced the 1st “Income Statement ” for YW for the period 1st April 2003 to 30th September 2004. During this 18 month period, the gross transportation income of YW was HK$1,881,317, which was about HK$104,517 per month. There were “sub-contracting charges” of HK$921.422, which was about HK$51,190 per month, and “truck expenses” of HK$599,540, which was about HK$33,307 per month. The “gross profit” was HK $ 360,355, which was about HK$20,000 per month. There were two major items of expenses, namely “Entertainment” of HK$70,231, which was about HK$3,900 per month, and “Quarter expenses” of HK$37,733, which was about HK$2,096 per month incurred by H. The net profit for this 18 month period was HK$193,172, which was about HK$10,731 per month. 28.H explained that “entertainment expenses” were for inviting persons who had helped him in mainland China, for hotel expenses if H had to stay overnight in mainland China, and also midnight snacks with workers when working late. As to “quarter expenses”, these were for his accommodation. He was the registered tenant of a public housing flat in Hong Kong, but such was taken away from him in about 2004 when the government found that he was spending very little time in Hong Kong. 29.During the trial, H produced a 2nd “Income Statement” for YW for the period 1st October 2004 to 31st March 2005. The transportation income by then had, according to this 2nd “Income Statement”, dropped to HK$233,115 for that period of 6 months, which was about HK$38,852 per month. After deducting “Sub-contracting charges” and “truck expenses”, there was apparently a gross loss of HK$48,881 for the 6 month period. “Entertainment expenses” dropped to HK$12,580, about HK$2,097 per month and “Quarter expenses” dropped to HK$13,621, about HK$2,270 per month. The “net loss” was apparently HK$79,539. 30.However, as YW was not a limited company, no audit of the “Income Statement” was required, and no audit was carried out by the firm of accountants who prepared the two “Income Statement”. In fact, the accountants clearly stated in the 2nd “Income Statement” that they were unable to ensure the completeness of income and net loss for the period. The accountants did not make this statement in the 1st “Income Statement”. Both “Income Statements” were prepared by monthly statements of accounts supplied by H to the accountants. 31.Whether it was YW, or H’s previous business, the gross income received by H was credited into his personal bank account, and business expenses were withdrawn therefrom, and there had not been any separate bank accounts for his businesses. 32.H said on 30th May 2005, after YW ceased business, he and another company, which I shall call HS, entered into an agreement that he would transport the cargo to HS’s clients, and he would receive HK$400 for each journey. H said each month there could be 20 to 25 journeys, and he could earn between HK$8,000 to HK$9,000 per month, but according to him, his income was only HK$8,000 per month from June to November 2005. 33.HS is a company with two shareholders, who are also its directors. One is H’s younger sister YCC, and the other is a Mr. Leung, who is the husband of H’s another younger sister YMM. There was no clear evidence as to when HS was formed and according to H, HS was formed in about July / August 2004. 34.H’s income prior to his working for HS was mainly credited into his Bank of China account, but according to H, the sums so credited were gross income. Take for example November 2004, H said his regular expenses would be HK$30,000 to HK$35,000 per month, and there were also sub-contracting fees of HK$14,470. Thus, according to H’s own evidence, for November 2004, although a sum of HK$53,620 and a sum of HK$33,234 were credited into his account, the net income was in fact about HK$34,384. 35.Looking at H’s savings account with Bank of China, there were the following credits, apart from what H said were transfers from his current account, and H’s explanations are set out in the brackets :
36.H had produced an agreement with HS and it was stated therein that his income would be HK$400 per journey. This means what H would be receiving as remuneration should not be a fixed salary. According to H, an adjustment would be made at the end of the year. However, it appears to me that it is very unlikely that an employer would pay two months remuneration in advance, without knowing the amount of work to be carried out. 37.Looking at YW’s 1st “Income Statement” for 1st April 2003 to 30th September 2004, as mentioned above, H’s gross income was about HK$104,517 per month and his net income was HK$10,731 per month, in addition to “entertainment expenses” and “quarter expenses”. The business was run from his home and thus the other expenses set out would also be attributable to him. His net income and benefits for this period would thus come to almost HK$17,000 per month. H said his transportation from 1st October 2004 to 31st March 2005 dropped to HK$230,515 which was about HK$38,419 per month gross. He alleged this happened right after the interim maintenance order. 