Ad (also known as At) v. Rt

HCMC 1/2022

[2026] HKCFI 3536

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MATRIMONIAL CAUSES NO 1 OF 2022

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DECISION

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A.      INTRODUCTION

1.By a Judgment handed down on 26 August 2025 (“the Judgment”)[1], this Court made an order nisi that there be no order as to the costs among H, W, Sister, Brother, the 3^rd Intervener and the 4^th Intervener (including all costs reserved) (“the Costs Order Nisi”).

2.On 20 January 2026[2], W applied by summons to vary the Costs Order Nisi (“W’s Variation Summons”),and asked that the Costs Order Nisi be varied to read:

“There be no order as to costs among [W], [H], [Sister], [Brother], 3^rd Intervener and 4^th Intervener (including all costs reserved), save that [H] do pay [W]’s costs incurred after 1 February 2023, to be taxed if not agreed, with certificate for Counsel.”

3.On the same day, H also took out a summons to vary the Costs Order Nisi (“H’s Variation Summons”).  He asked that the Costs Order Nisi be varied to:

“[W] do pay 70% of the costs of [H] (including all costs reserved), to be assessed if not agreed, forthwith.”

4.I will deal with H’s application first, followed by W’s application.

B.      THE LEGAL PRINCIPLES

5.The applicable legal principles are trite. 

6.The starting point is Order 62 rule 3(2) of the Rules of the High Court (Cap.4A, Laws of Hong Kong) (“RHC”) which stipulates that:

“If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings (other than interlocutory proceedings), the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.”

7.Order 62 rule 5 of the RHC further provides that:

“(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;

(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.”

8.In Ko Hon Yue v Chiu Pik Yuk, the wife and intended administratrix of Liu Ching Leung, deceased [2018] HKCFI 1973, Chu JA (as Chu VP then was)[3], having referred to the aforesaid rules, had the following to say:

“15. The Court of Appeal had held that, post-CJR, the approach is not to regard the proposition that costs should follow the event as a general rule, but only to operate in shifting to the unsuccessful party the burden of showing why some different approach should be adopted on the particular fact of the case: Wong Kam Tong v. Tin Shing Court, Yuen Long (IO) (No. 2) [2012] 2 HKLRD 1128 at [11] to [13]; Hung Fung Enterprises Holdings Ltd v. Agricultural Bank of China [2012] 3 HKLRD 679 at [100]; Pfeiffer GmbH v. Cheung Hay Kit t/a Sun Wai Construction, unreported, CACV 245/2013, 29 October 2014 at [7] to [10] and [20]; and Chan Shun Kei t/a Chan Shun Kei Construction Works v. Hong Kong Construction (Hong Kong) Limited (formerly k/a Hong Kong Construction (Holdings) Limited, unreported, CACV 192/2014, 7 March 2016 at [24].

16. At the same time, post-CJR the Courts are more ready to make costs orders that reflect the outcome of different issues, and it is no longer necessary for the winning party to have acted unreasonably or improperly to be deprived of his costs of a particular issue on which he has failed: Pfeiffer GmbH v. Cheung Hay Kit t/a Sun Wai Construction, supra, at [20]; and Chan Shun Kei t/a Chan Shun Kei Construction Works v. Hong Kong Construction (Hong Kong) Limited formerly k/a Hong Kong Construction (Holdings) Limited at [25]. The objective, as explained by Lord Woolf MR in AEI Rediffusion Music Ltd v. Phonographic Performance Ltd [1999] 1 WLR 1507 at 1522-1523, is to require litigants to be selective as to the points to take because ‘[i]f you recover all your costs as long as you win, you are encouraged to leave no stone unturned in your effort to do so.’ In this regard, the third principle in Re Elgindata (No. 2) [1992] 1 WLR 1207, 1214 A-C should be less generally followed.

