Kgk v. Whl
Read the full judgment text of FCMC 8110/2004 on BabelCite. This Family Court judgment was delivered on 18 January 2006 before Her Honour Judge Chu.
Matrimonial law – ancillary relief – property division – maintenance – earning capacity – dissipation of funds – MPPO s.7 – Court finds wife has earning capacity despite health claims – Court accepts wife's expense estimates for Australia – Court finds both parties depleted family funds similarly – Court orders property sale with proceeds split 25% husband, 35% wife, 40% trust for children – Husband ordered to pay lump sum for insurance premiums – Nominal maintenance for wife – Child maintenance HK$10,000 per month – Each party bears own costs
Legal issues: W's earning capacity · Expenses in Australia · Parties' withdrawal / dissipation of funds · Repayment to W's mother
Outcome: Ancillary relief orders made; Property sold; Maintenance ordered
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FCMC 8110 of 2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 8110 OF 2004 _________________ BETWEEN
_________________ Coram : Her Honour Judge Chu in Chambers Date of Hearing : 15, 16 August 2005 Date of Respondent’s Closing Submissions : 12 November 2005, with Leave granted on 16th December 2005 to produce a further letter of 23 December 2004, in support of her Closing Submissions Date of Petitioner’s Closing Submissions : 5 December 2005, as amended on 9 December 2005, and 2 additional points added pursuant to Leave granted on 16 December 2005 Date of Handing Down of Judgment : 18 January 2006 _________________ J U D G M E N T _________________ A. INTRODUCTION 1.The trial before this court was over the parties’ respective applications for ancillary relief. 2.The Petitioner (H) and the Respondent (W) were married on 20th November 1987. They have two sons, D, now 17, and B, now 10. 3.H and W separated on 5th July 2003, when H moved out of the matrimonial home. 4.About a year later, on 29th July 2004, H petitioned for divorce, alleging W’s unreasonable behaviour, but later his petition was subsequently amended to one based on the parties’ separation for over one year and W consented to the divorce. A Decree Nisi was granted to H on 26th October 2004, with custody of D and B granted to W. In his petition, H sought a property adjustment order in respect of the former matrimonial home. W then issued a Notice under Rule 56B of the Matrimonial Causes Rules for this court to consider her financial position after the divorce, and she applied for various forms of ancillary relief for herself and the children. 5.On 27th October 2004, there was an interim maintenance order under which H was to pay HK$17,000 per month for W and the two sons, inclusive of mortgage repayments of the matrimonial home. Subsequently, W was granted leave to remove D and B permanently out of Hong Kong to live in Australia. In January 2005, D moved to Melbourne where he is now studying while B is at present still living with W in Hong Kong. 6.The matrimonial home was purchased on 10th December 1998 in the joint names of the parties (“the Property”) at HK$1.525million, with two mortgage loans, one from the Bank of China, and the one from the Hong Kong Housing Society. H said at the trial he was told by a property agent that the estimated asking price of the Property would be about HK$1.55m, and he was told that there would be an interested buyer who would pay HK$1.5m. W, however, said at the trial that the market value was only HK$1.35million and that she had received an offer of HK$1.35m before the trial. Later, in her Closing Submissions, W claimed that with the increase in interest rate, and the “fear of a pandemic of Bird Flu”, the market had slipped into a recession. Anyway, both parties agree that the Property should be sold. As at August 2005, the amount of the two outstanding mortgage loans was about HK$1,121,343, and thus, if sold for HK$1.35m, the net equity would have been about HK$228,000 in August. 7.The elder son, D left for Melbourne Australia in January 2005 and that W said after the sale of the Property, W said she and B would also move to Melbourne to be with D. 8.This is a difficult case in that there was very little asset in the family. H has only a limited income, and W, who had been working as a primary school teacher earning about HK$19,000 per month said she had been unable to work since February 2004 as a result of health problems and the general stress and strain brought about by the break up of the marriage. Thus H is presently the only income source of the family. 9.It is also sad to note that not only the interim maintenance application had to be contested, the parties were not able to reach any settlement during the FDR hearing, and additional costs had to be expended on H’s side, as W was acting in person, to have the final ancillary relief application dealt with. Even at the commencement of the trial, there was no settlement, and oral evidence was heard over two days. The matter then had to be further adjourned pending H filing evidence in relation to the estimated expenses of W and the two sons in Australia, which was only produced by W shortly before the trial. After filing of the further affidavits, both parties indicated that they did not wish to cross examine each other on these new affidavits, and to save costs, they agreed to lodge written final submissions rather than have another hearing to present their submissions orally. Notwithstanding the time limits imposed by this Court, W did not lodge her Closing Submission until 12th November 2005, and H did not lodge his until 5th December 2005, which then had to be amended on the 9th December 2005, and H further asked for leave to add two further points. W then also sought leave to produce a letter in support of her Closing Submissions. I granted leave to both on 16th December 2005. Thus there was a gap of about 4 months between the trial and the Closing Submissions. B. ORDERS PROPOSED BY THE PARTIES 10.Although both parties agreed to the Property being sold, there was no agreement as to the division of the net sale proceeds. 