Kwok Lok Yin v. Woo Bik Wah
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DCMP2755/2008 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO. 2755 OF 2008 ----------------------
---------------------- Coram: Her Honour Judge H C Wong in Court Dates of Hearing: 17-18 November 2009 Date of Delivery of Judgment: 22 January 2010 ---------------------- J U D G M E N T ---------------------- 1.The plaintiff, who is a minor, claimed against the defendant by her next friend, her mother and guardian, Miss Yau. The defendant is the widow and beneficiary of the deceased’s estate. She is also the beneficiary of the pension/death gratuity of the deceased, Mr Kwok Chack-kwan (hereinafter referred to as “the deceased”), who died in March 2007. 2.The plaintiff is claiming for reasonable financial provisions for her future maintenance under sections 3, 4 and 7 of the Inheritance Provision for Family and Dependants Ordinance, Cap. 481 (hereinafter referred to as “Cap. 481”) and under section 12 of the Pensions Ordinance, Cap. 89 (hereinafter referred to as “Cap. 89”). Her claim is for $400,000. The statutory provisions 3.Section 3 of the Inheritance Provision for Family and Dependants, Cap. 481, provides the following:
4.S.3(2) provides:
5.S3(2) further provides:
6.Section 4 of the Ordinance provides:
7.Section 5 sets out the matters to which the court is to have regard in exercising the power in section 4. Section 5 of the ordinance provides the following:
8.S5(4) of the ordinance provides:
9.Under S5(7), the ordinance further provides:
10.Section 12 of the Pensions Ordinance provides:
The Applicant’s Case 11.The applicant minor was born on 29 January 2000. Her natural father was the late Mr Kwok Chack-kwan, the deceased, and her natural mother, her next friend and guardian ad litem, Miss Yau. The minor have been living with her mother Miss Yau since birth in a public housing flat; since October 2001, their home was in Choi Hung Estate,the tenancy was granted in the name of Miss Yau. 12.Miss Yau claimed that the late Mr Kwok had been cohabiting with her since late 1999. Since the birth of the minor, the deceased had been responsible for her maintenance until his death. 13.Before his death, the deceased was a civil servant working at the Leisure and Cultural Services Department (the “LCSD”) as an amenities assistant with a monthly salary of $25,000. He was given a housing subsidy as a civil servant which he applied in the purchase of a flat in Tseung Kwan O in 1993 (“the Tseung Kwan O flat”). 14.The Tseung Kwan O flat was registered in the joint names of himself and his wife, the defendant, Madam Woo. The mortgage on the Tseung Kwan O flat was paid off in March 2003. It is now in the sole name of the defendant, Madam Woo, after the deceased’s death. 15.It is Miss Yau’s evidence that when the deceased was alive, he was a loving and caring father who would frequently take the minor to experience outdoor activities. Each month, he would give money to Miss Yau for the minor’s maintenance as well as paying for her nursery fees and hobby classes. Miss Yau claimed he used to give $3,000 to Miss Yau for her own maintenance, $2,000 for the minor and $3,670 for the payment of the foreign domestic helper that Miss Yau employed. 16.Miss Yau is a full-time civil servant working as an artisan at the LCSD. Her monthly income is around $14,000. Miss Yau estimated the present monthly expenditure on the minor to be around $11,800, consisting of the following: food $2,700; rental apportioned at $800; tutorial classes fee $2,800; books and stationery $300; medical and dental expenses $300; entertainment and presents $500; trips or holidays $1,000; clothes and shoes $500; insurance premium $500; lunch and pocket allowance $300; transport $150; domestic helper apportioned $1,900; uniform $50. 17.The minor is now nearly 10 years old attending primary 4. She is bright and cheerful. Miss Yau claimed that she also performed well in school and is expected to have a university education. Miss Yau asked for $400,000 for the minor’s future maintenance which is about 50 per cent of what she would need to spend on the minor’s future maintenance, upbringing and education. The Defence Case 18.Madam Woo married the deceased in 1979. She is now aged 53. She is also a civil servant working at the Home Affairs Bureau, earning a monthly salary of $20,850. She is expected to retire in June 2010. Madam Woo admitted that she preferred not to draw a lump sum payment at her retirement, she would then be entitled to a monthly pension sum of around $11,000 a month. 