T v. J

FCMP 38/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MISCELLANEOUS PROCEEDINGS

NUMBER 38 OF 2007

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Coram : H.H. Judge Bruno Chan in Chambers

Date of Hearing :    27-28 September and 18-20 December 2007, 7-8, & 10, January, 31 March, 1 April, 24 June, 3 & 28 July and 13 August 2008.

Date of Judgment : 26^th August 2008

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J U D G M E N T

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1.This is the Applicant Mother’s application for maintenance under the Guardianship of Minors Ordinance, Cap.13 (“GMO”) for her 22 months old twins, a boy and a girl, born out of wedlock on 25^th October 2006 from what can only be described as a short but tumultuous relationship with the Respondent Father, a married man with a family of 2 children of his own now aged 7 and 9.  What the Mother is seeking are monthly periodical payment for the minors’ living expenses and their future education, security for such payments, as well as a lump sum for all the liabilities and expenses incurred for their birth and thereafter in maintaining them up to the time of the application.  She is a 31 year old single mother who used to work as a company secretary earning about $17,000 per month but is now unemployed, and he is a 42 year old finance adviser in corporate finance and banking who is now said to be in between jobs but has agreed of having an earning capacity of about $100,000 per month.

2.At the 1^st hearing of these proceedings on 13^th April 2007 the Father conceded that he is the biological father of the minors after his requested paternity test returned a positive result. Accordingly a declaration to that effect was made under s. 6 of the Parent and Child Ordinance, Cap.429 made by the court at that hearing, when it was apparent that the central issues are over the Father’s financial means and the needs of the minors, of which he has accused the Mother of making exaggerated, unrealistic and unreasonable demands, and she has retorted by accusing him of being irresponsible, mean and indifferent to the welfare of their children, which just further fuelled the tension and acrimony already existed between the parties long before these proceedings, not uncommon in cases of this sort, but particularly so here by the high emotions and extreme hostility displayed by them throughout the proceedings, as well as the numerous allegations and accusations, very often ugly and scandalous, levelled at each other both in their lengthy affidavits and in their testimony in court, many of which were in my view immaterial, irrelevant and unhelpful to the court’s task in resolving their disputes.  Nevertheless it will still be necessary to go into the relevant background of the case in more details.

Background

3.The parties first met in 2003 in some bar in Lan Kwai Fong, Hong Kong frequented by the Father for drinks after work, and eventually developed a relationship in late 2003 or early 2004 which went on and off for the next 2 years or so during which there were many quarrels between them, and according to the Mother, with acts of violence inflicted on her by the Father which had landed her in hospital once, with further hospitalization when she tried to commit suicide by drug overdose on 2 other occasions, followed by episodes of depressive disorder which required psychological treatment and medication until 2005.

4.The relationship sadly turned even worse in February 2006 when the Mother quitted her job as a secretary for a major accounting firm, then discovered her pregnancy of the minors and demanded the Father to face up to his responsibility and to make financial provisions for them. Unfortunately the Father initially doubted that he was responsible for the pregnancy, and later suspected that it might have been intentionally caused by the Mother to make trouble to his marriage and his family, and to extract financial compensation from him.

5.This sadly but not surprisingly brought out the worst reactions from the Mother which were in my view highly regrettable and inappropriate, including going up to the Father’s office waving a banner with words “I am having (Father)’s babies, please help” which led to some pushing and shoving by the Father when he tried to make her leave, and to his subsequent arrest and charge by the police, and his eventual resignation from his job, followed by her spilling the beans to some tabloids, then going up with the tabloid’s reporter to the office of his  wife who is a practising solicitor, circulating copies of the tabloid’s cuttings of their relationship (Paginated Bundle A2 : 371 – 373) to her employer and colleagues, and sending an abusive letter to her (A2 : 375), although specifically denied by the Mother, with such personal attacks and a veiled threat against her children that were nothing short of malicious and scandalous.

6.However much I empathise with the Mother’s plight of being a single mother with 2 infants without any financial means or family support, I cannot approve or condone her such behaviour, but the Father’s suspicious attitude over her pregnancy, his apparent indifference towards the birth of the minors whom he has never seen and has expressed no desire to have any contact whatsoever with them in future, his non-cooperation over the registration of their birth which caused unnecessary delay to the issue of their birth certificate, and his failure to provide any financial assistance for them until some 6 months after their birth at the 1^st hearing of these proceedings, and then at such an amount that, as will be apparent below, can only be described as woefully inadequate, were all equally to blame.

7.While both parties have accused the other of deceit and trickery, and regard themselves as the victim of such exploits, it is clear that they entered into such a relationship as consenting adults with their eyes wide open, but were oblivious to the fact that the true victims here were those innocent third parties whose lives have been so affected by their actions, and I do not mean just the 2 minors in question.  It is however not my intention to pass any moral judgment on the parties’ relationship, and I shall leave it at that and turn to the more relevant issues before me.

8.Going back somewhat in time to about May 2006, according to the Mother, she was kicked out of her parents’ home after they learnt about her pregnancy.  She therefore took up some temporary shelter provided by the Social Welfare Department for a couple of months, then moved into a friend’s place until the birth of the minors on 25^th October 2006 while relying on temporary social welfare all this time.  Thereafter the Mother and the infants stayed at another friend’s place until late December 2006 when she got off social welfare and moved the infants into a 600 odd sq ft serviced apartment in Hung Hom, Kowloon at a monthly rental of $10,700 inclusive of furniture and utilities by borrowing with her credit cards and from a friend to the extent that she was allegedly by then in debts of more than $170,000.

9.In January 2007 the Mother hired a domestic helper to look after the minors and returned to work as a sales executive at Macus Evans at a basic salary of $5,000 plus estimated commission of $7,000 - $8,000 per month,  but resigned only one month later when her helper allegedly quit because she was unable to handle taking care of the 2 minors and doing the other household chores at the same time. After some futile attempts to find another helper, the Mother has since decided to stay home looking after the minors with part-time help pending the outcome of these proceedings.  

