Esbu v. Lch
|
FCMC 8469/2006 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 8469 OF 2006 ------------------------
------------------------
----------------------- J U D G M E N T ------------------------ 1.This is a hearing on the Petitioner (“the mother”)’s application for an upward variation of the son’s maintenance currently payable by the respondent (“the father”). Background 2.The parties married in 2004. 3.Within wedlock, a son (“T”) was born who is now aged 8. 4.The mother issued a petition for divorce in 2006. A decree nisi was granted on 22 April 2008, which was later made absolute on 13 June 2008. 5.As for custody, this court granted an order by consent on 19 September 2007 for joint custody with care and control to the mother and defined access to the father. The current access arrangement is that during the school days, T will stay with the mother at her home in Tai Koo Shing except for Wednesday when the father will take T to his home in Cheung Sha Wan for dinner before returning him at about 9:00pm. For the weekend, the father will have staying access either on Saturday evening to Monday morning or from Sunday morning to Sunday evening, to be taken on an alternate basis. The parties will also share T’s long school holidays equally. With this arrangement, one would see that despite the fact that formal care and control was given to the mother, the reality is that T is now spending a not insubstantial amount of time with the father in access. 6.As for ancillary relief, this court has also granted an order by consent on 22 April 2008 that the father has to pay $2,800 per month as maintenance for T. 7.On 22 October 2012, the mother issued the present notice of application for ancillary relief asking for an upward adjustment of the maintenance for T. As the parties failed to reach any agreement on the issue, the case was therefore adjourned to today for trial. 8.The latest positions of the parties are that the mother is now asking for an upward adjustment of T’s maintenance to a monthly sum of $12,335, while the father is now only agreeing to pay a monthly sum of $4,500. Therefore, there is a difference of about $8,000 as between the parties’ open positions. The Legal Principles 9.The Court’s power to grant an order for variation is governed by s11 (1) and (7) of the Matrimonial Proceedings and Property Ordinance, Cap.192 (“MPPO”) which provides as follows:
According to the said provision, the court, in considering such an application for variation, has to consider all the circumstances of the case and in particular, any changes in the matters to which regard has been made in reaching the original order. 10.In the case of AEM v. VFM[1], Cheung JA has explained the modern approach in dealing with such an application at paras 14.4-8 of the Judgment:
11.As to the weight to be attached to the original order, Tang VP (as he then was) said in the case of HCTT v. TYYC [2008] 5 HKC 86 at paras 15-16: “15. But as Garner v. Garner [1992] FLR 573 shows that does not mean that the earlier order, whether made by consent or not, carries no weight. How much weight should be given to the earlier order must depend on the circumstances. Cazalet J said in the English Court of Appeal:
12.I shall bear the above principles in mind when I come to consider the facts of this case. The Mother’s Evidence 13.The mother is now aged 34. She works as a Facilities Manager in a bank earning an average monthly income of about $62,500. In her Form E, she stated that she had 50% interest in the flat at Tai Koo Shing in which she and T are presently residing. The estimated value of the flat is $5,541,301 and her half share being about $2,770,000. In addition, she also has about $240,000 cash in bank and a cash value of about $180,000 in some insurance policies. 14.In her Form E and also in the course of her evidence, the mother had listed out her current general expenses as follows:
General
15.It is the case of the mother that out of the general expenses of $18,617.78, half of it should be attributable to T except the domestic helper’s expenses as 2/3 of that expense has already been included under T’s sole expenses. In other words, a sum of $8,458.89 (($18,617.78-$1,700 = $16,917.78) x 1/2 = $8,458.89). In her final submission, counsel for the mother stated that the wife is now agreeable to attribute a sum of $8,000 only as T’s share of the general expenses. 16.As to T’s sole expenses, counsel had also revised some of the figures in the Form E and come up with the following figures: T’s sole expenses
17.Adding $8,000 as T’s share of the general expenses, the mother has come up with a figure of $24,670 ($8,000 + $16,670 = $24,670) as T’s total monthly expenses. She claims that the father should bear half of that sum and so she now asks for the monthly maintenance of T to be increased to $12,335 ($24,670 x ½ = $12,335). Discussion 18.The father has raised objections to the reasonableness of quite a number of items in the above list. Mortgage repayment at $7,351.78 19.It is the father’s case that T is now residing in a flat owned jointly by the mother and her aunt. As the payment is towards a mortgage of the flat, he is of the view that he should not be required to contribute to the capital investment of both the mother and her aunt. 20.At first glance, there seems to be some force in the father’s argument as the repayment of the mortgage will no doubt be a form of capital