SES also known as SBE-S v. HKL

FCMC 7243/2008

[2023] HKFC 27

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 7243 OF 2008

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BETWEEN

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J U D G M E N T

( Reinstatement of Maintenance )

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1.  By an Order made in June 2017 (“2017 Variation Order”) after the Petitioner Husband (“H”) sought a downward variation of a previous Ancillary Relief Order made in April 2011 (“AR Order”) following his redundancy, the following Orders were made:

“ …

2. Order 5 contained in the Order dated 13 April 2011 shall be suspended until such time as the Petitioner finds another job or he embarks on a new venture which is income producing AND IT IS FURTHER DIRECTED THAT the Petitioner do inform the Respondent and the Court in the event that he becomes gainfully employed on either a full or part time basis or he becomes involved in a venture that is income producing within 4 weeks of commencing such a position.

3. Order 6 contained in the Order dated 13 April 2011 shall be varied to the extent that … (b) the Petitioner do pay maintenance for E … in the sum of HK$33,000 … until such time as the Petitioner finds another job or embarks on a new venture which is income producing or until further order…”

2.  This 2017 Variation Order was made after a two-day hearing whereafter HHJ Melloy handed down her Judgment on 28 June 2017 (“2017 Variation Judgment”). This inter alia provided for the Respondent Wife’s (“W”) maintenance to be suspended; and daughter E’s monthly maintenance to be reduced from $40,000 to $33,000. H was to continue to pay for E’s school directly and 70% of her medical and dental expenses.

3.  In around the time the 2017 Variation Order was made, H moved to Vancouver with his second family. W discovered in July 2021 that he has incorporated GH, a franchised care-home business (“GH”). When she failed to elicit responses from H on GH, she initiates the present Summons on 10 January 2022 for:

“Reinstatement of maintenance of HK$55,000 to W and HK$40,000 to E, or upward variation of the maintenance and to be back dated to the time when H became gainfully employed or when he became involved in a venture that is income producing.”

Parties background

4.  Parties are both 52 years old, both are Korean nationals. They were married in July 1998. There are two children of the family, son N who is now 24, and daughter E who just turned 18 in December 2022. N no longer features in these proceedings as he now works and lives in the US. E plans to pursue her university studies in the US in the upcoming summer.

5.  H previously worked as a Managing Director of an international bank and used to make an annual income $4.3 – 11.8M; the family enjoyed a standard of living which commensurate with this level of income.

6.  W has always been a housewife. It is accepted that she does not have significant earning capacity.

7.  H filed for divorce in June 2008. Following a long trial leading to the AR Order, decree absolute was pronounced on 15 July 2011.

8.  H remarried in 2015, there are now two children with his new wife who are respectively age 6 and 1.

9.  Facts unfold to reveal that H incorporated GH on 18 July 2017 which provides care services in Vancouver. He has been the sole shareholder and director since July 2017. In Court, he was cross-examined on his issuance of these minor shareholdings to one of his staff. Despite this minority interest, it is W’s position that H’s ownership and control of GH means GH is H’s financial resources.

Previous proceedings

10.  In the original AR Order, H gave undertakings to pay for school tuition directly and ECA subject to a cap, H was to pay spousal maintenance of $55,000 and $40,000 to each child.

11.  Under the AR Order was an order for sale of a real property (“B Property”) with sale proceeds to be divided equally. Despite this, the property has not yet been sold and parties have been sharing the rental income of $29,000 and bearing the liabilities therefrom. H issued a Summons for sale of the B Property on 22 December 2022 and despite an order to do this, the parties have still failed to agree on the sale price somewhere between $37- 42M. The B property is clear of mortgage.

12.  H was made redundant in June 2016, which led to his application to vary down maintenance then, resulting in the 2017 Variation Order.

13.  It is W’s case that the suspension is not meant to be a long term measure, she quoted from the 2017 Variation Judgment at §22:

“… it does not seem to me that it would be appropriate to simply discharge the wife’s maintenance order altogether, although I do accept that it should be suspended until such time as the husband finds another job or he embarks on a new venture which is income producing. At that stage the issue of the wife’s maintenance maybe looked at again …”

14.  The 2017 Variation Order also provided for University tuition payment for N, H’s share being capped at $240,000 per annum, and the parties to share equally any amount over annual school fees exceeding $480,000. H also undertakes to pay for E’s school fees at an international school and 70% of her medical / dental expenses.

H’s case

15.  At the PTR on 19 October 2022, H’s counsel took the position that H has not erred in failing to inform W and the Court about GH, as he said that he did not receive any income from GH. H did not attend the PTR as he was not in HK. Based on his case, I raised the issue on the distinction between “profit making” and “income producing” with his counsel.

16.  In his opening submission, H says he has no salary from GH and has not received any dividend, that GH was not making any money until 2019, and he has not earned any income from GH. He says he interprets the 2017 Variation Order as “income producing to him”.

17.  H proposes the following for this application:

a. $0 for W (no change)

b. $33,000 for E (no change)

c. University tuition fee for E capped at $250,000, and only for E’s first degree.

18.  He maintains that GH is not making money, and has a long way to go before the financials are good enough to pay a larger amount of maintenance than his proposals.

19.  H argues that he is physically unfit and now has a new family to look after. He also says the W’s expenses are exaggerated.

W’s case

20.  W asks for the amount of maintenance made under the AR Order to be restored. She repeatedly says that she is not asking for H to pay the $320,000 declared in her Form E expenses. For this reason, she also says that it is therefore irrelevant how much her expenses are.

21.  She says she has funded N’s Master degree and that H should do the same for E should she elect to take a second degree.

22.  Under existing undertaking from H, he is supposed to pay for 70% of E’s medical and dental expenses, but W has alleged that he had failed to pay, or delayed in payment, and argued E’s need for braces. However, it turns out that H has only recently paid up some outstanding medical and dental expenses after this hearing.

23.  W alleges that H has failed to fulfil his obligation to give full and disclosure of his financial information. As recent as October 2022, W requested for GH’s credit card statements, tax documents, his tenancy agreement and his own bank account and credit card statements. W’s case finds that H has failed to produced statements from an undisclosed credit card; W is able to trace that H has made payments with this undisclosed credit card, and H falters in his explanation when cross examined in court. H has also failed to disclose three credit cards which he claims to be inactive; but W is able to point to some spending of at least one of these alleged “inactive” credit cards. W therefore alleges that she is unable to assess his true expenses, and how these credit card bills are settled. It is further pointed out by W that as these cards were used, and his disclosed bank statements do not show these undisclosed credit card expenses being settled, there must be further non-disclosure. The Court is invited to draw adverse inference against H on his ability to pay.

Reinstatement Application

24.  While the W’s Summons is framed as a reinstatement of the previous AR Order, this is in effect an application for variation of the 2017 Variation Order, and hence the legal principles for variation should apply. This approach also gives effect to what HHJ Melloy intended, quoted at Paragraph 13 above.

