Skp v. Safm
Read the full judgment text of FCMC 5731/2010 on BabelCite. This Family Court judgment was delivered on 2 September 2014 before Her Honour Judge Sharon D. Melloy.
Matrimonial proceedings – Variation of order – Child maintenance – Extracurricular activities – School fees – Index linking – Petitioner father relocated to Singapore – Child enrolled in X International School – Dispute over maintenance quantum and ECA contributions – Court varied maintenance to HK$24,000 per month from 1 May 2013 – ECA contribution set at HK$35,000 per annum – 1% annual increase ordered instead of index linking – Costs reserved
Legal issues: Maintenance Amount and Backdating · Variation of Paragraph R Undertakings · Index Linking vs Annual Increase
Outcome: Application to vary order granted in part
Cites 1 case
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FCMC 5731/2010 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 5731 OF 2010 ----------------------------
Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to public) Dates of Hearing: 13 and 14 February 2014 and 26 and 27 June 2014 Date of the written closing submissions: 4 August 2014 Dates of the written replies: 11 and 13 August 2014 Date of Judgment: 2 September 2014 ----------------------- Introduction 1.This is an application by a Respondent mother to vary the original court order of the 9 March 2011 in so far as it relates to the maintenance for the parties only son, H, a boy born in February 2005 who is now aged 9 years. In her re-amended Notice of Application dated the 20 June 2013 she sought the following relief:-
Background 2.This is a very emotive piece of litigation that appears to have been fuelled primarily by the parties’ unresolved conflict going back in particular to the basis of their agreement at the Financial Dispute Resolution hearing. The issues themselves are not difficult and should have been settled long ago. Unfortunately positions have hardened as the case has progressed and this has not been helped by mistakes that have been made along the way. In particular very significant errors were made by the mother in the presentation of her figures – errors which were not finally resolved until the first day of trial. 3.In addition there has been an issue with respect to the division of the parties’ chattels – with the father complaining that certain items had not been returned to him – as agreed. Again although this issue was not terribly significant in itself, it is clear that this has served to heighten the tensions between the parties. The wife denies any wrong doing on her part. 4.In addition the father has taken great exception to the fact that the mother began the litigation by issuing a summons for committal – (although to be fair it is difficult to see how else the mother could have progressed her case save perhaps by issuing a judgment summons which is also a contempt of court process, given that the chief complaint relates to the father’s failure to comply with his financial undertakings). The mother withdrew the summons for committal on the 28 March 2013 with no order as to costs, following the Court of Appeal judgment in CYM and YML, but by then the damage was done. The father was clearly still very angry about this at the trial. 5.The present dispute centres primarily on the mother’s complaint that the father has not complied with the court order dated the 9 March 2011 and the understanding that flowed from that – i.e. that they would split H’s expenses 50:50. The father in turn complains that the mother also failed to comply with the court order in that he alleges that she did not consult him ahead of time in relation to H’s extracurricular activities, that she enrolled him in activities that were not agreed and that she did not provide him with receipts for those activities. Thus he refused to pay – even for activities that the son had been enrolled in at the time of the original court order and which he knew that he was doing and of which he approved. He is also firmly of the view that H should only be engaged in three extracurricular activities at any one time and that he shouldn’t be enrolled in too many camps over the school holidays. 6.The situation was further complicated when the mother was offered a place for H at X International School. The father did not agree that he should attend. He repeated his opposition to this in the witness box notwithstanding the fact that H appears to be doing very well at X. The father’s chief complaint seems to be that the parties are not in the sort of social circle that would warrant H attending X. His argument appears to be to do with social class. The mother fundamentally disagrees with this and says that she simply wishes H to have every available educational opportunity that is open to him. 7.Consequently H began attending X school as a day pupil in April 2014 but on the mother’s undertaking that she will be wholly responsible for the X school fees subject to a capped contribution from the father. The father will continue to pay 50% of the fees that he would have paid had H continued to attend an ESF school. Thus the mother presently contributes significantly more to the cost of H’s education than had been originally envisaged – although it would be fair to say that this is her choice. 