C, Mt v. M, P

FCMC 5451 / 2018

[2020] HKFC 25

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 5451 OF 2018

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R U L I N G
(COSTS)

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Introduction

1.There are presently cross applications before me in relation to the costs arising out of the wife’s summons dated the 21 August 2019. The summons states as follows:

1.  The Respondent do forthwith return the passport of the Child of the family, namely, HTM, a boy, born on the XX December 2012 (“H”) to the Petitioner, as directed under the Court Order dated the 26th October 2018 (“the Child’s Arrangements Order”).

2.  The Respondent do forthwith provide a copy of his counselling letter confirming he has attended counselling for the court Order period of 6 months together with the receipt showing payment for the counselling sessions to the Petitioner’s solicitors as directed under the Child’s Arrangements Order dated the 26^th October 2018.

3.  Cost be to the Petitioner on a full indemnity basis.

2.Both of the issues identified in the summons relate to agreements and undertakings reached between the parties in the so called “Child’s Arrangements Order” of the 26 October 2018. Paragraph H of that order states that

H.  AND UPON the Respondent agreeing and confirming that he shall continue counselling with SM or other qualified counsellor who works in the same practice area as SM for a period of six months, commencing on 1^st November 2018 and ending on 30^th April 2019 and that he shall attend 2 counselling sessions per month.  AND FURTHER UPON the expiry of the 6 months being 30^th April 2019, the counsellor shall provide to the Respondent a letter to confirm that the Respondent has attended the regime of counselling as agreed herein and the Respondent shall then provide a copy of that letter together with receipts showing payment for the counselling sessions to the Petitioner as soon as practicable.  For the avoidance of any doubt, the Respondent’s attendance with a counsellor shall not: (i) be interpreted or understood in any way adverse to the Respondent’s ability to care for the Child; or (ii) be considered as a precondition for his access to the Child.

3.Paragraph L adds as follows:

AND UPON the Petitioner and the Respondent acknowledging, agreeing and confirming that the Petitioner shall hold the passport of the Child AND FURTHER the Petitioner agrees and undertakes to the Court and to the Respondent that she shall pass over the passport of the Child to the Respondent no less than 2 days before his intended travel with the Child.

4.It is of note that an issue concerning the non return of the passport was first raised before me at the Maintenance pending suit/interim maintenance/litigation funding hearing on the 9 August 2019. On that day I indicated that the child’s passport should be returned to the mother by the father without further ado. Unfortunately, however, neither matter had been resolved by the time that the summons returned to court on the 29 October 2019. It is of note that the father is a solicitor and therefore an Officer of the Court.

5.On the 29 October I took a pragmatic approach and requested that the passport (which had seemingly only just been found) be handed up to the court for safe keeping. I was also of the view that the husband needed to fully comply with paragraph H of the Child’s Arrangement Order. It seems that the husband had some concerns that the “counselling letter” could be used by the wife inappropriately. On that premise I asked the wife to undertake not to disclose the contents of the letter and and/or the counselling receipts to any third parties. I viewed the letter and the available receipts and upon the undertaking being given by the wife I then handed the same to Ms Irving, who appeared in court on behalf of the wife. I did not allow the husband to file an affidavit in reply to the wife’s 3^rd affidavit of the 21 August 2019 and I accept therefore that he has not had an opportunity to properly respond to some of the allegations made by the wife in that affidavit.  

6.It is the mother’s case that notwithstanding the fact that this is a child related matter, that it would be appropriate in the circumstances for the husband to pay for the costs of her application on an indemnity basis. She accuses of the husband of bullying her and of engaging in unacceptable litigation games. The husband for his part says that as this is a child related matter that the court should adopt its more normal approach of making no order as to costs. His solicitors point out that this continues to be a very high conflict case, that neither party trusts the other and that each have behaved inappropriately on occasion. She adds that in any event the wife was not wholly successful in her application given the outcome on the 29 October 2019. These points are all accepted.            

The issue

7.Consequently, the central issue here is whether or not the respondent father should be penalised in costs, given his behaviours with respect to the passport and “counselling letter”. This is notwithstanding the fact that generally speaking, in children’s cases, the more appropriate order is that there shall be no order as to costs. 