The Proceedings

10.Her applications for a declaration in respect of the minors under the Parent and Child Ordinance and for their maintenance under the Guardianship of Minors Ordinance were launched on 21^st February 2007 after she was granted legal aid. As aforesaid at the 1st hearing on 13^th April 2007, the Father conceded on the issue of paternity and offered to pay $7,000 per month for the maintenance of the minors, which was far less than what the Mother had in mind, as in her 1^st Affirmation she claimed to require as much as $51,000 per month to enable her to move to a bigger flat and to hire sufficient domestic help for the minors, and an additional sum of $162,000 to reimburse her for the start-up costs for the minors since their birth, but the Father’s offer was nevertheless accepted by her solicitors on her behalf on interim basis pending the final determination of her application.

11.The parties had since each filed further more lengthy affidavits, and at the subsequent trial in September 2007 the Father made some further proposals which were subsequently turned into an interim order to pay the Mother an additional sum of $100,000 to cover the interim maintenance for the minors for the period dating back to the date of her application and as advanced payment for the minors for the next several months, during which the Mother chose to discharge her legal aid to act in person, while the Father retained legal representation slightly longer until January 2008 allegedly due to financial constraints, but I would not be surprised if it was also because his lawyer found the Mother’s hostile demeanour in court towards her which had on occasions bordered on personal attack unbearable and decided not to put up with it anymore. 

12.I should also point out that what should have been a simple and straightforward matter over the minors’ reasonable needs as against the Father’s ability to pay, the 2 main criteria for consideration under s. 10 of GMO, had sadly and unfortunately dragged on not just because the parties had moved their battlefield into the court, but also because they had unnecessarily and unwisely chosen to put in details many ugly and scandalous allegations against each other over their past relationship in their affidavits, for which the Father must bear most of the blame as he started it all in his 1^st affirmation, which have in my view no apparent bearing on the issues nor can make any difference to the result, but instead gave the Mother an excuse to insist that she be given every opportunity to deal with each and every one of them by way of cross-examination of the Father at the trial thereby prolonging it, and in such vengeful manner that I suspect might well be also to take revenge against him for his failure to properly face up to his responsibility towards the minors.

13.Despite my giving the Mother every allowance, not just because she was then unrepresented but also because of the enormous strain she must have been under both at home and in court, but when she refused to heed my advice and warning not to dwell on unnecessary or irrelevant matters in particularly at the early stage of the proceedings, the trial would sadly descend into shouting matches between the parties and the Father’s lawyer, sometimes with the unwitting participation of the court, that it had to be adjourned prematurely on a few occasions for which I must bear my share of the blame for I had the ultimate control and management of the trial. The situation fortunately improved somewhat after the Father’s lawyer dropped out of the proceedings and the Mother started to focus more on the relevant issues. 

14.With the many difficulties and disruptions to the trial, and with the proceedings dragged on for well over a year which span more than half the life of the minors, it was inevitable that many of their needs and expenses have changed as they grew from those originally set out in the Mother’s 1^st affirmation which was made when they were merely 4 months old, hence at one of the adjourned hearings on 22^nd January 2008 the Mother sought and obtained another advanced payment from the Father of a sum of $90,000 for the minors’ use and benefits until the next hearing, and on 1^st April 2008 when her cross-examination of the Father again ran out of time despite being given  an additional 2 full days and had to be adjourned further, the Mother obtained yet another interim order increasing the original interim maintenance order to $34,000 per month after she produced evidence of the expiration of her original tenancy in December 2007 and her subsequent move to another serviced apartment at a higher rent with additional expenses, as well as to cater for the costs of temporary domestic helps in expectation of her return to work to earn her living. All these interim payments were of course expressly made without prejudice to the parties’ argument for a higher or lower amount at the end of the day.    

The Law

15.The Mother’s claims for various forms of maintenance for the minors are of course governed by s. 10 (2) of GMO which provides that the court may make one or more of the following orders : -

“(a)   an order requiring payment to the applicant by the parent or either of the parents of the minor of such lump sum (whether in one amount or by instalments) for the immediate and non-recurring needs of the minor or for the purpose of enabling any liabilities or expenses reasonably incurred in maintaining the minor before the making of the order to be met, or for both, as the court thinks reasonable having regard to the means of that parent;

(b) an order requiring payment to the applicant by such parent or either of such parents of such periodical sum towards the maintenance of the minor as the court thinks reasonable having regard to the means of that parent;

(c) an order requiring the securing to the applicant by such parent or either of such parents, to the satisfaction of the court, of such periodical sum towards the maintenance of the minor as the court thinks reasonable having regard to the means of that parent;

(d) an order requiring the transfer to the applicant for the benefit of the minor, or to the minor, by such parent or either of such parents, of such property, being property to which the parent is entitled (either in possession or reversion), as the court thinks reasonable having regard to the means of that parent;

(e) an order requiring the settlement for the benefit of the minor, to the satisfaction of the court, of such property, being property to which such parent or either of such parents is so entitled, as the court thinks reasonable having regard to the means of that parent”.

16.It is clear that both (a) and (b) are the relevant subsections here, and while the only guidance given therein is that the award shall be reasonable given the means of the paying parent, to arrive at what is reasonable, the court will nevertheless bear in mind all the relevant matters drawn to its attention relating to the parties as well as the children, with as aforesaid the most outstanding matters being the reasonable needs of the children which must necessarily be linked to the situation of the custodial parent, financially and otherwise, and the ability of the other parent to pay, bearing in mind of course his own reasonable needs and requirements as well as those of his family if any.

17.In other words, the court has to consider carefully the reasonableness of the amount of the claim by the mother for the children, and having determined what is a reasonable amount, as with any maintenance case, the court must then consider whether it is reasonable for the father to pay such an amount, considering the amount of maintenance payable against the court’s determination of the father’s overall net income : N v D [2008] 1 FLR, 1629. With all these in mind, I shall proceed to consider the Mother’s claims.

The Mother’s Claims

18.The Mother initially put her claims, as aforesaid on the basis of what was then said to be the monthly expenditure of $51,000 for the minors including her estimated rental expense of $24,000 for a bigger flat, the breakdowns of which can be found in A1 : 20, and which is reproduced as follows :

Rent	$ 24,000
Electricity	$  1,500
Gas	$  1,000
Club/Play Group	$  2,500
Insurance	$  1,500
Helper(s)	$ 10,000
Baby Food	$  3,000
Clothes	$  2,500
Baby Accessories/Diapers	$  3,000
Medical	$  2,000
Total:	$51,000

19.That was then in February 2007, and more than a year later with the Mother having moved to another flat and the minors soon starting kindergarten in about September 2008, she has revised the minors’ needs to a somewhat lesser sum of $44,000 per month, with a lower rental at $15,000 and a new provision for nursery/kindergarten school fees estimated at $7,000 – $8,000 accounting for the main difference. Her proposal is that when she returns to work upon the conclusion of these proceedings, she believes that she would eventually be able to earn $17,000 per month as before, from which she proposes to contribute $6,000 to $7,000 towards this monthly expenditure of the minors, with the balance of  $38,000 or so to be met by the Father by way of monthly maintenance and to be dated back to the time of her application.