8.The cost implications of this litigation have also been very significant. As I have said, mistakes were made during the course of the proceedings, which in turn has led to a significant increase in costs. This, extremely unfortunate aspect of the case, will need to be dealt with separately and as indicated to the parties during the hearing I will reserve the issue of costs generally so that this along with any other related issues may be properly looked into. I also accept that the history of offers made by each party, including any without prejudice offers will also need to be considered in that context. The history of the litigation 9.The original court order was dated the 9 March 2011 and followed a Financial Dispute Resolution hearing held on the 17 December 2010 – where an agreement was eventually reached in principle and outlined to the court. The important clauses in the original court order in so far as the present application is concerned are as follows:-
10.On the 23 January 2013 the respondent mother issued a summons for an order for committal and a Notice of Application for Ancillary Relief. She said that the father had simply refused to comply with his undertaking to pay for his half of H’s extracurricular activities (see paragraph R above) since the order was made. The mother sought HK$28,198 for the arrears and an extra HK$1,500 per month to cover H’s share of her increased rental. 11.On the 24 November 2012 the father paid the mother HK$15,000 for H’s extracurricular activities for 2013. Payment for 2011 and 2012 remained outstanding. Further the sum of HK$15,000 was not agreed. No contribution was made towards the increased rental. 12.On the 27 May 2013 the mother’s Notice of Application was amended as follows:-
This was finally re amended on the 20 June 2013 as set out in paragraph 1 above. 13.On the 25 June 2013 the mother filed an affidavit in support of her re amended application. It was at this stage that an unfortunate error occurred in that the direct expenses for H which should have read HK$19,337 per month were superimposed with the figure of HK$49,314 per month. Although I accept that this was a genuine mistake on the part of the mother and her legal team the fact remains that it was not picked up on and was further compounded in the mother’s Answer’s to the father’s Request for Further and Better Particulars filed on the 2 October 2013. 14.Nevertheless it should be noted that the father did not pay for the outstanding extracurricular fees for 2011 and 2012 in the sum claimed at that stage of HK$28,198. Nor did he agree to pay for H’s share of the increased rental. As at the date of his 2nd affidavit on the 26 July 2013 his position was as follows:
The main issue 15.What then is the main issue as of today? As can be seen this case is primarily concerned with the appropriate level of maintenance to be paid by the father for H. There are also issues with respect to extracurricular activities, summer camps, school trips, holidays and how to allow for increases in those sums going forward. Background to the marriage 16.The parties are British, the mother having been born in the United Kingdom in December 1970 and the father in June 1972. They are now aged 43 and 42 years old respectively. They met in June 1996, began to cohabit in October 1996 and married in September 1999. They both work in the banking sector, with the mother having joined a well known high street bank in the UK straight from school in 1987. The father joined Y in June 1999. In the summer of 2004 they relocated to Hong Kong. In February 2005 H was born. Unfortunately unhappy differences arose between the couple and in February 2009 they separated. The father subsequently formed a new relationship and he has since remarried and had two further children. The father also relocated to Singapore in May 2012 which is where he now resides. This in turn has meant that he has seen H much less than had been originally intended. He currently works for another well known British bank. The wife continues to reside in Hong Kong and she presently works for an Australian bank. Background to the litigation 17.As I have said the parties originally settled all matters in a Financial Dispute Resolution hearing held before me on the 17 December 2010. That of itself has become a matter of some contention with each side making frequent references to the FDR hearing during the course of these proceedings. The father’s case is that he agreed to a less favourable financial settlement than might otherwise have been the case, on the premise that there was also a clear agreement with respect to H. He contends that it is not now right that the mother should be able to vary the maintenance component for H when he cannot reopen the asset division. With respect this argument seems to me to be fundamentally flawed. It is always open for a parent to seek a variation of an order for maintenance for a child if circumstances change – and the father must have known this at the time given that he was very ably represented at the FDR hearing by both a specialist firm of solicitor’s and counsel. At the end of the day the parties agreed that the mother should retain her pension which included contributions made by her to the pension fund prior to the parties marriage. This in turn