CWYJ v. LTYE
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FCMC1135/2016
[2022] HKFC 65
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES
NUMBER 1135 of 2016
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| BETWEEN | ||
| CWYJ | Petitioner | |
| and | ||
| LTYE | Respondent |
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Coram: Deputy District Judge M Lam in Chambers
Date of Trial : 22 - 24 June 2021
Date of Closing Submissions of the Petitioner : 2 July 2021
Date of Closing Submissions of the Respondent : 16 July 2021
Date of Judgment : 12 April 2022
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Judgment
(Variation of Maintenance)
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Application
1. This is the Respondent’s application for downward variation of maintenance for his ex-wife by the Notice of Application for Variation dated 11 August 2020 as amended on 10 November 2020.
2. This is indeed the Respondent’s second application for variation of maintenance. He filed two notices of application for variation respectively on 4 April 2018 and 2 May 2018 (“First Variation Application”). The trial took place in May 2019 (“First Variation Trial”). On 28 June 2019, this Court handed down the judgment (“First Variation Judgment”) dismissing his application. No appeal was lodged against the judgment.
3. In this application, the Petitioner (ex-wife) and the Respondent (ex-husband) (collectively, the “Parties”) gave evidence in court. The Respondent’s father (“Father”), who had not given evidence at the First Variation Trial, testified for the Respondent at this trial.
Consent Order
4. The Parties got married in Hong Kong on 5 October 2007 (“Marriage”). Two daughters (“Children”) (now aged 13 and 12) were born of the marriage. The Petitioner petitioned for divorce in January 2016. The decree absolute was granted on 17 March 2017.
5. During mediation, the Parties reached a settlement agreement (“Settlement Agreement”) on the issue of custody as well as financial arrangements with the assistance of a mediator and their respective solicitors. The Settlement Agreement was reduced into the “Minutes of Consent Order” dated 26 July 2016 (“Minutes”).
6. The Minutes was subsequently made a consent order by Deputy District Judge D. Cheung on 27 January 2017. The Order was amended on 9 July 2018 and re-amended on 1 August 2018 ("Consent Order").
7. The Consent Order was granted upon a number of undertakings given by the Respondent. The undertakings and the terms of the Consent Order which are relevant to the present purpose are that : -
(1) the parties are to share joint custody of the Children with care and control to the Mother.
(2) the Respondent is to :
(i) procure and secure the former matrimonial home (“Matrimonial Home”) for the sole use and occupation of the Petitioner and the Children rent free.
(ii) pay or procure payments to be made for almost all of the expenses relating to the Children and the Matrimonial Home.
(3) solely for the Petitioner, the Respondent is to :
(a) pay, under the undertaking of Recital O and paragraph 3 of the Consent Order, a lump sum of HKD4 million (“Lump Sum Payment”) by eight installments of HKD500,000 each payable every six months. The first installment is to be paid on 1 January 2017 (subject to pronouncement of the Decree Absolute) and the last one on 1 July 2020.
(b) pay, under the undertaking of Recital M and paragraphs 2 (interim maintenance) and 5 of the Consent Order, periodical payment of HKD35,000 per month until the Petitioner’s death or remarriage, whichever is earlier (“Periodical Payments”) with the first payment to be made on 1 August 2016.
((3)(a) - (b) collectively, the “Spousal Payments”);
(c) provide the family car (“Family Car”) or another vehicle of the name or higher value for the sole use of the Petitioner and pay for all costs of car maintenance until her death or remarriage, whichever is the earlier, under the undertaking of Recital N of the Consent Order (“Family Car Undertaking”).
8. Notwithstanding that the Lump Sum Payment was termed as repayment of loan to the Petitioner, the Parties regard it as lump sum payment having the meaning of section 4 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”) as in the First Variation Application. Further, the Respondent’s confirmation of his understanding of the terms and legal effect of the Minutes with the benefit of proper legal advice and sufficient time for consideration before entering into the Settlement Agreement was recorded in the Minutes and further re-confirmed at trial.
Enforcement Proceedings
9. After two initial payments of HKD10,000 each in August and September 2016, totaling HKD20,000 (“2016 Payment”), the Respondent had since made no payment for the Spousal Payments until after a prohibition order (“Prohibition Order”) was granted restraining him from leaving Hong Kong on 6 July 2020.
10. Given her repeated requests for payment met with no success since the 2016 Payment, the Petitioner has commenced enforcement proceedings against the Respondent, including, issuing a number of judgment summonses, an attachment of income application (no order was made), a statutory demand (“Statutory Demand”) (issued on 17 August 2018 and was subsequently set aside). On the other hand, the Respondent took out the First Variation Application.
11. In the First Variation Judgment, it was found, in essence, that :
(a) the Respondent’s assets were on the increase whilst his liabilities were in decline;
(b) he continued to enjoy a high standard of living;
(c) two months after the First Variation Application was made, he elected to cease living with his parents (“Parents”) rent free and rented an apartment at a monthly rate of HKD25,000.
(d) the Parents have been generously supportive of the Respondent throughout the years and it was highly likely that their financial support would continue.
(e) the Petitioner’s assets and earnings have not materially increased after the Settlement Agreement.
12. On 1 July 2019, two days after the First Variation Judgment, the Respondent relocated to Singapore. The hearings of the Petitioner’s judgment summonses were then restored.
13. In April 2020, the Respondent returned to Hong Kong and got married with his current wife (“Wife”) in May 2020. On 6 July 2020, the Petitioner obtained the Prohibition Order, which was extended twice to 4 September 2020. The second extension was set aside on 8 October 2020.
14. In August 2020, the Petitioner issued another judgment summons as well as a summons to recover payments outstanding for more than 12 months. During the period, the Respondent took out the present application.
Payment History
15. Other than the 2016 Payment of HKD20,000, there was no payment at all for the Spousal Payments from the Settlement Agreement in July 2016 until after the Prohibition Order granted on 6 July 2020.
16. On 16 July 2020, the Respondent submitted an application form for the release of the funds from his MPF accounts in Hong Kong. On 26 August 2020, a cheque for payment of his MPF funds in Hong Kong at HK$846,132.05 (“MPF Funds”) was sent to the Petitioner to cover part of the arrears due to her under the Consent Order, including, inter alia, the periodical payments for the period between 1 September 2019 and 1 August 2020.
17. On 28 September 2020, a Consent Summons was filed into Court to discharge two of the judgment summonses with the MPF Funds, leaving the Lump Sum Payment of HK$3,989,647.95 unpaid.
18. Thereafter, the Respondent has made a monthly payment of HKD5,000 to the Petitioner for settlement of part of the Lump Sum Payment through his employer. As of 28 April 2021, the Lump Sum Payment remained outstanding was HKD3,944,647.95.
19. In January 2021, the Respondent paid HKD75,000 (the sum was said to be his annual wage supplement and in anticipation of his bonus) to the Petitioner in settlement of a costs order.
20. In February 2021, the Petitioner transferred the ownership of the Family Car to herself at the request of the Respondent. Subsequently, the Respondent also asked for the Family Car Undertaking be discharged with the sum of HKD60,000 (“Insurance Refund”), which was received by the Petitioner from an insurance company as a result of his restructure of an insurance policy for the Children.
21. Notwithstanding the Parties reported to have incurred general and personal expenses for the Children in their respective Form Es and affidavits, they admit in court that almost all of the expenses relating to the Children and the Matrimonial Home have all along been funded by the Parents save that the utilities expenses relating to the Matrimonial Home have been met by the Respondent.
Present Application
22. By the notice of the present application, the Respondent applied for downward variations of the Spousal Payments to the extent that : -
(1) the payment schedule of the Lump Sum Payment be varied to monthly installments of HKD5,000, commencing from 1 September 2020; the monthly installments be increased to HKD10,000 from January 2022 until the whole sum be fully paid;
(2) the Periodical Payments be varied downwards to HKD1 per annum; and
(3) the Family Car Undertaking be discharged.