Legal Principles regarding Variation of Maintenance

25.  The empowering legislation is in Section 11(1) and (7) of the Matrimonial Proceedings and Property Ordinance (Cap 192):

(1) Where the court has made an order to which this section applies, then, subject to the provisions of this section, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.

….

(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates and, where the party against whom that order was made has died, the changed circumstances resulting from his or her death.” (emphasis added)

26.  The modern approach in dealing with an application for variation of maintenance is summarised by Cheung JA in AEM v VFM [2008] 3 HKLRD 36 at §14, in particular the following sub-paragraphs:

“4. The modern approach, as required by section 11(7), is for the Court to consider all the circumstances of the cases. The Court is not required to proceed from the starting point of the original order but look at the matter afresh: Flavell v. Flavell [1997] 1 FLR 353 at 357B following Lewis v. Lewis [1977] 1 WLR 409 and Garner v. Garner [1992] 1 FLR 573.

5. Any change in any of the matters to which the Court was required to consider when making the original order was one of the circumstances to be considered.

6. Almost invariably, an application to vary an earlier periodical payment order will be brought on the basis that there has been some changes in the circumstances since the original order was made, for example, continuing inflation; the increased costs in supporting a growing child and that one party may be more adversely affected than another by the increase in the costs of living: Garner v. Garner.

7. An increase in the wealth of the husband was a relevant factor to be taken into account: Primavera v. Primavera [1991] 1 FLR and Cornick v. Cornick (No. 2) [1995] 2 FLR 490.

8. At the same time the basis and intended effect of the original order are relevant factors to which the Court on variation should pay regard and there should not be a radical departure from the approach taken by the parties themselves when they had entered into an agreement embodied in a consent order: Boylan v. Boylan [1988] FLR 282.” (my emphasis added)

27.  Principles are trite. There should be some change of circumstances since the previous order was made. The Court has wide discretion which includes backdating arrangement and I am entitled to look at the case de novo. For the purpose of this application, I do not accept that there is to be an “automatic” resumption of maintenance from the AR Order asked by the W; I will be looking at both parties’ financial positions and needs anew.

Issues

28.  The issues I have to consider are as follows:

1) Is GH income producing

2) H’s financial resources

3) W’s financial resources

4) H’s needs

5) W’s needs

6) E’s needs

7) Should the AR Order regarding maintenance for W and E be reinstated

8) Should there be backdating of the maintenance orders

Discussion

29.  Regarding H’s position that the venture he embarks on needs to be income producing to him to trigger his obligation to inform the Court and W, I find this position disingenuous. It is incomprehensible to me that he could come to this conclusion. If he did not understand the meaning of paragraph 2 of the 2017 Variation Order at the relevant time, he would surely have comprehended when he is legally represented for this application. The wordings of the Order are in plain and clear English, I am of the view that H has deliberately interpreted it in the way that best serves his interest.

30.  I find that he is in breach of the 2017 Variation Order with reference to his obligation to inform W and Court of his position. H now tries to brush it off by saying this has now been “superseded by subsequent events”, which is this present hearing.

31.  At the beginning of the trial, I sought to confirm again H’s position regarding GH, after seeking counsel advice, he conceded just before the lunch break that he accepts that interpretation of the 2017 Variation Order refers to a venture which is income producing; in short, he no longer holds the position that the Order is interpreted as “incoming producing to him”.

32.  H urges me to look at all the circumstances of the case and review the respective positions anew.

Credibility of Witnesses

33.  I find neither of them to be particularly credible witnesses.

34.  I find on a balance of probabilities that H has further undisclosed financial information which are not before this court. His answers during cross examination with regard to his credit cards and bank statements clearly indicate this.

35.  On the other hand, I also find W to have exaggerated her expenses, a lot of which looks unbelievable and clearly unsupported. This observation is also in line with HHJ Melloy’s findings in the 2017 Variation Judgment and in the Judgement from 2011 which led to the AR Order.

H’s Financial Resources

Is GH making money

36.  H has been the sole shareholder and director of GH since its incorporation in 2017. He gave evidence that he has granted one employee 6.8% of the company shares, to support this, he put into evidence three letters to the said employee sent in March 2020, April 2021, and April 2022. Despite this, information provided by H in his answer to questionnaire in October 2022 shows only his name on GH’s shareholder register.

37.  H says he has injected initial capital of CAD400,000 and CAD314,600 into GH (“Loans”), from which he is still receiving repayment after GH starts making money. So far, he has received repayment of at least CAD85,400 on 4 June 2020 and the CAD209,304 on 23 April 2021. From the attachment to his June 2022 Form E with reference to paragraph 5.5, he says his outstanding on the Loans stands at CAD105,296, which he expects to recover by the end of the first half of 2023.

38.  He has also borrowed a loan from the government, which should be largely repaid by December 2021; with CAD40,000 still outstanding as of 26 May 2022.

39.  H says he is not GH’s employee, he does not have a salary, nor a director’s remuneration. He says he will not be receiving any dividends pay out until full repayment of the Loans, and only after there is enough retained earnings in GH to cover its potential liabilities and risks.

40.  According to the financial statements produced by H, GH’s financial figures in the last few years are as follow:

Year	Revenue	Operating Income	Retained Earnings
2019	CAD644,000	CAD 21,997	(CAD144,688)
2020	CAD1,545,681	CAD367,888	CAD208,040
2021	CAD1,976,260	CAD359,916	CAD528,680

41.  From GH’s 2021 unaudited financial statement, the operating income of CAD359,916 and retained earnings of CAD528,680 at today’s exchange rate of 5.8 translate to $2,087,512 and $3,066,344 respectively.

42.  H argues that there is a need to maintain a certain level of retained earnings to operate GH; in court he says there has been increasing expenses, especially in terms of staff expenses, and potential litigation.

43.  However, as H is the Director and a majority shareholder (as alleged by him of 93.2%) of GH, he can singlehandedly make decisions for all the financial issues about GH, he confirms as much under cross examination. Clearly, he has the option of seeking to have the Company repays the Loans, or he can receive director’s remuneration, or declare dividends in any amount and as to timing. It is clear that he is extracting money from GH’s accounts, it is in his discretion how he labels these withdrawals and as to how much. I asked in Court whether there is any mandatory requirement under Canadian corporate /accounting rules that Loans must be first repaid before dividends can be declared, and he said no. H only says in court he has consulted tax advice on this approach but nothing has been put forward to support these decisions.

44.  W’s counsel has argued that in the management of financial matters in GH, H has chosen to have GH repay the Loans first, and then has deliberately kept the retained earnings in GH so that he receives no income, which will enable him to support his “income producing to him” interpretation of the 2017 Order.

45.  I find that GH is H’s alter ego, and for him, it is a clearly a left and right pocket issue. He has access to all the liquidity of the company, I therefore find that he has the financial resources to make payment to both W and E, the question is a matter of quantum. GH is clearly profit making and according to H’s oral evidence, has plans to expand in Greater Vancouver.

46.  I am also conscious that once the B Property is sold, H will be in better liquidity position; and with proper management of his funds and liabilities, his ability to pay for W and E will not be disputable.

