Idc v. Ssa

CACV 91/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 91 OF 2013

(ON APPEAL FROM FCMP NO. 158 OF 2011)

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BETWEEN

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.In this appeal, we shall refer to the parties as the Father and the Mother. They were not married but they had cohabited since October 2006 and their child [“Z”] was born on 8 March 2009. Before they met, the Mother had been married to another man. During that marriage, the Mother gave birth to another child N on 20 February 2004. N lived together with the Mother and the Father since October 2006. The relationship between the Mother and the Father ran into difficulties and since August 2010 they have been separated.

2.The background and the facts of the case have been carefully set out in the judgment of 22 January 2013.  We can gratefully adopt paras 4 to 8 of that judgment:

“[4] Both parties are British, with the Mother now aged 33 and the Father 39.  After the Mother completed her university studies, she worked as a fashion model and travelled around the world on her jobs.  In 2003 she married a film director from Thailand with whom she gave birth to a daughter N in 2004.  Two years later she divorced N’s father and obtained N’s custody.  By then she was dating the Father who had moved from London to Hong Kong in the 1990s where he had set up his fashion accessories business.

[5] Upon finalizing her divorce with N’s father in September 2006 the Mother moved with N into the Father’s apartment at Convention Plaza Apartments, and it seems that he had then assumed financial responsibility for N during his relationship with her mother.  On 8^th March 2009 the Mother gave birth to Z.

[6] That relationship ended in August 2010 but on amicable terms when the Father rented a 2-bedrooms apartment at Convention Plaza for the Mother and her two daughters, and continued to meet their expenses including allowing the Mother to continue to use his American Express credit card.  However, what remained of that relationship came to an end in May 2011 after an incident when the Father removed both children to his apartment without the Mother’s consent which required the intervention of the police before the children were returned to the Mother.

[7] Following the Father’s subsequent cancellation of her credit card and ceasing to be involved with N, and allegedly had her followed by his private investigators over some period of time, the Mother moved from the Convention Plaza Apartments in July 2011 with the children and her 2 domestic helpers to her current 3-bedrooms apartment in Bel-Air, Pokfulam under a 2-years lease at a monthly rent of HK$76,000.  The Father was then paying her HK$67,000 per month calculated at HK$47,000 being the rent which he paid for her former Convention Plaza Apartment and HK$20,000 as maintenance for Z plus direct payments for her school expenses, extra-curricular activities and the salary of the helper, of which the Mother claims to be grossly insufficient and was forced to meet her monthly deficits with her savings and later borrowing from her father and sister.

[8] Almost immediately after her move to the Bel-Air apartment, the Mother launched these proceedings seeking custody of Z and financial provision for her during her minority.  In support of her case she then filed an affidavit of more than 400 pages including exhibits setting out the history of her relationship with the Father with such details which I find mostly unnecessary, immaterial or irrelevant, and which served no useful purpose but certain to provoke tensions and hostilities between the parties, not to mention inflating legal costs.  Clearly a practice that should not find favour with the court.”

3.The matter came before the Family Court as an application by the Mother in respect of Z under Section 10 of the Guardianship of Minors Ordinance Cap 13 [“the GMO”].  Judge Bruno Chan [“the Judge”] heard the application and he found that the lifestyle enjoyed by the parties when they were together was of a high standard. 

4.On 22 January 2013, the Judge ordered periodic payments in the sum of $118,000 per month to be paid by the Father to the Mother until Z reaches the age of 18 or ceases her full time tertiary education, whichever is later.  That sum was ordered in addition to the undertaking given by the Father to be directly responsible for Z’s school fees, school bus charges, fee for ballet and music classes, medical insurance and other reasonable costs of extracurricular activities as well as provision for holidays and also her local travel, food, clothing, toys and presents and salary of a domestic helper.

5.The Judge dismissed the Mother’s application for a lump sum for the purchase of a property for Z.  He held that the court has no jurisdiction to make a lump sum order for such purpose.  The amount the Mother asked for is $32 million.  She also asked for $700,000 for the decoration of the property and $500,000 for the purchase of a car.  The question of jurisdiction is the primary issue in this appeal.

6.The Mother also challenged the Judge’s assessment of the periodic payment in this appeal.

