Ky v. Ckhd Aka Ckkd

FCMC 12371 / 2024

[2025] HKFC 146

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 12371 OF 2024

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DECISION ON COSTS

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Introduction

1.Before me is the question of costs arising out of 2 Summonses taken out by the Petitioner wife (to whom I will refer as “W”) dated 27/1/2025 and 28/1/2025 (“the 2 Summonses”) against the Respondent husband (to whom I will refer as “H”) in this Decision.

2.It must be said at the outset that W’s 1^st Summons dated 27/1/2025[1] was an ex parte application (without notice) for interim injunctive reliefs and assets disclosure order against H.  The ex parte application was heard by this Court on the same day of the Summons with Counsel Mr. Kung attending on behalf of W.  In support of the 1^st Summons, W filed her 2^nd Affirmation[2].

3.Having obtained the ex parte interim injunctive reliefs and the assets disclosure order, W was required to issue the 2^nd Summons (inter partes)[3] which largely resonated the reliefs obtained and with the returnable date of 10/2/2025 given.  Hence, the 2 Summonses are part and parcel of the same application rather than 2 separate independent “stand-alone” process of application for separate reliefs.

Chronology leading to disposal of W’s 2 Summonses

4.At the hearing returnable on 10/2/2025, H was legally represented and engaged Counsel Miss Ha to appear.  The interim injunction was extended to 1/4/2025 along with agreed directions for the filing of affirmation evidence[4]. 

5.On 3/3/2025, H filed his Affirmation in Opposition[5].

6.On 24/3/2025, W filed her 3^rd Affirmation in Reply[6].

7.On 27/3/2025, upon the joint application by the parties, I adjourned the hearing scheduled for 1/4/2025 to 16/5/2025.  In the meantime, the interim injunction do continue until the next hearing[7].

8.During the hearing on 16/5/2025, with the assistance of Counsel Mr Kung and Miss Ha, parties managed to enter into a comprehensive Consent Summons which contained, inter alia, mutual undertakings not to sell or dispose of any of the parties’ collection of antiques and valuables held, owned or controlled by the parties or their companies; to jointly appoint a certified public accountant to make an inventory report of the valuable items kept in the former matrimonial home, H’s medical clinic, W’s place of residence and W’s place of business.

9.Within the Consent Summons, parties agreed to each of them file an affirmation to identify the whereabouts of any other valuable items not contained in the inventory report and also to include valuable items previously under the control, power or possession of the parties which had been placed in auction houses or companies.

10.Further, H undertook and agreed to permit W to install additional security camera system in the study room of the former matrimonial home with access to the video-feed be shared.   H also undertook and agreed to permit W to install and/or maintain security cameras to monitor the entrance and canopy of the former matrimonial home which cameras shall not be removed, covered and/or otherwise obstructed and access to the video-feed also be shared.

11.In reciprocity, W undertook to H that she would share the video-feed of the security cameras monitoring the showroom and safe situated in W’s office which shall not be removed, covered or otherwise obstructed.  W further undertook and agreed that both parties shall jointly attend the study room of the former matrimonial home to allow H to retrieve certain items specified in the Consent Summons.

12.Upon compliance of the undertakings embodied in the Consent Summons, the interim injunction granted on 27/1/2025 which had been extended would be discharged.  The costs of W’s 2 Summonses be dealt with by way of paper disposal.

13.An order was then granted in terms of the Consent Summons at the hearing (“16/5/2025 Consent Order”).  Specific directions were granted for the parties to file and exchange submissions on the question of costs on or before 30/5/2025.

Parties’ general background

14.Parties married in February 1978.  At the time, H was aged 27 whereas W was aged 24. There is 1 child born out of the marriage in 1981 who is now self-supporting.

15.In November 2024, W filed a Petition for divorce relying on the fact of “Unreasonable Behaviour” to end the 46-year marital relationship.  The divorce suit was contested by H which had yet to be listed for trial.

16.H was and is a medical practitioner by occupation and W is a jewellery designer with her own business.  During the years of marriage, parties accumulated substantial wealth.  It is common ground that their wealth, apart from the former matrimonial home which worth around 35 million, also consists of sizable collection of Chinese antique porcelain, bronzes, seals, coins, jades, yellow stones, teapots, clocks, watches, jewelleries, handbags, furniture, paintings, drawings and fine arts, and other valuables which are physically kept or stored at the former matrimonial home.  There was a partitioned study room with sliding door in the former matrimonial home catered for storage of those valuable items.  Both parties have access to the study room.