47.  W argues that if it is true that H has been merely receiving Loans repayment after GH starts making money, then he is supporting his family from other sources of income hitherto; and hence his profit from GH can surely support W’s asks of maintenance for herself and E. I find some force in this argument.

W’s Financial Resources

48.  It is not in dispute that W has no earning capacity, this was the finding back at the AR Judgment in 2011, and reiterated in the 2017 Variation Judgment. Therefore, the W’s financial resources is limited to what she received from the capital division during the divorce.

49.  Parties have submitted an agreed /disputed schedule of assets and liabilities. It can be seen that the matrimonial pot is somewhere between $60-65M, with the bone of contention being the valuation of the B Property. Based on the W’s higher estimate of the value of this property, the respective split is thus: W has $34,230,000 and H has $31,573,000. The position is therefore, that W has more liquidity in her possession with zero earning capacity, and H is building GH’s business and has been trending increasing profit despite high operating costs, and is making plans to expand.

50.  It is fair to say that the parties have more or less the same capital base now, not unlike HHJ Melloy’s starting point back in 2017 when she looked at the variation application then. I therefore follow the same rationale that W should also be contributing to E’s expenses.

51.  As the conversation on the disposal of the B Property has been picked up, it is also likely that she will soon come into more liquidity when the B Property is sold. Although she may lose the shared rental income of $14,500, she will not be needing to pay management fees nor tax on the B Property anymore.

H’s Expenses

52.  In his Form E dated June 2022, he declares to have the following expenses, without taking into account $33,000 for E:

Items	Amount
General expenses	$55927.80
Personal expenses	$44,776.00
Children expenses	$70,329.67
TOTAL	$117,033.47

53.  Therefore, adding E’s school fees at $21,000 and monthly maintenance of $33,000, he says his expenses amount to $171,033.47. On his case and echoing my point above, this is what he has been paying since the 2017 Variation Order while building GH business which has no income in the initial years, he clearly has the resources to support this spending.

54.  On a high level examination of H’s numbers, which were not substantively supported, and cognizant of the fact that these expenses are in Canada, his declared amounts of spendings of $11,000 on food, $3,623 for domestic helper, $11,200 for meals out of home, $4,230 for entertainment, and $7,550 for holidays look a bit excessive; especially compared to what he counter-offered on W’s expenses (see §§61 and 67 below).

55.  He says this is a reasonable level of spending taking into account he now has a family of 4 in Vancouver. H’s counsel has quoted to me from Jackson Matrimonial Finance, 10^th Edition at §3.126 the following excerpt:

“… one of the very great difficulty … The law being as it is, it is quite impossible for the court to ignore the just claims of the first wife because the man has taken on himself other obligations, although the courts have to take into account those obligations, as involving a reduction in the capacity of the man to pay for the upkeep of his first wife [and child].”

56.  I wish to add the following quote from the same source at §3.127:

“Remarriage means that the payer spouse has assumed new financial burdens and responsibilities, and pro tanto his or her means may decrease; prima facie there is a decrease in the available resources out of which he or she can make provision for his former spouse and family; but bearing in mind this consideration the court will try to give the former spouse and children such orders as will protect their standard of living: it is ‘bearing in mind this consideration’, not ‘subject to it’”.

57.  In W’s closing submission, her counsel calculated that based on H’s main Canadian bank account, which is used to settle his three disclosed credit cards, his spending amounts to an average of $84,000 per month over a period of 6 months in 2022.

58.  The position I need to consider is whether H can continue his obligations to W and E in the light of his new family and obligations. I believe he has exaggerated his expenses. Further, my view is that offering to pay W nothing is not acceptable in these circumstances; this will be further discussed below.

W’s expenses

59.  I am convinced from W’s evidence that she has also exaggerated her expenses.

60.  According to W’s responses in court, the settlement of her expenses comes from her HSBC bank account and credit card, and one Korean credit card (used while in Korea); H’s counsel has analysed her numbers, and says it adds up to around $50,000 per month. H maintains that this is her monthly expenses.

61.  The following shows the numbers assessed by HHJ Melloy in the 2017 Variation Judgment, those declared by W in her Form E in January 2022 and June 2022, and counter proposal from the H.

General Expenses

	2017 Variation Judgment	January 2022 Form E	June 2022 Form E	H’s Counter proposal
Rent and management	55,000	43,800	43,800	33,000
Utilities	4,500	4,000	4,000	4,000
Management Fees	5,000		1,920 Belcher
Food	10,000	15,000	34,000	10,000
Household	1,000	1,000	2,000	1,000
Car	5,000		1,500 3 months in Korea	500
Insurance	1,000
DH	N/A	3,000	6,000	1,000
Other:	1,000 B maintenance	3,000	2,500 Pet, telephone, moving expenses	1,000
SUBTOTAL	82,500	69,800	95,720	50,500

62.  H argues that W should further downsize after E has left for studies. I said “further” because it appears that W’s rental expense has been reduced per her recent Form Es compared to that prior to the 2017 Variation Judgment. I am of the view that where children have departed for studies overseas, it is incorrect to sweepingly dismiss the need to take into account their portion of the general expenses. Afterall, the child will return on vacations and continue to reside at the W’s residence, taking up their consumption in utilities, food and household expenses. W says the present residence has two rooms, and no space for son when he comes home. That said, while I will not assess a lower level of rent in this decision, W should consider moving to less expensive accommodation when E goes away to study and she does not have to live close to E’s school, so that she can economize.

63.  Furthermore, in view of the fact that E will be leaving in the summer for the university education, the general expenses of the W should be lower, and I assess these on this basis while accepting that E will return to Hong Kong over her holidays.

64.  Her expenses are unsupported in general and her oral evidence does not assist her case. One good example is her claim on food of $34,000 in her latest Form E. At cross examination, it was put to her that those items that show up as food in her credit card come up to around $6000, which means she spends $28,000 cash on food. I do not find her answer to the questions convincing; to this item she also said she has food sent from Korea, and that it does not appear on her expenses because her family paid for it first. I do not accept this. I will only allow an assessment of $12,000 on this item.

65.  H clearly challenges these spendings. Out of the various items, I also do not accept that a household of two person requires household expenses of $2,000 per month. Her evidence regarding the domestic helper is not convincing, it seems she only has a part time helper, with no good reason that this expense has doubled over 6 months. Her car expense relates to only when she is using the family car when in Korea for three months a year, it also looks excessive.