11.In the amendment to Mr Sadhwani’s Closing Submission, H says he should receive 50% of the net sale proceeds and the remaining 50% should go to the children. At the trial, H had said that, after the sale of the Property, he was willing to make contribution towards for the maintenance for the children, and in Mr. Sadhwani’s Closing Submission, a sum of HK$8,000 per month was put forward for the children. Anyway, H’s position was that there should be no lump sum and no maintenance for W. 12.W’s proposal at the trial was that she should take 80% of the net sale proceeds of the Property, 40% for herself, and 20% for each of the children, and H to receive the balance of 20%. In her Closing Submission, W proposes that a sum of HK$60,000 from the net sale proceeds should be paid back to her mother first, and then out of the remaining balance, (i) 40% should be paid to W for her relocation expenses, and if there is a shortfall, H should meet such shortfall from his share of the proceeds : (ii) 20% for each of the children for education funds and / or their orthodontic treatment / dental surgery; (iii) 20% for H, but this should be for the children’s orthodontic treatment/dental surgery. W is also seeking HK$21,000 per month for the maintenance for herself and the two children, on the assumption that she would live in Australia with the children, with no mortgage payments. Further, W seeks a lump sum of HK$66,840 for repayment to her mother. C. THE LAW 13.In considering the applications for ancillary relief, I will need to have regard to the matters set out in s. 7(1) and 7(2) of the Matrimonial Proceedings and Property Ordinance (“MPPO”), which I set out as follows :
D. HISTORY OF THE MARRIAGE 14.Firstly, I would set out briefly what in my view are the major events in this marriage. For the avoidance of doubt, so far as the matters set out in this judgment differed from the evidence of H or W, this is because I preferred the evidence of the other party and because I considered that the documents produced confirmed my finding of fact and further I had been able to observe the demeanour of the parties when they were giving evidence during the trial. 15.H is Australian and W is Chinese. The parties first met in Hong Kong when H came here to work in 1982, and later they married in Taiwan in November 1987. After their marriage, H and W moved to Townsville, Australia to look for work there. H did find work but lost his job in July 1988. W was at that time pregnant with D. The parties then moved to Brisbane where H found work as an architectural draftsman and W worked as a temporary secretary. 16.D was born in early December 1988 in Brisbane. In February 1989, W’s father died in Hong Kong, and she returned with D to attend the funeral. Thereafter, she remained in Hong Kong and worked here for several months. After W left Brisbane, H moved back to Townsville to start a full-time architectural course which he later dropped out of. 17.In August 1989, H moved to Melbourne and so did W and D, and the family reunited in Melbourne. 18.In 1990, W started to work full time for a gas company doing secretarial work. H had started a degree course in 1990 but later withdrew. H then lost his architectural assistant job and started working as a taxi-driver to earn an income. 19.In 1991, the parties jointly applied to study for an undergraduate degree course at the Brigham Young University in Hawaii, and were later granted sponsorships to study as a married couple. 20.The parties then moved to Hawaii with D in 1992 and resided there for about 5 years until July 1997. 21.D started schooling in Hawaii and B was born in Hawaii in 1995. 22.In July 1997, both H and W graduated, H with a degree in Mathematics Education, and W with a degree in TESOL, which is “Teaching English to Speakers of Other Languages”. After graduation, the parties moved to Hong Kong to look for employment. 23.Unfortunately, H failed to find work here, and he returned to Melbourne with D in October 1997 while W remained in Hong Kong with B. Having failed to find work in Australia, H then returned to Hong Kong with D in March 1998. In the meantime, W had started full time work here. After H and D returned, H also found work in Hong Kong as a full time teacher. 24.In December 1998, as life was becoming more settled, the parties purchased the Property as their matrimonial home. 25.Thereafter, although the parties respectively changed jobs a few times, they were in relatively steady employment. 26.Things appeared to remain stable for awhile until some time in March 2003 when H broke the news to W that he was having an extra marital affair. After telling W of his affair, H left home but returned the same day and the parties then tried to salvage their marriage. Unfortunately, in April 2003, W found out that H was still seeing the woman he was having an affair with. W then moved out to stay with a friend for about a week, but later moved back home. 27.Although I believe the parties did try, the marriage could not be saved, and in July 2003, H finally left home and did not return. 28.In September 2003, W started a new employment with a primary school and also enrolled in a part time course for a Teaching Diploma at the Chinese University of Hong Kong, but only one or two months later in about October / November 2003, she dropped out of this course. 29.In February 2004, W ceased working completely and has not worked since. E. THE MAIN ISSUES 30.In my view, the major issues in this case are : -
31. I now deal with the issues. (a) whether W should work and, if so, her earning capacity 32.W is now 47 and she started working at the age of 18 or 19. Apart from the 5 years in Hawaii, and for some short intervals, she had worked almost throughout the marriage, until she resigned from her teaching job in February 2004. 33.W’s reasons for resigning can be summarized as follows :
34.Further, W said she had no reasonable prospects of finding a job in the near future, as she claimed that she had not obtained the proper qualifications to enable her to continue teaching in Hong Kong. She said likewise she was not sure of her employment prospects in Australia either, as she only had a degree in TESOL, which would not be of much use there. As she also suffered from partial hearing loss in her left ear, this might hinder her chances of obtaining any gainful employment. 35.Firstly, dealing with W’s health problems. W had produced no less than 13 documents as evidence of her health problems. Her problems can be categorised her as follows : -
