MARGARETA KRISTINA AGELL v. LARS CHRISTER AGELL AND ANOTHER

HCMC000004A/1977

  

IN THE HIGH COURT
DIVORCE JURISDICTION	1977, No. 4

BETWEEN
	MARGARETA KRISTINA AGELL	Petitioner
	and
	LARS CHRISTER AGELL	1st Respondent
	MARINA MCCLUNG	2nd Respondent

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Coram: Zimmern, J.

Date of Judgment: 5th March, 1980.

 

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DECISION

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1. On the 16th September 1977 the 1st Respondent was ordered to pay the Petitioner maintenance in the sums of $3,000 per month for herself and $1,750 each for two of the children of the marriage. These sums were assessed in the circumstances of the two parties then prevailing.

2. On the 26th January 1979 the Petitioner issued and served on the 1st Respondent a judgment summons to enforce arrears due in the sum of $84,500 under the order of 16th September, 1977.

3. On the 17th April, 1979 the 1st Respondent applied for a variation of the order of 16th September, 1977. On 20th April, 1979 the return date both summonses were by consent adjourned for a date to be fixed not before 15th June, 1979.

4. The Judgment Summons was with leave amended to read arrears in the sum of $79,500 and not $84,500.

5. The Petitioner on the 25th October applied for leave to issue a further Judgment Summons against the 1st Respondent to enforce payment of $40,000 said to be in default of the same order from 27th January 1979 to 23rd October, 1979.

6. Hearing of the three matters commenced before me on the 31st October 1979 when I made an order for leave in respect of the 2nd Judgment Summons. There was also an application by the 1st Respondent for discovery and this was resolved by the parties inter se. Mr. Rodway was for the Petitioner and the 1st Respondent acted in person.

7. The Petitioner's case was supported by two affidavits sworn by herself on 20th October 1979, 1st November 1979 and another sworn by her solicitor on 20th October 1979. She was cross-examined by the 1st Respondent. The 1st Respondent's case was supported by three affidavits sworn by himself on 19th April 1979, 24th October 1979, 27th October 1979 and one sworn by the 2nd Respondent, his new wife on 24th October 1979. He was cross-examined by Mr. Rodway.

8. Having read and heard the evidence I think it right and more convenient to deal with the 1st Respondent's application to vary the order of 1977 first. I must assume the order was rightly made. There was no appeal from it. What then were the circumstances of the case and the changes if any in the matters for which the Court had and was required to have regard when making the 1977 order?

9. The Court in 1977 divided up between them their then combined available capital and the Petitioner ended up with US$22,000 cash, furniture valued at $75,000 and $40,000 cash and some jewelry not valued. The 1st Respondent was allowed to retain his shares in a private company Marinuska Ltd. with a nominal value of $350,000 but which assets were then only worth about $220,000. It was as it is now a private company fully controlled by the 1st and 2nd Respondents though since 1977 new shares have been issued to a creditor. There was another $50,000 invested into private company fully owned by the 1st and 2nd Respondents.

10. Since then the Petitioner's available capital has increased. She deposed in her affidavit of 1st November 1979 to having

( i )	US$16,000 on deposit with a bank at 10¾ per cent per annum.
( ii )	US$25,000 on deposit with a foreign corporation at 12½ per cent per annum.
( iii )	Shares in Sweden market value SWK 5994
( iv )	Current and deposit accounts in her bank account in Hong Kong of about $23,000 of which I say only $10,000 can be considered as capital the balance being only current assets.
( v )	The furniture valued by her own counsel in 1977 at $75,000.
( vi )	Jewelry worth about $10,000.

She has now capital worth approximately $300,000, a substantial increase from her position in 1977.

11. The 1st Respondent's position capital wise is as was in 1977 - his shares in the two private companies.

Income and standard of living

12. In 1977 as a teacher she was earning $5,000 per month of which sum I took into account $4,000. Now her pay packet is just over $8,000 including housing and child allowances. She was giving private tuition at home earning about $3,000 per month but gave up for health reasons.

