Case Document

100%Judiciary

FCMC 7598 / 2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 7598 OF 2010

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BETWEEN
	YY	Petitioner
and
	CHOA	Respondent
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Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to public)

Date of Hearing: 31 July 2012

Date of written submissions: 10 August 2012

Date of Ruling: 15 August 2012

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RULING
(Attachment of Income Order)

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Introduction

1.This is an application by a petitioner mother for an attachment of income order following an agreement with respect to the amount of interim maintenance to be paid for the two children of the family. The issue of arrears was also resolved. The mother now asks that this be secured by an attachment of income order, something that is being resisted by the father.

Background

2.On the 9 November 2011 I handed down a judgment in this case allowing the petitioner to relocate to Shanghai with the two children of the family and her new partner. In that judgment I made findings with respect to the parties’ perilous financial state, both during the marriage and since. Indeed this became a central issue during the trial. For example when setting out the background I said at paragraph 7

7. It seems that the parties’ financial situation has always been a cause of some concern both during the marriage and since, with money often being in short supply. The mother maintained during the trial that she was unaware of the parties’ financial predicament during the marriage – something that the father has challenged. Whether the mother was aware of it or not the fact remains that the parties’ financial circumstances both then and now have been very tight.

At paragraph 28 I added

28. The mother wishes to relocate to Shanghai with her fiancée. There is no sense that in doing so that she wishes to distance herself from the father with a view to excluding him from the children’s life going forward – although the father clearly fears this. Rather as will be seen below, the sense one gets from the evidence is that primarily the move to Shanghai is a practical solution to the predicament that she and Mr J now find themselves in, both in terms of jobs and schooling.

3.Thus I acknowledged in the judgment that this application was greatly influenced by the financial situation that the parties found themselves in. This is further reiterated at paragraph 31 and 32 when, whilst giving credit to the mother for her attempts to earn money, I said that

31. The father for his part attempted to help with the school fees until 15 April 2010 when all his credit cards were cancelled after he tried to pay for them using his credit card facilities. At that stage he owed just under HK$380,000 on the credit cards alone. Shortly thereafter in May 2010 the parties separated. The father initially agreed to pay HK$3,500 per month for each of the two children. It is the mother’s case that on occasion the father failed to pay even this sum. It is difficult to ascertain whether or not this is true given that the mother’s bank statements have not been produced. However even on the father’s own case he was only paying her HK$7,000 per month in total until August 2011 when he restructured his debts. Thereafter he has been paying HK$15,000 per month. This left the mother in a situation where she has been trying to pay for all other expenses, including the school fees.

32. What is now clear is that the father is significantly in debt. During his cross examination he admitted to now having loans of close to HK$900,000. He has been unable to contribute towards the school fees. He is presently earning HK$794,256 per annum (HK$66,188 per month), plus an incentive payment of 30% of his annual fixed salary – if annual targets are met – i.e. a further HK$238,500 per annum (HK$19,875 per month).

4.I accepted the mother’s case that if she was granted leave that she would be able to live more comfortably in Shanghai with the children, because they would benefit in part from her fiancée’s employment contract. I also found that she should also be able to contribute towards the family’s finances in due course. I concluded that

40. All in all from a financial perspective the mother’s plan was practical and both well researched and investigated. The father’s attempts to undermine her proposal did not, it seem to me, hold any weight.

5.I subsequently gave the mother leave to relocate. As at the 26 August 2011 the father had agreed to pay the mother HK$7,500 per month as interim maintenance for each of the two children of the family. This was based on the children residing in Hong Kong. There has been no revision of the interim maintenance provisions since that date. The father made his application to vary on the 28 November 2011, following the mother’s relocation with the children.

The law

6.The mother’s lawyers have ably set out the law in their written submission as follows:

Section 28(1) of MPPO provides that:-

Where a maintenance order has been made against a maintenance payer and-

(a) (i) a court is satisfied that the payer has without reasonable excuse failed to make any payment which he is required to make by the maintenance order; or

(ii) a court is satisfied that there are reasonable grounds to believe that the payer will not make full and punctual payment in compliance with the maintenance order; or

(iii) the payer and designated payee agree to the making of an order under this section; and

(b) there is any income capable of being attached payable to the payer,

the court may, in accordance with rules made for the purpose of subsection (6), order the income to be attached as to the whole or part of the amount payable under the maintenance order and the amount attached to be paid to the specified payee.