36.As can be seen from the above, there was no evidence at the trial that W was still suffering from any alopecia, or serious hearing loss, and since 2001 W had worked full time. She might now still have some renal function problems, but there was no evidence at the trial that this would in any way affect her ability to work. At the interim maintenance hearing in October 2004, Judge Carlson had said “The wife says she has got a perfectly good case for not being able to work. I have already outlined what she says about that and certainly on her medical condition she would need to provide compelling medical evidence as to why she cannot work even on a part-time basis…”. There is simply no such medical evidence. 37.From 1st September 2000 to 31st August 2002, W was a full time teacher earning HK$17,505 per month. W had said that it was her concern about the effect of full time teaching on her health and her family life that led her to resign from her full time teaching job in September 2002, but she resumed working as a part time teaching assistant in January 2003 earning about HK$9,500 per month. 38.After H left in 2003, W had continued to work as a part time teaching assistant. In September 2003, she changed to work full time and enrolled in an evening course at the Chinese University in Shatin, and she did not get home until 10:30 p.m. or 11 p.m. She said she was under tremendous stress and pressure trying to cope with the demands from her work, studies and family. W said that the students’ parents complained about her performance at school. There was no evidence that D had failed badly. He did not do well but passed according to his report in February 2004 and remained more or less the same even after W stopped work, as seen from D’s report in July 2004. 39.It is clear that although W said she was suffering from immense pressure at the time the marriage broke down, she in fact did not cease working immediately at that time and in September 2003, she changed to a new full time job. I am of the view that her long hours were mainly because of her evening course, and she had to drop out after a couple of months. In fact, I could not understand why she chose to enrol in the course at that time, particularly when she said she had to look after the children. W resigned from her full time teaching job in February 2004. I accept that W and the children must have been under a great deal of pressure at the time when H left. The leaving was however, in a way, not that sudden, since he first broke the news of his affair in March 2003, and in April, when W found that H was still seeing the woman in question, she herself moved out for about a week, and finally in July 2003, H left. I would have thought that the main crisis period would be between March and July 2003, but during this period, W had continued to work, and in fact, in September 2003, as mentioned above, she started a new full time job and chose to also enrol in a part time course in the evenings for about two months. 40.Even if the pressure had gradually built up and that W might have needed a rest for a period of time, I find that there was no justification for her not to work for such a long time, and her not even trying to find some part time work. 41.D is now 17 years old, and B 10 years old. W had worked when both of them were much younger. 42.W has said she does not intend to work after her move to Australia and she says she will not work until B is grown up as B has a habit of lying about his homework and that he failed in his maths last semester and he was not very good at his examination. 43.Notwithstanding what W said, I am of the view that she should find work and I find that she does have an earning capacity. 44.H’s father, and his elder brother have both sworn affidavits, which were exhibited in H’s 4th supplementary affidavit. To summarise, H’s position, as supported by his father and elder brother is that W could find work in Australia, as follows : -
(iv) as an interpreter. 45.In reply, W filed an affidavit from a friend Ms J Lee, who lives in Victoria, Australia, and to summarise, W’s position is as follows :-
46.After hearing W’s evidence, I find her attitude and mindset somewhat inflexible and unaccommodating. There has been no attempt for her to even try and find some work. I do appreciate that B may need some supervision but W is an intelligent and capable woman. She speaks and writes good English, and is able to prepare well the cross examination of H, and also submitted a very detailed 47 page Closing Submission. Her Closing Submission also demonstrates her typing, computer and her organisational skills. Her presentation of her case is detailed and meticulous. She can also speak Mandarin in addition to Cantonese. I find her work capabilities are not limited to only the positions listed above. I have already said that W should work and that she has an earning capacity. As B will be at school mostly during the day, I am of the view that W should be able to continue to render the necessary supervision, assistance and care to B after she returns home from work. 47.As to W’s earning capacity, notwithstanding what H’s father said, namely a teacher of H’s experience could earn about A$46,000 per annum in Victoria, Australia, H himself said his salary would only be about A$32,000 to A$35,000 per annum, if he were to return to work in Australia. Having regard to W’s capabilities, I am of the view that when W moves to Australia, she should be able to earn at least about A$32,000 per annum in Australia, which, at A$1 to HK$6 approximately, (which was the exchange rate which the parties were using at the time of the trial, and which I will use in this judgment, as opposed to A$1 to HK$5.6 used by Mr Sadhwani in his Closing Submission) would be about HK$192,000 per annum, or about HK$16,000 per month. As for her earning capacity in Hong Kong, this should also be at least the same amount, namely HK$16,000 per month. Although her last salary was HK$19,000 per month, I have taken into account the fact that she had not been employed for awhile. (b) W’s and the children’s expenses in Australia 48.In W’s Form E of September 2004, she gave a list of her expenses in Hong Kong but by the time of the trial, D had left Hong Kong. 3 days before the trial, W filed 2 affidavits from D, one affidavit from her friend Ms J Lee, and one affirmation from her mother. Further, she provided estimates of her future living expenses in Australia. H had no time to respond to all these, but he elected to proceed with the trial, and only sought leave after the trial for him to file further evidence in relation to such expenses in Australia as claimed by W. I gave him such leave and also leave to W to file an affidavit in reply. Hence, after the trial, H filed his “4th supplementary affidavit” on 6th September 2005, exhibiting thereto an affidavit from his father, and an affidavit from his brother, and in reply thereto, W filed her reply affidavit on 30th September 2005, exhibiting thereto a 3rd affidavit of D, and a further affidavit from Ms J Lee. Thereafter, notwithstanding that they each take issue with the matters set out in the other’s affidavit, both elected not to cross examine the other, or H’s father, his brother, D, or Ms J Lee, on these further evidence. In any event, H’s father, his brother, D, and Ms J Lee were all living in Australia. 49.W has set out the anticipated general expenses in Melbourne for her and the children to be about A$3,486 per month or about HK$21,000 per month as follows : - (i) Estimated Monthly Expenses : -
