IN THE DISTRICT COURT OF
THE HONG KONG SPECIAL ADMINISTRATIVE REGION
SUIT NO. 5111 OF 1999
Coram: H.H. Judge Bruno Chan in Chambers
Date of Hearing: 24th-26th August, 6th-9th, 13th-14th and 28th September 1999
Date of Handing Down of Judgment: 22nd October 1999
J U D G M E N T
1. This is the Petitioner Wife's application for ancillary relief for herself and the only child of the marriage against the Respondent Husband. Although the parties are now divorced, I shall for convenience purpose refer to them as Husband and Wife in this judgment.
2. Both parties are American citizens who were married on 3rd September 1989 in California, USA. After the marriage they came to live in Hong Kong where the Husband accepted a job. Their child, a son, who is now 7 1/2, was also born in Hong Kong. In April 1996 the Husband accepted another job in Australia and the family moved to live there for about 2 years until March 1998 when they returned to Hong Kong and have since remained.
3. The Husband is employed as a vice president of Citibank in Hong Kong and earns a fairly good salary with various perks and benefits common to expatriates in senior position in Hong Kong including bonuses, housing, medical etc. The Wife was during the marriage and still is mainly a full-time housewife and mother, although she did have a part-time job for a short period of time between late 1998 and early 1999.
4. There were marital problems during the marriage and in about September 1998, after having sought advice from a solicitor, the Wife showed the Husband a draft divorce petition which she proposed to issue unless something was done to repair their marriage. As a result the Husband began to seek counseling and the Wife agreed not to file her divorce petition. On 13th February 1999, the family went to Nevada, USA where they have a condominium for a short holiday over the Chinese New Year. However on 24th February 1999, the day before they were due to return to Hong Kong, the Wife was served with divorce proceedings taken out by the Husband in Nevada earlier on the same day together with an ex-parte order granting him interim custody of the son and joint preliminary injunction restraining either party from dealing with their assets. Despite the interim custody order in his favour, the Husband never took de facto custody of the son and in fact allowed the Wife and the son to leave the U.S. together to return to Hong Kong.
5. The Nevada proceedings no doubt came as a great surprise to the Wife who immediately upon returning to Hong Kong sought legal advice to counter that proceedings in Nevada and also launched her own proceedings in Hong Kong, initially in the High Court by making the son a ward thereof on 1st March 1999 so that he could not be removed from the jurisdiction without leave of the Court, which was soon followed by the issue of her petition for divorce on 26th May 1999 based on the Husband's unreasonable behaviour under the present proceedings. In her petition the Wife also sought custody of their son and full ancillary relief.
6. Proceedings between the parties soon became fast and furious in both Hong Kong and Nevada with various applications for prohibition orders and injunctive reliefs. Eventually the Husband's divorce proceedings were dismissed by the Nevada Court for want of jurisdiction as the parties were regarded as non-residents there, and the parties were subsequently able to compromise on the warship and the divorce proceedings in Hong Kong, and on 8th July 1999 the decree nisi of divorce was granted to the Wife with the questions of custody access and ancillary relief adjourned to Chambers for trial. In the mean time the parties also agreed that the Husband would pay to the Wife HK$44,000 per month by way of interim maintenance pending the final determination of the proceedings. I gave the parties an early date in end of August 1999 for the hearing as the Husband was shortly due to be relocated by his employer to the branch office in Singapore, whilst it was the Wife's intention to return to the United States with the child after the divorce.
7. Both parties have filed substantive affidavits and there were exhaustive requests for further and better particulars and discoveries from both sides. The parties also gave evidence at length at the hearing and were extensively cross-examined.
8. Although custody and access were still in dispute at the start of the trial, the parties were able to resolve the matters in the course of the hearing by agreeing that the Wife is to have custody care and control of the child with certain defined access to the Husband, the terms of which I shall set out at the end of this judgment. There is however serious dispute as to whether the Husband should have access to his son outside the jurisdiction of the Wife's home state after her return to the United States as she is concerned that he may not return the son to her once he leaves the country. The other main issue is of course the Wife's claims for ancillary relief for herself and the son which I shall now deal with first.
9. In deciding ancillary relief claims, I am guided by the matters as set out in Section 7 of the Matrimonial Proceedings and Property Ordinance. The parties' financial situation and assets are fairly straightforward and well documented, and at the outset of the hearing they agreed in principle to distribute equally between themselves their assets which consist mainly of bank savings, retirement funds, some stocks and shares and the house in Nevada, the total gross value of which was at the start of the matrimonial proceedings in the vicinity of about US$1.7 - 1.8 million. In fact in the course of the hearing on 8th September 1999 when the value of the assets had dwindled down to US$1.37 million due to legal costs of the on-going trial, the Husband in an attempt to settle the Wife's claims offered her some of his Proctor and Gamble stocks and the Nevada Property which together with her own funds would amount to half of the then assets value at US$685,000, plus monthly maintenance for her at the rate of US$5,500 for 2 years, then US$2,750 for a further 3 years, and monthly maintenance for the son at US$1,500 plus education and medical expenses as long as they are covered by his employment contract.
10. The Wife was willing to accept US$685,000 as her half share of the assets but insisted that it be in liquid form as she would need all the cash to purchase her accommodation in the United States. Regarding monthly maintenance, she counter-offered US$5,000 net of tax for herself without any limitation as to duration at this stage, and US$2,000 for the child plus education and medical coverage.
11. It was quite apparent by then that the parties were not so far apart as to justify incurring further costs which was already quite substantial and was being run up at an alarming rate. To wit, between 8th September 1999 when the Husband's offer was made and the last day of the hearing on 28th September 1999, the parties ran up a further 200 pages of correspondence between solicitors, no doubt all for good reasons and part of further attempt to negotiate, yet there was no settlement and the hearing had to continue to its bitter end.
12. One of the reasons for the matter to turn out to be so much more complicated and contentious than anticipated, apart from the bitterness, animosity and total distrust the parties have for each other, which is not uncommon in divorce proceedings, is because the Wife intends to argue that the Husband's conduct in bringing the proceedings in Nevada which turned out to be totally fruitless but expensive, costing the parties more than US$140,000 in total legal costs, should be taken into account when assessing her claims. Furthermore, the fact that the Wife and the son will be living in the United States after the divorce, the expenses for rehousing them as well as their future needs and living expenses obviously vary in different parts of the United States, and as such the implication and impact of U.S. tax on the maintenance payable and the possible liquidation of some of the parties' retirement funds and stock options, which may attract further tax and penalties, all but add to the difficulty of the case.
13. I shall first consider the Wife's income, earning capacity and other financial resources. It is not in dispute that she was a full-time housewife and mother during the marriage except for a few months in late 1998 when she had a part-time job as an achivist, and that she was, and still is, wholly dependent on the Husband. Prior to the marriage she was a successful sales executive for a large printing and publishing company in California earning an annual salary of more than US$66,000 plus allowance for entertaining clients and travelling. She says as she is now aged almost 46 and unfamiliar with new technology, and as she has the care of a small child, she does not think she can go back into the workplace at her former level.
14. The Wife also complains that due to the rush of the ancillary relief hearing, she has not been given the opportunity to seriously consider her plan as to future employment and to research into the job market situation in the U.S.. She says during the initial period of her settlement in the U.S., she believes at best she can only do some part-time work to earn some pocket money as she needs to focus on helping her son to adjust to their new environment and his new school. One of her initial plans is to go back to university to study law which she is interested in, or interior decoration which she is good at. She hopes to be able to eventually go back into...