WM v. CNK

FCMP 19/2012

[2020] HKFC 225

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 19 OF 2012

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Mode of Hearing:  By Way of Written Submissions

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D E C I S I O N

(Variation of Costs Order Nisi)

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1.  This is a hearing (by way of written submissions) on the Applicant (“the father”)’s application for variation of the costs order nisi made after a contested hearing on the variation of the child’s maintenance.

Background

2.  The child (“M”) was born outside wedlock.  In a consent order dated 17 July 2013, the father and the Respondent (“the mother”) reached an agreement on the maintenance of M, inter alia, that:

(1)  The father undertook to purchase a property (with certain conditions on size, price, location, etc.) for the mother, M and a domestic helper to live in rent free until M reaches the age of 18 or when he leaves Hong Kong for overseas tertiary education or when he finishes tertiary education in Hong Kong.

(2)  The purchase will take place before the end of 2017, at the latest.

(3)  The father shall pay the monthly maintenance of $48,000 for M commencing 1 August 2013 until the mother commences full time employment or 30 December 2014, whichever is earlier, after which the maintenance payable will be reduced to $38,000 per month until the purchase of the property for the occupation of the mother and M.

(4)  After the mother and M move into the property purchased by the father, the maintenance payable will be further reduced to a monthly sum of $23,000 until M reaches 18 or finishes secondary education.

3.  The father did not honour the full terms of the agreement by firstly reducing the amount of maintenance payable and secondly, by failing to purchase a property for the mother and M’s occupation.  On 9 November 2016, the father issued a summons seeking to release him of the undertaking to purchase a property and a downward variation of the maintenance payable for M.  His final position on M’s maintenance was that he asked for it to be reduced to a monthly sum of $13,000.

4.  On 29 March 2018, the mother also issued her summons for an upward variation of the maintenance for M.  She asked for the maintenance to be increased to a monthly sum of $41,300.

5.  After a contested hearing lasting for 3 days, this court handed down its judgment on 20 September 2019 in which:

(1)  The consent order on M’s maintenance was varied to the effect that the father shall pay M’s maintenance at the rate of $29,000 per month; and

(2)  The father’s undertaking to purchase a property for the mother and M’s occupation was to be discharged.

6.  The above orders were made in addition to other undertakings given by the father among which the most important one was for the payment of M’s school fees.  At the time of judgment, M’s school fee and related expenses were in the monthly sum of about $8,500 and therefore, the total sum payable by the father towards the maintenance of M was at the rate of $37,500 per month.

7.  At §§65-66 of the judgment, I granted an order nisi that the father shall pay the costs of the mother, including all costs reserved with certificate for counsel:

“Costs

65. The father succeeds in discharging the undertaking on the purchase of a flat for M, whilst the mother succeeds in achieving an upward variation of the maintenance payable by the father (although the father is currently paying $32,000 per month, that is inclusive of M’s school fees). It may not be easy to decide who the winner is concerning these 2 applications.

66.  Be that as it may, I note that there is a vast disparity between the financial abilities of the parties.   Furthermore, it was the father who has unilaterally breached all his undertakings and the orders on maintenance in the Consent Order without the prior approval of the court.  Those actions should not be condoned.  In order to show this court’s disapproval of those breaches, and after considering all the circumstances of this case, in particular, the vast disparity of the parties’ financial abilities and for the protection of M’s best interests (any requirement for the mother to pay costs or share part of the costs would effectively mean that those costs have to be paid out from M’s maintenance), I have decided to exercise my discretion in favour of the mother in awarding her costs in these 2 applications, including all costs reserved with certificate for counsel.  This will be an order nisi to be made absolutely after the expiry of 14 days from the hand down of this judgment. “

8.  On 24 October 2019, the father issued his summons for variation of the costs order nisi. Although it was not stated in the summons how he would like the order nisi to be varied, it is clear from counsel’s submissions that the father is now asking for an order that each party is to pay his own costs.

9.  In view of the mother’s objection, I order that the application is to be dealt with by way of written submissions.  I also directed that a hearing bundle to be prepared by the father, which was only made available on 9 October 2020. After full consideration of the parties’ submissions, I now give my decision on the father’s application for variation of the costs order nisi.

Legal Principles

10.  In considering the issue on costs, the starting point must be O.62 r.3 (2) of the Rules of District Court (“RDC”):

“(2) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings (other than interlocutory proceedings), the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.”

(underline added)

11.  Three things are clear from the above rule:

(1)  Costs are awarded at the court’s discretion;

(2)  The starting point should be costs to follow the event; and

(3)  The starting point can be deviated from if there are special circumstances to justify such deviation.