50.W said in addition to the above, she will need to incur orthodontic treatment and dental surgery fees for the children. During the trial, W has explained during the trial D will need braces and this will cost HK$20,000, and another estimated sum of HK$150,000 for orthodontic surgery. All this will need to be carried out when D is 18 or 19. B will also need a comprehensive orthodontic assessment which cost HK$1,200 and a comprehensive treatment package for B will cost HK$32,000. W produced documentary evidence in support of what she said, but such evidence relates to the treatment to be carried out in Hong Kong. After the trial, W produced copies of reports and quotations from orthodontists and maxillofacial specialists in Australia, which gave a total estimate of about A$10,422 or HK$62,532 for D, and that using same estimates for B, his treatment would cost about A$3,800 or HK$22,800. The total cost for the orthodontic treatment and dental surgery for D and B would come to about HK$85,332. 51.W further said in her Closing Submissions that she would require a sum of about HK$70,000 for her moving / relocation expenses from Hong Kong to Melbourne. 52.H has challenged W’s expenses, and as mentioned above, he has in his 4th supplemental affidavit included an affidavit from his father, an architect living in Forest Lake (Brisbane) Queensland, and an affidavit from his brother, an economist living in Skye (Melbourne) Victoria. 53.H’s father used to live in Melbourne in the past and now visits Melbourne regularly. In his view, the monthly expenses for W and the children could be reduced to about A$34,970 per annum, which is about A$2,914 per month or about HK$17,500 per month. The reasons are set out in detail in his affidavit to which he included references to H’s step-sister, separated from her husband and allegedly lives on a total of about A$25,728 per annum for her and her 10 year old son. 54.H’s elder brother is now living in Melbourne and he estimates the monthly expenses for W and the children could be reduced to about A$33,500 per annum, which is about A$2,792 per month, or HK$16,750 per month. The reasons were set out in his affidavit. He is also of the view that W and D and B, after finalising their Australian citizenship, could make applications for social benefits from the Australian Government and that such benefits could be as much as A$1,200 per month. In this respect, I agree with what W has submitted, that it is likely to be any government’s stance that a parent has the primary duty to maintain their children, and I am of the view that it should only be a last resort for anyone to apply for social welfare benefits. 55.In W’s affidavit filed on 30th September 2005, she sets out various reasons for not accepting the figures put forward by H’s father and brother. According to their calculations, she said H’s step sister was in fact in receipt of a total of A$27,396 per annum which probably did not include any rental payments and this amount was for one adult and one 10 year old boy, while W has D to support as well as B. W claimed, based on H’s step sister’s figures, the amount she will need would be in the region of A$41,828. Further she said no actual invoices or bills were put forward by H’s father and brother. 56.It is extremely difficult for this court to decide on W’s future expenses in Australia, on these untested affidavits, and evidence. 57.W had taken advice from her friend Ms J Lee. W had also produced a detailed breakdown of her food requirement, and produced copies of water bills, gas bills, electricity bills, telephone and broadband bills from Ms J Lee. So far as rent is concerned, both H and W have provided information from listings of property agents. Ms J Lee had set out in her email of 28th July 2005 to W as to her reason for suggesting W to allow at least A$300 to $320 per week for rent, although from the listings, one could see properties being offered for much lower rent. Having considered the supporting documents, I am prepared to accept W’s estimates at this stage, namely the future expenses of her and the two children will be about A$3,500 per month, or about HK$21,000 per month, leaving aside the lump sum expenses for the dental treatment for the children, and her relocation expenses. 58.As to W’s expenses, such were set out in her Form E filed in September 2004, with D then living in Hong Kong as follows : -
59.Since January 2005, D has been living in Australia. W said in her Closing Submissions that an amount similar to the amount for Australia, namely a sum of HK$21,000 per month would be required for the maintenance of her and the children before the sale of the Property in Hong Kong. As appears above, the two mortgage repayments were about HK$10,826.39 per month, but may have increased recently due to the increase in interest rate. I accept that W will need a sum of about HK$21,000 per month to cover their expenses before the sale of the Property, and while she and B are still living here. (c) Parties’ withdrawal / dissipation of funds 60.The parties had both withdrawn various amounts of funds either shortly before or after the marriage breakdown. H's Withdrawal of Funds 61.On 23rd April 2003, H withdrew firstly $50,000 and then $30,000 totalling HK$80,000 from the parties’ joint account with the Hang Seng Bank (“Hang Seng Joint Account”), without first alerting or consulting W, and transferred the sums to his personal account at the same bank (“Personal Account”). After this transfer, a sum of about HK$23,000 was left in the Hang Seng Joint Account as at 24th April 2003. Thereafter, apart from withdrawals for payment of school fees, numerous sums were withdrawn by ATM over a period of about 4 months, leaving only about HK$106 in this account on 9th August 2003. H claimed that although he had used his ATM card to withdraw funds from