C v. W
IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 2825 OF 1998 __________________ BETWEEN
__________________ Coram : Deputy District Judge Tracy Chan in Chambers (Not Open to Public) Date of Hearing : 11th October 2006, 22nd November 2006, 4th January 2007, 5th Feb 2007 Date of Final Submissions by Petitioner : 21st January 2007 and 27th February 2007 Date of Closing Submissions by Respondent : 29th January 2007 and 3rd March 2007 Date of Handing Down of Judgment : 15th March 2007 _____________________ J U D G M E N T _____________________ 1.This is the Respondent’s application for variation of a maintenance order made on 11th May 2004. The Respondent shall be referred to as “H” and the Petitioner “W” in this judgment for easy reference. 2.The trial is conducted in Chinese because all witnesses speak Punti. When it comes to judgment writing, I prefer it be in English because most of the documents and all written submissions are in English. It is also obvious to me that both parties are conversant in English. Background and History 3.The parties were married in 1981 and have a son now 19 years old (“the Child”). 4.On 18th March 1988, W petitioned for a divorce relying on the fact that parties have lived apart for a continuous period of at least one year immediately preceding the presentation of her petition and that H consented to a decree being granted. In September 1998, W was granted a decree nisi of divorce which was eventually made absolute in October same year. 5.On 28th August 1998, there was a court order made by parties’ consent (“the First Consent Order”) whereby :
6.H took out a summons to vary the First Consent Order on 28 October 2003. As a result of the summons, an order by parties’ consent was made on 11 May 2004 (“the Second Consent Order”) whereby H’s summons was dismissed and H was to pay W HK$50,000 as costs for W in relation to the application taken out by him. Besides H gave certain undertakings to W and the Court at the occasion and such undertakings had been incorporated in the Second Consent Order. The relevant undertakings are as follows :
7.At the same time, W also gave undertakings to the Court and the Respondent. Relevant terms are as follows :
8.Parties further agreed that :
9.W complained that there were arrears of payments due under the Second Consent Order and a Judgment Summons was issued on 8th June 2005 asking to enforce the arrears calculated on the basis on First Consent Order. H also issued a summons on 24th November 2005 asking that the Second Consent Order be varied to the extent that the periodical payment be reduced from HK$12,000 to HK$6,000 per month. 10.Before the trial commenced, parties reached certain agreements. First, that leave be granted to the Respondent to amend his summons that the variation would also cover the First Consent Order, if it is found by me that the First Consent Order is enforceable. Secondly, that the Respondent be allowed to ask for variation to the lump sum payment from HK$150,000 to HK$75,000 to be paid by 30 instalments or that the instalments be varied although it has not been so stated in his summons. Further, W acceded before trial that the periodical payment be reduced to $6,000 per month be it a variation from any of the two consent orders mentioned above. Issues to be determined : 11.The main issues for trial include
Whether First Consent Order enforceable 12.It is W’s case that she is entitled to enforce the First Consent Order as H has defaulted in payments since November 2004. Based on the parties’ undertakings to each other and to the court by the Second Consent Order set out in paragraphs 6 to 8 hereinabove, W is entitled to enforce the First Consent Order in case of default. Reading from the entire context of the Second Consent Order, I find it a situation of forbearance to sue. W forbore from enforcing the First Consent Order against H. She agreed to accept a reduction in the periodical payment for the Child, a discharge of the periodical payment for herself and a reduced lump sum to the Child be paid by instalments. She accepted a reduction from payments H was bound to pay under the First Consent Order. In return for her such forbearance, there are clear obligations for H to observe and that include paying the adjusted amount accordingly. 13.H tries to persuade me that W should not be allowed to enforce the First Consent Order despite parties’ undertakings in the Second Consent Order as set out in paragraphs 6 - 8 above. It is not H’s case that the Second Consent Order is invalid or ineffective. In fact he is trying his best to persuade me that the payment terms in the Second Consent Order is enforceable but not those in First Consent Order. His saying is that defaults happened because at the time he gave his undertakings under the Second Consent Order he failed to accurately estimate his future financial situation and the prospect of his business. Worst of all, things did not happen the way he had expected. Further, at that time, he had just survived a critical health condition and he did not have the energy to deal with the terms carefully in the Second Consent Order. I do not see that this is a good ground to set aside the terms set out in paragraphs 6 - 8. 