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Kews v Nchc

Judgment Cited authorities 15 Cited in Precedent Map Related
Vincent
Judgment Date15 February 2013
Year2013
Citation[2013] 2 HKLRD 314; (2013) 16 HKCFAR 1
Judgement NumberFACV18/2012
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)
FACV18/2012 KEWS v. NCHC

FACV 18/2012

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 18 OF 2012 (CIVIL)

(ON APPEAL FROM CACV NO 75 OF 2011)

____________

BETWEEN

KEWS Petitioner
(Appellant)
And
NCHC Respondent
(Respondent)

____________
Before: Chief Justice Ma, Mr Justice Chan PJ, Mr Justice Ribeiro PJ,
Mr Justice Hartmann NPJ and Lord Clarke of Stone-cum-Ebony NPJ
Date of Hearing: 24 January 2013
Date of Judgment: 15 February 2013

_______________

J U D G M E N T

_______________

Chief Justice Ma:

A INTRODUCTION

1. The present appeal involves a consideration of the court’s approach in applications for ancillary relief under s 4 of the Matrimonial Proceedings and Property Ordinance Cap 192 (“the MPPO”)[1] where, in the assessment of the financial resources of the parties to a marriage, it is relevant to take into account the financial assistance provided by third parties to the husband or wife. In particular, it will be necessary to consider the extent to which (if at all) the court, when making such orders, is able to encourage third parties to provide such financial assistance so as to enable the husband or wife to meet his or her ancillary relief obligations. This latter point involves a consideration of what has become known as “judicious encouragement” in matrimonial law.

2. Financial assistance from third parties can of course take various forms, anything from the payment of money or transfer of property to the meeting of liabilities. What is involved here is the court’s approach in taking into account property or financial resources to which the husband or wife has or is likely to haveaccess, but to which (until the property or financial resources are transferred) that party has no legal entitlement. Thus, for example, trust property to which a husband or wife has a legal entitlement, do not present any difficulties: such property will certainly be taken into account in ascertaining that party’s assets. It is where discretionary trusts are involved or where, as in the present case, the financial assistance has come from a party’s relatives (in the present case, the parents), that difficulties may sometimes be encountered.

3. The relevant provisions in the MPPO are s 4 (applications for periodical payments and lump sum orders following a divorce, a decree of nullity or a decree of judicial separation) and s 7(1) (matters which a court must take into account when deciding applications under ss 4, 6 or 6A of the Ordinance).[2]

4. In the present case, after a trial in the Family Court[3] (HH Judge CK Chan), it was ordered that the Husband (the petitioner) make periodical payments of $14,000 a month to the Wife (the respondent) from 1 November to the end of 2010, thereafter such periodical payments to be increased to $21,000 a month until the death of either party or the remarriage of the Wife, whichever is earlier, or until further order. No lump sum was ordered. On appeal, the Wife’s appeal was allowed and the Court of Appeal[4] ordered that periodical payments of $42,500 a month be made to the Wife starting from 1 November 2010 until the death of either party or the remarriage of the Wife, whichever is earlier, or until further order. A lump sum of $1.5 million was also ordered to be paid by the husband within one year.

5. Before dealing with the applicable law and then applying it in the present case, I must first set the scene by identifying the relevant facts and the context of this appeal.

B FACTS

6. The general facts are amply set out in the judgments of the Family Court (dated 19 October 2010) and the Court of Appeal (dated 2 December 2011). The Chief Judge described the case as “a particularly sad case”. The parties met in the early 1990s when still in their teens, eventually marrying in 2000 in London. Unfortunately, in 2002, the Wife was diagnosed with a rare intestinal condition known as “superior mesenteric artery syndrome”. Her life was described by the Chief Judge as a “nightmare” for her and her family. When the matter came to trial in June 2010, the Wife had undergone some 10 operations since 2002, during which a large part of her digestive system had been removed. She weighed 70 lbs at trial. She was on heavy medication and was confined to her home. She was under the care of two experts in gastro-intestinal diseases and another for her genital prolapse. The experts are of the view that it is unlikely the Wife will be able to lead a normal life: it is not surprising she also suffered from depression and other psychiatric problems. Her mother acts as her guardian ad litem in the present litigation.

