JHCI v. MSYI

FCMC 12528 / 2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 12528 OF 2011

----------------------------

----------------------------

-----------------------

J U D G M E N T
(Ancillary Relief)

-----------------------

Introduction

1. This judgment follows an eight day trial to determine the issue of final ancillary relief.

2. On any assessment this has been a very emotive, highly conflicted case. The cost in terms of money, time and emotional wellbeing has been enormous for both the parties themselves and for everyone else involved. The situation has recently reached a new low following allegations being made against the elder son, J who is now 14 years of age. This has led to J living separately from his father. The trial on ancillary relief was conducted on the premise that the order following relocation stood whereby the parties had joint custody with shared care of both children. I am now told that the wife presently has de facto care and control of both children. The long term situation with respect to J is not known but it is anticipated that he may in due course go to boarding school. There are no other applications presently before the court in this respect.

3. In so far as the finances are concerned everything emanates from the issue of maintenance. The wife argues that the husband has not provided her and the children with sufficient maintenance during the course of these proceedings which in turn has led to her getting into debt. Other things flow from this including the wife’s claim for so called “reimbursable expenses”. In addition both parties seek “add backs” for other items. The wife seeks significant maintenance payments for both herself and the children going forward.

4. It is clear that both parties’ positions have hardened as the litigation has progressed. The husband’s stance is that he has been paying the wife an appropriate amount of maintenance, even after she lost her job in December 2011. The husband says the wife engineered her own redundancy, something which the wife vigorously denies. The wife in turn argues that she always feared that the husband would not support what she terms “his first family”. This was why she wished, she says, to relocate to the United States where the cost of living would have been cheaper etc. The husband for his part points to the wife’s earning capacity and the fact that she has not returned to the work force, even after the relocation judgment was handed down, which was not in her favour. The distinct impression at this stage is that both parties have come so far along the litigation path that neither is able to bend, so intent are they in winning this particular battle.

5. As will be seen, having now had the opportunity to review the figures in detail, I accept the wife’s basic premise namely that it will not be possible for the husband to maintain her and the children at the level she requires. It is arguable whether or not this is the same standard of living that they enjoyed during the marriage. I should add that it is generally accepted that when a marriage breaks down that both parties standard of living will of necessity be reduced. This case is no exception, notwithstanding the fact that the husband earns a great deal of money. I should add that with a bit of compromise it seems to me that it will be possible for both parties to have a very acceptable standard of living.  

6. In addition to the issue of maintenance the court is also charged with determining the appropriate capital split in a situation where the parties have been separated for over 5 years and much of the wealth accumulated during their marriage has been spent on legal costs. 

Background  

The breakdown of the marriage and the litigation to date

7. I have set out both the background to the marriage and the background to the litigation in my judgments of the 21 November 2011 (Maintenance Pending Suit etc) and the 15 January 2013 (Relocation, Sole/Joint custody, shared care). A comprehensive summary is found in the latter, which I think it may be helpful at this juncture to repeat:-

8.  As at the 21 November 2011 I set out the background to this case in my judgment on maintenance pending suit and costs as follows:-

Background

4. This is a fairly straightforward case on the facts that has been fuelled to a very large extent by high emotion and attendant conflict which appears to have escalated as the case has progressed.

5.  The parties married in April 1998. This was the husband’s second marriage and the wife’s first. The husband is British and the wife holds an American passport but is of Filipino decent. Unfortunately the parties were unable to have children naturally. They were subsequently very privileged to be able to adopt two children – J, a boy who is now aged 11 years old and S, a girl who is now aged 8 years. Both children attend a well known international school in Hong Kong. They are presently living with the mother. Access has been very problematic. The husband has issued a number of applications in relation to various issues pertaining to the children. The wife has also issued a summons for leave to permanently remove the children to reside in the United States. That application is likely to be heard sometime next year. There now also appears to be a dispute over custody.

6.  Both parties work in the banking sector. The husband is 41 years old. He holds a senior position with an investment bank. The wife is 49 years old. She returned to work in April 2008 after a career break during which she concentrated on looking after the children. This also coincided in part with the parties spending a period of time in Singapore following the husband’s secondment there. The wife also works for an investment bank. Both parties’ earn good salaries, but it would be fair to say that the husband earns significantly more than the wife.

7.  The parties separated in August 2009. On the 29 September 2010 the wife issued divorce proceedings based on the husband’s unreasonable behaviour. In that petition she also sought joint custody of the children with care and control to herself and reasonable access to the husband. She now states that she had not wanted a divorce and had only instituted proceedings because her lawyer at the time had advised her to do so. She says that her intention had always been to try to reconcile with the husband.  She also claims that she had not known of the husband’s new relationship at that time. On another occasion she said that she had felt pressured by the husband to issue proceedings. In any event, regardless of these assertions, the fact is that the wife issued proceedings against the husband based on fairly mild unreasonable behaviour particulars notwithstanding the fact that it was open to her to proceed on the basis of one year separation with the husband’s consent. This had been the husband’s preferred option. On the 14 October 2010 the husband filed an answer denying the allegations of unreasonable behaviour quite generally and reserving his right to apply for leave to amend the answer and to file a cross petition. Just as it had been open to the wife to proceed on the basis of one year separation with consent (or once she had learnt of the new relationship on his admitted adultery), it had also been open to the husband to simply proceed on the basis of the wife’s original petition. He chose not to do so. In any event the wife did not progress her petition. There was significant delay – some of which was justifiable and some of which was not.  On the 7 September 2011 the husband filed a subsequent petition based on two years separation. On the 23 September 2011 the wife’s original petition was dismissed and all pleading were transferred to the new proceedings. 

9.  Since then the matter has progressed under the father’s second petition. In terms of the background to the marriage I should add that both parties have lived in Hong Kong for a considerable period of time. The father moved to Hong Kong from the United Kingdom in 1995 and has remained here since, (save for a two year period from 2002 – 04 when the parties were seconded to Singapore). The father was married at that time, but that marriage faltered when his first wife chose not to join him in Hong Kong. He met the mother in Hong Kong shortly after his arrival and they began dating whilst he was still married to his first wife. That marriage was dissolved in July 1997. Prior to the divorce he and the mother began cohabiting. They were married in April 1998 in California and subsequently returned to Hong Kong. The father was 25 years old when he came to Hong Kong. He is 42 years old now. He has recently changed jobs, but continues to hold a senior position in the finance sector. He says that he wishes to continue to live and work in Hong Kong for the remainder of his career. He is settled in Hong Kong and considers it his home.

10.  The mother has also lived in Hong Kong for a considerable period of time. She was born in Manila but her family immigrated to the United States when she was 17 years old. She was studying overseas at the time. She is the eldest of 7 children. She and her family are all Roman Catholic. The mother has both an undergraduate degree and an MBA and she has lived in Hong Kong since 1992, save for the same two year stint in Singapore with the father in 2002 – 04. She also worked in the banking field but on the management side. She is a little older than the father and is now 50 years of age. She says that the parties agreed to remain in Hong Kong and to raise a family here because it was “neutral” ie it was not the United Kingdom or the United States. She says that the situation has now changed and that she now wishes to live in the United States with her extended family.

11.  It seems that both parties wanted to have children, but that the mother had difficulties conceiving leading to five rounds of IVF treatments. In the words of the mother during the trial she didn’t “just pop them out” (children) like other women and the parties subsequently decided to adopt. It seems that the father was initially more open to this idea than the mother, who was very keen to have her own biological children. In time however the mother came round to the possibility of adoption and now says that she “chose” her children. 

12.  J was born in May 2000 in Hong Kong and he was released into the parties care in August 2000. The adoption was completed in February 2001. J is of Chinese and Thai parentage. He is presently 12 years old and he attends a well known international school in Hong Kong. He suffers from Attention Deficit and Hyperactivity Disorder (ADHD) and is presently on medication which the parties originally obtained from the United States. It seems that he has recently been prescribed an alternative in Hong Kong. He is also allergic to dust and mites, although there is some dispute over the severity of this condition and the appropriate approach to it. J is presently based with his father, but he sees his mother regularly. He moved to live with his father on a “look and see basis” in January 2012, following an argument with his mother and has remained there ever since. The parties disagree about whether he still wishes to be based with his father.

13.  The parties daughter, S, was born in December 2002 in Malaysia. She was adopted by the parties when they were living in Singapore. Like J, S was released into the parties care in February 2003 whilst still a baby. According to the father S is Peranakan or Straits Chinese, which is an ethnic blend found in Malaysia, of Chinese, Malay, Arab, European and Indian heritage. S has been diagnosed with “clinical behavioural anxiety” and it has been suggested that she may also have some learning difficulties. S is currently based with her mother, but she also sees her father regularly.

14.  The children are presently together with one or other of the parents for 5 days/4 nights out of every 7 each school week save for the first weekend of every month when they are with their father for Friday and Saturday night. The school holidays are presently split between the parties.

15.  The mother took a career break while the children were small and did not work for 7 years. She resigned from her job in late 2001. J would have been approximately 18 months old at the time. S was born the following year. There is no doubt that during this period that she was the primary care taking parent. She was assisted in this role by the father and a domestic helper. In April 2008 she began working again following her introduction through a friend to a well known private bank in Hong Kong. From that point on a driver was also employed in addition to the other domestic help in the house, to assist primarily with the care of the children, which included ferrying them to and from different activities. 

  The breakdown of the marriage

16.  On the father’s account, he says that the marriage was in difficulty from about 2002, whereas the mother says that serious cracks first started to appear in 2008. In any event on the 24 August 2009 the father moved out of the matrimonial home, residing first in a serviced apartment and then moving into an apartment in Pokfulam. It seems that at first matters progressed on a fairly reasonable footing. The father continued to meet all outgoings on the former matrimonial home and he continued to see the children, although usually it seems that this was as prescribed by the mother.

17.  This all changed in November 2010 when the mother first became aware of the possibility of the father’s involvement with a third party. Up until that point it seems that the mother had been hopeful that reconciliation might be effected. The tone of the proceedings alters significantly thereafter.

18.  There are a number of themes that run through the parties’ affidavits which serve to illustrate the intensity of their conflict namely a) their continued inability to agree on the children’s access arrangements including pickups and drop offs, as evidenced by the parties e-mail exchanges and as set out in their affidavits. On occasion this has led to serious confrontations including physical altercations that have been witnessed by the children. There has been some police involvement. b) The mother’s inability to come to terms with the reality that the father has formed a new relationship with a former work colleague, Ms V and the fact that the children will inevitably come into contact with her. The mother has for example, expressed continued concerns including room sharing arrangements during holidays and c) the level of financial support that the mother has received and might expect to receive from the father going forward. The manner in which she received that support has also been the subject of intense disagreement. 

The updated situation

8. The wife is now 52 and the husband is 44 years of age. The decree absolute was eventually pronounced by agreement on the 25 November 2013. Since then the husband has remarried Ms V and they have moved into a larger apartment with her daughter I, who is now aged 6 years. As I have said until recently J was also based with them. The order stipulated that J was to stay over with his mother each Wednesday and on alternate weekends. Likewise, according to the original order S is to stay with her father each Tuesday and also on the same alternate weekends. In addition by virtue of a Ruling dated the 29 May 2014 the children’s weekend access was also varied so that it coincided with I’s weekends with the husband and Ms V. The court has been informed that J is currently living in a serviced apartment in Wanchai with his maternal Uncle. J is at present continuing to attend the same international school as before. It is anticipated that in due course that he may go to boarding school. S has just started at the N School pending a place becoming available for her at the L Centre at a senior school in the ESF. She is currently waitlisted for a place. It is acknowledged that historically both children have needed a lot of help and support.

9. The husband is currently employed in a senior position within the finance industry as a Chief Operating Officer. Ms V also works in the banking field and the wife is currently unemployed. As indicated above this has become a source of considerable friction between the parties, with each side taking increasingly more extreme positions as the litigation has progressed. It is the wife’s case that she has been unable to find suitable alternative employment in Hong Kong. The wife says that if the husband wishes her and the children to remain in Hong Kong then he should support them in a way that was comparable to their standard of living during the marriage. The husband for his part maintains that the wife has inflated her expenses and deliberately refused to find alternative employment. He is not prepared to support her at the level she requires.

The law on Ancillary Relief

10. The Court of Final Appeal’s decision in LKW v DD (FACV no 16 of 2008) 13 HKCFA 537 sets out the approach that the lower courts should now take when determining issues relating to final ancillary relief. 

11. Mr Justice Ribeiro PJ reiterates that there are four underlying principles that should guide ancillary relief proceedings namely fairness, the absence of discrimination, the upholding of the concept of the yardstick of equality and the rejection of a need for a minute retrospective investigation of the parties finances.

12. In addition he identifies a five step approach to be adopted in an ancillary relief trial which if I may I will summarize as follows:-

1)  The identification of the assets

2)  An assessment of the parties financial needs

3)  Whether or not the sharing principle should be adopted?

4)  Whether or not there is a good reason to depart from an equal division of the assets?

5)  Deciding the outcome

13. The s 7 factors (s 7 Matrimonial Property and Proceedings Ordinance, Cap 192) are largely dealt with within this general framework. They are:-

(1)  It shall be the duty of the court in deciding whether to exercise its powers under section 4, 6 or 6A in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say-

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

The issues

14. It is against this continuing conflicted background that the court is now asked to determine the issue of final ancillary relief. In broad terms the main issues are:-

a) What assets should be included in the matrimonial pot?

b) How should the husband’s unvested shares be treated?

c) How should the wife’s debts be treated?

d) Should any expenses be reimbursed to the wife?

e) Should there be any “add backs” on either the husband or the wife’s part?

f) What weight should be given to the Single Joint Expert’s report?

g) Should this case be regarded as a “needs based case” or should the sharing principle be applied?

h) In the event that this is a sharing case how should the assets be divided?

i) Should the yardstick of equality be departed from and if so on what basis? Should the issue of the unvested shares/debts and add backs be looked at again in this context?

j) What is an appropriate division of assets in the circumstances?

k) How much maintenance should the husband pay to the wife for herself and children going forward?

l) What is the wife’s earning capacity?

m) What should the final decision be?

These issues will need to be addressed within the framework identified by Mr Justice Ribeiro PJ in LKW v DD.

Open Proposals

The wife’s open proposals

15. The wife set out a very detailed proposal in her letter of the 29 January 2014.

Capital Division: As set out in our letter of 29 January 2014, our client seeks a 60/40 spilt of the net assets after both parties liabilities have been taken into account. In this regard:-

(1) The Phuket property is to be ring fenced until its title is clear and sold with the net proceeds of sale split 60/40. Until such time as the property is sold, the Phuket property is to be rented out and the net proceeds of rental used to meet the running costs with any surplus to be divided between the parties on a 60/40 spilt.

(2) In the event that further funds are required to clear the title to the Phuket property, your client will advance all of the necessary payments, to be notified and agreed by our client in advance of any payments being made, with our client’s 60% share of the further funds to be reimbursed to your client upon the sale of the property.

(3) Pending sale of the Phuket property, the children are at liberty to use the Phuket property during times when it is not rented out.

(4) In the event that title is not clear and/or the property cannot be sold in five years time, the parties will review the position.

(5) The balance of the capital split to our client of HK$9,319,531 is to be paid to our client by way of lump sum instalments to be met by the HSBC Expat Account and the HKEX stocks to be vested later this year. The single biggest asset is your client’s M Pension. However there is no information provided as to whether the pension can be liquidated or borrowed against.

10. In addition, our client also seeks reimbursement of the out of pocket expenses of HK$483,335 from October 2011 to date (see paragraph 32 of our client’s 16^th Affidavit [P14/4400]), the majority of these expenses were incurred for the children.

11. Our client also seeks an add-back of HK$515,997, including wedding expenses (see paragraph 31 of our client’s 16^th Affidavit [P14/4400].

12. Taking the balance lump sum, reimbursement and add backs into account, the amount to be paid to our client excluding the Phuket property is HK$10,060,864.

13. Maintenance: We enclose an updated Estimate of the monthly expenses for our client and the children⁽¹⁾. In respect of the children’s expenses, our client seeks an Order/Undertaking that your client will be responsible/ordered to pay for:-

(1) all of S’s additional learning support requirements outside of school including but not limited to speech therapy, mandarin, academic support and updated psychological reports including Dr A;

(2) all of the children’s activities, (our client to determine S’s activities and your client to determine J’s activities) not to exceed three activities per child per term and including all overseas trips connected with their activities;

(3) any additional summer courses required by the children (educational and recreational included);

(4) all of the children’s educational expenses and associated costs; and

(5) providing a driver for S while she is attending N school.

14. The children are currently the sole beneficiaries of your client’s two life insurance policies with HSBC and his current employer for a total coverage of US$1 million. Given that the children will have no other means of financial support, other than a claim against your client’s Estate in the event of his death, or disability (total or partial), while they are still dependents, our client requires that your client maintains an appropriate level of life insurance for herself and the children as his named beneficiaries until determination of his financial obligations in respect of our client and the children.

15. On the above basis, our client seeks maintenance for the children of HK$128,716 per month.

16. Given that the capital split is insufficient for a clean break between the parties, our client requires monthly maintenance from your client of HK$86,646 rounded up to HK$86,650. As our client is US tax resident, her maintenance will need to be tax equalised to ensure that the sum of maintenance received is sufficient to cover her monthly expenses.

17. Our client has been informed by her accountant that she is liable for tax in respect of her maintenance but not the children’s maintenance. Our client will need to pay Federal Tax in the US and she will only be liable to pay California State Tax in addition to the Federal Tax if she is residing in California. We enclose the 2013 Tax Rate Schedules provided by our client’s accountant in respect of the Federal Taxes and information from the IRS website in respect of US taxes paid on divorce⁽²⁾.

18. The total maintenance to be paid to our client per annum would be HK$1,039,800÷7.74=US$134,341 and the tax thereon would be US$30,909/HK$239,233 or HK$19,936 per month. On a tax equalised basis our client’s maintenance comes to HK$106,582 per month.

19. Our client is also seeking an order that all maintenance payments are to be backdated to January 2014 and inflation adjusted per annum to be paid by your client by way of automatic payments to her nominated bank account on the 1^st of every month for both herself and kids.

The husband’s open proposals

16.The husband for his part set out his open proposals as follows:-

In advance of the Ancillary Relief Hearing fixed on 10 June 2014, we are instructed to put an open offer of settlement to your client to resolve the financial issues on a full and final basis. This offer is being made following receipt of the Single Joint Expert report dated 6 June 2014 on your client’s spending since late 2010 – 28 February 2014.

In full and final settlement of all claims, each has against the other; our client proposes that your client have a settlement of HK$7,800,000 (US$1,000,000) offset against what your client has in her control which is HK$(578,634). Your client has the option to retain the Phuket property as part of this settlement should she wish. In the event she does not choose to retain the Phuket property the balance due, in the sum of HK$7,221,366 to effect the settlement will be paid by our client as follows:-

1. F (former M pension) HK$6,067,304;

2. HK$1,154,062 by 31 December 2014.

This capital settlement represents a 68% settlement in your client’s favour (7,800,000/11,450,945) as per the asset schedule as enclosed. This settlement takes into account, on a broadbrush basis, your client’s excessive credit card spending as she is a net credit position in the amount of ($578,634). It is clear from the SJE report that your client’s spending has been excessive and needs to be taken into account in the total asset pool.

Our client will make periodic payments to your client by way of spousal maintenance of HK$55,000 per month until her remarriage, cohabitation or further order, and periodic payments as child maintenance of HK$23,000 for J and HK$32,000 for S per month.

This proposal has been prepared taking into account the Single Joint Expert report of BWF. That report shows that since late 2010 – 28 February 2014 your client had average monthly expenditure of HK$291,275.47. There are categories of expenditure which our client is not willing to accept and we consider the Court will consider unreasonable as set out below. Once these amounts are adjusted, it can be seen that our client’s proposal for maintenance is reasonable. Should your client wish to have the standard of living in the manner consistent with her spending, then this can be achieved if she obtains gainful employment in the manner she previously held which provided her with a salary and bonus of approximately HK$2 million per annum or HK$166,666 per month. Taking the maintenance of HK$110,000 and such income of $166,666 this amounts to HK$276,666 which is more or less equivalent to her current spending of HK$291,275. The spending which our client is not willing to accept and has been adjusted is as follows:-

Item	Reason	Adjustment	Adjusted expense
Rent	This amount reflects the average amount paid over a period when our client was making direct contribution to your client’s rent – adjusted to reflect proposed rent of $50,000	13,385.11	50,000.00
Household	Excessive	(5,000.00)	2,841.57
Driver	Currently no driver employed and not agreed in any event	(4,872.81)	Nil
Legal	No further expenses after these proceeding	(19,244.77)	Nil
Adjustment of cash item	Total general cash items and personal cash items is HK$49,251.49 and is considered excessive given the other general and personal expenses incurred	(20,809.73)	Nil
Clothing shoes	Excessive	(25,000.00)	10,613.11
Holiday	Excessive	(10,000.00)	5,284.32
Contribution to parents	Such contributions never made during the marriage and are not necessary	(5,106.38)	Nil
Other – jewellery	Not agreed	(10,359.57)	Nil
Other – mobile	Excessive	(1,247.35)	1,000.00
Adjustment of cash items	Total general cash items and personal cash items is HK$49,251.49 and is considered excessive given the other general and personal expenses incurred	(28,441.76)	Nil
Finance charge	Not agreed	(13,828.83)	Nil
Unknown	Not agreed	(15,751.44)	Nil
Total		(146,277.53)
Adjusted expenditure	291,275.47 – 146,277.53		144,997.94

Our client will continue to pay for the children’s school fees and the children’s medical and dental insurance policies. Our client will meet J’s school transport and extracurricular expenses and your client is to meet S’s school transport and extracurricular expenses.

17. In his closing the husband offers the wife a lump sum of HK$7,018,031 after deduction of various items, such sum to be paid in two tranches, the first tranche of HK$6 million within 14 days and the balance by the 31 December 2014.

The identification of the assets

What assets should be included in the matrimonial pot?

18.The wife produced a schedule of assets during the hearing which, save for the last two columns is set out below. This identifies in broad terms where the parties are in agreement and where they are not. The husband says that there is HK$10,300,640 in the matrimonial pot whereas the wife says that the appropriate figure is HK$14,833,577. According to the first Form E’s filed by the parties, at the beginning of these proceedings they had approximately HK$25.5 million in assets between them. Much of the difference has been spent on legal costs. The value of the Phuket property has also fallen significantly. It is the wife’s case that she has also been obliged to spend some of what she had on trying to maintain the standard of living of the family. This is disputed by the husband but in any event this also goes some way towards explaining the significant difference in asset values between the start of the proceedings in September 2010 and now.

19. There are six points identified by the husband’s counsel which he says requires adjudication on by the court before it will be possible to accurately compute and identify the assets available for distribution. These are all relatively small matters, but nonetheless could not be agreed. They are as follows:-

i) What value should be attributed to the husband’s HSBC account no XXX-XXXXXX-XXX?

ii) How should the husband’s unvested shares be treated? In particular what value should be attributed to the 4,450 shares referred to at D (i) in the schedule?

iii) How should the court regard the husband’s anticipated future tax liability in so far as it relates to the shares?

iv) Should the court deduct the total of S’s school fees for the next academic year from the matrimonial pot?

v) Whether the sum owed to AP should be regarded as a genuine loan of the wife or whether the sum of HK$185,250 should be added back into the asset pool.

vi) How should the wife’s alleged liabilities of between HK$1,037,068 on the husband’s case and HK$1,531,581 on the wife’s case be treated?

In addition there are also the following issues to be determined:-

vii) Should any expenses be reimbursed to the wife?

viii) Should there be any “add backs” on either the husband or the wife’s part?

20. The schedule of assets which became a “working document” during the trial is reproduced below. I have highlighted in bold and in italics those items in dispute. In addition there is no agreement with respect to items 4 (c), 5 (a) – (c) and B2. These items are marked with an *.

RESPONDENT’S SCHEDULE OF ASSETS & LIABILITIES as at 30 April 2014 and 6 August 2014 pursuant to the Order of HH Judge Melloy dated 14 Nov 2013 [P 12/4004]
I. THE PETITIONER
		Original currency if not HK$	H’s Position (HK$)	W’s Position (HK$)
A. Assets
1. Property
	a) Phuket	THB11,600,000	2,784,000	2,784,000
2. Bank accounts
	a)HSBC XXX-XXXXXX-XXX - Premier Account		555,293	750,292
	b) HSBC Expat (GBP) XXXXXX-XXXXXXXX		Nil	Nil
	c) HSBC Expat (USD) XXX-XXXXX-XXX	US$5,508.30	42,962	42,965
3. Life Insurance
	a) HSBC Life XXXXXXXX, surrender value (subject to Undertaking in the Order dated 18 November 2013 [P12/3999]	US$156,820.52	1,223,196	1,223,200
4. Shares
	a) F XXXXXX (former M pension)	US$777,859.43	6,067,304	6,067,304
	b) Principal Investment Funds XXXXXX-XXXX		Nil	Nil
	c) Scottish Provident HFP XXXXXXX	US$10,233.76	79,312*	79,823*
	d) HKEx unvested stock (received in 2012) – 23,539 awarded shares and 623 dividend (HK$117.60 per share = HK$2,841,451 as at 31 March 2014 if had vested [P13/4307])		0	2,841,451
	i)4,450 awarded shares and 117 dividend shares vest on 7 July 2014 (HK$537,079)		(600,000)
	ii)7,319 awarded shares and 192 dividend shares vest on 3 December 2014 (HK$883,293)
	iii)4,450 awarded shares and 117 dividend shares vest on 7 July 2015 (HK$537,079)
	iv)7,320 awarded shares and 197 dividend shares vest on 3 December 2015 (HK$883,999)
	e) HKEx unvested stock (received in 2013) – (HK$1,850,000) – see explanation in Petitioner’s 17th Affirmation [P13/4307]			1,850,000
5. Pensions
	a) UK Private Pension Sun Life of Canada (£812.82/HK$10,567 – realisable 2025)			10,567*
	b) HKEx ORSO Pension (HK$604,642 unvested – see vesting explanation in Form E – P11/3517)			604,642*
	c) HKEx ORSO Pension voluntary contribution (HK$241,856)			241,856*
	d) UK Private Pension Lincoln National	GBP200	2,600	2,600
6. Other
	a) Motor vehicle		280,000	280,000
	b) [Funds currently held for Petitioner’s legal fees – HK$1,053,963.60]
	c) Funds held on owner’s account for loan to developer to discharge mortgage secured on Phuket property [THB1,604,000/HK$384,960
	d) Rental Deposit for P C		227,252	227,252
	e) Club Membership		188,000	188,000
TOTAL ASSETS OF THE PETITIONER			11,449,919	17,193,952
B. Liabilities
1. Petitioner’s liabilities – credit cards			44,857	44,857
2. Petitioner’s tax and provisional tax due for 2013/14 (15% of salary and			879,500*	866,749*
3. Anticipated future tax liabilities:
	a) in relation to 4.d)i)		0	80,562
	b) in relation to 4.d)ii)			132,494
	c) in relation to 4.d)iii)			80,562
	d) in relation to 4.d)iv)			132,600
	e) in relation to 4.e)			227,500
4. S’s school fees			147,000	0
TOTAL LIABILITIES OF THE PETITIONER			1,071,357	1,565,324
C. NET ASSETS OF THE PETITIONER			10,378,562	15,628,628
II. THE RESPONDENT
		Original currency if not HK$	H’s Position (HK$)	W’s Position (HK$)
A. Assets
1. Bank accounts
	a) HSBC XXX-XXXXXX-XXX (current)		29,488	29,488
	b) HSBC XXX-XXXXXX-XXX (savings)		857	857
	c) HSBC XXX-XXXXXX-XXX (current)		3,967	-
	d) HSBC XXX-XXXXXX-XXX (savings)		15,296	-
	e) HSBC XXX-XXXXXX-XXX (current)		100	-
	f) HSBC XXX-XXXXXX-XXX (savings)		18,004	-
	g) HSBC XXX-XXXXX-X (MPF)		88,729	88,729
	h) Wells Fargo XXXXXXXXXX	US$21.85	170	170
	i) Charles Schwaab	US$5,000	39,000	39,000
2. Others
	Money liquidated from Unit Trusts (HSBC XXX-XXXXXX-XXX & HSBC XXX-XXXXXX-XXX) Order dated 20 February 2014:
	a) Third Party in Philippines		480,000	480,000
	b) Sum paid to A P		185,250	0
	c) Funds currently held for Respondent’s legal fees
	d) RBG deposit		100,000	100,000
TOTAL ASSETS OF THE RESPONDENT			959,146	736,530
B. Liabilities
	Respondent’s liabilities		1,037,068	1,531,581
TOTAL LIABILITIES OF THE RESPONDENT			1,037,068	1,531,581
C. NET ASSETS OF THE RESPONDENT			(77,922)	(795,051)
TOTAL NET ASSETS (“TNA”) (Petitioner’s + Respondent’s)			(77,922)	(795,051)
	Petitioner’s net assets		10,378,562	15,628,628
	Respondent’s net assets		(77,922)	(795,051)
	TNA		10,300,640	14,833,577
	TNA (excluding Phuket property)		8,026,640	12,049,577
Currency Conversions: 1 USD = 7.8 HKD 1 GBP = 13.0 HKD 1 THB = 0.24 HKD

The six points raised by the husband

What value should be attributed to the husband’s HSBC account no XXX-XXXXXX-XXX?