13. The 1st Respondent's income is not quite that easily assessable. The respondents depended on Marinuska Ltd. for their income. It carried on business in the importation and sale of furniture and their hopes and expectation of success failed to materialise. They then changed the business of the company to that of a restauranteur. That business has more possibilities and is now at break even point or perhaps slightly over. On the evidence I am satisfied that the 1st Respondent is personally without liquid funds and the company is indebted to the hilt. I am also satisfied on the evidence that the two respondents are working and trying hard to make that business a success but for the present at any rate it is still a hand to mouth affair. Any accident to that business may well mean the financial ruin of the 1st Respondent as there are no reserves and that will not help anybody.

14. On the evidence it is clear to me the respondents' living comes entirely from the restaurant business which is operated in very much a family way. They control the cash income, pay creditors perhaps not when each debt falls due but when it is prudent so to do without courting further trouble, charge as much of their own expenses to the restaurant and the balance left over is their debt to the company. This system may perhaps be workable so long as the business can show a profit which as yet has to be proved.

15. There has been allegations made against the 1st Respondent of hidden capital and income. These I do not accept. That there is much bitter animosity between the parties I have no doubt. There are also charges of high living against the respondents. These matters are not surprising living as they do in a place like Hong Kong with no doubt many mutual acquaintances giving rise to a natural situation for gossip.

16. The Petitioner's expenses with her two children come to about $12,000 per month. Her pay as a teacher is about $8,000 and income from capital no less than $3,000. The 1st Respondent's ability to pay is as was. This is an application to vary an order made "until further order". The principle to be applied is still, I think, that laid down by Lord Cozens-Hardy M.R. in Hall v. Hall⁽¹⁾ wherein he said:

"it seems to me that the Court ought to have regard to all the circumstances of the case in the same manner as if those circumstances had existed at the date of the original order."

17. As for the Petitioner's present capital I ought not take a substantial part of it into account if I am able to find that any such part of it was accumulated from savings of periodic payments actually made or from fees earned through work beyond normal hours. I am not satisfied that this was the case. I have set out my views of the Respondent and can only repeat his ability to pay depends on circumstances, such as how much cash is left over after meeting recurrent expenses of the restaurant and to what extent he can put off creditors.

18. I must also see to what extent the 1st Respondent Can minimise his expenses so that he can actually pay the Petitioner. Without going into details there is some evidence of extravagance here and there on his part but I must not forget that the 2nd Respondent has rights in the business and anything the 1st Respondent gets from the company is through their joint efforts. Applying the principle set out above I am satisfied that the original order ought to be varied and is hereby varied to the extent of $1,500 per month for the Petitioner instead of $3,000 the order for payment to the two children to stand.

19. I now turn to the two judgment summonses and I am satisfied that the 1st Respondent's default was through inability. In all the circumstances of this case justice will be done if all the arrears up to and including January 1979 are remitted and a new order made for the payments in terms of the variation order up to and including October 1979 to be suspended for a year from today's date. Any payment made by the 1st Respondent subsequent to 31st October 1979 to be accounted as payments towards sums due subsequent.

20. No order as to costs.

 

Representation:

Rodway (Denton, Hall & Burgin) for Petitioner

1st Respondent in person

 

 

(1) [1915] P105 @ 109

HCMC000004/1977

 

IN THE SUPREME COURT
	1977 No. 4
	(Divorce)

 

BETWEEN
	Margareta Kristina Agell	Petitioner
	and
	Lars Christer Agell	1st Respondent
	and
	Marina McClung	2nd Respondent

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Coram: Zimmern, J.

Date of Judgment: 16th Sept., 1977

 

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DECISION

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1. On 12th October 1976 the wife petitioner herein presented her petition for divorce against her husband the first respondent on the ground that the marriage has broken down irretrievably by reason of the husband's adultery with the second respondent and she finds it intolerable to live with the first respondent. There are three children of the family and by her petition she claims custody of the children and ancillary relief for herself and the children.

2. On 22nd October 1976 the petitioner served on the first respondent notice of her application for maintenance pending suit for herself and the children.