38.In his 1st affirmation of means in June 2003, H had stated that his income was about HK$13,000 per month on average from August 2002 to March 2003. In his Form E in October 2004, H stated his income was about HK$11,967 per month. It is not clear as to how he arrived at this figure, and in any event, the figure was not supported by YW’s 1st “Income Statement”. H made his 2nd affirmation on 28th December 2004, and it was in this affirmation that he produced his 1st “Income Statement. In this affirmation, which was filed about end of December, H did not mention any drastic drop in his income at all, and he was still saying he took out about HK$11,967 per month, although he did say his income was not stable or regular. 39.H has been in the transportation business for some time. Prior to YW, as mentioned earlier, there was another transportation business STC, under which H was operating, and STC ceased operation on 1st December 2001. Apart from STC, the parties had another textile business FHC, which was also registered in the name of W at the request of H, and this business was deregistered by W on 10th March 2001. H was obviously making quite a good income during the parties’ cohabitation, and the parties were even able to employ a maid and H was able to pay for the mortgage of the former matrimonial home, which was about HK$11,800 per month at one time, and to pay maintenance for the whole family. 40.As I have stated above, from the 1st “Income Statement”, H’s income and benefits (including entertainment and accommodation expenses) from YW before October 2004 were in fact almost HK$17,000 per month. I am not satisfied that there was suddenly a drastic drop of income in November 2004, as alleged by H. The 2nd “Income Statement” was clearly stated to be unaudited, and that the accountants clearly stated that they were unable to ensure the completeness of income and net loss for the period. It was also clear from what H had said in his affirmation that he was still withdrawing almost HK$12,000 per month by December 2004. Even if there was some drop in the income of YW, which resulted in its cessation, I find that H, being an experienced transportation worker, does not need to work for HS, for such a low salary as HK$8,000 per month. I am of the view that his earning capacity should be at least HK$12,000 per month since November 2004. (iv) H's Property / other Financial Resources 41.H says he has no other assets apart from about HK$8,200 in his savings account with Bank of China on 17th November 2005, and his truck and trailer, valued to be HK$85,000 in October 2004. (v) H's Loans 42.In H’s 1st affirmation filed in June 2003, H listed personal debts totalling HK$304,761, among which a sum of HK$118,261 was allegedly borrowed in January 2001 from his fiancee’s sister, to buy his present truck. In his Form E filed in October 2004, H said he owed his fiancee’s sister HK$40,000 and RMB40,000, and other persons a total of HK$135,000. By the time H filed his 3rd affirmation in September 2005, just before the commencement of this trial, he said he owed two personal debts of HK$40,000 each. 43.H said he borrowed HK$40,000 on 26th January 2005 from one friend, and another HK$40,000 on 23rd February 2005 from another friend. Such sums were was used to pay for legal expenses, and to pay “Lai See” for his business friends and other relatives to “allow a better and smoother running of his business and to pay tribute to those who helped him in the past”. 44.H produced some IOUs for the loans he referred to in his 1st affirmation. For the two HK$40,000, he produced only copy of one cheque for $40,000, and apart from his bank statements, there was no other evidence to say these were loans. 45.I do not find H’s evidence in respect of these loans satisfactory, and, in any event, similar to W’s loans, there was no sufficient evidence as to when H needed to repay, or that H needed to repay any of these alleged loans immediately. (b) FINANCIAL NEEDS, OBLIGATIONS AND RESPONSIBILITES OF EACH PARTY (i) W’s Financial Needs 46.During the trial, W gave evidence as to the expenses of her and the two children, which amount to be about HK$16,909 per month. H’s Counsel Ms Lee says such should only be HK$15,776 per month for the following reasons :
47.In the circumstances, the monthly expenses for W and the children should be about HK$15,776 per month. Of this amount, the expenses for rent, utilities, food, household, transport for W and the children came to about HK$9,756 per month. I would consider each of their share to be about one third, i.e. about HK$3,252 for each. Apart from a monthly sum of HK$100 for clothes, W had not provided any details of her own personal expenses. (ii) H's Financial Needs 48.H is now living with his fiancee in China. She helps in her sister’s factory which provides her with breakfast and lunch, but apparently, she receives no salary. There is no reason as to why H’s fiancée cannot seek proper employment and contribute to her own share of the expenses. H gave the total of their monthly expenses to be as follows :