21. Unfortunately the hearing was conducted in two tranches, the first tranche being in June 2014 and the second tranche following over several days in August 2014. It had been initially agreed that the cut off point for the valuation of the assets would be the 30 April 2014. I queried this when the parties returned to court for the second tranche of the trial given the fact that as far as possible the valuation of the assets should be calculated as at the date of the hearing. To that end please see the excerpt from LKW v DD below:-

E.2 Step 1: Identification of the assets

The first step in the exercise is to ascertain the financial resources of each of the parties calculated as at the date of the hearing. In particular, under section 7(1)(a), the court must have regard to “the income, earning capacity, property and other financial resources” which each of the parties “has or is likely to have in the foreseeable future”. The object will of course be to compute the net financial resources, taking account of all material liabilities. At this stage, the court need not attempt to distinguish between matrimonial and non-matrimonial property, that being an exercise best undertaken (if necessary) when considering distribution of the assets.

22. Notwithstanding this the parties agreed on the 6 August 2014 that the most cost efficient and sensible way to proceed was on the premise that the cut off point for the valuation of all assets should remain as at the 30 April 2014.

23. A difficulty then arose because the husband wished certain items to be deducted from the balance in his HSBC Premier account as at the 30 April 2014 on the basis that he had regular recurring expenses that should be taken into account and deducted. He claimed that to do otherwise was to misrepresent the “average balance” in that account. The husband explains his position in a letter from his solicitors dated the 29 July 2014 as follows:-

1. At Item A, ‘Assets’ item 2 you have agreed to include our client’s bank balance as at 30 April 2014 of HKD750,292. This is an inflated bank balance as it takes into account our client’s salary deposit on 25 April 2014 of HKD266,000 [C8/2532] but does not take into account the expenses that our client immediately paid out thereafter as follows:-

1.1. His rent on 2 May 2014 HKD75,000

1.2. First tranche of maintenance on 2 May 2014 HKD40,000

1.3. Second tranche of maintenance paid out 3 May 2014 HKD40,000

1.4. Third tranche of maintenance paid 5 May 2014 HKD40,000

1.5. Total HKD195,000

It is therefore most appropriate that our client’s bank balance is recorded as at 30 April 2014 of HKD750,292.91 less HKD75,000, less HKD40,000, less HKD40,000, less HKD40,000. The balance is therefore HKD555,292.91. However, we confirm that our client’s current bank balance is HKD445,436.81.

2. We have added in the liability for S’s school fees of HKD147,000.

24. Although I have some sympathy with the husband in this respect – the fact remains that there must, as far as possible, be a clearly discernable cut off point at which the assets are valued and that should either be as at the date of the trial or alternatively as close to that date as possible. As will be seen that has proved difficult to achieve in this case. In so far as this point is concerned however, the difficulty is that to do otherwise leads to a whole range of other issues – which in turn need to be decided upon. For example the wife claims that the husband seeks to deduct the whole of the rent when according to his most recent Form E Ms V contributes towards this also – and so on and so forth. In the circumstances I accept that the appropriate figure to be included in the schedule is HK$750,292 – even though that figure may in actual fact vary over a month as income is received and payments are made.

How should the husband’s unvested shares be treated?

In particular what value should be attributed to the 4,450 shares referred to at D (i) in the schedule?

25. The difficulty here is that unvested shares are a particular type of post separation accrual in that until they are vested it is not possible to value them accurately. The husband joined his new company in July 2012 – three years after the parties had separated. In general terms I accept, as submitted by counsel for the husband, that the unvested shares are a financial resource which the husband is likely to have in the foreseeable future (see s 7(a) MPPO). To that extent although it is perfectly proper to include them in the schedule of assets, they are not assets to which “the yardstick of equality will forcefully apply”. The wife attributes a value to the HKEx shares as if they had vested as at the 31 March 2014 – i.e. a total sum of HK$2,841,451 and does so on the premise that prima facie she should be entitled to 50% of their value. I do not accept that to be the case. Infact these shares vest and will continue to vest on a rolling basis from July 2014 to December 2015. In so far as the first vestment is concerned in the sum of HK$600,000 odd, this is referred to in the schedule but has not been included in the total of the husband’s net assets given that the shares vested in July and the agreed cut off point for the schedule of assets is the 30 April 2014. In addition the wife seeks to include further unvested stock as set out in 4e) in the sum of HK$1,850,000. The husband describes the situation with respect to this stock award in his 17^th affidavit as follows:-

24.3 I received a stock award with a market value of HKD1,850,000 at the time of purchase. The exact number of shares is not known but when my employer purchases these on market they will do so at the current value up to an amount of HKD1,850,000 [P13/4245]. The stocks are unvested with 50% vesting in January 2016 and 50% in January 2017.

26. Thus in total the wife seeks to include HK$ 4,691,451 in the schedule of assets (i.e. HK$2,841,451 + HK$1,850,000) seemingly on the premise that she is entitled to 50% of that value. As I have said I do not necessarily accept that to be the case. Thus the shares shall remain on the schedule of assets as a financial resource that the husband is likely to have in the foreseeable future, but will not be included in the computation of assets for the time being.

27. Mr Egerton for the husband has relied on the case of Rossi v Rossi [2006] EWHC 1482 (Fam) in support of his position on this point. The difficulty with Rossi however, is that it does not specifically refer to unvested shares when analysing whether a post separation bonus should be included in the so called “matrimonial pot”. It is though helpful when looking at the time frames for including any form of bonus. To that end I have set out the requisite part of the judgment below. Nicholas Mostyn QC as he then was, sitting as a Deputy Judge said as follows:-

“[24] Doing the best I can to draw the various threads together I think that the following principles can be deduced:

24.1 The statute requires all the assets to be valued at the date of trial.

24.2 For the purposes of establishing the matrimonial property in respect of which the yardstick of equality will ‘forcefully’ apply the value of assets brought into the marriage by gift and inheritance (other than the former matrimonial home), together with passive economic growth on those assets, should be excluded as non-matrimonial property.

24.3 Assets acquired or created by one party after (or during a period of) separation may qualify as non-matrimonial property if it can be said that the property in question was acquired or created by a party by virtue of his personal industry and not by use (other than incidental use) of an asset which has been created during the marriage and in respect of which the other party can validly assert an unascertained share. Obviously, passive economic growth on matrimonial property that arises after separation will not qualify as non-matrimonial property.

24.4 If the post-separation asset is a bonus or other earned income then it is obvious that if the payment relates to a period when the parties were cohabiting then the earner cannot claim it to be non-matrimonial. Even if the payment relates to a period immediately following separation I would myself say that it is too close to the marriage to justify categorisation as non-matrimonial. Moreover, I entirely agree with Coleridge J when he points out that during the period of separation the domestic party carries on making her non-financial contribution but cannot attribute a value thereto which justifies adjustment in her favour. Although there is an element of arbitrariness here, I myself would not allow a post-separation bonus to be classed as non-matrimonial unless it related to a period which commenced at least 12 months after the separation.

24.5 By this process the court should, without great difficulty, be able to separate the matrimonial and non-matrimonial property. The matrimonial property will in all likelihood be divided equally although there may be deviation from equal division: (a) if the marriage is short; and (b) part of the matrimonial property is ‘non-business partnership, non-family assets’ (or if the matrimonial property is represented by autonomous funds accumulated by dual earners).

24.6 The non-matrimonial property is not quarantined and excluded from the court’s dispositive powers. It represents an unmatched contribution by the party who brings it to the marriage. The court will decide whether it should be shared and, if so, in what proportions. In so deciding it will have regard to the reality that the longer the marriage the more likely non-matrimonial property will become merged or entangled with matrimonial property. By contract, in a short marriage case non-matrimonial assets are not likely to be shared unless needs require this.

24.7 In deciding whether a non-matrimonial post-separation accrual should be shared and, if so, in what proportions, the court will proceeded diligently with the claim; whether the party who has the benefit of the accrual has treated the other party fairly during the period of separation; and whether the money-making party has the prospect of making further gains or earnings after the division of the assets and, if so, whether the other party will be sharing in such future income or gains and if so in what proportions, for what period, and by what means.”

28. I accept what is said in that judgment. Consequently in so far as the identification of the assets is concerned – the unvested shares have been identified and they are included in the schedule of assets as a financial resource which the husband is likely to have in the foreseeable future.

How the court would regard the husband’s anticipated future tax liability?

29. Given my Ruling above there will be no need to include an anticipated tax liability for those shares at this stage in the schedule of assets and liabilities.

Should the court deduct the total of S’s school fees for the next academic year from the matrimonial pot?

30. It is the husband’s case that he pays for the children’s school fees annually and that in the normal course of events he would have paid for the school fees for both children in April 2014. As S changed schools he was obliged to pay for S’s school fees in September. This is an expense that infact arose prior to the commencement of the new term in September – but the husband wants to deduct it from the schedule of assets as if it had arisen in April prior to the cut off date. I have also noted that the husband refers to the children’s school fees in his Form E as a recurrent monthly expense. In such circumstances I do not accept that it is appropriate to deduct this expense from the schedule of assets.

Whether the sum owed to AP should be regarded as a genuine loan of the wife or whether the sum of HK$185,250 should be added back into the asset pool?

31. It is the wife’s case that she had to resort to borrowing money from her best friend – Ms AP – because the husband did not provide her with sufficient maintenance. She says that there was no formal loan agreement because it was simply an arrangement between good friends. Ms P was not called upon to give evidence nor did she file an affidavit in support of the wife’s version of events. The wife points to a number of deposits made into her bank account which amount in total to HK$180,250 and not HK$185,250 as claimed. (The figure is also on one occasion put at HK$186,250). The husband for his part says that there is no evidence of a loan and he asks that the money be added back into the schedule of assets. He says that this was a cash parking arrangement and that these funds remain available to the wife.

32. Although it is true that there is no direct evidence of a loan, I am nevertheless inclined to accept the wife’s version of events on this point – especially given the evidence of monies being paid into her account as set out above. A cheque in the sum of HK$186,250 was also paid out of the wife’s account to P Ltd on the 9 January 2014. Thus I would accept for present purposes that the sum of HK$180,250/HK$185,250 should not be added back to the wife’s side of the asset schedule as suggested by the husband.

How should the wife’s debts be treated?

How should the wife’s alleged liabilities of between HK$1,037,068 on the husband’s case and HK$1,531,581 on the wife’s case be treated?

33. The husband’s primary case is that he paid an appropriate amount for the wife’s maintenance, which was subject to two court orders; that the wife engineered her own redundancy in December 2011 and that she has deliberately chosen not to seek re employment since. Consequently he says that any debts accumulated by the wife are of her own making and are her own responsibility and came about as a direct result of her refusing to trim her expenses and/or obtain further employment. At the end of his 17^th affirmation dated the 10 April 2014 he says inter alia that both parties should be responsible for their own debts.

34. As at the end of the trial the husband’s position appears to have shifted somewhat in that he accepted that the wife had debts of HK$1,037,068. The wife for her part said that she owed HK$1,531,581 on credit cards, loans and other debts. This is down slightly on her schedule of liabilities as set out in her updated Form E dated the 10 June 2013 when she said that she had debts of HK$1,637,113. This figure alters again in the wife’s most recent affidavit (16^th affidavit). Given this lack of clarity on the matter the solicitors for the husband wrote to the wife’s solicitors on the 29 July 2014 seeking an update.

35. The wife’s solicitors responded as follows:-

1. CREDIT CARDS – Our client has given evidence that she is incurring substantial finance charges on her credit cards which your client has estimated at HK$600,000 since separation. Your client has also acknowledged that the maintenance which he has been paying to our client for her and the children of HK$120,000 has not been sufficient.

Our client’s updated credit card liabilities are:-

Credit Card Provider	Outstanding Balance (HK$)	Minimum Payment Due (HK$)
American Express Card	290,796.00 (as at 11 July 2014)	* 10,767.00
Standard Chartered – Platinum Mastercard	257,741.00	14,213.00
Wing Hang Bank	51,710.89	40,007.00
HSBC – Premier Credit card (cancelled)	453,160.00	46,716.00
HSBC VISA card XXXX-XXXX-XXXX-XXXX	356,710.30	63,004.51
Total:-	HKD1,409,598.19 plus DBS card outstanding balance	HK$174,705.51

We enclose copies of our client’s updated credit card statements in support⁽¹⁾. In respect of our client’s American Express Credit card, our client has received a letter of demand from American Express’ lawyers⁽²⁾ to pay the full amount o fHK$290,796 within 7 days.

Our client’s financial situation is dire. She is incurring substantial finance charges which are payable from the family resources. Our client therefore seeks an advance from your client of her share of the capital assets to pay down her credit card liabilities. Ideally our client would like to pay off all her liabilities and if your client cannot advance this sum to her now then our client must have at least the minimum payment due.

36. Consequently it is not entirely clear how the precise figure of HK$1,531,581 has been arrived at. I accept however that the wife has debts of at least HK$1,409,598 as at the 13 August 2014. I do not know exactly what her debt situation was as at the 30 April 2014.

37. The situation has been further complicated by the fact that at the end of the trial it was agreed that the husband would advance the wife the sum of HK$454,734 in order that she could settle some of her most pressing credit card debt. (The figure actually given in court was HK$455,501). I was told that the sum of HK$94,000 was to be paid the day after the last day of trial on the 20 August 2014 and the balance within the following 14 days. (Infact it seems that this did not happen and payment was effected later).In any event this payment was made on the basis that it would be taken into account by the court when coming to a final decision on ancillary relief. It was specifically agreed that the money was to be advanced in order that the wife settle some of her most pressing liabilities. In the wife’s Reply to the husband’s written submissions she says:-

17. Due to the recent issues relating to J, the Respondent has had to use half of the HK$454,734 advanced by the Petitioner to meet urgent expenses relating to J which the Petitioner has refused to pay when requested. She has therefore not been able to reduce her liabilities as intended.

Since then the solicitors have written expressing concern and stating that this was not agreed.

38. In such circumstances it seems to me that it is not possible to include the wife’s debts in any accurate way in the schedule of assets and liabilities as at the 30 April 2014. I accept that the wife has current debts of approximately HK$1.4 million less the sum advanced to her by the husband at the end of the trial. In broad terms that means that she has current debts of somewhere between HK$945,000 - HK$1,172,500, depending on whether the full sum of HK$455,000 advanced by the husband is taken into account – or only half of that sum. For present purposes I am inclined to accept that both parties have been required to pay additional sums for or on behalf of J and therefore I will accept for these purposes that the wife owes at least HK$1,172,500. This sum has been included in the schedule of assets.

39. There are other minor discrepancies in the schedule of assets which do not amount to very much and which I was not addressed on specifically during the course of the trial. Some of these are simply a difference in calculation – for example the difference in value of the Scottish Provident Fund – HK$79,312 versus HK$79,823. For present purposes I have included an average figure of HK$79,567 for this item. In so far as the husband’s tax and provision for tax is concerned I have accepted his estimate of HK$879,500. In so far as 5 a) – c) is concerned, these are pensions which do not appear to be immediately available in any event. These have been marked with an *.

40. Thus the schedule of assets is as follows:-

RESPONDENT’S SCHEDULE OF ASSETS & LIABILITIES as at 30 April 2014 and 6 August 2014 pursuant to the Order of HH Judge Melloy dated 14 Nov 2013 [P 12/4004]
I. THE PETITIONER
		Original currency if not HK$
A. Assets
1. Property
	j) Phuket	THB11,600,000	2,784,000
2. Bank accounts
	d)HSBC xxx-xxxxxx-xxx - Premier Account		750,292
	e) HSBC Expat (GBP) xxxxxx-xxxxxxxx		Nil
	f) HSBC Expat (USD) xxx-xxxxxx-xxx	US$5,508.30	42,965
3. Life Insurance
	a) HSBC Life xxxxxxxx, surrender value (subject to Undertaking in the Order dated 18 November 2013 [P12/3999]	US$156,820.52	1,223,200
4. Shares
	a) F xxxxxx (former M pension)	US$777,859.43	6,067,304
	b) Principal Investment Funds xxxxxx-xxxx		Nil
	c) Scottish Provident HFP xxxxxxx	US$10,233.76	79,567
	d) HKEx unvested stock (received in 2012) – 23,539 awarded shares and 623 dividend (HK$117.60 per share = HK$2,841,451 as at 31 March 2014 if had vested [P13/4307])			(2,841,451)
	v) 4,450 awarded shares and 117 dividend shares vest on 7 July 2014 (HK$537,079)			(600,000)
	vi) 7,319 awarded shares and 192 dividend shares vest on 3 December 2014 (HK$883,293)
	vii) 4,450 awarded shares and 117 dividend shares vest on 7 July 2015 (HK$537,079)
	viii)7,320 awarded shares and 197 dividend shares vest on 3 December 2015 (HK$883,999)
	e) HKEx unvested stock (received in 2013) – (HK$1,850,000) – see explanation in Petitioner’s 17th Affirmation [P13/4307]			(1,850,000)
5. Pensions
	a) UK Private Pension Sun Life of Canada (£812.82/HK$10,567 – realisable 2025)		10,567*
	b) HKEx ORSO Pension (HK$604,642 unvested – see vesting explanation in Form E – P11/3517)			(604,642)
	c) HKEx ORSO Pension voluntary contribution (HK$241,856)		241,856*
	d) UK Private Pension Lincoln National	GBP200	2,600*
6. Other
	a) Jaguar motor vehicle		280,000
	b) [Funds currently held for Petitioner’s legal fees – HK$1,053,963.60]
	c) Funds held on owner’s account for loan to developer to discharge mortgage secured on Phuket property [THB1,604,000/HK$384,960
	d) Rental Deposit for Pine Court		227,252
	e) HKCC Membership		188,000
TOTAL ASSETS OF THE PETITIONER			11,897,603
B. Liabilities
1. Petitioner’s liabilities – credit cards			44,857
2. Petitioner’s tax and provisional tax due for 2013/14 (15% of salary and			879,500
3. Anticipated future tax liabilities:
	a) in relation to 4.d)i)
	b) in relation to 4.d)ii)
	c) in relation to 4.d)iii)
	d) in relation to 4.d)iv)
	e) in relation to 4.e)
4. Suzy’s school fees
TOTAL LIABILITIES OF THE PETITIONER			924,357
C. NET ASSETS OF THE PETITIONER			10,973,246
II. THE RESPONDENT
		Original currency if not HK$	H’s Position (HK$)	W’s Position (HK$)
A. Assets
1. Bank accounts
	a) HSBC xxx-xxxxxx-xxx (current)		29,488
	k) HSBC xxx-xxxxxx-xxx (savings)		857
	l) HSBC xxx-xxxxxx-xxx (current)
	m) HSBC xxx-xxxxxx-xxx (savings)
	n) HSBC xxx-xxxxxx-xxx (current)
	o) HSBC xxx-xxxxxx-xxx (savings)
	p) HSBC xxx-xxxxx-x (MPF)		88,729
	q) Wells Fargo xxxxxxxxxx	US$21.85	170
	r) Charles Schwaab	US$5,000	39,000
2. Others
	Money liquidated from Unit Trusts (HSBC xxx-xxxxxx-xxx & HSBC xxx-xxxxxx-xxx) Order dated 20 February 2014:
	a) Third Party in Philippines		480,000
	b) Sum paid to AP
	c) Funds currently held for Respondent’s legal fees
	d) RBG deposit		100,000
TOTAL ASSETS OF THE RESPONDENT			738,244
B. Liabilities
	Respondent’s liabilities		(1,172,500)
TOTAL LIABILITIES OF THE RESPONDENT
C. NET ASSETS OF THE RESPONDENT			(434,256)
TOTAL NET ASSETS (“TNA”) (Petitioner’s + Respondent’s)
	Petitioner’s net assets		10,973,246
	Respondent’s net assets		(434,256)
	TNA		10.538,990
Currency Conversions: 1 USD = 7.8 HKD 1 GBP = 13.0 HKD 1 THB = 0.24 HKD

41. Thus there is approximately HK$10,538,990 in the schedule of assets. In addition there are a number of unvested shares that should accrue to the husband over time.

Should any expenses be reimbursed to the wife?

42. This aspect of the case was also difficult to resolve given a certain lack of clarity surrounding the figures and confusion concerning the approach taken by the wife. It became clear during the cross examination of the wife that a) she was seeking reimbursement for expenses which under the terms of the court orders she was not entitled to and b) once that became clear to her she asked in the alternative for the previous court orders to be adjusted given that it was her case that she simply could not live on the amount of maintenance provided to her by the husband.

43. For the avoidance of doubt I think it might be helpful if reference was made in the first instance to the two court orders in question and the background to the issue. I have highlighted those clauses which deal with reimbursable expenses.

44. On the 21 November 2011 I made the following order with respect to the children:-

Order with respect to the children

Consequently I will make an order that upon the husband undertaking to continue to pay for:-

a) the children’s school fees;

b) op to HK$7,000 per month for the American Club fees and chits;

c) maintenance of the Phuket property;

d)the children’s medical and dental expenses;

e)the fees for the children’s therapy up to HK$10,000 per month; and

f)70% of the children’s extra tuition fees, extracurricular activities and school camps, within 14 days upon production of receipts for the same.

The husband shall pay the wife interim maintenance for the two children of the family in the sum of HK$46,000 per month per child with effect from the 1 December 2011 until further order.

45. This was on the premise that the wife was then working and earning just under HK$170,000 per month and that she could maintain herself and contribute towards the children’s expenses.

46. On the 19 March 2012 the wife applied to vary the maintenance upwards given the fact that she made redundant on the 30 December 2011. This application was eventually dealt with by consent. The following terms are of some relevance in this context:-

(C) UPON the Petitioner and the Respondent acknowledging to the Court and to each other that the expenses herein set out are agreed for interim purposes only and are without prejudice to the final determination of the Court at the substantive ancillary relief hearing.

(D) AND UPON the Petitioner undertaking to the Respondent and to the Court to pay the following expenses for J and S:-

(i) school fees of HK$29,233 per month;

(ii) extra-tuition fees of HK$1,200 per month for J;

(iii) J’s extra-curricular activities and S’s horse riding expense, total cost HK$4,000 per month;

(iv) the children’s therapy;

(v) the Cricket Club expenses up to HK$2,500 per month.

(E) UPON the Petitioner and the Respondent acknowledging to the Court and to each other that the appropriateness or not of the backdating of this Order from the date of the Respondent’s summons dated 19^th March 2012 has not been determined.

(F)AND UPON the Respondent agreeing, acknowledging and undertaking to the Petitioner and to the Court that S’s interim maintenance amount as specified in paragraph 3 of the Order includes an amount of HK$5,000 for S’s Sylvan and Chinese tuition and HK$2,000 for extra-curricular activities that she agrees to pay directly for S but for S’s horse riding.

(G) AND UPON the Petitioner agreeing, acknowledging and undertaking to the Respondent and to the Court to add the Respondent to his medical health insurance policy as provided by his new employment commencing on 9th July 2012 until further order.

(H)AND UPON the Respondent undertaking to the Court and to the Petitioner not to incur medical and dental expenses not covered by the Petitioner’s insurance policy without the prior written agreement of the Petitioner with the exception of further consultation with Dr C up to a maximum of 4sessions prior to the return date of this matter on 18th September 2012 at 9:30 am and the ongoing orthodontic treatment in the total sum of HK$15,000.

(I) AND UPON the Petitioner undertakes to the Court and to the Respondent that he be responsible for the reasonable costs of S and J seeing their respective doctors at Stanford, United States of America and the costs of any prescribed medication.

(J) AND UPON the Respondent’s return to Hong Kong, she will deliver J’s medication to the Petitioner.

BY CONSENT, IT IS ORDERED THAT:-

1. The Order dated 21^st November 2012 and the undertakings contained therein be discharged.

2. The Petitioner shall pay to the Respondent the sum of HK$65,000 as maintenance pending suit from 1^st July 2012 until further order.

3. The Petitioner shall pay to the Respondent the sum of HK$55,000 as interim maintenance for the two children of the family, namely J …and S …, with the amount of HK$23,000 for J and HK$32,000 for S from 1^st July 2012 until further order.

47. An order was made to this effect on the 22 June 2012. It is the wife’s case that in reality this order simply meant that the husband was paying for her rent. She says that she agreed to the order because she had been under the misapprehension that this would only be a short term measure designed to tide her over until either the parties reached an agreement on ancillary relief at FDR or otherwise or there was a trial. She says that it was clear that she was not going to be able to support herself and the children on this sum, if she was going to maintain anything like the standard of living that they had enjoyed before the marriage broke down and if she did not return to work.

48. In real terms then the husband’s maintenance obligations increased from HK$92,000 per month to HK$120,000 per month. He continued to be responsible for the children’s school fees and his undertakings with respect to the children’s other expenses were further particularized. The previous undertakings were discharged. It was also specifically acknowledged by the wife that she would be responsible from that date on for S’s extra tuition and other extracurricular activities save for the horse riding which was dealt with separately. These points are important in the context of “reimbursement”.

49. On the 7 January 2014 the wife issued a further Notice of Application seeking an increase of the interim maintenance payments to a) cover her medical and dental insurance and b) to cover the costs of her accommodation pending determination of the final ancillary relief. This matter was set down for hearting on the 20 February 2014. On that day a consent summons was filed inter alia in the following terms:-

AND UPON the Petitioner undertaking to the Court and to the Respondent that he will pay to the Respondent the sum of HK$18,775 within two days of the date of service of the Order to be made herein by way of reimbursement in respect of the Respondent’s claim for reimbursements set out in the letter from Stevenson Wong & Co dated 9 January 2014;

AND UPON the Petitioner and the Respondent acknowledging and agreeing that the Respondent’s claim for the balance of reimbursements will be dealt with at the ancillary relief trial or earlier by consent and that the Petitioner’s claim for reimbursements will be dealt with at the ancillary relief trial or earlier by consent;

AND UPON the Petitioner and the Respondent acknowledging and agreeing that the terms of the Order to be made herein is without prejudice to their respective positions as to the appropriate level of maintenance for the Respondent and the children;

AND UPON the Petitioner and the Respondent acknowledging and confirming that the Petitioner maintains his position in respect of the Respondent’s medical and dental insurance as stated in the letter from Withers dated 18 February 2014 and the Respondent maintains her position as set out in the letters from Stevenson Wong & Co dated 18 February 2014 and 19 February 2014 and in the event the Respondent’s insurance premiums are over HK$3,230.80 as a result of the lapse of the Respondent’s medical and dental insurance that any claim by the Respondent for the Petitioner to meet this shortfall shall be dealt with at the ancillary relief trial or earlier by consent;

AND UPON the Petitioner undertaking to the Court and to the Respondent that subject to Recital (D) above and Recital (F) below, the Petitioner will pay to the Respondent the sum of HK$25,846 as payment for the Respondent’s insurance premiums from February 2014 to the end of September 2014 within two days of the date of this Order; and

AND UPON the Petitioner undertaking to the Court and to the Respondent pay the Respondent’s medical/dental insurance premiums from February 2014 pending further order of the Court.

