Frequently
Asked Questions
Interest on Arrears of Maintenance
1.
What is the reason for requiring maintenance payers to
pay interest on arrears of maintenance?
Interest on arrears of maintenance aims to compensate
maintenance payees for the loss of interest on their savings,
or for the interest payable by them in respect of loans
that they have to obtain due to the maintenance payer’s
default or delay in making maintenance payment(s).
2. When will a maintenance payee
be entitled to interest on arrears of maintenance?
On the commencement of the Ordinance,
i.e. 1 May 2005, if a maintenance payer fails to make
FULL payment or PUNCTUAL
payment in compliance with a maintenance order, a maintenance
payee is automatically entitled to interest
in respect of the arrears of maintenance which accrue
on or after that date.
NOTE: Arrears of maintenance accrued before 1 May 2005
are not subject to interest.
3. What is the interest on arrears of
maintenance?
Arrears of maintenance is to carry simple interest
(a) at the rate the court orders; or
(b) in the absence of an order, at the prevailing rate
on judgment debt determined by the Chief Justice from
time to time.
4. What is simple interest?
Simple interest means that interest generated at the
end of a period will not attract further interest in the
following period. In other words, interest accrued and
yet to be paid will NOT attract interest.
5. How should interest on arrears of maintenance
be calculated?
Interest on arrears of maintenance is to be calculated
according to the following formula -
(P x R x T) / N
where P = outstanding maintenance
R = interest rate (rate specified by the Court or the
interest rate on judgment debt)
T = number of days in the period (from the day following
the due day of payment specified in the maintenance order
to the day of actual payment of the arrears)
N= number of days in the relevant calendar year
6. Where can I check the prevailing
interest rate on judgment debt?
Please click here.
You may also visit the Judiciary's
website.
7. Can a maintenance payee claim interest
on all arrears of maintenance previously accrued?
A maintenance payee cannot claim interest on arrears
of maintenance accrued before the commencement date of
the Interest and Surcharge on Arrears of Maintenance Ordinance
2003, that is before 1 May 2005.
In respect of arrears that are due for more than 12 months,
under the Matrimonial Proceedings and Property Ordinance,
a maintenance payee also needs to obtain the Court’s
permission for enforcing the payment of such arrears and
the interest thereon.
8. Can a maintenance payer refuse to
pay interest?
If a maintenance payer considers that he has reasonable
ground(s) not to pay the interest on arrears of maintenance,
he may, within a reasonable time after having knowledge
of the requirement to pay, apply by summons to the court
not to pay the interest and set out his ground(s) in the
application.
9. What are the factors that the Court
will take into account when considering a maintenance
payer’s application for not paying interest to the
payee?
The court will consider all factors, including (but not
limited to) the followings –
| (a) |
whether the maintenance payer has a
reasonable excuse for his failure to comply with the
maintenance order; |
| (b) |
whether the maintenance payer has evaded service
of court documents; |
| (c) |
the maintenance payer’s past record and conduct
in connection with the making of maintenance payments
to the payee under the maintenance order or an undertaking
in any proceedings; |
| (d) |
whether the maintenance payer has given the payee
a reasonable explanation for his failure to comply
with the maintenance order; and |
(e)
|
the maintenance payer’s ability to pay. |
Surcharge on Arrears of Maintenance
1. Why should the Court be given discretion
to impose surcharge when there already is a scheme for interest on
arrears of maintenance?
Surcharge on arrears of maintenance is to serve as a
deterrent against the blameworthy conduct of a maintenance
payer who, without reasonable excuse, repeatedly fails
to make full and punctual payment in compliance with the
maintenance order. This is different in nature from interest
on arrears of maintenance. The latter aims to compensate
maintenance payees for the loss of interest on their savings
or interest payable owing to debt incurred as a result
of the default in maintenance payment.
2. How can a maintenance payee obtain
a surcharge on arrears of maintenance?
Where a maintenance payer, without reasonable excuse,
repeatedly fails to pay the full amount or fails to pay
punctually in accordance with the maintenance order, the
maintenance payee can apply to the court for an order
requiring the maintenance payer to pay a surcharge on
the arrears of maintenance accrued on or after 1 May
2005.
3. Is court’s approval required
for getting both interest and surcharge on arrears of
maintenance?
Maintenance payees are entitled to interest on arrears
of maintenance automatically at interest rate on judgment
debt unless otherwise determined by the court. On the
other hand, only the court is empowered to impose a surcharge
on arrears of maintenance in cases where the payer has
defaulted repeatedly without reasonable excuse.
4. What is the maximum surcharge
that the Court may impose on a maintenance payer?
The amount of surcharge payable by the maintenance payer
shall not exceed 100% of the total arrears of maintenance
calculated from the date on which the arrears first accrued
(which should be a date on or after 1 May 2005) to the
date of payment of the surcharge.
5. How can a maintenance payee apply
to the court for a surcharge?
A maintenance payee may apply for a surcharge in the
same proceedings where he/she is seeking enforcement of
the maintenance order. Such proceedings include –
(a) judgment summons;
(b) attachment of income order;
(c) garnishee proceedings; and
(d) charging order.
A maintenance payee may also apply for a surcharge through
a special summons procedure as laid down in the ordinance.
Please click here for more information.
6. Can a maintenance payee apply for
surcharge in respect of all arrears of maintenance previously
accrued?
A maintenance payee cannot apply for a surcharge in respect
of arrears of maintenance that accrued before the 1 May
2005.
In cases where the arrears have become due for more than
12 months, under the Matrimonial Property and Proceedings
Ordinance, if the court grants leave to enforce such arrears
of maintenance, surcharge if any will be calculated from
the date specified by the Court as being the date on which
the payee is entitled to enforce payment of the arrears.
In other words, a maintenance payee needs also to seek
the court’s approval for claiming surcharge on arrears
of maintenance that have become due for more than 12 months.
7. What can a maintenance payee do if
the maintenance payer fails to comply with the surcharge
order?
If the maintenance payer fails to pay the surcharge ordered
by the court, the maintenance payee may seek enforcement
of the surcharge order through the usual enforcement proceedings,
e.g. judgment summons. In the case where the surcharge
is granted in the proceedings for enforcement of a maintenance
order, the payee may refer to the order of the Court made
in those proceedings and take appropriate follow up actions.
He or she may also seek recovery of the surcharge in the
District Court as if the same is a civil debt due to him
or her.
8. I am a maintenance payer. I was out
of town when the hearing of the application for surcharge
order took place. I have justifications for not fully
complying with the maintenance order. How can I ask for
the surcharge order to be varied or set aside?
Within a reasonable time after having knowledge of the
order, you may apply by summons to vary or set aside the
order.
If the court is satisfied that there is reasonable excuse
for your failing to –
(a) appear at the hearing; and
(b) pay the full amount or pay punctually in compliance
with the maintenance order,
the court may vary or set aside the order on such terms
as it thinks fit.
[Others]
1. What are enforcement proceedings?
Where a maintenance payee considers that the payer has
failed to comply with the original maintenance order,
say, he has failed to pay the maintenance in full or pay
punctually, the payee may institute proceedings to enforce
the maintenance order. The purpose of the enforcement
proceedings in this context is to apply to the Court,
among other things, to direct the payer to repay the arrears
of maintenance, to revise the payment arrangement, or
to charge the payer’s assets for repayment of arrears
of maintenance. Some examples of enforcement proceedings
for maintenance orders are –
(a) Judgment summons;
(b) Attachment of income order;
(c) Garnishee proceedings; and
(d) Charging order.
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