M v. C

FCMC 8147 / 2014

[2021] HKFC 218

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 8147 OF 2014

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J U D G M E N T
(VARY COSTS ORDER)

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1.This is the Petitioner wife (“Mother”)’s application for varying the costs order nisi, following the judgment of the court dated 4 December 2020 (“Judgment”), hearing the applications (a) of the Respondent husband (“Father”) for variation of periodical payments downwards; (b) of the Mother for variation of periodical payments upwards; and (c) for attachment of income order.

2.After a five-day trial, with the Mother represented by her then solicitor and the Father acted in person, the Judgment was handed down. I ordered that the applications by the Mother and the application by the Father be dismissed. I also ordered that there be no order as to costs for the applications, including all costs reserved, on a nisi basis (“Costs Order Nisi”).

3.The Mother applied by way of Summons filed on 11 December 2020 varying the Costs Order Nisi. She asked the Father to pay 50% of all her costs. Her application was supported by an affidavit filed on the same date.

4.The Court had given directions in relation to the proceedings of the case, including the filing of affirmation and that the application is to be dealt with by way of paper disposal.

5.The Father filed an affirmation on 4 January 2021, in which the Father asked for, inter alia, “pending the clarification by the Court on the order and applications for the above, the father would apply for extension of the application for leave to appeal on the judgment such that the issue could be resolved by the court and the parties without the need to appeal which would have resource implications for both parties and the court”. In view of the Father’s affirmation, the Court issued requisitions on 8 January 2021 stating that what the Father asked for is vague and further gave directions that if the Father intends to take out application(s) as stated in the said affirmation, he should take out proper application by way of summons.

6.By another affidavit filed by the Mother on 11 January 2021, she asked the Father to bear all her costs, instead of just 50% of her costs, and she had given reasons therein.

7.On 20 January 2021, the Father asked for more time to respond to the submissions of the Mother. By a letter from the Mother dated 22 January 2021, she had confirmed her position, inter alia, that she confirmed her application to ask for varying the Costs Order Nisi by asking the Father to pay for all her costs, instead of just 50% of her costs, and she intends to treat the affidavit filed on 11 January 2021 as the supplemental affidavit in support.

8.By a letter from the Father dated 10 February 2021, he asked for further time to respond. The Court gave further directions regarding the further proceedings of the application.

9.On 18 March 2021, the Father filed an affidavit in opposition to the Mother’s application.

10.On 8 April 2021, the Mother filed an affidavit in reply.

11.On 15 April 2021, the Father filed an affidavit in response to the Mother’s affidavit filed on 8 April 2021. Pursuant to the Court’s directions given on 18 February 2021, no further affidavit for the application of varying the Costs Order Nisi is to be filed without leave of the Court. As no leave was applied for and granted, the Father’s affidavit filed on 8 April 2021 will not be considered.

The legal principles

12.The issue of costs is in the court’s discretion. Pursuant to Order 62, rule 5 of the Rules of the High Court (“RHC”),

“(1) The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account --

(aa)  the underlying objectives set out in Order 1A, rule 1;

(e)  the conduct of all the parties;

(f)  whether a party has succeeded on party of his case, even if he has not been wholly successful; and

(g)  any admissible offer to settle made by a party, which is drawn to the Court’s attention.

(2) For the purpose of paragraph (1)(e), the conduct of the parties includes –

(a)  whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b)  the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c)  whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d)  conduct before, as well as during, the proceedings.”

Discussion

13.In paragraph 176 of the Judgment, I stated that :-

“Generally, costs should follow the event. In the present case, I have dismissed the parties’ respective applications. I am of the view that there is no winning party of the proceedings. Having considered the parties’ respective open proposal, circumstances of the case, and the court’s ruling, I am of the view that it is fair to order no order as to costs for all the applications, including all costs reserved. This is a costs order nisi, which shall be made absolute within 14 days from this order.”