66.  The following is my assessment of her general expense:

GENERAL
Rent and management (rounded up)	44,000
Utilities	4,000
Food	12,000
Household	1,500
Car	500
DH	3,000
Others (include pet related):	2,000
SUBTOTAL	67,000

67.  Wife’s personal expenses

Items	2017 Variation Judgment	January 2022 Form E	June 2022 Form E	H’s Counter proposal
Meals out of home		7,000	5,200	4,500
Transport		5,000	4,200	2,500
Clothing / Shoes		1,000	2,000	2,000
Personal grooming		1,500	1,000	1,000
Entertainment / presents		2,500	1,000	1,000
Holiday		7,000	12,500	4,000
Medical / Dental		4,000	4,500	3,000
Tax (B Property)		5,000	6,096	7,000
Contribution to parents		3,000	1,500
Dependent family members: N (son)		10,000
Others:		1,000 Pets	6,500 English lessons	1,500
SUBTOTAL		47,000	44,496	26,500

68.  I do not feel the need to dive into details of the W’s personal expenses except to comment on some vast differences between the January 2022 and June 2022 Form Es. Needless to say, H also challenges these and I have to agree.

69.  $7,000 for holiday sounds excessive, and there is certainly nothing to suggest why her costs of holiday has increased from $7,000 to $12,500 over 6 months. Nor is it accepted she has a sudden need for English lessons at this point in time after 20 years in Hong Kong and at $6,500 per month. Furthermore, when the B Property is sold, no doubt the related expenses like management fees and tax expenses will fall away.

70.  My assessment of the W’s personal expenses are as follows:

Meals out of home	5,000
Transport	3,000
Clothings / Shoes	2,000
Personal Grooming	1,000
Entertainment / presents	1,000
Holiday	5,000
Medical / Dental	3,000
SUBTOTAL	20,000

71.  Erika’s Expenses

Items	2017 Variation Judgment	Jan 2022 Form E	June 2022 Form E	H’s Counter proposal
School Fees	Paid by H	Paid by H	Paid by H
Extra Tuition	2,000	4,000	2,800	1,000
School books & stationery	1,000	1,000	600	600
Transport to school	2,200	2,800	4,500	1,200
Medical / Dental	3,000	4,500	3,500	1,000
ECA	2,000	2,000
Entertainment / Presents	1,500	1,500	3,000	2,000
Holidays	3,500	4,000	12,500	3,500
Clothing / shoes	3,000	3,000	3,000	3,000
Lunch / pocket money	4,000	5,500	9,000	5,000
Other Transport	1,000	1,500	1,280	1,200
Uniform	300
Others: school electronics, accessories	1,500	2,500		1,500
SUBTOTAL	25,000	32,300	40,180	20,000

72.  The following is my assessment for E, and taking into consideration that she will be away from Hong Kong upcoming summer, the overall amount should also cover her expenses in the US until further Order:

Items
School Fees	Paid by H (subject to §80 below)
Extra Tuition	3,000
School books & stationery	1,000
Transport to school	1,500
Medical / Dental	3,500
ECA	0
Entertainment / Presents	2,000
Holidays	5,000
Clothing / shoes	5,000
Lunch / pocket money	5,000
Other Transport	1,000
Others: school electronics, accessories, miscellaneous	3,000
SUBTOTAL	30,000

73.  Out of the expenses to be ordered for E, I shall also order that H is to pay E directly $10,000 commencing from the month she leaves Hong Kong for studies overseas this year until she completes her studies for the first degree.

Apportionment of Expenses

74.  I am apportioning the H and W share of expenses as below. In principle, H will have a bigger share of the shared expenses, this is because H continues to have earning capacity and in a business that is making money and expanding; while the W in essence has none and relies on the capital she received from the divorce proceedings. W will pay part of her own personal expenses as below (i.e. $14,000).

	H pays		W pays
	For W	For E
General $67,000	$44,666 (2/3) Round up to $45,000		$22,000 (1/3)
	$30,000	$15,000
Wife personal $20,000	$6,000		$14,000
E’s expense $30,000		$20,000 (2/3)	$10,000 (1/3)
	$36,000 (30.7%)	$35,000 (30%)	$46,000 (39.3%)

75.  For this application, W’s maintenance shall be varied to $36,000, and E’s maintenance shall be varied to $35,000.

76.  For the avoidance of doubt, I have arrived at this decision based on the parties’ respective resources and needs, the upcoming sale of the B Property, and H’s obligation to his current family.

E’s University Fees

77.  At this moment, H is paying for E’s school fees at an international school in HK.

78.  The principle is clear that the obligation to pay for the child’s university education ceases on her attaining her first degree. Whether parents will continue to fund a more advanced degree is a matter of discussion and choice. H’s counsel referred me to the case of NH v SH FCMC 11845/2007, 15 May 2017, and I accept the principle therein. I am therefore only looking at the H’s obligations up to the completion of E’s first degree.

79.  H argues that $250,000 per year he pays for in tuition at E’s current school would be more than enough for most top universities in the world, save for some more expensive private US colleges. He further contends that since he has been excluded from the decision-making process of E’s future university and therefore the cost of an expensive US college should not be imposed unilaterally on H unless W is also willing to contribute.

80.  I am of the view that the Father’s proposal of the annual cap of $250,000 to be on the low end. H paid for N at $240,000, and this was back under the 2017 Variation Order. Some level of inflationary element must be taken into consideration. Echoing HHJ Melloy’s thinking process, both parents should contribute to E’s education payment but conscious of W holding only onto her nest egg with no earning capacity, I am of the view that H’s contribution to E’s University tuition should be increased to $300,000 per year, such payment shall be paid up to the completion of E’s first degree. I shall apply the formula previously adopted in these proceedings, that is, if E’s university tuition is more than $600,000, H and W shall share equally any tuition fees in excess.

81.  It goes without saying that H’s contribution to E’s tuition fee in Hong Kong should continue until she completes her secondary level education this year.

82.  I am mindful of H’s argument that he now has two more young children to support. However, support for E is only for 3 – 4 years from Summer 2023, when she finishes her first degree, his children from his current marriage will be 10 and 5. His financial obligations to his first family will be substantially decreased then, save for maintenance for W.

Backdating

83.  W argues that there should be backdating of maintenance. I take the position that there shall be backdating from January 2020, which is when GH is not “in the red”. Although GH did start making some income in 2019, I have given some buffer to the timing, W never challenged the numbers in GH’s financial statements.

84.  On the basis that I intend to order W’s maintenance be at $36,000, the backdating of this sum should be somewhat tie to GH’s income producing progress. Therefore:

From January – December 2020 at $20,000 to W = $240,000

From January 2021 and going forward $36,000 to W = $864,000 (Up to and including December 2022)

This maintenance payment of $36,000 to the W shall be paid during the joint lives of the parties or until W’s remarriage, whichever is the shorter.

85.  Given that I have assessed maintenance for E is to be $35,000. I shall make an Order that this maintenance for E is to be backdated from January 2020, H has to pay $2,000 to E more from then, being $72,000 ($2,000 x 36) up to and including December 2022. I am not adjusting this amount in accordance with GH’s income as it is relatively small.

Costs

86.  Having in mind H proposes to pay nothing for W, and $2,000 short of my Order for E; and having considered both parties’ litigation conduct, I make an Order that H is to pay for 50% of the W’s cost for these proceedings.

H’s Undertaking

87.  As H has not sought to be released, I expect him to continue with his undertakings as stated in Recital E of the 2017 Variation Order.