17.According to W, the sizeable collection of the antiques came up to some 14,000 pieces and worth around HK$200 to HK$300 million, such value was worked out by W from previous sales records and market valuations.  According to W, back in 2010 H had once sold a single antique painting for RMB 16 million.  Around the same time, H had also sold several other paintings which generated proceeds of sale of at least RMB 36 million.[8] H used to trade the valuable items through renowned auction houses such as Christie’s, Sotheby’s, China Guardian and Bonhams.[9]

W’s submissions on costs

18.W’s Counsel Mr Kung started with the submission that W had achieved comprehensive success in obtaining substantially all the reliefs requested under the 2 Summonses.  The 16/5/2025 Consent Order provided enhanced protection beyond W’s requests made in her 2 Summonses at the outset.

19.W’s request for comprehensive disclosure was satisfied through the appointment of an independent certified public accountant to conduct check and produce an inventory report of the items owned by the parties.

20.W’s request for preservation of valuable assets was achieved by the installation of video surveillance with shared access along with mutual undertakings not to remove or in any way dissipate the assets. 

21.Actually the assets disclosure order obtained by W had revealed that there were 3 transactions of sale of antiques made by H prior to her petition for divorce without her knowledge.  H failed to disclose the sale proceeds received from the said 3 sales in his Form E despite that he was required to disclose asset changes during 36 months preceding the divorce.  Despite non-disclosure of the said 3 sales, H only disclosed in his Form E that there are some other antiques placed with the auction houses without specifying in any detail what those antiques were.  Such mode and conduct of H was said to display the attitude of “catch me if you can” over his disclosure obligation.  Thus W’s application was required to preserve matrimonial assets as there was a risk of dissipation.

22.Furthermore, there are altogether 2 USBs produced by H which contained large number of photos stored under different folders in the USB covering the collection of paintings. The need for H to provide the second USB, allegedly that it was an updated one, where H had removed photos of some of the items in the first USB which according to his memory no longer owned or existed.  Updating was done by H but not in the presence of W.

23.There was once an issue over the existence of a valuable artwork of Zhang Daqian painting.  It later transpired that the painting was sealed in the study room and kept with other drawings there which, surprisingly, H described those collections in the study room are “rubbish”.  With W’s and her legal team’s effort on reviewing and analysing the USBs provided by H and reviewing H’s affirmation evidence, such valuable painting was confirmed to exist.  Thus there was the need for W to take out the application in order to reveal and preserve valuable matrimonial assets.  There was an apparent risk of dissipation of assets by H.

24.The conduct of H, both before and after W’s petition for divorce was served upon him, caused great concern to W that there was the imminent risk of dissipation of matrimonial assets.  There was the need to seek preservation of assets on an urgent basis.  The grounds for the ex parte application (without notice) for injunctive reliefs were set out in detail at different paragraphs of W’s 2^nd Affirmation which were grouped under the following headings in W’s supporting affirmation :-

-  H’s refusal to provide undertakings (paras 16 to 19)[10];

-  H’s failure to provide full and frank disclosure (paras 20 to 21)[11];

-  H’s deliberate interference with security monitoring (paras 22 to 26)[12];

-  H’s unauthorised changes to access (paras 27 to 29)[13];

-  third party access and financial transfers (paras 30 to 31)[14];

-  H’s direct threats to matrimonial assets (paras 32 to 33)[15];

-  additional attempts to defeat claims (paras 34 to 36)[16].

H’s submissions on costs

25.H’s Counsel Miss Terri Ha in her Skeleton Submissions first submitted that W’s ex parte application was an abuse of process.  The primary position was that H’s costs should be paid forthwith by W on an indemnity basis.  There was, however, a drastic change to an alternative position that there should be no order as to costs.

26.For the abuse of process submission, it was said that there was no justification for W’s section 17 application in the first place.  Each of W’s allegation made for drawing her case of “risk of dissipation” was said to be based on W’s own material non-disclosure or misrepresentation of facts known to her.