20.As aforesaid she also claims a lump sum either in one amount or by instalments by way of reimbursement of all the expenses she has incurred in maintaining the minors from their birth up to the current month of August 2008 including their start-up costs of $162,000 first set out in A1 : 20, later revised and updated at various stages of the trial, and finally reproduced in her final submission, which I reproduce here in the same sequence as follows :

Medical (Western)	$ 40,755.00
Medical (Chinese)	$  2,988.50
Transportation	$  50,502.17
Food	$ 121,158.45
Laundry	$   2,104.40
Advisory	$   5,000.00
Electrical Appliances	$  12,540.40
Clothing	$  49,370.46
Nursery	$ 115,565.15
Furniture/Toys	$  35,843.74
Shoes	$   4,590.46
Stationary	$    829.20
Rental	$  287,434.00
Helpers	$   80,720.00
Misc. & Utilities	$   68,622.70
Total:	$  878,024.31

21.For this item the Mother accepts that credit should be given for all the payments the Father has made in these proceedings including interim maintenance and advanced payments amounting to well over $400,000 by now, and hence she seeks an order that he should pay her a lump sum representing the balance, plus a further sum of $2,400 for her moving house expenses earlier this year, and a projected sum of $8,000 being the one-off expenses for hiring a full-time foreign domestic helper including agency charges, air-fares, medical check-up and various standard charges required for hiring foreign domestic helper.

22.Not surprisingly the Father rigorously disputes the Mother’s claims as unrealistic, unreasonable and not based on the actual needs of the minors but rather on her own greed, or that they were deliberately and grossly exaggerated. He believes that with common sense and proper budgeting, the minors only require $14,000 per month for their reasonable needs, which he proposes to pay the Mother for the first few months until she finds employment, from which he agrees that she should be able to earn $17,000 per month and to contribute a monthly sum of $4,000 towards such needs of the minors, with the balance of $10,000 to be paid by him by way of future periodical payment (Exhibit R-6).

23.This proposal of the Father was as expected totally rejected by the Mother as both mean and unrealistic.  As a result the trial ran its full stormy course during which almost every item on the Mother’s list of expenditure for the minors was challenged and extensively crossed-examined, of which I propose to categorise into 4 main groups for easy reference for discussion : domestic helps, accommodation, living expenses and education expenses. In view of the Mother’s claims, it is necessary to consider these needs of the minors not only under the present context, but also retrospectively of what should have been their needs in the past in order to determine whether the Mother’s alleged spending to meet such needs, which she is claiming for reimbursement, were appropriate, reasonable or justified, as clearly they are as aforesaid the most contentious issues of this application.

24.While the court must always guard against unreasonable claims made on behalf of a child’s behalf with the disguised element of providing for the mother’s benefit rather than the child, as the Father suspects to be the case here, it is well established that a child’s need for a carer enables account to be taken of the caring parent’s financial needs, as the welfare of the child is not just one of the relevant circumstances, but also a constant influence on the discretionary outcome : N v D. It is therefore not realistic simply to apportion items of the budget as referable to the child’s needs because, in my judgment, financial provision must also be made to the mother to enable her to meet the child’s needs, even if it means only temporary until she is able to obtain domestic help and returns to work to maintain herself, as is the proposal of the Mother here, and as the Court of Appeal in the case of Re P (Child : Financial Provision) [2003] 2 FLR 865, [2003] All ER (D) 312 (Jun), CA, indicated that “a more generous approach to the calculation of the mother’s allowance is not only permissible but also realistic”.

25.In fact Thorpe LJ in Re P went on to say :

“thus, in my judgment, the court must recognise the responsibility, and often sacrifice, of the unmarried parent (generally the mother) who is to be the primary carer for the child…In order to discharge this responsibility the carer must have control of a budget that reflects her position and the position of the father both social and financial. On the one hand she should not be burdened with unnecessary financial anxiety or have to resort to parsimony when the other parent chooses to live lavishly. On the other hand whatever is provided is there to be spent at the expiration of the year for which it is provided.”  

With these principles in mind, I shall start my consideration of what is to be a fair and reasonable figure of financial provision for the minors with the first item of the category : domestic helps.

Domestic Helps

26.This is as aforesaid one of the most controversial issues between the parties, of which the Mother claims that she requires one full-time live-in Filipino helper and one part-time local helper for the minors, which will cost her some $10,000 per month before she can go back to work to earn her own living, and to be able to produce at least 3 months of income proof as part of the current requirements of the Immigration Department for hiring foreign domestic helper, which she says has become some sort of a vicious circle to her as without a domestic helper, she would not be able to go out to work and to come up with the requisite income proof. Her evidence is that in the meantime she has been relying on expensive local part-time helper who charges her on hourly basis at $50 or more which can run up to some $10,000 or more per month on the basis of 8-9 hours per day and every day which the Mother claims to have been her case the past year whenever she could afford with the various payments from the Father.   

27.While he does not dispute the requirement of income proof for hiring foreign domestic helper, the Father argues that the Mother could have returned to work much sooner by placing the minors in some child-care centre during daytime, in which case he says she could easily have the income proof to hire one fulltime foreign helper who would only cost about $4,000 per month or so in salary and other costs and who could then carry out the household chores in the morning while the minors were in the centre, and then take care of them the rest of the day before the Mother comes home from work.

28.Furthermore, the Father argues that despite the Mother having since April 2008 obtained a very substantial increase to the interim maintenance which would have allowed her to hire a local helper for the time being, she appears to have made no effort at all to find employment to obtain the necessary income proof, which he says go to show that she is merely trying to squeeze as much money from him as possible.