12.  It is recognised that the court’s discretion on costs is even wider in family matters.  I was referred to the case of HK v BD [2011] HKFLR 66 in which Hartman JA (as he then was) said at §78 of the judgment:

“78. In family matters, as in all civil proceedings, the basic principles are that costs are in the discretion of the court but that costs should follow the event except when it appears to the court that, in the circumstances of the case, some other order should be made. In family matters, because of their particular dynamics, the exercise of discretion is broader-based than in other civil proceedings. However, as was observed by Butler-Sloss LJ in Gojkovic v Gojkovic [1992] Fam 40, there still remains the necessity for some starting point. That starting point, as we have indicated, is that costs prima facie follow the event.”

13.  Although HK v BD actually concerns with matrimonial proceedings, there is no dispute that the same principles are equally applicable to family proceedings.  

Discussion

14.  In his written submissions, Mr. Egerton for the father tried to convince the court that the costs order nisi in favour of the mother should be varied to one that each party is to pay his own costs. Counsel relies on 2 main grounds, namely that neither party could be regarded as an overall winner in their respective application, and that the mother has failed to disclose her re-marriage until a very late stage (§32 of counsel’s submissions).

15.  In terms of whether there was a clear winner, I must agree with counsel that there was no clear or obvious winner in the parties’ respective application.  The father succeeded in getting a release from his undertaking to purchase a flat for the accommodation of M, but failed in his application for a downward variation of M’s maintenance.  The mother succeeded in getting an increase in M’s maintenance, but not at the level as she has originally sought.  Therefore, there is a prima facie case for the father to argue that there should be no order as to costs as neither party can be regarded as the overall winner of the applications.  This fact was duly recognised in §65 of the judgment.

16.  Be that as it may, in §66 of the judgment, I have also taken into account 2 important factors, namely the unilateral breach of the consent order by the father and the vast disparity between the financial capability of the parties.

17.  The unilateral breach of the consent order was in 2 ways.  Firstly, the father failed to honour his undertaking in the purchase of a property for M’s occupation.  But as pointed out by counsel, the deadline for the purchase of property was at the end of 2017.  The father has already applied for the discharge of the undertaking in November 2016, which application was eventually approved by this court.  I accept that the father should not be criticised in failing to honour that undertaking.

18.  However, the same cannot be said of his unilateral reduction of M’s maintenance from $38,000 to $32,000 since February 2015, which was requested to be further reduced to $13,000 per month at trial. Although to be fair to the father, his offer of $13,000 was in addition to his undertaking to pay M’s school fees, which stood at about $8,500 per month. This has the effect of uplifting his overall offer to $21,500 per month.  But this was still far below the final award of the court at $37,500 per month ($29,000 + $8,500 = $37,500).

19.  On the other hand, the mother’s latest offer was $41,300, which was much closer to the final award of $37,500.  Therefore, in terms of reasonableness, I found the offer of the mother much more reasonable than that of the father.  The father’s unilateral reduction of M’s maintenance should not be condoned.

20.  Furthermore, in reading the father’s submissions, there was no submission on the costs order’s financial impact on the welfare of M as compared to that of the father, if there was indeed no order to be made on costs.  If one should read §66 of my judgment, one would notice that I have taken into account the vast disparity of the financial capability of the parties before I exercised my discretion in favour of the mother, which was in effect a discretion in favour of M.  The father was a CEO of a listed company in Germany, earning a very good income and having assets in the sum of at least $16,000,000.  According to counsel at trial, his ability to pay the sum as claimed by the mother was not in issue.  On the other hand, the mother was living with and being financially supported by her present husband who was a rank and file police officer only with a regular income.   If this court should order each party to bear his own costs, this would mean that the mother has to pay her costs which I believe would not be insubstantial.   This will have an extreme adverse impact on the financial well-being of M as it is likely that a few years’ of his maintenance may be depleted just in paying his own costs of this litigation.   After considering counsel’s submissions, I still maintain my view the court’s discretion on costs should be exercised in favour of the mother, and through her in favour of M, under the overall circumstances of this case.

21.  Another ground of the father’s submissions was the mother’s failure to disclose her re-marriage until a very late stage.  It was the father’s contention that the mother had deliberately concealed this information and the fact that the accommodation of M had already been provided for.  This was a litigation conduct that needs to be taken into account. Therefore, it was counsel’s submission that the court’s discretion on costs should not be exercised in favour of the mother.

22.  I note that during cross examination, questions were put to the mother that when the parties were discussing the terms of settlement in about July 2013, she had failed to disclose her intimate relationship with her present husband or that she might even be contemplating re-marriage at that time.  That was denied by the mother.  At §31 of the judgment, I have refused to come to a conclusion that the mother was deliberately concealing her relationship with her present husband simply based on the proximity of time between the consent order and the mother’s re-marriage.

23.  Despite such conclusion, the father still pursued his criticism on the mother’s non-disclosure of her re-marriage until it was found out by him at a later stage.  According to him, the non-disclosure of this important piece of information, not only at the time of consent order but at any subsequent point in time, was a deliberate concealment of the fact that M’s accommodation had already been provided for, which in turn had caused both parties to have incurred unnecessary costs in the litigation.