BY CONSENT, IT IS ORDERED that:-

1. The Respondent be released from his Undertaking at Recital E of the Order dated 22 June 2012;

2. The Respondent’s Notice of Application for Ancillary Relief filed on 7 January 2014 to vary interim maintenance be adjourned from 20 February 2014 to 10 June 2014 to be determined at the ancillary relief trial; and

3. Costs be reserved.

50. It is clear from this that there continued to be inter alia an issue between the parties with respect to the reimbursable expenses.

How much was the wife claiming?

51. In the letter of the 9 January 2014 referred to in the court order the wife said that the total reimbursements due to her were HK$315,282.60. In her 16^th affidavit filed on the 17 April 2014 in preparation for the trial she said that she sought reimbursement of HK$483,335 for the period from October 2011 to date. This included a short fall of rent in the sum of HK$252,128. Following the trial during which time both parties were cross examined extensively on this point, the husband’s solicitors wrote confirming that in the witness box he had agreed to pay HK$55,881 of the so called reimbursable expenses. However on reviewing the matter he said that of those sums, some had already been paid previously and that infact he was in credit by HK$21,864. This point had not been picked up during the trial and consequently the wife had had no opportunity to challenge him on it. Counsel for the husband put it thus in his closing submission:-

85. The Petitioner’s position as to reimbursements as referred to in correspondence is as follows:-

i) When first taken to the new schedule on 7 August 2014 he agreed re-imbursements of HK$55,881

ii) On reviewing the transcript and the previous documents as referred to at C9/3191 the Petitioner considers that of the HK$55,881 he had in fact paid HK$25,434 therefore the sum due was HK$30,447 ($55,881 - $25,434)

iii) Following the hearing in August 2014 the Petitioner paid HK$52,311 [C9/3176] which was an over payment of HK$21,864 ($52,311 - $30,447)

86. Therefore the Petitioner’s reconciliation of the reimbursements that the Respondent owes him is HK$21,864 plus HK$27,449 in relation to the damage to the Jaguar car and excess medical claims. The total sum due to the Petitioner is therefore HK$49,313 [HK$21,864 + HK$27,449]

52. In the wife’s Reply to the husband’s closing she says as follows:-

15. Although the Petitioner agreed at the end of the Trial to reimburse the Respondent HK$52,311 to be taken into account once the Transcript of evidence is available, he then sought to change the amount to HK$50,281…. On the Respondent’s calculation, the amount which the Petitioner agreed during his cross examination to pay her is HK$59,961 and the amount that H is entitled to deduct by way of agreed reimbursements which he has paid is HK$24,854, see attached table.

16. The Respondent accepts that the amount owed by the Petitioner by way of agreed reimbursements should be HK$35,107 with her claims for non-agreed items to be adjudicated [C9/3074] of HK$530,031 (less the HK$59,961 dealt with in paragraph 15 above) comes to HK$470,070.

53. Thus the husband originally paid HK$52,311. The wife says that the correct figure according to the transcript is HK$59,961. I have tried to reconcile these figures – but with respect it is impossible for me to determine that on the basis of the letters that have passed between the parties since the conclusion of the trial. Given that this point was not raised during the trial and arguably should have been, I have therefore decided to proceed on the premise that what the wife says is correct – i.e. that the husband is entitled to deduct HK$24,854 and that the original figure should have been HK$35,107 and not the HK$52,311 paid. Thus arguably the wife owes the husband HK$17,204. (HK$52,311 – HK$35,107 = HK$17,204). In so far as the other items are concerned that the husband says are due and owing to him i.e. the damage to the jaguar car and the medical claims, these will be dealt with below.

54. For the record I accept that the wife was claiming many items as reimbursable, which under the terms of the court order were not strictly speaking reimbursable to her. It also seems to me that the issue of the rent needs to be dealt with under a separate head. It is almost impossible now to go back in order to adjudicate over each and every item in order to determine what should or should not have been paid. The parties have attempted to do this and at great cost. However the wife attached to her 16^th affidavit a schedule of items that she sought to be reimbursed to her. At that point the total amount in that schedule stood at HK$470,450. For the avoidance of doubt I do not accept that the wife was entitled to claim the following under the terms of the court order dated the 22 June 2012:-

Cooking	7,000
Chinese lessons	17,010
Kumon	2,400
Gymnastics	7,653
Piano	12,704
Art classes	12,320
Ballet	2,000
Girl Scouts	6,210
Total	74,297

55. In addition I accept that the husband was not liable for the three baseball trips that J went on, in the total cost of HK$29,444 or for the rent shortfall of HK$252,128. Thus of the HK$470,450 claimed by the wife, under the terms of the court order she was not entitled to at least HK$355,869 of it – on my calculation. Of the remaining items the husband says that they have been paid unless for example the receipt was unclear or not forthcoming. He has also refused to pay for additional items not particularly specified such as extra eye glasses for S.

56. The difficulty during the first tranche of the trial was that it became almost impossible to determine exactly what it was that the wife was claiming. Consequently I suggested that a comprehensive schedule be compiled. The wife’s solicitors produced this under cover of their letter of the 7 August 2014. This led to a further problem in that it was not always clear how the comprehensive schedule differed from the original schedule attached to the wife’s 16^th affidavit. In any event this schedule allegedly showed the full amount claimed by the wife, the sum that the husband had agreed to reimburse and what was outstanding. As before it included the items referred to above, to which the wife was not entitled to in any event. In total she claimed just under HK$550,000. This included for example hotel bills for the baseball trips not claimed previously, additional items, such as camps for the children, some of which arguably she was entitled to and others which she was not (e.g. science camp for S – 1 June 2013, that she was not entitled to claim for and a Lego workshop dated the 31 January 2012, that arguable she was entitled to claim for). In any event the wife’s claim had risen to HK$549,316.

57. In so far as the remainder of the so called reimbursable items are concerned, as indicated at least approximately HK$355,000 cannot be claimed back by the wife in any event. In broad terms that leaves a balance of just under HK$300,000 (if I were to accept the figure of HK$550,000 which is putting the wife’s claim at its very highest). The further difficulty I have is that it is clear from the comprehensive schedule produced that many of the items that were claimed as reimbursable were paid for by the Respondent using her credit card. The wife also seeks repayment of her debts, which are mainly her credit card debts. Thus there is likely to have been some double accounting here. In such circumstances I will not add back into the asset pool any of the so called reimbursable expenses. I am not of the view in the circumstances that any sums should be added back into the schedule of assets under this heading. I accept however that there is a related issue concerning the appropriate level of maintenance paid to the wife in the past – especially following her redundancy in December 2011.

Should there be any “add backs” on either the husband or the wife’s case?

The law

58. The law on “add backs” is well established.

If one or both of the parties have by their dealings with the assets enjoyed by the family severely depreciated or destroyed those assets, this is a matter to which the court might properly have regard… in the award that is made. It might be appropriate to add back the value of the asset lost or diminished in value to the balance sheet of the defaulter’s assets. (Rayden 18^th edition, para 16.80)

59. The point on “add backs” as claimed by the wife is similarly confused. In her letter of the 30 June 2014, which was after the first tranche of the trial, the wife attached an updated schedule of assets to the letter in which she claimed HK$566,446 for “add backs”. It is not clear what this figure is based on. Previously in her 16^th affidavit, she asked for an additional HK$460,000 be added back as follows:-

31. Add backs: I also seek to be added back and credit to be given to me for the following items of expenditure on the Petitioner’s 3^rd wife: The additional spend on a forensic accountant could have been better used on reducing liabilities or reimbursing me for amounts outstanding for more than 2 years. Half of the amount the Petitioner spend on purchasing his 3^rd wife a ring from the joint common funds, could have also gone a long way towards meeting maintenance payments the Petitioner says he is simply unable to afford.

Description	Date	Amount	Ref
Diamond ring	07.08.2013	399,000	P11/3567
Jewellery	08.09.2011	36,000	P7/2064
Chanel	11.12.2011	8,000	P7/2070
Carrera jewellery	03.12.2013	17,300	P7/2064
Costs of wedding		Unknown
Total		460,300 plus unknown

60. Given the court’s attempt to try to stick to a cut off point of the 30 April 2014, reference will accordingly be made to this sum and not the HK$566,446 referred to subsequently. In any event I do not accept that this sum should be “added back” into the schedule of assets. I accept the husband’s primary position on this which is that it was entirely proper for him to pay for those sums in a situation where the parties had been separated since August 2009, he had received a number of bonuses which were arguably “non matrimonial” and he was in a committed relationship with a third party. I agree that in the context of this case these sums could not be said to be inappropriate expenditure.

61. In so far as the husband’s claims for add backs are concerned he asks that there be an add back of HK$15,522 for the alleged “keying” of his jaguar car by the wife and that he be reimbursed for medical expenses in the sum of HK$11,897 that were not reimbursable to him under the terms of the court order dated the 22 June 2012.

62. In so far as the medical expenses are concerned this all goes to whether or not the wife was being paid an appropriate amount of maintenance at the time. This is a small sum. In such circumstances it does not seem to me to be appropriate for that sum to be added back to the schedule of assets.

63. Having reviewed the affidavit evidence in relation to the alleged keying of the husband’s car, I accept on the balance of probabilities that it was more probable than not that the wife was responsible for this rather unfortunate incident. I should add that emotions were running very high at the time on both sides and that there had been a number of physical altercations between the parties. Notwithstanding that I accept that the sum of HK$15,552 (say HK$15,000) should notionally be deducted from the wife’s final award in order to recompense the husband for the damage to his car. However given that the wife accepts that the husband has over paid her by HK$17,204 (see paragraph 53 above) and that these two sums more or less balance each other out, I will not make any final adjustments in this respect.

What weight should be attached to the Single Joint Expert’s Report?

64. The husband requested a single joint expert in order to a) categorise the nature of the wife’s spending with particular reference to her bank accounts and credit card accounts and b) in order to assess her monthly expenditure. The SJE was informed in the joint letter of instruction dated the 9 April 2014 that:-

2. The Petitioner considers that the Respondent has been incurring expenditure in excess of the party’s standard of living during the marriage and beyond what is affordable with respect to income. The Respondent has incurred outstanding liabilities of approximately HK$1.6 million as a result of her spending beyond her income/maintenance. The Respondent holds the view that the Petitioner has failed to pay sufficient maintenance to her and the children since their separation in August 2009.

65. The report was dated the 6 June 2014 and was filed with the court shortly thereafter. It purported to cover the period from late 2010 to February 2014. Unfortunately there were several difficulties with the way in which the report had been complied. Counsel for the wife summarized the situation in her closing submission as follows:-

SJE Report

26. There are obvious flaws in the report produced by Mr W, of particular note is his failure to properly apportion the significant cash spending, the wrong apportionment of other items of spending and the differing periods of time that he has used to arrive at his averages. In addition to this, it covers a period of approximately 9-12 months (end of 2010 to October 2011) when P was paying for many of the household expenses himself directly (ie all utilities). This would therefore result in an artificially lower figure for these expenses.

27. Despite the report’s obvious flaws, principally the fact that it does not include what P was paying direct for household expenses resulting in these figures being lower than they should be, it is of note that Mr W’s overall conclusion is that R’s monthly spending has been on average HK$291,275, a figure that is very close to what she estimated in her Form E at the outset taking account of what P was paying for. It is approximately HK$30,000 more than the income that she was receiving after the 1^st MPS Order when she was still earning and HK$171,275 short of what she has been receiving from P for the last 2½ years under the 2^nd MPS Order. The SJE Report is dealt with further below.

She added:-

SJE Report

51. As set out above, the SJE report was unfortunately lacking in many respects. Firstly a significant amount of cash spending – HK$50,775 per month was wrongly allocated or simply unallocated, distorting the true picture of R’s spending. Without accurately attributing the cash spending to, for example, wet market purchases which would have been consumed more or less equally by the entire household, the SJE inexplicably assigned $20,809.73 to the general household, $28,441.76 to R personally, and merely $1,505.82 to both of the children. Under cross-examination, the SJE admitted that some of the cash expenses assigned to R personally could have qualified for the general household bucket instead. R had provided receipts for as many purchases as possible, and had compiled six box files worth by the time the report was prepared. Most of these receipts related to cash spending. It is clear that very little use was made of these receipts and records to improve the accuracy of designation. The SJE did not ask to meet with R in order to compile his report with greater accuracy, this was a glaring oversight.

52. Secondly, when the SJE encountered bills which he was unable to allocate a category for, he did not consult R, and as a result, there is $15,571.44 per month of unidentified expense. Simple consultation with R may easily have cleared this up. Furthermore, although the SJE pegs R’s jewellery expenses at $10,359.57 per month, he did not know, as R told the Court in her oral evidence, that some of these purchases were in fact made for R’s brother, and that R’s brother would fund R and the children’s expenses in return while they were staying together in the U.S. Therefore, some of the “jewellery” expenses were actually real day-to-day living expenses, and the lack of consultation by the SJE grossly distorts the true picture of spending.

53. Thirdly, the SJE underreports the most basic elements such as her rent, which both parties agree is $62,000 a month. The SJE has stated her rent to be $36,614.89. How such a big discrepancy could come about is very curious indeed, the SJE was unable to provide an explanation for this. The SJE was questioned about how a sum as low as $1,894 per month for utilities was generated in his report when some of the electricity bills alone exceeded that sum. He admitted that he had only included electricity and gas into this sum, not water, internet, or telephone expenses. Additionally, the SJE did not take into account the fact, as set out above, the P had been paying for all utilities until October 2011, when the period examined ran from late 2010 until 2014. The average would therefore be skewed by the period before October 2011 when no expenditure on this category would be found in R’s accounts.

54. Although the SJE report was regretfully not as accurate as one would hope, and R’s input was never sought, it nevertheless shows very clearly that her needs are much closer to the amount stated in her Form E than the amount that P alleges she needs. The SJE report acknowledged that she spent at least $291,275 a month, only a few hundred dollars off R’s estimate in her Form E taking off expense paid by P.

55. Under cross examination P stated that adopting the SJE’s total for R’s average monthly spend was too high as it included unnecessary items that he did not agree with such as jewellery purchases, legal costs and loan repayments. However, even if these items are deducted from the sum of $291,275, the overall total would still be roughly $248,000, almost $100,000 more than the highest sum P had been prepared to offer in these proceedings. It is therefore clear that if a broad-brush approach is taken, the SJE’s report still corroborates far more with R’s position than it does with P’s. It is of note that this is very close to the amount that R is claiming by way of her Open Offer, made before seeing this report in full.

66. I accept the criticisms made by Ms Rattigan with respect to the way in which the report was compiled and its obvious deficiencies. I also accept that in general it goes to support the wife’s case as opposed to that of the husbands. Given the obvious difficulties with the report I do not generally intend to attach very much weight to the individual items of expenditure referred to in it when considering the question of maintenance. In so far as the capital position is concerned, I accept that in general it supports the wife’s case that she got into debt because she had insufficient funds to cover all of her requisite expenditure. The bigger question is whether or not that was justified in the circumstances or whether she should or could have trimmed her expenses so that she was able to live within her means – or alternatively whether she could or should have obtained other remunerative employment.

Should this case be regarded as a “needs based case” or should the sharing principle be applied?

67. In this instance it is the wife’s case that she “needs” a lump sum that vastly exceeds a 50% share of the asset pool once the reimbursable expenses and the debts are taken into account. But in doing so she is only able to articulate what her needs are in very general terms. In her closing counsel for the wife said as follows:-

“given all the circumstances of the case and particularly the fact that P will have the opportunity to build his assets going forward and R will not, it is submitted that is an appropriate case for an award of 60% of the assets to R as she has proposed at page 2 and 3 of her open proposal” [C8/2792-3]

68. With respect this does not appear to me to be a sufficient reason to classify this case in the first instance as a “needs based” case, although I accept as set out below that the issue of needs may then be addressed in the context of the sharing principle.

69. Paragraph 80 - 82 of LKW v DD (FACV no 16 of 2008) 13 HKCFA 537 sets out the correct approach with respect to the “sharing principle” as follows:-

E.4 Step 3: Deciding to apply the sharing principle

80. If surplus assets would remain after the parties’ needs have been catered for, the next step in the exercise should generally be for the court to apply the sharing principle to the parties’ total assets,leaving the “needs” question previously considered to be dealt with under that principle (as pointed out by Sir Mark Potter P in Charman v Charman (No 4) cited above). In other words, the court should not make an immediate allocation but should return to “needs” for them to be dealt with alongside all other material factors in the processes described below as Steps 4 and 5.

In the event that this is a sharing case how the assets should be divided?

70. Consequently I accept that the sharing principle should prima facie be adopted, which in this case would mean that both parties will be entitled to approximately HK$5,269,495 of the available assets. I accept that the Phuket property is an asset that can be dealt with now and that in the circumstances it would make more sense for the husband to retain it as part of his share of the assets. As indicated above there is an acknowledged difficulty with the title and further monies will need to be spent on the property to make this “good”. Hopefully this will be easier for the husband to do than the wife. It cannot be easily sold at present. I have also taken on board the fact that the husband’s life policy also accounts for over HK1.2 million worth of assets and again this is an asset which is not liquid and which will form part of the husband’s share of so called matrimonial pot. In addition the husband will retain whatever pensions he has left once the lump sum order is made. These are also largely illiquid.

Should the yardstick of equality be departed from and if so on what basis? Should the issue of the unvested shares/debts and add backs be looked at again in this context?

71. However I also accept that fairness dictates that this is a case where the yardstick of equality should be departed from.

72. In considering this next stage of the exercise I am assisted by the following extract from LKW v DD, when Mr Justice Ribeiro says as follows:-

E.5 Step 4: considering whether there are good reasons for departing from equal division

83. The fourth step therefore involves considering whether good reasons exist for departing from the principle of equal division. Any such departure means increasing or reducing one party’s share and correspondingly reducing or increasing the share of the other. The question for the court is whether the balance ought to be shifted from a point of equality to some other point in the circumstances of the case. This is necessarily a complex question which raises a range of separate issues.

84. What then are potentially good reasons for such a departure? The answer is to be found in the terms of section 7 and the implicit objective of a fair distribution of the assets. Any of the matters listed in paragraphs (a) to (g) of section 7(1) may provide an appropriate reason, as may the “conduct of the parties” and “all the circumstances” referred to in section 7(1). The catch-all category of “all the circumstances” makes relevant any matter which bears on the fairness of the financial outcome in a matrimonial context.

85. It is important to stress that while such factors, individually or cumulatively, are potentially capable of resulting in a departure from an equal division, a finding that one or more of those factors are engaged does not necessarily mean that a departure must occur. The weight to be given to such factors is in the court’s discretion to be exercised in Step 5 as described in Section E.6 below. It cannot be over-emphasised that the matter is fact-specific and discretionary. The sharing principle must not be mechanistically applied.

73. Turing next to the s 7 factors for guidance and in particular in the context of this discussion sub section a), b) c), and d)

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

The wife’s earning capacity

74. In this instance the wife’s earning capacity has been a pivotal point in the case. The wife is a well educated woman with undergraduate and post graduate degrees. She historically worked in the management side of banking and as stated above was working up until December 2011 when she was made redundant. The husband makes a persuasive argument in support of his case that the wife engineered her own redundancy in his closing argument as follows:-

46. It is the Petitioner’s case that the Respondent took voluntarily redundancy in December 2011.

47. It is important to consider the context of the proceedings and the immediate history to the Respondent’s purported termination of employment in December 2011.

48. Following the Respondent’s failure to proceed with her own Petition the Petitioner filed his own petition on 8 September 2011 on the basis of 2 years separation [P4/1150].

49. On 22 September 2011 the Respondent filed her application for leave to permanently remove the children of the family from Hong Kong to the United States of America [P2/514].

50. On 20 October 2011 there was a physical altercation between the parties at access changeover with the Respondent scratching the Petitioner’s arms and drawing blood [C2/336].

51. On the 21 October 2011 the Petitioner’s undertaking not to have access to the children in the presence of Ms V expired [P2/478].

52. On 4 November 2011 the Court heard the MPS application and gave a ruling on MPS and the costs of the dismissed divorce suit on 21 November 2011 [P4/1290].

53. The Respondent ‘keyed’ the Petitioner’s Jaguar [C2/438] on 17 November 2011. On the same day the Respondent gave 2 months’ notice to the [flat] Landlord concluding “My Husband H I lost his job. We will be moving back to California in January next year.” [C2/453].

54. In her email to the Petitioner of 22 November 2011 the Petitioner said “HK is not home. We’re only here because it was a neutral place to have our family when we started. That family isn’t here anymore.” [C2/484].

55. On 30 November 2011 the Petitioner obtained an Ex Parte Stop Order preventing J and S being removed from Hong Kong [P4/1361].

56. The termination letter from [the bank] [C2/468] is dated 9 December 2011.

57. The termination letter states the Respondent’s employment was to cease on 30 December 2011 and that the Respondent would be on Garden Leave from 17 December 2011.

58. It was put to the Petitioner in cross-examination that the Respondent had been asked to stay on in her role as an administrator which was why she was not asked to leave the office immediately; this was never part of the own Respondent’s own evidence either written or oral.

59. The reality of the situation in late 2011 was that:-

i) The Petitioner had filed his own Petition.

ii) The Petitioner would be able to have access to the Children in the presence of Ms V.

iii) The Respondent had applied to permanently relocate from Hong Kong to the United States.

iv) The Respondent gave notice on her and the Children’s accommodation in Hong Kong.

60. It was therefore entirely logical, from the Respondent’s perspective and position in late 2011, to bring her employment to an end, as she had similarly done with her and the Children’s accommodation in Hong Kong, she was after all planning to relocate to the United States.

75. It is clear that this was a time of great emotional upheaval for the wife and the family as a whole. Thus although I accept that the wife may not have been overly disappointed when she was made redundant and may even have welcomed it, I do not accept that she deliberately set out to orchestrate it. I am also conscious of the fact that this was not a case of a career woman suddenly being made redundant after a long and successful career in banking. The wife had not pursued a career throughout the marriage; she had not worked for 7 years or so while the children were young and she went with the husband to Singapore for two years during this period. In other words she supported the husband in his career choices at that time. It was the wife’s evidence that when she returned to the workforce that she did so through some personal contacts and that she had been fortunate in that respect. I accept what she says in that regard.

Should she have made more of an effort to then go back to work?

76. The husband argues that the wife should have returned to work and that she has deliberately chosen not to do so. With respect I think that is to oversimplify the issue. The wife is now 52 years old. Both parties have been involved in ongoing litigation for over 4 years. The proceedings have been extraordinarily contentious. The wife wishes to relocate back to the United States and therefore before the relocation judgment was handed down I can understand that it made little sense from her perspective to seek alternative employment in Hong Kong. Even after the relocation judgment was handed down she still clung to the possibility of relocating on the premise that this would be better for S educationally. I also accept that she has had some health issues which may also have made a job search somewhat difficult. It is also true to say that she has found it extremely hard initially to come to terms with the end of the marriage – although I believe that she has now done so.

77. All in all I accept that it was not really feasible for the wife to return to work before now. As things stand there are some very serious issues to be resolved regarding J which makes a return to the workforce unlikely in the immediate to short term.

78. Longer term I accept that the wife does have a significant earning capacity and one that she will need to realize in the event that she wishes to enjoy the same standard of living that the parties had enjoyed during the marriage. She could return to banking. She has talked about retraining as a special needs teacher. She also has other skills which she could utilize. I accept however that it is unlikely that she will be able to return to the workforce in any meaningful capacity for at least a year or so – perhaps longer depending on what happens with J. Even then I accept that her earning capacity is always likely to be significantly lower than that of the husband’s.

The husband’s earning capacity

79. In contrast the husband has a very significant earning capacity. His base salary is currently HK$280,000 per month and he is also entitled to cash bonuses and shares on an annual basis. Mr. Egerton submits that the court should put the husband’s cash bonus no higher than HK$1 million per annum. It should be noted however that historically the husband has received the following cash bonuses:

i)	2009 Calendar Year:	HK$1,710,100.00
ii)	2010 Calendar Year:	HK$656,471.59
iii)	2011 Calendar Year:	HK$112,053.56
iv)	2012 Calendar Year (new employ):	HK$2,250,000.00
v)	2013 Calendar Year (new employ):	HK$2,500,000.00
	Total	HK$7,228,625.25

80. The husband says, and I would accept this, that there have been very particular reasons why he has been able to receive such significant cash bonuses in the more recent past. I accept that this may not continue going forward.

Other financial resources

81. As indicated above the husband also has other very significant financial resources that are available to him namely the shares that he will continue to receive and that will continue to vest on a rolling basis. Although I accept that these should not be divided between him and the wife as of right, I also accept that these shares may need to be called upon by the husband going forward.

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

82. In general terms both parties need sufficient money to house, feed and clothe both themselves and their children. They will also need to provide for J and S’s future education. This may include boarding school fees for J in the relatively short term.

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

83. This is a very contentious issue. As indicated above although in general terms it is accepted that as far as possible the standard of living of both parties should be maintained post divorce, it is also understood that often this is very difficult if not impossible to achieve. Consequently it is generally the case that both parties standard of living will of necessity come down post divorce. That is the case here.

(d) the age of each party to the marriage and the duration of the marriage;

84. As indicated above the wife is 52 and the husband is 44 years of age. The wife has been out of the workforce this time around for nearly three years. The parties were married for 11 ½ years.

Should the issue of the debts, reimbursements, add backs and unvested shares be looked at again in the context of a departure from an equal division of the assets?

85. As indicated above I accept that the wife has accumulated debt partly because she did not have sufficient maintenance with which to support both herself and the children. However I also accept that she did not choose to reduce her expenditure to a more manageable level. Thus it seems to me that repayment of some but not all of that debt is a valid reason to depart from an equal division of the assets. Thus the wife shall receive an additional sum of HK$820,750 in order to partly repay her debts – i.e. approximately 2/3 of the outstanding debts. She will need to meet the rest from her share of the assets. In addition I accept, and this is borne out by the SJE report, that she owes her landlord some outstanding rent. She seeks just over HK$250,000 in that respect. I will allow this sum also. Thus the wife will receive an additional HK$1,070,750 on top of the proposed asset split. The wife will need to settle the remainder of the debts from her share of the assets. The husband asks that an additional sum of HK$200,000 be taken into account – this being a sum of money advanced to the wife at the end of the first tranche of the trial so that she and the children could go on holiday over the summer. This will not be deducted. I accept the submission made by counsel for the wife that this was not originally referred to in the schedule of assets and appears to have been something of an afterthought. In any event this money could perhaps be better described as advanced maintenance as opposed to an advanced capital sum. There will be no additional adjustment for the reimbursements claimed by the wife or for the add backs on either side save for the sum of HK$15,000 to be added on the husband’s side of the equation for the so called “keying incident”.

What is an appropriate division of assets in the circumstances?

86. Thus the wife shall be entitled to a lump sum of (HK$10,538,990 divided by 2) = HK$5,269,495 + HK$820,750 + HK$250,000 = HK$6,340,245. This is just over 60% of the assets.

87. In coming to this assessment I am aware that the husband does not have the available liquid assets to pay for all of these sums in one go and that therefore it will be necessary for him to rely on the unvested shares to some degree. Although the husband originally offered a lump sum payment in excess of this sum and by two tranches – I am aware as stated above that he has had to liquidate some further assets in part because of J and that consequently it is unlikely that he will be able pay as originally planned.

How much maintenance should the husband pay to the wife for herself and the children going forward?

88. I have been through the arithmetical exercise and in order for both parties to have an acceptable standard of living significant compromises will need to be made on both sides. It is of course imperative that funds are made available so that all essential expenses are covered for both children.

89. As indicated above the husband currently earns a base salary of HK$280,000 per month. Mr Egerton for the husband asks me to proceed on the basis that the husband’s anticipated cash bonus will be in the region of HK$1 million. Although I accept that the bonus might infact be worth a great deal more than that I also accept that these sums are not guaranteed. Therefore for present purposes I am prepared accept that the husband’s income will most likely be in the region of HK$365,000 per month (HK$280,000 + (HK$1,000,000 divided by 12 = HK$83,333) = HK$365,000 rounded up). Although it could be argued that the husband’s cash bonuses are also post separation accruals, the reality is that necessity dictates that the cash bonus will need to be relied upon in addition to the husband’s base salary. There is though the possibility that his monthly income could be as much as HK$488,000 per month (HK$280,000 + (HK$2,500,000 divided by 12 = HK$208,333) = HK$488,000 rounded down). Ms V is said to earn in the region of HK$113,000 per month and therefore the husband’s household income, put at its lowest, is going to be at least HK$478,000 per month rising possibly to HK$600,000 per month. I do not know if Ms V receives an annual bonus on top of her salary.