29.There is however no dispute that the Mother did try to return to work in January 2007 which is well supported by documentary evidence, and I have no reason to doubt her evidence that she had to resign after her helper quitted because of her inability to taking care of the minors and other household chores all by herself. While it may sound extravagant at first hearing for the Mother to claim that she required 2 helpers in her household, as the Father suspects, in particularly when the court is only concerned about the needs of the minors and not her own of which she has no claims in these proceedings, the reality is that the minors were then and still are very young and no doubt required full-time care and attention, all the more so for the fact that they are twins, that I can understand why a single helper would have had her hands full with both of them, let alone also have to carry out other household chores.

30.While the Father’s suggestion of placing the minors in some child-care centre may seem a viable option, given the age of the minors then and the various infections and other health problems they had had during the early stage of their life which necessitated hospitalization on at least 2 separate occasions, a fact not challenged by the Father and was again well documented, I can understand why that suggestion was not amenable to the Mother. In any event there is no evidence that there were such child-care facilities available in the Mother’s neighbourhood, or about their charges or even their suitability for the minors.

31.Until she is able to employ a foreign domestic helper, I accept that the Mother has no choice but to rely on part-time local helpers which she says cost her some $10,000 per month at $50 per hour, for 8 - 9 hours per day and everyday, and I do not agree with the Father’s argument that the Mother should have been able to negotiate with the employment agency for a lower rate under the circumstances, as there is no evidence that it would be feasible. In any event, one can hardly dispute the fact that it is almost always more expensive to pay for part-time or temporary help, be it domestic helpers, secretaries or typists, and with 2 infants who are twins, I can understand why the Mother needed domestic help for long hours each day and in most days, after all, she also has her own life to live and should not be tied down by her children at all time. 

32.However, from the documentary evidence produced by the Mother and according to the summary of expenses annexed to her final submission, it seems that she in fact did not spend $10,000 every month on this item, as there were months from April to September in 2007 when there is no record of such spending or payment, while in other months the payments were only in the region of $4,000 - $5,000, much less than what she claims she needs per month. In fact the total amount allegedly spent by the Mother on part-time helpers from December 2006 when she moved into her first serviced apartment to August 2008, a total of 19 months, was $80,720 with an average of less than $4,300 per month, which may indicate that she has used only 1 helper and for much less frequent as she claims, which seems to make sense considering the fact that she did not go out to work during that period other than the month of January 2007, and must have been sharing the chores of looking after the minors, which may on the other hand go to support her case that it does require 2 persons to take care of the minors and to carry out other household chores at the same time.

33.With the minors now some 22 months old and will soon be entering kindergarten or pre-kindergarten (nursery) classes, and hence no longer in need of full-time home care, I agree that it is time for the Mother to return to work to earn her own living and to obtain the necessary income proof to hire the foreign domestic helper to replace her present more expensive local helper, all of which I accept should in reality take some months to do so, and afterwards she may perhaps only require some part-time local help during weekends and holidays, the total costs of which should then be reduced to probably no more than $6,000 - $7,000 per month.

34.Since it is quite clear that the helper will also be expected to carry out other household chores in addition to looking after the minors, the Father may well argue that he should not have to shoulder up the entire costs of such helper as she also works for the Mother. The simple answer to that is that in my mind the Mother would not have required a helper at all if not for the minors. In fact, the evidence is that if it were not for them she would not even have to move out of her parents’ home to get her own accommodation, which is the next major issue between the parties that I propose to discuss next.

Accommodation

35.The Father does not dispute that the Mother needs to rent a 2-bedroom apartment to accommodate the minors and a live-in helper. His case all along is that she could have easily rented a 500 - 600 sq. ft. flat much cheaper for $7,000 to $8,000 per month in areas such as Shatin, Tsuen Wan, or Tsaung Kwan O in the New Territories where her elder sister lives, or even on the Hong Kong side such as North Point, Wanchai or Causeway Bay where he claims to have seen advertisements for one-bedroom flat at $4,200 per month, and that if she insists in renting serviced apartment, she can easily do so at her choice of location at Hung Hom at the various Horizon Hotels run by the Cheung Kong Group at a monthly rental much cheaper than her current apartment at $15,000 (Exhibit R3). In any event, at her limited earning capacity, he argues that she can not afford to spend anything more than $7,000 to $8,000 for accommodation, and certainly not at the level of her present flat.

36.The Mother’s case is that apart from the fact that she needs a bigger place to accommodate a live-in domestic helper, it is necessary to be fully serviced with utilities as she does not have any means to purchase her own furniture and household appliances, and that it should be closer to Central Hong Kong or Causeway Bay where she is likely to return to work. In January 2008 upon the expiration of the lease of her original apartment, she moved into her present bigger 2-bedroom apartment in the same building complex, of about 700 odd sq ft with living and dining areas, the full address of which she initially refused to disclose but subsequently revealed to be at Horizon Hotels near the waterfront of Hung Hom. As aforesaid it costs $15,000 per month in rent which is also inclusive of management fees as evidenced by her tenancy agreement and rental receipts (A3 : 889). Apart from the fact that it is also fully furnished as the previous one, she says that the service also provides repair and/or replacement of furniture and electrical appliances when they break down which is another advantage to her with her limited means and the absence of any adult man in her household.

37.While it is not for anybody including this court to dictate to the Mother where she should live with her children, there is no question that her choice must be reasonable in the circumstances of the case. No doubt she should be able to rent cheaper in more remote area in the New Territories, and in Tseung Kwan O she may also have the advantage of living close to her sister, although according to the Mother her sister also has her own children and family to look after. The reality is that living in those areas will also mean much more travelling to do for her to go to work and possibly for the minors to go to school, hence more travelling expenses for the entire family and lesser time for the Mother for her children, and more importantly to her, it may also mean less easy access to medical facilities in view of her concern over the minors’ health.

38.Furthermore, while the Father may argue that with her earning capacity the Mother cannot afford her present apartment on her own, there is no question that since he has a responsibility to provide a suitable roof over the heads of his children, and with her paying for her share of the rental expenses when she returns to work, at her expected earning it may no longer be said to be unaffordable or unreasonable in the circumstances.  