Orders

88.  The 2017 Variation Order be varied as follows:

i. Order 2 therein be varied to the extent that the Petitioner shall pay spousal maintenance to the Respondent at $36,000 per month commencing from 1 January 2023 and thereafter on the 1^st of each month during the parties’ joint lives or until her re-marriage, whichever is the shorter.

ii. The Petitioner is to pay back-payment to the Respondent in the sum of $1,104,000 for the period from January 2020 to December 2022.

iii. Order 3(b) therein be varied to the extent that the Petitioner shall pay maintenance for E at $35,000 per month commencing 1 January 2023 and thereafter on the 1^st of each month until E completes her first degree in university education. The H shall pay $10,000 out of this $35,000 to E directly and the balance of $25,000 to W commencing from the month E leaves Hong Kong for overseas studies.

iv. The Petitioner is to pay back-payment for E’s maintenance in the sum of $72,000 for the period from January 2020 to December 2022.

v. The Petitioner is to pay for 50% of the W’s costs arising from and occasioned by her Summons dated 10 January 2022 including all costs reserved, to be taxed if not agreed, with certificate for counsel. This be an order nisi to be made absolute 14 days from this Order.

AND IT IS FURTHER DIRECTED THAT: -

vi. The Petitioner do pay E’s college / university tuition fees at $300,000 per year. If the fees are not greater than $600,000 per year, then the Respondent shall pay for the shortfall. If the fees are more than $600,000 per year, then the Petitioner and the Respondent shall equally share the amount in excess of $600,000.

For Petitioner: Mr Julian Chan instructed by Messrs Haldanes

For Respondent: Mr Jeffrey Li instructed by Messrs Withers

FCMC 7243 / 2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 7243 OF 2008

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J U D G M E N T
(Variation of maintenance)

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Introduction

1.  This is an application by a Petitioner husband to reduce the maintenance for the wife and the two children of the family to an amount that the court thinks fit.

The original court order

2.  The original ancillary relief trial was heard over an 18-day period in late 2010/early 201l. It was a hugely contested matter that centred in part on the weight to be attached to a Deed of Agreement entered into prior to separation. At the end of the day the court made an order inter alia as follows:

1) The B property shall be sold at the best price obtainable and the net proceeds of sale shall be divided between the parties on a 50:50 basis.

2) The Petitioner shall transfer 50% of his vested shares in UBS to the Respondent.

3) The Petitioner shall pay to the Petitioner a lump sum of HK$697,406.50.

4) The above transactions to be in full and final settlement of the Petitioner’s claims for all forms of ancillary relief and for the Respondent’s claims for all forms of capital ancillary relief only.

5) The Petitioner do pay the Respondent periodical payments for herself in the sum of HK$55,000 per month first payment to be made on the 1 May 2011 and subsequent payments to be made on the 1^st day of each succeeding month during the joint lives of the parties or until the Respondent’s remarriage, whichever is the shorter or until further order.

6) The Petitioner do pay to the Respondent periodical payments for the children of the family in the sum of HK$40,000 per month per child first payments to be made on the 1 May 2011 and subsequent payments on the 1st day of each succeeding month until each child reaches the age of 18 years or ceases full time education, whichever is the later, or until further order.

3.  In addition, the husband undertook to pay for the following items for or on behalf of the two children of the family until, they reached the age of 18 years or ceased full time education, whichever is the earlier:

(i) to pay once in every 3 years an additional HK$6,000 per child if the annual short trip to Asia is replaced by a long haul trip;

(ii) School fees directly payable to the school;

(iii) Extra tuition and extracurricular activities fees on a reimbursement basis provided that the total costs of which do not exceed HK$4,000 per month for N and HK$3,000 per month for E (E’s costs raises to HK$4,000 per month when she reaches the age of 10);

(iv) As the children’s medical expenses are covered under the Petitioner’s UBS medical insurance scheme, the Petitioner will continue to maintain such insurance so long as it is provided under his employment.  In addition, he will also pay any reasonable medical and dental expenses of the children not covered under the said UBS medical scheme provided that prior consent is given by him.

4.  It is of note that at the time of the trial the court found that the parties had an asset base of approximately HK$53.6 million. The wife argued quite forcibly that the B property should be transferred to her either outright or subject to a charge. At the end of the day this was not accepted. She also argued for significantly more maintenance than was ultimately ordered. The husband for his part asked that the Deed’s provision on maintenance be upheld. Paragraph 13 of the Deed stated as follows:

As part of the agreement, Husband and Wife agree to a settlement following divorce in supplement to the separation of approximately 50% of all financial; property investment assets equally, the following payments to cover all maintenance, educational, living costs for Wife and the twochildren as follows: -

(i) If Husband's annual income is above US$1,000,000, he shall pay US$100,000 per year;

(ii) If Husband's annual income is between U$$200,000- 1,000,000, he shall pay US$50,000 per year;

(iii) If Husband's annual income is below US$200,000, he shall pay US$25,000 per year.

If Husband is not generating any salary or bonus income, then there shall be no payment. If Husband falsifies his income to avoid payment, then he shall pay US$50,000 to cover that year. These payments will extend until the two children have finished their schooling including university education.

5.  At the end of the day I agreed inter alia that this provision was fundamentally unfair and could not be enforced. I also agreed that in so far as maintenance for the children was concerned that the approach taken in the Deed was “contrary to public policy”.   

6.  In broad terms then, once the arguments were stripped away, the final order was a fairly standard one with both husband and wife receiving approximately 50% of the assets and the husband being obliged to provide ongoing financial support for both the wife and the two children of the family.

The actual outcome

7.  I am told that infact the B property was not sold and that the parties continue to hold that property jointly and to receive rental from it. They each receive 50% of the net rental income. The husband continued to pay maintenance to the wife for both herself and the two children of the family notwithstanding the fact that his own income has reduced significantly over the years. Ultimately he was made redundant on the 2 June 2016. He has not worked since. At the time of the trial I made the following findings with respect to the husband’s then income:

The husband’s income and earning capacity   

74. The husband earns HK$4 million per annum as his annual base remuneration plus a discretionary cash bonus and an equity ownership plan (i.e. shares). As from the 1 March 2011 his annual base remuneration will continue to be HK$4 million. I accept that the cash bonus cannot always be relied upon as income. In 2009, in keeping with industry practice for that year, he did not receive any cash bonus. However I also accept that generally speaking some form of cash bonus is received. From 2006/2007 to 2009/2010 the husband’s income net of tax ranged from between HK$4.3 million – HK$11.8 million per annum.

75. The husband has suggested that his earning capacity longer term cannot be relied upon. I have no idea if that is true. In the event that the husband’s circumstances change then it will be open to him to return to court to seek a variation.   

8.  It is the husband’s case that there has indeed been a significant change of circumstance and that the maintenance payments must now be reduced. It is also his case that he has tried to find alternative employment but without success.