14.Further H submits that some terms in the Second Consent Order are to the advantage of the Petitioner. I do not see any force in this argument also. Reading from the content of the two consent orders, I am of the view that W forbore from enforcing the First Consent Summons on condition that H complies with his undertakings. On the other hand, it is not H’s case that the forbearance of W has become irrevocable or it is inequitable for W to retract it. W’s forbearance and acceptance of a lesser amount of payment are good considerations to support the agreement between parties and she has since complied with her undertakings. The undertakings given by parties have been set out clearly for parties to observe. H was represented when the Second Consent Summons was executed. I note the remarks made by H about the advice given to him by his lawyer, I do not see any substance in the complaint. I could not find fault in his lawyer’s saying that the Second Consent Order would offer him a chance to be relieved from paying the lump sum payment which could not be achieved without the consent of W due to the operation of law. I shall come to this again later. After all it is not H’s case that he is not aware of the existence or the effect of the term stated in paragraphs 6 - 8 hereinabove. 15.Upon considering all the evidence before me, I find that W is entitled to enforce the terms in the First Consent Summons due to the default in payments of H. The payment clauses in the First Consent Summon relevant to H’s application for variation are as follows :
Legal principles on court’s power to vary a maintenance order 16.Counsel for W refers me to relevant legislations in relation to variation and discharge of orders for financial provision. Section 11 of Cap 192 is relevant.
17.Further, s.5 (4) of Cap 192 as referred to under s.11 (2) (c) provides that : An order under this section for the payment of a lump sum may provide for the payment of that sum by instalments of such amount as may be specified in the order and may require the payment of the instalments to be secured to the satisfaction of the court. 18.Counsel for W submits that reading from s.11 of Cap 192 the court has no power to vary an order for lump sum payment unless it is made under ss. 4(4) or 5(4). It is submitted that s.4 (1) (c) and s.5 (2) (c) of Cap 192 are concerned with orders for lump sum payments made for spouse and child respectively but they are not included in s.11 (2) (b) and (c) and therefore orders made under ss. 4 (1) (c) or 5 (2) (c) could not be varied. Reading from ss. 4, 5, 11 (2) (b) and (c) together I agree that this is the correct approach and interpretation to the sections. The lump sum payment in the First Consent Order is one made under s. 5 (2) (c) and therefore could not be varied by virtue of s.11 (2) (c). 19.For these reasons, I would not vary the lump sum order in the First Consent Order. For the periodical payment for the Child, as mentioned earlier, W has acceded to the request of H to have it reduced from HK$15,000 per month to HK$6,000. The next question is when the variation should take effect. H says that it should take effect as from day of arrears, i.e. November 2004 and W says that it should take effect from date of summons which is November 2005. Legal Principles on Variation 20.In exercising its power of variation, this court is required by s. 11 (7) of the Matrimonial Proceedings and Property Ordinance (“MPPO”) to have regard to :
21.All the matters mentioned in s. 7 of Cap192 are to be considered for the purposes of s. 11 (see Jones v. Jones 1971 3 All ER 1201, and also CCS v. LSB CACV 126 / 2004). 22.S. 7 (1) and (2) of Cap 192 provides as follows :
H’s Financial Circumstances 23.H is now 51. He has been involved in the family business for years helping to run the warehouse business and properties investments. Between April 2004 to March 2005 he was receiving a sum of HK$20,000 per month from SI Ltd trading as LMG. There was a profit of HK$32,519.61 (p 454) from TT Company. According to his tax return there was a sum of HK$31,999 being his portion of rental income from the units in KTI Buildings before they were sold. The total income for 2004 - 2005 was HK$304,518. 24.From April 2005 to March 2006, H made HK$60,000 from SIL trading as LMG for the whole year because the company went dormant starting from on 30th June 2005. H says he then had an income of HK$ 9,000 from LMGL as a manager starting from 1st July 2005 per month up to 31st December 2005; from 1st January 2006 his salary was increased to HK$15,000. During this time the net profit of TTC was HK$16,320.83. Total income for this year for H was therefore HK$202,320. 25.From April 2006 his monthly salary from LMGL remained at HK$15,000; and starting from 1st October 2006 it has been increased to HK$ 20,000 per month. Besides he has been receiving a payment of about HK$2,000 to HK$3,000 a month from TTC. 26.Between April 2004 to 2006, in addition to such income from his employment or his own business, he has received payments from the estate of his grandfather and father respectively. They are listed as follows :