19.From the deceased’s marriage to Madam Woo, she gave birth to a son, now aged 22 years old, Sze-chai, and a daughter, now 25 years old, Sze-yin. The son has obtained a PhD from Oxford University and is now working in the United Kingdom. It is said that he had borrowed for his studies a loan or loans amounting to £21,875.50 from the university for his tuition and rented accommodations. The daughter graduated from the Hong Kong Chinese University in 2005. She had some sort of employment three months before the hearing, but at the date of hearing she was unemployed. 20.Madam Woo further claimed that her own mother suffered a fracture in 2005 and required medical assistance and home assistance. Madam Woo claimed that she paid and contributed $6,000 per month towards her mother’s expenses. The deceased’s assets 21.The deceased was born on 21 February 1950. He joined the civil service on 10 March 1982. When he passed away in 2007 March, he had worked for the Hong Kong Government for 34 years 7½ months. It is not disputed that he was entitled to a lump sum pension of $1,306,612. On top of this was the payment in lieu of leave which he did not take, he was entitled to receive approximately $1.4 million. This sum was paid to Madam Woo, his widow upon his death under section 7(8)(a) of the Pensions Ordinance, Cap. 89, because the deceased nominated under section 7 his widow as the beneficiary. 22.It is not disputed that Madam Woo is now the owner of the Tseung Kwan O flat and the flat is worth over $1.2 million. Miss Yau admitted that after the deceased discovered he was suffering from terminal cancer in early January 2007, he arranged to transfer a sum of $600,000 to her. However, the deceased’s son, Sze-chai, later asked to borrow the sum of $250,000 from her for the private medical treatment of the deceased’s cancer before the deceased’s death. She had agreed and lent the money to him. 23.She further claimed that in addition the deceased had intended to give $400,000 to the minor for her future maintenance, but before this was effected, he passed away. 24.In passing, it is not disputed that Miss Yau had taken out another action in the District Court for the recovery of the $250,000 loan she claimed she had lent to the deceased’s elder son, Sze-chai. 25.The deceased’s bank records supported Miss Yau’s claim that a sum of $600,000 was given to her on 11 January 2007. It also showed that the deceased gave a sum of $400,000 to his son Sze-chai and his daughter Sze-yin on 15 January 2007. The $1 million formed part of the deceased’s savings accumulated from his monthly earnings. It is worthy to note that the nomination of his wife as his pension beneficiary was made under section 17(7)(a) of the Pensions Ordinance on 15 January 2007. Analysis 26.It is not in dispute that the deceased was the natural father of the minor and that he left his former matrimonial home in 1999. Madam Woo claimed he stayed in a small fishing hut in a village in Sai Kung after he left the matrimonial home while Miss Yau claimed the deceased left his wife to live with her at her public housing flat. 27.On 29 January 2000 the minor child was born. Since the birth, Miss Yau claimed the deceased had been a loving and caring father. She exhibited with her affidavit photographs showing the deceased sharing indoor and outdoor activities with the minor and Miss Yau could be seen in some of those photographs. 28.He was said to have been maintaining the infant child, the payments included the salary for a foreign domestic helper engaged to look after the infant child. He would also pay the nursery school fees and special tutorial classes as well as extra-curricular activities such as cub scout joining fee, monthly fees, and other activity classes such as ballet and painting. Support of these payments can be found in the receipts and the cheque stubs of the deceased’s HSBC current account exhibited with Miss Yau’s affirmation. 29.As the deceased’s natural born child, the minor is entitled to apply to the court for reasonable financial provisions from the deceased’s estate under sections 2, 3 and 4 of Cap. 481. 30.The deceased died intestate, he was survived by his widow, Madam Woo. The two adult children that Madam Woo gave birth to during their marriage also survived the deceased, and the applicant minor as the daughter of the deceased. No letters of administration of his estate had been taken out up to the date of the hearing. 31.Before his death, the deceased had the following assets:
32.The Tseung Kwan O flat became fully vested in Madam Woo’s name upon the deceased’s death on 27 March 2007 under the rule of survivorship. The $1 million cash was distributed by the deceased before his death when he transferred $600,000 to Miss Yau on 11 January 2007 and the $400,000 to his two adult children on 15 January 2007. These two lots of assets are therefore outside the present application for they do not form part of the deceased’s estate. 33.Upon his death, his pension and back-pay became immediately payable to his nominated spouse under section 17(1) of the Pensions Ordinance, Cap. 89. It is this death gratuity sum of $1.4 million-odd which forms the pool and subject of the present application as the deceased left no other assets. 34.Under section 5 of Cap. 481, the court shall have regard to a number of matters in its exercise of powers under section 4 of the ordinance which I have set out above. They included: the financial resources and financial needs of the applicant that she has at present or is likely to have in the foreseeable future; the financial resources and financial needs which any other applicant under section 4 has or is likely to have in the foreseeable future; the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future; the obligations and responsibilities which the deceased had towards any applicant for an order under section 4 or towards any beneficiary of the estate of the deceased; the size and nature of the deceased’s estate and any other matters that the court shall consider to be relevant. 35.In addition, the court shall consider the matters under section 5(2)(a) to (f), in particular, the matters under section 5(2)(a) and (b). (a) is of particular relevance, it is the age of the applicant and the duration of the marriage or union of concubinage. 36.The applicant is a minor of 9 years 11 months old. As to section 5(1)(a) to (g), the relevant matters the court should take into account are sections 5(1)(a), (c), (d), (e) and (g). So far as the minor is concerned, she was a dependant of the deceased, this is indisputable. I have no doubt the deceased had been occupied with his full-time job and his outdoor activities and fishing in Sai Kung. No doubt, he would at times, stay overnight at the small hut in a Sai Kung village that he rented. At the same time, he had in fact carried out his duty as a father and had been spending his free time with the minor as can be seen in the photographs exhibited by Miss Yau. 37.Even though there may be criticisms that he was not an official registered resident at the public housing unit of Miss Yau, it remained incontrovertible that he had been cohabiting with Miss Yau since 1999, and together they were raising the minor as her parents. It can be seen from the photographs in the documents exhibited that he was a devoted father and did take an active part as the minor’s father and partner to Miss Yau before his death. 38.Madam Woo in her evidence analysed the deceased’s spending pattern in the 21 months prior to the discovery of his terminal lung cancer in January 2007. I have made a calculation of his spending in the 21 months. I found after deducting what Madam Woo alleged to be a tax payment in June 2005 in the sum of $53,098, his monthly average spending was just under $11,000. 39.It is of note that the salary tax demand sent to the deceased for the year 2006 and 2007 showed that his first payment of tax was to be 30 March 2007 and the second instalment on 30 April 2007. It may be an indication that the 2006 final instalment of tax was paid in April 2007 and not June 2006. This can be seen in Exhibit WBW-3 of the defendant’s affirmation at page 382 of the bundle. 40.After taking into account the monthly average spending, and deduction of the alleged tax payment of $53,000-odd, the average monthly spending was $11,000 or thereabouts. This is not inconsistent with Miss Yau’s claim that the deceased paid her a sum of $3,000 for housekeeping, $2,000 for the minor’s school and other expenses and $3,670 to the domestic helper towards her salary. It is also supported in part by the entries in the small notebook of the deceased exhibited to Miss Yau’s affidavit as YSY-10 at page 273 of the bundle. 41.As to the minor’s maintenance and schooling, I have no doubt that they are deemed to be necessary by Miss Yau, whether they amounted to the monthly sum of $11,800 depends on the manner of spending Miss Yau had elected for the benefit of the minor, such as the items of $1,000 per month for holidays and the $2,800 tuition fees and the foreign domestic helper’s share of $1,900 per month. 