accumulation by the mother and the aunt. However, as pointed out by counsel, what really is in issue is the accommodation cost of T. I agree that in providing suitable accommodation to T, the mother has to incur certain costs, be it in form of rental or mortgage repayment. Those accommodation costs will be regarded as the costs of maintaining T as long as the amount is reasonable under the circumstances of the case. 21.As far as the sum of $7,351.78 is concerned, I cannot say it is in any way unreasonable bearing in mind of the current booming property market and the fact that the father himself is claiming $16,600 as his monthly accommodation cost. Other items under general expenses 22.The father has also challenged the other items under the heading of general expenses, including utilities, management fees, food and household expenses, saying that they are excessive. 23.I have no intention to go into a detail discussion on each and every item because they are necessarily rough estimates (except for management fee) and will fluctuate from time to time. Overall speaking, I do not find those figures, for an ordinary family of three to four in Hong Kong, are in any way excessive. Attribution to T’s expenses 24.The mother is now claiming that half of the general expenses should be attributed to T’s expenses. The father objects to such an attribution. In this regard, I do share some of the father’s concerns. 25.First, as far as I understand it, the household of Tai Koo Shing consists of at least 3 permanent members, namely, the mother, T and the domestic helper. 26.Second, there is evidence to suggest that the mother’s other relatives do reside at the premises from time to time, taking the household number to four or above. 27.Third, during the relatives’ stay, it is inevitable that the domestic helper will also render services to them. 28.Under these circumstances, I am of the view that a fair attribution would be 1/3 of those expenses instead of half as claimed by the mother. Therefore, I am inclined to accept a monthly sum of $5,639.26 as T’s share of the general expenses ($16,917.78 x 1/3 = $5,639.26). For the ease of calculation, I would round that up to a sum of $5,600. T’s sole expenses Tuition fee at $3,000 29.The husband actually does not object to T attending the extra tuition organised by the school. However, he said it should be $2,600 instead of $3,000. 30.In this regard, I do see that the mother was able to produce the relevant receipts. It is true that some of those receipts were for $2,600, but there were also other receipts well above that sum. I accept the mother’s explanation that apart from the regular monthly fees (which has already been increased to $2,860 recently), sometimes she had to pay additional sums for the preparation of special tests or exams. I agree that the fairest way is to add up all those receipts which come to an average monthly figure of about $3,000. I accept this being the actually monthly expenses of T in this item. Medical Expenses at $2,100 31.The wife now claims that T’s monthly medical expenses amount to $2,100 which is made up by the sum of $200 as general medical expenses and $1,900 being consultation fee with a psychologist called Annie Ho. 32.For general medical and dental expenses, I understand that both the mother and the father’s employers would provide medical coverage for their employees and children. However, as said by the mother and which I accept, that there is a cap on those claim for reimbursement and therefore, a claim for a relatively small sum of $200 per month is reasonable. 33.The more controversial issue is T’s consultation with a psychologist. It is the mother’s case that T is suffering from panic attacks and anxiety problem. This was how the mother described her concerns on T’s psychological health in her affidavit (A1/20):
34.I have no reason to disbelieve what the mother said in her affidavit about the Tai Tam Incident. According to those facts, the mother’s concern is quite understandable. Therefore, even though the mother has not produced any medical report on the psychological needs of T, I am inclined to accept that there is a need for some form of psychological therapy or counselling for the benefit of T. 35.Under these circumstances, I will allow the claim for $2,100 as medical expenses for T in full. Extracurricular activities 36.It is the mother’s case that T is now attending s number of extracurricular activities which cost a monthly sum of $3,000. 37.The father objects by saying that the number of extracurricular activities arranged by the mother are simply too many. 38.If one should look at those activities concerned, they include Putonghua (Monday morning), school violin (Tuesday and Thursday morning), piano (Tuesday evening), private violin (Thursday evening), painting (Friday evening) and Olympiad Math (Sunday morning). Those activities are in addition to the extra tuition organised by the school from Monday to Friday morning before school. Although I have no intention to interfere with the mother’s decisions on T’s extracurricular activities, I do share the father’s feeling that the number of activities may be a bit too many. 39.Under this item, it may not be appropriate for me to say which activities should be chosen, or dropped, for T as they should be left to the wise decision of the parents. What I would do here is simply to retain the sum of $3,000 to cater for all the extracurricular activities of T, and this sum would include Olympiad Math as well. In other words, the future payment of Olympiad Math will be the responsibility of the mother out of this sum of $3,000. Holidays at $1,580 40.It is the mother’s case that T has to attend a summer school in the US every summer costing about $19,000 a year. 41.The father objects saying that such summer school is not really necessary or that a less expensive place should be chosen instead. 