9.  The wife does not work and has not done so since the parties married. She is and always has been a full time housewife. I said this of her earning capacity in the ancillary relief judgment:

The wife’s earning capacity

76. It goes without saying that the wife has no income. I accept that she is unlikely to have any significant earning capacity going forward. One rather unsavoury aspect of the husband’s case was the suggestion that the wife was likely to remarry a man of means in the future and that somehow that was something that the court could or should take into account now. If the wife were to remarry then the husband’s maintenance obligations for her would come to an end. It is not something that can or should be taken into account when determining ancillary relief or the right level of maintenance provision now.

77. I also do not accept the suggestion that the wife is likely to be able to set up her own business and that that is something that likewise can or should be taken into account. 

10.  The wife has not remarried and there was no suggestion in this hearing that she is romantically involved with anyone.

11.  I am also told that there have been ongoing difficulties with some other aspects of the judgment. For example, there have been issues with respect to the reimbursable extra tuition and extra-curricular costs. It is the husband’s case that the wife has not provided him with relevant receipts and consequently he has generally not paid the HK$4,000 per month per child allowed for. It is the wife’s case that she has paid for this expense out of her own pocket. The husband does not believe that the children have many such activities in any event and it is of note that the wife was only able to produce old receipts going back in the main to 2012 and 2013 when she filed her supplemental affirmation dated the 23 November 2016. I accept that this supports the husband’s position on this point.

Background  

12.  I originally set out the background to the marriage at paragraph 4 – 7 of the judgment dated the 13 April 2011. Reference can be made to that as necessary. Since then the husband has remarried and he now has a baby daughter who has just turned one year of age. The husband’s wife does not currently work and although she is said to have an earning capacity of sorts that is also quite limited. The father still has a very strained relationship with the elder son N, who is now 18 years of age and who has just graduated from High School in Hong Kong. He is said to be a good student and has received university offers from both the United Kingdom and the United States. I am told (although this was not known at the time of the hearing) that his preference is to go to the University of X (X) in Los Angeles, USA. The younger daughter of the marriage E still attends the same international school in Hong Kong. She is 12 years old and she sees her father on a regular basis, although contact has been difficult at times. E has scoliosis and this is a matter of some concern to both of the parents. The mother continues to reside in an affluent area on the south side of Hong Kong Island with both children. This will of course change when N leaves for college/university in September/October. It is the wife’s case that she will wish to continue to provide a home base for N in Hong Kong during his undergraduate years and beyond. She says that in Korea it is customary for children to live with their parents until they marry. Consequently, she anticipates supporting the children in part until that time.

13.  On the 19 October 2016 payment of the wife’s maintenance in the sum of HK$55,000 per month was suspended on a temporary basis pending final determination of the husband’s summons. The husband has continued to pay for all other expenses as ordered by the court from his own savings.  

The law   

14.  The husband’s application is made pursuant to section 11 of the Matrimonial Proceedings and Property Ordinance Cap 192, which provides inter alia that:

11. Variation, discharge, etc. of orders for financial provision

(1) Where the court has made an order to which this section applies, then, subject to the provisions of this section, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.

(2) This section applies to the following orders, that is to say−

(a) any order under section3;

(b) any order made by virtue of section 4(1)(a) or (b) or 4(2)(b);

(c) any order made by virtue of section 5(2)(a) or (b) or 5(4);

(d) any order made by virtue of section 6(1)(b), (c), (d) or (e) on or after granting a decree of judicial separation; (Amended 69 of 1997 s. 33)

(da) any order made by virtue of section 6A; and (Amended 69 of 1997 s. 33)

(e) any order made by virtue of section 8(5), 8(6)(a), (b), (d) or (e) or 8(7)(b).

…

(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates and, where the party against whom that order was made has died, the changed circumstances resulting from his or her death.

15.  In the context of this case reference should be made in particular to paragraph 11 (2). Thus it should be noted that the court has no power to vary an order for the sale of a property made under section 6 (e). The wife suggested earlier on in the proceedings that the husband should transfer his half share of the B property to her on a clean break basis, in return for the discharge of the order for her maintenance. Although this was not later pursued, for the avoidance of doubt it should be noted that it is not possible for the court to make an order in these terms in any event. Thus the order for sale in relation to the B property remains and cannot be altered.

16.  Generally speaking, it is accepted that in considering a change of circumstances, I may look at a case “de novo”. I am not bound by the previous order for maintenance and I can look at the situation again bearing in mind the parties now existing financial circumstances. There is also generally a reason for an application to vary or what some might call a “trigger”. In this instance it is the husband’s case that the “trigger” is his redundancy and that all other matters relating to his change of circumstances are simply other peripheral issues that should be taken in to account when looking at the matter over all. I accept that that is the correct approach.   

17.  The court has a very wide power, including a power to suspend or terminate payments and to backdate any variation ordered. The overall objective is to achieve a fair outcome (see M v M, FCMC 4070 of 1990, dated 12 May 2006, unreported).

18.  Both parties have also referred me to a number of cases on variation which have been considered including the first instance decision   L v C, FCMC 7240 of 2006 (unreported) and the Court of Appeal decision in AEM v VFM (Variation of Maintenance) 2008 HKFLR 106.

Variation of maintenance  

The husband’s case  

19.  In short then it is the husband’s case that it is becoming increasingly clear that he is unlikely to find another job in the financial industry and consequently it is incumbent on both sides to reduce their expenses accordingly. He points out that both sides have roughly the same amount of assets i.e. approximately HK$28.4 – 28.5 million. This is more than each was awarded at trial. In addition, both sides have continued to hold their assets in similar vehicles where the rates of return are similar. Both parties receive the same income from the B property and in addition the husband also receives an additional small income from another rental property. But in broad terms their current financial position is very similar. Thus the husband says that it is inconceivable that he should be expected to fully maintain the wife and children from his assets, whereas there is no similar expectation that the wife should do likewise. Unless there is some change he expects to be without funds in 7 – 8 years’ time.

The husband’s proposal

20.  With this in mind the husband proposes that:

The wife

a)  the wife’s maintenance payment of HK$55,000 per month be fully discharged;

N

b)  he shall continue to pay the equivalent of HK$240,000 (being the cost of schooling in Hong Kong) as tuition fees for N once he goes to university or college. The husband points out that this would most probably cover N’s fees in full if he were to go to university in the United Kingdom. If he chooses to go to university in the US then the wife should pay the short fall;

c)  In addition the husband proposes paying for the following expenses until N finishes his undergraduate university education:

a. The residence hall fees for accommodation (excluding food) during the school year of 9 months payable directly to the school for any choice of university;

b. For other living expenses (including food), HK$7,300 per month during the school year of 9 months payable directly to N.  This figure is 70% higher than University of Y, City’s estimation of GBP110 per week including food (excluding halls) (Bundle 1-page 157) on a GBP to USD rate of 1.25 which translates to US$940 per month;

c. HK$18,000 payable to N for air travel to Hong Kong two times a year.  This should be sufficient for economy class fares with one brief stopover which is how the Petitioner himself and his family travel for long-haul;

d. All his medical and dental expenses during the school year of 9 months;

e. Extra tuition and extracurricular fees of HK$2,000 per month on a reimbursement basis during the school year of 9 months.