The jurisdiction point

7.Section 10 of the GMO provides:

“(1) The court may, on the application of either of the parents of a minor (who may apply without next friend) or the Director of Social Welfare, make such order regarding- (Amended 65 of 1986 s. 3)

(a) the custody of the minor; and

(b) the right of access to the minor of either of his or her parents, (Amended L.N. 80 of 2012)

as the court thinks fit having regard to the best interests of the minor and to the conduct and wishes of the parents. (Amended 1 of 2012 s. 7)

(2) The court may as regards a minor, on the application of a person with whom, whether by virtue of an order under subsection (1) or otherwise, custody of the minor lies at law, make in respect of the minor any 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 installments) 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. (Replaced 80 of 1997 s. 78)

(3) An order may be made under subsection (1) or (2) notwithstanding that the parents of the minor are then residing together, but-

(a) no such order shall be enforceable, and no liability thereunder shall accrue, while they are residing together; and

(b) any such order shall cease to have effect if for a period of 3 months after it is made they continue to reside together:

Provided that, unless the court in making the order directs otherwise, paragraphs (a) and (b) shall not apply to any provision of the order giving the custody of the minor to a person other than one of the parents or made with respect to a minor of whom custody is so given.

(4) An order under subsection (1) or an order under subsection (2) (other than an order for a lump sum payment in one amount, for a lump sum to be paid in instalments where all such instalments have been paid or for the transfer of property) may be varied, discharged, suspended or revived after being so suspended, by a subsequent order made on the application of either parent or after the death of either parent on the application of any guardian under this Ordinance, or (before or after the death of either parent) on the application of any other person having the custody of the minor by virtue of an order under subsection (1). (Amended 65 of 1986 s. 3; 17 of 1993 s. 19)”

8.In H v S (Financial Provision for a Child of Unmarried Parents) [2012] HKFLR 236, Judge Chu traced the development of the legislative scheme and case law in England as well as Hong Kong for making maintenance orders for the children whose parents did not marry each other.  In particular, at paras 47 and 48, after comparing our Section 10(2)(a) with paragraph 1(2)(c) of Schedule 1 of the Children Act 1989, Her Honour expressed the following views:

“[47] The only test set out in s.10(2) of GMO appears to be what the court thinks is reasonable having regard to the means of the parent against whom an order is being sought.

[48] Further, the power to make orders regarding lump sums in Hong Kong appears to be different from that in England.  In Hong Kong, the Court only has power is to order a lump sum 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 under s.10(2)(a) of GMO.  However, under paragraph 1(2)(c) of Schedule 1 of the Children Act 1989, the court can make an order for ‘such lump sum as may be so specified".  Therefore there is power to order a lump sum generally, in addition to the power in paragraph 5(1) of Schedule 1, which states that an order for a lump sum may be made for the purpose of enabling any liabilities or expenses incurred in connection with the birth of the child or in maintaining the child and reasonably incurred before the making of the order to be met.  There also appears to be power for the courts in England to make more than one lump sum (paragraph 1 (5)(a), Schedule 1), which is not the case in Hong Kong.”

9.Though Judge Chu’s survey is very comprehensive in terms of comparison between developments in Hong Kong and those in England, she did not review at length the legislative history of Section 10(2)(a) since it was not the focus of debate in that case. We have invited counsel to conduct further research on the legislative history of this subsection and we are grateful for their efforts. 

10.When the GMO was first enacted in 1977, it was modelled on the Guardianship of Minors Act 1971 and only contained provisions for periodic maintenance payment.  There was power for the court to order a lump sum payment for the maintenance and education of the child under section 5(2) of the Affiliation Proceedings Ordinance Cap 183 [“APO”] in connection with an affiliation order.  For a while, the regime under the GMO operated in parallel with the regime under the APO.  In 1997, the APO regime was abolished after a holding by Barnett J in L v C [1994] 2 HKLR 92 that the APO had impliedly been repealed by the Parent and Child Ordinance Cap 429.

11.In 1986, by Ordinance No 65 of 1986, the power to award lump sum payment was added to Section 10(2)(a).  It would appear that this change was precipitated by changes in the same direction in England.  Under the Domestic Proceedings and Magistrates Courts Act 1978 and the Family Law Reform Act 1987 (which introduced a new section 11B(2) to the Guardianship of Minors Act 1971), the power to order lump sum payment was provided.  In the memorandum for Executive and Legislative Councils in respect of the 1986 amendments to the GMO, the purposes of the amendment were explained as follows:

“To empower the court under all three ordinances [including the GMO] as in similar legislation in England and Wales to order payment in the form of a lump sum either in one amount or by instalments and to permit such an order to be made either in addition to or instead of an order for periodical payments.