23. Shortly before the trial, the Respondent offered that he would be willing to give an undertaking (“Proposed Undertaking”) to apply any increase in his salary, discretionary bonus and inheritance from his parents, net of taxes, towards discharging the balance of the Lump Sum Payment providing that the Spousal Payments would be varied to the extent that : -
(1) the Lump Sum Payment to be paid by monthly installments of :
(a) HKD5,000 until September 2021;
(b) HKD10,000 from October 2021 onwards; and
(c) HKD17,500 from October 2022 onwards until the Lump Sum Payment is discharged in full.
(2) the Periodical Payments be varied downwards from HKD35,000 to HKD1 per annum; and
(3) the Family Car Undertaking be discharged.
24. At trial, it was clarified for the Respondent that the Proposed Undertakings would only be given if the Respondent’s offer is accepted in full. In his Closing Submissions, the Respondent revised his offer (“Offer”) so that the monthly payment of HKD10,000 is to be started from September 2021.
Grounds of Application
25. The Respondent says that the Offer is the most that he can realistically afford in his present financial circumstances, which have been changed materially for the following reasons :
(1) the Father who controls the family’s finances is no longer willing to provide financial support to him, other than the support to the Children.
(2) Since his relocation to Singapore, he has been suffering a reduction in income and an increment in living expenses.
(3) the Petitioner, having her own business, investments and a steady boyfriend, is capable to maintain herself financially.
26. He offers to increase the monthly payments of the Lump Sum Payment in two stages because his loan from the DXX bank for which he currently makes a monthly repayment of about HK$5,000 would be discharged by October 2021 and his loan from the BXX bank for which he currently makes a monthly repayment of about HK$7,500 would be discharged by October 2022 (collectively, “Two Loans”).
27. The Petitioner resists this application. She complains the Respondent to have been in default of his obligation from day one and continues to be in default. She regards this application as a de-facto attempt to reduce the Lump Sum Payment and to get rid of the Periodical Payments. She denies any change in circumstances which justifies a variation of the Consent Order.
Legal Principles
28. The power of the Court to vary a periodical payment order and the repayment schedule of a lump sum payment order is provided for by section 11(1) of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”) .
29. The power is to be exercised in accordance with section 11(7) of MPPO. The Court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates.
30. The legal principles governing variation of a consent order can be summarized as follows: -
(a) The statutory power to vary is wide and the court is to consider all the circumstances of the case.
(b) While the court is not required to proceed from the starting point of the original order but look at the matter afresh, the basis and intended effect of the original order are relevant factors to which the Court 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. see AEM v VFM [2008] 3 HKLRD 36
(c) The existence of a prior agreement was an important aspect which should be looked at having regard to the conduct of the two parties, both leading up to the agreement and subsequent thereto, and the Court should bear in mind that formal agreements, properly and fairly arrived at with competent legal advice, should be given effect to unless good and substantial grounds were shown for concluding that injustice would be done by holding the parties to the terms of the agreement. see AEM v VFM
(d) Absent unfair or unconscionable factors attaching to the circumstances in which the agreement came to be concluded and absent material and drastic unforeseen circumstances arising after the conclusion of the agreement such as to cause manifest prejudice to one of the parties, the courts will hold the parties to their bargain. The burden is on the party seeking to achieve a different term to show “good and substantial cause” why the agreement should not be respected. see L v C [2007] 3 HKLRD 819
(e) The public policy of finality in litigation dictates that order, especially consent orders, providing for a clean break, should only be countenanced when the anticipated circumstances have changed very significantly, and/ or for cogent reasons rendering it unjust or impracticable to hold the payer to the original order. see CH v MEH [2012] 1 HKLRD 752
31. Where the third party financial assistance is involved, the court has to look at the reality of the situation, taking into account not only what a party actually had, but what might reasonably be made available to him if a request for assistance were to be made. As to what might occur in the foreseeable future, past conduct was often a useful guide. see KEWS v NCHC (2013) 16 HKCFAR 1
32. With these principles in mind, I now turn to consider the arguments between the parties.
Respondent’s Earnings and Earning Capacity
33. The Respondent was born in 1971 and graduated from a reputable university in the US with a degree in Engineering. He came from a wealthy family. The Father is aged 81 who has been a practicing solicitor in Hong Kong for more than 50 years. He ran his own law firm until its closure. He is now a senior solicitor in a well-established law firm in Hong Kong. The Respondent’s mother (“Mother”) is 75 years old. She is the director and sole shareholder of a limited company in Hong Kong (“Company”). The Company holds a number of valuable landed properties, including the Matrimonial Home.
34. Since the purchase of the Matrimonial Home in around 2009, the Respondent had lived there rent free with the Petitioner until he moved out in around November of 2015. Since then, he lived with the Parents in a different block of the same estate until around January 2018. From then on, he started to cohabit with his then girlfriend (the Wife) in a flat rented by him at a monthly rent of HK$25,000. He relocated to Singapore on 1 July 2019. The Wife joined him with her two dogs in November 2019. They got married in May 2020.
35. The Respondent has been working in the corporate finance industry since the mid-90s. In around 2007, he became a Responsible Officer under the Securities and Futures Ordinance. During the Marriage, he worked as a Responsible Officer in various established companies. He also embarked on his own businesses. In or around 2011, he successfully closed a mergers and acquisitions deal jointly with a Mr Yeung (“Yeung”), who rewarded him with HKD2,850,000 (“Business Venture”). In or about 2014, he tried to start some side businesses in Indonesia with some business partners.
36. According to the affidavits and the four Form Es filed by the Respondent respectively on 12 April 2016 (“2016 Form E”), 17 November 2017 (“2017 Form E”), 22 January 2019 (“2019 Form E”) and 3 March 2020 (“Last Form E”) in these divorce proceedings, his monthly incomes in the past few years can be roughly summarized as follows : -
(a) from April 2013 to mid 2015 : businessman and employment with XX holding limited : around HKD120,000;
(b) thereafter to around mid 2016 : businessman and employment with XX Capital Ltd (“Previous Employment”) : around HKD38,500 (at the time of Settlement Agreement);
(c) thereafter to 30 June 2019, employment with XX Securities Ltd as Head of the Corporate Finance Department (“Last Employment”) : around HKD91,958.
37. It is the Respondent’s case that he was forced to resign from his Last Employment as a result of the restructuring of the employer company, and, in April 2019, he entered into employment (“Current Employment”) with a subsidiary company of a publicly-listed group company on the Singapore Stock Exchange (“Group”) at the invitation of Yeung. Yeung is his good friend who was and still is the Group’s chief executive officer and executive director. He started the Current Employment in July 2019. In the Last Form E, his income was reported to be HKD69,600, (basic salary of HKD45,600 (SGD8,000) + double pay HKD3,800 + bonus 15,200 + traveling allowance HKD5,000). His basic salary was increased to HKD50,160 (SGD8,800) on 1 July 2020 and his bonus in 2020 was HKD30,780 (SGD5,400).
38. As summarized above, all the evidence points to the fact that he has strong earning capacity. he has good educational and professional qualifications. He has profound knowledge and experience in corporate finance and business developments locally and globally. He succeeded in the Business Adventure earning a profit of HKD2,800,000. His sound educational and professional background warranted him promotions and decent incomes over the years.
39. It is the Respondent’s case that he left Hong Kong for the Current Employment at the invitation of his old friend, Yeung, who offered to reward him with attractive remunerations, including, bonuses and stock options, depending on his performance and the performance of the Group. He trusts Yeung will look after his financial interests as Yeung did in the Business Venture. They had trust and confidence in each other when entering into the Current Employment, targeting at building up the manufacturing branch of the Group’s business with a new investment to be made in electric vehicles, aiming at planning the business for an IPO. Since he is familiar with corporate finance and business development in various countries, including Indonesia, he has been entrusted by Yeung with both business management and development with a view to the Respondent eventually becoming his Chief Financial Officer. He regards the Current Employment as a valuable opportunity to re-establish himself after his career setbacks and broken marriage.