14.The Mother explained in her written submissions and affidavits why the Costs Order Nisi should be varied to the extent that the Father should bear all costs, which could be summarised into the following main reasons :-

(a)  Failures of all applications and allegations of the Father

(b)  The Court had ruled that there was extensive non-disclosure of the Father and adverse inference had been drawn against the Father.

(c)  The Mother’s claims are mostly successful

(d)  The reasons of the Mother’s application for maintenance to increase were not denied by the Court

(e)  Other important considerations, including :-

(i)  Unilateral default in payment

(ii)  The need of the parties to come to court to get justice

(iii)  Vast disparity of the financial capability between the parties

(iv)  Adverse impact of costs on children

15.The Father opposed to the application and explained the reasons in his affidavit. In gist, the Father is of the view that it is unfair to order him to pay for costs. The Father also referred the Court to the conduct and behaviour of the Mother.

16.I have carefully considered all the submissions by the parties. I have also considered the background of this case, which I refer to paragraphs 3 to 32, 42 and 45 of the Judgment.

17.The issue of costs is in the Court’s discretion, with the consideration of relevant circumstances of the case. In this case, all the applications, including the Father’s application and the Mother’s applications had been dismissed. Generally, costs should follow the event, but there is no hard and fast rule, as the issue of costs is in the discretion of the Court. Therefore, I will further consider all the relevant circumstances of the case and the submissions of the parties.

18.In relation to the first 3 reasons submitted by the Mother, I have to consider whether the Mother, instead of the Father, is substantially the winner of the applications, and therefore she should be awarded costs. The Mother summarised in paragraphs 3 to 7 of the Affidavit filed on 11 January 2021 about the different allegations made by the Father which were either rejected by the Court or with no full and frank disclosure from the Father. The Father responded in his affirmation in opposition filed on 18 March 2021 stating that there is no winning party, as both the Father’s and the Mother’s applications for variation of maintenance were dismissed.

19.In the consideration of the issues involved and whether or not the Mother is substantially the winner, I notice that there were points and allegations made by each of the parties that were accepted and rejected by the Court. Even if the number of issues and allegations of the Husband that were rejected by the Court were much more than that compared with the Wife, I have to emphasise that this is not a simple calculation exercise counting the number of points accepted. The points accepted by the Court may be one of the considerations, but at the end of the day, the evidence has to be looked at as a whole to see who is substantially the winner.

20.It is a matter of fact that both the parties’ application for variation of maintenance were dismissed.

21.By looking at the substance and about the allegation of no full and frank disclosure, I notice the following :-

(a)  In paragraphs 143 and 144 of the Judgment, I am of the view that there is no full and frank disclosure as to the Father’s financial circumstances. He should have disclosed fully the documents he had been asked to produce, so that the court can have a full picture of the financial circumstances. As a result, I draw the inference that with the Father’s financial resources, he is able to cope with the financial difficulties he faces and he is able to continue paying for the maintenance in the amount to be awarded by the Court.

(b)  As against the Mother, in paragraphs 138 and 139 of the Judgment, I have reservation of the Mother’s version of the nature of work she is doing, her involvement in work and the amount of salary she had received, as there is no MPF or documents of salary proof. I also have reservation as to the Mother’s stance about her earning capacity, and as to her evidence to support not working and the level of income she may earn.

(c)  As submitted by the Mother, I did use slightly stronger words against the Father, comparing to that of the Mother. However, I do not form the view that either of them had been dishonest or intentionally misleading the Court. As I explained in paragraph 135 of the Judgment, both of them are highly intellectual persons, capable of emphasising skilfully their strong points, and sometimes even either intentionally or subconsciously exaggerating their own difficulties. Therefore, I have reservation in the accuracy of some of the aspects of their evidence of whether they had disclosed the full picture of their finance fully and frankly.