27.From estate of grandfather:
28.Between October 2004 to June 2005 he received a total of HK$267,771.01 from his father’s estate and HK$277,486 from his grandfather’s estate in cash. The total is HK$545,257.01. According to H, there should still be some properties not sold, and some proceeds of sale not yet distributed. But he said the amount would not be great. He says that there should be a total of about HK$530,000 as his share of the grandfather’s estate, yet he has received about HK$410,000 on paper, there should be a balance of about HK$120,000 to be received. He mentioned that his share on the unsold portion of estate would not be much. H would not know when he would receive that or whether the same would be used to pay off the debt he owed to SF. Further I understand that amongst other assets, the estate of his father includes a unit at EG, his share would be about HK$800,000 to HK$900,000. But this property cannot be realised during the lifetime of his mother. Summary on H’s income during the period relevant to arrears and the present application April 2004 – March 2005
April 2005 – March 2006
H’s Expenditure 29.As gathered from his affirmations, his monthly expenditure has been in the region of HK$35,000 to HK$42,500 including maintenance of HK$17,000 being paid to W and the Child. He is making payment to his various bank loans in the sum of HK$7,000 per month. If I take away the maintenance and debt repayment to avoid double counting, his monthly expenditure would be about HK$11,000 to HK$18,500 depending on whether he has to pay rent. The Rental has been HK$6,700 to HK$6,800. The expenditure from April 2004 to March 2006 was therefore HK$469,200. 30.I gather from his various documents exhibited in pp478 to 484 of Exhibit Bundle that he has paid a total of approximately $193,534 to W pursuant to the First and Second Consent Order between April 2004 to March 2005. There were payments for maintenance in approximate total of HK$96,000 and about HK$ 40,000 as payments for and incidental to the benefit of the Child not within any court orders like dental charges, school fees and air fair etc. for the period between April 2005 to March 2006. The total paid to W during the period between April 2004 to March 2006 is therefore HK$329,534. During this period he had paid legal costs for W under the Second Consent Order and that amounted to HK$50,000. Certainly he would have his own legal costs to pay. I also notice from his updated financial statement that his liabilities has been reduced from HK$989,786.58 to HK$856,386.30 between the period of September 2005 to August 2006 without taking into account the alleged debt of HK$1.5m owed to SF. The difference in the total of debt amounts to HK$133,400, so presumably he pays off part of his debt from time to time and at least, during the 12 months time between September 2005 to August 2006 He had at least paid off that amount for his debt. Further he said that the money he received from the administratrix of his grandfather’s estate has been used to pay off debts. For the item of debt I take that he paid HK$7,000 per month for 24 months within the relevant period, total being not less than HK$168,000. I must say that these figures on his expenditure are not meant to be accurate down to dollar and cent but to provide a picture showing the financial position of H. On the whole I find that his expenditure during these two years not less than HK$898,934. Summary of expenditure during April 2004 to March 2006, a period relevant to arrears and the present application
H’s Liabilities 31.He says he has liabilities owed to banks, his sister, his God mother and SF (another company run by the family). The total of his liabilities as at August 2006 is about 2.49m. (p 275 of Pleadings Bundle B)
32.To sum up the financial position of H, it is his case that all his income has been used to meet the maintenance for W and the Child since 1999. He has no spare money for his own living and he has been relying on debts and contribution from his present wife. He sets out the breakdowns in “WKTG 24” at p506 of Exhibit Bundle. From this schedule, even I accept the outgoings of the maintenance, I see that his income from estates has not been accounted for. Be that as it may, I accept that he has faced tight budget since the death of his grandfather. I accept his saying that the administratrix of his grandfather’s estate has asked him to account for rental he received from for the family but not yet given credit for. Although part of such outstanding rental due and owing to the family has been accounted for at the distribution of his grandfather’s estate, the outstanding is still around HK$1.5m. More important to H perhaps, is that his income from such advancement or loan ceased together with his monthly income of HK$15,000 from SF since the administratrix of his grandfather took over the accounts. 