The law

General approach

8.The law is not in dispute. It is accepted by both sides that the general rule, in normal circumstances, is that costs follow the event but that costs orders against one parent or another are exceptional in cases involving children. I agree that this is the court’s general approach.

9.Both sides have also referred me to Order 62 of the Rules of the High Court and the father has also taken me to the Hong Kong case TPL and WYY (CACV 47 of 2014 and CACV 61 of 2014) which reiterates that there would normally be no order as to costs in children’s cases, save, as I have said above, where there are “exceptional circumstances.”

10.It would therefore be very unusual indeed for the court to make an order for indemnity costs against a parent in a child related matter, and although I accept that in this case the child issue had been largely resolved and that this summons relates to matters arising out of the agreements reached, they are still ultimately concerned with the appropriate arrangements for H going forward.  

Indemnity costs

11.In LYE and CWW and HWL, FCMC 14787 of 2002, 6 May 2005 HH Judge Bebe Chu (as she then was) set out the Legal Principles relating to indemnity costs as follows:

LEGAL PRINCIPLES

3.     According to Rule 3 of the Matrimonial Causes Rules, the Rules of the High Court (RHC) shall apply with the necessary modifications to the commencement of matrimonial proceedings in, and to the practice and procedure in matrimonial proceedings pending in the Court of First Instance or in the District Court.

4.     Rule 91A of the Matrimonial Causes Rules provides that where the costs of an incidental to any matrimonial proceedings are directed to be taxed, R.H.C. Order 62 shall have effect in relation to the costs of proceedings in the Court of First Instance, and R.D.C. Order 62 shall have effect in relation to the costs of proceedings in the District Court.

5.     Order 62 Rule 28(3) in both R.D.C. and in R.H.C. provides that the Court in awarding costs payable to one party by another may in any case in which it thinks fit to do so order or direct that the costs shall be taxed on the common fund basis or on the indemnity basis.

6.     Any order for costs is in the discretion of the Court.  (see Headnote of Re Engindata Ltd (No. 2) 1993 1 All ER 232).

7.     Section 53 of District Court Ordinance Cap. 336 (equivalent to Section 52A of High Court Ordinance Cap. 4) provides that the Court shall have full power to determine by whom and to what extent the costs are to be paid.  See also Hong Kong Civil Procedure, 62/2/5:-

“The Court of Appeal in Choy Yee Chun (The Representative of the state of Chan Pui Yiu) v. Bond Star Development Ltd [1997] H.K.L.R.D. 1327, CA reviewed the cases and summarised the law as follows. A taxation of the successful party’s costs on an indemnity basis could properly be ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner. Any proceedings instituted or prosecuted in such circumstances as to constitute an affront to the court could properly be the subject of a direction for the taxation of the successful party’s cost on the indemnity basis. However, the circumstances in which an indemnity award might properly be made were not restricted to circumstances beyond the requirement that taxation on an indemnity basis must be “appropriate”. The principle for the award of an order of costs on an indemnity basis applied equally to those who not only instituted proceedings but who defended them. If a plaintiff had been forced to institute proceedings by the defendant whose conduct had been not only hostile in the normal litigious sense, but oppressive and with base ulterior motive, and if the pursuit of a defence constituted conduct which was part of an oppressive game plan, then invocation of the power to award costs on an indemnity basis might well be justified”.

HH Judge Chu continued

8.     I have been referred by the Petitioner’s solicitor, Mr. Ko, to the case of Re Tang Hong Yeun Andy HCB 19585 OF 2003 (at paragraph 18) quoting Choy Yee Chun (The Representative of the estate of Chan Pui Yiu) v Bond Star Development Ltd. [1997] H.K.L.R.D. 1327 CA, where it was held that the discretion was not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be “appropriate”.  See also Hong Kong Civil Procedure, 62/App/12.

9.     I have also been referred to the Judgment of the Court of Final Appeal in Town Planning Board v Society for Protection of the Harbour Limited.  FACV No. 14A of 2003, at paragraphs 12, 14, 15, 18 and 23 where the Court of Final Appeal has made the following comments:-

(a)  The Court has a broad discretion to determine how costs shall be paid and whether indemnity costs should be ordered (paragraph 12).