To ensure that a lump sum payment in respect of a child is limited to one for the child’s immediate and non-recurring needs.”

12.In the English statutes, there was no reference to “immediate and non-recurring needs”.  Thus, though one of the purposes of the 1986 amendment was to follow the trend in England, this additional qualification was a special feature in the Hong Kong legislation.  In the same paper, the reasons for allowing maintenance orders by lump sum payments were given at para 8 as follows:

“… a lump sum order could provide for non-recurring expenses for which a periodical payments order may be unsuitable, for example the expenses of medical treatment, or of meeting reasonable expenses for maintenance incurred before the making of the order …”

13.At the Second Reading of the bill on 29 October 1986, the Attorney General gave similar reasons for moving the bill.  He also gave the examples of expenses of school uniforms and equipment.

14.Thus, section 10(2)(a) of the GMO was amended to its present form in 1986 and the qualification that the lump sum is to meet “immediate and non-recurring needs” was introduced in such circumstances.

15.In 1991, the Law Reform Commission published its report on illegitimacy (topic No 28).  One of the areas examined by the Commission was maintenance for illegitimate child in the various statutory provisions.  At para 5.27 of the report, in the context of a comparison between the APO regime and the regime under the Matrimonial Proceedings and Property Ordinance [“MPPO”], the Commission pinpointed the lack of power to make orders for transfer of property, settlement of property or secured periodical payments as inconsistent with the basic premise that children should be treated alike regardless of the marital status of their parents.  At paras 5.28 and 6.5, the Commission recommended that the GMO, APO as well as the Separation and Maintenance Ordinance be amended to ensure that illegitimate children enjoy the same rights to financial provision as legitimate children.

16.That recommendation was taken on board and in 1993 the Parent and Child Ordinance Cap 429 was enacted.  In the schedule to that ordinance, viz ordinance No 17 of 1993, section 10(2) of the GMO was amended by adding sub-paragraphs (c), (d) and (e).  Those sub-paragraphs empowered the court to make orders for transfer of property, settlement of property or secured periodical payments.  Apparently, the change was to address the concern at para 5.27 of the 1991 report of the Law Reform Commission.

17.However, as there was no specific discussion in the 1991 report on section 10(2)(a), no attention was paid to the distinction on lump sum payment under the MPPO and the GMO in terms of the requirement of “immediate and non-recurring needs”.

18.Though there was another round of amendment of Section 10(2) in 1997 by the Law Reform (Miscellaneous Provisions & Minor Amendments) Ordinance (Ordinance No 80/1997), those amendments are not material for present purposes.

19.To sum up the above survey on the legislative history of Section 10(2), the requirement of “immediate and non-recurring needs” had been introduced when the power to award lump sum payment was added to the GMO regime in 1986.  Notwithstanding the subsequent review by the Law Reform Commission and the amendments in 1993 and 1997, this requirement remains in our statute book.

20.From the examples given in the legislative materials (expenses for medical treatment, school uniform and equipment), it could not have been the legislative intent that this power can only be exercised once as in the case of lump sum award in favour of a spouse under MPPO.  A child may need to have non-recurring medical treatment on more than one occasion.  Having regard to the statutory context, we are also of the view that the power under Section 10(2)(a) can be exercised more than once.  First, there is no explicit wording in the statutory provision which limits the power to be exercised on one occasion only.  Second, the power is to cater for the needs of a child which may span over a long period of time.  The concept of clean break as between a husband and wife which underlies the lump sum award under the MPPO in such context has no application to the relationship between a parent and a child.  Third, the sub-paragraph refers to “immediate need”. Thus, in each application, the court can only make a lump sum award for needs within the immediate future.  In the case of a child of tender age (like Z in the present case who is only 5 years old), there must be non-recurring needs several years down the road which cannot be covered by a lump sum award made today.  We cannot see any sound policy reason for denying a second or a third application being made some time in the future with regard to such future non-recurring needs when they become immediate.