40. At present, the Respondent is the Chief Executive Officer of two subsidiary companies of the Group. He is also involved with the corporate finance and business development of the Group and the manufacturing arm of another subsidiary. He goes on business trips almost every week. Even though it is said that the progress of the intended IPO has been delayed, he was still rewarded with a 2.5% interest in a subsidiary company of the Group, 10% basic salary increment and bonuses in 2019 (including SGD20,000 which was applied to discharge his credit card debts) as well as in 2020.
41. Since March 2020, the Respondent has been working as a project leader on a USD20 million deal for electric bikes. He reiterates that it is a breakthrough deal for the Group as his employer has emphasized that it was the most important line of their investments, and, he regards it as his chance to earn a good bonus and stock options. Since August 2020, his employer has embarked on other potential electric bike business negotiations. When he stayed in Hong Kong after May 2021, he still managed to identify a few good clients in Hong Kong to prove his value to the employer. He was valued by his employer, who urgently needed him to go to Indonesia to oversee the projects when he was in Hong Kong in 2020 and even postponed the project schedule for him.
42. As stated above, the Respondent’s income rose from HKD38,500 in April 2016 (shortly before the Settlement Agreement) to HKD90,458 by January 2019 (before the First Variation Trial). He relocated to Singapore shortly after the hand down of the First Variation Judgment, earning an average monthly income of HK$HKD69,600. He received 10% increment of basic salary in 2020.
43. Despite the Respondent seeks to argue that his current earnings are lower than his earnings from the Last Employment, it is indeed much more than his earnings at the time he entered into the Settlement Agreement. I opine that the decline in earnings compared to the Last Employment should be short-term. He has strong earning capacity and prosperous career prospects before him. The chance that he will be handsomely rewarded by his long-term friend and business partner as promised is high. It is highly likely that his monthly average income will far exceed HKD70,000 in the foreseeable future.
Respondent’s Assets and Liabilities
44. The Respondent says that his current financial position is more or less the same as that stated in the Last Form E, broadly he has assets in the value of 378,798 (HKD13,798 cash in banks, HKD365,000 long-term debts owed by a previous business partner) plus a sum of HKD205,119 in the Central Provident Fund in Singapore. He has liabilities of HKD394,924 (excluding the Spousal Payments).
45. It is my finding in the First Variation Trial that the Respondent’s assets increased from HKD1,365,001 to HKD1,600,178 before the First Variation Trial whilst his liabilities were in decline. With regard to his liabilities, the majority of them was reported to be the money owed to the Parents (other than the Spousal Payments). In the 2016 Form E, he logged HKD1 million loan owed to the Parents. In the 2017 Form E, his loans owed to the Parents were increased to HKD3 million due to their settlement of his credit card debts of HKD2 million (which were accumulated since the Marriage). In the 2019 Form E and the Last Form E, no money due to the Parents was reported.
46. There is around HKD138,000 decrease in his assets and approximately HKD80,000 decrease in his liabilities between the last two Form Es. Majority of his liabilities were the Lump Sum payments owed to the Petitioner.
Respondent’s Expenditure
47. In the Last Form E, the Respondent sets out his expenditure as follows:
(A) General Expenses Items Amount (HKD) (1) Rent $18,810 (2) Utilities $2,000 (3) Food $4,000 (4) Household expenses $5,000 (5) Insurance premia $1,619.9 (6) Domestic helper $2,736 (7) Supplies & medical expenses for dogs $5,500 General expenses $39,665.9
(B) Personal Expenses Items Amount (8) Meal out of home $4,000 (9) Transport $3,000 (10) Clothing/shoes $1,000 (11) Personal grooming $300 (12) Entertainment/presents $500 (13) Holiday $3,000 (14) Medical/dental $200 (15) Tax $2,374.53 (16) Monthly repayment of BXX loan $7,481.33 (17) Monthly repayment of DXX loan $5,244 (18) CRC club absent membership fee $300 Personal expenses $27,399.86
(C) Children Expenses Item Amount Children expenses $41,648 Total monthly expenses $108,713.76
48. At trial, the Respondent confessed that upon and after the Settlement Agreement, all of the children’s expenses were in fact met by the Parents and he only paid for the utilities for the Matrimonial Home in a monthly sum of around HK$2,396. He accordingly adjusted his monthly expenditure to HK$69,461.76 and reiterated that it exceeded his income. He contends that his relocation to Singapore in July 2019 with the Wife joining him together with her two dogs on 5 November 2019 has increased his living expenses which rendered him incapable of paying the Spousal Payments.
49. I am not impressed. Such argument plainly ignores the financial resources and responsibilities of the Wife and unjustifiably puts the interests of the wife in the subsequent marriage ahead of the legal obligation to maintain his former wife. Indeed, there is compelling evidence to show that the Wife is financial resourceful.
50. It is the Respondent’s evidence that the Wife was a Marketing Manager earning a decent income before her relocation to Singapore in November 2019. She has run an online business since then. From July 2020 onwards, she has been funding the litigation costs of these proceeding to the extent of close to HKD1 million. She determines to continue funding his legal costs in litigations against the Petitioner because she despises the Petitioner and is eager to frustrate her. He has no actual plan to repay the Wife, who has not asked for repayment from him. She also asked him not to ask for money from the Parents.
51. In parallel to the Respondent’s evidence, the Father testified that the Wife, who “had a lot of money”, was resourceful to the extent that the Parents were no longer required to financially support the Respondent after she got married with the Respondent.
52. Undoubtedly, their evidence mirrors each other that the Wife is a capable person of substantial financial means. It is unreasonable for the Respondent to bear the general living costs for her at the expenses of the Petitioner. The intention of taking care of the current wife should not take priority over the duty to maintain the ex-wife, still less of the legal obligations under a court order by consent. Accordingly, I take the view that there is no justification for the Respondent to bear the general expenses for the Wife. He should control his own general expenses that are commensurate with a middle-aged working man in Singapore.
53. In assessing the expenditure of the Respondent, the high standard of living during the Marriage is of reference. It however has not granted him a licence to continue living luxuriously while defaulting on maintenance payments, leaving the Petitioner with no payment at all or a monthly sum of HKD5,000. Taking into account all the circumstances, including, the fact that the Respondent is well-educated experienced finance-management person, and, some of the alleged expenses are in lack of sufficient particulars or documentary evidence in support, I am of the view that the following general expenses should be adjusted downwards for a household of two adults living in Singapore and the Respondent’s Share should be reduced accordingly :
(a) household expenses of HKD5,000 is unjustified and on the high side.
(b) domestic helper: the Respondent testifies that he has no longer engaged domestic helper and does the household chores all by himself.
(c) dog expenses : I share the view with Mr Lam, the Counsel for the Petitioner, that the expenses for 2 dogs of the Wife, HKD3,000 for dog supplies and HKD2,500 for dog medications and vet visits, are grossly excessive, and, should in any event not take priority over the maintenance of the Petitioner.
(d) the other expenses are also excessive which warrant a downwards adjustment.
54. Looking at the matter in the round and adopting a board-brush approach, I form the view that the Respondent’s own general expenses should not be more than HKD12,500.
55. By the same token, the Respondent’s personal expenses should be reduced :
(a) meals out of home: he says that he usually has lunch at the company canteen which costs him about SGD2-3 for each meal only. He routinely eats at home, rather than dining out, because the Wife is used to cook for him.
(b) transport: he does not maintain a car in Singapore and his transportation expenses are on MRT or bus.
(c) clothing, shoes, personal grooming: can be slightly adjusted downwards.
(d) holidays: his holiday expenses are excessive. There is no justification for him to spend HKD3000 for holidays but paying nothing or HKD5,000 to the Petitioner for maintenance.
(e) CRC membership fee: given his relocation to Singapore, the membership fee is not reasonably necessary.
(f) Two Loans: were scheduled to be discharged by October 2021 and October 2022 respectively.
56. Even taking into account of the repayments of the Two Loans (for reasons which I will elaborate further below), his personal expenses should be maintained at a monthly sum of not more than HKD13,000 plus the utilities expenses of the Matrimonial Home in the sum of around HKD2,500.
