Cwg v. Mh and Others

HCMP 643/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 643 OF 2012

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RULING ON COSTS

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Introduction

1.In this protracted litigation in relation to the applicant Wife’s application for financial relief, I handed down the Main Judgment in March 2013, and further under the Ruling for variation of costs, the husband (R1) and his mother (R2) were ordered to, jointly and severally, among other things, pay certain costs of the Wife, with certificate for two Counsel for all parties.  Under a further order by consent, R2 had agreed to pay a total of HK$10.8m for the Wife’s costs in the manner set out therein (“Consent Order”).

2.For ease of reference, I shall continue to adopt the abbreviations in the Main Judgment, unless otherwise indicated.

3.R2 failed to pay the Wife her costs in full under the Consent Order as a result of which the Wife issued a bankruptcy petition against R2 which was fixed for a hearing on 22 June 2016.  R2 took out the Stay Summons shortly before the Bankruptcy Hearing.

4.This court dismissed R2’s Stay Summons on 20 June 2016 and reasons were handed down on 24 June 2016 (“Reasons”).  This court further directed that the matter of costs be dealt with on paper.

5.There was no dispute that the Wife should be awarded costs of the Stay Summons.  The issue was whether such costs should be awarded on an indemnity basis.

R2’s grounds for opposing indemnity costs

6.R2’s grounds for opposing indemnity costs were as follows:

(i) The Stay Summons was not intended to “frustrate” the Bankruptcy Petition at “last minute” ;

(ii) The contempt of R2 was in the past found to have frustrated this court’s fact-finding process, and that R2 had already been punished by the Court of Appeal by way of indemnity costs for her non-disclosure, and that R2 should not be punished again on the same grounds;

(iii) The Stay Summons was not a frivolous application and that at most, the application was misguided as to the scope of the Hadkinson principle and also the inherent jurisdiction of the court, but this would not warrant indemnity cost;

(iv) The conduct of R2 was not unreasonable to a “high degree”, nor “venal” or “wicked”;

(v) There was no general rule that indemnity costs should be awarded against a contemnor.

Discussion

7.The Stay Summons was issued under O 45 r 11, namely on the ground of matters which had occurred since the date of the Consent Order and/or under the court’s inherent jurisdiction.  The new matters relied on by R2 were that the Court of Appeal was about to hand down its decision on the Husband’s appeal against the Main Judgment and that the Wife had issued the Bankruptcy Petition.

8.The Stay Summons was opposed on two main grounds by the Wife, namely that (1) R2 was still subject to the Hadkinson principles and she had not purged her contempt; and (2) There had been no new matter which had occurred since the date of the Consent Order.

9.I held against R2 on both grounds.  In particular, on ground (1), I have said in the Reasons that R2 should be fully aware that the sums of a total of HK$10.8m were agreed by her to be paid on or before 25 November 2015, over 6 months before the Stay Summons was issued.  In my view, not only had she not purged her previous contempt, she had continued to ignore court’s orders, even one that she had herself consented to, and this court further found that the Stay Summons was clearly a last minute attempt to delay the Bankruptcy Hearing.  I further held there were no new matters to support a stay under O 45 r 11, since R1’s appeal was lodged long before the Consent Order and neither the imminent decision from the Court of Appeal nor the Bankruptcy Petition were matters which went to the validity of the Consent order.

10.On the Hadkinson issue, R2 had not yet complied with the previous Disclosure Order which were made against her, upon which the previous Hadkinson Orders were made.  R2 has yet to purge her contempt.  In addition to this, she herself agreed to the terms of payment under the Consent Order, and yet until almost the eve of the Bankruptcy Hearing, she chose not to comply with the terms of the Consent Order.  As I said earlier, she chose to continue to ignore this court’s order, even one she had consented to.  This is clearly a case of serious and repeated contempt.

11.I do not see how R2 could have been “misguided” as to the scope of the Hadkinson principle or the inherent jurisdiction of the court.

12.In the Reasons, I had already found that R2 took out the Stay Summons as a last minute attempt to delay the Bankruptcy Hearing.  This was further confirmed by the fact that the next day after the Stay Summons was dismissed and before the Bankruptcy Hearing, R2 paid up all the outstanding costs plus interest.

13.I accept Ms Eu’s submissions that the Stay Summons was wholly unmeritorious, and further R2 had no grounds in opposing costs on indemnity basis.

Conclusion

14.In the above circumstances, I made an order that R2 should pay the Wife’s costs of and incidental to the Stay Summons on an indemnity basis.  Such costs are to be summarily assessed and I order R2 to pay the summarily assessed costs within 14 days of today.

Summary Assessment

15.The Wife submitted a statement of her costs of a total of HK$295,225.  It was submitted on behalf of R2 that Ms Eu appeared without any junior counsel at the hearing on 20 June 2016 and therefore the costs of junior counsel Mr Chan Hei Ching should be deducted.  I accept this.

16.The amount summarily assessed on indemnity basis is HK$225,225.

Ms Audrey Eu SC and Mr Chan Hei Ching, instructed by C T Chan & Co, for the applicant

Mr Samuel Yip, instructed by B C Chow & Co, for the 2^nd respondent