24.  I note that a similar question was put to the mother on 29 August 2018, i.e. the last day of trial, alleging that she had failed to disclose her re-marriage in her correspondence in 2015 when the issue of M’s German passport was raised.  The mother replied that she did not know there was a need to tell the father of her re-marriage, as she would not have expected the father to tell her about his re-marriage.  She said she was just following the court order and there was nothing therein to require her to tell the father about her re-marriage.

25.  I find the mother’s answer being reasonable and I am not prepared to come to a conclusion that there was any non-disclosure of the mother’s re-marriage, and even if there was one (which is not my finding here), it was done deliberately.

Conclusion

26.  Based on the above discussion, I still maintain my view that despite the fact there was no clear overall winner in the litigation, the facts that the mother’s offers, though not entirely successful, were much more reasonable than that of the father and most importantly, in view of the vast disparity of the parties’ financial capability, there was ample justification in exercising the wide discretion of this court on costs in favour of the mother and in turn, in favour of M.  The costs order nisi made on 20 September 2019 is hereby made absolute.

Costs of this application

27.  As the father failed in his application for variation of the costs order nisi, the costs of such application are to be given to the mother, with certificate for counsel.

Representation:

FCMP 19/2012

[2019] HKFC 246

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 19 OF 2012

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J U D G M E N T
(VARIATION OF MAINTENANCE)

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1.  This is a hearing of the parties’ respective summons for variation of the maintenance payable under the consent order dated 17 July 2013 (“the Consent Order”).  The Applicant (“the father”) asks for the undertaking to purchase a property for the use of the child (“M”) to be discharged and the maintenance payable to be reduced, whilst the Respondent (“the mother”) asks for the maintenance payable to be increased.

Background

2.  The father is a German national.  He was and still is a Chief Executive Officer (“CEO”) of a listed company in Germany.   The mother is a local Chinese.  The parties met in Hong Kong sometime in 2006 and thereafter developed a romantic relationship.

3.  M was born in 2008 and is now aged 11.   M is currently living with the mother in Hong Kong and being a Year 7 student of an English Foundation School (“EFS”).

4.  The parties’ relationship came to an end towards 2011/2012, leading to the present proceedings during which a settlement on M’s maintenance was reached as evidenced by the Consent Order before HH Judge Bruno Chan on 17 July 2013 (A/1-5).  The relevant and essential terms of the settlement were as follows:

(1)     The father undertook to purchase a property (with certain conditions on size, price, location, etc.) for the mother, M and a domestic helper to live in rent free until M reaches the age of 18 or when he leaves Hong Kong for overseas tertiary education or when he finishes tertiary education in Hong Kong.

(2)     The purchase will take place before the end of 2017, at the latest.

(3)     The father shall pay the monthly maintenance of $48,000 for M commencing 1 August 2013 until the mother commences full time employment or 30 December 2014, whichever is earlier, after which the maintenance payable will be reduced to $38,000 per month until the purchase of the property for the occupation of the mother and M.

(4)     After the mother and M move into the property purchased by the father, the maintenance payable will be further reduced to a monthly sum of $23,000 until M reaches 18 or finishes secondary education.

5.  It is not disputed that the father has failed to honour the full terms of the agreement in at least 2 ways.  Firstly, he unilaterally reduced the monthly maintenance to $32,000 (as opposed to $38,000) since February 2015.  Secondly, he failed to purchase a property for the mother and M’s occupation by the end of 2017.

6.  Instead, the father took out a summons on 9 November 2016 (A/6) seeking to be released from his undertaking to purchase a property for the mother and M’s occupation and also a downward variation of the maintenance payable for M.  In his supporting affirmation, the father asked for the monthly maintenance to be reduced to $23,000 (B/6, §14).  After the conclusion of the evidence, counsel for the father asked for the sum to be further reduced to $13,000 together with the father’s undertakings in respect of M’s educational costs (§88 of counsel’s Closing Submission). 

7.  The parties had attempted negotiation for a settlement but unfortunately failed.  On 29 March 2018, the mother took out her summons for an upward variation of M’s maintenance from $38,000 to $41,300 until June 2024, and $41,900 until M reaches 18 or finishes secondary school education.

8.  The mother had at the same time issued a judgment summons (“JS”) for the outstanding arrears amounting to a sum of about $288,695 being the difference in monthly maintenance the father had unilaterally reduced since February 2015 up to March 2018.  The JS is now adjourned sine die pending the determination of the present 2 summonses.

Issues

9.  It is to be noted that it is now the father’s case that his ability to pay is no longer a primary issue.  In counsel’s Closing Submission, it was stated at §86 that:

“86. So far as maintenance the primary issue after the oral evidence is not the Father’s ability to pay but what in fact are the real expenses of [M].”

10.  Therefore, it is my view that the issues to be decided now are:

     (1)     Have there been any major change of circumstances, rendering it reasonable for the father to withdraw his undertaking on the purchase of a property for the use of M and the mother?