this joint account, he in fact did not have control over this joint account and that it was W who held the passbook, and that she was the one who had control. H admitted that he had withdrawn money from this joint account using his ATM card up until he left home, but that after he left, he said that he only used the ATM card once or twice. H left home on 5th July 2003. W claimed that she did not have an ATM card then, and that all the ATM withdrawals were by H. W claimed that H had further withdrawn or depleted another HK$23,000 from 24th April 2003 to 12th December 2004. As at 3rd July 2003, there was still about HK$5,000 left. As W said that she did not have a ATM card at the time, I accept what she said, namely H had further withdrawn about HK$23,000 from this account after H left home. 62.I now turn to the two sums of $50,000 and HK$30,000 transferred by H from the Hang Seng Joint Account to his Personal Account at on 23rd April 2003. After these transfers, on 25th April 2003, H had about HK$105,522.82 in his Personal Account. Between 26th October 2003 and 12th March 2004, it would appear that H had withdrawn about HK$105,000. H said the sums were withdrawn for “money in hand” and to meet his living expenses. In August / September 2004, H also received his bonus and his gratuity, and thereafter he withdrew most of it. H had produced a schedule explaining how he spent his gratuity and bonus after September 2004, which I accept. 63.The parties also held a joint foreign currency account at the Hang Seng Bank. On 9th July 2004, there was an amount of A$3,034.64, and by 7th January 2005, there was only A$46.39 left. H had withdrawn the sums totalling about A$3,000, i.e. about HK$18,000, and he said all the money in this account were used for his various expenses. 64.From the above, between 23rd April 2003 and 7th January 2005, after taking into account school fees of HK$650 per month for about 10 months, H had depleted about HK$140,000 from the above mentioned three accounts at Hang Seng Bank over this period of about 22 months. Under cross examination, H said he had spent all the sums, which included : - (i) $8,600 for legal costs (ii) $7,000 for 2002 / 2003 tax
H said as his monthly expenses were about $34,000 and his income was only $28,000 per month, and thus he had a shortfall of about $6,000 per month, and therefore various sums were withdrawn from time to time to meet such shortfalls. 65.H said all the money was spent and there was no evidence that H had any balance left. W's Withdrawal of Funds 66.Mr Sadhwani had produced a list attached to his Closing Submission to show that W had withdrawn the following amounts from her accounts : From her Bank of China personal savings account (“Personal Savings Account”) : (i) HK$70,900 on 29th November 2003 (CSH)
67.W’s explanations for the above amounts were :
68.On 13th September 2003, after the transfer of HK$145,000,W had HK$179,792.55 in her Personal Savings Account, and had only about HK$15,000 left on 14th September 2004. She had depleted the sum of HK$145,000, of which a sum of HK$70,000 was transferred to her mother. W said the rest was spent on supplementing living expenses. However, at that time, she was receiving maintenance from H of about HK$14,000 per month and she was also working, and earning HK$9,500 per month until August 2003, and HK$19,000 from September 2003 to February 2004, and she should be able to maintain herself and the children from these amounts. 69.W’s mother, Madam Yung, had filed two affirmations. She lives in Hong Kong but Mr. Sadhwani did not wish to cross examine her. Although Madam Yung said she had lent A$10,000 to the parties to buy a car in 1990, she herself had said that she had no intention to ask them to repay the loan, and that it was W who insisted on paying her back HK$70,000 (i.e. A$10,000, or HK$60,000 plus HK$10,000 as interest for over the years). H said at the time it was not his understanding that the sum had to be paid back and that he had regarded this to be a gift. As Madam Yung was not called and not cross examined, I accept what she said. However, as Madam Yung said she had no intention to ask the parties to repay, it did in effect turn out to be a gift. Further, as the loan was incurred about 13 years ago, there was no legal obligation for W to suddenly repay her mother and to pay her interest in November 2003, which was not sought by Madam Yung, even though she might feel there was a moral duty to do so. 70.Both H and W had depleted monies as outlined above. Mr Sadhwani submitted that W had depleted about HK$221,700. His calculations were not correct since the amounts set out in (vi) to (ix) in paragraph 66 above were in fact transferred to W’s Personal Savings Account and he seemed to have double counted certain sums. In my view, H had depleted about HK$140,000, and W had depleted the sum of HK$145,000 from the then family funds. (d) Whether certain sums should be paid back to W’s mother for her contribution towards the Property 71.In Madam Yung’s 1st affirmation, she said in early 1999, shortly after the parties purchased the Property with two mortgage loans, she “gave” W a sum of HK$60,000 to help with the expenses for new furniture / decoration of the Property and with their mortgage loan repayments because the family was struggling financially. Madam Yung said the money came from the estate of her late husband plus interest. In fact, Madam Yung said she decided to divide the cash portion of the estate among her five children, and W’s portion was HK$50,000 and the HK$10,000 was interest over the years. She said she also paid for the annual premium payments for the H’s Executive Life 303 Insurance Policy with AXA Insurance Company for about 10 years from 1988 to 1997, as during this period H and W were living overseas in Australia and Hawaii, and the annual premium payment notices were sent to Madam Yung’s home address in Hong Kong. She paid for these premium payments without seeking reimbursements. W said these premium payments totalled about HK$21,840, which was not challenged by H. H said he thought both the $60,000 and the premium payments were gifts from Madam Yung to the family and he was never asked to pay the sums back. W had also said that she borrowed a total of HK$45,000 from her family from 2004 to the present to supplement her and the children’s expenses. W had produced copies of cheques and credit advices as evidence of such payments. In her Closing Submission, W sought a lump sum of HK$66,840 of which a sum of