3. The application was heard before a learned Registrar who on 9th December 1976 made an order ordering the first respondent to pay the petitioner $4,500.00 per month commencing 22nd October 1976 to be divided as to $2,100.00 for herself and $800.00 for each of the three children.

4. On 14th December 1976 the first respondent served notice of his intention to appeal against the decision of the Registrar and of an application to set aside the order.

5. The decree nisi was made on 8th January 1977 and the judge ordered that the question of maintenance be adjourned for hearing by the Registrar in chambers.

6. By a consent order dated 21st March 1977 it was ordered that the first respondent's appeal against the Registrar's decision be transferred to the High Court in conjunction with the petitioner's application for custody and final maintenance.

7. On 4th April 1977 the petitioner served notice of intention to proceed with her application for ancillary relief made in the petition and on 19th April 1977 issued a judgment summons against the Registrar's order for maintenance pending suit.

8. Both matters came before me on 16th May 1977. I made a consent order on the judgment summons and the application for ancillary relief was adjourned.

9. The parties came before me again on 4th July 1977 when Mr. Eddis for the first respondent said his appeal against the Registrar's decision should be heard before the application for ancillary relief. I agreed.

10. The petitioner and the first respondent are Swedish nationals and were married in Stockholm in 1957. There are three children of the marriage namely, Anna Charlotte, born 7th September 1959; Anna Margarita, born 22nd February 1963 and Karl Axel, born 14th August 1966. The first respondent obtained employment with a big Swedish corporation and was posted to Canada in 1961 where he went with the petitioner and Anna Charlotte. Anna Margarita and Karl Axel were bron there. That employment terminated in 1970 and they all returned to Sweden. The first respondent then obtained employment with AB Volvo, the Swedish motor corporation, and he was posted to Hong Kong in January 1971 and they all lived at 6, Turtle Cove Villas, Tai Tam, which I shall call the matrimonial home. In 1974 Volvo posted another man to Hong Kong senior to the first respondent. They did not get on and the first respondent felt his days with Volvo were numbered. According to the petitioner she knew by April of 1976 that the first respondent had developed a close affinity with her best friend the second respondent. then a married woman. He had asked for a divorce but there was reconciliation. The first respondent maintains she knew he had wanted a divorce as early as 1974. In June 1976 the whole family went on leave to a seaside home in Sweden. In July the first respondent left ostensibly for a business trip and a few days later telephoned the petitioner from the airport at Stockholm to say that he had with him the second respondent and that he wanted a divorce and that was that. Let me say here and now that there is no evidence whatsoever that any fault can be imputed to the petitioner for the breakdown of this marriage. They each consulted lawyers in Sweden and a divorce agreement was executed and the first respondent paid her an initial sum thereunder. She on her part whilst acknowledging that she did sign the agreement maintains that she was forced to do so. Be that as it may she returned to Hong Kong some time in August 1976 settled herself in the matrimonial home and the first respondent returning a few days later found her in occupation and stayed away. She consulted solicitors in Hong Kong and frankly told the court that she had been advised that she would obtain better ancillary relief under the jurisdiction of the courts in Hong Kong than in Sweden and accordingly presented her petition on 12th October 1976. In the meantime Volvo had made known to the first respondent that they were terminating his post in Hong Kong as Marketing Director, Volvo Area Far east, and that they were prepared to offer him a post as Regional Manager Indonesia on much the same financial terms with headquarters in Indonesia, Bangkok or Singapore. It was not an offer of employment for a term of years but subject to notice of termination. He felt that acceptance meant not only a come down in the commercial world but engaging himself in an enterprise which had no future at all. He accordingly turned down the offer and after advice of lawyers in Sweden entered into an agreement with Volvo dated 27th October 1976 being exhibit A in the ancillary relief hearing. The important terms are:

(i)	Volvo to pay the first respondent a compensation for loss of office of $400,000.
(ii)	As the first respondent's family were in occupation of the matrimonial home, it shall be vacated not later than 30th June 1977.
(iii)	Subject to one month's notice for any month's earlier vacation of the matrimonial home prior to 30th June 1977 Volvo would pay the first respondent $10,000 per month.
(iv)	Volvo to be entitled to withhold $50,000 from the $400,000 as security for the vacation of the matrimonial home.
(v)	The first respondent to have the right to purchase a company car at half market value the discount not exceeding $25,000.