(b)  The successive party should show, in order to obtain an order for costs on an indemnity basis, that the case has some “special or unusual feature” (paragraph 15).

(c)  In relation to the award of costs generally, it has been accepted, as Chu J pointed out, that while

“the ground [upon which costs are awarded] must be connected with the case. This may extend to any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation, but no further”.

There is no reason why this statement does not apply with equal force to the exercise of the discretion to award indemnity costs (paragraph 18).

(d)  Other factors, such as the reasonableness of the conduct of the parties, may need to be taken into account (paragraph 23).

12.Ms Irving has also referred to Town Planning Board v Society for Protection of the Harbour Ltd No 2 (2004) 7 HKCFAR 114, which supports the general proposition that indemnity costs orders are based “on a wide range of factors and circumstances” and that an order must be “appropriate”.

Discussion

The wife’s case

13.it is the wife’s case that the husband’s litigation conduct has been so extreme that it should be sanctioned by a costs order made against him on an indemnity basis. In her counsel’s submission of the 12 November 2019 she states inter alia as follows:

4.  The Petitioner seeks her costs, and on an indemnity basis. She should not have had to come to Court to compel the Respondent to comply with a Court Order, especially given that the matter of the passport had been raised at the MPS hearing on 9 August 2019, when the Respondent was told by the learned Judge to return the passport that day; that nothing else would be tolerated.  Clearly the Respondent decided to ignore that Order.  Nothing was said on that day that the passport was lost, only that he found the wording of the order “ambiguous”.

5.  The Respondent’s conduct outside the Court before the hearing on 29 October 2019 reinforces why costs must be on an indemnity basis.

6.  From the letter from Tanner de Witt of 25 October 2019, it was clear that the Respondent had been seeking to exert leverage over the passport issue, such that “if it is located”, then Recital L should be amended such that the passport be handed over to him “upon his request or in the case of travel...”. Letter attached (Attachment-3).

7.  Outside the Court, this proposal was repeated by the Respondent’s solicitor, who stated, presumably on her client’s instructions, that the passport was genuinely lost and the Respondent had not been able to find it.

8.  This proposal was refused by the Petitioner, on the basis that the Respondent would then “ask” for the passport, then simply keep it.  In any event, there was no reason why the Recital L had to be amended, nor had there been an application made to vary Recital L.

9.  At the very moment the parties were about to enter Court, it was said that the passport had been located, the night before, after a thorough search.  This had not been said when requests to vary the recital were being made. Clearly the Respondent still hoped to exert some leverage on the retention of the passport, even when aware that he had the passport in his possession.

10.  This is simply unbelievable and makes a complete mockery of the Court Order, the Court and of the Respondent’s obligations, not only as a party to the proceedings, but as an Officer of the Court.

14.These circumstances are well noted and I am particularly concerned by the suggestion that the father had deliberately withheld the fact that he had recently “found” the passport, from the wife’s lawyers outside court. Such behaviour is inexcusable. However, whilst I have some sympathy with the wife I think it is also important not to blow this situation completely out of all proportion, especially given the highly emotive nature of this case and the parties behaviours in the past. Consequently, it seems to me that it would not be appropriate to award costs on an indemnity basis. The question then becomes what sanction would be appropriate, given the circumstances? Certainly had it not been for the court’s indication on the 9 August I may have simply acceded to the husband’s request and made an order that there be no order as to costs. However, given the court’s very firm indication on that occasion and the fact that the passport was not returned prior to the hearing on the 29 October 2019 and that there seems to have been a certain amount of unacceptable litigation brinkmanship outside of court, it seems to me that some sort of order is appropriate.

Conclusion.

15.Consequently, having read the submissions filed and having considered the matter in the round, I intend to exercise my discretion and order that the husband shall pay 50% of the wife’s costs of and arising out of her summons dated the 21 August 2019 on a party and party basis to be taxed if not agreed. There shall be Certificate for Counsel.  

Ms. Frances Irving instructed by Ho & Ip for the Petitioner

Ms Joanne Brown of Tanner De Witt for the Respondent