49.The above expenses were in RMB and include those of H’s fiancée as well. I am of the view that a reasonable amount for H’s expenses should not be more than about HK$6,000 per month. (c) STANDARD OF LIVING BEFORE THE BREAKDOWN OF THE MARRIAGE 50.H was financially responsible for all the family expenses during the parties’ cohabitation. The parties had a reasonably comfortable standard of living as they even employed a domestic helper for a period of time, and also their last matrimonial home of about 500 sq ft was self owned. (d) AGE OF THE PARTIES AND DURATION OF THE MARRIAGE 51.W is now 41 years old, and H is now 45 years old. The parties’ marital relationship was about 8 years up to the Decree Absolute in August 1995, and after the divorce, they cohabited again for about 6 years from the Decree Absolute to June 2001. (e) PHYSICAL OR MENTAL DISABILITY 52.W was suffering from depression, but as stated above, her medical report showed that she is now in remission. 53.H is not suffering from any physical or mental disability. (f) CONTRIBUTIONS MADE BY EACH OF THE PARTIES TO THE WELFARE OF THE FAMILY 54.Although W was a full time mother and housewife, and financially dependent on H throughout their relationship of about 14 years, she had helped H in his two businesses, and her contributions in looking after the home and caring for the family should therefore be equal to that of H. (g) VALUE OF ANY BENEFIT LOST BY ANY PARTY 55.There was no evidence of any such loss. (h) THE CHILDREN 56.The financial needs of the children have been included in the monthly amount which I have found to be about HK$15,776. The elder child has completed Form 5 and is now attending a business management course at a post secondary college. The course commenced on 1st October 2005, and will last 2 1/2 years. His tuition fees are HK$20,000 for one year, which is about HK$1,666 per month. The daughter is now attending secondary school, and her school fees are about HK$1833 per month. The children’s school fees plus their other expenses were about HK$5,920 per month, excluding their share of the rent, utilities, food, and household expenses of another HK$6,500. The children’s total expenses are in the region of HK$12,000 per month. 57.Neither child suffers from any physical or mental disability. CONCLUSION 58.H said that he could only pay about HK$1,000 to HK$1,500 per month for the maintenance of the two children, and that W should continue to rely on CSSA, and she should supplement the total expenses by working. 59.As I have accepted that W has an earning capacity of HK$5,000 per month, she should be able to find work and to support herself. Having considered all the circumstance, I am of the view that the previous nominal maintenance order for W should not be disturbed. 60.I have found that H’s earning capacity should be at least HK$12,000 per month since November 2004. Having found that his reasonable expenses to be about HK$6,000 per month, and having considered all the circumstances of the case, I am of the view that H should be able to pay HK$6,000 per month for the maintenance of the children from November 2004. I will therefore vary the interim maintenance order accordingly. I realise that this sum may not be able to cover all the children’s expenses. In fact, I note that W and the children have been supporting themselves on CSSA of about HK$11,000 per month since February 2002. ORDER 61.My order is therefore as follows :
62.In relation to the issue of costs, it will not be necessary for the parties to fix a hearing for such argument. I direct that the Petitioner should submit her written submissions on costs within 14 days hereof, and the Respondent to submit his written submissions within 14 days thereafter, and if necessary, the Petitioner may submit her written submissions in reply within 7 days thereafter. In relation to the costs argument, the parties should jointly prepare a bundle of all the “without prejudice save as to costs” correspondence for the court’s consideration. 63.So far as the Judgment Summons is concerned, in Ms Lee’s Closing Submission, she said H would be prepared to repay the sums owed by monthly instalments of HK$500 each. There was no submission from Ms Chan on this. The amount of arrears is now different, in light of my above order. To save further costs, I hope the parties can reach agreement in relation to the payment of the arrears, but if not, they should fix a hearing for 2 hours for the Judgment Summons.
Ms G Chan of m / s Ho & Wong for Petitioner Ms E Lee instructed by m / s Or, Ng & Chan for Respondent |