meant that she received a more generous share of the total assets although arguably a 50% share of the joint assets. This appears to have been a matter that has continued to rankle with the father. But whatever the rights and wrongs of the original order the fact remains that the parties reached an agreement at FDR which became a binding order in full and final settlement of each parties’ claims for ancillary relief. Both parties made compromises in order to achieve that settlement and in the normal course of events that should have provided the parties’ with a sensible platform for future decision making in relation to H going forward. Unfortunately that was not to be. The current issues in dispute 18.The actual issues between the parties had narrowed somewhat by the time that the trial commenced on the 13 February 2014. Unfortunately the hearing went part heard and subsequently resumed on the 26 June 2014. Further compromises were reached in the interim. Ms Rattigan for the mother summarized the position as follows in her Closing Argument of the 4 August 2014:-
19.Thus the court is now being asked to determine the following:-
As I have said the issue of costs will be dealt with separately. The law 20.The mother’s application to vary is made pursuant to section 11 (7) of the Matrimonial Proceedings and Property Ordinance Cap. 192, which provides that:-
21.It is accepted that in considering a change of circumstances, I may look at the case de novo. In other words the court is not necessarily fettered by the existence of a previous order. I may look at the situation afresh and make an order based on the parties’ existing financial circumstances. It is also true that there is normally a “trigger” for applications of this nature i.e. something that led to the change of circumstances referred to in the legislation. The overriding principle is always one of “fairness”. The court must try to do what is fair and reasonable in all of the circumstances of the case. 22.Counsel for the father has referred me to a number of cases on variation including the Court of Appeal decision in AEM v VFM [2008] HKFLR 106. In that case the Hon Cheung JA made the following point when setting out the law. Referring in particular to agreements reached by consent he said:-
23.Ms Irving for the father added at paragraph 63 and 64 of her Closing Submissions:-
24.I accept that up to a point. If the arrangements for caring for H had not changed then I would accept this proposition without question. However that is not the case. As will be seen the practical arrangements for caring for H have changed quite radically from what appears to have been originally contemplated at the FDR hearing. Discussion How much maintenance should the father pay for H? When should that amount be backdated to? 25.The mother now seeks HK$25,000 per month backdated to the 1 May 2013 and the father now offers HK$23,000 per month backdated to the 1 March 2014. The difficulty is that the mother’s original figure of HK$26,060 or indeed the compromised figure of HK$25,000 did not match her own schedule of expenses for H, as eventually produced on the first day of trial. This schedule is reproduced below in so far as it relates to the items of expenses and H’s monthly costs annualised:-
26.At the first day of trial it was accepted that the relevant figure for the purposes of the hearing was HK$47,533 per month as this represented what the mother said it cost to maintain H on a monthly basis. The additional expenses related to a life policy and school savings plans fell outside the cost of maintaining him and were both items that the mother had chosen to take out of her own initiative. If HK$47,533 is divided into 2 one comes to a figure of HK$23,766.50 per month. Thus it is hard to fathom the rationale for the mother’s original request of HK$26,060 per month or indeed the eventual figure of HK$25,000 per month. Likewise the father’s counter offer of HK$23,000 per month also seems to be a compromised figure designed to try to achieve settlement. It does not seem to be based on either the mother’s figures or on what the father says the correct figure should be. It says a great deal about this litigation that the parties were unable to reach a compromise – when one of the central issues at the end of the day had been whittled down to a difference of only HK$2,000 per month. 27.I should add that I do not accept the mother’s argument that the higher sum should be allowed because she had not included some miscellaneous items or purchases for which there was no receipt. 28.Counsel for the father says that it also is within my remit to make an order for a sum lower than the figure of HK$23,000 per month, if I were to accept the father’s arguments in this respect. 29.The schedule shows that the mother spends HK$23,776 per month as set out above. Of those expenses the husband challenges in particular the expenses for holidays and the Football Club subscription. Holidays 30.At the FDR it was apparently agreed that each party would pay for the holidays that they took with H. This was however based on the following section in the court order relating to H’s care:-