90. The husband says he has outgoings of just under HK$420,000 per month. This includes maintenance of HK$120,000 per month and expenses for the children.

91. In her most updated Form E the wife puts her expenses at just over HK$316,600 per month. In her open offer she seeks approximatelyHK$235,000 per month. The husband offers HK$110,000 per month although he acknowledged in court during cross examination that the wife “needed” HK$153,000 per month. As I have said his position is that the wife should provide the shortfall by returning to work and earning the difference.

92. Each party’s respective positions in relation to the wife’s maintenance are helpfully encapsulated in the table set out below that was attached to a letter from the husband’s solicitors dated the 6 August 2014:-

M and Children’s Estimated Monthly Expenses 4.1 General
Item	M’s Form E dated 10.06.2013 (HK$)	M’s Open Proposal (HK$)	Petitioner’s Proposal (HK$)
Rent – H.K.	62,000	62,000	50,000
Mortgage instalments	N/A
Utilities (electricity, gas, rates, telephone & water)	12,000	12,000	1,894
Management fees	N/A
Food	18,000	18,000	7,754
Household expenses (dry clean, finance charge, water, internet, phones)	12,656	6,000	2,500
Car expenses (Petrol, toll, car)	9,000	9,000	5,000
Insurance premia	900	900	900
Domestic helper(s)	17,000	7,000	4,500
Others (specify) – car maintenance / registration	10,000	10,000	3,000
Club membership – American Club Annual rental fee of HK$36,000 Monthly Subs HK$1,800		4,800	4,800
Total monthly household expenses	141,556	129,700	80,348

4.2 Personal
Item	M’s Form E dated 10.06.2013 (HK$)	M’s Open Proposal (HK$)	Petitioner’s Proposal (HK$)
Meals out of home	7,000	7,000	7,000
Transport	600	600	600
Clothing / shoes	10,000	10,000	10,000
Personal grooming (including haircut and cosmetics)	5,500	5,500	5,500
Entertainment / presents	2,000	2,000	2,000
Holidays airfare / meals on travel / shopping for myself alone	11,800	11,800	5,000
Medical / dental (premium only, does not include actual expenses)	7,200	3,280	3,280
Tax for US account	8,200	833	833
Insurance premia life / accident	9,828	-
Interim maintenance	TBD
Contribution to parents	N/A
US Taxes / HK taxes	16,250	?
Other (specify) fitness, membership, personal clubs	3,000	2,400	0
Total monthly personal	81,378	43,413	34,213

4.3 Children
Item	M’s Form E dated 10.06.2013 (HK$)	M’s Open Proposal (HK$)	Petitioner’s Proposal (HK$)
School fees	Petitioner to pay in full 15,250 for S only	-
Extra tuition fees	Petitioner to pay in full 4,500 for S only	-
School books and stationery / computer	Petitioner to pay in full 5,000 for S only	-
Transport to school (including school bus)	200 for S only	-
Medical / dental expenses. Petitioner to provide full medical and dental coverage for Suzy	6,000 for S only	-
Extra Currricular Activities for Suzy only – tutors Sepcialist – 8k, gavik 9.6k, Chinese 1,920 ballet 1,800, piano, gymnastics, kumon	21,320 for S only	-	5,000
Entertainment / presents		5,000	2,000
Holidays for both kids (airfare, food, incremental)	31,500 to be paid in full by Petitioner	23,600	10,000
Clothing / shoes	6,000	6,000	3,000
Insurance premia	To be covered in full by Petitioner for 1st family (2 kids any myself)	-
Lunches and pocket money	800 + 250	1,050	1,050
Other Transport		6,600	2,000
Child-minding fees
Uniform	350	-
Other (specify) Cricket Club	350	-
Total monthly expenses for children	93,670	42,250
Total monthly expenses (4.1 + 4.2 + 4.3)	316,604	215,363

I have highlighted in bold and italics those areas where the parties are in dispute.

93. In general though I accept that the husband has an income of approximately HK$365,000 per month out of which provision will need to be made for his share of his household expenses, the children’s expenses and the wife’s household expenses. There is also an obvious difficulty now in that I do not know the financial ramifications of J’s present situation.

94. If both parties are to live on HK$365,000 per month then economies will need to be made, both in terms of rental, food, the employment of one domestic helper and not two, (or one domestic helper and a driver on the wife’s case), holidays and their own personal expenses. Of course the husband will also have the benefit of Ms V’s income coming into his household – but Ms V also has her own financial responsibilities with respect to I and her own expenses to cover including her tax etc. On the husband’s case she presently contributes to the general household expenses.

95. From the wife’s perspective she too will need to make some hard choices. Should she retrain and commence work as a special needs teacher where the pay is a lot lower than in the banking field, or should she return to work in an area that she knows better. She will also have a significant cash sum available to her post settlement which she can utilize in part to support her monthly needs – if she so chooses. It is a matter for her.

96. Ms Rattigan for the wife argued persuasively that the wife’s estimates for expenditure should be maintained in a variety of different areas – such as housing, food, holidays etc. I will go through these below. However – simply put it is clear to me that on the face of it that the husband simply cannot afford to maintain the wife at the standard sought.

What then would be an acceptable level of expenditure in each household?

97. The husband’s sets out his expenses in his latest Form E as follows:-

Part 4 Current Monthly Expenses 4.1 General
Item	Amount	H’s Share
Rent	HK$75,000	HK$50,000
Mortgage instalments	HK$	HK$
Utilities (electricity, gas, rates, telephone, mobile & water)	HK$8,000	HK$6,000
Management fees	HK$	HK$
Food	HK$12,000	HK$10,000
Household expenses	HK$1,500	HK$1,200
Car expenses	HK$9,300	HK$9,300
Insurance premia	HK$	HK$
Domestic helper(s)	HK$9,000	HK$5,000
Other (specify): NOW Broadband / TV / Phone for Repulse Bay - $1,500 (will stop at end of contracts by end 2013) Phuket - $9,000 HKCC - $4,500	HK$15,000	HK$15,000
Total monthly household expenses Attach copies of the latest rental receipt.	HK$129,800	HK$96,500

4.2 Personal
Item	Amount
Meals out of home (daily lunch, coffee, dinner 2-3 times per week)	HK$15,000
Transport	HK$500
Clothing / shoes (increase as no casual dress at work in new job)	HK$6,000
Personal grooming (including haircut and cosmetics)	HK$1,500
Entertainment / presents (gifts / theatre / concerts / books / magazines / movies etc previously under other, also under counting of family gifts etc)	HK$10,000
Holidays (expense slightly higher as not able to book and plan long in advance)	HK$7,500
Medical / dental (non-covered dental, therapists, physio)	HK$4,000
Tax	HK$65,625
Insurance premia	HK$5,900
Interim maintenance	HK$120,000
Contribution to parents	HK$
Dependent family members	HK$
Other (specify): Pension contribution (12,500) Gym membership (Pure – 1,797)	HK$14,297
Total monthly personal expenses	HK$250,322

4.3 Children
Item	Amount
School fees	HK$31,645
Extra tuition fees (S)	HK$9,600
School books and stationery	HK$1,000
Transport to school (including school bus and taxi to / from after school events)	HK$3,000
Medical / dental (significant expense on J’s medication, orthodontic work and other non-covered medical expense – ADHD not covered by insurance)	HK$6,000
Extra Curricular Activities (J’s baseball, sailing, cotillion, S’s horse riding)	HK$5,000
Entertainment / presents	HK$5,000
Holidays	HK$6,000
Clothing / shoes	HK$3,000
Insurance premia	HK$
Lunches and pocket money	HK$1,500
Other Transport	HK$
Child-minding fees	HK$
Uniform	HK$
Others (specify):	HK$
Total monthly personal expenses for children	HK$61,745
Total Monthly Expenses (4.1 + 4.2 + 4.3)	HK$418,567

98. Turning next to the wife’s arguments in relation to the items disputed by the husband in her list of expenses

a)Housing

The husband has consistently offered the wife HK$50,000 for her housing although he knows that her current rent is HK$62,000. His primary case is that that is a more reasonable figure given the original order for shared care of the children. The husband had initially moved into Baguio Villas following the separation where his rent was HK$28,000 per month. Recently he moved and the rent is now HK$75,000 per month. He says that he is paying HK$50,000 of that and that Ms V pays the rest. During the trial the husband explained his rationale for this increase on an “expense per head” basis. I don’t intend to go into this now. Suffice it to say that I accept that the husband’s standard of living has increased significantly since the separation. I am also reluctant to reduce the wife’s rental cost especially given the present upheaval within the family and the fact that S’s school place at the ESF has not yet been confirmed. I will therefore allow both parties a notional figure of HK$62,000 for rent – out of which the husband should contribute 2/3 as he does at present or HK$43,400. If the husband and Ms V wish to remain in their present flat then Ms V may have to pay more for this expense going forward.

b)Utilities and household expenses

The wife claims HK$12,000 per month and the husband offers HK$1,894 per month for utilities. This was an area of the SJE’s report that was particularly unhelpful. In his own updated Form E the husband puts his utility expenses for his household at HK$8,000. This was on the premise that it also included phones, internet etc and that therefore there was some interplay with that and the estimate for household expenses at HK$1,500. Ms Rattigan points out therefore that the husband is estimating a total for HK$9,500 for these expenses. It seems that the wife is seeking HK$18,000 for both. This seems excessive. I will allow HK$6,000 per month for each side.

c)Food

The wife claims HK$18,000 under this head and the husband offers HK$7,754 based on the SJE’s report. Again I did not find the SJE very helpful in respect to this item and I accept that many cash items were not included in this amount. By the same token the wife’s estimate of HK$18,000 per month – although a consistent figure throughout the proceedings and one that the husband originally accepted, seems high. The husband’s estimate for food is HK$12,000 per month for his household. Going forward I will allow each side HK$8,000 per month.

d)Car and car maintenance/registration

The wife seeks HK$19,000 per month under this head in total, which even taking into account the fact that she has purchased a new car and that the HP agreement is HK$5,500 per month, seems excessive. The husband’s estimate for his own car expenses, without the HP agreement is for HK$9,300 per month. The wife’s original estimate was HK$9,000 per month which included the cost of a car loan. I will allow HK$9,500 each for all car expenses. In doing so I have noted that S now gets the school bus in the mornings.

e)Domestic helper and driver

The wife argues that she needs a driver primarily in order to take S to and from school and also to take her to her various after school activities. The difficulty with that argument is that it is accepted that the family only had a driver when the wife was working. She is not working and thus a driver is an unjustifiable expense at present. The wife has one domestic helper and the husband has two, I will allow HK$7,000 under this head for each household on the premise that they each have one domestic helper each.

f)Wife’s holidays

This has also become a huge bone of contention between the parties. It is accepted that during the marriage the parties regularly visited the UK and the States to visit family and friends and that they also went to their house in Phuket on a regular basis. The wife seeks HK$11,800 per month or HK$141,600 per annum for herself for holidays. I accept that this is excessive and not in line with the standard of living enjoyed by the parties during the marriage. The husband estimates HK$7,500 per month for his own holidays. Going forward I will allow each side HK$5,000 per month for themselves for holidays and in addition HK$2,500 per month each for the children.

g)Gym’s and clubs

The wife seeks a club for her and the children’s use during the weekends. The husband agrees to contribute the sum of HK$4,800 so that she can rent a club membership at the American Club. I accept that this is reasonable in the circumstances and will enable the wife to access club facilities during the week. I also accept the husband’s evidence that it would be possible for the wife to purchase a club membership at P Club for HK$40,000. This is a capital expense and I accept that it is a matter for the wife to decide whether to spend part of her share of the capital award on the purchase of a debenture or club membership. In that event the allowance of HK$4,800 would need to be utilised for monthly chits and other expenses. I will allow the husband’s expense of an additional HK$1,800 per month for a gym. Given that the wife is not working she should be able to use the gym at the American Club. I will not allow a further sum of HK$1,800 for that purpose.

h)S’s expenses

In general the husband proposal is set out in his solicitor’s letter of the 6 August 2014.

Further, we confirm that, the Petitioner proposes he pay the following amounts direct for S:-

1.	School Fees	$12,250
2.	Extra tuition	$8,300
3.	School books	$500
4.	School Bus	$1,250
5.	Medical / dental	$3,000
6.	Uniform	$200
7.	Total:	$25,500

i)S’s school transport

The issue of the school bus has now been resolved and S goes by bus to school in the morning. Both parents are responsible for S’s pickups when she is with them. This largely been allowed for in the cost of the car and car maintenance/registration referred to above and other transport below.

j)S’s extracurricular activities

The husband will pay HK$8,300 directly for S’s extra tuition. In addition he offers HK$5,000 per month to cover further items whereas the mother seeks HK$21,320 per month. I will hold the father to his undertaking to pay for the extra tuition directly. A further HK$5,000 will be provided for S’s extracurricular activities and it will be for the wife to budget within this sum. The same amount of money will be allowed for J, but on the premise that the wife is now responsible for those payments.

k)J and S’s holidays

The husband claims HK$6,000 under this head whereas the wife seeks a staggering HK$23,600 per month or HK$283,200 per annum. I will allow HK$2,500 per month each. This should cover the cost of a return flight to the United States or the United Kingdom plus one short haul holiday per annum.

l)J and S’s entertainment and presents

I will allow HK$2,000 per month under this head.

m)J and S’s wardrobe

I will allow HK$5,000 per month under this head.

n)J and S’s other transport

I will allow HK$3,000 under this head – to include the additional costs associated with getting S back from school on days that she is with the wife.

0)Insurance and tax

This is a new proposed expense and will not be allowed. It is for the wife to make whatever arrangements with respect to this matter as she thinks fit in the circumstances. I will deal with the issue of the husband’s insurance below. The wife also asks that her maintenance be equalised for US tax. However no expert evidence was produced in this respect. It is simply referred to in her open submission. Consequently I am not in a position to take this aspect of her case any further.

99. Thus I intend to make an order allowing each side the following:

4.1 General
Item	Husband	Wife
Rent – H.K.	43,400	62,000
Mortgage instalments	N/A
Utilities (electricity, gas, rates, telephone & water)	6,000	6,000
Management fees	N/A
Food	8,000	8,000
Household expenses (dry clean, finance charge, water, internet, phones)	Nil	Nil
Car expenses (Petrol, toll, car)	9,500	9,500
Insurance premia		900
Domestic helper(s)	7,000	7,000
Phuket	(9,000)
Club membership and subs and chits	4,800	4,800
Total monthly household expenses	78,700	98,200

(Please note that I am proceeding on the basis that any expenses for the Phuket property will be covered by its rental income).

4.2 Personal
Item	Husband	Wife
Meals out of home
Transport	15,000	10,000
Clothing / shoes
Personal grooming (including haircut and cosmetics)
Entertainment / presents	2,000	2,000
Holidays airfare / meals on travel / shopping for myself alone	5,000	5,000
Medical / dental (premium only, does not include actual expenses)	4,000	4,000
US accountant		833
HK tax for husband	65,625	-
Insurance premia	5,900
Pension contribution	12,500
Gym membership	1,800
Total monthly personal	111,825	21,833

4.3 Children – in addition to the husband’s undertaking
Item	Husband	Wife
School fees	12,500 Undertaking
Extra tuition fees	8,300 Undertaking
School books and stationery / computer		500
Transport to school (including school bus)	Undertaking 1,250
Medical / dental expenses. Petitioner to provide full medical and dental coverage for S	Undertaking	3,000
Extra Currricular Activities		10,000
Entertainment / presents	2,000	2,000
Holidays	5,000	5,000
Clothing / shoes		5,000
Other Transport		3,000
Uniform		200
Total monthly expenses for children	29,050 (including undertaking)	28,700
TOTAL			HK$368,308

100. As will be noted above I have significantly reduced each party’s personal expenditure out of necessity. I have allowed the husband HK$5,000 per month more because he is working and he will additional funds to pay for lunches, work clothes etc. These figures also do not include J’s school fees. Provision will also need to be made for either his school fees in Hong Kong or his boarding school fees plus any related expenses. I will allow for this in the court order in so far as it relates to his immediate to short term needs.

101. There has been a huge issue in this case with respect to reimbursable expenses. Consequently I will hold the husband to his undertaking only in so far as it relates to the school fees for S, payment of S’s extra tuition costs, medical and dental expenses that are covered by his medical insurance and payment of her school fee bus. The mother will receive the remainder of the funds in the sum of HK$3,700 related to his undertakings in cash plus an additional HK$22,500 per month to cover the children’s actual expenses.

102. In so far as the general expenses are concerned I will attribute 1/3 of these to J and S each on the premise that eventually J will most likely be based with his mother and that this is likely to be the most tax effective way to proceed. Thus there will be an order for maintenance for J an S in the sum of HK$46,000 per month each. The maintenance for the mother will be set at HK$56,500 per month. Thus in total the husband shall pay maintenance in the sum of HK$148,500 per month.

What if the husband’s cash bonus is in excess of HK$1 million?

103. Notwithstanding the argument that the husband’s cash bonus is a post separation accrual, it seems to me that there would be an obvious inequity here if the husband received a significantly enhanced cash bonus in the immediate to short term which meant in turn that the wife’s standard of living was reduced but not the husband’s. Thus I will order in that event that the husband shall pay to the wife an additional 50% of any cash bonuses received for the year ended 2014 and 2015. Thereafter I will expect the wife to have returned to work in some capacity and to be contributing towards her own outgoings.

Section 7 factors not referred to above

(e) any physical or mental disability of either of the parties to the marriage;

104. Thankfully this is not in issue.

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

105. I accept, as at the time of the trial that both parties have each made a full contribution.

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

106. This has been dealt with above.

What should the final decision be?

107. On the 17 October 2014 the court received a letter from the husband’s solicitors stating that the husband had liquidated a further HK$500,000 from his F fund to meet J’s ongoing legal fees and his own legal costs. I am also very conscious that J’s future needs, whatever they might be, should as far as possible be appropriately catered for.

108. Consequently as things stand there is approximately HK$5.5 million in the F fund. The husband will also receive approximately HK$880,000 on the 3 December, being the next tranche of vested shares and a further HK$540,000 on the 7 July 2015 being the next tranche thereafter. The additional stock referred to under 4 (e) does not vest until 2016 and 2017.

109. I will therefore make an order that HK$5 million shall be paid to the wife within the next 28 days from the F fund. The balance of HK$500,000 shall be paid into court in order to cover any potential school fees and other related expenses for J in the immediate to short term. The husband shall retain the HK$880,000 and HK$540,000 from his vested shares. Two further sums of HK$670,122.50 each shall be paid to the wife on or before the 1 January 2016 and 1 January 2017. These payments, along with any potential additional payment from the additional cash bonus shall be in full and final settlement of the wife’s capital claims.

110. The husband has undertaken to meet certain of S’s expenses directly. I will hold him to that undertaking only in so far as it relates to her school fees, extra tuition fees not to exceed HK$8,300 per month, the school bus fees and those medical and dental expenses covered by his medical insurance. The wife has complained that the husband pays the maintenance in tranches at the beginning of each month. This will need to be corrected and going forward the husband will need to pay the sum of HK$148,300 in full by direct debit on the 1^st day of each month.

111. The husband also undertook in the court order dated the 18 November 2013 to maintain the existing HSBC insurance policy no XXXXXXXX. I will release him from that undertaking.

The order

Therefore I will make an order as follows:

UPON the husband undertaking to continue to pay for S’s school fees, extra tuition fees not to exceed HK$8,300 per month, the school bus fees and her medical and dental fees to the extent that they are covered by his medical insurance. His undertaking to pay for J’s medical and dental fees to the extent that they are covered by insurance shall continue.

AND UPON the husband being released from his undertaking to maintain the existing HSBC insurance policy no XXXXXXXX.

IT IS ORDERED THAT

1. There shall be a transfer of property order in relation to the Phuket property such property to be transferred from the joint names of the parties into the sole name of the husband, to take effect within the next three months.

2. The husband shall pay to the wife a lump sum of HK$6,340,245 in three tranches namely HK$5 million to be paid within 28 days and two further tranches in the sum of HK$670,122.50 each to be paid on or before the 1 January 2016 and on or before the 1 January 2017.

3. The husband shall pay to the wife an additional sum representing 50% of his annual cash bonus in excess of HK$1 million for the years ending 2014 and 2015.

4. The husband shall pay the sum of HK$500,000 into court within the next 28 days – such sum to be ear marked for J’s immediate educational needs.

5. The husband do pay to the wife periodical payments for herself in the sum of HK$56,500 per month first payment to be made on the 1 day of November 2014 and subsequent payment to be made on the 1^st day of each succeeding month, such payments to be made at the same rate and in the same manner during the joint lives of the parties or until the wife’s remarriage, whichever is the shorter, or until further order.

6. The husband do pay to the wife periodical payments for the two children of the family in the sum of HK$46,000 per month each first payment to be made on the 1^st day of November 2014 and subsequent payments to be made on the 1^st day of each succeeding month until each child’s 18^th birthday or cessation of full time education, whichever is the later or until further order.

7. The division of capital as set out in paragraphs 1 above shall be in full and final settlement of the husband’s claims for all forms of ancillary relief and the division of capital in paragraphs 2 and 3 above shall be in full and final settlement of the wife’s claims for capital ancillary relief.

8. There shall be liberty to apply on an urgent basis

9. Costs shall be reserved for argument.

112. It is further ordered that the Court order dated the 22 June 2012 shall be discharged and the parties be released from their undertakings contained therein.

FCMC 12528 /2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 12528 OF 2011

----------------------------

------------------------------------------------------

J U D G M E N T
(Relocation, Sole/Joint custody, shared care)

------------------------------------------------------

Introduction

1. This is an application by the respondent mother for leave to permanently remove the two children of the family out of the jurisdiction of Hong Kong in order to relocate with them to California in the USA. The children, J, a boy aged 12 and S, a girl aged 10 are both adopted. The father opposes the mother’s application.  He wishes the children, to remain in Hong Kong and for their care to be shared between the parties more or less as they do at present.

2. In this context the mother seeks an order for joint custody but with care and control to her and reasonable access to the father. The father asks for an order for sole custody to himself but with joint care and control to both parties.

3. In the event that the relocation is allowed the father proposes that the mother have sole custody and care and control of both children. In either event he asks that he be released from his undertaking to take the children to mass on Sundays.

4. If the relocation is denied the mother still asks for joint custody but with care and control of both children and reasonable access to the father.

5. All relocation cases are difficult. However, this case is more difficult than most, given that it is clear that both sides have a perfectly tenable point of view and both have presented a good arguable case.

6. The mother has made this application on the premise that in the worst case scenario the father will not be able to provide adequate financial support for either herself or the children in Hong Kong. Although she has lived in Hong Kong for the last 18 years she says that she now wishes to return to the United States where she has the support of her wider family. She says that this will afford her some security as she will be able to purchase a home in the States and the children will be able to go to good public schools in the event that the parties are unable to afford private ones. She complains about a reduction in her standard of living if she is forced to remain in Hong Kong.

7. From the father’s perspective the mother’s application is more about her inability to come to terms with the reality that he has formed a new relationship and that the children will inevitably spend time with both him and his new partner. He believes that the children need to have regular contact with both parents. He does not believe that it is in the best interests of the children for them to relocate. He fears that the mother will not support his access to the children if they are permitted to do so.

What are the main issues to be considered?

a)  Should permission be given for one or both of the children to leave Hong Kong in order to relocate to the USA with their mother?

b)  How should the children’s time be allocated between their parents once the relocation issue has been determined?

c)  What orders should be made for custody, care and control, access and/or shared care?

Background

8. As at the 21 November 2011 I set out the background to this case in my judgment on maintenance pending suit and costs as follows:

  Background

4.  This is a fairly straightforward case on the facts that has been fuelled to a very large extent by high emotion and attendant conflict which appears to have escalated as the case has progressed.

5.  The parties married in April 1998. This was the husband’s second marriage and the wife’s first. The husband is British and the wife holds an American passport but is of Filipino decent. Unfortunately the parties were unable to have children naturally. They were subsequently very privileged to be able to adopt two children – J, a boy who is now aged 11 years old and S, a girl who is now aged 8 years. Both children attend a well known international school in Hong Kong. They are presently living with the mother. Access has been very problematic. The husband has issued a number of applications in relation to various issues pertaining to the children. The wife has also issued a summons for leave to permanently remove the children to reside in the United States. That application is likely to be heard sometime next year. There now also appears to be a dispute over custody.

6.  Both parties work in the banking sector. The husband is 41 years old. He holds a senior position with an investment bank. The wife is 49 years old. She returned to work in April 2008 after a career break during which she concentrated on looking after the children. This also coincided in part with the parties spending a period of time in Singapore following the husband’s secondment there. The wife also works for an investment bank. Both parties’ earn good salaries, but it would be fair to say that the husband earns significantly more than the wife.

7.  The parties separated in August 2009. On the 29 September 2010 the wife issued divorce proceedings based on the husband’s unreasonable behaviour. In that petition she also sought joint custody of the children with care and control to herself and reasonable access to the husband. She now states that she had not wanted a divorce and had only instituted proceedings because her lawyer at the time had advised her to do so. She says that her intention had always been to try to reconcile with the husband.  She also claims that she had not known of the husband’s new relationship at that time. On another occasion she said that she had felt pressured by the husband to issue proceedings. In any event, regardless of these assertions, the fact is that the wife issued proceedings against the husband based on fairly mild unreasonable behaviour particulars notwithstanding the fact that it was open to her to proceed on the basis of one year separation with the husband’s consent. This had been the husband’s preferred option. On the 14 October 2010 the husband filed an answer denying the allegations of unreasonable behaviour quite generally and reserving his right to apply for leave to amend the answer and to file a cross petition. Just as it had been open to the wife to proceed on the basis of one year separation with consent (or once she had learnt of the new relationship on his admitted adultery), it had also been open to the husband to simply proceed on the basis of the wife’s original petition. He chose not to do so. In any event the wife did not progress her petition. There was significant delay – some of which was justifiable and some of which was not.  On the 7 September 2011 the husband filed a subsequent petition based on two years separation. On the 23 September 2011 the wife’s original petition was dismissed and all pleading were transferred to the new proceedings.  

9. Since then the matter has progressed under the father’s second petition. In terms of the background to the marriage I should add that both parties have lived in Hong Kong for a considerable period of time. The father moved to Hong Kong from the United Kingdom in 1995 and has remained here since, (save for a two year period from 2002 – 04 when the parties were seconded to Singapore). The father was married at that time, but that marriage faltered when his first wife chose not to join him in Hong Kong. He met the mother in Hong Kong shortly after his arrival and they began dating whilst he was still married to his first wife. That marriage was dissolved in July 1997. Prior to the divorce he and the mother began cohabiting. They were married in April 1998 in California and subsequently returned to Hong Kong. The father was 25 years old when he came to Hong Kong. He is 42 years old now. He has recently changed jobs, but continues to hold a senior position in the finance sector. He says that he wishes to continue to live and work in Hong Kong for the remainder of his career. He is settled in Hong Kong and considers it his home.

10. The mother has also lived in Hong Kong for a considerable period of time. She was born in Manila but her family immigrated to the United States when she was 17 years old. She was studying overseas at the time. She is the eldest of 7 children. She and her family are all Roman Catholic. The mother has both an undergraduate degree and an MBA and she has lived in Hong Kong since 1992, save for the same two year stint in Singapore with the father in 2002 – 04. She also worked in the banking field but on the management side. She is a little older than the father and is now 50 years of age. She says that the parties agreed to remain in Hong Kong and to raise a family here because it was “neutral” i.e. it was not the United Kingdom or the United States. She says that the situation has now changed and that she now wishes to live in the United States with her extended family.