7. With the Wife’s condition as it was, until 2006, the Husband remained at her side and they were very much attached to each other. He kept her company during her treatment in Hong Kong and abroad. In late 2006, however, the Husband told the Wife and her family that he needed a break to re-establish his working career. They separated and the Husband moved back inwith his parents.

8. On the financial side, the trial Judge recorded the Husband’s employment history as follows[5] : -

“(1) The Husband’s Harvard degree was obtained in 1998. After graduation, he worked with a company called A for a short period of time at the salary of $24,000 per month. He left the company in 1999 to care for the Wife who told him that she had cancer, which was untrue.

(2) He worked for another company called NH in February 2001 but left upon the request of the Wife as she did not like being alone.

(3) After rejoining NH in 2002, the Husband changed to part time in January 2003 after the Wife’s first operation in November 2002.

(4) From December 2003 to March 2004, the Husband accompanied the Wife to a Clinic in the USA for treatment.

(5) In April and May 2004, the Husband and Wife were in Vancouver for faith healing.

(6) From September to December 2004, the Husband and Wife attended a faith healing church in Texas.

(7) The parties separated in 2006 after which the Husband returned to work for NH in May 2006 but left in February 2007 as the business did not prosper.

(8) In 2007, the Husband studied for the Securities and Future Commission Paper 1 Exam and obtained a license for Dealing in Securities, Advising in Securities and Asset management in March 2008.

(9) In January 2009, the Husband attended an Executive MBA program at the HKUST with sponsorship from his father and graduated in May 2010.

(10) On 24 February 2009, he commenced his present employment at a salary of $15,000 per month, to be increased to about $30,000 to $40,000 by the end of this year.”

9. I shall deal with the Husband’s earning capacity later in this judgment (for the Court of Appeal took a different view in analyzing this aspect to that of the trial Judge) but highlight at this stage one factual point. Apart from being a Harvard graduate, the Husband possesses impressive financial qualifications. In particular, he graduated in 2010 with an Executive MBA degree, having attended the Kellogg/HKUST Business School. The EMBA course at this School is one of the most prestigious courses of its kind and, in terms of salary, on average, graduates with this degree commanded the highest starting salaries in the financial sector. Mr Russell Coleman SC (who represents the Husband) drew our attention to a chart compiled by the Financial Times dealing with EMBA rankings for 2012. This chart indicated that the three-year average annual salary for graduates with a Kellogg/HKUST EMBA was US$465,774, the highest by far of the top 100 business schools world-wide. At trial, the figure contained in the FT chart then available was US$345,111.

10. Earning capacity aside, both parties to the marriage enjoyed significant financial support from their own parents.

11. The Husband’s parents, both in their seventies, come from a well-known family in Hong Kong. The trial Judge made a finding that they could not be regarded as being in the “extremely rich” category. However, it is clear that they have been supportive of the couple before the separation in 2006, and since then – indeed all along – they have continued generously to support the Husband:-

(1) They paid for the wedding reception at the Shangri-la Hotel in August 2001.

(2) The Husband’s parents also met the bills for the credit cards of the couple (the Wife had four supplementary cards) when they were still together. The parents did not give evidence at trial but the Wife’s parents did. Their testimony was to the effect that the Husband’s parents had given financial support in the past so as to allow the couple to lead a reasonably high standard of living. The Husband was able to buy expensive items for the wife; at trial a list was compiled showing that designer goods were purchased having a value of over $1.13 million.

(3) After the couple separated, the Husband’s parents continued to support him and did so generously as they had done previously. The trial Judge did not provide many details of this (other than to make an important finding to which I shall refer below), but the judgments of the Court of Appeal are more revealing:-

(a) Cheung CJHC referred to the fact that documents showed that between 2005 and 2010, the Husband had a total of over $7 million deposited into his account, even though his total salary over that period came to just over $400,000. This gave him an annual income of nearly $1.5 million. Over the same period, the withdrawals from his bank account amounted to $8.28 million; this equated to an annual average of $1.74 million. The Husband’s credit card bills were paid by his father: in the few years prior to the Court of Appeal hearing, this amounted to just less than $1 million. Between 2006 and 2008, the Husband received gifts...

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