27.W was said to simply rely on one single threat made by H to her that he would destroy all valuables.  H had then apologised to W for making the threat and reassured W that he would make financial provision

to her.  It was also said that W had failed to mention the inconvenience and prejudice to H on her application to seal up the study room as part of her injunctive reliefs sought.  Furthermore, W was said to have withheld from disclosing H’s reasons for not agreeing to her single-sided undertakings but only said no explanation was given by H for trying to suggest that there was a risk of dissipation by H.

28.Submission was also made against W for misleading the Court when she said H had failed to make full and frank disclosure of assets simply because H had not particularised the antiques and previous sales in his Form E.  W was said to have failed to hold herself to the same standard of disclosure for not particularising in her Form E details of those jewellery, watches and handbags which W had removed from the former matrimonial home without the knowledge of H.

29.W was said to have falsely claimed that H’s pasting of stickers over lenses in the former matrimonial home was a risk of dissipation whilst H’s lawyers had, prior to the ex parte application, already written to W’s lawyers to demand W to remove those secret cameras installed without H’s knowledge or consent.

30.H’s lock-up of the partitioning door of the study room was said by W to show that there was a risk of dissipation.  However, W did not disclose her removal of valuable assets from the former matrimonial home beginning from the month even before she issued her petition for divorce.  Furthermore, W failed to disclose H’s concern of W rifling through his personal and private belongings (including privileged legal documents) when W returned to the former matrimonial home daily whilst H was at work in his clinic.  The locking up of the partitioning door by H was said to be done to safeguard family assets, which is quite to the opposite of W’s allegation of H dissipating the assets.

31.Given that W herself had maintained a USB stick with detailed inventory record of the antiques, there was complete lack of urgency for an ex parte application for disclosure against H.  W was said to have knowingly placed H at the risk of being in contempt of court by seeking the urgent assets disclosure order when she had the information on hand all along.

32.W was said to have overstated the value of the antiques to be HK$200 to HK$300 million in order to justify the urgency and necessity for seeking the ex parte injunction order.  In the past, W had assisted H in handling sales for items which ranged between HK$200 to HK$2,000 only[17].

33.W was said to have falsely stating that H had withheld disclosure of payments to Miss Li in his Form E whilst each of the transfers made were visible in the bank statements.

34.Finally, it was submitted by H’s Counsel that the mutual undertakings were agreed and arrived at not because of any admission or necessity, but rather to avoid further argument or escalation of legal costs.

Applicable legal principles on costs

35.First and foremost, it is trite that the Court has a very wide discretion over question of costs.  With the implementation of the Civil Justice Reform in April 2009 (“CJR”), there was a substantial amendment to Order 62 of the Rules of the High Court (“RHC”) which rule governs costs in civil cases.  Such rule, by virtue of rule 3 of the Matrimonial Causes Rules, Cap.179A (“MCR”), is applicable to matrimonial proceedings in the Family Court.

36.In a gist, a new Order 62 rule 3(2A) was introduced which specifically applies to costs in interlocutory proceedings.  It is fair to say that a clear distinction was drawn between costs in interlocutory proceedings and in other proceedings.  The overall effect following the introduction of the new rule 3(2A) was that “costs to follow the event” under the long existed rule 3(2) had now, for interlocutory proceedings, become an option rather than any usual form of costs order or, the default position, so to speak. 

37.Order 62 rule 3(2A) of the RHC provides :-

“3(2A) If the Court in the exercise of its discretion sees fit to make any order as to the 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.”

38.Further, Order 62 rule 5 of the RHC provides :-

“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) any such offer of contribution as is mentioned in Order 16, rule 10, which is brought to its attention in pursuance of a reserved right to do so;

(b) any payment of money into court and the amount of such payment;

(c) any written offer made under Order 33, rule 4A(2);

(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.”

39.In the unreported case of HK v BD[18], the date of Decision was 15/10/2010, where Hartmann JA (as he then was) said :-

“78. In family cases, 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 Butler-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.

79. On behalf of the wife, the oblique criticism was made that the judge proceeded on the basis of “honours even”, that seemingly being the essential reason why he came to his determination that both parties should bear their own costs. We do not see that the judge can be criticised in that respect. If costs were to prima facie follow the event, it was necessary for the judge to identify who had been successful and who had not. ……….

95. But there were of course many issues which the judge in the present case had to take into account in considering how best to exercise his discretion as to costs. It is a long established principle that, after analysing the case of each party, costs must be judged by way of overall impression. They are not to be assessed by breaking down the litigation into its many component and interlocking parts in order to draw up some kind of profit and loss account (my emphasis).”