     (2)     What are the reasonable monthly expenses of M that should be paid by the father under the present circumstances of the case?

The Law

11.  The law giving the court’s jurisdiction to vary a maintenance order in respect of a minor born outside wedlock is found in section 10 (4) of the Guardianship of Minors Ordinance, Cap. 13 (“GMO”):

“(4) An order under subsection (1) or an order under subsection (2) (other than an order for a lump sum payment in one amount, for a lump sum to be paid in instalments where all such instalments have been paid or for the transfer of property) may be varied, discharged, suspended or revived after being so suspended, by a subsequent order made on the application of either parent or after the death of either parent on the application of any guardian under this Ordinance, or (before or after the death of either parent) on the application of any other person having custody of the minor by virtue of an order under subsection (1).”

12.  On how to exercise the court’s discretion, I agree with counsel that helpful guidance can be found from similar cases brought under section 11 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”) for children born within wedlock together with the relevant case laws.

13.  In the case of AEM v. VFM[1], Cheung JA has explained the modern approach in dealing with such an application at paras 14.4-8 of the Judgment:

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

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

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

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

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

14.  As to the weight to be attached to the original order, Tang VP (as he then was) said in the case of HCTT v. TYYC [2008] 5 HKC 86 at paras 15-16:

“15. But as Garner v. Garner [1992] FLR 573 shows that does not mean that the earlier order, whether made by consent or not, carries no weight. How much weight should be given to the earlier order must depend on the circumstances. Cazalet J said in the English Court of Appeal:

“Almost invariably, an application to vary an earlier periodical payment order will be brought on the basis that there has been some change in the circumstances since the original order was made; otherwise, except in exceptional circumstances, the application will, in effect, be an appeal. If an order is not appealed against, or is made by consent, then the presumption must be that the order was correct when made. If it was correct when made, then there will usually be no justification for varying it unless there has been a material change in the circumstances. However, because of the impact of continuing inflation, because children grow older and cost more to support and because, for example, the cost of living in its increase may hit one party harder than another, it will usually follow that, if time has passed, there will inevitably have been changes in the circumstances, of the parties concerned.

     Following Lewis v. Lewis, by which decision this court is bound, a court on the hearing of an application to vary is fully entitled to look at all the relevant matters set out in s.25 of the Matrimonial Causes Act 1973.  On occasions, the court may be slow to accede to an application to vary a consent order; not least because the parties’ solicitors might otherwise be deterred from either seeking to negotiate such a provision or to achieve finality.  Another factor which may influence a court will be the time that has passed since the original order was made.  If an application consequent on an order is brought very soon after that order has been made, the court, in normal circumstances, is likely to attach more weight to the earlier order than if it had been made some years previously.  Likewise, the court would expect to pay full regard to any special terms agreed between the parties at the time the original order was made- as, for example, when endorsements on briefs or contemporaneous correspondence show that an agreed order has, for some particular reason, been set at an artificially low figure.  Shortly stated, the court must decide what weight it should attach to the original order and all the surrounding circumstances.  However, once an application to vary is before it, the court is fully entitled to make an order considering all the circumstances afresh, paying such regard to the older order as may be appropriate.”

16.     Thus, although the jurisdiction to vary is untrammelled, normally the earlier order would not be varied unless there has been a material change in the circumstances.”

15.  I shall bear the above principles in mind when I come to consider the facts of this case.

The Father’s Case and Financial Circumstances

16.  It is the father’s case that his ability to pay is no longer a primary issue.  By this, I take it to mean that he has no difficulty in paying the maintenance as claimed by the mother for M.  What remains disputed is whether the amount claimed is reasonable and whether they should be allowed in full.

17.  Despite the father’s concessions, I still find it necessary to go into a brief discussion on his financial positions so that the final decisions on M’s maintenance could be made in proper context.

18.  The father is a German national now aged 54.  He is currently the Chief Executive Officer of a listed company in Germany earning an average monthly income of about HK$376,963 (B/119).  He is also in possession of the following assets and liabilities (B/118):

Assets (+)
(1)	Various bank accounts	HK$2,664,756
(2)	Various stocks	HK$8,533,331
(3)	Insurance and endowment policies	HK$1,077,295
(4)	Valuable personal items	HK$319,000
(5)	Pension/MPF/Gratuity interests	HK$724,666
Liabilities (-)
(6)	Loans and various credit cards	HK$1,005,829
	Net Assets:	HK$16,551,922

19.  In his evidence, the father has testified on his financial responsibilities towards his ex-wife and child from his first marriage; and also his responsibilities towards his current wife and child, the marriage of which was entered into shortly after his separation from the mother.  But as the father’s ability to pay is not a major issue here, I will not venture into a detailed discussion of those financial responsibilities as they will not have a profound impact on the father’s abilities to satisfy the reasonable needs of M.