57. The fact that the Respondent has grossly exaggerated his expenses is revealed by the letter of his solicitor dated 27 April 2021 in that his latest version of his expenses was stated. It was repeated in his closing submissions which is now set out as follows :
Items Amount (HKD) (1) rent $13,248 (2) management fee $1,152 (3) hiring of furniture and fixtures $4,032 (4) income tax $3,531 (5) mobile phone (Singapore) $300 (6) mobile phone (Hong Kong) $700 (7) internet (Singapore) $300 (8) utilities (Singapore) $500 (9) water charges (Singapore) $250 (10) transportation $2,500 (11) meals at work $400 (12) meal outside $3,000 (13) dog expenses $1,200 (14) groceries $2,000 (15) internet (Hong Kong) $836 (16) utilities (Hong Kong) $500 (17) water charges (Hong Kong) $150 (18) gas charges (Hong Kong) $700 (19) PCCW Land Line $200 (20) repayment of BXX loan $7,500 (21) repayment of DXX loan $5,243 Total monthly expenses $48,242 (inclusive of the Two Loans and the utilities expenses for the Matrimonial Home)
58. The Respondent has offered no reasonable explanation to justify the substantial reduction of his alleged expenses in such a short period of time. His exaggerations of his expenses are obvious. It is noteworthy that he sub-let his rented apartment to his friend during his overseas trip.
59. In my view, the Respondent should adjust his lifestyle and expenditure to meet his obligations to the Petitioner. It is unjust for him to spend generously on himself leaving nothing or HKD5,000 for the Petitioner. His total monthly expenses should not be more than HKD28,000(General expenses of HKD12,500 + personal expenses HKD13,000 plus the utilities expenses of the Matrimonial Home in the sum of around HKD2,500).
Respondent’s Spending
60. In consideration of his reasonable expenses as aforesaid, the Respondent’s incomes, reportedly to be HKD78,500 in November 2017, HKD90,458 in April 2019, HKD69,600 in February 2020, are indeed more than sufficient to maintain a reasonable standard of living. His allegation that he has been incapable of paying the Spousal Payments to the Petitioner, settling his credit card liabilities, repaying the Two Loans, which were reported to be HKD317,696 in November 2017 and further accumulated to HKD433,931 in April 2019, and HKD394,924 in February 2020 is unjustified.
61. Mr Lam complains that the Respondent has continued to spend lavishly instead of paying the Petitioner by referring to his credit card statements and bank statements, some involving the period between January 2019 and July 2020 and some covering the period from January 2019 to March 2021. Some of them were not available or produced at the First Variation Trial.
62. The Petitioner blames the Respondent for extravagantly spending roughly HKD115,934 in November 2017, HKD281,750 in January 2019, HKD131,300 in April 2019, HKD118,775 in May 2019, HKD180,812 in June 2019, HKD108,713 in February 2020, HKD110,856 in April 2020, HKD86,309 in June 2020, HKD86,855 in July 2020 while not paying a cent to her from October 2016 to mid-July 2020 is a neglect of his duty under the Consent Order.
63. On the evidence before me, his allegation that a sizable number of his spending was made for others do not sit comfortably with his constant high spending pattern. Other than those he has provided particulars or documentary evidence in support, his general explanations that the expenses have been or would be reimbursed by the Group, friends, the Wife are bare self-serving allegations which are far from convincing. It is illogical that he would be able to tell that those payments were made for other peoples yet he could not outline any basic information about those arrangements.
64. I further seek support from his own evidence that he continued to enjoy a high standard of livings. From May to July 2019, he made three self-paid trips to Thailand, one self-paid trip to Singapore. In July 2019, he made a trip to Taiwan for celebrating his friend’s wedding anniversary. In September 2019, he enjoyed a 13-day pleasure trip to San Francisco to attend a function of a prestigious private club. In November 2019, he enjoyed another pleasure trip to Thailand for a friend’s wedding.
65. According to the bank statements disclosed by him, he made payments of a sum of HKD16,559 for the CXX club membership fee in January 2019, of spending at the club at HKD8,640 in May 2019, at HKD5,077 in June 2019. He spent HKD2,000 for a charity dinner in October 2019, HKD4,000 for a dinner in San Francisco in November 2019, HKD3,300 for another private club in November 2019. He chose to stay in a prestigious hotel at tens of thousands after he got married with the Wife even though he has rented an apartment in Singapore.
66. The Respondent’s credit card debts and bank loans are generally similar to his liabilities in 2019. He nevertheless gave no reasonable explanation as to why those debts were incurred and further accumulated over the years if he has been cutting down his own expenses and the payments made for others were reimbursed by them as he alleged. The expansive entries of personal expenses spanning the period and the running of the credit card debts and bank loans remain unjustified.
67. For reasons set out above, the Respondent should not have run at a deficit which went towards his credit card debts and the Two Loans, rolling over from month to month. It was his choice to spend unreasonably and not to discharge the credit card liabilities in full. Such liabilities are not valid reason for extinguishing or substantially reducing his payment obligations under the Consent Order.
Parents’ Assistance
68. In looking at the reality of the Respondent’s finances, this Court should take into account not only what he has, but also what might reasonably be made available to him if a request for assistance were to be made.
69. In the First Variation Judgment, I found that the Parents had been supportive of the costly lifestyle of the Respondent before the divorce, and, continued to financially support him after the Parties’ separation. Not only providing the Matrimonial Home as well as funding almost everything (living and education expenses, service of a live-in domestic helper) for the Children are in effect discharging a substantial part of the Respondent’s obligations under the Consent Order, the Parents did so even more generously as they had done previously by paying off the credit card debts (mostly for over-spending) for the Respondent to the extent of HKD2 million as well as paying for the pleasure trip to Thailand for the Parties and the Children in the month of August 2017.
70. Coupled with the fact that the Respondent undertook to procure and secure the Matrimonial Home for the Petitioner to reside under the Consent Order, which could not be done without the assistance of the Parents, who owned the Matrimonial Home through a company, there was compelling evidence that the Respondent had intended to and actually looked to the Parents for financial support, and, the chance of continuous assistance in the foreseeable future remained high.
71. In his opening submissions, the Respondent seeks to argue that in light of the new developments since the First Variation Trial, the question of the financial assistance by the Parents should be revisited. He relies on the following incidents for proof of the Father’s adamant insistence on not paying a cent to the Petitioner after the First Variation Trial :
(a) Having been informed of the First Variation Judgment in or shortly after June 2019, the Father expressed sternly that he had no obligation to make payment for the Petitioner and would not pay a cent for her use.
(b) in or about late 2019, the Father repeated his stance when he found out that the Petitioner’s boy friend (“Friend”) had been staying over at the Matrimonial Home.
(c) on 17 July 2020, the Father reiterated his position when the Respondent asked for his financial assistance to discharge the Prohibition Order.
72. Both the Respondent and the Father gave evidence on how the relationship between the Father and the Petitioner increasingly worsened as time went on. Even though the Petitioner seeks to argue that some of the incidents they relied on happened long time ago and their accounts of most of those incidents are inaccurate, her own evidence tends to show that her relationship with the Parents was not good when divorced and further deteriorated after the First Variation Trial which is evidenced by the following events : -
(a) Notwithstanding the Petitioner’s efforts in prosecuting various enforcement proceedings against the Respondent for payments of the Spousal Payments throughout the years, and, inviting the Father to monitor the Respondent’s compliance of the Consent Order, the Father did not accede to her request, instead, he was the driving force of the Respondent in defending and delaying her enforcement proceedings, including the application for setting aside of the Statutory Demand.
(b) After her issuance of the Statutory Demand against the Respondent, the Parents ceased to reimburse her for the living and education expenses. Since then, the Mother has only supplied limited groceries and food for the household and directly paid the education fees for the Children.
(c) She confirms that she did not consult the Father about the Friend staying over at the Matrimonial Home in and after 2018.
(d) On or around 18 August 2020, there was a hot dispute between the Parents and the Respondent on one camp and the Petitioner on the other at the Parents’ residence, in that the Petitioner was accused of assaulting the Father whereas the Petitioner explained that she just lightly patted the Father’s back to make her way during her argument with the Respondent. No matter who was to be blamed for initiating and / or aggravating the dispute. The conflict between the two camps was so serious which entailed intervention of the police.
