Dcb v. Ab

HCMP 2173/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2173 OF 2014

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D E C I S I O N

(On Costs (2))

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Introduction

1.This Court handed down a judgment in these wardship proceedings in relation to the interim maintenance for the ward L on 22 July 2016 (“22.07.16 Judgment”) and costs were reserved. 

2.Since the interim maintenance application, there was a trial in December 2016 in relation to L’s care and control and the Mother’s application for relocation of L and this Court later handed down a judgment on 16 May 2017 (“16.05.17 Judgment”).

3.The order made by this court in the 16.05.17 Judgment was to the following effect:

(i) The 19.05.15 Custody Order be varied to the extent that the Mother be granted L’s sole care and control with defined access set out in the order;

(ii) The Mother’s application for permanent removal of L to Singapore be dismissed;

(iii) The two week arrangement do continue until the Mother returns to Hong Kong;

(iv) L shall remain a ward of this court until further order.

4.Essentially, the Mother was the successful party in relation to (i) but the unsuccessful party in (ii).  Subsequent thereto, a decision on costs was handed down by this Court on 28 July 2017 (“28.07.17 Decision”) where no order as to costs was made.

5.The present decision is to deal with those reserved costs in relation to the Mother’s interim maintenance application.

6.Save otherwise indicated, in this decision, I shall follow the same abbreviations in the 22.07.16 Judgment and the 28.07.17 Judgment.

General Principles

7.Generally speaking, costs are in the unfettered discretion of the court.  As seen in Order 62 of the Rules of the High Court, costs normally follow the event.  

8.Mr Cheng, Counsel for the Father, had referred the Court to two Court of Appeal judgements.  The first one was HK and BD, CACV 252/2009 & CACV 71/2010, (unrep) Reasons for Judgment dated 15 October 2010 where it was said that:

“In family matters, as in all civil proceedings, the basic principles are that costs are in the discretion of the court but that costs should follow the event except when it appears to the court that, in the circumstances of the case, some other order should be made. In family matters, because of their particular dynamics, the exercise of discretion is broader-based than in other civil proceedings. However, as was observed by Nurler-Sloss LJ in Gojkovic v Gojkovic [1992] Fam 40, there still remains the necessity for some starting point. That starting-point, as we have indicated is that costs prima facie follow the event[1].”

9.The other case referred to by Mr Cheng was QMY and GSS (No 2) [2016] 1 HKLRD 433 (CA), which concerned maintenance proceedings for a child and the Court of Appeal had expressed the view that it was an appropriate case for not making any order as to costs of the appeal and the costs below as the proceedings were brought for the benefit of the child, and there was no winner or loser amongst the parents in matters concerning the welfare of the child, and the appeal was resolved by a point raised by the Court.

10.The facts in QMY were not set out in the Reasons for the costs order, and the brief reasons given were those set out above.  In any event, it was said that the appeal was resolved by a point raised by the Court of Appeal and seemingly not by the parties, and no doubt this was taken into account by the Court of Appeal when making no order as to costs.

11.Notwithstanding Gojkovic was decided some 25 years ago, what was quoted in HK and BD is still generally applicable in family cases.   Each case will of course depend on its own facts, and it is trite that in family cases, the court’s discretion on costs is broader based than that in other civil cases. 

12.Further, as set out in the 28.07.17 Decision, since the Civil Justice Reform in Hong Kong, Order 62 rule 5 (1) now also sets out special matters which the court shall take into account to such extent, if any, as may be appropriate in the circumstances.  Such special matters include the conduct of all the parties, and whether a party has succeeded on part of his case, even if he has not been wholly successful.

13.As further seen in the 28.07.17 Judgment[2], it has been long been recognized, and also set out by our Court of Appeal in TPL and WYY, CACV 47/2014 and CACV 61/2014, Judgment dated 15 December 2014, the general practice in applications to do with children, the usual order should be no order as to costs.  However, as pointed out by Yuen JA in TPL, the general practice is not a rigid rule and accordingly, the courts have said that this approach to costs does not apply in exceptional circumstances, such as where the conduct of one party has been reprehensible or the party’s stance has been beyond the band of what is reasonable[3]. 

