W v. F
Read the full judgment text of FCMC 809/2004 on BabelCite. This Family Court judgment was delivered on 11 February 2015 before Her Honour Judge Sharon D. Melloy.
Matrimonial Causes – Enforcement of Maintenance – Leave to enforce arrears exceeding 12 months – Judgment Summons – Ability to pay – Wilful failure – Interest on judgment debt – Suspended committal – Security for payment – MPPO s.12 – MCO s.53A – Leave granted to enforce arrears of HK$1,556,455.20 – Judgment debtor committed to prison for one week suspended upon payment by 30 September 2015 – Property in Sai Kung held as security – Costs to judgment creditor on indemnity basis
Legal issues: Leave to enforce arrears exceeding 12 months · Judgment Summons and Contempt · Interest on Judgment Debt
Outcome: Leave granted to enforce arrears exceeding 12 months. Judgment debtor committed to prison for one week suspended.
Cited by 4 cases
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FCMC 809/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO 809 OF 2004 ________________________ BETWEEN
Date of Hearing: 18 December 2014 Submission from both parties: 26 January 2015 Further supplemental skeleton submission from the Petitioner: 2 February 2015 Date of Judgment: 11 February 2015 ________________________ J U D G M E N T Introduction 1.There are three applications before me that now require adjudication, namely a summons dated 5 March 2014, issued by the wife, seeking leave to enforce arrears exceeding 12 months before the date of two judgment summonses; in addition, there are the two judgment summonses just referred to, the first dated 5 March 2014 and the second dated 24 November 2014. In summary, the wife is seeking to enforce the sum of $1,556,455.20. This represents the difference between the maintenance actually paid by the husband since 19 April 2007 and the sum said to be due to the wife, including an annual increase in the maintenance payments in line with the Consumer Price Index. In addition, interest has accrued on the sum owed, (and I would just add that the rate of interest on judgment debts is determined by the administration and circulated on a regular basis by the Chief Justice to all judges and practitioners). Background 2.I do not intend to go into the background in any great detail, but I think it would be helpful just to summarise where we are at. On 27 March 2012, the Court of Appeal delivered its judgment, in which it did the following:
3.The sum of $1,556,455.20 represents the balance now said to be due to the wife pursuant to the orders, and taking into account, firstly, all sums paid by the husband to date; secondly, the Consumer Price Index rises; thirdly, interest; fourthly, costs of the summons; and lastly, travel expenses for the judgment debtor. 4.Although my original intent had been to deal with this matter quickly, unfortunately the situation became somewhat delayed over the Christmas period. When I came back to the case I discovered that the husband had sought leave to respond further to the oral submissions made by counsel on 18 December. In the interest of fairness I gave the husband leave to file a brief summary as requested. Given the time lag, I also listened to the tape recordings of the hearing, and was concerned that an incorrect indication may have been given by me on the issue of interest. Consequently, both sides were given leave to file further submissions on this point. Both the husband and the wife filed a supplemental submission on 26 January 2015, and leave was also given to the wife to file a further submission in response to points raised by the husband. That was dated 2 February 2015. Offers of settlement 5.Turning next to any offers of settlement, prior to the hearing the husband in fact made the following proposal, which I will just read out for the record. This is in an email dated 17 December 2014. He said:
6.This proposal was not accepted by the wife. She seeks the full amount of $1,556,455.20. Leave to enforce the arrears of maintenance 7.As stated by Ms Rattigan in her submission, it seemed to me that that very helpfully and succinctly summarised the position, so I will refer to sections 36 to 39. Ms Rattigan said that section 12 of the MPPO provides that the leave of the court is required to enforce maintenance payments which are due more than 12 months before the date of commencement of the application for enforcement, and she then cites section 12, which I will not repeat here. She goes on to say that the starting point is that arrears exceeding 12 months will not be enforced unless there are special circumstances, and she cites two cases, CYM v YML and CSL v WWK. At paragraph 38, she continues:
8.In this instance, I accept entirely that there are special circumstances which warrant leave being given to the wife. I accept that the wife did everything within her power to settle these matters without returning to court and that these proceedings, i.e. these enforcement proceedings, have, in effect, been a last resort. I also accept that there has been inevitable delay because of the appeal process and mediation, both of which were ongoing for a considerable period of time. 9.In the husband’s further submission dated 26 January 2015 he does not deal with the main legal arguments pertaining to the enforcement of arrears which are more than 12 months old. Instead, he concentrates on the CPI adjustments and why these were not implemented. Generally speaking, I do not accept these are valid arguments in relation to the leave to enforce point. 10.For the avoidance of doubt, therefore, leave is given to the wife to enforce the arrears of maintenance that are over 12 months old. Judgment Summons 11.That leaves then the issue of the judgment summonses. Turning first to the law, the judgment debtor is required to show cause. He has to show the court why he should not be committed to prison for contempt. The court needs to ascertain whether he had the ability to make the payments ordered and whether he has wilfully failed to do so. The judgment creditor needs to prove this beyond reasonable doubt. 12.The court has the power to commit a judgment debtor to prison for up to three months or to commit, suspended upon payment of the outstanding debt either in its entirety or by instalments, or to adjourn sine die with liberty to restore. 13.When considering the possibility of imprisonment, the court is bound by the claim made in the original judgment summonses. In other words, the court looks to the amount that the judgment creditor says is owed at that date, and the judgment debtor is put to strict proof in relation to those amounts. If the court is considering the possibility of making a new order in which the judgment debtor is, for example, asked to pay by instalments, then it is possible to calculate the outstanding amount due up to date, or to remit or suspend or in some other way to vary the amounts owed. 14.In this case, the wife issued two judgment summonses. I accept that if one includes the arrears exceeding 12 months, which I do, that the total sum due is, as stated previously, $1,556,455.20. Interest 15.The husband originally raised an issue re the interest payable on the sum owed. This point is covered by section 53A of the Matrimonial Causes Ordinance. Again I do not intend to repeat the whole section, but subparagraph (vi) says:
16.In this instance, the husband did not issue the requisite summons in accordance with this section. In any event, although it might be argued that the husband had a reasonable excuse not to pay following the judgment of C K Chan, there is no doubt that this position changed once the Court of Appeal had handed down its decision on 27 March 2012. From that point on the husband should have been left in no doubt about his financial obligations to pay maintenance including the Consumer Price Index annual adjustment. The husband, however, chose not to pay what was due and owing to the wife for a variety of different reasons, including what he says were cash‑flow difficulties and his reluctance to sell assets at what he considered to possibly be an under value. The fact that interest then accrued on the outstanding sum is an inevitable consequence arising out of that failure to pay. Thus, even if the husband had followed the correct procedures, i.e. if he had issued a summons regarding the interest payments, it is very unlikely, in my view, that the interest would have been reduced in any way. 17.As I have said, the husband has also argued that he had cash‑flow difficulties which made punctual payments after 27 March 2012 difficult. Although that may have been true, there was never any real argument concerning his significant asset base. In 2011 his assets were estimated at 65 million, and at 60 million in 2013. He estimates that this had fallen to 51 million by the time of the hearing, which is still a significant sum. In such circumstances, I can see no basis for waiving the interest payable. Proposals going forward 18.The wife seeks a suspended prison sentence. She does not, however, wish to imprison the husband, but she does wish to be paid. The difficulty is that most of the husband’s assets remain outside of the jurisdiction, and he is asking for significant time to pay. 19.The husband says that he intends to sell two properties, the first a converted barn in the United Kingdom, for 135,000 sterling, and the second, a property in France for €2 million. He wishes to be given time to pay, and offered 1 December 2015 as the backstop date for payment. 20.In that regard I would also like to refer at this point to the injunction that was granted on 28 October 2014 in relation to the Sai Kung property, Order 5 of that order states as follows:
21.This injunction was extended on 18 November 2014 until further order. 22.The wife’s concern is that on her case, the husband has moved assets beyond the reach of the court, leaving only the property in Sai Kung as an available asset against which any future arrears might be enforced. Thus she was very reluctant to agree to the remortgage of the Sai Kung property as another alternative way to raise funds. If there was going to be such a remortgage, she asks that it be limited to the amount of money that is currently due and owing to her. The husband agreed that this was an option that could be looked at, although admittedly he was now looking at other options, as set out above. 23.In addition, the wife has concerns about security for payment in the event that there is an order that payment be made by a certain date. Conclusions 24.I have considered all of those competing points when coming to the following conclusion. I will therefore make an order as follows:
Ms Rattigan, instructed by Haldanes, for the petitioner (judgment creditor) The respondent (judgment debtor) appeared in person |
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