31.The mother says that it was her hope and indeed the original intention of the parties that the father would have frequent contact with H. In reality however this has not happened. This is partly due to the fact that the father is now living in Singapore and that he has other commitments. The mother feels very aggrieved about this and says that this has in turn led to her bearing an increased share of the costs associated with caring for H as she is now responsible for him for most of the time. The father for his part is very defensive and argues that infact he is in regular contact with H and that he sees him as frequently as he is able. He says that he should not be required to pay a contribution towards the holidays that H takes with his mother as a) this was not agreed to at FDR, b) he has his own expenses related to H and his access to him and c) that in any event the mother takes luxurious holidays which are excessive and not in keeping with the type of holidays that they took as a couple. 32.The mother claimed just over HK$6,850 per month as a contribution towards the cost of taking H on holiday with her. I do not accept the arguments advanced by the father that this amount should be excluded. I accept that in reality the mother is bearing more of the costs associated with caring for H while he is on holiday from school – which includes taking him away on holiday with her – given that the father does not do so as often as had been originally anticipated. 33.The father also argues that the amount itself of HK$6,500 per month is unreliable. However this figure seems to be in keeping with what the father is claiming for holidays for himself. In his Form E dated the 19 April 2013 he claims HK$6,300 per month for holidays for himself plus an additional HK$2,480 per month as his share of the cost of holidays for his younger children. In his Answer dated the 23 September 2013 he adds the following to a query from the mother:-
Thus it seems to me the father’s criticism of the mother in relation to holidays is a little harsh. I accept that given the change of circumstances that it is valid for her to include this item in H’s list of expenditure. I also accept the figure given as reasonable. Football Club subscription 34.The father argues that as the mother is a member of the Football Club and that given this is an expense that would accrue to her in any event that this is an item that should be excluded from the list of expenses for H. I do not agree. The subscription is a necessary expense and one that H benefits from. He uses the club with his mother and takes part in various sporting activities there. Thus that item of expense will likewise remain. I do not consider it unreasonable for the father to contribute towards this. Conclusion on the maintenance figure 35.Consequently I accept that H’s actual expenses are in the region of HK$47,533 per month or HK$23,766 per month for each parent. I will therefore round this figure up to HK$24,000 per month. This is then the figure that the father should pay. When should the maintenance be backdated to? 36.The mother asks that the maintenance be back dated to the 1 May 2013 – which was shortly after her Form E was filed. The difficulty with that date is that the mother’s request for an upward increase in maintenance changed on the 25 June 2013 when she filed her 4th affidavit in support of her Re Amended Summons dated the 20 June 2013 – as set out in full in paragraph 1 above. This is when the mistake occurred and when she said that H’s direct expenses were HK$49,314 per month as opposed to HK$19,337 per month. Although in retrospect the mistake is easy to see (the figure of HK$19,337 was taken from the line above), it was on that basis that the mother sought an increase of maintenance to HK$39,737 per month. It has been said that this made it very difficult for the father to enter into any meaningful negotiations with the mother until the situation had been properly clarified – which was not until the first day of trial. Although I accept that in part I am also mindful of the fact that the father also originally took quite an extreme position (see paragraph 14 above). 37.The father for his part asks that the maintenance be backdated to the 1 March 2014 – which was shortly after the first tranche of the trial which was after the situation on the figures had been properly clarified. 38.However it seems to me that the “trigger” in this case was when the father relocated to Singapore. He commenced employment there on the 4 May 2012 – so it seems likely that he relocated there around that date. Thus although the mother argues that the father saw H less than had been originally intended even before that date, it is safe to assume that the situation altered very significantly from that time onwards. Notwithstanding that the mother is only seeking to backdate the maintenance payments to the 1 May 2013. I will therefore make an order in the terms sought by the mother. The father’s point in relation to the mistake made in the figures is likely to be dealt with separately when I come to consider the issue of costs. Should I release the parties from paragraph R of the order dated the 9 March 2011 and if so what should that be replaced by? The mother seeks a capitalized sum of HK$20,000 per annum plus a continued undertaking that the father pay for 50% of all school camps and trips, whereas the father offers a capitalized sum of HK$30,000 per annum inclusive of all items including school camps and trips. 