40.In the later case of Waxman v. Li Fei Yu (unreported, HCA 1972/2012, date of Decision was 11/9/2013), the following passages of Hon To J in respect of the Court’s approach when determining costs of interlocutory proceedings are useful and important :-

“19. Summing up on the post-CJR position, I think the court has much wider discretion as to costs in interlocutory proceedings. Unlike other proceedings, the general rule of costs following the events do not apply. The court is entitled to take into account all the circumstances of the case, including those set out in rule 5, to make such order as it thinks fit. In the exercise of its discretion, the court may take the issue-based approach or may take into account merit of the parties’ case or the possible outcome of the action. The circumstances of interlocutory proceedings are so numerous that it is impossible to make any general rule. Costs to follow the event and costs be to the successful party’s costs in the cause are obvious options.”

41.In the often cited case of YBL v. LWS (No.2) [2017] 2 HKLRD 783, where our Court of Appeal had said :-

“9. In our judgment, the proper approach in determining costs is that succinctly put by the Chief Justice in Mimi Kar Kee Hung v. Raymond Kin Sang Hung, FAMV 10 & 11 of 2014, 7 July 2015 at [7] :

‘The discretion as to costs in this Court, as in any other Court, is to be exercised in a principled way with a view to reality and justice (my emphasis).’

10. For present purposes, the relevant principles on the exercise of discretion as to costs can be summarized as follows :

(a) whilst the courts often start with the proposition of costs following event, it is no longer a general rule but a starting point,    see Hung Fung Enterprises v. Agricultural Bank of China [2012] 3 HKLRD 683;

(b) there have to be some justifications for depriving a successful party of his costs;

(c) in measuring who is the successful party and the extent of his success, the court must examine the reality and justice of the case (my emphasis). Thus, in Hysan Development Co Ltd v. Town Planning Board (No 2) (2016) 19 HKCFAR 635, the Court of Final Appeal made no order as to costs notwithstanding the success of the appellants in reversing the Court of Appeal’s decision because they did not achieve the full objects of their appeals;

(d) in addition, under Order 62 Rule 5, the court in exercising its discretion shall take into account the matters set out in Rule 5(1) as may be appropriate in the circumstances;

(e) Rule 5(2) highlights some conduct which the court may take into account including whether it is reasonableness for a party to take an issue, the manner in which the matter was pursued or defended, the extent of success, and conduct before, as well as during the proceedings;

(f) If a successful party has brought the litigation upon himself or has done some wrongful act in the course of the transaction, he could be deprived of his costs.”

42.Guided by the above principles, I now proceed to consider the appropriate costs order in respect of W’s 2 Summonses. 

Discussion

43.Given that W’s 2 Summonses were resolved by parties’ consent and ended up with the 16/5/2025 Consent Order without a trial, there was no findings made upon those factual matters (including cross allegations) made by each party in their respective affirmation evidence.

44.However, I believed that considerable time and legal costs must have been spent by both parties given that Counsel were engaged for the 2 inter partes hearings before me on 10 February 2025 and 16 May 2025. 

45.Moreover, W’s 16-page 2^nd Affirmation (43 paragraphs) was filed in support of her ex parte application (without notice) first taken out on 27/1/2025 with 13 exhibits added up to 93 pages in total.  This was not uncommon.  However, W was met with H’s 22-page Affirmation in opposition (116 paragraphs) with 17 exhibits but added up to 811 pages (my emphasis) in total.  This is voluminous.  Then W, seemingly was being compelled to file her 31-page 3^rd Affirmation in reply (97 paragraphs) with 8 exhibits which added up to 87 pages in total.

46.Without the parties’ credentials and the contents of their affirmation evidence properly tested through cross examination, the parties’ cases and matters raised on paper was no more than “one’s words against the other” which I could only attach very little weight.  It was thus not possible for me to say from the affirmation evidence who was the “successful” party in W’s application. Guided by the principles cited above, I could approach the question of costs by analysing the cases of each party, all the circumstances surrounding the application, the way it went along and then to get an overall impression[19]; and to exercise my discretion on costs in a principled way with a view to reality and justice[20].