21.Hence, with the benefit of the legislative materials and on a more thorough analysis of the provision, we respectfully disagree with the view of Judge Chu as to the confinement of Section 10(2)(a) to a one off application.

22.This is not the occasion for considering whether similar analysis is applicable with regards to lump sum payment for the maintenance of a child under the MPPO (where lump sum payment can be awarded “as may be so specified” and “for the purpose of enabling any liabilities or expenses reasonably incurred by or for the benefit of that child before the making of an application”, see s 5(2)(c) and (3) of the MPPO) and we express no view in this judgment in that context.  Suffice to say that our interpretation of the power under Section 10(2)(a) of the GMO can remove much of the concern about discrimination against children of unmarried parents stemming from the requirement of “immediate and non-recurring needs”.

23.We can now come to the crucial question on Section 10(2)(a) in the present context: can the purchase of a property for the accommodation of the child be described as “immediate and non-recurring needs”? The Judge accepted the submission of Mr Coleman SC (who appeared below for the Father and in this appeal appearing together with Mr Todd) that a lump sum to purchase a property for a child does not come within that sub-paragraph because a need for housing cannot be said to be non-recurring.  Such a need, the Judge said, is an on-going everyday need.

24.On behalf of the Mother, Mr Pointer QC (appearing with Ms Irving) submitted that the sub-paragraph is wide enough to facilitate the purchase of accommodation for the child.  Counsel accepted that we are talking about housing need and it is a need the child has from birth.  However, he submitted that once that need is fulfilled, it has no need of repetition as he would be living in the same house until enfranchisement.  In that sense, the need would be non-recurring albeit continuing.

25.Counsel referred us to Phillips v Peace [2005] 2 FLR 1212, a case decided in the context of a second attempt by an unmarried mother to seek financial relief of a capital nature.  In the first round, the court granted as settlement order for the purchase of a home for the child. About 8 years later, she again sought relief in relation to the housing of the child on the basis that the property purchased under the first settlement order had become inadequate.  Her application for a further settlement order was prohibited by para 1(5)(b) of Sch 1 of the Children Act 1989.  Her attempt to circumvent that prohibition by seeking a lump sum order was also rejected by the court as a misuse of that power.   We do not find anything said in that judgment which would support Mr Pointer’s submission that housing need can be regarded as “non-recurring” need in the context of our Section 10(2)(a).

26.On this point, we agree with the Judge and Mr Coleman.  We are of the clear view that the housing need of a child is a recurring need.  The attempt to have the need satisfied by a property owned by a parent would not change the nature of the need to a non-recurrent one.  For a variety of reasons, the child may have to be relocated to some other residences in the years ahead and her housing need would still have to be satisfied.  The purchase of a property to cater for such need for the time being cannot satisfy such need once and for all.  Phillips v Peace [2005] 2 FLR 1212 cannot be regarded as the authority that our courts do not have any power under the GMO to provide for such need when it is necessary to do so.  We do not have the equivalent of para 1(5)(b) of Sch 1 of the Children Act in the GMO.  On the contrary, Section 10(4) gives our courts the power to vary, discharge, suspend or revive a settlement order made under Section 10(2)(e). 

27.In any event, a lump sum order is not appropriate if the intention is to reserve a reversionary interest to the paying party.  In Phillips v Peace [2005] 2 FLR 1212, Singer J made the following observations about lump sum payments (in the English statutory context) for the benefit of a child at paras 27 to 29:

“Lump sums are not designed to revert to the payer. It is of their essence that they are paid once and for all and are used to reimburse past expenditure or are spent on current or future needs. To the extent that whatever was purchased with the lump sum is not consumed it will be retained for or by the child.

…a lump sum for a child is not intended to endow the child for life, but only to deal with his requirements until he is no longer, or should reasonably no longer be, dependant on the paying parent. … That indeed is the rationale for the practice which has developed of settling accommodation purchased with a view to occupation by the child and the primary care-giving parent, with ultimate reversion to the payer.

The device of a lump sum subject to conditions which require, in effect, its repayment in due course or, put another way, involve treating the money or what is acquired with it as a repayable loan, produces effects very close to an order for settlement of the money or whatever it is used to purchase.”

28.We therefore reject Mr Pointer’s submission under Section 10(2)(a).

