W v. W
Read the full judgment text of FCMC 13244/1997 on BabelCite. This Family Court judgment was delivered on 10 March 2006.
1. This is an application by the Petitioner, wife for ancillary relief for herself and the children of the family. I shall for ease of reference refer to the Petitioner as the wife and the Respondent as the husband.
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IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 13244 OF 1997 _________________________ BETWEEN
_______________________________ Coram: Deputy District Judge D'Almada Remedios in Chambers (not open to public) Dates of Hearing: 15, 16, 17, 23, 24 and 27 February 2006 Date of Judgment: 10 March 2006 _____________ Judgment _____________ 1.This is an application by the Petitioner, wife for ancillary relief for herself and the children of the family. I shall for ease of reference refer to the Petitioner as the wife and the Respondent as the husband. 2.The parties were married on 27th of September 1989 in Hong Kong. There are two children of the family, a daughter born on the 23rd of February 1990 in Hong Kong and a son born on 18th of March 1996 in the USA. Now aged 16 and 9 years old respectively. 3.The wife petitioned for divorce on 13 December 1997. There was then an attempt at reconciliation between the parties which involved a number of family trips abroad. However the wife was of the view that the husband did not want to attempt reconciliation and thus instructed her solicitors to proceed with the divorce and filed her notice of intention to proceed on the 24 February 2003. On the 11 June 2003 an amended petition on the ground of unreasonable behaviour was filed. On the 15 October 2003 a decree nisi order of divorce was granted and custody of the two children was granted to the wife with reasonable access to the husband. 4.The husband The husband is aged 56. He is a merchant dealing in jewelry. Having originally commenced his work with his father in the business, he has been in working in this field ever since. 5.He is the sole proprietor of a limited company whom I shall refer to as CJA in Hong Kong. His shareholding in CJA is 100%. He is a director and 83.75% shareholder of a limited company in Japan whom I shall refer to as CCL. His late mother holds the other 16.25% shareholding. He receives remuneration from the above two companies. 6.He and his wife jointly own the matrimonial home a flat situated at King's Road, Hong Kong. He is the sole owner of two properties in Tokyo, Japan and Shanghai, China. He has cash in various bank accounts equivalent to a few hundred thousand Hong Kong dollars. Approximately HK$7million of shareholdings in the above two companies. Approximately HK$2 million owed and due to him as director of CJA, a provident fund of approximately HK$100,000 and a debt in the form of interest owed to his sister in the amount of about HK$800,000. He is also a beneficiary of his mother's estate the value of such estate being approximately HK$9 million. The property in China is rented for a sum of approximately RMB 4,000. 7.The wife The wife and two children live at the matrimonial home. The children are attending school. Since her marriage to the husband she became a full-time housewife. She is responsible in taking care of the children with the assistance of a domestic helper. Since 2003 she developed some health problems, more particularly to her spine. She is now aged 46. She has some jewelry which was given to her during the marriage by the husband. She has no other assets or income. She relies solely on the husband for financial support for herself and her children. 8.The claims The wife's claims for ancillary relief for herself and the children of the family are for periodical payments for their respective benefits in the amount of $70,000 a month, being $30,000 as maintenance for herself and $40,000 to the children being $20,000 each. A lump sum payment of HK$3 million and a sum of $500,000 for renovation and or repair fees for the matrimonial home. 9.The husband has sought no financial relief for himself. 10.The law In resolving the ancillary relief application, I am charged with the duty to pay heed to the criteria set out in s.7(1) of the Matrimonial Proceedings and Property Ordinance (the MPPO) cap.192 in respect to a claim by a spouse and s.7(2) as regards a claim brought for the benefit of a child of the family. 11.I will list the criteria. 