39.I accept that without any other resources the Mother simply cannot afford to buy her own furniture and appliances, and can therefore only rent a serviced apartment which is fully furnished. From the materials produced by the Father in Exhibit R-3, it seems that the Mother’s current landlord, Horizon Hotels, do provide 2-bedroom suites from 603 sq ft to 724 sq ft at a rental starting from $9,990 per month, which is indeed much lower than the Mother’s current unit. The complex also offers many facilities including free shuttle transportation to the nearby MTR and train stations. While the starting rate of $9,990 per month may well be for the smaller units, and that the Mother’s current unit is clearly of the bigger type, which therefore caused the Father to seriously question the wisdom and rationale on the part of the Mother in paying $15,000 just for a slight increase in floor area.

40.Her explanation is that she wanted to move to a higher floor to keep her children away from unnecessary noise and mosquitoes, which I do not accord any weight, that she needed a bigger place for the reasons already given, which I do, and that the rental rates shown in the Father’s exhibits were in fact for last year which have since gone up quite substantially to the level of her current unit, as has been the case generally in the current property market, a fact which has not gone unnoticed by the court. Under the circumstances I accept that the rental expenses claimed by the Mother for both of her serviced apartments for the minors were not unreasonable or excessive, and given the facts that the minors were then of such tender age and that the Mother was without any family support, I also agree that it would not be unreasonable to attribute the entire amount of such rental expenses to the minors as of necessity without apportioning any share to the Mother who was then without any income, but when she returns to work to earn her own living, it would be proper in my view to allocate half of the monthly rental expenses to her, which means that the minors’ accommodation needs would then be about $7,500 per month on the basis of what I have found as above for a suitable serviced apartment.  

Living Expenses

41.For this category I propose to include all the remaining items in the Mother’s summary of expenses which amounted to about $17,000 per month in total according to her 1^st Affirmation, including for nursery/play group estimated then at $2,500 but which the Mother now claims should in fact be much higher with the growth of the minors, and especially when they will soon be entering kindergarten with a much higher school fees.

42.These were of course based mainly on the Mother’s estimation then, of which she has since given a more detained breakdown based on what she says to be the actual spending supported by receipts and invoices, on a monthly basis that went back in fact to as early as March 2006 when the minors were not even born, an exercise which she refers to as bookkeeping in her said summary, and which total almost $510,000 for the entire period. After making some proper adjustments by taking out those items which are of capital nature and hence non-recurring such as furniture and electrical appliances, or those which were as aforesaid incurred prior to the birth of the minors and hence not claimable under either sections, as well as those in my view not attributable to the minors such as advisory or stationary, the total amount has still come down to about $460,000, averaging just over $20,000 per month over a period of 22 months from the birth of the minors, some $3,000 more than her originally estimated amount.  

43.When considering the minors’ living expenses, and of their reasonable needs for that matter, I have to constantly remind myself that we are dealing with 2 small children who are twins but of different sex, which means that they each have different needs and requirements throughout their development, and things such as clothing and shoes and even toys may not be used, exchanged or recycled between them as would normally be the case with children of the same sex but different age, and hence there may well be two different sets of expenses for their different needs as they grow and develop, something which the Father seemed to have overlooked or regarded too simplistically at times during the proceedings.

44.Many of these expenses such as food, clothes and accessories are well supported by the voluminous invoices and receipts which have all been produced to the Father for inspection. There were however allegations that some of the receipts in particularly those from supermarkets might not be genuine, or that they might have included the Mother’s own purchases, all of which were rigorously denied by the Mother under cross-examination.

45.Having seen and heard her for days in court, and while she might have been rude and disrespectful, and I do not mean just to the Father, especially when under the stress of cross-examination during the early stage of the trial, I do not believe that she has falsified or fabricated these receipts, and I accept her evidence, which were mostly straightforward, spontaneous and firm, on the expenses on food, clothing and shoes in the main frank and truthful. Some of the purchases such as special baby food or baby accessories may appear somewhat generous, but not in my view extravagant or unreasonable for 2 small children. It is also quite understandable that more purchases might be required for newly born babies, and given that they were her first born she naturally needed time and experience to learn how to better budgeting and economizing.

46.Other expenses such as transportation which were mainly for taxi fares amounting to $2,300 per month on average, but which the Father argues were extravagant, excessive and unnecessary given the age of the minors, as he believes that they should not be going out so often and suspects that they may actually be the Mother’s own travelling expenses. Her explanation is that when she did her daily purchases for food and necessities, she had to bring the minors along if she had no helper on that day, or if her helper was doing household chores, she wanted to keep the minors out of the way, and with 2 infants she had no choice but to take the taxi. I find her explanation acceptable, and with the minors entering kindergarten, such expenses may well be higher.   

47.Another contentious item between the parties was over the health insurance premium payment of $1,500 for the minors which despite its relatively minor sum went so far as to cause the Mother to call her insurance agent Ms Chow to come to court as her witness. It may seems totally out of proportion in terms of time and costs but Ms Chow was nevertheless able to clarify the item as reasonable and necessary given the past medical history of the minors. I agree that the amount for 2 small children is not excessive or unreasonable, and with the insurance policy in place, no doubt their medical expenses should now be much lower than what the Mother claimed of $2,000 in the past, while some of the hospitalization expenses, as I understand it, have in fact been subsequently reimbursed under the insurance policy.

48.Ms Chow also gave useful evidence, which was in the main not challenged, of the difficulties the Mother had gone through by herself in the absence of any family or financial support during the early stage of the lives of the minors, and how she as her friend had to give her all sort of help and support by doing the shopping for her daily needs as she was then tied down by the minors in the absence of any domestic help, and to also lent her money on various occasions notwithstanding the interim maintenance from the Father especially during the early stage of the proceedings.

49.Another controversial item was over the nursery/playgroup expenses which were, unlike the insurance premium payment, quite substantial at $115,565 in total, averaging more than $4,800 per month over a period of 24 months going back to August 2006 according to the Mother’s summary. However, unlike her other items of expenses, the Mother’s evidence on this item is far from clear or satisfactory.

50.Firstly, since the minors were only born on 25^th October 2006, why would there be such expenses in the sums of $592 and $1,816.30 prior to their birth respectively in August and September 2006?