22.With my observation and ruling, I have to decide how much weight I should put on their evidence and after consideration of all the evidence, I made my ruling accordingly dismissing the Father’s application to vary the maintenance downwards and the Mother’s application to vary the maintenance upwards. I am not of the view that the Mother is substantially the winner.

23.I have considered the Mother’s reasons for the application for maintenance to increase. I indicated in paragraph 164 of the Judgment that I have no doubt that the Mother loves the Children very much and would wish to give the best she could to the Children. However, I also indicate that the Court has to strike a balance between the financial resources and needs of the parties and of the Children. After hearing the Mother’s submissions and with the consideration of all the evidence as a whole, I am not of the view that the Mother’s application to increase the periodical payments should be allowed. The Mother should support herself and the Children with her own financial resources if there is any shortfall in order to provide a better and more comfortable life for herself and the Children (explained in paragraphs 161 to 166 of the Judgment).

24.Other important considerations as suggested by the Mother had been made, including the following :-

(a)  The unilateral default of full payment as ordered by the Court (paragraph 16 of the Judgment)

(b)  The background of the parties, including the Mother being the carer of the Children, the parties’ relationship and the need of the parties to come to court to get justice (paragraphs 3 to 32 and 42 of the Judgment),

(c)  The parties’ respective income, earning capacity and financial resources (paragraphs 46 to 85 of the Judgment)

(d)  Conduct of the parties (paragraph 155 of the Judgment)

(e)  The open proposal of the parties (paragraphs 26 and 32 of the Judgment)

25.The 2014 Order, the matrimonial resources the parties obtained from the 2014 Order and and the circumstances leading to the 2014 Order were considered, which are necessary for the application for variation of maintenance.

26.I have not lost sight of the fact that money had been spent by the Mother in engaging solicitors to fight for the applications. With the payment for legal fees, the Mother will have less money to be spent on herself and on the Children. Both parties started acting in person since about 2018. The Mother had engaged her solicitor and the Notice to act was filed on 2 May 2019. She filed the Notice to Act in Person again on 4 December 2020. The Father acted in person since 2018, but he explained that he had obtained some legal advice, although not engaging a solicitor formally to act for him for the Court proceedings.

27.I have considered especially the background of the parties and their relationship, how they conducted the case all along and during trial, and also my ruling. Both the parties are highly intellectual persons, capable of iterating their points skilfully (paragraph 135 of the Judgment). With the sour relationship since the end of the marriage carrying forward to after divorce, the complaints and allegations against each other had continued. There was complete lack of trust and communication during the marriage and after the divorce, leading to the high difference in views which cannot be reconciled (paragraphs 158 to 160 of my Judgment).

28.I am aware of the 9 properties the Father owns (refer to paragraph 63 of the Judgment) and the high stable income (refer to paragraph 70 of the Judgment). After consideration of all the evidence, I accept that the liabilities of the Husband are actual debts (refer to paragraph 162(c) of the Judgment) and I accept that the Father had incurred his financial debts and liabilities, leading to his disposable income having decreased to an extent that made him unable to comply with the 2014 Order (refer to paragraph 171 of the Judgment).

29.However, I rule that these financial difficulties were self-induced and the Father has the ability to pay for the amounts to be ruled by the Court (see paragraph 162(c) and (d) of the Judgment). My analysis and ruling is in the context that the Father has to make re-arrangement of some of his 9 properties, such as selling or disposing some of the properties, in order to have the ability to pay for the future maintenance and pay back the outstanding maintenance.

30.With the circumstances of this case, together with the consideration of the underlying objectives set out in O.1A, rule 1 of the RHC, I am of the view that it is reasonable and fair to order no order as to costs. Therefore, the Mother’s application for varying the Costs Order Nisi be dismissed.

Costs

31.Generally, costs should follow the event. In view of the background of this case and the parties now act in person, I am of the view that it is fair to order no order as to costs, including all costs reserved, for this application. This is a costs order nisi, which shall be made absolute within 14 days.

The Petitioner acted in person

The Respondent acted in person