73. In Court, the Father did not hide his dislike of the Petitioner. He was heated and responded spontaneously without pausing for thought during cross-examination. In gist, his evidence can be summarized as follows : -
(a) The Parents love the Respondent deeply. The Respondent is his only son and the eldest son of the paternal family. He will financially support the Respondent forever.
(b) He cares much about his own reputation as well as the Respondent’s reputation. He will never allow the Respondent to become bankrupt or to lose his job. He is ready, willing and able to pay millions to settle the debts of the Respondent so as to save his son from imprisonment or bankruptcy. That was why he settled the credit card debts to the tune of HKD2 million for the Respondent in 2017. He would pay for the debts for the Respondent because he did not want the Respondent dislike him.
(c) He is, however, not willing to settle the Spousal Payments for the Respondent for various reasons : -
(i) he harbours a grievance against the Petitioner for her being “up to something”. He considers the Settlement Agreement which was embodied in the Consent Order was agreed between the Parties deliberately without his involvement or knowledge. He was taken by surprise when being informed of it, in particular, the loan owed by the Respondent to the Petitioner was increased from HKD3,000,000 to HKD4,000,000 therein. He did not agree to it. He emphasizes that it is a maintenance agreement between the couples and he strictly has no payment obligation under it.
(ii) He reiterates that as the Consent Order is a maintenance order, which is different from credit card debt, the Respondent’s payment obligation can be varied according to the Respondent’s ability to pay and the Petitioner is not entitled to look to him for maintenance payments.
(iii) He supported the Respondent in the First Variation Application as well as the application for setting aside of the Statutory Demand from his wisdom. He applauds the Judge in the High Court proceedings to set aside the Statutory Demand for correctly held that the Spousal Payments were in the nature of maintenance orders which were variable and not provable debts in bankruptcy.
(iv) He was dismay for the filing of an anonymous complaint against the Respondent with the SFC accusing the Respondent of being in debt of HKD4 million. He surmised the complainant was the Petitioner, who aimed at disqualifying the Respondent from being a Responsible Officer.
(d) Under cross-examination, he disclosed his hidden agenda in keeping the Parties in ongoing litigation for the Spousal Payments, for fear that once the Lump Sum Payment was paid, the Petitioner would leave with the Children and remarry. He loves the Children and therefore would rather have the litigations between the Parties continued to secure the Children’s residence at the Matrimonial Home.
(e) Throughout the years and not until the Respondent married the Wife in May 2020, the Parents had unceasingly given money to the Respondent despite the father-and-son relationship turned sour after the Respondent married the Petitioner, whom he has always considered to have coveted his money. He only stopped giving money to the Respondent because the Wife was a capable person who had a lot of money and accordingly the Parents’ financial assistance was no longer necessary.
(f) He is, in any event, ready and willing to continue financially support the Respondent because the Respondent is his only son and he loves him. Both he and the Mother spoil him. It has never been a problem to give the Respondent HKD10,000 - 20,000 whenever he asks for. He is prepared to give him even more money so long as the payments are for food, meals, daily life and building up image. He will financially support the Respondent without limit except payments for the Petitioner. He has never asked the Respondent for repayments and will not do so in future.
(g) he has put the family fortune under the Mother, who has been allowed to give money to the Respondent without his prior approval. She would produce bank statements for his review on expenditures made. He would ignore the withdrawals involving insignificant amounts but make enquiries about the purposes of payments to the Respondent over tens of thousands. He confessed that at times he had commented about her making substantial payments to the Respondent, he however conceded to those payments. He has never asked the Respondent for repayment. He knows she spoil the Respondent.
(h) Under cross-examination, he further testified that the Respondent had asked for and the Mother continued to give money to the Respondent throughout the years and even up to the present date notwithstanding the Respondent got married with the Wife, he consented to such arrangements because the Parents loved the Respondent, and, as a father, he was obliged to pay his son money. Even when the Respondent was kept in Hong Kong in 2020, the Mother acceded to his requests for money for meals, gifts for the Children and daily expenses.
74. The Father’s evidence aforesaid attracted no serious challenges from the Petitioner. Having considered the evidence of the Parties and the Father individually and the combined effect of all of their evidence, it is clear to me that the Father has initially and subjectively surmised the Consent Order as an arrangement between the Parties to lay hands on his money. He has always considered the Petitioner to have coveted his money. The issuing of the Statutory Demand has turned his relationship with the Petitioner from bad to worse for he considered it placed the Respondent at risk of being bankrupted and losing the position as a Responsible Officer. He, rightly or wrongly, regarded the issuance of the Statutory Demand and the anonymous complaint to the SFC as the Petitioner’s plan to ruin the Respondent’s career, and subjectively attributed the Respondent’s change of career from a Responsible Officer in Hong Kong to a lower-paying job in Singapore, to the Petitioner. He is saddened that his only son left the Parents to relocate to Singapore and blamed the Petitioner for all these, rightly or wrongly. No doubt his hidden agenda to keep the Petitioner living in the Matrimonial Home with the Children is another reason for his refusal to pay the Petitioner.
75. I accept that the Father’s determination of keeping himself aloof of the Respondent’s payment obligation of the Spousal Payments under the Consent Order is genuine. The reality is the Father, instead of assisting the Respondent to make the Spousal Payments to the Petitioner, has decided to support the Respondent in defending the Petitioner’s enforcement proceedings as well as prosecuting the applications for variation of maintenance. His relationship with the Petitioner further deteriorated after the First Variation Trial. He has been adamant in not making any payment to the Petitioner for her own use and benefits.
76. That said, I am not impressed by the Respondent’s another argument that the Parents’ financial assistance was the basis or fundamental assumption upon which the Parties entered into the Settlement Agreement, and, the fact that the Father has been adamant in refusing to pay a cent to the Petitioner has rendered the whole basis of the Respondent’s payment obligation obsolete.
77. First, such argument appears to be premised on the wrong footing that the Parents’ assistance is the sole reason for the Respondent to enter into the Settlement Agreement. That was not the finding in the First Variation Trial. The reasons for the judgment should not be taken out of context.
78. Second, the argument ignores the Respondent’s own evidence that the Settlement Agreement was agreed in the circumstances that :
(a) he anticipated a substantial income increment in the foreseeable future, and, in reality, he enjoyed substantial income increment in subsequent years.
(b) the common background fact that the Lump Sum Payment was agreed in the circumstances that it was to cover not less than the loan the Petitioner alleged the Respondent to have owed her. The position is marked with the fact that the Lump Sum Payment was termed as repayment of loans to the Petitioner in the Minutes and the Consent Order, and, the Parties’ respective first Form E filed before the Settlement Agreement, in that both of them reported that the Respondent owed HKD3,000,000 to the Petitioner. It is also echoed by the Father’s evidence that he discovered, to his dismay, that the lump sum maintenance was fixed at HKD4,000,000 which was more than the loan owed by the Respondent to the Petitioner in the sum of HKD3,000,000.
79. Third, in a variation application (not a set aside application), all the relevant circumstances should be taken into account including, inter alia, the parties’ earnings and earning capacities. The payer’s personal reason for entering into a consent order cannot be the only determining factor voiding the terms of a consent order.
80. It is clear to me that the Parents’ unwillingness to make any payment for the Petitioner stemmed from their poor relationship with her, which will nevertheless not stop them from giving money to the Respondent for his own use and enjoyment as in the past. It is the Father’s repeated declarations in Court that while the Parents refused to make payment to the Petitioner for her own use and benefits, they would continue their support to their son everlastingly.
81. The Parents’ support is flexible to suit the Respondent’s needs. They financially supported the costly lifestyle of the Parties and provided them with a decent apartment for residence during the Marriage. After the Parties’ separation, they continued to support the Respondent and did so even more generously by not only funding almost everything for the Children and the household but also paid off the debts for him to the extent of HKD2 million in one go. They continued giving monies to the Respondent throughout the years, even after he relocated to Singapore and got married with the Wife.