20.  It is the father’s case that the mother has also entered into a marriage shortly after the Consent Order was made.  Her husband (“Mr. Lo”) works in a disciplinary force and is being provided with married quarters as part of his remuneration package.   As the housing needs of both the mother and M have now been catered for, the need for the provision of housing by the father is no longer there.  Therefore, the father asks for the withdrawal of his previous undertaking in purchasing a property for the use of M and the mother.

21.  The father also submits that as the mother’s marriage (in the year of 2014) happened so shortly after their settlement on financial provisions (in 2013), it is reasonable to assume that when the parties were negotiating for and finally reached a settlement in 2013, the marriage was well within her contemplation and therefore should have been disclosed to him during negotiation.  In short, the father is alleging that the mother has breached her duty for full and frank disclosure when negotiating for the settlement.

22.  Furthermore, it is also the father’s case that many of the expenses as claimed on behalf of M are without evidential support or unreasonable in amount or nature.  He is now willing to give an undertaking to pay for M’s educational expenses together with payment of a monthly sum of HK$13,000 towards the reasonable maintenance of M, the breakdown of which could be found at Annex B of counsel’s Closing Submission dated 19 September 2018. 

23.  The father also asks for the variation to be backdated to the date of the mother’s marriage (on 8 May 2014) and claims for the return of a sum of $598,320 from her.  In the event that the court does not accede to the request for backdating to the mother’s marriage, he asks for backdating from his summons, i.e. 9 November 2016 in the sum of $231,840.

The Mother’s Case and Her Financial Circumstances

24.  The mother is now aged 40.  On 8 May 2014, she married Mr. Lo who is a civil servant working in a disciplinary force in Hong Kong.  Together, they have another child born in 2016.  Therefore, the family of 4 (the mother, Mr. Lo, M and the new born child), together with a domestic helper are now living in government quarters.

25.  In order to care for M, and her new born child, the mother could not return to full time employment. According to her, she is now working as a part time English tutor earning about $2,400 per month in 2016/17 which has recently increased to about $4,200.

26.  In the mother’s Form E (B/96-97), she has listed out M’s current monthly expenses (as on 29 March 2018) but I also note that some of those items have been revised in her latest (6^th) Affirmation (B/68-69) as follows (the figures in bracket are sums claimed before revision):

Items	Monthly Amount (HK$)
General
Rent	$379
Utilities	$1,000
Household expenses	$500
Domestic helper	$1,125     $3,004
Child
School fees	$7,740 (from $8,920)
Extra tuition fees	$3,200
School books and stationery	$1,000
Transport to school	$1,200
Medical/dental	$1,500
Extra-curricular activities	$4,400
Entertainment/presents	$3,130 (from $2,510)
Holidays	$2,500 (from $3,333)
Clothing/shoes	$1,000 (from $1,500)
Insurance premia	$593
Lunches and pocket money	$8,900 (from $9,300)
Other transport	$500
Uniform	$300 (from $200)
Others	$583 (from $413)
	$36,546
	(from $38,569)
Total:	$39,550
	(from $41,573)

27.  It is the mother’s further case that the school fees of M will be increased to $9,390 in 2018-19 (which should have already happened by the time of this judgment).  Upon M’s entry into secondary education in 2019-2020, there will be a further increase of 38% for Year 7 school fees and a further increase of about 6-7% for Year 8 to Year 13.  In addition, the mother asks for the father to provide security to his payments (§2 of her summons, A/27) and raises objection to the release of the father’s undertaking to provide housing for M.

28.  During the hearing, sometime has been spent on whether the mother has fully utilised her earning capacity by returning to the labour market on a full time basis.  I presume that line of cross examination was based on the fact that the mother had once undertaken in the Consent Order that after her return to full time employment, she would also contribute to the expenses of M in the monthly sum of $10,000. I think it is now unrealistic to expect the mother to fulfil this undertaking in view of the development since the Consent Order.   I am glad to see that counsel has sensibly not made any submissions in this area in both his Opening and Closing Submissions and I will say no more in that regard.

Father’s Undertaking to provide Housing

29.  An important part of the father’s application is for the withdrawal of his undertaking to purchase a property before the end of 2017 for the exclusive occupation of the mother and M.   It is not disputed that such undertaking was breached by the father as such a property has never been purchased, nor provided to the mother and M for their occupation.   It is the father’s case that the purpose of such undertaking was to provide both the mother and M a proper accommodation.  As their accommodation has now been properly provided for by virtue of Mr. Lo’s employment, there is no reason why the father should not be released from that undertaking.

30.  The mother objects by saying that the accommodation offered by Mr. Lo cannot be said to be stable. Putting aside the facts that Mr. Lo’s employment may be subject to changes in future and staff quarters are not a guarantee, M is facing an additional difficulty in that as an illegitimate child, he may be evicted therefrom as he is not treated as a family member of Mr. Lo from the prospective of [the government]. 

