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Ch v Meh

Judgment Cited authorities 13 Cited in Precedent Map Related
Vincent
Judgment Date10 December 2010
Year2010
Judgement NumberFCMC1969/2007
Subject MatterMatrimonial Causes
CourtFamily Court (Hong Kong)
FCMC1969B/2007 CH v. MEH

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 1969 OF 2007

_________________

BETWEEN

CH Petitioner
and
MEH Respondent

_________________

(Application for Variation of Lump Sum Order by Instalments)

Coram : H.H. Judge Bruno Chan in Chambers

Date of Hearing : 28TH – 30TH September, 4th November 2010.

Date of Judgment : 10th December 2010.

_________________

J U D G M E N T

_________________

1. This is the Respondent Husband‘s application under s.11 of Matrimonial Proceedings and Property Ordinance, Cap 192 (MPPO) to vary downward the quantum of the 2nd lump sum instalment and the timing of its payment to the Petitioner Wife as well as his monthly maintenance for her under a consent order made on 2nd February 2009 upon the dissolution of their 8 years marriage, and pending the determination of the application, that there be a stay of the 2nd lump sum instalment payment.

2. That order was made following a successful FDR hearing during which the parties agreed, inter alia, that the Wife was to receive 50% of the total assets calculated as a lump sum of HK$16,886,077 payable by the Husband by 3 instalments, as well as monthly maintenance for her and the 2 children of the family.

3. The Husband has paid the 1st instalment but not the 2nd instalment as he claims that due to the 2008 global financial crisis, his financial position both as to the capital and income has altered to such an extent that he can no longer afford to pay the 2nd instalment, hence the application now before me.

4. His application is of course not acceptable to the Wife, who contends that his financial situation is not as dire as alleged by him, that his total income and benefit package from his employer has remained essentially the same, that he has other resources including borrowing ability to meet the 2nd instalment, that he has not cut down on his own standard of living and lifestyle since their divorce, and that if he indeed

has difficulty making the 2nd instalment, the court should only allow him further time to make payment.

5. Mr Pilbrow on behalf of the Wife also questions the court’s jurisdiction under the section to vary the quantum of the lump sum instalments, as it has always been the understanding of practitioners in family law that the jurisdiction is only confined to vary the timing of the instalments and the manner in which they are paid, or to discharge a particular instalment, but not the quantum of the principle sum.

6. Ms Irving for the Husband however contends that recent authorities from England certainly indicate that their courts do have the jurisdiction under their Section 31(2)(d) of the Matrimonial Causes Act 1973, upon which our Section 11 is based, to re-open the overall quantum of lump sum orders by instalments, and hence our courts should accordingly also have similar power.

7. This thus constitutes a major dispute on an important point of law between the parties which no doubt requires detailed examination of the relevant authorities, of which however according to both parties that there is none from our courts, hence the focus will mainly be on the English ones, but before that, and while I have already set out the background of the parties in my earlier judgment dated 3rd October 2007 on the question of maintenance pending suit (PB6 : 1859 – 1882), it would be helpful to revisit some of them for the purpose of this judgment.

Background

8. The Husband, who was born in Canada and now aged 50, is the President and CEO Asia of a well-established German family business known as HWL Ltd. owned by his 2 cousins in Germany. He was sent by the company to Hong Kong in 1983 where he has since been responsible for the Asian side of the operation in particularly China and Hong Kong.

9. The Wife was born in Switzerland and is now aged 43. After marrying the Husband in 1989 she joined him in Hong Kong to be a full-time housewife and mother to their 3 children, namely J, a son, and A and C the 2 daughters aforesaid in a property in Clear Water Bay owned by the Husband’s employer.

10. In addition to free accommodation of a spacious garden house with 4-5 domestic staff and driver as well as company cars provided by his employer, the Husband also received a substantial basic monthly salary but his main income actually came from his annual bonus but normally referred to by his company as a distribution of the profit share fixed at 5% of specified profit earned in Hong Kong and China usually paid at the end of each summer for the preceding year ranging between HK$3 – 6 million per year based on the preceding several years record going back to 2005, which enable the family to enjoy a generally high standard of lifestyle, fine dining and luxurious shopping, weekend spent boating on the family junk and the Husband’s speed boat, substantial overseas holidays, membership in private clubs such as Clear Water Bay Golf and Country Club, the Aberdeen Boat Club and the China Club, and sending their children to expensive international school.