11. It seems that both parties wanted to have children, but that the mother had difficulties conceiving leading to five rounds of IVF treatments. In the words of the mother during the trial she didn’t “just pop them out” (children) like other women and the parties subsequently decided to adopt. It seems that the father was initially more open to this idea than the mother, who was very keen to have her own biological children. In time however the mother came round to the possibility of adoption and now says that she “chose” her children.  

12. J was born in May 2000 in Hong Kong and he was released into the parties care in August 2000. The adoption was completed in February 2001. J is of Chinese and Thai parentage. He is presently 12 years old and he attends a well known international school in Hong Kong. He suffers from Attention Deficit and Hyperactivity Disorder (ADHD) and is presently on medication which the parties originally obtained from the United States. It seems that he has recently been prescribed an alternative in Hong Kong. He is also allergic to dust and mites, although there is some dispute over the severity of this condition and the appropriate approach to it. J is presently based with his father, but he sees his mother regularly. He moved to live with his father on a “look and see basis” in January 2012, following an argument with his mother and has remained there ever since. The parties disagree about whether he still wishes to be based with his father. 

13. The parties daughter, S, was born in December 2002 in Malaysia. She was adopted by the parties when they were living in Singapore. Like J, S was released into the parties care in February 2003 whilst still a baby. According to the father S is Peranakan or Straits Chinese, which is an ethnic blend found in Malaysia, of Chinese, Malay, Arab, European and Indian heritage. S has been diagnosed with “clinical behavioural anxiety” and it has been suggested that she may also have some learning difficulties. S is currently based with her mother, but she also sees her father regularly.

14. The children are presently together with one or other of the parents for 5 days/ 4 nights out of every 7 each school week save for the first weekend of every month when they are with their father for Friday and Saturday night. The school holidays are presently split between the parties.

15. The mother took a career break while the children were small and did not work for 7 years. She resigned from her job in late 2001. J would have been approximately 18 months old at the time. S was born the following year. There is no doubt that during this period that she was the primary care taking parent. She was assisted in this role by the father and a domestic helper. In April 2008 she began working again following her introduction through a friend to a well known private bank in Hong Kong. From that point on a driver was also employed in addition to the other domestic help in the house, to assist primarily with the care of the children, which included ferrying them to and from different activities.  

The breakdown of the marriage

16. On the father’s account, he says that the marriage was in difficulty from about 2002, whereas the mother says that serious cracks first started to appear in 2008. In any event in August 2009 the father moved out of the matrimonial home, residing first in a serviced apartment and then moving into an apartment in Pokfulam. It seems that at first matters progressed on a fairly reasonable footing. The father continued to meet all outgoings on the former matrimonial home and he continued to see the children, although usually it seems that this was as prescribed by the mother.

17. This all changed in November 2010 when the mother first became aware of the possibility of the father’s involvement with a third party. Up until that point it seems that the mother had been hopeful that a reconciliation might be effected. The tone of the proceedings alters significantly thereafter.

18. There are a number of themes that run through the parties’ affidavits which serve to illustrate the intensity of their conflict namely a) their continued inability to agree on the children’s access arrangements including pickups and drop offs, as evidenced by the parties e-mail exchanges and as set out in their affidavits. On occasion this has led to serious confrontations including physical altercations that have been witnessed by the children. There has been some police involvement. b) The mother’s inability to come to terms with the reality that the father has formed a new relationship with a former work colleague, Ms V and the fact that the children will inevitably come into contact with her. The mother has for example, expressed continued concerns including room sharing arrangements during holidays and c) the level of financial support that the mother has received and might expect to receive from the father going forward. The manner in which she received that support has also been the subject of intense disagreement.

The present arrangements for the children

19. As referred to above since January 2012 J has been based with his father and S has been based with her mother. It seems that after the mother returned to Hong Kong following the Christmas break in 2011 there was an argument between J and his mother which led, on the mother’s account to her slapping him. It seems that relations between mother and son had been strained even prior to that. After that incident they became rather more difficult. Both parents acknowledge that J can be a challenging child. Eventually the parties agreed that J should live with his father on a trial basis and that arrangement has continued until now. On the 13 February 2012 the arrangement was formalized and an order was made that the father do have interim care and control of J. On the mother’s account J wanted to return to her after the summer. On the father’s account J has wanted the present arrangement to continue. I will come to this again when I discuss Ms H’s reports below.

20. On Tuesday evenings the father continues to have access to S and she stays over at his place with J. On Wednesdays the mother has access to J and he stays over at her home with S.  The children are separated on Monday, Thursday and Sunday nights. The weekends are generally split. The father has access to S from 6 pm on Friday until 7 pm on Saturday every weekend apart from the first weekend in each month. The mother has access to J from 7 pm on Saturday to 7 pm on Sunday apart from the first weekend of the month when the father has access to both children from 6 pm on Friday to 7 pm on Sunday. Thus the children are together at their father’s on Saturdays and with their mother on Sundays save for the first weekend of the month when they have the full weekend with their father. The father undertook to take the children to mass or to Sunday  school when they are with him on Sundays (see the order dated the 15 December 2011), which includes the first weekend of the month, miscellaneous Sundays and holiday times generally. This was amended on the 28 September 2012 – so that the undertaking was limited to occasions when the father was in Hong Kong. This has also been the cause of considerable conflict between the parties, with the mother becoming extremely upset if the father did not, for any reason, fully comply with his undertaking. 

The Law

21.  There is no dispute over the law. The Family Court is bound by its own Court of Appeal’s decision in SMM v TWM CACV 209/2009, which reaffirms Hong Kong’s reliance on the guidance provided by the English authorities and in particular to both Poel v Poel [1970] and Payne v Payne [2001] 1 FLR 1053. Since then the Court of Appeal in England and Wales has handed down its most recent decision on relocation namely MK v CK [2011] EWCA Civ 793, which in broad terms reiterates that in all cases concerning children

  the principle – the only authentic principle – that runs through the entire line of relocation authorities is that the welfare of the child is the court’s paramount consideration.  Everything that is considered by the court in reaching its determination is put into the balance with a view to measuring its impact on the child. (Lady Justice Black, paragraph 141)

22.  Although there has been no further consideration of the approach to relocation cases in Hong Kong since MK v CK, generally speaking there appears to be consensus on the fundamental approach to be applied, as referred to above. In other words in relocation cases as in all cases concerning children, the welfare of the child is paramount and that principle comes before all others. 

23.  Notwithstanding that it seems that I am still bound by the approach taken in Payne, in determining what is in these children’s best interests. Thus in order

 (40). … To guard against the risk of too perfunctory an investigation resulting from too ready an assumption that the mother’s proposals are necessarily compatible with the child’s welfare

The court is asked to adopt the following approach as set out by the Right Hon Lord Justice Thorpe:

  i.  Pose the question: is the mother’s application genuine in the sense that it is not motivated by some selfish desire to exclude the father from the child’s life.  Then ask is the mother’s application realistic, by which I mean, founded on practical proposals both well researched and investigated?  If the application fails either of these tests refusal will inevitably follow.

  ii.  If however the application passes these tests then there must be a careful appraisal of the father’s opposition; is it motivated by genuine concern for the future of the child’s welfare or is it driven by some ulterior motive?  What would be the extent of the detriment to him and his future relationship with the child were the application granted?  To what extent would that be offset by extension of the child’s relationships with the maternal family and homeland?

   iii.  What would be the impact on the mother, either as the single parent or as a new wife, of a refusal of her realistic proposal?

   iv.  The outcome of the second and third appraisals must then be brought into an overriding review of the child’s welfare as the paramount consideration, directed by the statutory checklist insofar as appropriate.

In suggesting such a discipline I would not wish to be thought to have diminished the importance that this court has consistently attached to the emotional and psychological well being of the primary carer.  In any evaluation of the welfare of the child as the paramount consideration great weight must be given to this factor.”

24.  In addition, Ms Rattigan for the mother has made reference to F v H (Children: relocation) [2008] 2FLR 1667 where it was held that

  (1)  The bar as to practicalities to be jumped by a relocation applicant was set at a wide variety of heights depending on the facts and circumstances of the case. In this commonplace category of cross-border family creation in which the primary carer was returning to a completely familiar environment the bar was set considerably lower than in the case of an applicant who in pursuit of some dream or ambition was proposing to take the children to an unknown and untried environment.  The bar was set particularly low if the primary carer was returning, as in this case, to a completely familiar home after a brief absence

25.  Although I accept that MP in California (the town where the mother wishes to live) is a completely familiar environment to the mother, given that her family are there and that she and the children go there frequently to visit, it seems to me that a distinction should be drawn between a case like this, where both parties have lived in Hong Kong for a considerable period of time and someone who might be termed as a “true expat” i.e. someone who is in Hong Kong on a recognisably short term basis. Clearly this is not a case of a primary carer returning to her home after a brief absence. The bar will be set a little higher as a result.

26.  MK v CK differentiates between cases where there is one primary care taking parent and others where there are two parents who take on a significant care taking role. Lady Justice Black made the point that the courts would be mindful of the dangers that might accompany this type of categorisation. (See paragraphs 145 of MK v CK). This was certainly of some concern when the issue of J’s short term living arrangements were discussed. It was made very clear to both parties on that occasion that any “preliminary skirmishes” would not be entertained. That remains the case. My concern both then and now is with the practical arrangements that will work best for J and S in the short to medium term. As Lady Justice Black rightly points out 

145.  ....  The ways in which parents provide for the care of their children are, and should be, infinitely varied.  In the best of cases they are flexible and responsive to the needs of the children over time.  When a relocation application falls to be determined, all of the facts need to be considered.

With respect I agree.

Discussion

27.  I must now turn to consider the issues, the law and the parties evidence as set out in their affidavits and as given orally by them during the hearing.  I also heard evidence from the social welfare officer who filed two reports dated the 7 July 2011 and 20 January 2012  respectively. I have also heard from the psychologist Ms H who filed a report dated the 18 June 2012 together with an addendum dated the 21 June 2012, together with an updated report concentrating on the children’s present perspective dated the 12 December 2012.

Should permission be given for one or both of the children to leave Hong Kong in order to relocate to the USA with their mother?

Introduction

28.  I asked both parents what their response would be to the suggestion that the children be split and that leave be given for S to relocate to the USA with her mother and for J to stay in Hong Kong with his father. The mother’s response was that this would be “heartbreaking” whereas the father said that he thought that this was a “terrible idea”. Having heard both parties give evidence and having reread all of the pleadings I have to say that I tend to agree with both parents. I accept that this would not be a sensible solution in this case. I am therefore approaching this application on the premise that either both children stay in Hong Kong or both relocate to the United States with their mother. Given that I will first go through the exercise prescribed by Lord Justice Thorpe in Payne before considering whether or not the proposed relocation will be in the best interests of the children. I will then consider the different practical proposals put forward and again will consider what will be in the best interests of the children. Finally an order will be made that most closely reflects the practical arrangements identified.

Is the mother’s case genuine in the sense that it is not motivated by some selfish desire to exclude the father from the children’s life?

29.  The mother presents her case on the basis of “need” and is posited on the worst case scenario. She produced a schedule at trial which identifies her likely capital award and then looks at how that might be utilized if she was living in California and she was either working or not working. She then goes on to look at the situation in Hong Kong if she were not working. She does not present a fourth scenario i.e. if she were in Hong Kong and working. She argues that in the worst case scenario if the father loses his job or if he refuses to support her financially then she and the children can survive in California. She says that she can live with either her mother or another family member and that the children can attend good public schools free of charge. She is confident that she will be able to obtain some kind of employment in California. Longer term she would like to buy a home. She also says that there is good medical and dental care in California and that J’s ADHD and S’s anxiety condition can be well catered for. Likewise that in the event that S does have a learning disability that that too will be well catered for.

30.  The difficulty I have with the mother’s case generally is that it is not based on the reality of her current circumstances – but on a fear of what might happen in the future. As things stand at present it is clear that the father is in a position to support her financially and that he has done so since the parties separated. This may not be in a manner that the mother deems acceptable (utilities to be paid by her versus utility payments to be met by the husband by direct debit for example) or at level that she believes will maintain her present standard of living. But this is not a case where the father is unable to provide appropriately for the mother and the children – far from it. At present the father is currently paying the mother HK$120,000 per month. He is meeting other expenses, such as the school fees, directly. The mother may argue that this is not sufficient and that he could and should pay more. The father may also argue that he is paying too much. At the end of the day this is a standard of living argument.   In other relocation cases that have been before me there has been a real issue with respect to financial support (see Re: MJP v JWP, FCMC 9154/2008 dated the 30 October 2009, unreported and Re: YY v CHOA, FCMC 7598/2010 dated the 9 November 2011 unreported). In these cases this issue was afforded a great deal of weight when considering what was in the best interests of the children overall. It seems to me that this case is in a very different category.

31.  So whilst I might accept that the mother does genuinely wish to relocate to California, I do not necessarily accept her arguments for doing so.

Has the mother “moved on”?

32.  As has been pointed out several times during the course of these proceedings the mother filed her summons to relocate on the 22 September 2011 shortly before the father filed the second divorce petition and just before he was released from his undertaking not to have access in the presence of Ms V. By that stage the mother would have been acutely aware that a) there was no possibility of a reconciliation and b) that Ms V was about to become a a regular and permanent feature in her children’s lives. I agree that certainly at that stage, rightly or wrongly, the mother would have found that possibility incredibly difficult to come to terms with.

33.  The psychologist, Ms H, also expresses concern about the extent to which the mother has in truth “moved on” and about potential difficulties with access if the relocation is permitted. At paragraphs 144 – 145 of her first report she said that

144.  From my interviews with Mrs. I, (the mother) I did not form the impression that her application to permanently remove the children from Hong Kong was based on some selfish desire to exclude Mr. I from the children’s lives.  On the other hand, some of the correspondence which she has sent to Mr. I over time would seem to suggest this.  She is certainly still very angry and hurt so far as Mr. I leaving the marriage is concerned.

145.  Mrs. I informed me that she still loved Mr. I in the way that one would always love the father of one’s children but she has also said that he is not the man she married and that she doesn’t know him now.  So, whilst having spent time with Mrs. I and concluded that she is capable of being a loving and generous person, I do not think that she currently has the capacity to be generous in a way that will truly facilitate access between Mr. I and the children in the event that they moved back to California.

34.  Having seen the mother in the witness box, I would agree with Ms H’s assessment of the situation. She added to this in the witness box as follows:

A.  Well, I think that the selfish desire to exclude, to me, is on one end of the continuum.  Not facilitating access is further along the continuum.  And in a situation where the children are a world away, if you like, I firmly believe – and it is in my experience – that the residential parent does actually need to facilitate access.  And I’m not talking about just reminding the children to, you know, to Skype or what have you.  I’m saying being really very, very clear about holiday dates and about regular times for the children to actually have some kind of electronic access and about including the non-residential parent in their lives.  Also I think that one has got to present a reasonably positive view of the non-residential parent and Mrs I has said she’s very direct; she’s not sweet; she won’t lie to her children; she has a poor view of Mrs V and when she is, say in California there is no alternative view to be juxtaposed to that. So I don’t think – we’ve talked about Mrs I moving on but are really not talking about her being there yet.  So, no I don’t think she has a selfish desire to exclude.  But do I think that she has the capacity, at the moment, to facilitate access in a way that it needs to be when there is such a distance, no I don’t.

Again I would accept Ms H’s assessment of the situation.

35.  The mother for her part says that she has moved on and that she is now in a very different place. The difficulty for me however is that the evidence would seem to suggest that the mother has not moved on sufficiently. Even during the adjournment there was an unpleasant and completely unnecessary incident at the Hong Kong Cricket Club (see letter from the mother’s solicitor dated the 18 September 2012).

36.  When asked about access the mother said that the father could travel to see the children in the United States whenever he wanted and that they would divide the holidays. She said that she would have “an open door policy”. The difficulty with that proposal is that the mother has said that previously and that in reality access was made very difficult if it also involved Ms V. It also meant access on “her terms”. The father for his part has made it clear that he will not be able to travel to the United States often and that unlike in his previous job he will not be travelling to the United States on business. Since then the mother has attached her proposed access schedule to counsel’s closing submission. She proposes that the father come to the United States to celebrate the children’s birthdays with her together – presumably as a family. Thus she seems to be inviting the father to come to the United States for a short period of time only and when the children are likely to be in school in any event. In high conflict situations the experts generally suggest that the parties have minimal interaction with each other and that they follow a parallel parenting regime. This is one such situation. The mother’s proposal in respect to birthdays seems neither practical nor sensible in the circumstances. I do not believe that it will work going forward. In addition she suggests that parties alternate Christmas and Easter. This year she suggests that the children spend one week over Easter with their father – either in the United States or in the UK. She does not propose that the children come back to Hong Kong. She suggests that the summer holidays be split. In reality then the children are likely to see their father twice a year – if that, if the relocation goes ahead.  

37.  The father was also very concerned that given that S tended to try to avoid conflict in all its forms that she might not engage in any form of access, if the relocation is permitted, because she would not wish to upset her mother. I accept that this is a genuine concern. 

38.  In conclusion I agree with Ms H that the mother does not appear to have come to terms fully with the reality of the father’s new relationship and that there may be difficulties with access going forward if the relocation is permitted. I accept that there is a distinct possibility that the father might be excluded from the children’s lives, if I give permission for the children to relocate to the US with their mother.

39.  Strictly speaking the analysis should end there. Given though that in many other respects this is a finely tuned case it seems to me important to go through the remainder of the exercise and to consider all of the other different factors involved. This will also be important when considering over all if it is in the best interests of the children to go or to stay.

Is the mother’s plan realistic, i.e. founded on practical proposals both well researched and investigated?

40.  There is no doubt that the mother’s plan is realistic – it is both well researched and investigated.

41.  As I have said it would be possible initially for her and the children to live with a family member. She would then hope eventually to buy a property. The children would be able to attend either good public schools or private ones – if finances allowed. She says that she intends to work and feels that she has a better chance of obtaining employment in the United States than in Hong Kong, although she has not been successful as yet.

42.  Although the husband challenges some of what she says he accepts that MP in California is a “nice place”.

43.  Much of what the mother says makes logical sense. If she were living in California she could afford to live in very comfortable accommodation and should in time be in a position to buy a home. I accept that this may not really be feasible in Hong Kong unless she was working. Even if she were working she may not be able to afford the sort of home that she would like to live in. As suggested by both Mr Egerton for the father and S however, it would be possible for the mother to buy a property in California, even if she remained in Hong Kong for the time being. In this way she could take steps to secure her future longer term. I also accept that the cost of living is likely to be lower and the quality of life higher in California than in Hong Kong. I accept that the children would be able to attend good schools in California. They presently attend a very good school in Hong Kong. 

44.  I do not however necessarily accept that the mother will be in a better position to find a job in California than in Hong Kong. Certainly most of her relevant work experience has been in Asia. Given the present economic climate it is likely to be as difficult to find remunerative employment in California as in Hong Kong – especially in the banking field. The mother says that she is not picky and that she is happy to do anything. She has been looking at administrative jobs. Given the rate of unemployment in the United States I am not convinced that the mother will be better placed to find alternative and probably lower paid work in California than here.

45.  In the event that the mother passes both of these hurdles (which in this case she has not) Thorpe LJ goes on to pose the following question:

Is the Father’s opposition motivated by genuine concern for the future of the children’s welfare or is it driven by some ulterior motive?

46.  The mother implies that the father is being difficult by opposing the application and that he has refused to return J to her as a strategic ploy because of this litigation. I do not accept that to be the case. The father appears to be genuinely concerned about the children. He agreed that J should live with him for a while following the row between the mother and J in January. He seems very concerned that the mother’s relationship with J should be supported – in what are very difficult circumstances. The father puts his position thus in his 6^th affirmation dated the 28 February 2012:

75.  I believe J living with me is the right thing for him but I think it is important that he and his mother try to rebuild their relationship.  The Respondent appears to believe their relationship is fine and has sent me texts and emails stating “J and I have talked.  We’re good”.  This is at odds with J’s view.  I consider that the two of them would benefit from counselling either together or separately to help repair things.  The relationship between J and the Respondent cannot be repaired while the Respondent insists on controlling it.  I consider she needs to recognize that a 12 year old boy needs a degree of independence in both thought and action.  I continue to encourage him to be understanding of the challenges his mother faces and try to explain why she may act the way she does without excusing it but she needs to clearly demonstrate to J that (a) she has not given up on him and (b) that she will allow him room to grow while being supportive and understanding.  She appears not to want to spend any quality time with him.

76.  Wherever J ends up living, it is important that he has a healthy relationship with both parents and I spend considerable time with him talking about the need to be respectful of adults and to live up to his commitments.  It is still early days with J in my care and control but he is receptive and is beginning to make progress.  His grades in Maths and Language Arts are beginning to improve and he is calmer and more focused at home than he has been in some time.

77.  As has been stated in my Solicitor’s correspondence and my 5^th Affirmation (C3/554, C3/601, P5/1441), I remain very concerned about separating J and S.  I think it is important for all siblings to have a strong relationship but more so for siblings from divorced parents and I am concerned that the Respondent is forcing S to view J as having taken ‘Dad’s side’, saying things to S (according to S’s comments) like “J and Dad are both home wreckers and losers and we girls are better off without them”.  While I accept this split between J and S for the moment as I think it is best for J in the short term to spend time apart from his mother.  I am vehemently opposed to that as the ultimate outcome.

78.  I am extremely worried about both the immediate and longer term impact of a relocation to the US on both children but on J particularly.  He has been very vocal with both parents about his desire to stay in Hong Kong.  He feels he argues too much with some of his cousins in the US and does not want to be away from me or his friends.

79.  He has very clearly said he would rather stay with me in Hong Kong and visit his mother during holidays.  I believe that if he is forced to relocate, this will irreparably damage his relationship with his mother whom he will resent for going against his wishes.  I believe the Respondent will in turn respond negatively to this and then again, in turn, J will suffer at what is a critical stage in his development.

80.  J has become a young man who knows his own mind.  He had made it clear in no uncertain terms that he does not want to move to the US and it concerns me greatly that at