HK$45,000 was repayment to her mother for these loans. However, the copies of the cheques W produced were not from Madam Yung, but from another family member. Madam Yung did not refer to these loans at all in her affirmation. I find there was no sufficient evidence that there was a loan of HK$45,000 from Madam Yung. 72.Clearly, Madam Yung has been very generous towards the parties. She has also helped the parties with cooking meals, and taking care of their children for about two and half years from about March 2000 to about July 2002, to help them save the expenses of hiring a domestic helper. However, it is also clear to me from her affirmation that she was not expecting any reimbursement for the premium payments or for the sum of HK$60,000 towards the Property. H had said under cross examination that if he did surrender his AXA policy, he would repay to Madam Yung. Thus, H is prepared to pay back the premium payments. In relation to the HK$60,000, from what Madam Yung said in her affirmation, the sum of HK$60,000 was clearly a gift to W, and not a loan. F. OTHER S. 7 MATTERS 73.I now turn to consider the other s. 7(1) and (2) matters set out in the Matrimonial Proceedings and Property Ordinance (“MPPO”). (a) Income, Earning Capacity, Property and other financial resources which each party has or is likely to have in the foreseeable future 74.I have dealt with W’s income and earning capacity above. I now turn to deal with H’s income and earning capacity. H's INCOME / EARNING CAPACITY 75.H is a teacher at an international school, and according to his present contract, his salary is HK$ 31,753.28 per month. This present contract runs from 1st September 2005 to 8th August 2006. In addition to his salary, he receives an annual bonus which is about one month’s salary, and a gratuity every two years based on performance. H also receives medical benefits, and is required to make contribution towards the provident fund in line with the school policy. 76.H joined the school in September 2002 with a salary of HK$27,846 per month. He received a bonus of this amount in about August 2003. His salary in September 2003 was increased to HK$29,158 per month, and he received a bonus of this amount in about August 2004. After completing two years in August 2004, he received a gratuity of about HK$85,000 in August / September 2004, which was about 3 times his average salary for past two school years. He has just received a bonus in August 2005 of about HK$30,532. 77.H had previously also taken on part time work, teaching test preparatory courses. He earned about HK$6,000 in August 2003, and HK$11,600 in June and July 2004. H said he stopped such part time work as he had been made aware that he was not allowed under his employment contract to undertake other work without the consent of the school. W submitted that his evidence about not working part time was not credible. 78.W submitted that H had a total income of HK$962,497 in 26 months during the period from July 2003 to August 2005 as follows :
79.After taking into account tax and deductions of MPF payments, W submitted that H’s net income for the past 26 months was about HK$33,941 per month. 80.I am prepared to accept what H had said about his part time work, and that he has ceased such work. In fact, there was no evidence that he had taken on any part time work since about July 2004. He has, however, received a slight increase in his salary. His average monthly salary from September 2005 until August 2006 will be about HK$34,400 per month (i.e. HK$31,753.28 x 13 months divided by 12), taking into account his bonus in August 2006. H should also be receiving a sum of about HK$95,250 (3 times his salary) as gratuity in August / September 2006. If one divides this by 24 months, then H’s earning capacity will be about HK$38,000 per month. H's PROPERTY AND FINANCIAL RESOURCES 81.Apart from his interest in the Property, H’s assets were approximately :
82.Just before the trial, H had borrowed a sum of HK$15,000 from Hang Seng Bank for payment of his legal fees for which he has to repay HK$2,610 per month for 6 months from 9th September 2005. H’s estimate of costs was HK$81,250 of which HK$35,000 was paid, leaving a balance of HK$46,250. W had suggested to him that he could act in person, thus saving legal costs, and the money could be saved for the children. H said that he needed a lawyer and he was compelled to come to court by W’s incessant nature. Having observed W’s attitude in the conducting of this litigation, in my view, it is not unreasonable for H to instruct a lawyer to represent him. W’ PROPERTY / FINANCIAL RESOURCES 83.Apart from her interest in the Property, W’s assets were, at the date of her Form E in September 2004, approximately :
84.In September 2004, W had about HK$2,600 outstanding in her credit account. There was no updated information. W claimed she owed a sum of HK$45,000 to her family, which I find there was no sufficient evidence and which I have dealt with earlier in this judgment. (b) Financial needs, obligations and responsibilities which each party has or is likely to have in the foreseeable future 85.I have dealt with W’s financial needs above and I now look at H’s financial needs. H has a girlfriend whom he hopes to marry within the next two years. At present, he lives on one of the outlying islands. His expenses in August 2005, as set out in his 2nd Supplementary affidavit were as follows : -
86.In addition to the above, H has the following monthly expenses :
87.W had challenged H’s expenses. In particular, she said that the electricity charges could be reduced to HK$200 per month from HK$649 per month, and that his telephone charges could be reduced by about 50%; the total food expenses, at home and outside, could be reduced as HK$4,150 per month was too high; for the items for groceries, clothing & shoes, and personal grooming, W said she only claimed HK$680 per month for her and the children, whereas H claimed HK $690 for himself. W also said there was no evidence that H needs long term dental treatment in China. 88.H said he is now living on a shoestring budget, and he no longer goes on holidays nor has he been back to Australia for 3 years. 