17.       Moreover, Order 62 rule 5(1)(e) and rule 5(2)(a) and (b) also direct the Courts to have regard to the conduct of the parties, including whether it was reasonable to raise, pursue or contest a particular allegation or issue, and the manner in which an allegation or issue was pursued.  Whether a matter is an issue will depend on the circumstances of the case.  However, in the light of the underlying objectives in Order 1A rule 1, in construing rule 5(2), ‘issue or allegation’ should not be narrowly confined: see Wong Kam Tong v. Tin Shing Court, Yuen Long (IO) (No. 2) at [16]; and Chan Shun Kei t/a Chan Shun Kei Construction Works v. Hong Kong Construction (Hong Kong) Limited (formerly k/a Hong Kong Construction (Holdings) Limited at [25].”

9.In Yoe Han Yauw v Yoe Han Hian & Others [2022] HKCA 498, Au JA also set out the general principles as follows:

“19. It is trite that costs are a matter of wide discretion for the judge. The discretion is to be exercised in accordance with principles and with a view to reality and justice […]

20. The relevant principles on the exercise of discretion as to costs has further been succinctly summarised by Lam VP (as he then was) in YBL v LWC (No 2) [2017] 2 HKLRD 783 at [10]:

‘(a) Whilst the courts often started with the proposition of costs following the event, it was no longer the general rule but a starting point (Hung Fung Enterprises v Agricultural Bank of China [2012] 3 HKLRD 679 applied);

(b) There had to be some justification for depriving a successful party of his costs;

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

(d) In addition, under O.62 r.5, the court in exercising its discretion should take into account the matters set out in r.5(1) as might be appropriate in the circumstances;

(e) Order 62 r.5(2) highlighted conduct which the court could take into account including 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;

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

21.     It is also not necessary to establish that a successful party has acted unreasonably or improperly in raising an issue for it to be deprived of whole or part of its costs.  The Court may so order where the failed allegation of the successful party has caused a significant increase in the length or costs of the proceedings: Re Elgindata Ltd (No 2) [1992] 1 WLR 1207 at p1214; and Zhuhai International Container Terminals (Jiuzhou) Limited v Lo Tong Hoi (unreported, CACV 181/2011, 31 July 2012) at [33].  However, while the Court in the exercise of its discretion may refuse to make a costs order in favour of a successful party, it is most unusual and rare for a successful party to be ordered to bear the costs of the unsuccessful party: Jiang Zhong v Yeung Chun Leung [2018] 1 HKLRD 886 at [6.21] per Cheung JA.”

10.DHCJ Jonathan Chang SC stated in Happy Fish Company Limited v Tang Jeb Ming [2023] HKCFI 600 at [3] that:

“Whilst costs are in the unfettered discretion of the court, costs should normally follow the event. The general rule does not cease to apply just because the successful party raised issues on which he fails. After all, costs are not to be decided according to a score sheet on how many issues have gone one way or another. In any litigation, it is not unusual for a winning party to have raised (and failed on) one or more issues, but this by itself does not attract a costs sanction. There is no doubt a discretion in the court to deprive a successful party of the whole or part of his costs if he has caused a significant increase in the length or costs of the proceedings by raising issues on which he did not succeed, and this can be done even if it was not unreasonable to have raised those issues. But the necessity of an issue is not to be judged with the benefit of hindsight. The court should give real weight to the overall success of the winning party and approach the question of costs from such a perspective.”

11.There is no dispute that the above general principles are applicable to matrimonial cases.  In HK v BD (CACV 252/2009, unreported, 15 October 2010), Hartmann JA explained that:

“78. 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 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.

[…]

95.     […] 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.  […]”

C.      H’S VARIATION SUMMONS

C1.     Preliminary observation of the Court

12.With the above legal principles in mind, I would now turn to consider H’s application.

13.At the outset, it is important to bear in mind why this Court considered on a preliminary basis that no order should be made on the costs between W and H.  At [500] – [501] of the Judgment, it was explained that:

“500. Having taken all the circumstances into account, I hold the preliminary view that I should make no order as to the costs in all the proceedings herein.

501. In relation to the AR trial, the following circumstances are relevant:

(1) Both H and W have succeeded and failed in a number of issues. In my view, there is no clear cut ‘winner’ at the end of the day;

(2) W has unreasonably insisted to pursue her claim in relation to companies which have been assessed to have nominal value;

(3) W has unreasonably pursued unmeritorious claims at the trial;

(4) H has given untruthful evidence in court which should not be condoned;

(5)     W has not been totally truthful.”