42.I have been informed at the hearing that the foreign domestic helper is no longer engaged, instead, Miss Yau now engaged a local part-time helper to look after the minor while Miss Yau is at work. I do not consider the $2,000 for hiring a local helper to be unreasonable. It is equivalent to a rate of $50 per hour for two hours each day, five days a week, for picking up and taking the minor from school to tuition classes and maybe to prepare a snack for her to eat in between school and tutorial classes while Miss Yau would pick her up from tutorial classes after work. And this amount of $100 a day amounted to $2,000 a month is equivalent or close to the $1,900 apportioned to the foreign domestic worker’s salary as the share of the minor’s care. 43.As to the monthly holiday sum of $1,000, it seemed to be high when the minor is not expected to take monthly holiday trips. On the other hand, holiday trips may take place twice a year during the winter and summer vacations. Of course, trips during the summer and winter vacations probably cost more than $5,000 each time, depending on the nature of the trip, while local school trips and outings would cost much less. However, on the whole, I do not consider the total amount of $12,000 a year to be excessive. 44.On the tuition classes, if the minor and Miss Yau have supporting families and relatives, it may not be strictly necessary to hire a tutor to supervise the minor’s schoolwork. Unfortunately, Miss Yau has a full-time job and lived alone with the minor without family support. It seems to be the trend for schoolchildren these days in Hong Kong to get extra help from tutors outside the school. It is a prevalent practice amongst parents in Hong Kong to send their children to tutorial classes after school and to seek assistance from private tutors from time to time. For this reason, I do not consider the expenses on tutorial classes to be either excessive or unreasonable. The financial needs of Madam Woo and her two adult children 45.Madam Woo admitted she is a civil servant with a monthly salary of $20,850. When she reaches the age of retirement she will receive a full pension, and she said this would come in June 2010. She admitted she would receive approximately $11,000 per month in pension should she decide not to draw a lump sum at the time of her retirement. The total pension sum is estimated to be $1.03 million. 46.Further, Madam Woo received the $1.4 million death gratuity at the death of the deceased in May 2007 because she was nominated under the Pensions Ordinance for under the Pensions Ordinance, only the spouse can be nominated to receive the deceased’s death gratuity. She claimed she had invested 80 per cent of that sum in equity and funds. She further exhibited some of the monthly statements of her investment account at the Hang Seng Bank for the period between 2008 to February 2009, the date of her last affirmation. 47.She also claimed the investment had shrunk mainly due to the economic downturn in the last quarter of 2008. The value of the investment had been reduced by as much as 50 per cent. She claimed these were long-term investments and not short-term speculation on her part. Unfortunately, no further bank investment statements for 2009 have been produced by Madam Woo before the hearing, the up-to-date value of her investments is therefore unknown. 48.She also claimed that her son’s overseas study loans have not been repaid, and her daughter was at the date of hearing unemployed. Madam Woo claimed she was contributing $6,000 to her mother’s living and medical expenses, but she failed to disclose her mother’s financial positions. It is not possible, therefore, to determine whether the contribution to her mother was made due to her mother’s need or out of filial responsibility on Madam Woo’s part. 49.As to Sze-chai’s study loans, they were borrowed between June 2006 and September 2008. If Madam Woo had intended to finance Sze-chai’s studies abroad, she would have paid the tuition fees and the rental for him at the time either from her own savings or asked the deceased to pay those tuition fees and rental incurred in 2006, or applied part of the death gratuities for the repayment of those expenses. The fact that she did not do so up to the present is an indication that Sze-chai would have to do what most students in Hong Kong and the UK would do and repay the loans from his post-graduate income. 50.Both Madam Woo’s children have received high education. They are both adults and no longer in full-time education, therefore cannot be regarded as dependants of Madam Woo and certainly not of the deceased before or after his death. Their resources are the education they received and the future earning capacity. Neither adult children nor Madam Woo applied for reasonable provisions under section 4 of Cap. 481, probably for the obvious reason that they were not dependants of the deceased. There were no evidence that they were in the few years before the deceased’s death his dependants. 