My views and observation

47.W’s ex parte application (without notice) was filed on 27/1/2025. This was around 2 months after W filed and served her Petition for divorce in November 2024.  There was protracted exchange of letters between parties’ lawyers soon after the Petition was served to try and explore viable options of assets preservation by way of undertakings, let alone the other aspect of assets disclosure through compliance with the standard procedure on exchange of Form Es and questionnaires given that divorce proceedings had already been commenced.

48.One of the peculiar feature in this case, and indeed it was common ground, was that over the years of marriage, there was accumulated a sizeable collection of antiques, paintings, drawings, artwork including porcelain, teapots, coins etc stored within a study room in the former matrimonial home to which both parties had access. There was surveillance cameras installed to monitor the antiques since there was once a burglary around the neighbourhood few years ago.  Both parties have had access to the footage of the camera surveillance. There was also electronic record by the use of USB containing photos and inventory of the collections stored in the study room.  The USB was kept by H.

49.After the interim injunction was obtained on 27/1/2025 and served upon H, H revealed through his lawyers’ letter dated 17/2/2025[21] that the inventory kept by him within the USB in his possession required updating since some of the items in the inventory might have been sold and no longer existed.  At the end, an updated USB was prepared by H and sent over to W for safekeeping and checking.

50.On this incident of USB updating alone, one has to ask the simple question : “How likely it was that H would provide W with an updated USB on his own initiative (my emphasis) without being served with the interim injunction and asset disclosure order; given that he had already been served with W’s petition for divorce knowing well that there was ancillary relief claim by W against him ?”   The answer which I would say was “unlikely”.

51.I tended to say the readiness and willingness of H to provide W with an updated USB in February 2025, more probable than not, came along under the coercion of the said interim order rather than the divorce petition that he had received 2 months ago in November 2024.

52.As regards H’s financial disclosure in his Form E which he excluded the 3 transactions of sale completed around 12 months before the divorce proceedings were commenced, I agree with W’s Counsel that the disclosure obligation under the Form E extended to any asset changes during the period of 36 months preceding the date of the Form E (my emphasis) rather than dividing disclosure between pre-divorce and post-divorce asset changes so alleged by H.

53.Given that H had legal advice and assistance when he completed his Form E, he must have been fully and properly advised by his lawyers on the disclosure obligation under the Form E.  I believe H must not have mistaken or misunderstood the need to disclose the 3 transactions of sale.  That said, H’s “reasons” for not disclosing them because the transactions of sale was completed before the divorce commenced could not stand.  Such “reasons”, in my view, only served to support W’s criticism of H’s “catch me if you can” attitude and his selective financial disclosure.  

54.With my view and observation on the production of updated USB and selective disclosure of the Form E aforesaid, I am prepared to say W’s Summonses was necessary and rightly brought.  W had achieved the aim and objective of assets preservation and disclosure against H.

The “time factor” and “outcome factor”

55.Now I would turn to 2 other topics, namely (a) the period of time spent to arrive at the resolution of the interim injunction (“time factor”); and (b) the outcome achieved under the 16/5/2025 Consent Order (“outcome factor”). 

The “time factor”

56.On the time factor, it has taken nearly 4 months (counting from 27/1/2025 to 16/5/2025) for H to eventually agree to (i) appoint professional accountant to take inventory; (ii) to install additional cameras for surveillance purposes; (iii) to undertake to preserve matrimonial assets, all of which are usual interim measures commonly adopted when there was dispute or complaint of suspected risk of assets dissipation and hence the need to preserve valuable matrimonial assets.

57.Taking into account the chronology starting from the ex parte application, it is fair to say the time factor of nearly 4 months was lengthy which was attributed to the time spent on exchange of affirmation evidence with the last affirmation in reply by W to be filed on or before 24/3/2025.  Yet it took another 7 ½ weeks before parties could finally agree on those usual interim measures as per the terms under the 16/5/2025 Consent Order to discharge the interim injunction.  This outcome was only achieved during a hearing on that day with Counsel appearing on both sides and further legal costs were incurred which, in my view, could have been avoided had the Consent Summons came along before the 16/5/2025 hearing.

58.Apparently parties in this case chose to wait and see the other party’s evidence on the table (through the affirmation evidence and the voluminous exhibits) and then started to assess their position as to whether to pursue or to defend the interim injunction or; as at present, to end the matter by way of compromise.