C2.     H’s ground in support of the variation application

14.In support of H’s application, his counsel submitted that W should be ordered to pay 70% of H’s costs on various grounds. I would categorise them as follows:

(1)     When the litigation is viewed as a whole, both quantitatively and qualitatively, H was the substantially successful party on the issues which drove the length, cost and complexity of the AR Trial;

(2)     W had persisted in making but failed in various arguments which were “principal cost drivers”;

(3)     W’s case was heavily overstated and inconsistent;

(4)     W’s litigation conduct was unreasonable, for example, she had insisted to pursue assets which were of nominal or disproportionate monetary value, issues that were untenable in law or totally unmeritorious;

(5)     W’s conduct including the dissemination of malicious defamatory emails that caused significant damage to HH HK and her reliance on the evidence of SSP who ultimately failed to attend trial for cross-examination.

C3.     Discussion

15.The above arguments may be disposed of quite quickly.

16.H claimed that he was the “substantially successful party” “both quantitatively and qualitatively”. 

17.First of all, as H’s counsel accepts, one should not treat the process of determining costs as if akin to conducting a profit and loss account or a mechanical tally of who won which issue.  Nor should costs be decided, as DHCJ Jonathan Chang SC put it, according to a score sheet on how many issues have gone one way or another.

18.Even if we have to draw up a score sheet as such, I simply cannot see how H could be said to be a “substantially successful party” “quantitatively”.  A quick glance at the outcome of the various issues would show that W must have succeeded in more issues than H.

19.Neither can I reach the conclusion as alleged by H if we were to look at the ultimate outcome of the lump sum payment.  In W’s open proposal made on 29 July 2024, she suggested the lump sum payment be fixed at around HK$88 million, whereas H proposed in his open proposal filed on 5 August 2024 that it should only be in the region of HK$10.35 million.  In the end, this Court ordered that the lump sum payment should be HK$41.7 million. Although arithmetically it was slightly closer to H’s figure, I do not think the matter should be assessed by pure arithmetic as such.

20.That is the reason why I took the view (a view which I still maintain) that there is “no clear-cut winner” in this case.

21.In the course of her arguments, H’s counsel discussed at length issues which H had succeeded.  In H’s 17^th Affirmation which was filed in relation to H’s Variation Summons, he frankly admitted that:

“For the purpose of cost efficacy, I shall not deal with [W]’s allegations about the topics upon which she succeeded in the AR Trial, unless it is necessary to do so. My application is based on topics upon which I succeeded and topics upon which [W] failed, in line with the general rule that costs follow the event. If she wished to argue for costs against me on the basis of what she views as successes at the trial, this should have been the focus of her cost variation application.”

(emphasis added)

22.With greatest respect, such an approach is totally misconceived.  It is unreasonable and unrealistic for H to ask the Court to ignore the fact that H has lost on a large number of issues.  

23.An obvious example is the beneficial ownership of the 12D Flat, which must also fit the description of “principal cost drivers” used by H.  This is an issue which W succeeded.  There is no reason why the Court should not take this result into account as part of the holistic assessment.

24.In H’s affirmation, he even attempted to count the number of hours which had been spent in Court on the issues which W lost ultimately.  This is a futile exercise which is totally unhelpful in the circumstances of the present case, where, as stated above, both parties succeeded and failed in a number of issues.

25.H then relied on W’s litigation conduct and alleged that she had overstated her case, in that while she alleged that the net family assets would worth nearly HK$177 million, the Court only held that it worth around HK$106 million. 

26.I am of the view that H’s argument is misconceived.  This is because, when assessing W’s “reasonableness”, the Court should not forget that H himself alleged that the net value of the family assets should only be assessed at around HK$30 million.  In other words, if W could be said to have “heavily overstated” the said value, then H must have “heavily understated” the said value.  Hence, this argument does not assist him.

27.As for W’s litigation conduct in pursuing claims unreasonably, I agree that this is a relevant factor which I have already taken into account when the Costs Order Nisi was made.