11. The first respondent said he did his best to find other employment without success and sank the $350,000 golden handshake he received from Volvo and another $50,000 into two private companies namely Marinushka Limited incorporated by the second respondent on 1st October 1976 against allotment of shares therein and incorporated another private company called Project Associates Asia Limited.

12. Just before the final parting in August 1976 the petitioner was a part-time school mistress at the International School at Repulse Bay earning about $2,200 per month. The employment entitled her three children in the school to a 25 per cent reduction in fees. The first respondent's salary from Volvo was $18,750 less 10 per sent deduction as rent for the matrimonial home for which I am told Volvo pays about $8,000 exclusive of rates and I know valued by Volvo at $10,000 under the termination agreement.

13. I now come to the decision of the Registrar of 9th December 1976 wherein he made the interim awards I have mentioned. In my opinion the reasons for the awards show a misjudgment prompted by a submission of counsel for the petitioner which on the realities and justice of the case is no more than a cliche. I quote at length from the decision:

"	The first respondent has made what are termed as 2 possible practical solutions to the question of maintenance. First, he suggests that the petitioner and the children should move from the house into less expensive accommodation so that he will receive the $10,000 cash allowance from Volvo. He will then be able to pay the rent of new but less expensive accommodation and apply the balance by way of maintenance. To this suggestion Mr. Rodway for the petitioner has 2 objections. He says that it will lower the standard of living to which the petitioner and her children have become accustomed, and secondly, it may involve the petitioner in a further and unnecessary move to yet other accommodation for if the first respondent at the end of June 1977 sets up the same plaint that he is now making, namely that he has no income, then it may not be possible for the petitioner to stay in the new premises but rather she will have to seek even less expensive accommodation."
"	Upon careful consideration of the problem, I am persuaded that Mr. Rodway is right. It is true that in the short term the petitioner has the use of a luxurious house and that this house arises out of the first respondent's previous employment. However, as I have already said, it is by no means certain whether the first respondent or Volvo instigated this arrangement and in any event, it cannot be said that the first respondent is doing anything actively to support the petitioner. Upon the evidence, it would appear that when this arrangement comes to an end in June next then the first respondent will not be in a position to provide any support whatsoever for the petitioner apart from the payment of school fees amounting to some $23,400 p.m. which he says he is determined to find sufficient money to pay. The first respondent walked into the situation with his eyes open. He must now accept the consequences."

14. It is Mr. Rodway's two objections which found favour with the learned Registrar which I find completely unacceptable. No doubt before the breakup of the marriage the family had been accustomed to a certain standard of living since their arrival in Hong Kong in 1971. They are foreign nationals and are in Hong Kong only by reason of a contract of employment. They are settled in a home rented and decorated by the employers which pay the landlord some $8,000 per month rent exclusive of rates and reimburse themselves some $1,800 from the employee's salary for rent. This is a commonplace practice in Hong Kong where business or professional men are posted here from abroad by their employers. I am further prepared to assume that the house or apartment any such employee and his family are settled in is no better than the house or apartment they left behind at home. There is then no difference in kind but unfortunately that is not all for there is still costs to be considered. Housing in Hong Kong is notoriously expensive. It could cost anything between five to ten times more than its equivalent in say a suburb of London. No salaried man posted here without private means of his own can afford to maintain another comparable apartment for his estranged wife who elects to live here. On the facts of this case by allowing the petitioner to stay in the matrimonial home the whole family was in fact deprived of the sum of $10,000 per month which Volvo were prepared to pay for vacant possession. I have been told that the petitioner has found a flat in Stanley for herself and the children for $3,500 per month. If sense had prevailed in October 1976 and had they moved out in December or latest January 1977 a large sum of money could have been saved and set aside for the support of the petitioner and the three children. They however stayed in the matrimonial home in fact till after the contract period and that source of money is now gone, save for the $50,000 retained by Volvo less the rental for the overstay. The appeal is therefore allowed the effect of which will be apparent when I deal with the periodic payment hereunder.