59.Whilst parties in litigation are perfectly entitled to compromise any issue or dispute at any stage of the proceedings, Order 62 rule 5(2) does require the Court, when determining costs of any interlocutory proceedings, to take into account whether it was reasonable for a party to take an issue, the manner in which the matter was pursued or defended, the extent of success, and conduct before, as well as during the proceedings[22] (my emphasis).

Any conduct issue over exchange of undertaking proposals ?

60.H’s Counsel Miss Ha, in her written submissions, referred to H’s undertaking proposals contained in her written submissions produced for each hearing was met with no response or counter-proposal from W until physical appearance in Court.  Had W responded earlier, the hearing(s) would have been avoided or shortened[23].

61.Further, H’s Counsel submitted that W’s refusal to accept the undertakings proposed by H which would prevent any dealing of the antiques without parties’ consent was said to be indicative of W’s ulterior motive for taking out the ex parte injunction[24]. 

62.W’s Counsel Mr Kung, in his written submissions, first commented that the proposed undertakings from H, apart from the primary preservation obligations, contained other provisions which were impractical and unworkable.  When W proposed to accept only the core assets preservation undertakings but not the other impractical ones, H would refuse and maintained that his entire package of undertakings should be accepted by W.  At the end and as now shown in the 16/5/2025 Consent Order, H’s impracticable and unworkable undertaking proposals which W had identified earlier had been excluded[25].

63.It was further commented by W’s Counsel that H had characterised W’s proposed undertakings as “one-sided” rather than mutual undertakings.  Taking H’s contention to the highest in that W’s undertakings were “one-sided”, H could have but he did not counter-propose mutual undertakings which he could include the HK$14.80 million allegedly taken away by W (which W denied) as per his case[26]. H only came up with a refusal.  

My View

64.It is trite law that undertakings are promises offered voluntarily by parties in litigation which could either be unilateral (from one party) or mutual (from both parties).  Undertakings could never be ordered or imposed by the Court except that they could be noted and recorded within the terms of a court order, usually as preamble preceding the terms of the court order.  There is no rule governing the circumstances under which, or as to when or as to what extent undertakings are required to be given.

65.Suffice to say was that in litigation, including matrimonial cases, where a party was faced with injunction application, he or she would normally provide undertakings at the earliest possible time (my emphasis) in the terms akin or close to the injunctive reliefs being sought in order to avoid injunction orders being granted or, if already granted, to continue over him or her.  Apparently this was done for costs savings and with less acrimony between the parties. 

66.Parties’ respective submissions on their willingness to provide undertakings, be it “one-sided” or mutual, would not be subject to scrutiny of the Court as to their contents or adequacy.  Given the parties had referred me to the reasons for not being able to compromise upon the undertakings at any time earlier, I have the following observations which shed some light on the reasonableness and conduct of the parties to assist me in costs determination.  

67.In the present case, W had lodged her claims for ancillary relief in her Petition for divorce followed by the filing of 2 Form A (Notice of Application for Ancillary Relief) dated 20/11/2024 and 13/12/2024.  On the other hand, H had once filed an Answer to W’s Petition but did not include any claim for ancillary relief therein which he was required to do so, if H so wishes to claim, under Rule 68 of the Matrimonial Causes Rules, Cap.179A (“MCR”). Neither had H ever filed any Form A to claim ancillary relief against W after he filed his Answer.

68.Without any ancillary relief claim properly lodged in the prescribed form (by way of Form A) and according to the requisite rules of procedure (under Rule 68 of the MCR), but only raised as an allegation in the affirmation in opposition saying that W had removed valuation items worth around HK$14.80 million from the former matrimonial home (which W vehemently denied and has yet to be proved), there was no basis for H to contend or complain that W did not provide undertakings or mutual undertakings to preserve matrimonial assets when he had never lodged his claim for any of them by way of his ancillary relief application.

69.Moreover, I noticed that even in the Acknowledgment of Service (Form 4) dated 27/11/2024 filed by H’s previous lawyers Messrs. K.F. Chan & Co., Solicitors on his behalf, at both questions 8 and 9 therein, it was marked “N/A” (i.e. Not applicable) when H was being required to state his position, inter alia, whether he wished to be heard on ancillary reliefs claimed in the Petition (question no.8) and whether he wished to make application for ancillary reliefs on his own account (question no.9). The “N/A” answers to both questions speaks volume.