89.Apart from the interim maintenance, according to H, the expenses set out by him in paragraph 85 would be about HK$11,715 per month, exclusive of tax payments and the loan repayments which amount to another HK$8,610 per month. I am of the view that a reasonable amount for H’s living expenses should be about HK$11,000 per month. (c) Standard of living enjoyed by the family before the breakdown of the marriage 90.Both H and W were working before the breakdown of the marriage, and in fact throughout most of their marriage. They thus had double income and had enjoyed a comfortable standard of living common to most middle class families. They own their home which is about 710 sq ft, and were able to build up some savings. They were able to afford to go on holidays to China each year. H had visited his family in Melbourne with the children almost every other year after he came to live in Hong Kong. (d) Age of the parties and duration of the marriage 91.H is now 46, and W is 47, and their marital relationship lasted about almost 16 years. (e) Any physical or mental disability of either of the parties 92.I have already dealt with W’s alleged health problems earlier in this judgment. I find that there is no evidence of any physical or mental disability on the part of either party which will affect his / her income capacity. (f) Contributions made by each party to the welfare of the family, including any contribution made by looking after the home or caring for the family 93.Both H and W had worked hard during their marriage. W had submitted that she had made great financial contribution, which would include contributions through her mother, and sacrifices, and she had rendered support in H’s educational and professional attainment, in addition to taking care of the family’s needs and welfare. W had set out in her Closing Submissions over 7 pages of details of her contributions and sacrifices. Most of what was set out by her was not evidence before me at the trial. However, I do accept that she had made substantial contributions and sacrifices during this marriage, and towards the welfare of the family. W had made allegations about H being irresponsible with money, particularly in relation to the purchase of a new car early during the marriage, without consulting her, and that he did not spend enough time to bond with his family. The marriage was not a short one, and H had also worked throughout the marriage and helped in building up the family funds and assets, and I am of the view that he had also made contributions towards the welfare of the family. (g) Value of any benefit (e.g. pension) which either party will lose by reason of the dissolution of the marriage 94.The parties will no doubt suffer a reduced standard of living, as in most cases where there is limited income and assets. W said she and the children will lose the chance of inheriting or sharing H’s provident fund, his insurance policies, and also she would lose her home, upon its sale, and there was loss / depletion of family funds. On H’s side, he will equally lose the chance of inheriting or sharing W’s provident fund. Both have lost a self owned home, and suffered from depletion of family funds. (h) Conduct 95.Having regard to all the circumstances, and although W had made various allegations against H, I consider that there was no marital conduct on the part of either party which was “obvious and gross”. (see Rayden 17th Ed para 21.6) (i) The children 96. W had set out that D had spent most of his young life overseas, and that he had always felt out of place in Hong Kong, and that was why W felt that he should receive education in Australia. 97.I am satisfied that had the marriage not broken down, the parties would have expected the children to receive overseas education, and would have sent them abroad at some stage. 98.H’s relationship with another woman and his moving out of home, and the protracted divorce proceedings have no doubt affected somewhat his relationship with the children, particularly D, who had sworn 3 affidavits on behalf of W to support her case, and to respond to affidavits submitted by H, and to make various allegations against his father. I do not understand why W had to involve D in these proceedings. Unfortunately, as there was no directions hearing or pre-trial review before me before the trial, after the unsuccessful FDR hearing before another judge, I was not able to give any directions before the commencement of the trial. In any event, in my view, W should not have shown H’s affidavits to D or any third party, without leave of this court. D said he was very sad and angry after reading H’s 4th affidavit and learning about what his grandfather and his uncle had said about his private Mathematics tutoring time / cost be cut by half. It is indeed sad to see that W’s actions in involving D may now have also affected his relationship with his paternal grandfather and uncle. As it appears to me that D’s affidavits were probably drafted by W, I note what he has said but will not attach much weight to his allegations. H. CONCLUSION 99.As H said he would repay the AXA premium payments to Madam Yung if the AXA policy were to be surrendered, I will make an order that H pays to W a lump sum of HK$21,840 for her to repay her mother. I will leave him to decide whether to surrender the policy or raise such funds by other means. 100.Both parties have agreed that the Property should be sold. I will make an order that such sale to take place within 3 months, and that W shall have the conduct of the sale. 101.The parties have depleted more or less the same amount of family funds. Although W said she paid the sum of HK$70,000 to her mother, it still means that the available family funds were depleted. H should have a monthly surplus when the maintenance payments are reduced, and his recent loan paid off in March 2006. He is also likely to receive a sizeable gratuity of about HK$95,000 in August / September 2006 and every 2 years in future if he remains with the same school. 102.By now W has not worked for almost two years during which she was supported by H. From August 2003 to March 2004, in a total of 8 months, W had received a total of HK$130,000 in maintenance payments from H, namely on average about HK$16,250 per month, during which period she was working mostly full time, earning HK$19,000 per month from September 2003 to February 2004. In fact, during the period from August to February 2004, W should have received net of MPF a total of about HK$135,000 from her income. From April 2004 to August 2005, W had received HK$283,017 including an amount of HK$5,417 for D’s airfare. Thus, from August 2003 to August 2005, W should have received total maintenance payments of HK$407,630 (namely HK$413,017 less the airfare of HK$5,417) from H, and with her own income before she resigned, she would have at least about HK$542,630 during this period for her use, which would average about HK$21,700 per month. I accept that W will need money for relocation, and the children will need about HK$85,000 for orthodontic treatment / dental surgery. 