28.For the defamatory emails, I do not think much weight should be attached thereto because W has in effect been quite severely penalised by my departure from the equal sharing principle.

29.For SSP’s absence from the AR Trial, I do not agree that W should be penalised for that, because his absence is apparently something out of W’s control. 

30.It was also argued by H that if W had been reasonable in the conduct of the AR Trial, much costs and time could have been saved.  That may be so.  However, the reverse is also true: if H had been reasonable and truthful in his evidence, much time and costs could have been saved too.  In my view, the Court has to take a holistic assessment of the whole case rather than to merely focus on W’s conduct as such.

31.While talking about H’s conduct, I must also say that H’s own conduct cannot be said to be more commendable than that of W.  One of the matters which I should specifically mention is the fact that H had unilaterally ceased paying litigation funding, and reduced MPS to just HK$10,000 per month.  Such kind of conduct is simply outrageous.

C4.     Conclusion

32.To conclude, having considered all the relevant matters, including those put forward by H, I maintain my view that, subject to my consideration of W’s Variation Summons, the Costs Order Nisi should be made absolute.

33.H’s Variation Summons should therefore be dismissed.

D.      W’S VARIATION SUMMONS

D1.     Introduction

34.W’s application to vary the Costs Order Nisi is made on the basis of a Calderbank letter which W issued on 1 February 2023 at 8:08pm (“W’s Subject Offer”). 

D2.     The communications

35.In order to properly consider W’s Subject Offer, it is necessary to set out the correspondence between the parties at the material time as follows:

From W to H – 1 February 2023 at 12:07pm

“[W]’s Divorce settlement proposal

Without Prejudice (Save as to costs)

35 million HKD (in 3 instalments – 50%, 25%, 25%)

First payment upon signing the consent summons (50%)

2^nd payment within 30 days from the date of signing (25%)

Last payment 14 days upon decree absolute (25%)

Transfer [the 9A Flat] (mortgage free on my name) upon signing the consent summons.

Sponsor [Daughter]’s HK passport and support her application

Remove me as guarantor from [the 12D Flat]

Spaze property to remain in my name – I will bear the liability of outstanding taxes and spaze maintenance fees etc.

Homestead Property you may give me or keep with you either way is fine.

Transfer GSWI shares to me and I will wind up the company or get it stricken off.

Cease All the proceedings (including overseas) – it’s a waste of time and money – let’s end this on good faith keeping aside all the bitterness we had for the past 3 years.

Please let me know your thoughts on this as how we can work around this and we can meet and discuss in detail as well.”

From H to W – 1 February 2023 at 2:31pm

“[H]’s Counter proposal

Without Prejudice (Save as to costs)

I need your consent to sell the flat – [the 9A Flat] – to fund the alimony settlement.

3 million HKD (in 2 instalments)

First payment within 2 weeks of signing the consent summons & consent to sell the flat (50%)

2^nd payment within 2 weeks after decree nisi is made absolute (50%)

HKD30,000 to [Daughter] until she reaches the age of 18. In case you decide to get married again, I’ll reduce the amount to HKD15,000. Otherwise, in 9 years time, you’ll receive a total of HKD3,240,000 in addition to HKD3 million.

I’ll Sponsor [Daughter]’s HK passport and support her application once everything is agreed and signed.

Remove me as guarantor from [the 12D Flat] – I think [Sister] has removed you already

Spaze property to remain in my name – I will bear the liability of outstanding taxes and spaze maintenance fees etc. - Agreed

Homestead Property you may give me or keep with you either way is fine. – You can keep

Transfer GSWI shares to me and I will wind up the company or get it stricken off. – Agreed after the consent summons are signed

Cease All the proceedings (including overseas) – it’s a waste of time and money – let’s end this on good faith keeping aside all the bitterness we had for the past 3 years. – You’ll need to ask [your brother] to repay me the money he has siphoned.  You can ask him for his bank statements and calculate the amount yourself.  I can give you the data that he shared with me (with false salaries & inflated expenses & the salary your parents received), and you can compute the figure.”

From W to H – 1 February 2023 at 3:36pm

“Without Prejudice (Save as to costs)

I need your consent to sell the flat – [the 9A Flat] – to fund the alimony settlement.