70.In my view, it makes no sense or beyond simple logic for a spouse to insist upon the other spouse that he or she should provide undertakings or mutual undertakings to preserve matrimonial assets when he or she did not claim for them by way of his or her ancillary relief.  That said, H would not be in any position to complain or to argue that W’s proposed undertakings are “one-sided”, even if that was the case although I made no such finding in this Decision.  I am of the view that H had, by insisting upon the undertakings being “one-sided” rather than mutual, unnecessarily prolonged the matter and escalated the costs.

71.On the other hand, W’s claim for ancillary relief was all along clear and manifest, and also properly brought onto court record in these proceedings from the very beginning.  There was every reason and justification for W to seek injunctive reliefs against H out of her concern over risk of dissipation of the valuable matrimonial assets by H, bearing in mind that only H was residing in the former matrimonial home and that the sizeable quantity of collection of antiques had been physically stored there during the marriage for years, let alone W’s case of noting H’s interference with the security monitoring system overseeing the place where the antiques were stored around the time of the filing of the divorce petition.

72.Going back to the time factor, I am of the view that this case was one of those “run-of-the-mill” type of cases in matrimonial litigation where there are ample justifications to seek preservation of family assets either by way of injunctive reliefs or the use of undertakings.  Viewing the case in a round, I tended to say the time spent to achieve the terms of compromise as per the 16/5/2025 Consent Order was longer than one would have normally expected; in particular, when both parties had the benefit of full legal advice and Counsel assistance from the very beginning of the case.

73.Such observation brings me to consider whether there are any conduct issue that I need to take into account when determining the question of costs in the present case[27]. At this juncture, it may be useful to re-visit what was said by H’s Counsel in her skeleton submissions[28].

74.It was said by H’s Counsel that the mutual undertakings embodied within the 16/5/2025 Consent Order were agreed upon and arrived at not because of any admission or necessity; but rather to avoid further argument or escalation of legal costs.

75.With respect, I do not agree with such submission by H’s Counsel Miss Ha.

76.My analysis and observation above[29] on H’s lack of basis to insist upon W to provide undertakings to preserve matrimonial assets, be it labelled as mutual or cross undertakings, in light of the absence of any ancillary relief claims by H of the assets sought to be preserved by undertakings from W, it appears to me that H’s submission of the 16/5/2025 Consent Order was agreed upon or arrived at to avoid escalation of legal costs a complete non-starter.  The reality was, in my view, quite to the contrary.  H had, wittingly or unwittingly, procrastinated on the terms of the undertaking proposals from the very beginning of the divorce proceedings had prolonged the matter at the expense of additional legal costs, which could probably be avoided, had now been spent on both sides.

77.In respect of the time factor, I tended to say H should be answerable for the extra time spent due to his insistence or demand on W to provide undertakings to preserve or guard against dissipation of assets of which he had made no claim by way of ancillary reliefs.  In my view, this is unreasonableness conduct on the part of H who should be liable for the costs consequences arising therefrom.    

The “outcome factor”

78.From any perspective, the terms eventually arrived at and agreed upon by the parties as per the 16/5/2025 Consent Order exceeded the initial reliefs sought by W under her 2 Summonses.  I accept W’s Counsel Mr Kung’s submissions that W had achieved comprehensive success in her applications, both as to assets preservation and assets disclosure.

79.On this factor alone, I can firmly say W was the “successful party” and there was no reasons or basis to deprive W the costs of her application.  Costs should follow the event.

Conclusion

80.For all the reasons outlined above including the “time factor” and “outcome factor”, my overall impression, insofar as the question of costs was concerned, was that W would be the “winner”.

81.Examining the reality and justice of the case before me and exercising my discretion fairly and in a principled manner, I decided that H should bear the costs of W’s 2 Summonses, including all costs reserved, to be taxed if not agreed, and to be paid forthwith.

82.I also grant Certificate for Counsel.

Orders

83.I now grant the following orders :-

(1) H (Respondent) do pay to W (Petitioner) the costs of and occasioned by W’s Summonses dated 27/1/2025 and 28/1/2025 including all costs reserved, to be taxed if not agreed, and be paid forthwith;

(2) There be Certificate for Counsel.

84.This is a costs order nisi which would become absolute if no application to vary the same was made within 14 days from the date of this Decision.