39.It seems to me that a continued undertaking of any kind would be extremely problematic. The parties are unable to communicate almost at any level and to ask them to attempt to continue to do so in relation to school camps and trips could, in my view, be disastrous. Thus although I accept that it may not be possible to fully anticipate H’s expenses going forward I will nevertheless release both parties from their undertaking as set out in paragraph R of the original court order. 40.The question then becomes how much should the father pay? There is a dispute between the parties concerning the extent of the mother’s agreement to pay for H’s school fees at X. It is accepted by the mother that even though on the face of it the father may be earning more than her, that this is still an appropriate case for a 50:50 split of H’s expenses, given that this is what the parties themselves originally agreed to do at the FDR hearing. This is of course subject to the caveat about X’s fees. The mother agreed to pay for the school fees which she confirmed in her affidavit of the 21 May 2013. In that affidavit she proposed the following undertaking:-
41.This undertaking was not accepted by the father who responded as follows in his affidavit of the 25 July 2014:-
42.The father offered HK$30,000 per annum for his contribution towards H’s extracurricular activities and school camps and trips. The mother did not counter offer – pointing out that she could not anticipate how much the costs of the school camps and trips might be. She has however produced a schedule from Z School and another from X. The father says that these show how excessive the potential trips might be at X. Whilst some of the costs associated with the trips are expensive (e.g. Nepal – HK$25,000 and Spain HK$30,000), others are very similarly priced to Z School. For example Z School includes trips to Cambodia (HK$9,400), Cebu (HK$7,880), Boracay (HK$12,500) and Mount Kinabalu (HK$11,000). In comparison X has some more expensive trips but others that are similarly priced – for example a trip to Cambodia (HK$7,500) and China (HK$5,200/HK$7,500). It seems that both the ESF and X offer their students a number of opportunities abroad as they get older and indeed it is often a requirement that they take advantage of such opportunities for one week a year. In the lower years X states that all students are expected to attend a Pre School Adventure and Service Camp. This costs HK$10,000. This is the same at the ESF schools with all students expected to participate in the upper years of Primary school and the lower years of senior school – although the cost of those camps is somewhat lower at HK$3,800. 43.I accept in principle that the father should contribute towards the cost of the school trips at X at the same rate as the cost of similar trips at the ESF. The difficulty is that assessing what that cost might be is an almost impossible task. I also accept that H may very well have elected to have taken the more expensive options at the ESF – especially as he gets older. I also agree that it is reasonable that the father should contribute towards activity camps that the mother enrols H in whilst he is on holiday from school and the mother is working. This seems to me to be entirely sensible course of action to take in the circumstances. I will therefore allow a slightly higher sum of HK$35,000 per annum – i.e. HK$20,000 per annum each to cover all extracurricular activities (HK$40,000 in total) and HK$15,000 per annum each to cover school trips and camps (HK$30,000 per annum in total). This should also cover the cost of the activity camps during the school holidays referred to above and any additional tuition fees – if any. It will then be for the mother to budget within this total figure of HK$70,000 per annum. Should there be index linking or should I make an order that the maintenance component of the original order of the 9 March 2011 be increased by 1% per annum as suggested by the father. Or should I make some other order? 44.The difficulty with the mother’s request is that it could lead to a very much increased level of maintenance which would not be appropriate in the circumstances. The father identified this in his affidavit of the 19 April 2013 when he said as follows:-
45.Although the figures are now different, the basic point remains the same i.e. the father could end up paying a very much increased figure for extracurricular activities and school camps and trips which was not originally anticipated and would not be fair and reasonable in the circumstances. 46.The father offers a 1% increase instead – which seems reasonable. I will therefore hold him to his agreement in this respect. This will be in relation to all payments. The order 47.Taking into account all of the above I will therefore make an order as follows:- AND UPON both the Petitioner and the Respondent each undertaking to each other and the court to take out a life and critical illness insurance policy on themselves with H as the beneficiary. IT IS ORDERED THAT
Mrs F Irving instructed by Withers for the Petitioner Ms M Rattigan instructed by Howse Williams Bowers for the Respondent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMC 5731/2010