Tky v. Ysga

FCMC 2208/2023

(formerly FCMC 903/2022)

[2024] HKFC 27

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 2208 OF 2023

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D E C I S I O N
(Variation of Costs Order Nisi)

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1.This is a hearing of the Respondent (“the husband”)’s summons dated 21 September 2023 in which he asked for, inter alia, that the costs order nisi in the MPS Judgment dated 7 September 2023 (“the MPS Decision”) in favour of the Petitioner (“the wife”) to be varied to:

(1)  Insofar as costs of the MPS part of the Judgment is concerned, the wife do pay the husband’s costs and occasioned by such application; and

(2)  Insofar as costs of the Litigation Funding part of the Judgment is concerned, costs of the same be in the cause of the application, pending result of the husband’s intended appeal.

The Wife’s MPS Application and Costs Order Nisi

2.In her MPS summons dated 17 November 2022, the wife asked for:

(1)  Interim maintenance (“IM”) for the benefit of the household and 2 children of the family in the sum of HK$164,800 per month, to be back dated to 31 January 2022; and

(2)  Legal costs provisions (“LCP”) as follows:

(a)  From 31 January 2022 to 31 October 2022, a sum of HK$158,800 per month, totalling HK$1,588,000 forthwith;

(b)  From 1 November 2022 onwards at HK$163,893 per month until the Financial Dispute Resolution (FDR) hearing or further order, whichever is earlier, payable on the 1^st day of each month; and

(c)  Amount to be determined by the Court, payable on the 1^st day of each month, from FDR hearing or further order specified in (b) above for the remaining period of these proceedings.

3.In counsel’s skeleton submissions, the wife has modified her claim for LCP to:

(1)  HK$158,000 from January 2022 to October 2022; and

(2)  HK$203,733 (with Senior Counsel to be engaged) or HK$173,200 (with only junior counsel to be engaged) per month from November 2022 to January 2024 (estimated date of FDR).

4.On the other hand, the husband asked for the MPS summons to be dismissed altogether, or alternatively, the court should only grant a MPS order in the sum of HK$22,750 per month, with no LCP or backdating, and costs be given to the husband.

5.The MPS application was dealt with on paper and on 7 September 2023, the court granted the following MPS Order:

(1)  The husband shall pay a monthly sum HK$28,000 to the wife as the children’s interim maintenance (HK$14,000 each) payable on the 1^st day of every month, starting 1 December 2022, until further order of the court.

(2)  The husband shall pay MPS by way of legal costs provision in the sum of HK$1,200,000 payable by 12 monthly instalments of HK$100,000 each on the 1^st day of every month starting 1 October 2023 and the last instalment ending on 1 September 2024.

6.As the wife has to come to court before she could get the above orders, she was also given the costs of the application, including all costs reserved, with certificate for counsel on a nisi basis. The husband now asks for the costs order nisi to be varied.

The Husband’s Submissions

7.The husband submits that despite the fact that an interim maintenance (“IM”) order of HK$28,000 per month was made for the benefit of the 2 daughters, the amount was much lower than what the wife had asked for in the summons (HK$164,800 per month). The IM of HK$28,000 was only 17% of the amount claimed, and the claim for backdating was also refused. In fact, the sum awarded was even lower than what the husband had been paying at the time, i.e. HK$31,000 per month. The husband submitted that it was unnecessary for the wife to make such an application which had led to the husband spending unnecessary costs. Therefore, the husband should be given the costs of and incidental to this part of the MPS application.

The Wife’s Submissions

8.The wife is now acting in person. In her 2-page submissions, she basically said that the total sum of MPS/IM granted was HK$128,000, not HK$28,000 per month. She does not agree that her MPS application was unnecessary and so the husband’s application for variation of the costs order nisi should be refused.

The Law on Costs in Interlocutory Matters

9.O.62 r.3 (2A) of the Rules of the High Court, Cap. 4A and the Rules of the District Court, Cap 336H provides for costs in interlocutory matters:

“(2A) If the Court in the exercise of its discretion sees fit to make any order as to costs of or incidental to any interlocutory proceedings, it may, subject to this Order, order the costs to follow the event or make such other order as it sees fit.” (underline added)

10.Therefore, for interlocutory proceedings, costs follow the event is an option, but not necessarily the norm. In considering on what order to be made in respect of the costs of interlocutory proceedings, apart from the result of the proceedings, the court has to give equal consideration to the conduct of the parties by reference to the underlying objectives as set out in O.1A r.1.

11.Further guidance on how a court should exercise its discretion on costs can be found in O.62 r.5 which states the court shall take into account the following relevant matters:

“5. (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;

(a) ---;

(b) ---;

(c) ---;

(d) any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings, but the Court may not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22;

(e) the conduct of all the parties;

(f) whether a party has succeeded on part 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.”

My Views

12.In exercising the court’s wide discretion on costs, a central issue to be asked is: whether it was necessary for the wife to come to court before she could obtain the order on MPS/IM. In this case, it may be true to say that as far as the IM for the 2 children is concerned, the final order of HK$28,000 per month was well below the sum claimed by the wife at HK$164,800. But if one looks at the offer of the husband, which was nil, or alternatively, only a monthly sum of HK$22,750, it was quite obvious that the wife had to come to court before she could get the IM order at HK$28,000. There is no submission by the husband that he had ever made a without prejudice offer above that sum.

13.Again, it may be true to say that the IM that the husband had been paying was HK$31,000 per month up to the hearing, but it was not a sum that he had been paying on a voluntary basis. He was ordered to pay such sum at a previous hearing and this sum had never been offered by him at any stage before or at the MPS argument. Therefore, it is abundantly clear that the winner of the IM application must be the wife.

14.Moreover, if one looks at the MPS/IM Order as a whole, the husband was also ordered to pay LCP (as part of the MPS application) in the sum of HK$1,200,000 payable by monthly instalment of HK$100,000 each. The husband did not make any offer on LCP. Therefore, the wife’s application is necessary before she could get such an order from the court.

15.I note that the husband is arguing that he is now seeking leave to appeal against the MPS Order. But until he has overturned the MPS Order on appeal, the MPS Order stands and the wife should be regarded as the winner on the application. I see no reason why she should bear the costs of the husband, or be deprived of any part of her costs.

Conclusion and Order

16.Based on the above discussion, I see no reason not to regard the wife as the winner of the MPS application and so should be entitled to its costs. The costs order nisi is now made absolute.

Costs

17.Costs to follow event. The wife shall have the costs of and incidental to this variation application. Such costs and the costs of the MPS application are to be assessed summarily. I hereby direct the wife to lodge and serve a 2-page (A4 paper) statement of costs for summary assessment within 14 days and the husband to lodge and serve his list of objections (if any) also limited to 2 pages of A4 paper within 14 days thereafter. Upon receipt of these documents, the court will proceed to assess the costs on a summary basis.

Representation:

The Petitioner acting in person

Messrs. Withers, solicitors for the Respondent