29.Turning next to Section 10(2)(e), Mr Pointer’s submission is a simple one: “property” which shall be the subject matter of a settlement order can be a sum of money.  Though there is no definition for “property” in the GMO, a wide definition is given in the Interpretation and General Clauses Ordinance Cap 1, section 3:

“… ‘property’ includes (a) money, goods, choses in action and land; …”

30.In the context of the MPPO, Section 2 defines “property” to include money.

31.Bearing in mind the legislative history, the purpose for which Section 10(2)(e) was added to the GMO in 1993 to give effect to the recommendation of the Law Reform Commission on equality between legitimate and un illegitimate children, the similarity in language between Section 10(2)(e) of the GMO and Section 6(1)(b) of the MPPO, we do not see any reason to give a narrower interpretation to the meaning of “property” in Section 10(2)(e).  The context of the GMO does not require a different meaning from that laid down in Cap 1 to be given to this word.

32.Mr Pointer referred to a line of English authorities to demonstrate that orders were made under a similar provision for settlement for the benefit of a child of unmarried parents for funds to be provided for the purchase of a house for his or her accommodation during the period in which the father was obliged to maintain the child with the reversion to the father at the end of the trust.  For the purpose of this judgment, we only need to mention the following cases: J v C [1999]1 FLR 152; Re P [2003] 2 FLR 865;  F v G [2005] 1 FLR 261; Re S [2006] 2 FLR 950; MT v OT [2008] 2 FLR 1311.

33.The Judge rejected the argument on jurisdiction based on Section 10(2)(e) at para 31 of his judgment.  He held that the property ordered to be settled must already be owned by the Father or to which he is so entitled, either in possession or reversion.  He accepted the submission of Mr Coleman that it could not be extended to putative property, and thus the court has no power to order the Father to purchase a property in order to have it settled in favour of the child.

34.With respect, we cannot agree with the Judge in this respect.  His approach focuses on the property to be purchased as the subject matter of the settlement.  However, as the English cases show, the sum of money which is to be used for the purchase can equally be the subject matter of the settlement.  It is perfectly viable to have a sum of money to be settled on trust for the purchase of a property to be used for the benefit of the child up to a certain point in time and thereafter to be held for the father by way of reversion.

35.Mr Coleman relied on Phillips v Peace [2005] 2 FLR 1212 to argue that Section 10(2)(e) should not be construed in a way to allow a settlement for the purchase of a property to cater for the housing need of a child when this could not be achieved by a lump sum payment under Section 10(2)(a).  With respect, Singer J did not decide anything which can remotely support such argument.  The condemned misuse of power in that case was the attempt by the mother to circumvent the effect of para 1(5)(b) of Sch 1 of the Children Act.  We are not dealing with that sort of situation.  Given Singer J’s observations cited at para 27 above on the inappropriate use of lump sum order to achieve what should be achieved by a settlement order, it is difficult to derive from the limitation in our Section 10(2)(a) an underlying statutory policy against a settlement of a sum of money to provide for the housing need of a child under Section 10(2)(e).  Further, as submitted by Mr Pointer, if the Father has a landed property suitable for the accommodation of the child, it is not disputed by Mr Coleman that the court can either order a transfer of the property (under Section 10(2)(d) of the GMO) or a settlement of it for the benefit of the child.  Thus, construing Section 10(2) as a whole, there is no underlying policy restricting provision for housing need of the child to periodic payment by reference to rental expenses.  As counsel put it rhetorically, why should there be a distinction between a settlement of the landed property and a settlement of a sum of money for the purchase of property?  Subject to what we shall say below on the exercise of the discretion, we agree with this observation.

36.In our judgment, the court does have jurisdiction under Section 10(2)(e) to order a settlement of a sum of money to be held on trust for the purchase of a property to cater for the accommodation need of a child with a reversion to the paying parent.  The Judge was wrong in dismissing the application under Section 10(2)(e) for want of jurisdiction.

The exercise of the discretion

37.Therefore, we have to consider whether we should exercise the discretion under Section 10(2)(e) in the present circumstances.

38.Though Mr Pointer accepted that there is no rule of law that a wealthy parent must provide for the accommodation need of a child by purchasing a property to be held on trust for the latter’s residence (with a reversion to the paying parent)[1], counsel submitted that it is appropriate to make such an order in the present case in view of the following:

(a) The Father can afford to purchase a property for such purpose;

(b) The Father had offered a property purchased by him to be used for the child’s residence though such offer had been rejected by the Mother because of its location;

(c) The Father had no objection to the idea of purchasing a property though he had reservation as to the timing and suitability of property to be purchased, see para 59 of the judgment; and

(d) The purchase of a property can provide long term security in respect of the housing need of the child.