82. As can be seen from the Respondent’s own evidence and his bank statements, solely for the period between February and September 2019, the money he received from the Mother ranging from a couple of thousands to tens of thousands, including:
Date Alleged by the Respondent Amount(HKD) 13.2.2019 loan from the Mother 70,000 19.3.2019 (ditto) 8,569 14.5.2019 (ditto) 78,700 1.6.2019 (ditto) 13,360 17.6.2019 money from Mother to pay for medicine 24,000 17.6.2019 loan from the Mother 40,000 24.6.2019 cheque from the Mother 3,580 2.7.2019 (ditto) 8,443 8.7.2019 (ditto) 3,600 18.7.2019 (ditto) 7,722 2.8.2019 T/T from Mother for his rental deposit 50,000 23.8.2019 cheque from the Mother 2,880 11.9.2019 from the Mother for credit card payment 100,000 410,854
83. Under cross-examination, the Respondent further gave evidence that the Parents had given him a sum of HKD100,000 for his wedding expenses. Solely in the month of June 2019, he got HKD80,940 from the Mother and paid a total of HKD180,812.52 for credit cards bills. He also said that when he moved to Singapore, he asked the Mother for money for residence and living and said that he would repay her upon his receipt of the refund of rental deposit in Hong Kong in November 2020. However, in November 2020, he told her that he needed to buy furniture and settle credit card debts and would only pay her HKD2,200. He then used his money for settling credit card debts and for the Wife’s use. He also applied the sale proceeds of his car of HKD140,000 for his own use and transferred HKD80,000 to the Wife for her relocation expenses and her dogs.
84. Viewed in this light, there is clear evidence before me that over the years the Respondent has been used to turn to the Parents for money for his own use and benefits. Those payments, ranging between hundreds and millions, were for settling his credit card bills, his daily life, image-building, necessities, including but not limited to, residence, food, dining, gifts for the Children. The Parents have all along been generous to him and remained flexible in terms of the amount and timing. There has been an understanding and an established practice between the Parents and the Respondent that the Mother could freely give him money and the Father actually endorsed to such arrangements so long as those payments were not for the Petitioner. The Father would only make enquiries about the purposes of payments exceeding tens of thousands. Even so, the Father would not object if the Mother insisted and both of them would not ask for repayments from the Respondent.
85. Regardless of the Respondent’s allegation that he has regarded those payments from the Parents as loans and he intended to repay them when he is able to do so, he has neither made any serious payments in the past nor has he put forward any schedule of repayments. Strictly his Form Es have brought discredit on him, in that he alleged that he owed money to the Parents at HKD1,000,000 on 1 April 2016; at HKD3,000,000 on 17 November 2017. There was no report of money owed to the Parents in the last two Form Es filed respectively on 15 April 2019 and 3 February 2020. During the period, no meaningful payments have been made. He did not include any of his alleged loans from the Mother in the liabilities section of his last two Form Es.
86. In cross-examination, the Respondent admitted that he had never meaningfully repaid any of the alleged loans advanced by the Parents to him. The very small sums of money which he said to have repaid to the Mother were minimal as compared to the amounts of money he received from the Mother. Needless to say the Respondent’s evidence also runs counter to the Father’s evidence that the monies given to the Respondent were not loans. The Parents have never intended him to repay nor asked him for repayments.
87. I should add that, in light of the Father’s strict evidence that the Parents have all along financially supported the Respondent and would continue to do so in future, there is no room for a meaningful argument on the impact of not listing the Mother as a witness in the present application as suggested by the Petitioner. Suffice it to say that I share the view with Ms Leung, the Counsel for the Respondent, that prior to the Opening Submissions for the Petitioner, the Petitioner has never disputed the Respondent’s case that the Father controlled the family’s finances. The Parties have all along given evidence along this line in their respective affidavits and in Court that they actually looked to the Father, and not the Mother, for provision of accommodation and financial support in the past. It is the Petitioner’s case that she took the initiative to approach the Father, not the Mother, to ensure the outstanding Spousal Payments under the Consent Order would be settled.
88. In the Respondent’s 14th affidavit and the Updated Agreed Statement of Issues, he stated that it was the Father who controlled the family’s finances. The Petitioner did not challenge this point in her affidavit, nor did she do so at the direction hearing or the Pre-trial Review. There has never been any suggestion that the Mother had or would make secretive payments to the Respondent behind the Father’s back.
89. In the premises, I am satisfied that the Father has all along been in control of the family’s finance. Lacking any concrete evidence to indicate any secretive payments made by the Mother to the Respondent behind the Father’s back, the suggestion of drawing an adverse inference against the Respondent for not listing the Mother as a witness is not substantiated.
Respondent’s other financial resources and liabilities
90. The Respondent alleges that while he was struggling to make ends meet, the financial assistance from the Parents was limited, ending up with an accumulation of his credit card liabilities necessitating a monthly repayment of HKD13,000 for the Two Loans.
91. Not only that such allegation does not sit well with the Father’s declaration of the Parents’ readiness to financially support him, it also contradicts to the Father’s evidence that the Parents’ financial assistance only ceased because the Wife was very rich. Such evidence was echoed by the Respondent’s own testimony that the Wife told him not to ask the Father for money after their marriage. It is noteworthy that under cross-examination, the Father further disclosed that the Mother in fact continued to give money to the Respondent to the present date.
92. Moreover, as analyzed above, there is clear evidence to show that such bank loans and credit card liabilities should not have been incurred or accumulated in light of his decent incomes and reasonable expenses, not to mention his election of not discharging his bank liabilities in full but applying part of the sale proceeds of his car of HKD140,000 for his own use and transferred at least HKD80,000 to the Wife for her relocation expenses and her dogs, transferring HKD55,000 to the Wife for their over-budgeted wedding expenses, applying HKD50,000 advanced by the Mother on 2 August 2019 to pay for his rental deposit in Singapore (but also said to have applied the refund of his rented apartment in Hong Kong for the same purpose).
93. In looking at the reality of the Respondent’s finances, I should take into account not only what he actually has, but also what might reasonably be made available to him if a request for assistance were to be made. I also remind myself that “judicious encouragement” if it meant a form of pressure on non-parties to add to the relevant spouse’s resources which, on the evidence they would not do or were unlikely to do, should be rejected. See KEWS v NCHC [2013] 2 HKLRD 314
94. Taking into account all the relevant evidence before me, I come to the conclusion that the Parents and the Wife would come to the Respondent’s assistance for his living expenses, the credit card liabilities and the repayments of the Two Loans should he ask for. I accept that even though the Father, who is the person in charge of the finance of the Parents, has determined not to give any money directly to the Petitioner for her own use or settle the Spousal Payments for the Respondent, he is always prepared to give money to the Respondent for his own use and benefits. Solely in the period between February 2019 and September 2019, on the Respondent’s disclosed case, he received a total sum of HKD410,854 (HKD51,356 each month in average) from the Parents.
95. Apparently the Wife is another strong financial resources for the Respondent. She has since July 2020 funded the legal costs of the present proceedings in the tune of HKD1 million and would continue to finance his legal costs for the purpose of defeating the Petitioner as explained by the Respondent. Despite such financial burdens, she still persuaded the Respondent to cease asking the Parents for money.
96. I accept Mr Lam’s submissions that those are financial resources available to the Respondent when called upon. He has been able to utilize, on his own admitted case, at least HKD1.4 million which he decided to use to cover legal fees and personal expenses, as opposed to complying with his duty to repay the Petitioner in the past two years. He has neither made any meaningful repayments to the Parents or the Wife, nor has he indicated any concrete plan of repayment to them.
97. Solely from 2019 onwards, the Respondent has been able to call upon the Wife to bring in funds of HKD1 million since July 2020, and at least from the Parents a total sum of HKD410,854 in the span of a few months in 2019 as well as HKD100,000 for the wedding expenses. In July 2020, he managed to pay out over HKD846,132 from his MPF savings in Hong Kong, not to mention HKD50,000 from refund of rental deposit. Solely on his own disclosed case, he has been able to gather over 2 million in funds within 2 years. Indisputably he had resources at hand in the past few years. The Father’s settlement of his credit card debts in the tune of HKD2,000,000 in July 2017 was not a single incident that the Parents came to his assistance when he asked for.