12.Criteria A -
The husband has been in gainful employment throughout the marriage. He will continue with the running of his own businesses for the foreseeable future. Although he is now aged 56 he has given no indication or suggestion to the court that he intends to retire soon or cease working. It is probable that should he chose to do so in the future, he will either sell his companies or keep them running and derive income there from. It is expected that the husband's present earning capacity will continue for the next 10 years at least. The husband owns properties in Hong Kong, Japan and China. 13.The wife has been out of employment for a very long time, since the time of marriage until today, it has been approximately 17 years. She is not young and with her being out of the work force for such a long period of time and with back pain it is unlikely that she will find any good prospects of employment and hence be in gainful employment. She will therefore be wholly reliant upon the husband for financial support. 14.Criteria B -
The husband and the wife have set out in detail their needs and obligations which they have and are likely to have in the future. I shall deal with these more particularly hereafter. In summary, the wife will be required to look after and house the children, whilst the husband may re-marry as he has a girlfriend in Japan. There is no evidence that the wife will re-marry. 15..CriteriaC –
The parties to the marriage enjoyed a comfortable standard of living. The husband's income provided them with the privilege of a spacious matrimonial home. They employed a maid. The family ate well and sometimes extravagantly. I believe the wife's evidence that it was common for them to enjoy more expensive food such as Japanese food including expensive beef and sashimi and to dine out at five star hotels or expensive restaurants. 16.In 1996 there was also no sparing of expenses when the husband arranged for the whole family and maid to go to the USA for the wife to give birth to the son in USA. He flew her there in business class. The husband showered his wife with expensive and luxury gifts during birthdays, anniversary's and Christmas. The gifts ranged from fashionable brands of clothing, handbags to precious stones and pricey jewelry. Family holidays abroad were taken once or twice a year. Entertainment at the cinema or shopping particularly for clothing was standard. The husband wholly paid the children's extra tuition classes and expenses. The wife received at least HK$50,000 maintenance a month from the husband. Other expenses such as school fees, rates and management fees and utility bills for the matrimonial home, were paid directly by the husband. At Chinese New Year she would receive about $23,000 from the husband. 17.Criteria D –
The parties are now aged 56 and 46 years old. Although the wife filed her petition for divorce some 8 years after the marriage, there was an attempt at reconciliation for the following 6 years. It was decided by the wife that the marriage was at an end in 2003. In the present case the marriage was for a period of about 14 years. This can therefore be described as a long marriage. 18.Criteria E -
There is no evidence before me that the husband is suffering from any kind of disability. He claims that his health is deteriorating. He says he has been advised by his doctor not to reside in dusty conditions but there is no medical evidence that such a condition effects his earning capacity. There is medical evidence before me that the wife is suffering from some physical disabilities of her back. She has been diagnosed with a prolapsed inter vertebral disc L4/5. She has been admitted into hospital for her condition and regularly attends for treatment and physiotherapy. If her conditions deteriorate she may have to have an operation to fuse the L4/5 discs. The wife spends much of time when not looking after the children going to treatment or doing exercises for her back so as to avoid the need to undergo the operation. The wife endeavours to use the public health system which is at low cost. In her present condition coupled with her being out of the workforce for 17 years it is unlikely that she will be able to achieve any gainful or rewarding employment. 19.The son is suffering from asthma. He has to take medicine on a long-term basis. At present he sees a doctor regularly for his condition. Hence medical fees. Food supplements such as swallows nest is provided to him in the hope that it will make him healthy and strengthen his immune system. The wife also takes food supplements for her medical condition. 20.Criteria F –