d)  prior to university the maintenance for N shall be reduced to HK$20,000 per month;

e)  the wife shall be responsible for maintaining N otherwise when he is in Hong Kong during his undergraduate years;

f)  the husband asks that it be specifically ordered that his financial obligations towards N cease when he finishes his undergraduate degree and that he be permitted to fund N directly either in the States or the UK without going through the wife;

E

g)  he shall continue to undertake to pay the following for E;

a. All school fees payable to A;

b. HK$17,350 per month equivalent to 50% of E’s proposed living expenses of HK$34,700 based on figures provided in the Skeleton (Table 5 and paragraphs 73-75).  This represents an 11% increase for her living expenses (excluding rent) compared to the 13 April 2011 Judgement which is reasonable and generous.  Detailed discussion of her living expenses is provided in the following section;

c. Extra tuition and extracurricular fees of HK$2,000 per month on a reimbursement basis with proper receipts;

d. 70% of E’s medical and dental expenses.  The Respondent has shown in her evidence that she is willing to pay for such expenses (although her estimates are grossly exaggerated);

e. Once every 3 years an additional HK$6,000 if the annual short trip to Asia is replaced with a long-haul trip;

23. The Petitioner upholds his proposal that he pays about 70% of E’s total expenses (including school fees).  It is only fair that the Respondent contribute to about 30% of her expenses from her own assets.

The wife’s position

21.  In broad terms it is the wife’s case that there should be no change to the current maintenance order. She makes no other proposals. I am told that suggestions by her that she might be prepared to agree to a temporary reduction of maintenance were taken out of context and cannot be relied upon now given inter alia that she was not legally represented at the time. She also says that she is already paying approximately HK$65,000 per month from her own resources to maintain both herself and the children. However, she was not able to produce very much evidence to support that assertion. For example, her bank and credit card statements did not support her case on food expenses and there was similarly little or no evidence to support her case on other estimated expenses. It is also of note that her asset base has grown considerably over the last 6 ½ years. In contrast the husband has until recently been earning some income and he also sold his investment in Thailand and received redundancy payments etc, which would explain his increased asset position.  

Earning capacity 

22.  The husband originally worked in Z Research as an investment analyst. He worked for a number of well known financial institutions. As indicated above he was made redundant on the 2 June 2016. He says that he has found it impossible to find another job since. He makes a compelling argument for why this might be the case, including his age, the state of the finance industry etc etc. The wife for her part does not accept that the husband’s earning capacity has been severely compromised. She believes that he has exaggerated the situation and that his search for jobs has been half hearted at best. In contrast she points out that she has virtually no earning capacity as a Korean woman in Hong Kong with limited language skills and no work experience. For the avoidance of doubt and as before, I accept that to be the case. However, I also accept that it may be very difficult indeed, in today’s market, for the husband to find a new job in Hong Kong in the financial field and that he may need to look further afield and in different areas. Notwithstanding all of that the husband does still have a greater earning capacity than that of the wife. Given that, it does not seem to me that it would be appropriate to simply discharge the wife’s maintenance order altogether, although I do accept that it should be suspended until such time as the husband finds another job or he embarks on a new venture which is income producing. At that stage the issue of the wife’s maintenance may be looked at again. The husband is therefore obliged to inform the wife and the court in the event that he becomes gainfully employed on either a full or part time basis or he becomes involved in a venture that is income producing. He should do so, say within 4 weeks of commencing such a position.

23.  I do not think it appropriate where the parties otherwise have an almost equal asset base to expect the burden of providing for the wife and the two children to rest entirely on the husband’s shoulders. It is of note that the wife’s solicitors have suggested that the husband has not been full and frank in his disclosure. For the avoidance of doubt that is not accepted. In contrast and as indicated above, I did not find the wife to have been entirely truthful in her evidence to the court.  

The children’s maintenance

N

24.  I accept the husband’s proposal with respect to N as set out in paragraphs 20 c) subsection a, c, and d above. In addition, the husband shall pay for N’s living expenses in the sum of HK$10,000 per month (i.e. HK$7,300 + HK$2,000 for the reimbursable extra-curricular activities = HK$9,300 rounded up to say HK$10,000 per month) and there shall be no requirement for the husband to reimburse N for any extra tuition or extra-curricular fees as referred to in subsection e. I have therefore added the HK$2,000 proposed to N’s proposed monthly allowance. Further the husband shall continue to pay maintenance for N in the sum of HK$40,000 per month until he goes to university in October. For the avoidance of doubt the husband is legally required to contribute towards N’s education costs until such time as he completes his undergraduate degree. Thereafter any further financial support for N with respect to further study shall be a matter for discussion between him and the parties. Further he shall make payments for and on behalf of N directly to either N himself or to the college/university concerned.

25.   In so far as the provision of college/university fees is concerned given the husband’s offer, which is accepted, it is further directed that in the event that the college tuition fees are more than HK$240,000 but not greater than HK$480,000 per annum then the wife shall pay the short fall. If though the fees are less than HK$240,000 per annum, then the husband shall be entirely responsible for those fees. In the event that the college fees are more than HK$480,000 per annum then each parent shall be responsible for one half of those fees.    

E

26.   The husband’s proposal with respect to E’s school fees is accepted. Consequently, the husband’s undertaking in paragraph 2 (ii) of the court order dated the 13 April 2013 shall remain in place. In addition, the husband’s proposed undertakings in paragraph 20 (g) d and e above are also accepted. In so far as the other expenses are concerned I accept that until such time as the husband finds a new job, that each side should be responsible for half of E’s expenses given that each side will need to pay for these from their own asset base. This means that each party should pay for one half of E’s share of the general expenses and one half of her actual expenses. What then should be regarded as being E’s reasonable expenses going forward?  

General expenses

27.   In the wife’s supplemental affirmation dated the 23 November 2016 she set out her up to date expenses. These included her general expenses for three people as follows:

Part 4   Current Monthly Expenses

4.1   General

Item	Amount
Rent	HK$62,700
Mortgage instalments	N/A
Utilities (electricity, gas, rates, telephone & water)	HK$4,500
Management fees	HK$15,300
Food	HK$20,000
Household expenses	HK$1,000
Car expenses	HK$5,000
Insurance premia	HK$1,000
Domestic helper(s)	N/A
Other (specify) (B’s maintenance)	HK$1,000
Total monthly household expenses	HK$110,500

Attach copies of the latest rental receipt.