42.It is my view that children attending summer schools nowadays are not really that uncommon. Even the government is prepared to subsidise some low income families so that their children can go for such trips. Therefore, the issue here is not whether summer school for T is reasonable. Instead, it is whether the money spent is a reasonable amount under the circumstances of this case. 43.I understand that T was born in US and therefore, a US citizen. The mother has quite a number of close relatives in the US and Canada. It is also the intention of the mother to send T to further his education there. Therefore, I do not consider it unreasonable to send T to US for summer school. 44.As to the quantum of such expense, I understand that the father objects to the sum of $19,000. It is regrettable that the mother has not produced sufficient documentary evidence on the quantum of the expenses. However, as T will be travelling during peak season, I think the sum of $19,000 including the air fares and all other expenses is about right. In other words, I will not disturb this figure and a monthly sum of $1,580 will be allowed. Clothing and shoes 45.The father challenges the reasonableness of this. It is my view that for a growing child, $500 per month on both clothing and shoes cannot be regarded as unreasonable. This sum is therefore allowed in full. Insurance at $1,247 46.The mother said she is now paying a monthly sum of $1,247 for an educational fund to provide some security for T’s future tertiary education. 47.T is only 8 and he will only attend tertiary education in about a decade from now. This saving for future expenses by the mother may be the act of a prudent mother, but by asking the father to make such a premature contribution at this early stage should not be allowed. Domestic helper at $3,300 48.By asking the father to pay a monthly sum of $3,300 towards the expense of the domestic helper, the mother is in fact asking for the father to pay a share in 2/3 of those expenses. 49.The father objects pointing out that a not insubstantial amount of T’s time was in fact spent with him and that the domestic helper does also provide services to the mother and her relatives. 50.In this item, it is my view that since the mother has full time employment, the engagement of a domestic helper is therefore necessary. However, as the domestic helper also provides services to the mother and her relatives, I say a fair division would be to apportion half of the domestic helper’s total expenses as T’s expense. I understand that the mother is now spending about $5,000 per month on the domestic helper, half of that would be $2,500. Summary of T’s expenses currently payable by the mother 51.Based on the above discussion, I would allow the following as T’s reasonable monthly expenses now being paid by the mother:
The father’s evidence 52.The father is now aged 32. He is an Airfreight Product Manager by occupation. He is now residing with his parents at a flat in Cheung Sha Wan, Kowloon. In his Form E, he stated that he had an average monthly income of $45,650 but with his total outgoings at $59,397. He hHHHe has $41,000 cash in bank but with a debt of about $170,000. He said he could only afford to pay a monthly sum of $4,500 as T’s maintenance. 53.The mother challenged the father’s alleged income and also some of the items of expenses. The father’s income 54.In his Form E, the father stated that he had a monthly salary of $40,750. He also had an average overtime payment of $3,400 and average bonus of $1,500 per month. This takes the father total monthly income to $45,650. 55.However, counsel for the mother argues that according to the employer’s return for the year from 1 April 2011 to 31 March 2012 (A2/541-542), the father had the following income:
If based on this figure, the father did have an average monthly income of $48,037.17 for the year of 2011-2012. 56.The father explained the discrepancy was due to the fact that part of his income was made up of bonus which varied from year to year. 57.I accept that the father’s income is not fixed because of the variation in his bonus each year. I think the fairest way is to average out his total income based on the information which he has given the court for the purpose of this hearing. According to the father’s income for the 10 months as from 9 June 2010 to 31 March 2011 (he only joined the company as from June 2010), his total income amounted to $395,450. Adding this to $576,446 for 2011-12, the father’s total income for these 22 months (June 2010 to March 2012) was $971,896. If divided by 22 months, the average monthly income comes to a figure of $44,177, which is slightly below what he stated in his Form E. Therefore, and for the ease of calculation, I will treat the father as having an average monthly income of $45,000. Rental payment by the father 58.It is the case of the father that he is currently paying a monthly sum of $16,600 as rent