- I will need accommodation for [Daughter] and Myself, figure out a way to transfer the property to me.

3 million HKD (in 2 instalments)

First payment within 2 weeks of signing the consent summons & consent to sell the flat (50%)

2^nd payment within 2 weeks after decree nisi is made absolute (50%)

- My debts are over 4 million I would need 35 million as lumpsum if we want to achieve clean break. Only in that case I will be able to bear liabilities and expenses of Spaze Property and GSWI. I have no source of income and need maintenance however if if I get the capital sum or lumpsum (35 million hkd) I wouldn’t need maintenance.

HKD30,000 to [Daughter] until she reaches the age of 18. In case you decide to get married again, I’ll reduce the amount to HKD15,000. Otherwise, in 9 years time, you’ll receive a total of HKD3,240,000 in addition to HKD3 million. – [Daughter]’s monthly expenses are over 50,000 hkd and [tuition] fee is separate. If the lumpsum is 35 million hkd and you transfer the house I can take care of [Daughter]’s expenses as well. The amount you’ve offered is just not enough to even pay off my debts. So think about this again and get back to me.

I’ll Sponsor [Daughter]’s HK passport and support her application once everything is agreed and signed – This needs to be submitted in March as her Indian passport is expiring this year.

Remove me as guarantor from [the 12D Flat] – I think [Sister] has removed you already – ok send me the Documents confirming the same.

Spaze property to remain in my name – I will bear the liability of outstanding taxes and spaze maintenance fees etc. – Agreed – only if you agree to pay 35 million HKD as lump-sum.

Homestead Property you may give me or keep with you either way is fine. – You can keep - ok

Transfer GSWI shares to me and I will wind up the company or get it stricken off. – Agreed after the consent summons are signed

Cease All the proceedings (including overseas) – it’s a waste of time and money – let’s end this on good faith keeping aside all the bitterness we had for the past 3 years. – You’ll need to ask [your brother] to repay me the money he has siphoned. You can ask him for his bank statements and calculate the amount yourself. I can give you the data that he shared with me (with false salaries & inflated expenses & the salary your parents received), and you can compute the figure. – The amount of INR 64Lacs was transferred to you there is nothing more that was owed to you. There are other cases filed in India and Dubai you need to cease those proceedings as well.

If you really intend to settle this now you may have to come up with a better proposal which takes into consideration our Accommodation, Liabilities and Debts, [Daughter]’s educational needs and my maintenance or lump-sum to achieve clean break.”

From H to W – 1 February 2023 at 6:59pm

“Without Prejudice (Save as to costs)

[H]’s proposal

- 3 million HKD (in 2 instalments)

First payment within 2 weeks of signing the consent summons & consent to sell the flat (50%)

2^nd payment within 2 weeks after decree nisi is made absolute (50%)

- HKD30,000 to [Daughter] until she reaches the age of 18.

[The 9A Flat] - <R-Mom and I need accommodation also. Anyhow, whatever I’m offering, I’ll only be able to give after I sell the flat as this is the only liquid asset I have.

Secondly, for the house, you can continue living in that house ([the Matrimonial Home]) because half of it anyway belongs to my Mom. So Dad can’t ask you to leave, you can live there rent free.>

My debts are over 4 million I would need 35 million as lumpsum if we want to achieve clean break. Only in that case I will be able to bear liabilities and expenses of Spaze Property and GSWI. I have no source of income and need maintenance however if if I get the capital sum or lumpsum (35 million hkd) I wouldn’t need maintenance. - < R – Talking about liabilities, my liabilities alone stand at HKD42.5m, majorly belonging to [AB]. You refuse to acknowledge it despite knowing the truth. How am I to repay that? If I have HKD35 million, will I not first pay off my loans first?>

