Aem v Vfm

CourtCourt of Appeal (Hong Kong)
Judgment Date10 January 2008
Citation[2008] 3 HKLRD 36
Judgement NumberCACV261/2006
Subject MatterCivil Appeal
CACV000261/2006 AEM v. VFM

CACV 261/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 261 OF 2006

(ON APPEAL FROM FCMC 4070 OF 1990)

______________________

BETWEEN

AEM Petitioner
and
VFM Respondent

______________________

Before : Hon Cheung JA and A. Cheung J in Court

Date of Hearing : 18 December 2007

Date of Judgment : 10 January 2008

______________________

J U D G M E N T

______________________

Hon Cheung JA :

The background

1. The parties are former husband and wife. For ease of reference and following the approach in the Court below I will refer to them as husband and wife. The parties were married in England in August 1970. Two children were born of the marriage. The first was a son born in 1975. The second was a daughter born in February 1979. The parties moved to Hong Kong in May 1987. In January 1991 the parties were divorced.

The 1991 Order

2. Upon their divorce the parties reached a settlement on their financial arrangements and the settlement was made an order of the Court dated 27 August 1991 (‘the 1991 Order’) under which the husband was to pay the wife

(1) a lump sum of HK$2 million by instalments within two years;
(2) periodical payments of HK$1,250 per month for the wife’s maintenance;
(3) periodical payments of HK$16,250 per month for each of the two children until they reach the age of 18 or complete full-time education.

3. The daughter was born with congenital defects and she was mentally and physically handicapped. The specific agreement concerning the daughter was that she was to receive her maintenance until she was able to support herself and live independently. The husband further undertook to pay for the school fees of the children and their educational and school expenses in boarding school in UK.

4. The parties further agreed that their joint property in the United Kingdom known as Bury Farm was to be maintained for use by either of them while they were living outside UK and upon the wife’s decision to return to live in UK she was to have the option of the exclusive use of Bury Farm as her principal place of residence with the children. In the event the wife returned to the UK but did not take up occupation at Bury Farm as the principal place of residence the husband agreed to provide and pay for an accommodation for her.

5. The periodical payments to the wife and two children were index-linked. They were to be automatically increased annually by the lower of the Retail Price Index in whichever country the wife resided or the husband’s increase in salary.

The 1994 Order

6. In 1994 the wife decided to return to UK and a Court order dated 6 August 1994 (‘the 1994 Order’) incorporating new agreements reached by the parties was made. By this new Court order the wife was to be paid a monthly sum of £2,335 for herself, £110 for the son and £180 for the daughter with the same annual increment as before.

7. Upon returning to England the wife instead of taking up residence in Bury Farm in UK sold her interest in that property to the husband for the sum of £173,577 and purchased a house at Farrer Top, St. Albans, England as her home. She also purchased a property in Scotland which she ran as a bed and breakfast guesthouse during the tourist season.

The 1998 Order

8. In April 1997 the wife applied to increase the monthly maintenance for herself and the daughter who was then already 18 but still undergoing schooling. The son was by then 23 and had finished his education and was not involved in the application.

9. By an order dated 30 July 1998 (‘the 1998 Order’) H H Judge Bruno Chan varied the periodical payments for the wife and the daughter as follows :

1) £3,000 per month for the wife,
2) £300 per month for the daughter,
3) £2,000 per annum by way of reimbursement of home help services expenses for the daughter commencing 1999.

10. The new rate of payment was to commence on 1 May 1997.

The 1998 summons

11. The 1998 Order did not provide for index link of the periodical payments as before. The wife on 15 September 1998 issued a summons asking for the periodical payments contained in the 1998 Order to be index-linked. A hearing date for this application was initially set down for 11 June 1999. However the parties by consent vacated this hearing date on 9 June 1999 and the matter was not further pursued by the wife.

The 2006 Order

12. On 22 August 2005 the wife applied to vary the 1998 Order. On 12 May 2006 (‘the 2006 Order’) Judge Chan varied the maintenance payment as follows :

(a) The periodical payments under the Order of 30th July 1998 for the Petitioner be increased and backdated as follows, with credit to be given for amounts already paid:
1999 £40,880
2000 £41,780
2001 £42,700
2002 £43,720
2003 £44,680
2004 £45,663
2005 £46,668
2006 £50,000
(b) The said periodical payments of £50,000 per annum, payable by equal monthly instalments, shall be increased by 5% annually starting 1stJanuary 2007 until further order.
(c) The Respondent shall pay a further sum of £2000 per annum to the Petitioner for the benefit of their daughter (name), which sum shall also be increased by 5% annually.’

13. From this Order the husband appeals.

Principles on variation

14. 1. The power to vary a periodical payment order is expressly provided for by section 11(1) of the Matrimonial Proceedings and Property Ordinance (Cap. 192) (‘MPPO’) :
(1) Where the court has made an order to which this section applies, then, subject to the provisions of this section, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.’
2. How this power is to be exercised is stated in section 11(7) :
(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates and, where the party against whom that order was made has died, the changed circumstances resulting from his or her death.’
3. The traditional approach to variation was not to re-fix afresh the amount of maintenance but to consider the amount of change in the actual means of the parties so that the new order should merely be increased or decreased roughly in proportion to the change in the means : Foster v. Foster [1964] 3 All ER 541, Jackson’s Matrimonial Finance and Taxation 7th Ed. Ch. 3. 131.
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 16 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.

Principle on backdating of order

15. 1. The court has an almost unrestricted power to vary its own order retrospectively and to backdate any variation which it makes in a pre-existing order beyond the date of the application for variation.
2. In practice, orders are not usually backdated to a date prior to the notice of application to vary unless the justice of the case so requires.

See Rayden & Jackson on Divorce and Family Matters 18th Ed, Vol. 1, Para. 18.25 and the cases cited.

Financial position of the wife when the 2006 Order was made

16. The wife was 56 years of age when the 2006 Order was made. She did not work and had to spend more time looking after the daughter. The wife had since 2003 sold her property in Scotland and also her bed...

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