for his present apartment in Cheung Sha Wan. This is challenged by the wife as it turns out that the apartment was actually owned by the father’s parents. It is the wife’s case that the so called tenancy between the father and his parents is really a sham and the rental payment should either be disregarded or that it should be treated as the father’s contribution towards the maintenance of his parents, instead of as a reasonable expense of the father. My view 59.It is the father’s evidence that before he moved into the present apartment in Cheung Sha Wan, he was residing at a flat in North Point for a monthly rent of about $13,000. However, as the rent was going up and the fact that he wanted to have more living space with T, he decided to move into the apartment owned by his parents in Cheung Sha Wan and paid a current rent of $16,600 per month. He said the tenancy with his parents is a genuine one and they have even signed a formal tenancy agreement which has been properly stamped. 60.In considering the genuineness of this tenancy, I am mindful of the following facts. 61.First, although there is no legal restriction on the rental of an apartment by the parents to their own children at a market rent, it is rather odd that the parents of the father not only have let their apartment to the father, they have actually lived at the apartment as well. It is odd in the sense that the landlords actually live together with their tenant and at the same time are receiving rent from him. 62.Second, as evidence shows, the remuneration package of the father actually includes a rental refund to the father by his employer in the sum of $190,080 for the year of 2011 to 2012. This raises the question of whether the tenancy agreement was entered into purely for the purpose of gaining tax advantage by the father. 63.Third, I also need to remind myself that even though there may be some doubts on the genuineness of the landlord and tenant relationship between the father and his parents, this court cannot ignore the fact the father and T do have accommodation needs. At the same time, this court also has to recognise that the father does have two aged parents to support, who in return do provide help in the care of T. In other words, even if the father does not rent the present apartment from his parents, he still has to rent somewhere else for his and T’s accommodation. 64.Having considered the matter in the round, I would tend to accept that the father does have accommodation needs in the sum of $16,600 per month. However, since the father’s payment of rent can also be regarded as some form of contribution to his parents, it would not be reasonable to include another sum of $3,000 as contribution to parents in the father’s monthly expenses. Car and transport expenses 65.It is the father’s evidence that he now owns a car (a BMW) which costs him $5,900 per month to maintain. In addition, he also has to spend $4,900 per month on the item of transport which would include his outgoings on petrol, car parking charges, tunnel fees, etc. He said this expense is necessary for him to maintain a certain level of living standard which is essential for him and his family. He quoted the example of the necessity for him to drive to Wanchai to pick up T after school and return him to the mother on Wednesday evening. He said he could not do this without driving his own car. He also mentioned of the need to use the car during the weekend. My View 66.I agree with Ms. Hung’s submission that keeping a car in Hong Kong is very expensive nowadays. From the father’s evidence, the monthly expense on keeping and using the car, together with the father’s other travelling expenses, amount to $10,800. I share Ms. Hung’s doubt on the necessity of this car expense. For the Wednesday access, I understand that the paternal grandfather will pick up T after school. He can take T to Cheung Sha Wan either by MTR or by bus. If T has to be rushed back to the mother after dinner, it can be done by taxi. As to weekend access, again, I do not think the use of the father’s car is a must. Of course, if the father can afford to pay the reasonable monthly expenses of T, there is no reason to disrupt his present life style including the keeping of a car, which he only uses 3 to 4 days in a week. However, if his ability to pay T’s maintenance is seriously affected by his expenses on the car, I think it is time for the father to reconsider his priorities in his monthly spending. 67.In the circumstances of this case, I understand that the father is having an average monthly income of about $45,000. If he has to spend $10,800 monthly to keeping his car and other travelling expenses, that amounts to 24% of his income. That is unacceptably high. In this regard, I would allow the husband to have $5,000 per month as his travelling expenses, which would include his daily travel to work and travel with T during access. The father’s debt of $169,384 68.In his Form E (A2/381), the father stated that he has outstanding liabilities in the sum of $169,384 which include the following items:
69.In order to repay the outstanding liabilities, the father has to pay $8,653 per month towards those loans. 70.It is the mother’s case that the taking out of those loans were unnecessary except for the sole purpose of creating an impression of impecuniosity on the part of the father. My View 71.From Exhibit P6, which is a table prepared by the mother listing out the values in all of the father’s bank accounts for the year of 2012, one would see that for that particular year, the father has maintained all along certain level of deposits ranging from $227,243 to $109,901. On average, the net value of all his accounts was $194,307.75. 72.If one should take the month of June 2012 for consideration, the father had the sum of $222,546 in his bank accounts. However, from a letter dated 18 June 2012 (Exhibit R3), one would see that the father had also taken out a loan of $200,000 repayable by 24 monthly instalments of $8,653.33 each. This begs the question of why the father should still take out the loan of $200,000 while he already had the money in his accounts. 73.In this regard, the father did try to explain in court that he took out the loans in order to ease his cash flow problem. I am afraid that is not a convincing answer. I accept as a fact that the father does not own substantial capital assets, but the loan of $200,000 taken out by him is also in my view not strictly necessary. The same applies to the monthly repayment sum of $8,653, which will not be counted as the reasonable monthly expenses of the father. Summary of the father’s reasonable monthly expenses 74.Based on the above discussion and the father’s Form E, I find the father’s reasonable monthly expenses are as follows:
75.As the father has a monthly income of $45,000, I find that he will have a monthly surplus of $6,636. T’s total monthly expenses 76.In paragraph 51 above, I have already ruled that the mother is now paying $19,723 as T’s monthly expenses. However, in order to have a full picture of T’s total monthly expenses, it would only be fair to take into account the payments made by the father on T as well. 77.According to the Form E of the father, he is now spending $1,230 on T (A2/386), out of which $780 was for Olympiad Math. As I said in paragraph 39 above, I would allow a monthly sum of $3,000 for all of T’s extracurricular activities, including the Olympiad Math which will be paid by the mother in the future. Therefore, the sum of $780 should be taken out from the father’s expenses. By doing so, the money spent on T by the father would become $450. 78.Furthermore, the father is also spending a monthly sum of $26,600 as general expenses (A2/385), out of which a sum of $5,900 is for car expenses. I have already ruled that the keeping of a car by the father is unreasonable under his stringent financial circumstances and I would only allow a sum of $5,000 as the husband’s overall transport expenses. Out of this sum, it would be reasonable to attribute a sum of $2,000 being the father’s personal travelling expenses, and the balance of $3,000 being travelling expenses under the general expenses for the whole family. With this adjustment, I am satisfied that the general expenses of the father amounts to $23,700 ($26,600 - $5,900 + $3,000 = $23,700). 79.As there are four members in the father’s family, and the fact that T does not reside with the father full time, it would be fair to attribute 1/4 of that amount as T’s expenses only, namely the sum of $5,925 ($23,700 x ¼ = $5,925). Adding this to the sum of $450, I am satisfied that the father is currently spending the monthly sum of $6,375 ($5,925 + $450 = $6,375) on T. 80.By adding up the money spent on T by the mother and the father, I am satisfied that the total monthly reasonable expenses of T are $26,098 ($19,723 + $6,375 = $26,098). Monthly maintenance for T 81.As it is my finding that T’s total monthly expenses are $26,098, the next issue is how this sum should be shared between the parties. 82.After considering all the circumstances of this case, I am of the view that it is reasonable for the father to share 40% of the expenses. I come to this conclusion because:
83.By adopting such a percentage, I am of the view that the reasonable maintenance payable by the father should be $10,439 ($26,098 x 40% = $10,439). As the father is already paying $6,375 on T, the amount that he should pay to the mother should be $4,064 ($10,439 - $6,375 = $4,064). For the ease of calculation, I would round that up to $4,100. The original order was $2,800 and the new order represents an increase of 46% in the maintenance payable by the father. Order 84.Based on the above reasons, I will vary the maintenance order dated 22 April 2008 to the effect that the father shall pay a monthly sum of $4,100 to the mother as maintenance for T, payable on the 1st day of every month starting from 1 November 2012 until T has reached the age of 18 years or has completed full time education, whichever is later. Costs 85.The father’s open offer is $4,500 plus payment of Olympiad Math. The order now is $4,100 only. The father is the winner of the litigation. Costs to follow the event and there is no reason why this should not be the case in this application. The husband will have the costs of the application, including all costs reserved. As to quantum, I propose to assess the father’s costs summarily at $2,500. This will be in the form of an order nisi to be made absolute upon the expiry of 14 days from the handing down of this judgment.
Representation: Ms Barbara Hung of Messrs Chain, Chow & Barbara Hung, Solicitors, for the Petitioner The Respondent acting in person [1] [2008] HKFLR 106 Please refer to HCMP1420/2013 for the relevant appeal(s) to the Court of Appeal. |
Cases cited in this judgment