14.In any event, as seen in TPL and the line of cases referred to in the 28.07.17 Judgment, the usual order of no order as to costs is normally applied in relation to applications concerning care and access arrangements of children, rather than financial applications.  

15.In KWKM v KSW CACV 432/2016, [2007] HKCA, (unrep) 15 June 2007, the successful litigant, namely the petitioner/wife, was ordered to pay the costs of the respondent/husband, the unsuccessful litigant, and she appealed.  The wife had made an application for interim maintenance for the parties’ 13 year old son and initially sought HK$6,000-$6,200 a month which was later revised to $4,265 a month.  The father had throughout been willing to pay $3,000 a month and was subsequently ordered to pay $3,380 a month.  There was no Calderbank offer made by the father.  Yuen JA in her judgment applied the principles set out in In re Elgindata Ltd (No 2) [1992] 1 WLR 1207, and allowed the appeal as the wife was the successful litigant although the eventual order of $3,380 was some way from the sum claimed by her, she obtained an order more than the amount of $3,000 which the father was willing to pay. 

16.Mr Cheng, on behalf of the Father, referred this Court to an earlier judgment of mine in LCTK and TV v TKKP FCMC 173/2009 (unrep) Judgment dated 25 June 2010, wherein an order was made for the interim maintenance for a child on application by her mother and the father was ordered to pay 50% of all the mother’s costs of the application, on the basis that the mother’s claims were largely unsubstantiated even though initiating the proceedings almost a year ago, and that although the mother was not awarded the sum she sought, the proposals of the father were also too low, and that the mother had no choice but to issue an application for interim maintenance in order to obtain the order.

17.As seen from the above cases which concerned interim maintenance applications or financial applications for the benefit of a child, and depending on the circumstances of each case, the approach is still generally a successful party will be awarded his/her costs.

The present case

18.I now turn to consider the facts of the present case.  At the time of the hearing of the interim maintenance, the Father was acting in person.  The background was set out in the 22.07.16 Judgment and also the 16.05.17 Judgement and will not be repeated here.  Suffice to say, the Mother returned with L from Singapore to Hong Kong on 8 March 2016, after being ordered by the Singapore Court to do so, and about 8 days later, on 16 March 2016, the Mother issued a summons, seeking among other things, interim maintenance for L.

19.The Mother’s solicitors had lodged a bundle of relevant correspondence between the parties concerning L’s interim maintenance (“Correspondence Bundle”).  To summarise, the chronology in relation to the issue of L’s interim maintenance was as follows:

(i) On 8 January 2016, on the basis he had been granted sole care and control, the Father issued a summons seeking, among other things, maintenance from the Mother in the sum of HK$4,000 per month upon L’s return to Hong Kong, which was later adjourned to a direction hearing after L’s return;

(ii) After the Mother and L returned to Hong Kong on 8 March 2016, as mentioned earlier, she issued a summons on 16 March 2016 seeking, among other things, interim maintenance for L, and she was seeking a sum of not less than HK$5,000 per month and an interim allowance of HK$20,000 for accommodation based on the then Interim Access Order;

(iii) On 23 March 2016, the Mother through her solicitors proposed an interim sum of HK$20,000 or the Father to provide suitable accommodation for L, and a sum of HK$5,000 per month for L;

(iv) There being no response from the Father, on 27 April 2016, the Mother’s solicitors wrote again and repeated the Mother’s above proposal;

(v) There was a direction hearing on 5 May 2016, but no offer of financial payment was made by the Father for the benefit of L at that hearing, nor did the Father withdraw his summons for L’s maintenance against the Mother;

(vi) On 17 May 2016, the Mother’s solicitors wrote again pointing out, among other things, that if the Father failed to agree to or make a reasonable offer of financial provision for L, they would pursue the summons they issued on 17 May 2016 for periodical payments for L;

(vii) On the same day, 17 May 2016, the Mother’s solicitors further sent a Calderbank letter, or a letter marked “without prejudice save as to costs” and set out the Mother’s proposal of HK$20,000 per month for L, being HK$15,000 per month for accommodation and HK$5,000 per month for L’s living costs on the basis that L was spending two weeks each month with the Mother in Hong Kong and education costs were to be in addition;

(viii) Then on 14 July 2016, the day before the hearing for interim maintenance, the Mother’s solicitors sent a further letter to propose settlement, namely that the Father was to pay a sum of HK$86,000 for L’s expenses from March to July 2016, and from 1 August 2016, the Father to pay HK$24,000 per month for L’s maintenance.