51.Secondly, in her 2^nd Affirmation of 14^th May 2007 in reply to the Father’s allegation that the minors did not need to go to playgroup at their age (then 7 months) and hence the provision of $2,500 for such item should not be included, the Mother said this in Paragraph 14 (ii) : “There are play groups for baby development when babies reach the age of 9 months and I have factored this at this stage so that the court may take it into account so to alleviate the need to make a further application a few months down the line”(A2 :416-417). It is therefore clear from the evidence that at the time when she made that statement, the minors had not yet started attending any playgroup, which bags the obvious question of why would there be such expenses listed in her summary then and which dated back every month to August 2006?

52.The Mother has of course put both nursery and playgroup under this item, so could those expenses be for nursery instead? There is however no evidence, either in her affirmations or testimony in court, that she has ever placed the minors in any nursery, as she clearly rejected the Father’s earlier suggestion to put them in some child-care centre. If on the other hand, the nursery which the Mother meant was in fact pre-kindergarten type of classes, I agree with the Father that it would be too early for the minors to attend, in particularly with her tight budget at that time, notwithstanding the interim maintenance she was then receiving from the Father, that she should have exercised her discretion much more cautiously with this spending which is in my view not absolutely essential for the minors at that age, at least not until April 2008 when they had reached 1 ½ years of age and when there was a substantial increase to the interim maintenance. In the circumstances I do not regard this item as part of the reasonable needs of the minors before April 2008, and accordingly do not propose to allow reimbursement of any of these expenses which might have been incurred prior to that date.       

53.Lastly, I should also point out that the remaining item of miscellaneous expenses such as electricity and gas totalling $2,500 should be for the entire household, as the Mother has conceded including her share as well, it would therefore be fair, as in the case of the rental expenses, that when she returns to work, half of which should be apportioned for her own share, and hence the minors’ share should then be about $1,250 per month.

54.In conclusion and under the circumstances I would put the minors’ reasonable monthly living expenses at about $10,000 for the time being until the Mother returns to work when they should then come down to $8,000. I shall now move on to the last item : their kindergarten and educational expenses.

Education Expenses

55.The Mother, like most parents, wants to enrol her children to the best kindergarten available and hence more expensive, which she says charges between $3,000 to $4,000 per month for school fees per child, hence a monthly requirement of $7,000 to $8,000 for the minors, plus additional expenses for school uniforms, books and stationary as well as travelling for school. If I agree with her on this item, this would bring the total needs of the minors to well over $30,000 per month.

56.Without being specific on this item, the Father argues that there must be equally suitable kindergartens that charge less in school fees for the minors, say $2,000 for each child, which is clearly much less than what the Mother has in mind. However, if I were to adopt his figure of $4,000 per month for the minors’ school fees, it would still bring their total needs to at least $27,000 per month, an amount the Father argues still beyond his ability  given the state of his current financial situation and the expenses of his family which he has to meet, which I propose to discuss next..

The Father’s Means

57.The Father has been working in the field of corporate finance since obtaining his Master degree in Business Administration in 1993. While accepting that he has an earning capacity of about $100,000 per month for the purpose of these proceedings and based on his past income, he claims that he has in fact been out of regular employment since 31^st August 2007 when he resigned from his last job for reason of redundancy and has since only been able to earn less than half of his previous income on free-lance consultancy basis, but is hopeful that the situation will improve as there is more substantive work lining up within the next month or two.

58.To resolve his resultant financial difficulties, the Father says that he sold his matrimonial home in joint name with his wife at Conduct Road, Hong Kong on 7^th September 2007 for $8.78 million, and after deducting for the large outstanding mortgage, agency fees and other necessary expenses, he shared the net proceeds equally with his wife and used his half share of $1,840,000 to repay his previous loan of $650,000 to his parents, and to pay off his half share of an overdraft of about $100,000 to HSBC, another overdraft of $456,000 to Hang Seng Bank, plus further overdraft balance to HSBC and credit cards balance in the total sum of about $210,000, leaving some $210,000 from the sale proceeds in cash which he says have since all been spent on maintaining his own family as well as meeting the various payments for the minors, so much so that he now has to resort to relying on his wife’s earnings and her share of the sale proceeds (A2 : 731 – 732).

59.This evidence of the Father was not surprisingly met with grave suspicion from the Mother, not just because of the timing of his resignation from his previous job and the sale of his matrimonial home, all of which came just within weeks of the original trial fixed on 27^th September 2007, but also of the fact that the Father chose to share the net sale proceeds with his wife whom she believes had never made any financial contribution towards the purchase of the matrimonial home, as well as the ways he disposed of the sale proceeds.

60.There is no evidence before the court which may go to support the Mother’s allegation that the Father might have intentionally resigned from his last employment in order to avoid her claims other than the close proximity of its timing to the trial which is only circumstantial and hence may be coincidental, the fact that he has throughout the proceedings readily admitted of an earning capacity of no less than $100,000 per month for the purpose of meeting the Mother’s claims would have in my view rendered any such intention superfluous.

61.The Mother however does not accept that his earning capacity only caps at $100,000 per month, as she believes that he would in addition also earn bonuses, a very common practice in his field of banking and finance, and which can be a very significant part of his total income package. In fact it is her evidence that he used to boast about it during their better times together.

62.The Father does not dispute the practice of paying large bonuses in his profession of corporate finance, but argues that it must necessarily depend on the performances of both the employers and the employees, and that in view of the Mother’s disturbances caused to him in the past and the effect and impact of these proceedings on him, it was indeed a miracle that he had not been fired much earlier by his former employer due to his poor performance, let alone paying him bonuses. In fact he alleges that his reputation has since been so badly tarnished by the Mother’s actions that he is having so much difficulty finding any job in corporate finance that he has decided to try corporate development instead which he says does not normally pay bonuses.

63.While I do not doubt the effects these proceedings naturally have on the Father, and no doubt on the Mother as well, I do have some reservation over his claim about his reputation being so affected as a factor or reason against his future prospect in his field, as unlike something much more serious such as incompetence or fraudulent practice at work, personal relationship problems from outside work and after office hours do seem not uncommon in the field of corporate finance, and should not in my view have affected the Father’s job prospect as much as he may have implied. In any event, I have some reservation that people would still remember what the Mother did more than 2 years ago.