33.H told me that his financial position has been and would be affected also by his health condition. He says prior to the Second Consent Order he had two incidents of health crisis under which he had just a very narrow escape from death. 34.H is now remarried. His present wife is running her own business. The only evidence before me is that she is making enough money to support herself and, according to H, to make some contribution to their family. I note that she has an investment in a property. I find the wife’s financial situation rather neutral to this application since she is not a burden to H, nor could she be expected to take on the family expenses all by herself. The Financial Position of W 35.W is now 48, educated and has been working in the cosmetic field for some time. She has however been unemployed since May 2006. While she was employed, her salary was around HK$30,000 per month. Since her unemployment she has got two free lance jobs in cosmetic field and she is making a total HK$25,000 per month. She is confident that she would get a steady job eventually. Her savings in the bank is HK$1.2m. She has no other valuable assets. Her monthly expenses on the family is about HK$20,000 and on herself is HK$5,000. She has not suggested any health condition for me to consider. The Needs of the Child 36.The Child is now 19 years old. He has started his studies in hotel management in Switzerland in early 2007. The yearly expenses for him including his studies would be about per year HK$200,000. It will take 2 - 3 years to complete. Conclusion : 37.I accept that H has faced changes in his financial situation since the death of his grandfather in 2001 and then led to his first application for variation in 2003. Situation did not improve as he had expected since the Second Consent Order. With his present income of around HK$23,000 a month, it is difficult for him to meet his undertakings to pay maintenance of HK$17,000 per month under the Second Consent Order or HK$30,000 per month under the First Consent Summon. As mentioned above, I find the First Consent Order enforceable, I would take that as the basis for the variation. I have explained in the above that I have no power to vary the lump sum order for HK$500,000 for the benefit of the child. I make no order in that regard. 38.For the periodical payment for the Child, as W acceded that it be reduced to HK$6,000 as requested by H, that is the extent I would order the First Consent Order to be varied. After considering the whole of the circumstances, including the financial positions of parties, the need of the Child, H’s liabilities etc, I order that such varied sum to take effect from November 2005 as requested by W because although I find that H has tight budget since the death of his grandfather, he did have some extraordinary income from the estate of his family. He had just received a sum of HK$ 225,486 on 28 October 2004 which is less than a month he started to reduce payment to W. Even I accept that he had paid the estate money all to settle his liabilities, it is my judgment that undertakings to the court should take priority. Further I order that H is to pay this maintenance until the Child finishes full time education pursuant to s.10 (3) of Cap 192. 39.Parties have not mentioned about their position on the periodical payment for W at the rate of HK$15,000 per month under the First Consent Order. For avoidance of doubt, upon consideration of evidence before me and the operation of legal principles, I order that to be discharged as it seemed to be parties’ intention that W would not pursue the periodical payment for her in the circumcises of the Second Consent Summons. She was given HK$100,000 for her vacating the flat occupied by her. That sum has been fully paid by H. And in any event, I find H not able to maintain W in view of his other obligations. Costs 40.Save and except for the costs of the hearing on 11th October 2006, the costs of this application be borne by H. Reasons being that H is the one who has departed from his undertakings and that he does not succeed on any items of his application except the one conceded by W. I order that such costs are to be taxed if not agreed. This is an order nisi which shall become absolute 14 days from date of this order. 41.For the costs in relation to the hearing on 11th October 2006, I have already ordered W to pay H’s costs for half day in the afternoon. I now intend to make further order to:
On 11th October, time has not been used constructively for progress of the trial due to late instructions to counsel and failure to prepare trial bundles. As a result the hearing has to be adjourned without progress and at the close of that day, counsel asked for leave to be discharged from being instructed to act for W. I direct that the solicitors representing W to show cause to me why the above two orders should not be made against them within 21 days.
Petitioner : Represented by Mr D. Tang, Counsel instructed by Messers Yu & Associates Respondent : Acting in person |
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