Section 28(1A) of MPPO provides that:-

For the purpose of subsection (1)(a)(ii), in deciding whether there are reasonable grounds to believe that the maintenance payer will not make full and punctual payment in compliance with the maintenance order, the court shall take into account all the circumstances of the case, including (but not limited to)-

(a) the payer's past record and conduct in discharging his reasonable financial obligation towards the designated payee before any maintenance order is made;

(b) the payer's past record and conduct in connection with the making of maintenance payments to the payee pursuant to the maintenance order or an undertaking in any proceedings; and

(c) the risk of the payer dissipating his property.

Section 28(2B) of the MPPO provides that:-

“An attachment order may be made by the court on its own motion or on the application by the maintenance payer or the designated payee or both.”

Further, Rule 13 of the Attachment of Income Rules, Cap 13A provides:-

The court may-

(a) dispense with or relax any procedure specified in rules 3 to 8; or

(b) abridge any time limit specified in rules 3 to 8,

if the court is satisfied that it is fair and reasonable to do so in the circumstances of the case.

The issue

7.Should then an attachment of income order be granted given the circumstances of this particular case?

The consent summons

8.It was agreed half way through the hearing to vary the maintenance as follows:

(a) H will pay to W HK$8,000 per month (HK$4,000 per child per month) to be paid on the 28^th day of each and every subsequent month commencing on 28^th August 2012 until 27^th August 2013.

(b) H will pay to W HK$10,000 per month (HK$5,000 per child per month) on the 28^th day of each and every subsequent month commencing on 28^th August 2013, such sum to be increased/decreased to take account of the Hong Kong Composite Price Index commencing on 28^th August 2014.

(c) H do pay W HK$50,000 in respect of the arrears of children maintenance no later than 31^st March 2013.

This was a significant reduction from the HK$15,000 per month that was originally ordered.

Discussion

9.The mother maintains that an attachment of income order is necessary given the father’s history of irregular and inadequate payment. She says that there was no reasonable excuse for the father reducing payment with effect from the end of November 2011. It is suggested that the reason for the father’s financial predicament is his over spending. Further it is alleged that he is unable to manage his finances properly.

10.With respect I do not agree. It is clear that these parties have been in a financial crisis for a considerable period of time. I do not accept that the father should take all of the responsibility for this. Decisions were made during the marriage, including the decision to send the children to an expensive International School, which then had a significant financial impact on the family’s finances. It seems that the parties lived beyond their means, which in turn led to excessive borrowing. Both parties played a part in this.

11.In November 2011 the father applied, quite properly, to vary the interim maintenance payments downwards. He continued to pay what he could. This is set out in the table below. He explained his predicament in court on several occasions. He has always accepted his financial obligation towards his children. He says simply that his debts are such that he cannot pay as originally ordered.

Month Amount paid by H
(in HK$) Outstanding amount
(in HK$)

Nov 2011 2,000 13,000

Dec 2011 3,000 12,000

Jan 2012 3,000 12,000

Feb 2012 3,000 12,000

Mar 2012 3,000 12,000

Apr 2012 3,000 12,000

May 2012 3,000 12,000

Jun 2012 3,000 12,000

July 2012 3,000 12,000

Total: 26,000 109,000

12.The father asks that an attachment of income order not be made because

… this will trigger my line manager’s attention and will seriously affect my job security.

13.I accept that this is a valid concern. The mother says that it should not be – given that the father works for a Swedish company. With respect it seems to me that the father’s concerns are not so much with the Administration of his company but with his immediate boss in Hong Kong. I accept that an attachment of income order may send his line manager the wrong message. I have also noted the father’s proposal that he set up a direct debit authorization to enable the maintenance to be paid from his savings account to the mother’s savings account. He hopes that this will go some way towards reassuring the mother that he will continue to pay as ordered. I will hold the father to this and would ask that it be expressed as an undertaking in the order.

Conclusion

14.I will not therefore make an order that the interim maintenance payments be secured by an attachment of income order. The mother’s summons dated the 26 March 2012 shall accordingly be dismissed.

15.As indicated during the trial I will now give leave for both sides to file a short submission on the issue of costs with respect to the father’s application to vary the maintenance payments dated the 28 November 2011and the mother’s application for an attachment of income order dated the 26 March 2012. I note that the father has done so already in the submissions filed with respect to the attachment of income order. In any event leave is given for both sides to file a short submission on costs if necessary within the next 7 days. The father may supplement his original submission if he should so wish.