Before the marriage the wife worked as a clerk in an office. Soon after the marriage the wife ceased working as she was pregnant with the daughter. She has been a full time housewife and primary carer of the children since then with the assistance of a domestic helper. 21.The husband has been and will be the sole breadwinner of the family. He spends approximately half his time in a month in Japan and in Hong Kong running his jewelry business. He has operated this business since the time of the marriage and prior to that was in the same business with his father. Apart from having one other part time assistant, he is the sole and main operator in his business meeting clients and purchasing goods. 22.Both parties have hence made an equal contribution to the marriage. 23.Criteria G
24.What I must consider is the reasonable and just needs of the wife and dependent children and to balance that against the husband's ability to cater for those needs, paying due heed to his needs as well. 25.The parties needs and obligations It is sensible to look first at the standard of living enjoyed by the family before the breakdown for that is the yardstick against which the wife and children's needs must be measured and then to consider to what extent the husband can be called upon to provide for them. 26.I turn now to deal with their respective needs. 27.The husband These are set out in his financial statement form E dated 6 January 2006. The main expenses that are disputed by the wife are expenses of hotel accommodation, meals out of home and contribution to his girlfriend. She submits that it is unreasonable that the husband incur hotel charges in the sum of approximately $8,000.00 whilst living in Hong Kong as he could live at his late mother's flat at no fee. As both his companies CJA and CCL pay for the husband's entertainment, meals and provides him with allowance his expenses should be reduced to a minimum. As regards the contribution of HK$16,275 to his girlfriend, the needs of the wife and the children have priority over her and such sum should not be permitted. 28.It is submitted by Ms. Chan the solicitor, for the wife, that the total monthly expenses that should be permitted for the husband is $14,966.00. 29.The wife's and children's expenses The wife's latest financial statement dated 20 December 2005, evidences her and her children's needs. The total monthly expenses as claimed by her amount to about HK$71,000. There are anticipated monthly expenses from September 2006 of a further $20,000 for the daughter's fees for studying abroad and the son's change to a “Direct subsidy scheme” school of $5,000 month. Therefore totaling about $96,000 month. 30.The husband submits that the reasonable needs of the wife and children should amount to about $41,000. He flatly opposes the amount of $7,228 claimed by the wife as food supplement for herself and the children. He challenges the majority of the other expenses as being too high. 31.It can however be seen from the evidence and as stated in the husband's own written closing submissions that since his marriage in 1989 he paid his wife HK$50,000.00 per month as maintenance excluding direct expenses paid by him plus an extra $23,000.00 every Chinese New Year. He gave her this sum until June 2003. His observation is that the sum occupied some 62% of his salary of HK$81,000.00 in 2003. 32.The wife and children's expenses mostly encompass those of housing, food and household expenses, children's private and extra-tuition fees, together with some extra curricular activities and entertainment, presents, holidays and food supplements. As stated earlier these are fully particularised in her Form E. Although the wife and children are accustomed to eating extravagantly and well, the wife and children can cut the cost of this item by making some adjustments to their eating habits and also to their regularity of dinning out and/or perhaps at less expensive venues. 33.I do not find that she has inflated her claims, however I do find that some of her expenditures can be reduced to fit her and her children's reasonable needs. 34.Having carefully reviewed and taken into account those expenses. The children are now getting older, the cost of living has increased. The husband was paying the wife at least $50,000.00 a month in 2003, I find it impossible that their expenses should now be decreased to $41,000 per month as the husband suggests. I consider a reasonable sum for the needs, obligations and responsibilities of the wife and children amount to $65,000.00. That is the amount required to maintain their standard of living. It is also a reflection as to the standard of living they enjoyed during the subsistence of the marriage. 