11. Sadly the marriage was severely affected in 2002 by the development of a rare and incurable metabolic disease by son J which had caused such emotional stress and pressure on the parties over the next several years that, together with other reasons that are no longer relevant, drove the parties apart and in early 2006 the Husband moved out of their Clear Water Bay home to a rented apartment in the Mid-Levels. The parties had by then each had another relationship.

12. Finally, after an unsuccessful mediation, the Wife filed for divorce in February 2007 in these proceedings and on 3rd October 2007 I granted the Wife maintenance pending suit at HK$75,000 per month on the basis that the Husband or his employer was to continue to be responsible for all her household expenses in the Clear Water Bay property, her car expenses and the children’s education and medical expenses.

13. Tragically shortly thereafter their son J succumbed to his illness and died on 28th October 2007, whereupon the Wife applied for an increase to her maintenance pending suit to enable her to move out of the Clear Water Bay property with the daughters to rent on the Peak to be closer to their German Swiss International School, and on 26th February 2008 I allowed the increase to HK$215,000 per month, as offered by the Husband, to include provision of the Wife’s rental expenses of HK$105,000, her household expenses of HK$35,000 and HK$75,000 for her living expenses and the children’s, while his undertaking to be separately responsible for the children’s medical and education expenses was to continue.

14. After the Wife and the daughters moved to the Peak, the Husband returned to the Clear Water Bay property where he has since been cohabiting with his colleague Ms S. Eventually the parties were able to agree to have joint custody of the daughters with care and control to the Wife.

15. As aforesaid, the parties subsequently also reached agreement on the question of ancillary relief at the FDR hearing on 25th September 2008 during which they were represented by counsel. The assets upon which they agreed to an equal division were set out in the Husband’s schedule and valued at HK$33,716,716.72, of which HK$897,755.58 were the parties’ joint assets consisting mainly of an Australian property and the Country Club debentures, HK$3,099,924 were the Wife’s assets, with the balance of about HK$30,000,000 being the Husband’s assets comprising mainly of his bank accounts (HKS6.74M), stocks and shares (HK$9.59M), pension funds (HK$5.67M) and moneys owed to him (HK$7.55M) (PB9 : 2788 – 2790).

16. The agreement was later set out in details in a 5 - page draft consent order subsequently endorsed by this court on 2nd February 2009 (“the said order”) (PB8 : 2341 – 2346), of which the lump sum of HK$16,886,077 payable by the Husband to the Wife was by the following instalments :

(a) HK$6,943,038 within 42 days of decree absolute;

(b) HK$6,943,039 no later than 26th September 2009 provided that should he be able to pay earlier, he should do so;

(c) HK$3,000,000 upon maturity of J's Lifesaver Insurance Policy in 2013.

17. The said order also required the Husband to pay the Wife HK$148,000 per month for her maintenance, reducing to HK$120,000 after the 2nd lump sum instalment, and to HK$110,000 after the 3rd instalment, as well as HK$15,000 per month for each of the 2 daughters in addition to his undertaking to continue to pay for their school fees, tuition, medical, insurance and education policy expenses.

18. The Husband has paid the 1st instalment albeit late, by realising his Tracker Fund and UBS Portfolio for just under HK$3 million, a substantial drop in value due to the global financial crisis, and had to make up the balance from his HSBC account.

19. The 2nd instalment was as noted above not paid and on 24th September 2008, 2 days before it was due, the Husband took out the application now before me seeking variation thereof, claiming that he no longer has the liquidity to pay it due to the 2008 financial crisis which has also severely affected his company’s business and hence his profit share, and proposing instead to pay the Wife the entire proceeds of J’s Lifesaver Policy upon its maturity in 2013 which is anticipated to have a maturity value of US$699,542, or the equivalence of HK$5,456,427.

20. He also proposed, if the court should accede to his application, to continue to pay the Wife the monthly maintenance of HK$120,000 for her until payment of the maturity money from the lifesaver policy, HK$30,000 for the children, and a further sum of HK$28,000 per month until that instalment payment to compensate her for the interest she would otherwise be receiving on the full lump sum payment...

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