39.As stated above, in many English cases, similar orders were made in respect of the maintenance of children with wealthy parents.  However, in Re P [2003] 2 FLR 865 at para 45, Thorpe LJ made this observation,

“The home will ordinarily be transiently required during the child’s minority or until further order. The appropriate legal mechanism is therefore a settlement of property order. Since the respondent is entitled to the reversion, which in certain circumstances may fall in before the child’s majority, the respondent must have some right to veto an unsuitable investment.”

40.We wish to emphasize that Thorpe LJ did not say the paying parent has an absolute right to veto though we accept that his or her view on the suitability of the purchase (from the investment angle) must be given the appropriate weight.

41.Mr Coleman submitted no such order should be made in the present circumstances because:

(a) Ultimately, it is a question of reasonable provision for the housing need of the child having regard to the means of the Father;

(b) The Mother had chosen the existing residence (a rented premises) as being suitable in preference to the Convention Plaza unit purchased and offered by the Father;

(c) The Judge also found that the existing arrangement is reasonable;

(d) Since the Judge’s award, the landlord had increased the rent.  The Father had agreed to that increase and increased the monthly payment to the Mother accordingly;

(e) The Father’s concern about the timing on the purchase of property from an investment point of view is a real one in light of the state of the property market in Hong Kong; and

(f) As the Judge said at para 86 of his judgment, it is a discretionary exercise to be carried out with common sense.  The Mother has not demonstrated how the Judge had erred in principle in the exercise of his discretion and, in accordance with well established principle, this court should not intervene. 

42.On the last bullet point in Mr Coleman’s submission, given the Judge held that the court had no jurisdiction to entertain an application for the purchase of a property for the housing need of the child, he could not have exercised his discretion with this option in mind.  We do not accept Mr Coleman’s submission that the word “accordingly” at para 59 of his judgment indicated he had exercised such discretion.

43.However, we accept that the Judge had assessed the reasonable housing need of the child and come to the conclusion that the existing housing arrangement is reasonable in accordance with the principles set out in the English cases cited in the judgment, including J v C [1999]1 FLR 152; Re P [2003] 2 FLR 865; F v G [2005] 1 FLR 261.

44.Mr Pointer did not challenge the reasonableness of the existing arrangement.  In essence, his complaint was that in view of the factors set out at para 38 above, had the Judge come to the correct view on Section 10(2)(e), he would have exercised his discretion in favour of ordering a purchase of a property. 

45.We do not agree. Though the purchase of a property would have the added benefit of providing security for the reasonable housing need of the child, there is no evidence to suggest any problem with regard to security on the facts of this case.  As mentioned, the Father had agreed and paid for the increase in rent.  At the same time, we agree with Mr Coleman that the Father’s concern about the timing of investing into the property market in Hong Kong is a real and reasonable one.

46.Moreover, the Mother had floated the idea of relocation to another country and in her own evidence, she alluded to that option.  In her 8th Affidavit, she reserved her position on that option, see paras 54 and 55.  

47.By now, the child has resided at the 3-bedroom Bel-Air apartment for almost 3 years (having moved there in July 2011).  There is no suggestion that there is any problem with this residence.  As the Judge found, it is a residence which is not too remote from what the Father has been able to enjoy and is not unreasonable in the circumstances.

48.Exercising our discretion with the relevant principles set out in the English cases cited by the Judge, we are of the view that the existing arrangement is reasonable having regard to the means of the Father and the circumstances.  We would not make any order under Section 10(2)(e).

The purchase of a car

49.The Mother asked for a lump sum payment to buy a car for the transportation of the child.  The Judge found at para 77,

“[77] It appears to me that at the present stage and in the circumstances referred to above, there is indeed no necessity to purchase a car for transporting Z when most of her weekdays transportation will have already been taken care of by her father paying for her school bus fares, while for weekends and holidays when realistically she will be spending part thereof with the Father.  It is simply not justified or practical to me to purchase a car for her at this stage, let alone spending HK$500,000 for it.  The Father’s proposal of HK$1,000 for her taxi fares mainly for her extra-curricular activities and on those weekends when she would be with her mother seems to me a reasonable sum under the circumstances.”