35.The husband has claimed expenses of about HK$89,000 per month. Of those, $41,000 as interim maintenance is included. Therefore his expenses are about $48,000.00 a month. The bulk of those expenses are $7,000 for tax, $8,000 each for hotel room charges and meals making a total of $23,000.00. On top of that is a contribution to his girlfriend of HK$16,275.00. Totaling HK$39,000. Much of his expenses are paid for by his companies as can be seen from the company's accounts, see the accounts of CCL at p.2143. He charges day to day expenses such as laundry and amenities to his company which are not shown in his companies accounts. From 1 April 2003 to 1 March 2004 he received an allowance of about HK$500.00 per day (HK$148,500) for 297 days from CJA. 36.It can be seen that most of the husband's expenses are covered by the companies and/or can be charged to the company as it is his sole discretion. Tax has already been accounted for by the company and hence no allowance will be permitted in his monthly expenses. As to the hotel charges of $8,000.00 these are an unnecessary expenses as he is able to stay at no cost at his late mother's flat in Kimberly Road. Though if he is genuinely reluctant to stay there as he feels uncomfortable as his mother committed suicide there, he should look to less expensive hotel or alternative accommodation. 37.Contribution paid to his girlfriend in Japan of about HK$16,000 a month is high. The husband attempts to justify this expense because the cost of living in Japan is very high as compared to Hong Kong. All that the husband has told me in relation to his girlfriend is that he is supporting her at this amount. The cost of living in Japan may be high and higher than that here but this does not take priority over the needs of the children and the wife. What in effect the husband is proposing is for this court to endorse his payment of about 40% of his maintenance now payable (HK$40,000) to the wife and children to his girlfriend. This in broad terms means that he is willing and able to pay more to maintain one person, the girlfriend, than three people that is his wife and children. This is an imbalanced and unwarranted expense and the majority of such sum should not be paid to the girlfriend but be used towards the needs of the wife and children. 38.The wife requires $65,000.00 month to support herself and the children. I find that the husband requires about $14,000.00 a month for himself as most of his expenses are paid for by his companies. 39.I have considered all the evidence and the submissions made by the Ms. Chan and the husband in arriving at my decision. 40.Assets There are no disputes amongst the parties as to the husbands assets save for some disagreements as to their value or the amount of his interest in the assets and his liabilities. The difference set out in the table below. 41.The husband suggests that the wife has accumulated over the years of marriage jewelry and cash totaling approximately HK$2.1 million. He doubts her integrity that she has no money or assets and refers to her first financial statement where she affirmed that she only had $2.30 in her bank account to which he submitted was an outright lie and a ridiculous statement. Especially he says, when in the same breath, she was alluding to the fact that he had been paying her maintenance in the sum of about $55,000.00 a month. 42.He asserts that during the marriage she received cash from him in the sum of about $5,000.00 a month as an emergency fund just in case she and the children were to be in need of quick cash. He gave this fund to her as he was often out of town and as an insurance. He produced in court a bank statement dated 27 March 1996 from The China State Bank, LTD evidencing that the wife had savings of HK$360,723.17. It is his case that she has not used all the funds he had given her over the years and she still has a large amount of these funds but that she has failed to disclose them and hidden them away from the court. The wife denies that she was given such emergency funds. As for the $360,000.00 odd in the bank account it is her evidence that all has since been used on the family expenses. She states that she has no savings and has of late had to borrow some $100,000 from her sister to maintain herself and the children as a result of the inadequate maintenance she receives from the husband. 43.The Assets of the Parties. There are agreed valuation reports of the landed properties in Hong Kong, China and Japan.