My Views

31.  It is quite clear from the mother’s evidence that she and Mr. Lo knew each other when they were still young.   Shortly after the breakdown of her relationship with the father in 2011, the mother’s relationship with Mr. Lo has become close and intimate.  Mr. Lo even helped her to sign for a tenancy because according to her, she as a single mother and without stable employment was in great difficulty in securing a rental accommodation.   However, there is no evidence on when the mother and Mr. Lo decided to form a new family by marriage.  It is true to say that the period between the settlement and the mother’s marriage was relatively short, but I am not prepared, without any further evidence in this respect, to jump to the conclusion that the mother must have form the intention to marry Mr. Lo at the time of the settlement and thus failed to fulfil her duty for full and frank disclosure.

32.  As to whether the father should be released from the undertaking to buy a property for the use of M and the mother, one has to bear in mind that the purpose of such undertaking is to satisfy the reasonable housing needs of M, and ancillary to that the housing needs of the mother as well.  The reality is that M is now living with the mother in a new family in staff quarters provided by the employer of Mr. Lo.  There is no evidence to suggest that Mr. Lo is not treating M as a child of the new family.  In her evidence, the mother has hinted that M may not be allowed to stay in the government quarters but apart from that bare assertion, I see no concrete evidence in this regard.  Under these circumstances, it is not realistic to expect the mother and M to move out from the new family even if the father should have honoured his undertaking in purchasing a flat now. 

33.  After hearing the parties’ evidence in this regard, I am satisfied that the reasonable accommodation needs of M has now been catered for and this significant change of circumstance would justify the withdrawal of the father’s undertaking in respect of the purchase of a flat for M and the mother’s accommodation.

Reasonable Needs of M

Educational Costs

34.  The father is willing to give an undertaking to pay for M’s educational costs until he completes his secondary education as billed by his school from time to time.  He further maintains his undertaking under paragraph (A) (3)(a) of the Consent Order concerning with M’s tertiary education.

35.  In view of the increasing costs of M’s education in the years to come, an undertaking in this regard seems to be a better option so as to avoid any future adjustment.   I am satisfied that M’s educational costs can be secured by a proper undertaking from the father.

Life Insurance of the Father

36.  The father also confirms his previous undertaking under paragraph (A)(4) of the Consent Order in respect of his life insurance.  In paragraph 4 of Annex A to counsel’s Closing Submission, the father has reiterated his undertaking with more details.   Counsel has also enclosed the insurance’s annual statement provided by HSBC in Annex C to his Closing Submission.  I am satisfied with the father’s undertaking in this regard.

Other Needs

37.  In Annex B of counsel’s Closing Submission, Mr. Egerton has set out a table setting out the claims of the mother as opposed to the proposals of the father.  But as that table has not incorporated the mother’s revised claims in her 6^th Affirmation, I would further revise the table for the ease of comparison:

Items	Mother’s Claims	Father’s Proposals
Rent	$379	$379
Utilities	$1,000	$500
Household expenses	$500	$200
Domestic helper	$1,125	$1,125
School fees	$7,740 (as revised)	Undertaking to
		pay all items billed by School
Extra tuition fees	$3,200	$800
School books and stationery	$1,000	$500
Transport to school	$1,200	$500
(including school bus)
Medical/dental	$1,500	$1,000
Extracurricular activities	$4,400	$1,000
Entertainment/presents	$3,130 (as revised)	$1,000
Holidays	$2,500 (as revised)	$1,000
Clothing/shoes	$1,000 (as revised)	$1,200
Insurance premia	$593	N/A
Lunches and pocket money	$8,900 (as revised)	$3,200
Other transport	$500	N/A
Child-minding fee	N/A	N/A
Uniform	$300 (as revised)	$200
Others	$583 (as revised)	Undertaking to pay all items billed by school
Total:	$39,550 (as revised)	$12,604 but say
		$13,000

38.  The items in italics are those in dispute and they are now reproduced hereunder for ease of reference:      

Items	Mother’s Claims	Father’s Proposals
Utilities	$1,000	$500
Household expenses	$500	$200
Extra tuition fees	$3,200	$800
School books and stationery	$1,000	$500
Transport to school	$1,200	$500
(including school bus)
Medical/dental	$1,500	$1,000
Extracurricular activities	$4,400	$1,000
Entertainment/presents	$3,130 (as revised)	$1,000
Holidays	$2,500 (as revised)	$1,000
Clothing/shoes	$1,000 (as revised)	$1,200
Insurance premia	$593	N/A
Lunches and pocket money	$8,900 (as revised)	$3,200
Other transport	$500	N/A
Uniform	$300	$200
Others	$583	Undertaking to pay
		all items billed by school

39.  It is regrettable to note that a vast majority of the mother’s claims are disputed in one way or the other.  Some differences are really minor involving only a few hundred dollars (for the item of uniform, the difference is merely $100).  Having said that, I note from Mr. Egerton’s Closing Submission that counsel has reasonably not made submissions on each and every disputed items, especially those very minor ones. By this, I take that the father has decided not to put up any serious challenge to those very minor items, although that does not mean that he agrees to each and every one of them.   Therefore, when I come to the discussion on the reasonableness of the mother’s claims, I will concentrate on Section E of counsel’s Closing Submission which set out the father’s objections to the quantum of M’s monthly reasonable needs.