28.   The husband took great exception to many of these expenses. In particular, he said that there was no need for the wife to continue to rent such an expensive property and further he pointed out that she was unable to provide evidence that she paid management fees of HK$15,300 per month – which on the face of it seemed very expensive. Likewise, he said (and I accept this to be the case) that there was no evidence that the wife paid anything like HK$20,000 per month for food. In turn he reiterated throughout that he had reduced his own expenses as much as he could. He put his own expenses for two adults, a domestic helper and a baby as follows:

Part 4   Current Monthly Expenses

4.1   General

Item	Amount
Rent	HK$53,000
Mortgage instalments	HK$930
Utilities (electricity, gas, rates, telephone & water)	HK$1,800
Management fees	HK$4,527
Food	HK$6,800
Household expenses	HK$1,200
Car expenses	HK$3,000
Insurance premia	HK$500
Domestic helper(s)	HK$5,400
Other (specify) THE B PROPERTY, MISC.	HK$2,000
Total monthly household expenses	HK$79,157.50

Attach copies of the latest rental receipt.

29.   In broad terms then the wife’s stated general expenses are about HK$30,000 per month more than the husband’s. Over HK$20,000 per month of that relates to the wife’s rental and management fees. I was provided with a copy of the wife’s current tenancy agreement after the hearing. This states that the tenancy agreement shall expire on the 30 October 2017. I accept that it would be reasonable in these circumstances to expect the wife to move into a more reasonably priced flat. This is especially since N will be leaving for college/university shortly. Consequently, I accept that the wife’s general expenses, once she has moved from her current apartment should be no more than HK$82,500 per month. In that regard I also accept that her estimate for food is exaggerated. I have consequently reduced that to HK$10,000 per month:  

General

Item	Amount
Rent	HK$55,000
Mortgage instalments	N/A
Utilities (electricity, gas, rates, telephone & water)	HK$4,500
Management fees	HK$5,000
Food	HK$10,000
Household expenses	HK$1,000
Car expenses	HK$5,000
Insurance premia	HK$1,000
Domestic helper(s)	N/A
Other (specify) (B maintenance)	HK$1,000
Total monthly household expenses	HK$82,500

Of that say HK$41,250 should be attributable to E. Both parties shall contribute HK$20,625 each towards this expense. I accept that this is not an exact science, especially given the fact that N will be home over the longer college vacations. But generally speaking this seems to me to be an acceptable bench mark.

E’s actual expenses

30.   The wife set out the children’s expenses in her updated affirmation instead as follows:

4.3   Children

Item	Amount
School fees	PAID BY PETITIONER
Extra tuition fees	HK$8,000
School books and stationery	HK$1,000
Transport to school (including school bus)	HK$2,200
Medical / Dental	HK$10,000
Extra-Curricular Activities	HK$11,000
Entertainment / presents	HK$3,000
Holidays	HK$7,000
Clothing / Shoes	HK$5,000
Insurance premia	N/A
Lunches and pocket money	HK$8,000
Other Transport	HK$1,500
Child-minding fees	N/A
Uniform	HK$300
Others (specify) School electronics, accessories	HK$3,000
Total monthly expenses for children	HK$60,000

31.   The immediate difficulty with this is that this estimate is for both children. As with the general expenses the husband also takes great exception to many of these expenses. For example, he says that there is no evidence that E or indeed N had many extra tuition classes or extra-curricular activities over the years. As indicated above I accept that to be the case. He also objects to the estimate of HK$10,000 per month for medical/dental, when he has continued to pay for reasonable medical and dental expenses directly and he has offered to pay for all of N’s medical and dental expenses whilst at college/university and for 70% of E’s. He also maintains that school lunches should not cost anything like the amount claimed by the wife. Whilst that is true I would also expect both children to have received pocket money in the past and for E to continue to receive pocket money going forward. I have also taken into account the fact that this schedule should henceforth only relate to E. With all of this in mind it seems that the following schedule is probably more reflective of the reality:  

Child - E

Item	Amount
School fees	PAID BY PETITIONER
Extra tuition fees	HK$2,000
School books and stationery	HK$1,000
Transport to school (including school bus)	HK$2,200
Medical / Dental	HK$3,000
Extra-Curricular Activities	HK$2,000
Entertainment / presents	HK$1,500
Holidays	HK$3,500
Clothing / Shoes	HK$3,000
Insurance premia	N/A
Lunches and pocket money	HK$4,000
Other Transport	HK$1,000
Child-minding fees	N/A
Uniform	HK$300
Others (specify) School electronics, accessories	HK$1,500
Total monthly expenses for E	HK$25,000

Conclusion

32.   Generally speaking, it seems to me that the wife should, if she is sensible, reduce her outgoings to a more sensible level, especially the rental, given that N will also be away for most of the year. As I have said it is of note that the current tenancy comes to an end on the 30 October 2017. However, I also accept that this may take some time to organize.  On the premise that the husband shall continue to undertake to pay for E’s school fees and for 70% of all of her medical and dental costs and the other undertakings referred to above, I will therefore reduce the maintenance for E to HK$33,000 per month (HK$20,625 + HK$12,500 = HK$33,125 rounded down to HK$33,000 per month) but with effect from the 1 January 2018. Again this shall be on a temporary basis until such time as the husband finds a new job etc. The order in relation to reimbursement of extra tuition and extra-curricular fees shall also be discharged.

Costs

33.   The husband has been largely successful in his application. He asks that consideration be given for his ad hoc legal costs in the sum of approximately HK$55,000. However, given that the parties were both representing themselves for most of the time and that the wife only instructed solicitors latterly I will exercise my discretion and make an order that there be an order nisi to be made absolute in 14 days’ time that there be no order as to costs.

Order

34.  Consequently an order shall be made as follows:  

a) The Petitioner husband shall be released from the undertakings contained in paragraph 2 (i), (iii) and (iv) of the order dated the 13 April 2011.

b) Further he shall undertake to make the payments for N as set out in paragraphs 20 c) subsection a, c, and d above.

c) Further it is directed that N’s college/university fees shall be paid in the manner set out in paragraph 25 above.

d) Further he shall undertake to make the payments for E as set out in paragraph 20 g) subsection d and e.

IT IS ORDERED THAT

1.  Order 5 contained in the court order dated the 13 April 2011 shall be suspended until such time as the husband finds another job or he embarks on a new venture which is income producing. It is further directed that the husband do inform the wife and the court in the event that he becomes gainfully employed on either a full or part time basis or he becomes involved in a venture that is income producing within 4 weeks of commencing such a position.

2.  Order 6 contained in the court order dated the 13 April 2011 shall be varied to the extent that:

a) The husband do pay maintenance for N in the sum of HK$10,000 per month such payment to be made to N directly with effect from the 1 September 2017 and thereafter to be paid on the 1st day of each succeeding month (on a 12-month basis) until such time as N completes his undergraduate degree. The husband do pay maintenance to the wife for N in the sum of HK$40,000 per month until the 31 August 2017.

b) The husband do pay maintenance for E in the sum of HK$33,000 per month with effect from the 1 January 2018 and thereafter to be paid on the 1st day of each succeeding month until such time as E reaches the age of 18 years or ceases full time education, whichever is the later or until such time as the husband finds another job or he embarks on a new venture which is income producing, or until further order. The husband do pay maintenance for E in the sum of HK$40,000 per month until the 31 December 2017.  

3.  There shall be an order nisi to be made absolute in 14 days’ time that there be no order as to costs.