64.I therefore accept that it is quite likely that the Father had received bonuses in addition to his salary in the past, in particularly during the time when he was an assistant director of a merchant bank, and that from some of his past tax returns and records that he did at times earn more than $100,000 per month, as he did in his last job at $110,000. But he had also gone through a period of economic downturn during the early 2000s when he claims to have earned much less and had to rely on borrowing from his parents and various bank overdrafts. Furthermore, there is no evidence that he did receive any bonus from his last job, nor is there any evidence or sufficient evidence before the court as to the average amount of bonuses that he might have received over the past 2 or 3 years that can be imputed into his admitted earning capacity of $100,000 as his true average earning or earning capacity. Under the circumstances I can only say that he has an earning capacity of at least $100,000 per month and possibly more.

65.I should also mention, if not for any reason other than for background information, that the Father was in fact a graduate from the law school of Hong Kong University where he first met his wife who is as aforesaid a practising solicitor, but he himself has never practised law, nor as far as I understand does he hold any solicitor’s practising certificate, as apparently his interest has always been in the field of corporate finance.

66.Before considering the Father’s ability to pay for the minors’ needs, it is of course necessary to first consider his expenses both for himself and his family, which he first set out in his 1^st Affirmation (A2 : 364) and subsequently updated in his 3^rd Affirmation (A2 : 731-732), in which case it would also be necessary to take into account the total income available for his family, i.e. to include his wife’s income, which is said to be insubstantial at some $30,000 plus per month as a non-partner in a local firm as evidenced by her tax return.

67.In his 1^st Affirmation the Father put his total monthly expenditure at about $121,000, with more than half of which went to the mortgage payment of the matrimonial home and various other overdraft and bank loans repayment totalling $77,330, and only about $43,000 were for his personal expenses as well as his family’s including household utilities, food, transportation, as well as his children’s school fees and extracurricular activities. His evidence is that other expenses such as clothing, entertainment and holiday for the whole family had to be met by his wife’s income, as well as her own personal expenses, hence the budget for the entire family was very tight, which was the main reason why he says he decided to sell his matrimonial home.

68.The sale of the property and the paying off of the mortgage and various other bank loans of course mean a saving of some $55,000 from his monthly expenses, but in their place come new expenses in particularly the monthly rental of $38,500 for his present accommodation, a 3-bedroom 1,300 sq ft apartment in the mid-level. Furthermore, it is also his evidence that he has to continue with his monthly repayment of $22,000 over his mother-in-law’s flat in Yuen Long as a result of 2 bank loans earlier obtained by him and his wife by using the flat as security, hence it is an obligation that he cannot ignore.

69.As for the remaining items of his monthly expenditure, the Father’s evidence is that they have remained more or less the same as before, save that his children’s school fees have gone up from about $10,000 to $12,675 after his son has switched to the same school of his daughter at somewhat higher school fees, and some increase to his children’s extracurricular activities, bringing his current total expenditure to slightly more than $120,000 per month, hence seemingly giving no saving or benefit from the sale of his matrimonial home according to the Mother, which just further fuels her suspicion that the sale was just a plot to mislead her and the court.

70.It is relevant to also mention that on the last day of the trial, the Father in what he said to be one last attempt to settle the Mother’s claims by offering to pay her $20,000 per month for the maintenance of the minors, and a further lump sum of $200,000 by borrowing from his parents or other means to help her with her debts and other expenses incurred for the minors. While that offer was as expected rejected by the Mother again as insufficient as far as the monthly maintenance is concerned, it bags the obvious question that while the Father was no doubt genuine about settling his long dispute with the Mother with this last attempt, with his alleged lack of income and current financial difficulties, how could he afford to make such a proposal unless he has other resources?   

71.I shall now pause here to return to the parties’ issue over the minors’ kindergarten school fees, which is between $2,000 (the Father’s figure) and $4,000 (the Mother’s figure) per child. From the documents produced by the Mother, the Father’s figure is clearly at the low end while the Mother’s is unsurprisingly close to the high end of kindergartens in Hong Kong. Her argument is that they should be comparable to those of his own children who are attending expensive school at $10,000 per month in total costs. They are of course much older and are in international school, and hence at a different level in terms of needs, but I agree that the Father’s proposed figure for the minors is really stretching the reality, and I agree that $3,000 for each minor would seem more reasonable, which when taking into account of their travelling expenses including those of the helper for bringing them to school and back, or for their school bus fares if applicable as well as various miscellaneous school expenses such as books and uniform, I propose to round up the total education expenses to $3,500 for each minor, hence $7,000 for both, which would bring their total needs to $30,000 per month, some $10,000 more than the Father’s last proposal, and apparently over his means too.

72.The Mother however believes that he has other resources especially from the sale proceeds of his matrimonial home which she argues should all belong to him, that he should not have to share with his wife whom she believes has never made any financial contribution towards the initial purchase, and which he can now use to provide for the 2 minors.

73.When considering the Father’s means to pay, the court is of course not bound to have regard only to his actual income, or his earning capacity as he has readily conceded, but also to take into account of all his mental and physical resources, the money at his disposal, and his capital position : J-P C v J-A F [1955] 2 All ER 617, CA; W v W (No.3) [1962] 1 All ER 736; Donaldson v Donaldson [1958] 2 All ER 660.

74.It should also not allow itself to be misled by appearances but should evaluate the reality of that party’s circumstances : J-P C v J-A F above; Thomas v Thomas [1995] 2 FLR 668, [1996] 2 FCR 544, CA; Browne v Browne [1989] 1 FL:R 291, CA.

75.Similarly, the court may properly take into account of overdraft facilities, borrowing powers or abilities of a party :  Donaldson v Donaldson and W v W (No.3) above.

76.While all these principles were derived from the divorce jurisdiction when the courts consider the means of a spouse to make financial provisions for the other spouse and/or their children upon the breakdown of their marriage, they should in my view also apply in other situations like this when the court is required to consider a parent’s means to maintain his or her children where there is no other specific statutory guideline. 

77.It is true that I have earlier found that there is no valid or sufficient basis to suspect the decision or the timing of the Father’s sale of his matrimonial home which seems to be coincidental, and I accept that even though the sale did not lead to any saving in his expenses, it did get rid of all his debts, many of which as he explained carried high interest payments, the same can not be said about the way he allegedly divided the sale proceeds with his wife, or over some of his alleged repayments from his share.