40.  Before I proceed to discuss the more significant disputed items, there are some general comments that I want to make here.  It is apparent that many of counsel’s attacks on the mother’s claims centred on the fact that she had not produced all the receipts in support.  I think that is true for many of those challenges as raised by the father.  Although I must bear in mind that the general burden of proof rests squarely on the mother, one must not lose sight of the fact that many of those daily expenses are not of very great amount of which one would always keep a receipt.  I also note that after the mother’s quotation of M’s various expenses at her Form E (B/97) on 28 March 2018, there has never been any request from the father for further and better particulars or for the production of the actual receipts for verification.   Moreover, many of those expenses are not static and by nature will change from to time to time.  That means those figures are necessarily estimated averages and therefore, their reasonableness has to be assessed in that particular light.

Extra tuition fees

41.  The mother claims for $3,200 per month for M’s extra tuition fees.  The father proposes a figure of $800.

42.  It is true to say that the mother did not produce receipts amounting to the sum of $3,200.  But everybody knows that in Hong Kong, students taking extra tuitions are extremely common.    I have no doubt that M must have taken and may be still taking those extra tuition classes, or at least some of them.  It is also common that students may attend extra tuition for different subjects at different times.  Therefore, the tuition fees claimed under this item must be an estimated average figure, instead of an actual reimbursement figure.  As far as that figure is concerned, $3,200 per month does not seem to be unreasonable despite the lack of receipts and I will therefore allow them in full.

Transport to School (including School Bus)

43.  The mother claims for $1,200 per month.  The father proposes $500.

44.  School bus receipts are much more straight forward and there is no reason why those receipts could not be produced.  Since the father is challenging the quantum and the burden on proving such quantum rests squarely on the mother, I tend to accept the father’s contention that a monthly sum of $500 should be allowed instead of the $1,200 as claimed.

Medical/Dental

45.  The mother claims for $1,500 per month for M’s medical and dental expenses.  The father proposes $1,000.

46.  In cross examination, it was put to the mother that the receipts produced only amount to $4,324 in total, averaging about $864.80 per month.   Again, I accept that the amount claimed is just an estimated average figure and the claim of $1,500 per month for a minor’s medical/dental expenses does not seem to me to be unreasonable. I will allow them in full.

Extra-Curricular Activities

47.  The mother claims for $4,400 per month for M’s extra-curricular activities.  The father proposes $1,000.

48.  It is the father’s case that the mother could only produce an application form to “ABC Cooking Studio” with $2,900 worth of cooking lessons thereon together with $400 admission fee being billed.  The father complains that there were not enough details on how often M would go to those cooking lessons and how long would $2,900 last.  He further complains that no receipts from the mother were produced.

49.  The mother explained that the extra-curricular activities would include swimming, tennis and chess classes, which were not unusual activities for M given his educational background.

50.  I accept that for a minor like M, the attendance in various extra-curricular activities is quite common.   The nature and expenses on those activities are not static and will change from time to time.   M might be attending activities like cooking, swimming, tennis or chess at the time of hearing, but by the time of this judgment, he might be attending other activities instead.  As an estimated average figure, I do not find the sum of $4,400 being unreasonable.

Entertainment/Presents

51.  In her latest affirmation (B/68), the mother claimed for $3,130 as M’s expenses on entertainment and presents (only $2,510 in her Form E).  The father proposes $1,000.

52.  In her supporting affirmation, the mother was suggesting that M had to spend about $1,730 per month on movie.   I agree that sounds a bit too much.  I would reduce it to $1,000 (a deduction of $730) for movies. After such adjustment, I would allow $2,400 in this item ($3,130 - $730 = $2,400).

Holidays

53.  In her latest affirmation, the mother claimed for $2,500 per month as M’s holidays’ expenses (B/69), instead of her previous claim of $3,333 in Form E (B/97).  The father proposes $1,000.

54.  It is the father’s case that the receipts produced by the mother do not support the said amount of $3,333 (nor the lesser sum $2,500).  For example, for the receipt in support of the Thailand trip, the sum quoted may have included expenses for other family members, including those of the domestic helper. 

55.  Mr. Li for the mother submits that M is a child with international background and with his advancing age, a yearly budget of $40,000 for holidays is not unreasonable. 

56.  I accept that the mother has not produced enough evidence to support an annual budget of $40,000 (nor the lesser budget of $30,000) for M’s holiday expenses.  Doing the best as I could, I would say a monthly sum of $2,000 is about right, that is roughly about 1/3 of what the father is spending on his own holidays (B/121, the father’s Form E).