44.Income 45.It is the wife's case that the husband income a month from CCL is HK$59,500.00 month after tax and from CJA is $44,000.00 month plus rental received by him for his Japanese property in the sum HK$9,280 making a total of $112,000.00. The husband's disputes the income earned. It is his case that as is shown in exhibit R3 a document showing his income and tax from the accountants his income from CCL is about $41,000.00 after tax and $41,000.00 from CJA plus rent of about $8,000.00 from his Japan property totaling HK$90,000.00. 46.The wife has no earning capacity. Her sole source of income per month is from the husband's maintenance. The husband is the major hand at both companies save for a part-time worker. He himself, as admitted in court is able to decide how much salary he receives from his company. He gave an example that when he was required to pay his lawyers fees for the present divorce case he increased his salary but now that he is no longer legally represented his salary has been reduced. The husband's income from his companies is therefore at his sole discretion and is flexible. His income from the companies is not stagnant it can be wide ranging, as evidenced from about HK$90,000.00 to HK$112,000.00 a month. 47.Both companies are doing well. They have a total net profit of HK$478,000. These profits have not been distributed. From the balance sheet of CJA in March 2005 there is inventories in the sum of HK$6,433,251 and cash in the sum of HK$1,074,546. The husband says that is so as the companies must be seen to have value. It is submitted by Ms. Chan that the husband decides unilaterally whether to distribute profit and if such profit were distributed he would be the beneficiary and his income would therefore be further increased. In any event such profit derived from the companies is exclusively for the use of the husband. 48.As can be discerned from above, the net disposable monthly income of the husband is sufficient to provide for the needs of the children and the wife. 49.The husband has sufficient monthly income, profit and funds from his companies to provide for the needs for himself, the wife and children in the style of life to which they were accustomed. There is even extra to support his girlfriend. 50.He has the necessary resources out of the capital assets to meet the needs of the family. The husband agrees to the wife claims for the transfer of his interest in the matrimonial home to her. The husband submits that as the matrimonial home is to be transferred to the wife and with her $2.2 million of jewels and cash that is sufficient apportionment of the assets being HK$11 million or approximately 45% of his calculated capital assets. The wife claims for the transfer of the husband's interest in the matrimonial home and a lump sum of HK$3 million which would mean a total assets of HK$11.8 million. 51.The matrimonial home is in need of repair and renovation. Desperate repair is required to repair the water leakage. There has been much correspondence between the parties requesting the husband to attend to the repairs with urgency. The wife seeks total renovation costs of the matrimonial home in the sum of HK$500,000.00. The husband finds this sum extortionate. He is agreeable to pay for the repairs caused by the water leakage but not to the other renovation costs. 52.The husband's figure of HK$2.1 million of jewelry given to his wife and money in the bank are all his own estimates. In cross-examination of the wife he put to her she had jewels worth approximately $500,000.00 she was unable to agree as she did not know the value. She stated that they were beautiful jewels which she kept in the safe deposit box in the bank. Later in the husband's case he changed his estimate and valued them at approximately HK$750,000.00. 53.The remaining $1.35 million he submits are money's he has given to her during the marriage to which she must have saved. They consist of a payment of $300,000.00 he gave to her on the birth of their daughter as a reward, $960,000.00 as emergency money and $200,000.00 as money not used from monthly maintenance she received being a savings of about $2,000 a month for a year times 13 years. 54.I believe the wife when she says that she has spent all the monies she had in the bank in maintaining herself and the children and that she does not have any sum hidden away. As can be seen from the living standard it was high. I believe that any sums saved would have been depleted by now. As to the value of the jewelry the husband gave two estimates. I consider the original figure as put by the husband of about HK$500,000.00 to be reasonable. The wife has said she does not wear them any more as she does not wish to be reminded of the husband. She has therefore given them or kept them all for the daughter and when the daughter is old enough she will wear them on special occasions. Clearly there is some value both sentimentally and financially. So much so they may be considered as something like an heirloom of this family to which may be passed on from one generation to another. Given the circumstances I do not find it appropriate to take the value of the jewels given to her by the husband as part of the wife's assets. 