78.While it is also true that the matrimonial home was in the joint names of the Father and his wife, and that indeed even if his wife had not made any monetary contribution towards its purchase, there should normally not be anything unusual or suspicious if a husband chose to let his wife have a half share of the proceeds as a gift or a show of love or appreciation between them in their marriage. However given the circumstances of this case, the Mother is certainly entitled to question whether it was indeed a proper gift and not some means by the Father to deliberately reduce his resources to meet her claims in these proceedings.

79.Furthermore, the Mother is entitled to go even further by questioning why some of the Father’s alleged loans or debts repayments were not also deducted from the sale proceeds, like the mortgage on the property, before he shared the balance with his wife, such as those of his parents’ loan of $650,000, or the various bank overdrafts which were all incurred, according to his answer to the Mother’s request for further and better particulars (PB A2 : 447 – 448), for the support of his family? In other words, why should the Father have to shoulder up all these repayments, totalling more than $1.4 million, all by himself from his own share of the sale proceeds?  Is it not also more normal or natural, and logical too, for him to pay the rental deposit of $77,000 for the present accommodation of his family from the sale proceeds first before sharing the balance with his wife, instead of paying it from his own share which was then dwindling fast with other repayments?   

80.I agree that this whole arrangement of repayments and sharing of the sale proceeds look suspiciously as the Mother alleges to paint a dire financial situation of the Father which may in fact not be the whole picture, and which may also explain why he could afford to offer the said sum of $200,000 to the Mother, although his explanation was that he would have to borrow from his parents again or by other means, which if true also reveal his borrowing powers or abilities. In other words, I have no doubt that the Father has both the means and resources to meet the monthly needs of the minors as I have assessed above. 

Set-Up Costs and Accrued Expenses

81.Before coming to my final conclusion on what should be the Father’s monthly maintenance for the minors, there is one more matter that I need to discuss : the Mother’s claim for reimbursement for her set-up costs for the minors after their birth as well as the accrued expenses incurred in maintaining them before and during these proceedings.

82.Of the set-up costs for furniture such as baby cribs, electrical appliances and other basic items necessary for the minors totalling about $48,000, most of which are well supported by receipts and other documentary evidence, I would allow as necessary and reasonable.

83.As for the accrued expenses allegedly incurred by the Mother in maintaining the minors from their birth up to the presence, the details of which as aforesaid have been produced in one form or another during the trial and reproduced in her final submission and supported as aforesaid by voluminous receipts and invoices. Given my above findings as to the needs of the minors under the 4 categories, and discounting those items which I have already dealt with above, I have arrived at a total sum of about $750,000, which should of course be set off against all the payments so far made by the Father by way of interim maintenance and advanced payment up to August 2008 in the total sum of $436,000, giving a balance of about $310,000. The Mother however claims a slightly lower sum of $280,000.

84.To this sum she also seeks to include the moving house costs of $2,400, which seems reasonable for such a small household with literally no furniture and within the same building complex, and the estimated service charges of $8,000 for hiring the foreign domestic helper which I accept as fairly standard. It therefore brings the Mother‘s claim for reimbursement to the total sum of $290,000 which I would for the reasons given above accept as reasonable.

85.While the Father has never quite specified the purpose of his last offer of $200,000 for the Mother other than to help ease her financial situation including enabling her to pay off some of her debts incurred in maintaining the minors, it does show, as pointed out above, that he has the means to come up with a not insubstantial lump sum for the Mother, and given my findings and observations about his resources, I am convinced that he should not have any difficult raising his lump sum to $290,000 as reimbursement of the Mother’s claims.   

Conclusion

86.For all the reasons aforesaid and in the circumstances, I am satisfied that the Mother currently requires a sum of $34,000 per month for the reasonable support of the minors until she is able to find employment and to employ a foreign domestic helper. Thereafter the minors’ needs should be reduced accordingly to $28,000 per month when the Mother is in a position to pay for her share of the rental and household expenses on top of paying for her own expenses from her income. As I agree with the Father that the Mother should have started looking for employment when his interim maintenance for the minors was increased to $34,000 back in April 2008, and that she needs say 6 months to put everything in place including her full-time helper, I would therefore allow the said payment of $34,000 to continue until 1^st October 2008 when it shall be reduced to $28,000 per month for the minors. As for the lump sum of $290,000, I am prepared to give the Father 3 weeks until 15^th September 2008 to make the payment.

87.Although the parties are now acting in person, both were legally represented during the first half of the proceedings and hence must have incurred legal costs. While the Mother may have come up somewhat short with her claim for the periodical payment, she can still be considered as the successful party and is therefore entitled to seek her costs of the proceedings, which was necessary in view of the lack of any financial support or proposal from the Father until well into the proceedings. On the other hand, it is also the conduct of the Mother in these proceedings, which I have already gone into details above, that has unnecessarily protracted the trial which otherwise would have taken perhaps just half of the time it actually took to conclude, for which it would only be fair that she should receive only half of her costs in the proceedings. Accordingly my order is as follows :   

(i)   The Respondent (Father) shall continue to pay the Applicant (Mother) the sum of $34,000 per month as maintenance for the minors until 1^st October 2008 when the said sum shall be reduced to $28,000 per month, being $14,000 for each, until they reach the age of 18 or cease fulltime education, which ever is later, or until further order.

(ii)   The Respondent shall on or before 15th September 2008 pay the Applicant a lump sum of $290,000 for the balance of the expenses reasonably incurred by her in maintaining the said minors since their birth.

(iii)    The Respondent shall pay 1/2 of the Applicant’s costs in these proceedings to be taxed if not agreed. This is an order nisi to be made absolute at the expiration of 21 days.

88.Finally, I must not end this judgment without saying that, having witnessed close up so much bitterness and animosity between the parties in these proceedings and at such a level indeed rarely seen even in this jurisdiction which routinely deals with cases where emotion usually runs high, a situation no doubt further exacerbated by the Father’s questionable tactics in the proceedings and his lack of sensible proposals until almost towards the end, all the more inexcusable in my view when he had had the benefit of legal representation by lawyers supposedly well experienced in family matters, I can only hope that this will finally bring closure to the parties’ conflicts so that they can each move on with their life, and while the Mother will most likely have to shoulder up the entire burden and responsibility of raising the minors for many years to come all on her own without any participation or assistance other than financial from the Father, she can at least take some comfort from knowing that she will have all the joy and pride of seeing her children grow up to be useful members of the society.

Both parties acting in person.