103.Having considered all the s. 7 matters and all the circumstances of this case, I am of the view that H should receive 25% of the net sale proceeds of the Property, and W should receive 75%, 35% for her own benefit, and to include her relocation costs, and 40% to be held in trust for the children, in equal shares, for their orthodontic treatment/dental surgery, and if there is any surplus, for their education. 104.I am of the view that W’s 35% should cover her relocation expenses, and if not, as she should have surplus from her own monthly income once she starts working, she should be able to meet any shortfall out of her own resources. I am also of the view that the children’s share of 40% should also cover their orthodontic treatment/dental surgery expenses, and if not, upon production of original invoices or receipts by W to H, the shortfall shall be shared as to 30% by W and 70 % by H, having regard to their respective earning capacity. 105.Whether in Hong Kong or in Australia, the expenses claimed by W for her and the children are about HK$21,000 per month, of which the general expenses including accommodation, utilities, food, transport, and household items are about HK$15,000 (in Hong Kong) to HK$16,800 per month (in Australia), and apportioning approximately one third for each, it will be about HK$5,000 to about HK$5,600 per month for each. 106.W has not claimed very much for her own expenses. The amounts for clothings/shoes/uniforms/haircut/grocery, entertainment, and general dental insurance for W and the children amount to about HK$1,100 per month of which some are W’s expenses. I would make a rough estimate for the children’s share to be about HK$800 per month. Their other expenses including school fees, books, stationery, school activities, other tuition, and interest class come to about another HK$2,350 per month. 107.As I am of the view that W has an earning capacity of HK$16,000, she will be able to support herself, I propose to make only a nominal maintenance order for her. In view of the fact that W will need time to look for a job, this order will commence from 1st March 2006, and this will give W about 6 weeks to find work. 108.Further, having regard to W’s income capacity of HK$16,000 per month and H’s of about HK$38,000 per month, W should also contribute a portion, of say about 30%, towards the children’s expenses, while H should contribute about 70%. 109.The children’s expenses are about HK$14,000 per month, and therefore H’s contribution should be HK$10,000 per month. I am of the view that H has the ability to pay this sum as I find that his reasonable living expenses are about HK$11,000, and with his tax payments of about HK$6,000 per month, and HK$2,610 per month towards the loan repayments, his total expenses are about HK$19,600 per month, whereas his average monthly income is about HK$38,000 (before deduction of MPF, and taking into account the gratuity). There will be a surplus, and after March 2006, he will have a greater monthly surplus, when he has repaid his loan. 110.In her Closing Submission, W has sought an order to allow her to retrieve her personal items stored at H’s family’s homes in Australia. This matter was not brought up by her during the trial. In any event, there was no sufficient evidence that these items were still there. I decline to make such order. 111.In relation to the disclosure of H’s address, H had made allegations about W’s harassment, and has asked that there be leave for him not to disclose his address, but as W will be living in Australia, she is unlikely to cause H any harassment in the future. I am not satisfied that H has any cause for concern. I therefore order that H to disclose his present residential address within 14 days. Further, under s. 28A of the Matrimonial Proceedings and Property Ordinance, H will need to notify W within 14 days any change in his address by sending his new address by registered post to the last known address of W or to such address as may be notified to him by W. However, I would say that as H is presently legally represented, W should conduct any communications with H through his solicitors. No doubt, if W were to harass H in future, H can always make a report to the police or apply for a restraining order, and W may be at risk as to costs. 112.In relation to the attachment of income order sought by W, W has submitted a letter dated 23rd December 2004 to H’s former solicitors complaining that H did not pay the interim maintenance for December 2004 on time, as a result of which there were no sufficient funds in her account for the autopay repayment of one of the mortgage loans. However, this seemed to be the only occasion that W had complained about a delay in the payment of maintenance. H has voluntarily paid her maintenance before the interim maintenance order and has since complied with the interim maintenance order. There are no outstanding arrears, and there was no evidence of any other delay in payment, save for December 2004. H said any attachment of income order might create a negative impression on his school’s conservative and strict principal, and could have an adverse effect on his future employment. In any event, I have already ordered H to disclose his residential address. In the circumstances, I am not prepared to make any attachment order at this stage. I. ORDER 113.The effect of my order is as follows :
COST 114.As neither party can be said to have succeeded with their proposals, I make an order nisi that each is to be responsible for his / her own costs. This order shall be made absolute and final within 21 days. OTHER MATTERS 115.I make a declaration under s. 18 of the MPP0 that the arrangements of the children have been made and are the best that can be devised in the circumstances. 116.I also make a declaration under s. 17A of the Matrimonial Causes Ordinance that the financial provision made for the Respondent is reasonable and fair or the best that can be made in the circumstances. 117.Finally, I give leave to the Petitioner to apply for the Decree Nisi pronounced on 26th October 2004 to be made absolute forthwith, notwithstanding the expiration of 12 months therefrom.
Mr Kamlesh Sadwani instructed by m / s Krishnan & Tsang for Petitioner The Respondent acting in person |