98. In the premises, I could safely conclude that the chance of the Respondent receiving financial assistance from the Parents and the Wife in the foreseeable future is very high and such assistance is flexible in terms of amount and timing which could cover the Two Loans and the existing credit card liabilities as well as his personal expenses should he ask for.
99. In any event, such bank loans and credit card liabilities should not take priority over the Respondent’s legal obligations to maintain the Petitioner. Moreover, given he has let the credit cards debts and the Two Loans roll over for years, there is no reason or urgency for such liabilities be discharged at the expenses of the Petitioner.
100. Proper weight should also be attached to the Respondent’s promising career prospects which will likely entitle him to attractive remuneration including increments of salary, bonuses and share options, still less of his prospects of entitlement to the Parent’s estate in future as indicated by him. I opine that it is highly likely that he would be able to discharge his liabilities with his future earnings in the foreseeable future.
Respondent’s Business
101. The Respondent also says that his businesses in Indonesia failed miserably, leaving him heavily in debt. Such allegation does not advance his case any further. According to the four Form Es he has filed since April 2016, the value of all of the shareholdings of his several companies were reported to be either insubstantial or valueless. Those businesses involved were stated to be in a state of failure, either be suspended or yet commenced. He has not put forward any solid evidence for proof of his actual loss, other than general allegations. Nor has he articulated his actual sales deals in hand which have subsequently aborted frustrating his ability to pay.
Petitioner’s Earnings and Earning Capacity
102. The Petitioner was born in a humble family in 1971. She was educated up to Form 5 level. Prior to the Marriage, she worked as an inter-bank money market broker earning a monthly salary of HKD80,000 plus discretionary bonuses. Shortly after marriage, she resigned from her employment and became a full-time housewife as agreed between the parties.
103. In or around 2015, disputes over the Respondent’s investment in overseas business and his extramarital affair arose. Subsequently, he moved out of the Matrimonial home. The Petitioner filed a petition for divorce in January 2016. With the referral of a friend in or around December 2016, she managed to find a job earning HKD45,000 plus allowance. She was however laid off in November 2017. Since then, she has remained unemployed.
104. On or around 14 November 2017, the Petitioner borrowed HKD200,000 from a bank, and thereafter, from time to time, borrowed an approximate amount of loans from banks. She undertook wine classes and invested HKD300,000 for 10% shareholdings in a limited company, which ran a bar in Central, with nine partners (“Business”). The bar had its soft opening in or around October 2018. Its business has been unsuccessful so far.
105. The Respondent contends that in view of the failure of the Business, the Petitioner should engage herself in gainful employment. There is however no suggestion of any job markets which suit her.
106. Undoubtedly the Petitioner earned a decent income in the past. The reality is she has been unemployed since the Marriage except the short-lived employment which was arranged by her friend and lasted for less than one year. In consideration of her limited educational background, of her unemployment for more than a decade except the short-lived employment, of the fact that she is the primary carer of the two children and effectively, a single mother parenting alone after the Respondent’s relocation to Singapore, I am not impressed that her employability has in any way improved. Further, the Children should not be deprived of her full time care as they have enjoyed since their birth.
107. Much reliance has been placed on the Petitioner’s securities trading to suggest that she has other undisclosed financial means. The Respondent challenges that on each occasion she borrowed monies from the bank, she in fact had cash and securities in her bank account:
date of loan loan amount over 24 months bank balance 27.4.2016 $275,000 $608,407 14.11.2017 $200,000 $972,732 2.5.2018 $180,000 $1,079,351 26.2.2019 $175,000 $579,322 17.1.2020 $200,000 $212,301
108. The Respondent also refers to her testimony that she has not made any calculations of her profit or loss over the years to contend that her carefree behavior does not sit well with someone struggling financially.
109. In my view, the Petitioner’s testimony should not be taken out of context. Under cross-examination, she explained that right from the breakdown of marriage, she applied for bank loan roughly annually notwithstanding that she kept hundreds of thousands dollars in bank. That was in view of her limited savings which could not last long, she accordingly tried to take advantage of the low lending interest rate to engage in securities tradings in the hope that they would generate some incomes for her. The purpose of those loans were not for immediate living expenses but for taking advantage of their low interest rates for securities trading, so as to provide herself with some financial securities in her dire circumstances. She however was not a professional expert in securities and could not be absolute sure that her investments must be profitable.
110. Coupled with the Respondent’s refusal of payment under the Consent Order, she found it necessary to keep the loans rolling over year by year before her savings is exhausted. Due to the limited capital money, the incomes generated from the securities trading were limited. As a result, she has not made detailed calculations on the profit and loss of those trading strictly on a regular basis as suggested by Ms Leung, but on rough calculations at different times, overall, the profits were insignificant.
111. The Petitioner’s evidence is in line with the decline of her securities trading in the recent years. The balance of the relevant account was reduced from many hundreds of thousands to less than three hundred thousand after February 2019. Such fact goes contrary to the suggestion that she has been making good profits from securities trading.
112. Further, I am not persuaded that the Petitioner’s investment in the Business in which she had no experience at all, with high overheads, rather than to get a job, is a valid proof of the existence of her undisclosed assests.
113. The Petitioner has accounted for the circumstances giving rise to her investments in the Business. She explained that in light of the Respondent’s non-payment of maintenance and her limited savings, she had strived hard to support herself. With the assistance of her friend, she managed to engage herself in gainful employment. She was however laid off shortly. She then took the chance to invest in the Business together with her friends so as to benefit from the low rent offered by one of the partners, who owned the premises where the bar located.
114. I am impressed that the Petitioner’s evidence is consistent with the background facts and logical in the normal course of events. After the breakdown of marriage followed by the non-payment of maintenance by the Respondent, she felt insecure with her limited savings and struggled to generate income by engaging herself in gainful employment, obtaining loans for securities trading as well as investing in a bar business. Those loans and investments were limited in scope compared to the Spousal Payments. Obviously she has been eager to maintain herself over the years. Against her wishes, the employment was a short-lived one and the bar business was fruitless under the covid-19 pandemic.
115. The Respondent’s another suggestion that the Petitioner has hidden part of her assets with her sister is dispelled in her live evidence that she was simply assisting her sister in making investments.
116. Lack of any solid evidence to undermine her assertions or for proof of the existence of her other financial resources, the Respondent’s suggestion of the existence of any material undisclosed assets or financial means of the Petitioner must fail. I have no reason not to believe her evidence that the Respondent’s default of maintenance payments and her legal costs incurred in the enforcement proceedings have rendered her living off her own savings and investments.
Petitioner’s Assets and Liabilities
117. According to the Petitioner’s last Form E filed on 21 September 2020, she has HKD45,960 cash in bank, her interest in securities at HKD62,700, personal items at HKD228,000, MPF at HKD244,504, and, liabilities at HKD395,200 (credit card debts at HKD20,200 plus bank loans at HKD375,000).
118. The Respondent contends that as most of the Petitioner’s expenses are being met by other people, her monthly expenditure should be less than HKD5,000 and the Offer is more than reasonable for her. He seeks support from the following matters :
(a) She lives at the Matrimonial Home rent free. All the education and living expenses of the Children are met by the Parents, who also provided food, groceries and household items for the Petitioner and the Children. The utilities are paid by the Respondent.
(b) Her testimony that the Friend has paid for her holidays and meals with him, and, from time to time bought some groceries, food and household items for her. She could also seek his assistance in lending her some money for the legal fees and only repaid him after her receipt of the maintenance payments from the Respondent in July 2021.
(c) In her letter dated 24 March 2021, she claimed her additional out-of-pocket expenses at an average of HKD3,521.42 per month for the period from August 2020 to February 2021, ranging between HKD603 and HKD5,314.