15. Now I turn to the petitioner's application for ancillary relief made in the petition. This is not at all an easy one as the first respondent once a high salaried man is now in business on his own or with the second respondent through the media of the two private companies I have mentioned. He is not getting an income from either one of them at the moment and the immediate prospects are not exactly bright. I shall go into this matter with more particularity later. For the time being I need to add that the petitioner alleges that the first respondent cannot be relied on at all. He has failed in his duty to support his wife and family. His refusal of Volvo's offer of another post was irresponsible as was the sinking of his capital into these two private companies. He has not tried sufficiently to get another post in the area. I can appreciate the petitioner's feelings. In this respect about the only suggestion she has not made is that they should all go back to Sweden and he finds himself a job there and support them. Her reasons for wanting to stay in Hong Kong are valid. First all the three children went to or are attending the International School at Repulse Bay - an American school. English is now their first language and they would not feel at home in Sweden. Anna Charlotte was born in Canada and it is the petitioner's desire that after the youngest child has graduated from the International School they all emigrate to either the U.S.A. or Canada. This would be six or seven years from now. Under these circumstances I intend to make a final division of the spouses' capital assets and to make provisions for periodic payments by the first respondent. What then are the spouses' assets. Turning to the first respondent's assets. The only investments he had immediately prior to the final parting in July 1976 were

(a)	The boat Cloud IX;
(b)	certain share holdings in Sweden sold in September 1976 for about $85,000;
(c)	a certain lot of shares in Jardine Matheson & Co. Ltd. again sold in September 1976 for about $13,000;
(d)	the family furniture in the matrimonial home.

When he left Volvo in November 1976 he received $350,000. He has since sold Cloud. IX for about $120,000 as he has sold the car which he was allowed to purchase from Volvo at a reduced price at a profit of $12,000. He has been paid by Volvo salary for the months of August to November and that sum came to $67,500 less 10% for rent. With the cash income and after converting all his investments into cash save the family furniture he has received into his hands since August 1976 an approximate sum of $640,000. I do not include in this sum a total salary of $15,000 he has received from Marinushka Limited nor am I going to deal with a boat which he bought in England in 1976 and sold to Marinushka Limited for reasons which will appear later. Out of this sum of $640,000 he invested $400,000 in the two private companies leaving a balance of $240,000. Since August 1976 he has paid to the petitioner for herself and the children sums totalling about $60,000 thus reducing the balance to $180,000. His tax bill for the year came to $25,000. He swore on oath in November 1976 that he had debts amounting to some $70,000. With his living expenses since August 1976 and the costs of the divorce proceedings without going down to the last dollar I doubt if he has much if anything left of the sum in question. When he left Volvo in November 1976 he received $350,000. He has since sold Cloud. IX for about $120,000 as he has sold the car which he was allowed to purchase from Volvo at a reduced price at a profit of $12,000. He hap been paid by Volvo salary for the months of August to November and that sum came to $67,500 less 10% for rent. With the cash income and after converting all his investments into cash save the family furniture he has received into his hands since August 1976 an approximate sum of $640,000. I do not include in this sum a total salary of $15,000 he has received from Marinushka Limited nor am I going to deal with a boat which he bought in England in 1976 and sold to Marinushka Limited for reasons which will appear later. Out of this sum of $640,000 he invested $400,000 in the two private companies leaving a balance of $240,000. Since August 1976 he has paid to the petitioner for herself and the children sums totalling about $60,000 thus reducing the balance to"$180,000. His tax bill for the year came to §25,000. He swore on oath in November 1976 that he had debts amounting to some $70,000. With his living expenses since August 1976 and the costs of the divorce proceedings without going down to the last dollar I doubt if he has much if anything left of the sum in question.