50.In the appeal, Mr Pointer submitted that necessity is not the correct test.  He contended that the Judge should have regard to the standard of living enjoyed in the past and held that the provision of a car is reasonable.

51.The Judge’s decision had to be read as a whole. We do not think he applied the wrong test.  He obviously had the previous standard of living in mind as he referred to it extensively at paras 40 to 48 of his careful judgment.  He was also mindful of the correct approach as reflected in his discussion and citation at some length the relevant English authorities.  At para 76, he referred to the fact that the Mother did not drive and did not have a driving licence here.  Coupled with the reasons he gave at para 77, this court cannot fault the Judge’s refusal to make an order for the purchase of a car.  In our view, it is plainly right.

The periodic payment

52.The Judge ordered periodic payment in the sum of $118,000 per month.  It is made up of three components,

(a) Rent and utilities $80,000

(b) Maintenance for Z $13,000

(c) Carer allowance for the Mother $25,000     

53.Mr Pointer submitted though the Judge alluded to the correct approach in his judgment, he had failed to apply it faithfully. Counsel said that the sum awarded is so low that the Mother cannot possibly maintain anything close to the standard of living enjoyed by the Father and the standard enjoyed by Z when she was with the Father.  The Mother has no earning capacity.  With a carer allowance of $25,000, counsel said, she would not be able to participate with Z in activities like holidays, recreational activities and entertainment.  The Mother would also need to pay for N’s expense even though the court did not consider it appropriate to order the Father to pay for such expense.

54.Before the Judge, the Father’s position was that a sum of $10,000 was sufficient as carer allowance.  However, the Judge, after referring to the Mother’s case on the level of expenditure and Mr Coleman’s criticism of it at paras 80 to 83, reminded himself of the relevant law on care allowance.  He said at para 84,

“...While she is certainly not entitled in law to claim her carer’s allowance on the same basis of a wife for ancillary relief, it would not be inappropriate in my view instead to use her former average income as the basis for assessing her allowance as the primary carer, which as Thorpe LJ said in Re P above, and using his words here, may be checked but not diminished by the absence of any direct claim in law, and that in order to discharge this responsibility as the primary carer of Z, she must have a budget that reflects her position and the position of the Father both social and financial, as she should not be burdened with unnecessary financial anxiety or have to resort to parsimony when the Father chooses to live lavishly.”

55.The reference to Re P can be found at para 82 of his judgment in the Judge’s summary of the submission of Ms Irving (counsel for the Mother):

“… as the authorities direct that a carer’s allowance reflect the commitment, responsibility and sacrifice of the Mother as carer, as it was said in Re P, supra, at para 49 that ‘(the carer) should not be burdened with unnecessary financial anxiety or have to resort to parsimony when the other parent chooses to live stylishly’.”

56.Thus, it is obvious that the Judge very much had this approach in mind when he decided on the appropriate level of the carer allowance.

57.The Judge ended up on the figure of $25,000 which would enable the Mother “to budget her general household expenses as well as her own needs at a more realistic and workable level, certainly not at the standard as before or of the Father, but not brutally remote therefrom either”.

58.Mr Pointer placed before us a document (which was also before the Judge) setting out an analysis of the Mother’s budget.  In respect of the Mother’s own expenses, excluding a sum of $30,000 in respect of N, she claimed a total sum of $45,518 per month with a breakdown as follows:

		$
(a)	Meals out	4,000
(b)	Transport	5,000
(c)	Clothes & shoes	20,000
(d)	Personal grooming	5,000
(e)	Holiday	4,584
(f)	Medical and dental	334
(g)	Insurance	5,400
(h)	Yoga	1,200

59.It was against such background that Mr Coleman made the submission that the Mother was claiming in the name of carer allowance what was in substance a claim for maintenance as if she was a wife seeking ancillary relief.  And it was in such context that the Judge made the observation that she was not entitled to claim on the same basis of a wife for ancillary relief.  In our view, even in the context of a wealthy father, the Judge was correct in so holding.  In J v C [1999] 1 FLR 152 at p.159H, Hale J (as she then was) said:

“The point can only be that one has to guard against unreasonable claims made on the child’s behalf but with the disguised element of providing for the mother’s benefit rather than for the child. I accept that entirely.”