Clothing/shoes

57.  Although the mother claimed for $1,500 per month as M’s expenses on clothing and shoes in the Form E, I note that in her most updated evidence, (B/69), she has reduced it to $1,000 only.   I would adopt this latest figure of $1,000 although Mr. Egerton said the father proposed $1,200.

Lunches and Pocket Money

58.  In the mother’s latest affirmation (B/69) she claimed for $8,900 per month as M’s lunches and pocket money, instead of her previous claim of $9,300 per month in the Form E (B/97).  It is apparent that this amount would include all expenses on food, snacks and pocket money as there was not a separation claim for food in the Form E.

59.  The father said that in some of the receipts produced, the expenses of other people must have been included.  One obvious example was the receipt from Le Meridien Cyberport in which 2 bottles of wine were included. Obviously, these could not be M’s expenses.

60.  Although there is some force in the father’s argument, I have to remind myself that this item would include the daily food consumption of a minor who is entering into his teens.  It would be impossible for the mother to produce all the supermarket receipts and make a proper apportionment.   Furthermore, food and lunches are only parts of this item and we also have to consider the pocket money to be given to M, which was $20 per day, or about $600 per month.  I would expect this sum to be increased further upon M’s entry into secondary school.

61.  The father proposes $3,200 which is a totally unrealistic figure.  I would allow $8,100 per month ($7,500 for food and dining out, $600 for pocket money).  In other words, a sum of $800 will be deducted from this item.

Summaries of M’s reasonable expenses as allowed

62.  Based on the above discussion, I would allow the followings as M’s reasonable monthly expenses:

Items	Deduction	Amount Allowed
Rent	---	$379
Utilities	---	$1,000
Household expenses	---	$500
Domestic helper	---	$1,125
School fees	Undertaking to pay	---
Extra tuition fees	---	$3,200
School books and stationery	---	$1,000
Transport to school	(-) $700	$500
(including school bus)
Medical/dental	---	$1,500
Extracurricular activities	---	$4,400
Entertainment/presents	(-) $730	$2,400
Holidays	(-) $500	$2,000
Clothing/shoes	---	$1,000
Insurance premia	---	$593
Lunches and pocket money	(-) $800	$8,100
Other transport	---	$500
Uniform	---	$300
Others	---	$583
Total:	(-) $2,730	$29,080

63.  For the ease of calculation, I would round up the sum to $29,000.  It has to be noted that this sum of $29,000 is in addition to the father’s undertakings to pay the school fees of M and also the provision of a life insurance on the father with M being named as the beneficiary.

Orders

64.  Based on the above reasons, and subject to the undertakings of the father that:

(i)     The father shall reimburse the mother all school fees paid by her on behalf of M as billed by an ESF School in Hong Kong for his secondary school education within 14 days;

(ii)     In the event that M attends tertiary education (local or overseas), the father shall discuss with the mother as to the amount of such education and his contributions; and

(iii)    The father shall maintain his life insurance policy number 20562097-20 with HSBC with:

(a)   M being named as the sole beneficiary;

(b)It has a current death benefit of HK$580,890 increasing to HK$689,405 when M attains the age of 18 (Year 2024);

(c)  When M turns 18 and if he wishes to continue with his tertiary education, the said policy may be surrendered to finance his tertiary education; and

(d)The father shall continue to pay the annual premium of HK$85,000;

I hereby make the following orders:

(1)     The Consent Order to be varied to the effect that the father shall pay a monthly sum of HK$29,000 to the mother as M’s maintenance payable on the 1^st day of every month starting from 1 October 2019 until M reaches the age of 18 or finishes full time education, whichever is the latter;

(2)     The variation on maintenance will be backdated to 1 April 2018;

(3)     The father’s undertaking to purchase a flat for M and the mother ‘s occupation to be discharged and backdated to 9 November 2016; and

(4)     All undertakings contained in the Consent Order will be discharged and replaced by the undertakings above.

Costs

65.  The father succeeds in discharging the undertaking on the purchase of a flat for M, whilst the mother succeeds in achieving an upward variation of the maintenance payable by the father (although the father is currently paying $32,000 per month, that is inclusive of M’s school fees).  It may not be easy to decide who the winner is concerning these 2 applications. 

66.  Be that as it may, I note that there is a vast disparity between the financial abilities of the parties.   Furthermore, it was the father who has unilaterally breached all his undertakings and the orders on maintenance in the Consent Order without the prior approval of the court.  Those actions should not be condoned.  In order to show this court’s disapproval of those breaches, and after considering all the circumstances of this case, in particular, the vast disparity of the parties’ financial abilities and for the protection of M’s best interests (any requirement for the mother to pay costs or share part of the costs would effectively mean that those costs have to be paid out from M’s maintenance), I have decided to exercise my discretion in favour of the mother in awarding her costs in these 2 applications, including all costs reserved with certificate for counsel.  This will be an order nisi to be made absolutely after the expiry of 14 days from the hand down of this judgment.

[1] [2008] HKFLR 106