FCMC 12528 /2011 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 12528 OF 2011 ---------------------------- BETWEEN   JHCI Petitioner and   MSYI (formerly known as MSY) Respondent ------------------------ Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to public) Dates of Hearing: 18 – 21 June and 13 – 16 November 2012 Dates of written closing submissions: 20 and 21 December 2012 Date of written replies: 7 January 2013 Date of Judgment: 15 January 2013 ------------------------------------------------------ J U D G M E N T (Relocation, Sole/Joint custody, shared care) ------------------------------------------------------ Introduction 1. This is an application by the respondent mother for leave to permanently remove the two children of the family out of the jurisdiction of Hong Kong in order to relocate with them to California in the USA. The children, J, a boy aged 12 and S, a girl aged 10 are both adopted. The father opposes the mother’s application.  He wishes the children, to remain in Hong Kong and for their care to be shared between the parties more or less as they do at present. 2. In this context the mother seeks an order for joint custody but with care and control to her and reasonable access to the father. The father asks for an order for sole custody to himself but with joint care and control to both parties. 3. In the event that the relocation is allowed the father proposes that the mother have sole custody and care and control of both children. In either event he asks that he be released from his undertaking to take the children to mass on Sundays. 4. If the relocation is denied the mother still asks for joint custody but with care and control of both children and reasonable access to the father. 5. All relocation cases are difficult. However, this case is more difficult than most, given that it is clear that both sides have a perfectly tenable point of view and both have presented a good arguable case. 6. The mother has made this application on the premise that in the worst case scenario the father will not be able to provide adequate financial support for either herself or the children in Hong Kong. Although she has lived in Hong Kong for the last 18 years she says that she now wishes to return to the United States where she has the support of her wider family. She says that this will afford her some security as she will be able to purchase a home in the States and the children will be able to go to good public schools in the event that the parties are unable to afford private ones. She complains about a reduction in her standard of living if she is forced to remain in Hong Kong. 7. From the father’s perspective the mother’s application is more about her inability to come to terms with the reality that he has formed a new relationship and that the children will inevitably spend time with both him and his new partner. He believes that the children need to have regular contact with both parents. He does not believe that it is in the best interests of the children for them to relocate. He fears that the mother will not support his access to the children if they are permitted to do so. What are the main issues to be considered? a)  Should permission be given for one or both of the children to leave Hong Kong in order to relocate to the USA with their mother? b)  How should the children’s time be allocated between their parents once the relocation issue has been determined? c)  What orders should be made for custody, care and control, access and/or shared care? Background 8. As at the 21 November 2011 I set out the background to this case in my judgment on maintenance pending suit and costs as follows:   Background 4.  This is a fairly straightforward case on the facts that has been fuelled to a very large extent by high emotion and attendant conflict which appears to have escalated as the case has progressed. 5.  The parties married in April 1998. This was the husband’s second marriage and the wife’s first. The husband is British and the wife holds an American passport but is of Filipino decent. Unfortunately the parties were unable to have children naturally. They were subsequently very privileged to be able to adopt two children – J, a boy who is now aged 11 years old and S, a girl who is now aged 8 years. Both children attend a well known international school in Hong Kong. They are presently living with the mother. Access has been very problematic. The husband has issued a number of applications in relation to various issues pertaining to the children. The wife has also issued a summons for leave to permanently remove the children to reside in the United States. That application is likely to be heard sometime next year. There now also appears to be a dispute over custody. 6.  Both parties work in the banking sector. The husband is 41 years old. He holds a senior position with an investment bank. The wife is 49 years old. She returned to work in April 2008 after a career break during which she concentrated on looking after the children. This also coincided in part with the parties spending a period of time in Singapore following the husband’s secondment there. The wife also works for an investment bank. Both parties’ earn good salaries, but it would be fair to say that the husband earns significantly more than the wife. 7.  The parties separated in August 2009. On the 29 September 2010 the wife issued divorce proceedings based on the husband’s unreasonable behaviour. In that petition she also sought joint custody of the children with care and control to herself and reasonable access to the husband. She now states that she had not wanted a divorce and had only instituted proceedings because her lawyer at the time had advised her to do so. She says that her intention had always been to try to reconcile with the husband.  She also claims that she had not known of the husband’s new relationship at that time. On another occasion she said that she had felt pressured by the husband to issue proceedings. In any event, regardless of these assertions, the fact is that the wife issued proceedings against the husband based on fairly mild unreasonable behaviour particulars notwithstanding the fact that it was open to her to proceed on the basis of one year separation with the husband’s consent. This had been the husband’s preferred option. On the 14 October 2010 the husband filed an answer denying the allegations of unreasonable behaviour quite generally and reserving his right to apply for leave to amend the answer and to file a cross petition. Just as it had been open to the wife to proceed on the basis of one year separation with consent (or once she had learnt of the new relationship on his admitted adultery), it had also been open to the husband to simply proceed on the basis of the wife’s original petition. He chose not to do so. In any event the wife did not progress her petition. There was significant delay – some of which was justifiable and some of which was not.  On the 7 September 2011 the husband filed a subsequent petition based on two years separation. On the 23 September 2011 the wife’s original petition was dismissed and all pleading were transferred to the new proceedings.   9. Since then the matter has progressed under the father’s second petition. In terms of the background to the marriage I should add that both parties have lived in Hong Kong for a considerable period of time. The father moved to Hong Kong from the United Kingdom in 1995 and has remained here since, (save for a two year period from 2002 – 04 when the parties were seconded to Singapore). The father was married at that time, but that marriage faltered when his first wife chose not to join him in Hong Kong. He met the mother in Hong Kong shortly after his arrival and they began dating whilst he was still married to his first wife. That marriage was dissolved in July 1997. Prior to the divorce he and the mother began cohabiting. They were married in April 1998 in California and subsequently returned to Hong Kong. The father was 25 years old when he came to Hong Kong. He is 42 years old now. He has recently changed jobs, but continues to hold a senior position in the finance sector. He says that he wishes to continue to live and work in Hong Kong for the remainder of his career. He is settled in Hong Kong and considers it his home. 10. The mother has also lived in Hong Kong for a considerable period of time. She was born in Manila but her family immigrated to the United States when she was 17 years old. She was studying overseas at the time. She is the eldest of 7 children. She and her family are all Roman Catholic. The mother has both an undergraduate degree and an MBA and she has lived in Hong Kong since 1992, save for the same two year stint in Singapore with the father in 2002 – 04. She also worked in the banking field but on the management side. She is a little older than the father and is now 50 years of age. She says that the parties agreed to remain in Hong Kong and to raise a family here because it was “neutral” i.e. it was not the United Kingdom or the United States. She says that the situation has now changed and that she now wishes to live in the United States with her extended family. 11. It seems that both parties wanted to have children, but that the mother had difficulties conceiving leading to five rounds of IVF treatments. In the words of the mother during the trial she didn’t “just pop them out” (children) like other women and the parties subsequently decided to adopt. It seems that the father was initially more open to this idea than the mother, who was very keen to have her own biological children. In time however the mother came round to the possibility of adoption and now says that she “chose” her children.   12. J was born in May 2000 in Hong Kong and he was released into the parties care in August 2000. The adoption was completed in February 2001. J is of Chinese and Thai parentage. He is presently 12 years old and he attends a well known international school in Hong Kong. He suffers from Attention Deficit and Hyperactivity Disorder (ADHD) and is presently on medication which the parties originally obtained from the United States. It seems that he has recently been prescribed an alternative in Hong Kong. He is also allergic to dust and mites, although there is some dispute over the severity of this condition and the appropriate approach to it. J is presently based with his father, but he sees his mother regularly. He moved to live with his father on a “look and see basis” in January 2012, following an argument with his mother and has remained there ever since. The parties disagree about whether he still wishes to be based with his father.  13. The parties daughter, S, was born in December 2002 in Malaysia. She was adopted by the parties when they were living in Singapore. Like J, S was released into the parties care in February 2003 whilst still a baby. According to the father S is Peranakan or Straits Chinese, which is an ethnic blend found in Malaysia, of Chinese, Malay, Arab, European and Indian heritage. S has been diagnosed with “clinical behavioural anxiety” and it has been suggested that she may also have some learning difficulties. S is currently based with her mother, but she also sees her father regularly. 14. The children are presently together with one or other of the parents for 5 days/ 4 nights out of every 7 each school week save for the first weekend of every month when they are with their father for Friday and Saturday night. The school holidays are presently split between the parties. 15. The mother took a career break while the children were small and did not work for 7 years. She resigned from her job in late 2001. J would have been approximately 18 months old at the time. S was born the following year. There is no doubt that during this period that she was the primary care taking parent. She was assisted in this role by the father and a domestic helper. In April 2008 she began working again following her introduction through a friend to a well known private bank in Hong Kong. From that point on a driver was also employed in addition to the other domestic help in the house, to assist primarily with the care of the children, which included ferrying them to and from different activities.   The breakdown of the marriage 16. On the father’s account, he says that the marriage was in difficulty from about 2002, whereas the mother says that serious cracks first started to appear in 2008. In any event in August 2009 the father moved out of the matrimonial home, residing first in a serviced apartment and then moving into an apartment in Pokfulam. It seems that at first matters progressed on a fairly reasonable footing. The father continued to meet all outgoings on the former matrimonial home and he continued to see the children, although usually it seems that this was as prescribed by the mother. 17. This all changed in November 2010 when the mother first became aware of the possibility of the father’s involvement with a third party. Up until that point it seems that the mother had been hopeful that a reconciliation might be effected. The tone of the proceedings alters significantly thereafter. 18. There are a number of themes that run through the parties’ affidavits which serve to illustrate the intensity of their conflict namely a) their continued inability to agree on the children’s access arrangements including pickups and drop offs, as evidenced by the parties e-mail exchanges and as set out in their affidavits. On occasion this has led to serious confrontations including physical altercations that have been witnessed by the children. There has been some police involvement. b) The mother’s inability to come to terms with the reality that the father has formed a new relationship with a former work colleague, Ms V and the fact that the children will inevitably come into contact with her. The mother has for example, expressed continued concerns including room sharing arrangements during holidays and c) the level of financial support that the mother has received and might expect to receive from the father going forward. The manner in which she received that support has also been the subject of intense disagreement. The present arrangements for the children 19. As referred to above since January 2012 J has been based with his father and S has been based with her mother. It seems that after the mother returned to Hong Kong following the Christmas break in 2011 there was an argument between J and his mother which led, on the mother’s account to her slapping him. It seems that relations between mother and son had been strained even prior to that. After that incident they became rather more difficult. Both parents acknowledge that J can be a challenging child. Eventually the parties agreed that J should live with his father on a trial basis and that arrangement has continued until now. On the 13 February 2012 the arrangement was formalized and an order was made that the father do have interim care and control of J. On the mother’s account J wanted to return to her after the summer. On the father’s account J has wanted the present arrangement to continue. I will come to this again when I discuss Ms H’s reports below. 20. On Tuesday evenings the father continues to have access to S and she stays over at his place with J. On Wednesdays the mother has access to J and he stays over at her home with S.  The children are separated on Monday, Thursday and Sunday nights. The weekends are generally split. The father has access to S from 6 pm on Friday until 7 pm on Saturday every weekend apart from the first weekend in each month. The mother has access to J from 7 pm on Saturday to 7 pm on Sunday apart from the first weekend of the month when the father has access to both children from 6 pm on Friday to 7 pm on Sunday. Thus the children are together at their father’s on Saturdays and with their mother on Sundays save for the first weekend of the month when they have the full weekend with their father. The father undertook to take the children to mass or to Sunday  school when they are with him on Sundays (see the order dated the 15 December 2011), which includes the first weekend of the month, miscellaneous Sundays and holiday times generally. This was amended on the 28 September 2012 – so that the undertaking was limited to occasions when the father was in Hong Kong. This has also been the cause of considerable conflict between the parties, with the mother becoming extremely upset if the father did not, for any reason, fully comply with his undertaking.  The Law 21.  There is no dispute over the law. The Family Court is bound by its own Court of Appeal’s decision in SMM v TWM CACV 209/2009, which reaffirms Hong Kong’s reliance on the guidance provided by the English authorities and in particular to both Poel v Poel [1970] and Payne v Payne [2001] 1 FLR 1053. Since then the Court of Appeal in England and Wales has handed down its most recent decision on relocation namely MK v CK [2011] EWCA Civ 793, which in broad terms reiterates that in all cases concerning children   the principle – the only authentic principle – that runs through the entire line of relocation authorities is that the welfare of the child is the court’s paramount consideration.  Everything that is considered by the court in reaching its determination is put into the balance with a view to measuring its impact on the child. (Lady Justice Black, paragraph 141) 22.  Although there has been no further consideration of the approach to relocation cases in Hong Kong since MK v CK, generally speaking there appears to be consensus on the fundamental approach to be applied, as referred to above. In other words in relocation cases as in all cases concerning children, the welfare of the child is paramount and that principle comes before all others.  23.  Notwithstanding that it seems that I am still bound by the approach taken in Payne, in determining what is in these children’s best interests. Thus in order  (40). … To guard against the risk of too perfunctory an investigation resulting from too ready an assumption that the mother’s proposals are necessarily compatible with the child’s welfare The court is asked to adopt the following approach as set out by the Right Hon Lord Justice Thorpe:   i.  Pose the question: is the mother’s application genuine in the sense that it is not motivated by some selfish desire to exclude the father from the child’s life.  Then ask is the mother’s application realistic, by which I mean, founded on practical proposals both well researched and investigated?  If the application fails either of these tests refusal will inevitably follow.   ii.  If however the application passes these tests then there must be a careful appraisal of the father’s opposition; is it motivated by genuine concern for the future of the child’s welfare or is it driven by some ulterior motive?  What would be the extent of the detriment to him and his future relationship with the child were the application granted?  To what extent would that be offset by extension of the child’s relationships with the maternal family and homeland?    iii.  What would be the impact on the mother, either as the single parent or as a new wife, of a refusal of her realistic proposal?    iv.  The outcome of the second and third appraisals must then be brought into an overriding review of the child’s welfare as the paramount consideration, directed by the statutory checklist insofar as appropriate. In suggesting such a discipline I would not wish to be thought to have diminished the importance that this court has consistently attached to the emotional and psychological well being of the primary carer.  In any evaluation of the welfare of the child as the paramount consideration great weight must be given to this factor.” 24.  In addition, Ms Rattigan for the mother has made reference to F v H (Children: relocation) [2008] 2FLR 1667 where it was held that   (1)  The bar as to practicalities to be jumped by a relocation applicant was set at a wide variety of heights depending on the facts and circumstances of the case. In this commonplace category of cross-border family creation in which the primary carer was returning to a completely familiar environment the bar was set considerably lower than in the case of an applicant who in pursuit of some dream or ambition was proposing to take the children to an unknown and untried environment.  The bar was set particularly low if the primary carer was returning, as in this case, to a completely familiar home after a brief absence 25.  Although I accept that MP in California (the town where the mother wishes to live) is a completely familiar environment to the mother, given that her family are there and that she and the children go there frequently to visit, it seems to me that a distinction should be drawn between a case like this, where both parties have lived in Hong Kong for a considerable period of time and someone who might be termed as a “true expat” i.e. someone who is in Hong Kong on a recognisably short term basis. Clearly this is not a case of a primary carer returning to her home after a brief absence. The bar will be set a little higher as a result. 26.  MK v CK differentiates between cases where there is one primary care taking parent and others where there are two parents who take on a significant care taking role. Lady Justice Black made the point that the courts would be mindful of the dangers that might accompany this type of categorisation. (See paragraphs 145 of MK v CK). This was certainly of some concern when the issue of J’s short term living arrangements were discussed. It was made very clear to both parties on that occasion that any “preliminary skirmishes” would not be entertained. That remains the case. My concern both then and now is with the practical arrangements that will work best for J and S in the short to medium term. As Lady Justice Black rightly points out  145.  ....  The ways in which parents provide for the care of their children are, and should be, infinitely varied.  In the best of cases they are flexible and responsive to the needs of the children over time.  When a relocation application falls to be determined, all of the facts need to be considered. With respect I agree. Discussion 27.  I must now turn to consider the issues, the law and the parties evidence as set out in their affidavits and as given orally by them during the hearing.  I also heard evidence from the social welfare officer who filed two reports dated the 7 July 2011 and 20 January 2012  respectively. I have also heard from the psychologist Ms H who filed a report dated the 18 June 2012 together with an addendum dated the 21 June 2012, together with an updated report concentrating on the children’s present perspective dated the 12 December 2012. Should permission be given for one or both of the children to leave Hong Kong in order to relocate to the USA with their mother? Introduction 28.  I asked both parents what their response would be to the suggestion that the children be split and that leave be given for S to relocate to the USA with her mother and for J to stay in Hong Kong with his father. The mother’s response was that this would be “heartbreaking” whereas the father said that he thought that this was a “terrible idea”. Having heard both parties give evidence and having reread all of the pleadings I have to say that I tend to agree with both parents. I accept that this would not be a sensible solution in this case. I am therefore approaching this application on the premise that either both children stay in Hong Kong or both relocate to the United States with their mother. Given that I will first go through the exercise prescribed by Lord Justice Thorpe in Payne before considering whether or not the proposed relocation will be in the best interests of the children. I will then consider the different practical proposals put forward and again will consider what will be in the best interests of the children. Finally an order will be made that most closely reflects the practical arrangements identified. Is the mother’s case genuine in the sense that it is not motivated by some selfish desire to exclude the father from the children’s life? 29.  The mother presents her case on the basis of “need” and is posited on the worst case scenario. She produced a schedule at trial which identifies her likely capital award and then looks at how that might be utilized if she was living in California and she was either working or not working. She then goes on to look at the situation in Hong Kong if she were not working. She does not present a fourth scenario i.e. if she were in Hong Kong and working. She argues that in the worst case scenario if the father loses his job or if he refuses to support her financially then she and the children can survive in California. She says that she can live with either her mother or another family member and that the children can attend good public schools free of charge. She is confident that she will be able to obtain some kind of employment in California. Longer term she would like to buy a home. She also says that there is good medical and dental care in California and that J’s ADHD and S’s anxiety condition can be well catered for. Likewise that in the event that S does have a learning disability that that too will be well catered for. 30.  The difficulty I have with the mother’s case generally is that it is not based on the reality of her current circumstances – but on a fear of what might happen in the future. As things stand at present it is clear that the father is in a position to support her financially and that he has done so since the parties separated. This may not be in a manner that the mother deems acceptable (utilities to be paid by her versus utility payments to be met by the husband by direct debit for example) or at level that she believes will maintain her present standard of living. But this is not a case where the father is unable to provide appropriately for the mother and the children – far from it. At present the father is currently paying the mother HK$120,000 per month. He is meeting other expenses, such as the school fees, directly. The mother may argue that this is not sufficient and that he could and should pay more. The father may also argue that he is paying too much. At the end of the day this is a standard of living argument.   In other relocation cases that have been before me there has been a real issue with respect to financial support (see Re: MJP v JWP, FCMC 9154/2008 dated the 30 October 2009, unreported and Re: YY v CHOA, FCMC 7598/2010 dated the 9 November 2011 unreported). In these cases this issue was afforded a great deal of weight when considering what was in the best interests of the children overall. It seems to me that this case is in a very different category. 31.  So whilst I might accept that the mother does genuinely wish to relocate to California, I do not necessarily accept her arguments for doing so. Has the mother “moved on”? 32.  As has been pointed out several times during the course of these proceedings the mother filed her summons to relocate on the 22 September 2011 shortly before the father filed the second divorce petition and just before he was released from his undertaking not to have access in the presence of Ms V. By that stage the mother would have been acutely aware that a) there was no possibility of a reconciliation and b) that Ms V was about to become a a regular and permanent feature in her children’s lives. I agree that certainly at that stage, rightly or wrongly, the mother would have found that possibility incredibly difficult to come to terms with. 33.  The psychologist, Ms H, also expresses concern about the extent to which the mother has in truth “moved on” and about potential difficulties with access if the relocation is permitted. At paragraphs 144 – 145 of her first report she said that 144.  From my interviews with Mrs. I, (the mother) I did not form the impression that her application to permanently remove the children from Hong Kong was based on some selfish desire to exclude Mr. I from the children’s lives.  On the other hand, some of the correspondence which she has sent to Mr. I over time would seem to suggest this.  She is certainly still very angry and hurt so far as Mr. I leaving the marriage is concerned. 145.  Mrs. I informed me that she still loved Mr. I in the way that one would always love the father of one’s children but she has also said that he is not the man she married and that she doesn’t know him now.  So, whilst having spent time with Mrs. I and concluded that she is capable of being a loving and generous person, I do not think that she currently has the capacity to be generous in a way that will truly facilitate access between Mr. I and the children in the event that they moved back to California. 34.  Having seen the mother in the witness box, I would agree with Ms H’s assessment of the situation. She added to this in the witness box as follows: A.  Well, I think that the selfish desire to exclude, to me, is on one end of the continuum.  Not facilitating access is further along the continuum.  And in a situation where the children are a world away, if you like, I firmly believe – and it is in my experience – that the residential parent does actually need to facilitate access.  And I’m not talking about just reminding the children to, you know, to Skype or what have you.  I’m saying being really very, very clear about holiday dates and about regular times for the children to actually have some kind of electronic access and about including the non-residential parent in their lives.  Also I think that one has got to present a reasonably positive view of the non-residential parent and Mrs I has said she’s very direct; she’s not sweet; she won’t lie to her children; she has a poor view of Mrs V and when she is, say in California there is no alternative view to be juxtaposed to that. So I don’t think – we’ve talked about Mrs I moving on but are really not talking about her being there yet.  So, no I don’t think she has a selfish desire to exclude.  But do I think that she has the capacity, at the moment, to facilitate access in a way that it needs to be when there is such a distance, no I don’t. Again I would accept Ms H’s assessment of the situation. 35.  The mother for her part says that she has moved on and that she is now in a very different place. The difficulty for me however is that the evidence would seem to suggest that the mother has not moved on sufficiently. Even during the adjournment there was an unpleasant and completely unnecessary incident at the Hong Kong Cricket Club (see letter from the mother’s solicitor dated the 18 September 2012). 36.  When asked about access the mother said that the father could travel to see the children in the United States whenever he wanted and that they would divide the holidays. She said that she would have “an open door policy”. The difficulty with that proposal is that the mother has said that previously and that in reality access was made very difficult if it also involved Ms V. It also meant access on “her terms”. The father for his part has made it clear that he will not be able to travel to the United States often and that unlike in his previous job he will not be travelling to the United States on business. Since then the mother has attached her proposed access schedule to counsel’s closing submission. She proposes that the father come to the United States to celebrate the children’s birthdays with her together – presumably as a family. Thus she seems to be inviting the father to come to the United States for a short period of time only and when the children are likely to be in school in any event. In high conflict situations the experts generally suggest that the parties have minimal interaction with each other and that they follow a parallel parenting regime. This is one such situation. The mother’s proposal in respect to birthdays seems neither practical nor sensible in the circumstances. I do not believe that it will work going forward. In addition she suggests that parties alternate Christmas and Easter. This year she suggests that the children spend one week over Easter with their father – either in the United States or in the UK. She does not propose that the children come back to Hong Kong. She suggests that the summer holidays be split. In reality then the children are likely to see their father twice a year – if that, if the relocation goes ahead.   37.  The father was also very concerned that given that S tended to try to avoid conflict in all its forms that she might not engage in any form of access, if the relocation is permitted, because she would not wish to upset her mother. I accept that this is a genuine concern.  38.  In conclusion I agree with Ms H that the mother does not appear to have come to terms fully with the reality of the father’s new relationship and that there may be difficulties with access going forward if the relocation is permitted. I accept that there is a distinct possibility that the father might be excluded from the children’s lives, if I give permission for the children to relocate to the US with their mother. 39.  Strictly speaking the analysis should end there. Given though that in many other respects this is a finely tuned case it seems to me important to go through the remainder of the exercise and to consider all of the other different factors involved. This will also be important when considering over all if it is in the best interests of the children to go or to stay. Is the mother’s plan realistic, i.e. founded on practical proposals both well researched and investigated? 40.  There is no doubt that the mother’s plan is realistic – it is both well researched and investigated. 41.  As I have said it would be possible initially for her and the children to live with a family member. She would then hope eventually to buy a property. The children would be able to attend either good public schools or private ones – if finances allowed. She says that she intends to work and feels that she has a better chance of obtaining employment in the United States than in Hong Kong, although she has not been successful as yet. 42.  Although the husband challenges some of what she says he accepts that MP in California is a “nice place”. 43.  Much of what the mother says makes logical sense. If she were living in California she could afford to live in very comfortable accommodation and should in time be in a position to buy a home. I accept that this may not really be feasible in Hong Kong unless she was working. Even if she were working she may not be able to afford the sort of home that she would like to live in. As suggested by both Mr Egerton for the father and S however, it would be possible for the mother to buy a property in California, even if she remained in Hong Kong for the time being. In this way she could take steps to secure her future longer term. I also accept that the cost of living is likely to be lower and the quality of life higher in California than in Hong Kong. I accept that the children would be able to attend good schools in California. They presently attend a very good school in Hong Kong.  44.  I do not however necessarily accept that the mother will be in a better position to find a job in California than in Hong Kong. Certainly most of her relevant work experience has been in Asia. Given the present economic climate it is likely to be as difficult to find remunerative employment in California as in Hong Kong – especially in the banking field. The mother says that she is not picky and that she is happy to do anything. She has been looking at administrative jobs. Given the rate of unemployment in the United States I am not convinced that the mother will be better placed to find alternative and probably lower paid work in California than here. 45.  In the event that the mother passes both of these hurdles (which in this case she has not) Thorpe LJ goes on to pose the following question: Is the Father’s opposition motivated by genuine concern for the future of the children’s welfare or is it driven by some ulterior motive? 46.  The mother implies that the father is being difficult by opposing the application and that he has refused to return J to her as a strategic ploy because of this litigation. I do not accept that to be the case. The father appears to be genuinely concerned about the children. He agreed that J should live with him for a while following the row between the mother and J in January. He seems very concerned that the mother’s relationship with J should be supported – in what are very difficult circumstances. The father puts his position thus in his 6th affirmation dated the 28 February 2012: 75.  I believe J living with me is the right thing for him but I think it is important that he and his mother try to rebuild their relationship.  The Respondent appears to believe their relationship is fine and has sent me texts and emails stating “J and I have talked.  We’re good”.  This is at odds with J’s view.  I consider that the two of them would benefit from counselling either together or separately to help repair things.  The relationship between J and the Respondent cannot be repaired while the Respondent insists on controlling it.  I consider she needs to recognize that a 12 year old boy needs a degree of independence in both thought and action.  I continue to encourage him to be understanding of the challenges his mother faces and try to explain why she may act the way she does without excusing it but she needs to clearly demonstrate to J that (a) she has not given up on him and (b) that she will allow him room to grow while being supportive and understanding.  She appears not to want to spend any quality time with him. 76.  Wherever J ends up living, it is important that he has a healthy relationship with both parents and I spend considerable time with him talking about the need to be respectful of adults and to live up to his commitments.  It is still early days with J in my care and control but he is receptive and is beginning to make progress.  His grades in Maths and Language Arts are beginning to improve and he is calmer and more focused at home than he has been in some time. 77.  As has been stated in my Solicitor’s correspondence and my 5th Affirmation (C3/554, C3/601, P5/1441), I remain very concerned about separating J and S.  I think it is important for all siblings to have a strong relationship but more so for siblings from divorced parents and I am concerned that the Respondent is forcing S to view J as having taken ‘Dad’s side’, saying things to S (according to S’s comments) like “J and Dad are both home wreckers and losers and we girls are better off without them”.  While I accept this split between J and S for the moment as I think it is best for J in the short term to spend time apart from his mother.  I am vehemently opposed to that as the ultimate outcome. 78.  I am extremely worried about both the immediate and longer term impact of a relocation to the US on both children but on J particularly.  He has been very vocal with both parents about his desire to stay in Hong Kong.  He feels he argues too much with some of his cousins in the US and does not want to be away from me or his friends. 79.  He has very clearly said he would rather stay with me in Hong Kong and visit his mother during holidays.  I believe that if he is forced to relocate, this will irreparably damage his relationship with his mother whom he will resent for going against his wishes.  I believe the Respondent will in turn respond negatively to this and then again, in turn, J will suffer at what is a critical stage in his development. 80.  J has become a young man who knows his own mind.  He had made it clear in no uncertain terms that he does not want to move to the US and it concerns me greatly that at this delicate stage in his development, such a major upheaval, in overt contradiction of his wishes, would lead to a severely damaged relationship with his mother.  At this stage she has shown little willingness to take the steps required to repair their current relationship and I believe a relocation to the US could see him react by refusing to work in school and by rebelling against his mother.  In Hong Kong he has his relationship with me as his secure base to fall back on.  Without that, I worry he could become a severely troubled teen. 81.  