60.Perhaps more pertinently, Bodey J commented on the approach to a mother’s budget in Re P [2003] 2 FLR 865 at paras 77 to 84.  His Lordship emphasized on the need to apply a broad brush approach with common sense.  In particular, at para 78:

“It is in quantifying the mother’s reasonable needs as carer of the child that a tension emerges in such cases … where the Father is very wealthy. This tension is between seeking to achieve that the child has a standard of living bearing ‘some sort of relationship with the Father’s current resources and standard of living’, yet that the mother is not in the process provided for just the same as if she and the Father had undertaken the commitment of marriage.”

61.Then at para 80:

“Since there will always be distinctions of fact and degree as between cases, it is not possible to reduce to words any formula for seeking to ensure that the above distinction is maintained between mother as carer and mother as former wife. There will always be some budgetary needs claimed by a mother which fall clearly within her reasonable needs as the child’s carer and others which fall clearly outside those needs as carer.”

62.Para 81 is also important:

“There will equally and inevitably be numerous grey areas, where the need asserted is of no direct benefit to the child, but is (or is arguably) of legitimate indirect benefit in helping reasonably to sustain the mother’s physical/emotional welfare. This will be most pronounced when the Father is very wealthy and able without difficulty to provide for living costs of no clearly identifiable direct benefit to the child, but which would indirectly promote the mother’s care of the child by allowing her such a lifestyle as not to feel ‘out of place’ in the society of the parents of the child’s friends.”

63.In our view, there are obvious items and figures in the Mother’s budget going beyond her reasonable needs as the child’s carer. We do not accept Mr Pointer’s submission that the Judge had to explain how each item on the Mother’s budget is to be paid.  That would treat all items and the amounts sought by the Mother as if they are all her reasonable needs as Z’s carer.

64.As Mr Coleman pointed out, the Mother’s evidence on her needs was presented in the manner of a wife claiming for ancillary relief and we cannot find any specific evidence supporting a claim for carer allowance in terms of indirect benefit to Z.  We are not saying that such evidence is necessary in all cases where carer allowance is sought.  However, we are dealing with extravagant claims from the Mother.  Mr Pointer did not draw our attention to any part of the evidence which might support these claims as carer allowance.    

65.We are not impressed by Mr Pointer’s submission that the $30,000 expenses for N had to be factored into the equation.  In short, we agree with the Judge’s reasoning at paras 50 to 56 of the judgment.

66.By reference to para 84, Mr Pointer criticised the Judge for using the previous income level of the Mother as the benchmark for assessment.  We see no problem for the Judge to make reference to this so long as he did not use it as the sole consideration.  As shown in the judgment, he had fully considered the other relevant matters including the standard of living of the Father and what the Mother and the child used to enjoy when the parties were together.  Taking into account the other provisions in the whole package, we do not think the Mother is driven back to the lifestyle she had before she met the Father. 

67.Though the standard of living would not be the same as that when the parents were together, we do not think that the Mother is required to live in parsimony.  There is no evidence to suggest that she must live in a lifestyle ‘out of place’ in the society of the parents of the child’s friends.  Taking a broad brush approach, we cannot say the $25,000 award is outside the generous ambit of the Judge’s discretion.  We do not see any valid basis for interfering with the Judge’s decision in respect of the periodic payment.

Result

68.For the above reasons, though we disagree with the Judge on the jurisdiction point in respect of Section 10(2)(e), we would not make an order under that sub-paragraph in the circumstances of the present case.

69.We would also dismiss the appeal in respect of the periodic payment.

70.Instead of making a costs order nisi, we direct parties to lodge submissions on costs as follows:

(a) The Mother shall lodge submissions on costs by 19 June;

(b) The Father shall lodge submissions on costs by 3 July; and

(c) The Mother shall lodge submissions in reply by 10 July.

71.Unless we give other directions after reading these submissions, we would decide the question of costs on paper.

72.We thank counsel again for their assistance in this appeal.

Mr Martin Pointer, QC and Mr Frances Irving, instructed by Oldham, Li & Nie, for the Applicant (Appellant)

Mr Russell Coleman, SC and Mr Richard Todd, instructed by Mayer Brown JSM, for the Respondent (Respondent)