20.It was not disputed that the parties were attending mediation during which the matter of L’s maintenance was raised, but as these discussions were without prejudice, they had not been disclosed, save that the Father alleged that he had sent a letter to the Mother’s solicitors on 14 July 2016 offering HK$17,000 per month for L (“Disputed 14.07.16 Letter”).

21.The Mother’s then solicitors (prior to the Mother’s legal aid certificate being discharged) denied having ever received the Disputed 14.07.16 Letter, and queried its authenticity.  They further objected to it being included in the Correspondence Bundle.  The Father was unable to produce a fax log report of the Disputed 14.07.16 Letter which he claimed he had faxed to the Mother’s solicitors on 14 July 2016. 

22.At the interim maintenance hearing on 15 July 2016, the Father did not give any indication that he had altered his position from one of seeking a sum of HK$4,000 for L’s maintenance from the Mother, to one offering to pay HK$17,000 per month to the Mother for L’s maintenance.

23.In any event, the Disputed 14.07.16 Letter, if indeed sent, was only sent at the eleventh hour, and would not have prevented the hearing on 15 July 2016 taking place.  The Disputed 14.07.16 Letter made no mention of L’s medical and education costs, nor made any proposals for reimbursement of L’s expenses from 8 March 2016 to July 2016.

24.This Court in the end ordered the Father to pay interim maintenance for L in the sum of HK$17,740 per month, on top of the Father’s undertaking to arrange for L’s medical expenses to be paid/reimbursed and also to be responsible for L’s nursery school expenses in Hong Kong.  In addition, the Father was to pay HK$58,590 for L’s maintenance from 8 March 2016 until 13 July 2016.

25.The award the Mother in the end obtained from the Court was clearly more or better than what the Father was offering in the Disputed 14.07.16 Letter, if it was indeed sent.

26.The Father complained that the Mother proposed a less compromising offer on 14 July 2016, and she must have appreciated that there was even a slimmer change of settlement by increasing the offer right before the hearing.  Even so, the offer made by the Mother on 17 May 2016 was clearly marked “without prejudice save as to costs”, and the Father was clearly warned about costs.  The Father had had an opportunity and plenty of time to respond and to seek legal advice and to make a reasonable offer, but there was no evidence that he did. 

27.The Father did not respond in writing at all until the alleged Disputed 14.07.16 Letter.  Nor did he withdraw his own application for L’s maintenance from the Mother.  As stated in the 22.07.16 Judgment, the Father’s approach towards the interim maintenance application was totally misconceived, in that he was under the impression that because he was granted sole care and control of L, the Mother had to pay him for maintenance for L, or that the Mother should not be entitled to maintenance for L when she was exercising access rights, and/or because she had “abducted” L previously. 

28.As further stated in the 22.07.16 Judgment, based on the difference between their respective after tax income, this Court was of the view that the parties should contribute and share L’s interim needs of HK$28,000 per month in the proportion of about 83% (being the Father’s) and 17% (being the Mother’s). 

29.The Father’s after tax income was almost 5 times that of the Mother’s.  The Mother had to come to the Court in order to obtain an award for the benefit of L.  There were no voluntary payments made by the Father for the benefit of L prior to the award made by this Court.

30.Having considered the circumstances of this case, the Mother is clearly the successful party, and I see no reason why costs should not follow the event.

Order

31.I therefore order the Father to pay the Mother’s costs of and incidental to her application for L’s interim maintenance under her summons of 16 March 2016 including the present costs argument, such costs to be taxed if not agreed.  The Mother’s own costs be taxed under Legal Aid Regulations, where applicable.

Mr Ken Cheng, instructed by SM & Co, for the plaintiff

Mr Robin Egerton, instructed by Tanner De Witt, for the defendant