At the time of writing, since mid-December 2011, J has not spent more than 2 consecutive nights with his mother and until the revised order regarding J’s care and control had only spent three nights in total. 47.  The mother denies that there are any difficulties in her relationship with J. Although, as will be seen below, I am pleased to note from Ms H’s updated report that relations between J and his mother seem to have improved, it is clear that there are difficulties and that these need to be worked on if the relationship is to continue to improve.  What would be the extent of the detriment to the father and his future relationship with the children, were the application granted? To what extent would that be offset by the extension of the child’s relationship with the maternal family and homeland? 48.  I accept, as indicated above, that the father’s relationship with the children would be severely undermined if the relocation application is approved. Although I accept that the children might benefit from being in close proximity to other family and some of their cousins I agree that this would not be sufficient to counteract the loss of their father. It also seems from the comments made by J that he has concerns about being in close contact with his cousins. It is clear that the children are closely connected to both of their parents. They both have a close relationship with their father. S for example complains about not seeing enough of her father. She is however also close to her mother, whereas J appears to have a more challenging relationship with his mother. What would be the impact on the mother if her application was refused? 49.  I accept that the mother is likely to be devastated if her application is refused. I also accept that she is likely to be very angry. However she has lived in Hong Kong for a considerable period of time and has made it her home. She has friends here. She is able to work. She is of Asian descent. She has also said that she will not leave Hong Kong if her application is refused.  50.  Likewise I accept that the father would be equally devastated if the children were allowed to relocate. Character of the parties The mother 51.  It has been said that the mother has come a long way and that although she was devastated by the father’s affair that she is now ready to move on. The difficulty, as I have said, is that whilst I might accept that she has made some progress, I am not sure that she has made sufficient progress. The mother came across well in the witness box. She is a bright lady. However even at trial, in my presence, she tried to be quite intimidating towards Ms V when she gave her evidence. To use that well worn phrase of the psychologists – the mother seems to have little “insight” into her own behaviour or her own part in the breakdown of her marriage or indeed of her present relationship with J. She puts all of the blame at the door of the husband. Likewise she has taken the moral high ground with respect to this application and arrangements for the children generally. This simply does not resonate as being either completely true or completely accurate. The father 52.  The father also presented as being a very bright man but one who is struggling and has struggled to deal with the present situation. I accept that he too can be uncompromising in his approach and that this has probably not helped the situation.   Ms H’s first Report dated the 18 and 21 June 2012 53.  Ms H filed a very detailed first report. She spent a considerable amount of time with the children and both parents. She also spoke to both children’s teachers. I will deal with the children’s views as expressed to Ms H and the social welfare officer separately below. Ms H did not support the removal application. In her report of the 18 June she said inter alia in addition to the paragraphs 144 and 145 referred to in paragraph 34 above that 141.  So far as Mrs. I’s (the mother’s) application to permanently remove J and S to the United States is concerned, I make the following points. 142.  Mrs. I has lived in Hong Kong for the last twenty years.  She has a well established group of friends and, unlike many homemaking spouses; she has an established and recent record of employment.  In speaking with Mrs. I, I did not form the impression that she would not be prepared to stay in Hong Kong if she felt that she would be adequately provided for.  I believe her to be genuine in fearing that her current standard of living will be reduced and that this would not be the case if she were to relocate herself and the children back to her family home in California.  When addressed on this issue, Mr. I is matter of fact about the family’s income having been reduced.  He states in his affidavit that he and Ms. V do not share expenses but clearly contemplates an increase in financial responsibility going forward. 143.  I have no knowledge of Mr. and Mrs. I’s financial situation but it seems to me that, if Mrs. I were to stay in Hong Kong, she and the children – whether only S or J and S – would need to be in accommodation still suitable for, for example, J’s friends coming to stay over. 144.  … 146.  The proposal put forward in Mrs. I’s first affidavit, was in practical terms prime facie an acceptable option at the time when it came to the children’s overall wellbeing.  Matters have now moved on, however, and such a proposal must now be viewed in the light of the fact that J, at least on an interim basis, now lives with his father, an arrangement which appears to be beneficial to J.  Further, in the last month or so, it would appear that careful plans have been put in place for the ongoing schooling of both children at ABC School.  I cannot speak to the quality of the schools referred to in the documentation provided by Mrs. I and do not doubt her belief in the quality of education they would be able to provide.  However, I must say that the carefully structured and integrated level of support for the learning needs of J and S that ABC is willing to provide appears to be most impressive. 147.  I am not of the view that Mr. I’s opposition to the permanent removal of the children is in any way motivated by anything other than his view as to what would be in the best interests of both J and S.  He has it seems made genuine efforts to arrange his working life to spend more time with the children. 148.  I have interviewed the children at length and they have been consistent in their views.  J is really enjoying and benefitting from this time with his father. In my view this is not just because of his somewhat volatile relationship with Mrs. I but due also to where he is in his own personal development.  Though I know Mr. I had talked to J about the possibility of his having to leave Hong Kong and reassured him that he will be okay, I do not think that any extended family, loving though they may be, will benefit J as much staying with his father. 149.  S has a close and obvious attachment to both parents.  In my view, she may feel rather lost in a big family environment and, as with J, it is my view that her interests are best served by having both parents in her life on a constant basis. 150.  I mentioned above that the history of access has been problematic.  This speaks to the larger question of how it could be satisfactorily achieved if the children moved permanently to the United States.  Having spoken with both Mr. and Mrs. I, I am not optimistic that the relationship currently existing between them will make for acceptable access between Mr. I and the children to be properly established or maintained should the children move back to the United States.  At the moment, there are still difficulties between Mr. and Mrs. I over phone calls, Skyping, holiday arrangements, pick up points and handovers.  I cannot see how these difficulties would be any less if the residential parent lived outside Hong Kong.  I would add that, in my experience, when access is made difficult for children, over time they begin to avoid it as a source of conflict.  This all too often leads to a breakdown of the relationship between the child and the non-residential parent. 151.  Apropos the above, it is my view that it is very clear that the children have a close and loving bond with both parents.  Their educational and healthcare needs are well met in Hong Kong and if a more amicable arrangement can be reached by the parents so far as finances and access are concerned this will assist the children immensely.  All other professionals interviewed attested to the close bond that the children had with one or other or both of the parents and I would add that this has been amply demonstrated by the children’s responses during my interviews with them.  As the welfare of the children is paramount in these matters and as both children have demonstrated clearly over time that they need both their parents and each other on a constant basis, I am of the view that Mrs. I’s application to permanently remove either or both of them to the United States should not be granted. 54.  She also said that she did not believe that the children should be separated. When it was put to her that the children were separated at present, Ms H clarified her position: A.  I would say that if the situation continues to improve, with particularly – S no problem – with J, in particular, he is really enjoying this situation.  Now it may well be that the summer holiday, having had some, you know, very nice time with both parents and feeling that certain things have been resolved, perhaps, that he would like to go back to see what it is like living with Mrs I and obviously that would be a very useful thing because Mr I would be starting a new job and Mrs I would have the time, as you say.  But I do think that this is a situation where, just at the moment, as it stands, certainly J’s teachers were very much in favour of this new arrangement being in place at the moment.  And J has continually, throughout the interviews been absolutely consistent with wanting to keep this kind of schedule. 55.  She also spoke to the school and pointed out that it had been agreed that J would drop Chinese and that he would become part of a learning strategies class. This would also mean that he would have a full psycho educational assessment and that his learning plan would then be tailored to his specific needs.  Both of J’s teachers confirmed that J seemed “calmer and happier” since moving to his father’s and that the present arrangement seemed to be working “really well”. 56.  In so far as S is concerned the teachers confirmed that she seemed to be struggling academically and that the plan going forward was to ensure that she had much more direct contact with them in an attempt to ensure more academic success. Social welfare Reports 57.  Two social investigation reports were filed – the first dated the 7 July 2011 and the second dated the 20 January 2012. The first report was filed prior to the mother filing her application to relocate and consequently it simply dealt with issues pertaining to custody and access. It recommended joint custody, with care and control to the mother and suggested that the parties go to mediation with a view to resolving any disputes over access. This report was also filed before J began living with his father. 58.  The second report dated the 20 January 2012 was more controversial, in that it states that the father was open to the relocation plan. There was some confusion about how this was dealt with by the father. The suggestion was that a letter had been sent to the social welfare officer correcting this misunderstanding. However no letter to that effect was subsequently produced. It was not clear therefore whether or not the social welfare officer knew about the father’s stance on the mother’s relocation application. In her oral evidence the social welfare officer said that although she knew that the father had reservations about the relocation application that she was not aware that he had actually opposed the application. In any event the social welfare officer did not make a recommendation one way or the other simply recording as follows: 15.  It is noted that J did not want to leave his friends in Hong Kong, S worried about changes and Mr I concerned about the maintenance of the father-child relationship after the removal.  When the removal is considered to be beneficial to the children, Ms I should take care of the feelings and emotion of the children and better prepare them for the plan.  Besides, she needs to draw up a well defined access schedule with Mr I so as to facilitate his close contact with the children for maintenance of their relationship after the removal. The Views of the Children 59.  Both children have expressed their views very clearly and succinctly to both Ms H and the social welfare officer when asked. Although still quite young they have not been afraid to express a view. They attend a well known international school in Hong Kong, where children are encouraged and indeed expected to speak up. They have done so. They have considered the issues and their predicament and have proffered both an opinion and a solution. The views that they have expressed will therefore be afforded considerable weight when I consider this matter overall.   60.  Initially, as set out in Ms H’s first report, J said that he wished to remain in Hong Kong and to live with his father. He reported that his relationship with his mother, as at May of last year, was still not good, although he confirmed that he would miss her if she relocated to the States and he remained in Hong Kong. He confirmed that he had a better relationship with his father than with his mother. 61.  S, although a more reserved child was equally firm that she wished to remain in Hong Kong and that she wished her mother to remain here too. 103.  S arrived later and was more forthcoming than she had been in the previous interview.  S said that if the Judge said that the two children had to move to California with Mrs. I, S would say “No thank you, I just want to get a house but I do not want to stay there forever”.  I mentioned that alternatively, the Judge might say that S could stay in Hong Kong but that her mother may need to live in California for work which would mean that S would only be able to Skype her mother, phone her and see her on holidays.  S replied again in a very downcast way “That would be very bad for me”. Since then the mother has confirmed that in the event that her relocation application is denied that she will remain in Hong Kong. 62.  In conclusion the children reiterated as follows: 112.  S stated that she wanted to go to ABC but not a school in California.  I mentioned that she had been to the school in California for a short time.  She remembered “going twice but that the kids kept staring at her there even after the second day”.  She reiterated that she did not want to go to California although it was a nice place. 113.  So far as J was concerned, he stated that he did not really have a relationship with Ms. V; it did not bother him that his father was paying attention to her; the only person it bothered was his Mum.  So far as the school in California was concerned, he said he remembered only being there for one day and that it was good but that he wanted to stay here in Hong Kong.  He did not think he would get on with him Mum in California because she would be mean to him if she was mad at Dad.  He said that living with Dad was going well; that he missed having his stuff from Repulse Bay; but that he liked the current schedule.  He reiterated that he has all of his friends here and that this was his home.  He felt that, if his mother had to go back to California for any reason, she could still visit here on vacation and that that would still work; and that he wanted to stay with his father in Hong Kong. They expressed similar views to the social welfare officer: J 9.  J told the Investigating Officer while assembling his robotic engine that he would like to live in Hong Kong as he lived here for a long time and he had friends here.  He did not want to leave his friends.  He told that those in the USA were his relatives only but not his friends.  Besides, he liked his present school.  He said that he could stay in Hong Kong to live with the father if the mother moved to the USA. S 10.  S talked with the Investigating Officer while she was painting a small picture. She told that she liked Hong Kong because she had been living here for long time.  She liked to go to the USA for vacation only.  She commented that the USA was noisy and the house there was too big for her.  She was also anxious to make new friends in the new school.  She had told the mother about her wish to stay with the mother in Hong Kong but her mother still wanted to go to the USA. The updated report dated the 12 December 2012  63.  The trial ended in November 2012, whereas Ms H’s report was dated the 18 and 21 June 2012. The Social Welfare reports were obtained even earlier. Consequently at the end of the trial I was very concerned to obtain an update of the situation from the children’s perspective. Consequently Ms H was asked to see the children in order to do just that. She filed a short updated report on the children’s views on the 12 December 2012. 64.  In summary the children’s views had not changed, although S’s views had developed a little. She still wished to remain in Hong Kong with both her Mum and Dad. She proposed splitting her time equally between both parents. She drew on my white board the schedule she would prefer, namely that she split her time equally with her parents, spending say Sunday to Tuesday with her father, a half day with each parent on Wednesday and Thursday to Saturday with her mother. She said that she would like to buy a house in California but not to live there and that she missed each parent when she was not with them. In so far as her relationship with J was concerned and the present living arrangement Ms H reported as follows: I enquired into S’s ongoing relationship with J.  She reported that she and J still got on badly and that he was still jealous that her mother liked her more and that she gave S more things even if it was just for her birthday.  She went on to say that J was always mean to her and that her Mum says boys are “only jealous”.  S stated that her Dad wasn’t jealous, however. I asked S how she felt about J still living for the most part with their father.  She replied that this was mostly better because sometimes J was mean to her and sometimes he was not.  Then I asked what she thought of her going back to California and perhaps J staying with their father in Hong Kong.  She was visibly uncomfortable with the question and did not answer directly stating, “I’m quite upset if I go back to the United States.  I really like Hong Kong and it’s a really good place but it is really polluted”. 65.  J’s views were also consistent with what he had said before. He still wished to remain in Hong Kong. He said that his relationship with his mother was better than before and that he didn’t think his mother was favouring S as much as she had done previously. He was concerned about the present proceedings and said that ... he was scared of the situation and that it was always in the back of his mind.  Further When asked whether, if both parents decided to stay in Hong Kong, who he would like to live with he replied that that he would still like to stay with his father.  He stated, “I like Dad’s place, it is calm and there is not as much tension generally”.  During the course of this line of questioning, he indicated that he still fought with his Mum sometimes but that at Dad’s there was no fighting, although they argued sometimes about home work.  He also mentioned that his father’s new job was better because there were no late calls. When further enquiry was made about going back to live with his mother should she stay in Hong Kong, he replied that if his mother were to stay in Hong Kong he supposed he could consider living with her but that his preference would be still be to stay with his Dad.  On a Likert scale of 1-10 (10 being his level of preference to stay with his father) J expressed his preference to be an 8. Overall would the relocation be in the best interests of the children? 66.  Having considered all of the different factors it seems to me that on balance it would not be in the best interests of these children to permit them to relocate to the United States at this point in time. I have weighed up all of the different factors as set out above.  I have also been ably assisted by Ms H’s reports. I have given considerable weight to the views of the children themselves. Consequently the mother’s summons dated the 22 September 2011 to relocate to the United States shall be dismissed. How should the children’s time be allocated between their parents once the relocation issue has been determined? 67.  The mother wishes that J be returned to her care. She points out that she is not working at present and that she has always been the care taking parent. Although that is true, it seems to me that that the mother may very well return to the work in the future. In any event the mother proposes that the present arrangement continue with the weekends being split between the parties save for the first weekend in every month. She accepts that the children should spend one night of the school week with their father. She does not wish the father to be released from his undertaking with respect to Sunday observances. 68.  The father proposes that the present arrangements continue save that the weekends be alternated with the children being picked up after school by the parent responsible for them that weekend and dropped off by them at school on Monday morning. He makes that proposal for a number of reasons: a) it means that the children will have the opportunity to spend a more extended period of time with each parent and b) it will lessen the opportunity for the parents to have any direct contact with each other and therefore it should reduce the possibility of any ongoing conflict.  69.  S suggests that the week be split equally between the parents as set out above. 70.  Although S’s suggestion has a lot to recommend it – I am conscious of the fact that the present arrangement has now been in place for a year or so and that notwithstanding ongoing difficulties, particularly with respect to pickups and drop offs it now seems to be working reasonably well. I am also aware of the fact that the children do not seem to be very close – although they are there for each other when the situation demands it. J has reiterated that his preference is to continue to be based with his father. I think that his view should continue to be respected. Certainly this arrangement seems to be working well from the schools perspective and he seems to be doing better academically. Although I accept that in an ideal world the children should be brought up together, in this instance they will in fact continue to spend most of the week together, especially if I accept the father’s suggestion about the weekends. The fact that they are spending a couple of nights apart does not seem to be detrimental to them. Although, as was pointed out during the trial, the children are separated for part of the week from one or other of their parents, they do infact spend the majority of the week with each other.  71.  Therefore in broad terms I accept that the current living arrangement shall continue during term time save that the weekends shall be alternated between the parents from Friday after school until Monday morning. This will have the added benefit of ensuring that S has an extended period of time with her father – which is something that she has requested. Likewise it will ensure that J also has the opportunity to have some quality time with his mother and to spend longer periods of time with her, which is something that also appears to be missing from the present schedule. Hopefully this will help them both work on their relationship. 72.  For the avoidance of doubt the Father is released from his undertaking to take the children to mass when they are in his care, although in the interests of family harmony I would encourage the children to go as regularly as possible. As indicated previously an undertaking is generally something that is freely given. This undertaking has caused considerable friction between the parties. The father wishes to be released from it. I will accede to his request.  What orders should be made for custody, care and control, access and/or shared care? 73.  When asked why he was seeking an order for sole custody the father said that it was because he had found it difficult to reach consensus with the mother on almost anything and in particular he was concerned about decision making around the children’s various health issues. Thus he proposed sole custody of both children either to him or to the mother. However when attempting to negotiate a settlement with the mother he did propose joint custody of both children. Clearly though this was not his preferred option. 74.  The mother for her part proposed joint custody. The law 75.  I do not intend to repeat the law on custody/joint custody. Reference can be made to PD v KWW [2010] HKFLR 184 in that respect if necessary. In this instance, given my decision with respect to the practical arrangements for the children, I either have to make an order for joint custody or I could make an order that sole custody of J vests in the father and sole custody of S vests in the mother. Discussion 76.  The term custody refers, generally speaking, to the important decisions to be made in a child’s life. In this instance the parties have already agreed that the children should be raised as Roman Catholics. In so far as J is concerned he will continue to attend ABC school. His ADHD will continue to be monitored. There may be a dispute over the appropriate medication for him to take. However there does not seem to be any dispute that he needs to continue to be on medication. For the avoidance of doubt the father will be responsible for J’s medication requirements going forward both in respect to the ADHD and to other matters including his allergy to dust and mites. 77.  The situation with S is slightly more problematic. There is the possibility that she too may have a learning difficulty. The mother has found it difficult to accept this. The father says that it needs to be addressed. Given that, although S is attending a very good school at present, there is the possibility that she may need to change schools. This is a custodial issue. In order to avoid the possibility of further conflict I will therefore direct that S have a full psychological and educational assessment with a view to establishing whether or not she does have a learning difficulty. In the event that the parties are unable to agree on the appropriate assessor within the next 14 days then each is invited to put forward the name of their proposed psychologist and I will direct who shall make the assessment. There shall be a call over on this issue once the assessment has been received. 78.  Apart from this all of the other difficulties that the parties have experienced have been over the practical arrangements for the children. I do not think that of itself should at this stage preclude the possibility of both parties having joint custody of the children. Both are involved and committed parents who want what they consider to be the best for J and S. Ms H puts it very well when she comments on this in her short supplemental report dated the 21 June 2012: 4.  On the issue of sole custody alone, it is my view that it would be in the best interests of the children if both parents had joint custody of the children.  The concept of custody is a legal concept.  From a psychologists view point there is a presumption that if at all possible children’s interests are best served if they have the benefit of parents’ love, concern, care and advocacy.  The viewpoint is more consistent with the legal line of thinking in relation to a sharing of parental responsibilities etc.  I am aware of the move toward legal reform in children’s matters in Hong Kong.  Presently however the concept of custody remains.  I must state therefore I that considered the views of the Honourable Mr. Justice Hartmann on the proper approach to custody quoted at paragraphs 55-56 in SMM v TWM, a case known to this Court in the course of forming my opinion that both parents in this particular case should have joint custody even if at the moment there was considerable tension between them. 79.  Notwithstanding the obvious difficulties here I have therefore decided that there shall be an order for joint custody. In doing so I intend to put in place a detailed schedule for the day to day care of the children in the hope that this will limit the opportunity for continued conflict between the parties.  80.  For the avoidance of doubt the father will be responsible for deciding upon and arranging for J’s extracurricular activities, including any extra tuition. These activities shall take place when J is in his care, unless otherwise with the express agreement of the mother. Information pertaining to these activities shall be provided to the mother. I would suggest that the parties set up a dedicated e-mail account for the express purpose of dealing with the practical arrangements for the children only. Likewise the mother will be responsible for deciding upon and arranging for S’s extracurricular activities, including any extra tuition. Again these activities shall take place when S is in her care, unless with the express agreement of the father. 81.  As I understand it the children have an extensive schedule of after school activities at present including extra tuition for both and baseball and Cotillion for J and art and ballet classes for S. These activities will no doubt alter from time to time. For the avoidance of doubt the father will be responsible for arranging J’s schedule and the mother will be responsible for arranging S’s schedule.  82.  In the case of RE: SKP v Y,ITT, FCMC 17772/2011 dated the 9 November 2011, unreported, I looked at what the different terminology used in relation to children’s orders might mean. I said as follows:   Joint care and control 21.  Consequently joint care and control denotes a situation where the parties are sharing the day to day practicalities of raising a child. It will normally mean that the child is spending significant periods of time with both parents in each of their homes, but not necessarily on a 50:50 basis. However the time shared is likely to be more significant than in a standard custody/access type order and will probably mean that the child is spending at least 35% of his time based with each of his parents. One would expect that both parents are involved in the schooling and extracurricular activity schedule and it normally denotes a high level of co-operation between the parents. Consequently one would normally expect an order for joint custody and joint care and control to be made by consent. In the language of the social scientists an order for joint custody and joint care and control would probably be reflective of a cooperative co parenting scenario.   So how does this compare with the concept of shared care? 22. The concept of shared care as an alternative to joint care and control has developed over time. I referred to this recently in a case that may be going on appeal and is presently unreported namely TAC v VDC nee VDM FCMC 16497 2010. In that case I referred to H v H (unreported, 6 September 2002, CACV 42 of 2002, where the Court of Appeal first upheld an order for shared care. This judgment has been referred to by counsel for the father in this hearing. What is interesting is that in that case an order was made for sole custody and shared care. This approach was then followed by myself in SEB v ZX (Custody) [2007] HKFLR 165 referred to above and more recently in RWS v KCC, FCMC 9661 of 2010 unreported. In each of these cases and for a variety of different reasons it was felt appropriate for the ultimate decision making power to vest in only one parent. Thus orders were made for sole custody. However the court was anxious to ensure that the child/ren involved should continue to spend significant amounts of time with both parents in a way that was more reminiscent of a joint care and control order. In order to recognise this and the fact that the non custodial parent continues to have a great deal of practical control in the child’s day to day life, the phrase shared care was coined. Again in social science terms this is perhaps more reflective of a parallel parenting regime i.e. where there is a very high level of conflict between the parents which makes cooperative co parenting virtually impossible, but where it is in the child/rens best interests to spend significant periods of time with both parents. It would be normal in a situation like that to set out very clearly how the child/ren’s time is to be split between both parents. There is no order for access per se. I made such an order in RWS v KCC, FCMC 9661 of 2010 commenting as I did that: I have given a great deal of thought to the appropriate order to be made in this case.  As I have said it is not possible for me to make a “parallel parenting” order as such.  However I would like to make an order that supports the concept of parallel parenting.  Consequently it seems to me that it would be more appropriate to make an order for shared care as opposed to a traditional order for care and control and access.  This will make no difference at all to the practical arrangements that I intend to put in place.  They would have been the same in either event.  However the concept of shared care seems to me to echo that of parallel parenting and I would urge the parties to adopt that approach. … … I will therefore make an order for shared care, following the format of the order in H v H i.e. that the care of the children shall be shared between the parents as follows: Detailed arrangements were then set out accordingly. 23. In TAC v VDC nee VDM FCMC 16497 2010 I made an order for joint custody and shared care. Again there was a very high level of conflict between the parents necessitating a very detailed order, which was again more reminiscent of a parallel parenting regime. I did not think it appropriate in that case for the important decision making power to vest in one parent only. 83.  In this case there is also a very high level of conflict and therefore a detailed order is necessary. The important decision making power will continue to vest in both parents and this will be monitored by the court – certainly in the short to medium term in so far as it relates to S’s educational requirements. Each parent will be responsible for the children when they are in their care and each will be responsible for the necessary decision making that that care denotes. As I have said the father will generally be responsible for making practical decisions about J and the mother will generally be responsible for making practical decisions about S as set out above. Order 84.  Consequently I will make an order that the parties shall have joint custody and shared care of the children. The weekly term time schedule shall be as follows: Monday  – The children shall be split. J shall be with the father and S shall be with the mother. Each parent shall be responsible for the child in their care. Tuesday – S shall be in the care of her father with J from after school on Tuesday until she is dropped off at school on Wednesday morning. The father shall be responsible for the care of both children during this time. (Note that the father shall be responsible for picking S up after school. At present he picks S up from the mother’s home at 7:00 pm. If it is specifically agreed to by the parties this arrangement may continue. Otherwise it falls upon the father to make suitable arrangements for both J and S after school on Tuesdays).  Wednesday – J shall be in the care of his mother with S from after school on Wednesday until he is dropped off at school on Thursday morning. The mother shall be responsible for the care of both children during this time. Thursday   – The children shall be split. J shall be with the father and S shall be with the mother. Each parent shall be responsible for the child in their care. Friday   – The weekends shall be alternated. The parent responsible for the children on any given weekend will arrange for them to be picked up from school on Friday from after school and returned to school on Monday mornings. In the event of any disagreement on this the father shall have the first weekend, following the date when this judgment is handed down. At present J goes to Cotillion on Friday’s after school and S goes to ballet. Both children have activities on Saturday’s. It is expected that these or other similar activities shall continue.  85.  Single public holidays not attached to a weekend and not included in the children’s school holidays shall be alternated between the parties. In the absence of agreement the mother shall have the first single public holiday on the 1 May 2013. The father shall have the 17 May and so on and so forth. Likewise single non school days shall be alternated between the parties. Again in the absence of any agreement the father shall have the first of these days. 86.  Generally speaking the school holidays are to be split equally and/or alternated between the parties. The father has made detailed proposals in this respect in his solicitor’s letter of the 30 August 2012. The mother has not had an opportunity to do so. I will therefore give each side a further 28 days to provide any further written submission on the subject of school holidays otherwise than as set out above. For the avoidance of doubt given that this year the mother had the children for the Christmas period, the father will have them for the Chinese New Year school holiday.  Costs 87.  As this is a child related matter I will make an order nisi that there shall be no order as to costs, to be made absolute at the expiration of 14 days. There shall be certificate for counsel.   ( Sharon D. MELLOY )    District Judge Mr. Robin Egerton instructed by Messrs Withers for the Petitioner Ms Mairead Rattigan instructed by Messrs Haldanes for the Respondent 84459-EN-2011-11-21 JHCI v. MSYI HTML content FCMC 12528 / 2011 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 12528 OF 2011 ---------------------------- BETWEEN   JHCI Petitioner and   MSYI  (formerly known as MSY) Respondent ---------------------------- Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to public) Date of Hearing : 4 November 2011 Date of Judgment : 21 November 2011 ---------------------------------- J U D G M E N T (Maintenance Pending Suit Ruling in relation to the costs of the dismissed divorce suit) ----------------------------------   Introduction 1.  There are two matters which need to be adjudicated upon in this judgment. The first is an application by the respondent wife for maintenance pending suit for herself and the two children of the family. This summons is issued pursuant to s. 3 and 5 of the Matrimonial Proceedings and Property Ordinance Cap 192.  The wife also seeks provision for her legal fees. The second is in relation to the costs of the original divorce petition filed by the wife.  2.  On the 23 September 2011, I gave directions that each party file and serve a written submission in relation to the costs of the original divorce suit. The wife’s original petition was dated the 29 September 2010. It was based on the husband’s unreasonable behaviour. The petition was subsequently dismissed on the 23 September 2011. Short written submissions were then exchanged on the 7 October 2011. I will deliver my ruling in relation to that matter also at the end of this judgment.  The issues 3.  There are a number of issues that need to be determined namely: How much should the husband pay to the wife as interim maintenance for the two children of the family? How much should the husband pay to the wife as maintenance pending suit for herself, if anything at all? Should those maintenance payments be backdated and if so to what date? Should any provision be made for the wife’s legal costs? Who should bear the costs of the maintenance pending suit/interim maintenance application? How should the issue of costs in relation to the first petition be determined?  