51.The minor, on the other hand, was 7 years old at the time of the deceased’s death. She is now 9 years old and 11 months, studying in primary school. She will have at least 12 or 13 years to go before she completes her tertiary education. Her needs are clearly evident. There is not a shred of doubt that she was a dependant of the deceased before his death, yet no provisions whatsoever had been made for her at his death. 52.Madam Woo claimed that the $600,000 the deceased gave Miss Yau was supposed to be for the minor’s future provisions. However, there is no evidence that that was the case, particularly when it is not disputed by the defendant that a sum of $250,000 had been transferred back or borrowed by Sze-chai from Miss Yau before the deceased’s death. 53.According to Miss Yau, the $600,000 represented half of the value of the Tseung Kwan O flat in Madam Woo’s name that the deceased wanted her to have, and that he had promised her upon the receipt of his pension in July 2007 he would pay her provisions for the minor for he expected to have one year life expectancy upon discovery of his illness in January 2007. Due to his untimely death in March 2007, the $400,000 he promised to pay for the minor’s provision was not paid. 54.Miss Yau’s own income is $14,000 per month, in order to provide for the minor, she would need a supplement to her income to ensure the minor would be reasonably maintained. I have taken into consideration the matters set out in section 5 of Cap. 481, namely the needs and resources of the minor, the needs and resources of the beneficiaries, the other beneficiaries such as the deceased’s two adult children and Madam Woo who has an independent income and a pension at her retirement. 55.The obligations and responsibilities of the deceased to his two elder children have been discharged when he transferred to them the sum of $400,000 on 15 January 2007. His obligations and responsibilities towards the minor have not been discharged in comparison to the two adult children, particular regard must be given to the young age of the minor. 56.I agree with Mr Kwok that section 5 is a forward-looking legislation, the court should look at the present and future needs of the minor in its consideration of what is the reasonable financial provision for the minor, rather than examine the deceased’s spending pattern in the past. Section 12(1)(b) of the Pensions Ordinance confers the assignment of the deceased’s pension or death gratuity to someone other than the nominated spouse under the order of court for the maintenance of the minor child of the officer. In this particular context, I agree that the pension or death gratuities fall into the category of the estate of the deceased. 57.Though section 6 of Cap. 481 provides for a 6 month time limit for an application under section 4, the 6-month time limit does not start to run until representation to the estate of the deceased is taken out. In the present case, no representation of the deceased’s estate had been taken out, and therefore the application is not time barred. 58.As to the sum applicable in Miss Yau’s application, the monthly expenditures on the minor amounted to $11,800. Should Miss Yau, being the mother, be required to share the responsibility and expenditure with the deceased’s estate equally, the half share will come to $5,900 a month. Using a multiplier of 12, when the minor is expected to complete her university education, the sum comes to $849,600. Miss Yau is merely asking for $400,000, less than half of that sum. I consider it to be a modest sum in comparison to the liquid assets that Madam Woo possesses in addition to the Tseung Kwan O flat which is fully paid up, and the salary or pension she will receive in future. 59.For the aforesaid reasons, I grant the applicant’s application and order Madam Woo to pay into court the sum of $400,000 to be invested by the Registrar of the District Court, and out of that sum, the sum of $5,000 to be paid out to Miss Yau as the next friend and guardian of the minor for the minor’s benefit on the first day of each month until the minor reaches the age of 18 years or further order. 60.Costs to be borne by the defendant, to be taxed if not agreed. (Discussions re payment of HK$150,000 previously paid into court) 61.I order the payment into court be transferred to the Registrar of District Court as part payment of the judgment sum, the balance to be paid within 3 months hereof. 62.I will grant counsel’s certificate in the application. Plaintiff’s own costs to be taxed in accordance with Legal Aid Regulations.
Mr Kwok Sui-hay, instructed by Messrs Christine M Koo & Ip, assigned by DLA for the Plaintiff Mr Calvin Chauk, instructed by Messrs Charles Chu & Kenneth Sit, for the Defendant |
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