16. The petitioner's capital consists US$22,000 which is slightly over $100,000. She has about $15,000 worth of travellers cheques and savings plus a modest collection of jewellery which I do not take into account.

17. The total available combined capital of the two therefore consists of

(1)	The first respondent's investments in the two private companies costing $400,000.
(2)	The petitioner's cash capital of $100,000.
(3)	The furniture valued by counsel for the petitioner at $75,000.
(4)	$40,119.05 held by Messrs. Johnson, Stokes and Master being the final balance of $50,000 held by Volvo as security for the vacation of the matrimonial home.

18. The shares in Marinushka Limited for which the first respondent subscribed $350,000 are only valued now at about $220,000. The company has issued a debenture to its bankers and the assets of the company are mortgaged to the hilt. It has been trading for about a year. Although forecasts of its business have not come up to expectation the first respondent remains optimistic that under his management the company will succeed. For the purpose of this final division of the spouses' capital I keep the value of the shares at $400,000. They remain his property free of claim by the first respondent. If the company were to fail he will have no cause to complain. If the company were to succeed and he derives a big income therefrom it will be open to the petitioner to go back to the court for a variation of the periodic payment order.

19. For the petitioner I order that she retains her $100,000 and that the family furniture and the sum of $40,119.05 be transferred to her absolutely.

20. I now come to the provisions for periodic payment.

21. The first respondent's income is now nil. He drew $5,000 per month for three months from Marinushka Ltd. as salary and then stopped because the company at this stage of its business could not afford it. This I accept. He expects the company's business to improve from about September onwards and hopes to be able to put the company on its feet next year.

22. The petitioner is now working full-time and her salary is $5,000 per month. She has since July and may I say very belatedly moved from the matrimonial home to rented premises at Stanley costing $3,500 per month. Anna Charlotte will reach her 18th birthday in a few days time. She finished her schooling at the International School with flying colours and was awarded a scholarship to an American University on which she has set her heart. However acceptance of this award entails expenses for her first year some $30,000. I was asked to make an award. The first respondent said before me that he could not afford this sum and suggested that if the petitioner could borrow this sum from an aunt in Sweden he would repay. Counsel for the petitioner suggested that this was scandalous. I personally find it difficult to understand why it is so. The first respondent has not $30,000 and his company is already borrowed to the hilt. If he is prepared to take the legal obligation for a loan to which the petitioner might be able to make or indeed make it out of her own funds for the welfare of their own child why was it not worthy of seriously study at least? A court in Hong Kong has the power to make such order as it thinks fit for the education of any child of the family who is under the age of twenty-one (cf. section 42(1) of the Matrimonial Causes Act 1973 where the age limit is eighteen). I have been told at the hearing that the age of majority in Sweden, the personal law of Anna Charlotte, is the same as in England that is eighteen. I do not in the circumstances of this case make any order for her education. The court has powers to award maintenance to Anna Charlotte until she reaches the age of twenty-one. I do not intend to do so as I do not know whether in fact she is going to a university or coming out to the world. I have no doubt that both her parents love her and they are obviously educated people who might well accept that even though a court cannot justify making an order in their daughter's favour in the circumstances of the case they could between themselves do their best for their promising daughter. There are still Anna Margarita now aged fourteen and a half and Karl Axel just over eleven both attending the International School costing about $1,000 per month each.

23. As I have said the petitioner is now earning $5,000 per month but I shall only take $4,000 into account. Her rent is $3,500. I accordingly order the first respondent to pay her for herself maintenance the sum of $3,000 per month and to her for each of the two children $1,750 per month which would include school fees. In respect of the sum payable to the petitioner for herself it will be during their joint lives or until such date as she shall remarry or further order. The sums payable to the petitioner for the children to continue until they attain the age of eighteen years or further order. Both payments will be as from the 1st October 1977 and all arrears under the Registrar's order save any arrears under the consent order of the 16th May 1977 are hereby discharged.

 

Representation:

Rodway (Fairbain, Kwok & Wong) for petitioner.

Eddis (Johnson, Stokes & Master) for first respondent.