Background  4.  This is a fairly straightforward case on the facts that has been fuelled to a very large extent by high emotion and attendant conflict which appears to have escalated as the case has progressed. 5.  The parties married in April 1998. This was the husband’s second marriage and the wife’s first. The husband is British and the wife holds an American passport but is of Filipino decent. Unfortunately the parties were unable to have children naturally. They were subsequently very privileged to be able to adopt two children – J, a boy who is now aged 11 years old and S, a girl who is now aged 8 years. Both children attend a well known international school in Hong Kong. They are presently living with the mother. Access has been very problematic. The husband has issued a number of applications in relation to various issues pertaining to the children. The wife has also issued a summons for leave to permanently remove the children to reside in the United States. That application is likely to be heard sometime next year. There now also appears to be a dispute over custody. 6.  Both parties work in the banking sector. The husband is 41 years old. He holds a senior position with an investment bank. The wife is 49 years old. She returned to work in April 2008 after a career break during which she concentrated on looking after the children. This also coincided in part with the parties spending a period of time in Singapore following the husband’s secondment there. The wife also works for an investment bank. Both parties’ earn good salaries, but it would be fair to say that the husband earns significantly more than the wife. 7.  The parties separated in August 2009. On the 29 September 2010 the wife issued divorce proceedings based on the husband’s unreasonable behaviour. In that petition she also sought joint custody of the children with care and control to herself and reasonable access to the husband. She now states that she had not wanted a divorce and had only instituted proceedings because her lawyer at the time had advised her to do so. She says that her intention had always been to try to reconcile with the husband.  She also claims that she had not known of the husband’s new relationship at that time. On another occasion she said that she had felt pressured by the husband to issue proceedings. In any event, regardless of these assertions, the fact is that the wife issued proceedings against the husband based on fairly mild unreasonable behaviour particulars notwithstanding the fact that it was open to her to proceed on the basis of one year separation with the husband’s consent. This had been the husband’s preferred option. On the 14 October 2010 the husband filed an answer denying the allegations of unreasonable behaviour quite generally and reserving his right to apply for leave to amend the answer and to file a cross petition. Just as it had been open to the wife to proceed on the basis of one year separation with consent (or once she had learnt of the new relationship on his admitted adultery), it had also been open to the husband to simply proceed on the basis of the wife’s original petition. He chose not to do so. In any event the wife did not progress her petition. There was significant delay – some of which was justifiable and some of which was not.  On the 7 September 2011 the husband filed a subsequent petition based on two years separation. On the 23 September 2011 the wife’s original petition was dismissed and all pleading were transferred to the new proceedings. 8.  It seems that immediately following the separation that the parties reached some kind of an accord with respect to interim maintenance. Although there is a slight discrepancy over the exact amounts for individual items, according to the husband’s evidence (as set out in his Form E dated the 10 December 2010), he was paying for the following items either for or on behalf of the wife and the children: Contribution towards the wife's rent - HK$53,000/HK$50,000 Household bills - HK$15,000/HK$20,000 Medical - HK$4,000/HK$2,000 Cash - HK$20,000 Phuket property - HK$7,000 American Club - HK$5,000 School fees - HK$30,400 over 10 months 9.  Although it is difficult to be precise it seems that the husband was paying something in the region of HK$104,000 per month plus the children’s school fees. 10.  This seems to largely accord with the wife’s evidence as set out in her Form E dated the 8 February 2011 which states that Since August 2010, the Respondent has been depositing a sum of HK$20,000 per month into our joint account with HSBC.  This amount is used primarily to cover grocery bills and household expenses.  The Respondent contributes a sum of HK$50,000 per month for my current monthly rental of HK$62,000.  In addition, the Respondent further pays most of the household expenses including the children’s educational expenses.  I am responsible for the expenses of the children’s extracurricular activities and the rest of the household expenses. 11.  By letter dated the 16 May 2011 the husband sought to change the basis upon which he had been paying maintenance to date. Based on the parties respective incomes he proposed paying 61.58% of the children’s expenses on the premise that he earned that proportion of the parties joint income. Thus he offered to pay HK$60,037 per month for the children’s maintenance (i.e. HK$30,018.50 per month per child). In addition he undertook to continue to pay for a) the children’s school fees (HK$32,050 per month over 10 months or HK$26, 708 per month over 12 months), b) the American Club subscription and chits (HK$7,000 per month) and c) for the children’s therapy (HK$8,000 – 10,000 per month). In total then the husband proposed paying HK$75,037 – HK$77,037 per month plus 61.58% of the children’s extracurricular activities, which counsel has since estimated at HK$7,389 per month. In total then he offered to pay between HK$82,426 – HK$84,426 per month plus the children’s school fees. He also undertook to continue to cover medical and dental expenses for the children as before. In round terms therefore the husband was proposing a reduction of c HK$19,574 - HK$21,574 per month. 12.  On the 26 August 2011 the wife issued a summons for maintenance pending suit/interim maintenance and provision for her legal fees.  Initially she sought HK$205,250 per month plus presumably a continuation of the husband’s undertakings to pay for the school fees and other items as he does at present. She seems to accept that the husband is currently paying the amounts as set out above save for his contribution to the extracurricular activities. As at the date of the hearing she asked for HK$153,400 per month plus the school fees plus the continuation of his undertaking with respect to other items and provision for her legal fees at a further HK$50,000 per month.    The law 13.  Applications for maintenance pending suit and interim maintenance for children are governed as I have said by s. 3 and s. 5 Matrimonial Proceedings and Property Ordinance, Cap 192. The only governing principle is that the court will make such order as it considers reasonable in all of the circumstances of the case.  Consequently maintenance pending suit/interim maintenance applications are approached on a broad brush basis.  A detailed examination of the parties’ means will be examined at a later date at a full ancillary relief hearing if agreement is not reached in the meantime. Any over payment or under payment can be dealt with then. Recent case law 14.  Both sides have helpfully referred me to the recent Court of Appeal decision on maintenance pending suit namely HJFG v KCY (CACV 127/2011, 28 October 2011). Although a big money case and therefore factually very different from this case, the following principles bear repetition. The Hon Hartmann JA referring to Nicholas Mostyn QC’s judgment when sitting as a Deputy Judge in TL v ML and others [2006] 1 FLR 1263 at p 1289, said as follows: 35.  As to the amount of maintenance pending suit that may be paid, the Ordinance provides only that it must be ‘reasonable’, that is, having regard to the circumstances of the case, that it must be fair. 36.  An important factor in determining fairness is a consideration of the marital standard of living.  In this regard, each case must be considered according to its own circumstances.  It is not simply to be assumed that great wealth equates to great extravagance.  Some married couples who enjoy great wealth spend with comparative modesty and with a discipline born of discretion, others enjoy consumption on a grand scale. 37.  The principles that have emerged over time to guide judges in matters of interim maintenance have been fashioned in the main to ensure fairness.  This is well illustrated in the judgment of Nicholas Mostyn QC, sitting then as a deputy High Court judge, in TL v ML and Others (Ancillary Relief: Claim against Assets of Extended Family) [2006]1 FLR 1263, at 1289, in which, having looked at earlier authorities, he derived the following principles that speak specifically to fairness or are based on the need to ensure it.  For present purposes, it is sufficient to cite the relevant principles without citing the judge’s reference to the source of those principles: i.  The sole criterion to be applied in determining the application is ‘reasonableness’, which is synonymous with ‘fairness’. ii.  A very important factor in determining fairness is the marital standard of living.  This is not to say that the exercise is merely to replicate that standard. iii.  In every maintenance pending suit application there should be a specific maintenance pending suit budget which excludes capital or long-term expenditure, more aptly to be considered on a final hearing.  That budget should be examined critically in every case to exclude forensic exaggeration. iv.  Where the affidavit or form E disclosure by the payer is obviously deficient, the court should not hesitate to make robust assumptions about his ability to pay.  The court is not confined to the mere say-so of the payer as to the extent of his income or resources.  In such a situation, the court should err in favour of the payee. 38.  Finally, it is to be noted that in applications for interim maintenance, when the amount to be paid is for a limited period only and not all of the evidence is necessarily before the court, it is not appropriate, nor indeed in most cases possible, for the court to conduct a detailed investigation into the finances of the parties.  While, in order to determine what is or is not reasonable, some analysis is always required, that analysis can be conducted on a ‘broad brush’ basis. 15.  In so far as the provision of legal costs is concerned, the Hon Hartmann JA confirmed that it is possible for provision for legal costs to be included in an order for maintenance pending suit. He added at para 78 as follows: 78.  S.3 of the Ordinance, of course, still required the judge to be satisfied that any contribution towards the wife’s on-going legal costs was reasonable.  That meant that he had to be able to conduct some analysis of the nature and extent and purpose of the contributions sought.  On the part of the wife, that required some breakdown of her anticipated costs. 79.  Aside from the fundamental requirement of supplying a sufficiently detailed breakdown of anticipated costs, I am of the view that the following principles articulated by Wilson LJ in Currey should in future be adopted as providing prudent guidance to both judges and practitioners in this jurisdiction. 80.  In the view of Wilson LJ, the initial, overarching inquiry should be into – “… whether the applicant for a costs allowance can demonstrate that she cannot reasonably procure legal advice and representation by any other means. Thus, to the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, whether directly or as the means of raising a loan, in funding legal services.” 81.  As Wilson LJ pointed out, satisfying that condition alone may not be sufficient.  In the broad exercise of discretion, a judge may consider that other factors must come into play – “The subject matter of the proceedings will surely always be relevant; and, insofar as it can safely be assessed at so early a juncture, the reasonableness of the applicant’s stance in the proceedings will also be relevant.” 16.  It is also understood that a fees allowance may be made for a period of time, most commonly up to the FDR hearing whereupon the matter may be considered afresh. 85.  Wilson LJ spoke of a legal costs allowance being structured, especially as to its duration, so as to best encourage a spouse in receipt of the allowance to act reasonably, looking in good faith to try and reach settlement.  In KGL v CKY (page 219), this Court adopted the same fundamental reasoning albeit by reference to the spouse paying the allowance: “There is no reason why public funds should be expended to fund litigation when there are ample resources available within family funds. With proposals for more active juridical involvement in pre-trial proceedings to restrict the incidence of costs this is in line with the modern approach. The court can keep better control of litigation if it’s funding is at least in part within its purview. The party that controls the funds will be less willing to use them on unnecessary interlocutory procedures if he or she will have to provide funding for the other side.” Discussion 17.  I must now turn to consider the issues, the law and the parties’ evidence as set out in their Form E’s, their affidavits (if relevant) and in their Answers to Requests for Further and Better Particulars. How much should the husband pay to the wife as interim maintenance for the two children of the family? 18.  In the husband’s solicitor’s letter dated the 16 May 2011 the husband puts his case as follows: Relying on the current financial disclosure our client has a gross monthly income of HK$401,485 (excluding his retirement plan contribution and the stock units and including the deferred cash) and your client has disclosed monthly income of HK$169,167.  Your client has not disclosed her bonus and we have therefore relied on your client’s last bonus as informed to our client of US$125,000 for this purpose.  Your client therefore has a monthly bonus amount HK$81,250 (HK$125,000 x 7.8/12) which makes her total monthly income HK$250,417.  The parties’ total joint monthly income is HK$651,902.  Our client earns 61.58% of that income and your client earns 38.42% of that income.  We have relied upon the parties’ proportional income and used this as a means to calculate their respective share of the children’s expenses.  Our client’s share of the expenses is then as follows:- Expenses Amount (HK$) Respondent’s 61.58% share (HK$)   Rent (children's 2/3) 41,333 25,452 Utilities (children's 2/3) 8,000 4,926 Food (children's 2/3) 12,000 7,389 Domestic helper 4,650 2,863 Petrol and tolls (children's 2/3) 9,333 5,747 Extra tuition fees 4,500 2,771 School transport (children's 2/3) 8,333 5,131 School books and stationary 1,000 616 Entertainment and presents 5,000 3,079 Clothing and shoes 3,000 1,847 Uniform 350 216 TOTAL: $97,499 $60,037 In addition to our client paying 61.58% of the children’s expenses he is also assuming 100% of the children’s school fees, the approximate amount of HK$7,000 for the American Club each month, the children’s medical and dental expenses and the children’s therapy expenses which is approximately HK$8,000 – HK$10,000 per month for J’s ADHD treatment and occupational therapy and S’s speech therapy and anxiety treatment.  Therefore our client will be paying children’s expenses as follows:- - Children’s maintenance $60,037 - School fees $32,050 - American Club $7,000 - Children’s therapy ($8,000 - $10,000) $10,000 TOTAL: $109,087 Plus: medical and dental and his holiday expenses with the children. Your client will pay children’s expenses of HK$37,462 (HK$97,499 – HK$60,203).  Each party is to pay for their own holidays with the children. In relation to the children’s extra-curricular and extra-tuition activities our client proposes that the parties continue to discuss and agree which activities and tuition the children should participate in from time-to-time and our client will reimburse your client 61.58% of those expenses within 14 days of production of receipt. The parties’ respective incomes  19.  The initial difficulty I have with the husband’s proposal is the assumptions that it makes in relation to the parties’ respective incomes. In the letter of the 16 May the husband says that his gross salary in 2010 was HK$401,485 per month excluding his retirement plan contribution and the stock units but including the deferred cash. In his 2010 compensation summary attached to the letter his total remuneration package salary is set out as follows:      2010  Base Salary HKD 3,200,000.00 Cash Bonus HKD 656,471.59 Deferred Cash $ 94,640.26 - 25% paid in July 2011 $ 23,660.07 - 25% paid in December 2011 $ 23,660.07 - 50% paid in July 2012 $ 47,320.13 Stock Units $ 33,403.00 Retirement Plan Contribution HKD 78,776.59 TOTAL REWARD HKD 4,930,000.00 20.  If one includes deferred cash, stock units and retirement contribution his salary is HK$410,833 per month. Without the stock units and retirement contribution his salary for 2010 was HK$329,259 per month. According to his Form E his salary as at December 2010 was c HK$380,000 per month. Given all of this I will approach this on the premise that the husband was earning approximately HK$330,000 per month net of stock and retirement contribution for 2010, but that his salary has since gone up to something in the region of HK$401,485 per month – say HK$400,000 per month, including his deferred cash but not the retirement plan contribution and stock units. In other words I accept what has been said in this respect in his solicitor’s letter.    21.  In so far as the wife is concerned the letter from her employer dated the 21 September 2011 states as follows: This is to confirm you commenced employment with [the bank] effective April 2008.  Your current capacity is Vice President in Investment Banking Division with an annual remuneration of HK$1,550,000.  You also receive an annual other allowance of HK$480,000.  This allowance is subject to change in accordance with prevailing Company policy and the allowances will not form part of your Total Compensation. We further confirm your 2010 discretionary variable incentive award, paid in February 2011 is USD20, 512.00. 22.  Thus the wife currently has an income of HK$129,166 per month plus an allowance of HK$40,000 per month making a total of HK$169,166 per month.  In putting forward his offer the husband has assumed that the wife will receive a discretionary bonus of US$125,000 per annum, whereas it is clear from this letter that last year she received a bonus of US20, 512. In the wife’s counsel’s submission she says that she now has a gross income of HK$182,458 per month. This presumably includes the discretionary bonus. I will therefore approach this aspect of the case on the premise that the wife has a salary before bonus and taxes of c HK$169,166 per month – rounded up to say HK$170,000 per month. I have not included her discretionary bonus in this, although I accept that it is another financial resource that is available to her and that the amount she receives will vary from year to year depending on market conditions. This is something that I will refer to again later. 23.  Consequently it seems to me that the basis upon which the husband makes his proposal is fundamentally flawed in that it assumes levels of income that the wife may not have. I am therefore proceeding on the basis that the husband is earning approximately 70% of the parties’ joint income. (70% x HK$570,000 = HK$399,000) 24.  The other difficulty I have had is that the husband has not included all expenses in the schedule contained in his solicitor’s letter. Generally the first point of reference for this is the Form E. The wife’s schedule for General expenses as set out in her Form E is as follows: 4.1  General Item Amount (HK$) Rent (HKD 50,000 paid by respondent) 62,000 Mortgage instalments N/A Utilities (electricity, gas, rates, telephone & water) (Paid by Respondent) 12,000 Management fees N/A Food (grocery + market + taxi + parking) (Paid by Respondent) 18,000 Household expenses (Furniture, subscriptions/Watson’s water, BBQ gas) 7,500 Dry Cleaning & Household repairs (Paid by Respondent) 2,000 Car expenses/loan/insurance/registration/ /maintenance 9,000 (including car loan of HK$6,253 per month) Insurance premia (household/Travel) 900 Domestic helper(s) – HK$4,000 each + Helper insurance – HK$250/month (Respondent pays HKD 4,000 for helper and I pay the remaining insurance costs for helper(s) + Driver – HKD 12,500) 17,000 Others (specify) – Petrol / toll (Paid by Respondent) 14,000 Total monthly household expenses HK$142,400 (of which the Respondent now contributes HK$100,000 and I pay the remaining sum of HK$42,400)   25.  The husband in his letter of the 16 May has accepted the wife’s estimate for rent at HK$62,000, utilities at HK$12,000, food at HK$18,000 and, petrol at HK$14,000 but has attributed 2/3 of those expenses to the children. He then proposes that he pay 61.58% of those expenses. Given that I accept that the wife’s counsel was correct to assume that the husband was not going to challenge the actual level of those expenses. Counsel for the husband has now tried to do so, albeit very late in the day, on the basis that the court is required to look at the expenses critically. Although I do of course accept that that is generally speaking the correct approach, it seems to me that had that been the husband’s case that he should have made that clearer a lot earlier in the proceedings. I have noted that the husband has also accepted many of the wife’s estimates in relation to the children’s actual expenses. In those circumstances I agree that it should not be open to the husband to challenge those expenses now – at what is the 11th hour.   26.  I am also concerned that the husband has completely left out of his calculation the following General expenses save for the fact that the domestic helper was included in his schedule, but not the driver: Household expenses (Furniture, subscriptions/Watson’s water, BBQ gas) 7,500 Dry Cleaning & Household repairs (Paid by Respondent) 2,000 Car expenses/loan/insurance/registration/ /maintenance 9,000 (including car loan of HK$6,253 per month) Insurance premia (household/Travel) 900 Domestic helper(s) – HK$4,000 each + Helper insurance – HK$250/month (Respondent pays HKD 4,000 for helper and I pay the remaining insurance costs for helper(s) + Driver – HKD 12,500) 17,000 IN PART 27.  In the remainder of the wife’s Form E she has set out her personal expenses and the expenses for the children as follows: 4.2 Personal Item Amount (HK$) Meals out of home with children 5,000 Transport (taxis / bus) 600 Clothing / Shoes 10,000 Personal grooming (including haircut and cosmetics) 5,500 Entertainment / presents 2,000 Holiday (airfare/food/entertainment) Regional trips x 4 US trips x 2 Food + entertainment Shopping 1,800 2,000 4,000 4,000 Medical / Dental 7,200 Tax – US (federal and state) 6,000 + State – To Be Confirmed (“TBC”) Tax – HK 40,520 Insurance premia   Interim maintenance   Contribution to parents   Dependent family members   Tax accountant / financial consultant for US taxes 2,200 Others (specify) (yoga classes/gym) 1,500 4.3 Children Item Amount (HK$) School fees (Paid by Respondent) 30,400 Extra tuition fees (summer camps + field trips) (Paid by Respondent) 4,500 School books and stationery 1,000 Transport to school (including school bus) taxis 200 Medical / Dental (Immunotherapy/medication) 6,000 Extra Curricular Activities (tutors/activities, therapist) 22,200 Entertainment / presents (parties/membership to Disneyland, Ocean Park, movies, computer games, CDs Dvds) (Paid by both) 5,000 Holidays (paid by both   Air tickets (3x Phuket trips) x 3 (including helper) 4,250 Air tickets 2x to US 4,000 Summer vacation elsewhere 2,500 Food + entertainment + shopping 5,000 Clothing / Shoes 3,000 Insurance Premia TBC Lunches and pocket money (Paid by both)   Other Transport   Child-minding fees   Uniform 350 Others (specify) – American Club (meals + activities) (paid by respondent) 7,000 Total monthly expenses for children HK$95,400 (of which the Respondent contributes HK$34,900 whilst the remaining sums are either paid by us both or I pay solely)   28.  In so far as the wife’s own expenses are concerned I have some difficulty with the estimate for tax at HK$6,000 plus HK$40,520 per month. I do not accept that estimate – which does not appear to be in keeping with the wife’s tax demand in any event.       Although I accept that the wife will be obliged to pay both HK and US taxes it does not seem to me that she is likely to be paying such a large amount. Some of the other expenses also seem to be on the high side (e.g. clothing/shoes – HK$10,000 per month, personal grooming HK$5,500 per month). 29.  In so far as the children’s expenses are concerned, it seems that most of these have been accepted by the husband without challenge.     30.  Unfortunately the wife then chose to produce a slightly different schedule of expenses in her most recent affidavit. It is this schedule that she now seeks to rely upon in support of her application. Item Actual Spend H to pay M to pay 1. Rent on RBG 62,000 50,000 12,000 2. Utilities 12,000 12,000 0 3. Food (home) 18,000 18,000 0 4. Helper 4,650 4,650 0 5. Petrol and tolls 20,000 20,000 0 6. Extra tuition fees 4,500 4,500 0 7. Taxi + school transport 500 500 0 8. School books 1,000 1,000 0 9. Entertainment / presents 5,000 5,000 0 10. Clothing / shoes / pocket money / uniform 10,000 5,000 5,000 11. Driver 12,500 0 12,500 12. Helper's insurance 250 0 250 13. Summer camps 833    833 14. After school activity 22,200 11,100 11,100 15. Meals out 5,000    5,000 16. Household expenses 4,000   4,000 17. Car 9,000 0 9,000 18. Car insurance / registration 1,100 0 1,100 19. Airfares 4,700 4,700 0 20.US Medical and ADHD med 3,640    4,000 21.American Club 7,000 7,000 0 22.Children's medical and dental 10,000 10,000      242,173 153,450 64,783 31.  With respect I have not found this very helpful as it makes it difficult to compare one against the other. In broad terms however the wife is seeking HK$153,450 per month plus, it would seem, an undertaking from the husband to continue to pay the school fees, the children’s therapy and the maintenance costs for the Phuket property. The wife’s approach is largely based on what she says was the established practice during the marriage and post separation. However the net result is a request for a much higher payment compared to the original amount that the husband was paying prior to the 1 June 2011. How best to approach this case? 32.  If one were to approach this case on the same mathematical base as suggested by the husband but on the premise that a) he contributes towards 70% of the children’s expenses as opposed to 61.58% and b) all of the expenses are included, the schedule would look something like this: Item Actual Spend H to pay 70% Wife to pay 30% 1. Rent (Children’s 2/3) 41,333 28,934 12,399 2. Utilities (Children’s 2/3) 8,000 5,600 2,400 3. Food (home) (Children’s 2/3) 12,000 8,400 3,600 4. Helper * 4,650 3,255 1,395 5. Petrol and tolls * 20,000 14,000 6,000 6. Extra tuition fees ** 4,500 3,150 1,350 7. Taxi + school transport * 500 350 150 8. School books * 1,000 700 300 9. Entertainment / presents * 5,000 3,500 1,500 10. Clothing / shoes / pocket money / uniform * 10,000 7,000 3,000 11. Driver * 12,500 8,750 3,750 12. Helper’s Insurance * 1,000 700 300 13. Summer camps * 833 583 250 14. After school activity ** 22,000 15,400 6,600 15. Meals out (Children’s 2/3) 3,333 2,333 1,000 16. Household expenses (Children’s 2/3) 2,666 1,866 800 17. Car (Children’s 2/3) 6,000 4,200 1,800 18. Car insurance / registration (Children’s 2/3) 733 513 220 19. Airfares - -   20. US medical + ADHD meds (Children’s 2/3) 2,426 1,698 728 21. American club - -   22.    - -   TOTAL 158,474 110,932 47,542 33.  Thus the expenses attributable to the children would amount to something in the region of HK$158,500 of which the husband should be contributing c HK$111,000 and the wife c HK$47,500. This analysis is based on the wife’s figures. I have attributed 2/3 of all the household expenses to the children and 1/3 to the wife. The expenses have then been split on a 70%:30% ratio in keeping with each party’s respective earnings. In so far as the expenses directly attributable to the children are concerned these are likewise shared in the same ratio. I have marked those with an *.  I have included the expense of the domestic helper and the driver in this category as it seems to me that these expenses are mainly attributable to the children. Likewise the cost of petrol. 34.  Consequently if this approach is adopted, as seems sensible in the circumstances of this case given that both parties are working and earning a good salary, the husband would be expected to contribute in the region of HK$111,000 per month towards the children’s expenses.   35.  In addition, given that the husband is earning significantly more than the wife, it does seem to me to be fair and reasonable to hold the husband to his undertakings to pay for the school fees, the American Club fees and chits up to a maximum of HK$7,000 per month, the children’s therapy up to a maximum of HK$10,000 per month, and the cost of maintaining Phuket in the sum of HK$5,000 per month. In addition the husband has offered to pay for the children’s medical and dental expenses. Thus the husband will be obliged to pay at least an additional HK$48,700 per month without taking into account any medical or dental costs. 36.  The husband has proposed that the children’s extra tuition fees, after school activities and school camps etc should be agreed to between the parties in advance and that he should then contribute towards those expenses upon production of the relevant receipts. I accept that this would be appropriate notwithstanding the high level of conflict between the parties. Thus the sum of HK$19,000 shall be deducted from the maintenance figure of HK$111,000 being the cost to the husband of the extra tuition fees, after school activities and school camp. I will hold the husband to his proposal as set out in his letter of the 16 May 2011, that upon discussion and agreement he will contribute 70% of the cost for the extra tuition fees, after school activities and school camps upon production of receipts. This is to be done within 14 days.     Order with respect to the children 37.  Consequently I will make an order that upon the husband undertaking to continue to pay for: a) the children’s school fees, b) up to HK$7,000 per month for the American Club fees and chits, c) maintenance of the Phuket property, d) the children’s medical and dental expenses, e) the fees for the children’s therapy up to HK$10,000 per month and f) 70% of the children’s extra tuition fees, extracurricular activities and school camps, within 14 days upon production of receipts for the same, the husband shall pay the wife interim maintenance for the two children of the family in the sum of HK$46,000 per month per child with effect from the 1 December 2011 until further order. How much should the husband pay to the wife as maintenance pending suit for herself, if anything at all? 38.  I have considered whether or not I should make any order for the wife given that she is earning a good salary herself. On her figures the maintenance order for the children will mean that she is contributing c  HK$47,500 towards the children’s expenses plus her contribution to the extracurricular expenses etc. In addition she has to contribute towards her share of the general expenses and her own expenses. I accept that both parties should pay for the children’s flights when they are in their care. All in all it seems to me that she will be able to support herself without any assistance from the husband and have funds in excess, although I accept that in part this will be dependent on her actual tax obligation. Likewise the husband should have sufficient funds to maintain himself appropriately. I am conscious of the fact that his new partner should also be contributing towards his household expenses. I am satisfied that generally speaking the maintenance order is well within the husband’s ability to pay. 39.  I would add that this amount is also, by strange coincidence, almost identical to the amount paid by the husband prior to the 1 June 2011. Should those maintenance payments be backdated and if so to what date? 40.  The wife asks that the maintenance be backdated. I accept that this would be appropriate given that the husband reduced payment without prior agreement with her. I will therefore make an order that the maintenance order be backdated to the 1 June 2011, which is when the husband said that the new arrangement was to come into effect, due credit to be given for all payments made by the husband in the intervening 6 month period.      Should any provision be made for the wife’s legal costs? 41.  The wife also asks for HK$50,000 per month as a contribution towards her litigation costs. 42.  As has recently been confirmed by the Court of Appeal and as set out above, the Family Court in Hong Kong has continued to rely on the guidance provided by the English Court of Appeal case, Currey v Currey when determining the issue of litigation funding. The test to be applied is as follows: (1) That the applicant spouse has no assets, or none that can reasonably be deployed (at para [19], [20]). (2) That she can provide no security for borrowing, or none which can reasonably be offered (at paras [19], [20]). (3) That she cannot reasonably obtain legal services by offering a charge on the outcome of the litigation (at para [20] and see Sears Tooth, per Wilson J). (4) That she cannot secure publicly funded legal help ‘at a level of expertise apt to the proceedings’ (at para [20])” There should then be an overarching enquiry into the circumstances surrounding the request. 43.  On the wife’s evidence it seems that although there are properties in the Philippines, the US and in Phuket, that it may not be easy to use these to fund the litigation or alternatively to use them as security for borrowings. The property in the US for example is held on trust and other properties are jointly held. I also accept that she would in all probability not be able to rely on the third limb and legal aid would clearly not be available to her. Overarching enquiry and costs 44.  But notwithstanding that I am aware when looking at this overall that the wife has in the main been able to fund her litigation to date by relying on her own income. A quick look at her credit cards reveals regular payments to lawyers. Given that she is in receipt of a good salary and a discretionary bonus, which has not been taken into account when determining the level of maintenance to be paid, plus the fact that she will now continue to receive a significant contribution towards the children’s maintenance it seems to me that this is not a case for awarding litigation costs. 45.  I am also concerned at the level of costs to date and the unfortunate way in which the wife has chosen to conduct some aspects of these proceedings. Aggressive and aggravated proceedings are to be discouraged – especially when children are unfortunately caught in the middle. As the Hon Hartmann LJ has pointed out above when considering whether to award litigation costs the reasonableness of the applicant’s stance will be relevant. Unfortunately I do not believe that the wife has always been reasonable. It was not reasonable for example to issue divorce proceedings based on unreasonable behaviour notwithstanding the fact that the parties had already been separated for a year. Neither was it reasonable to choose not to proceed with that petition when costs had already been expended and the marriage was clearly at an end. The wife’s approach to the arrangements for the children has also been a cause for some considerable concern. 46.  It also seems that the wife has simply asked for legal costs quite generally. She has not provided very much detail in support of her application. This approach was quite properly, in my view, criticized in HJFG v KCY. An update on costs has been provided at my request. This estimated the wife’s costs to date at just under HK$750,000 and the husband’s at c HK$470,000. One wonders how much of this could have been saved had a less emotive and more pragmatic approach been taken to the litigation. The wife sought in general terms for assistance to continue with her litigation, when the way in which she has chosen to do so to date, is a cause for some concern. Going forward the wife estimates that she will need HK$750,000 for an ancillary relief trial and HK$620,000 to pursue her removal application. The husband’s estimates for the relocation trial are HK$560,000 and a further HK$194,000 for the ancillary relief proceedings as at the end of the FDR hearing. He says that it will cost a further HK$511,000 for an ancillary relief trial. 47.  The husband offers to make payment of HK$250,000 to the wife to be applied to her ongoing legal costs, such sum to be taken into account in the final division of capital assets. I will hold the husband to this offer, save that I do not think it appropriate for it to be specifically taken into account in the final division of assets [Again see HJFG v KCY]. In the event that the husband has difficulty with this I will make an order that the husband do pay the wife maintenance pending suit for herself in the sum of HK$50,000 per month for the next 5 months with effect from the 1 December 2011, for litigation funding on the wife’s express undertaking that this sum is to be paid directly to her lawyers. The same condition shall apply if the husband chooses to advance the sum of HK$250,000 to the wife. I would hope that in part that the wife will use these funds wisely and consider her options for settlement. In any event if settlement is not possible, HK$250,000 will go some way towards covering the cost of the removal application, whereupon the issue of litigation funding may be looked at again.      Costs of the application 48.  The wife issued her application for maintenance pending suit following the husband’s unilateral reduction of her maintenance. She sought a greater sum than I have ultimately awarded. However she has been successful in part. She has not however won her application for litigation funding. I have simply endorsed the husband’s offer – although not his request that the monies be off set against any award eventually received by the wife in the ancillary relief proceedings. In the circumstances I will therefore make an order nisi to be made absolute in 14 days time that the husband do pay half of the wife’s party and party costs of her application for maintenance pending suit/interim maintenance and litigation funding. There shall be certificate for counsel. How should the issue of costs in relation to the first petition be determined?  49.  As I have said I have some concerns about the way in which the wife has chosen to conduct certain aspects of this litigation. This is largely set out above. Solicitors for the husband have made the comment in their written submission on costs that her conduct in the divorce suit has been less than desirable. I agree. They ask for the husband’s costs of and occasioned by his summons of the 7 December 2011 in which he sought to dismiss the wife’s petition and the transfer all pleadings to the new proceedings issued by himself. The wife asks that there be no order as to costs. I have some sympathy with the husband in this respect. I am also conscious of the fact however that the husband chose initially at least to defend the wife’s petition. In all of the circumstances therefore I will make an order that the wife do pay half of the husband’s costs of and occasioned by his summons dated the 7 September 2011, on a party and party basis to be taxed if not agreed.    ( Sharon D MELLOY ) District Judge Mr. Egerton instructed by Messrs Withers for the Petitioner husband Ms. Rattigan instructed by Messrs Haldanes for the Respondent wife