55.The husband's mother Madam Wu passed away in 1998. The value of Madam Wu's estate is HK$9.7 million. There is a document purportedly a will left by Madam Wu leaving the husband a 40% share of her assets. The wife says that amounts to about HK$3.9 million before tax. The husband claims that his share is only 25% which is an equal division amongst himself and his three siblings. He says that the estate has not been distributed as his siblings and him have a dispute over the estate. However no court action has been commenced and no Grant of Probate has been applied for by him. 56.It has been 8 years since the passing of his mother. It should be the husband's primary consideration to settle any disputes as the husband will inherit from his mother's estate at the least 25% which amounts to HK$2.4 million which forms at least 10% of his estimated present assets. Not an insignificant amount. 57.The property in Shanghai is in his sole name purchased at US$168,000.00. It is rented out at RMB 4,000.00 per month and the rental is given to a Mr. Tsui. The husband feels morally obligated to support Mr. Tsui as Tsui used to assist him in running his business but now is no longer doing so, yet has an ill mother and a wife who is out of a job. Although the husband feels morally obligated to support Mr.Tsui this should not be at the expense of the wife or take priority over the wife and children. 58.The Japan property was purchased in the husband's sole name in 1994 for Yen 61,577,000.00 about HK$4 million. He did not take out a mortgage on the said property. It is used as his own residence when in Japan and also as commercial premises for running his company CCL from Japan. 59.The husband's mother's has a 16.25% shareholding in CCL. The husband has stated that he will divide her share with his siblings. It appears unlikely that this will be so as this was not included as part of her estate. I accept Ms.Chan, solicitor for the wife's submission, that this company is in reality wholly owned by the husband. 60.The husband's sister Ms. Weng lent a sum of US$522,293.33 to him for the running of his business in April 1985. The interest due under the loan per annum is stated as his liability in his financial statement of HK$840,000 odd. The husband informed the court that his father was a wealthy man and he had left money to his sister and hence she was in turn able to lend him the money. Despite the loan and interest due the husband has made no repayment for the past 20 years. It is submitted by Ms. Chan that if no payment has been made for 20 years it is unlikely he will be called upon now to repay it. It is his sister on behalf of his father who loaned him the money. Ms. Chan submits no allowance need be set aside for interest and the husband can take the interest for his own use. As no interest has been paid for such a long time, it appears that it is just a paper liability and hence such funds are further available for the husbands use. 61.I assess the husband's available assets at an amount of about HK$26 million. 62.It can be seen that the husband was able to make purchases in the China and Japan properties without resort to loans from the bank. Clearly evidencing his financial ability and liquidity. His business is successful. It is likely that his business will continue to prosper and the value may be increased. He has provided his family and himself with a good standard of living. The wife is middle-aged, her earning capacity is minimal. She is wholly reliant upon the husband. Apart from the maintenance of about $50,000 a month she received from him prior to 2003 the husband paid other expenses directly. The wife and children are living at the matrimonial home, the leakage needs to be repaired. Previously the husband renovated the home quite regularly. Renovations were completed in 1989, 1996 and 2000, sums of between $100,00 to $300,000 were spent on each occasion. The last in 2000 was a small scale renovation. From the quotation dated 29 August 2004 received from the contractor appointed by the husband (though he says he only asked for a quote on the leakage and consequential repairs) the amount of HK$475,900.00 is required for the renovation. It is six years since the last renovation. Even though the husband knew of the need to repair the leakage in the matrimonial home since 2004 and was willing to make payment for it and being aware of the condition of the house no payment has been made for the repairs. The house should be placed in a satisfactory and decent condition for the wife and children. It is appropriate that she be given sufficient funds for this. It is correct that she also be provided with sufficient capital so that she may be secure for the future. 63.To achieve this aim and to keep the family so far as is possible in the standard of living they have been used to. I propose to share the capital assets between the parties as follows. The husband transfer his interest in the matrimonial home to his wife. The husband to pay a lump sum in the amount of HK$3 million. The husband do pay the wife $340,000.00, $90,000.00 being the permitted arrears of maintenance due until today and a sum of $250,000.00 for the renovation and repairs of the matrimonial home. The husband do pay the wife a monthly maintenance of $65,000.00 a month being $25,000.00 for the wife and $40,000.00 for the children being $20,000 for each of the children of the family. This should be a sufficient provision, in the circumstances, for both the wife and the husband to meet their respective needs. 64.It follows the husbands summons dated 10 January 2006 for a variation of the interim maintenance order 16 November 2005 is dismissed. 65.In concluding I make the following orders:-
Miss. S.H Chan of Lunning & Chan for the Petitioner The Respondent acting in person |