(d) Her credit card statements reveal her spending pattern at a monthly average of HKD8,383 in the period between July 2020 and August 2020 (excluding the loan repayments for her securities trading). Other than a total sum of HKD1,369 was spent on groceries, clothing and personal care, the remaining sums were for dining and wine.
119. On such basis, the Respondent accuses the Petitioner of grossly inflating her monthly expenses to HKD67,330 in her latest Form E dated 21 September 2020. In reply, the Petitioner explains that the expenditure stated in the Form E was based on her normal standard of living. In reality, she was forced to keep her expenditure to the minimum because of non-payment of the Respondent. She also explains that for some expenditure on dining and wine, her friends have later repaid her for their shares.
120. I do not find the evidence lends any support to the Respondent’s argument. Plainly the evidence points to the fact that the Petitioner has tightened her belts to the extreme as compared to her luxurious standard of living during the Marriage due to the Respondent’s continuous non-compliance of the Consent Order. It is unjust to regard her present expenditure as her reasonable needs in the normal circumstances. To allow the Respondent’s argument would permit him to take advantage of his own wrong, leaving the blameless party to bear all the undesirable consequences flowing from his non-compliance of the court order. This cannot be right.
121. Apparently the standard of living of the Petitioner has been deteriorating due to the Respondent’s default of payments over the years. There is no solid evidence to indicate the existence of any stable source of income for her. Occasional provision of holidays, some food or groceries by the Friend has not advanced her financial position any further. The facts that she has been engaging in securities trading and a fruitless business or that she has sometimes spent a few thousand dollars on wine or meals do not constitute good pointers of the existence of hidden assets.
Family Car
122. In or around June 2019, the Respondent stopped maintaining the Family Car as required under the Consent Order. In September 2019, the Petitioner received the Insurance Refund of HKD60,000 from the insurance company without prior notice from him. She said that she had used it to cover the children and household expenses but the sum was not deducted from the amount owed by the Respondent.
123. On the other hand, the Respondent requested to use such sum for discharging the Family Car Undertaking including the car maintenance expenses of HKD16,154 (“Car Payment”) paid by the Petitioner, leaving HKD43,846 for the Petitioner for future maintenance of the car. In February 2021, at the request of the Respondent, the Petitioner transferred the car to her own name under protest.
Conclusion
124. As elaborated above, it is my finding that the Petitioner’s life has not changed for the better but for the worse. She was not paid a single cent from October 2016 to mid-July 2020 and has never received full payments. After August 2018, she has not been paid or reimbursed any money she paid for household expenses, extra food and personal necessities for the Children. From July 2019, the Respondent ceased to maintain the Family Car. She has been living on her own savings. Her efforts in generating income from security transactions were not fruitful to the extent that could cover her reasonable expenditure. Her employment was short-lived while her business was a failure. She is still dating the same boyfriend, who pays for her only to the extent that concerns their romantic relationship, which are gratuitous and sporadic in nature and could not have improved her financial position any further.
125. On the contrary, the Respondent is financially resourceful. He has strong earning capacity, earning handsome incomes throughout the years. The Parents and the Wife are wealthy people who have and would come to his assistance whenever he asks for save and except that they will not make payments to the Petitioner for her own use. He pocketed his income and the money given by the Parents for his own use save for the insignificant amounts paid to the Petitioner, namely the 2016 Payments and the payments made after the Prohibition Order.
126. In the circumstances, it is unjust to allow the Respondent to continue his financially carefree lifestyle leaving the Petitioner to lead a frugal life. Further, I bear in mind that the Consent Order was made by the Parties voluntarily, with legal advice and assistance of mediator. The Respondent confirms that he has been properly advised of and fully understood the legal implication and effect of the Minutes upon entering into the Settlement Agreement in these two variation applications.
127. Having carefully considered all the arguments, evidence and submissions of the Parties, I form the view that the Parents’ refusal to make any payments to the Petitioner for her own use and benefit is genuine. That being the case, the Respondent is still financially capable of honoring his commitments under the Consent Order with his financial resources. It is unjust for him to lead a financially carefree life at the expenses of the Petitioner.
128. Taking into account all the relevant circumstances, it is reasonable for the Respondent to control his monthly expenditure to not more than HKD28,000 (inclusive of the utilities paid for the Matrimonial Home). The balance of his income should be applied to maintain the Petitioner. His bank loans, credit card liabilities and expenses which go beyond his reasonable expenditure should not take priority over his legal obligations under the Consent Order. In any event, it is open to him to look to his other financial resources, as the Parents, the Wife, his strong earning capacity and good prospects of receiving bonuses and increment of salary to settle such liabilities.
129. Viewed in this light, given the Respondent’s income has to be shared with the Petitioner, both of their standards of living have to be adjusted downwards. A balance should be struck between the expenditure of a working father in Singapore and a full-time mother in Hong Kong. Further, in order to avoid further arguments on the maintenance expenses of the Family Car, a small sum should be included in the monthly periodical payment for the Petitioner so as to discharge the Family Car Undertaking, after taking into account of the Insurance Refund together with the Car Payment.
130. In weighing all the relevant factors and doing a balancing exercise, I have come to the conclusion that it is fair, just and reasonable to order the Respondent to pay a monthly periodical payment of HKD10,000 to the Petitioner for maintenance payment and a monthly installment payment of HKD32,000 for the Lump Sum Payment. The relevant undertakings under the Consent Order will be discharged to the extent to give effect to such payments. This is subject to the condition that any payments made by the Respondent to the Petitioner for discharging the Lump Sum Payment and the Periodical Payments during the relevant period are to be offset against the payments.
Order
131. I order that the Consent Order be varied to the extent that: -
(1) the payment schedule with respect to the balance of the Lump Sum Payment as of 1 September 2020 under paragraph 3 of the Consent Order be varied to monthly installment of HKD32,000 with the first payment be back-dated to 1 September 2020 and thereafter on the 1st day of each succeeding month until the whole sum be fully discharged.
(2) the monthly Periodical Payment of HKD35,000 under paragraph 5 be varied downwards to HKD10,000 per month commencing from 1 September 2020 and thereafter on the 1st day of each succeeding month until the Petitioner’s death or remarriage, whichever is earlier.
(3) the Respondent’s Undertakings given under Recitals M and O be discharged retrospectively from 1 September 2020 to the extent as to give effect to the variations as set out in paragraphs (1) and (2) above.
(4) Credit be given to any sums that the Respondent has paid to the Petitioner for settlement of the Periodical Payments and the Lump Sum Payment during the relevant period. The Respondent do pay the arrears or shortfalls of the periodical payments and the Lump Sum Payment under paragraphs (1) and (2) above within 28 days from the date hereof.
(5) the Family Car Undertaking under Recital N be discharged retrospectively from 1 September 2020.
(6) all payments shall be paid into the designated bank account of the Petitioner.
(7) Penal notice be endorsed.
132. For avoidance of doubt, save for the variations as set out in the preceding paragraph, the other terms and undertakings of the Consent Order do stand.
Costs
133. Given the outcome of this application and having regard to all the relevant circumstances, I form the view that the Respondent’s unreasonable insistence on paying just a monthly sum of HKD5,000 (to be increased to HKD10,000) for discharging the Lump Sum Payment until shortly before this trial only then the Offer was put forward, which is still far less than the amount he can afford and is in effect riding of the periodical payments, the Petitioner virtually had no option but to defend the present application. Coupled with the fact that she has beaten the Respondent’s open offer by a significant amount, the Petitioner should be awarded costs of this application.
134. I order that the Respondent do pay the Petitioner’s costs of this application, including all costs previously reserved, to be taxed if not agreed, with one certificate for counsel.
135. The costs order nisi shall become absolute after 14 days from the date of this judgement unless application to vary the order nisi by Summons is filed within this 14-day period.
136. I thank Counsel for their assistance.
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( M LAM ) Deputy District Judge |
Mr Benjamin Lam and Ms. Fontanne Chu, instructed by Messrs Chong & Yen, for the Petitioner
Ms Vivien Leung, instructed by Withers, for the Respondent