HKD30,000 to [Daughter] until she reaches the age of 18. In case you decide to get married again, I’ll reduce the amount to HKD15,000. Otherwise, in 9 years time, you’ll receive a total of HKD3,240,000 in addition to HKD3 million. – [Daughter]’s monthly expenses are over 50,000 hkd and [tuition] fee is separate. If the lumpsum is 35 million hkd and you transfer the house I can take care of [Daughter]’s expenses as well. The amount you’ve offered is just not enough to even pay off my debts. So think about this again and get back to me. < R – How is it that [Daughter]’s expenses are HKD50,000+ EXCLUDING tuition fee? That’s purely absurd. If you continue to inflate the expenses, you won’t be able to survive irrespective of whatever maintenance amount you receive. Moreover, are you never going to earn? You can’t live your life sitting on my back, you’ll need to get a job and support yourself and bear some of [Daughter]’s expenses too.>

I’ll Sponsor [Daughter]’s HK passport and support her application once everything is agreed and signed – This needs to be submitted in March as her Indian passport is expiring this year. <R – again once you arrive on some conclusion, only then I’ll agree to this. Plus, it’s expiring in December 2023 not March.>

Remove me as guarantor from [the 12D Flat] – I think [Sister] has removed you already – ok send me the Documents confirming the same. < R: she hasn’t done so yet, she’ll do it soon, one of us will let you know once done >

Cease All the proceedings (including overseas) The amount of INR 64Lacs was transferred to you there is nothing more that was owed to you.

There are other cases filed in India and Dubai you need to cease those proceedings as well. < R – 64 lacs (FD) belonged to [GE] which [your brother] returned to me. I am talking about the monies he siphoned from GCPL. Please refer attached to refresh your memory. ICICI bank statement screenshot where you can clearly see your parents were receiving ‘salaries’. And most importantly, [your brother] confession, which speaks for itself.>

This is what I can offer in all honesty, I don’t want to get into ‘you did this you did that’ but those malicious emails which you and your associates circulated did wonders.  You should have at least waited for the proceeding to have wrapped up before trying to harm the companies.  And whatever I’m offering, I’ll only be able to give after I sell the flat as this is the only liquid asset I have.”

From W to H – 1 February 2023 at 8:08pm (W’s Subject Offer)

“Without Prejudice (Save as to costs)

[H], honestly it’s not me going about who did what

It’s you who is.

The motive of this discussion was to discuss settlement to reach middle ground which save us time and money both and takes care of our needs which anyway by law you are obligated to.

My last offer is 39 million HKD which includes our accommodation, [Daughter]’s needs, my debts and liabilities.  You will have no obligation towards us after that.  I can’t go below this.  As [Daughter] as well has growing needs and with time they will only increase.  The house we are living in right now doesn’t belong to you or me. I cannot be expected to live rent free if I am unable to contribute in expenses related to the house.  Moreover, by May Dad will lease out the place and I and [Daughter] will not have any place to live.  I can’t buy anymore time as he is also struggling financially.  That’s the reason I am trying if you can understand our situation compassionately.  Take your time figure out something – you have 13.5 million as retained earnings, 19 million is owed to you from [WIRE LTD], the property valuation is 12 million, you have funds with related companies.  You will be able to make money in no time again and pay off your liabilities and however this is immediate need and can save time as well.”

From H to W – 1 February 2023 at 8:43pm

“Without Prejudice (Save as to costs)

I know what I am obligated by law to do but the same law says I should have the funds to meet the obligations.

Regarding the retained earnings, take into account the liability (losses that [HH HK] is making) against it also then do the calculation once again, you’ll arrive at a negative figure.

The property is what will help me with the settlement. Whatever [WIRE LTD] owes me belong to [AB], you’re aware of that, I have to pay him a total of HKD36.2m and he also came to HK few days back to meet regarding this. He met Dad also to discuss that same, I’m sure Dad must’ve informed you also. [AB] wants me to repay as soon as possible and he’s been persisting for quite some time now. I’m also in a very tight situation, on top of that, he has become more panicky because Dad told him that I won’t pay him back and will run away with the money.

I’m also in a difficult spot right now.  Moreover I’m unsure if I can continue to keep the companies afloat by the year end.”

From W to H – 1 February 2023 at 9:23pm

“Without Prejudice Save as to costs

[H],

You have [WIRE LTD], DIS, [BSP Limited], [XLTD], 2 apartments etc and you have other companies wherein you have enough capital and assets. I am sure you can work around something. Regarding liabilities you will earn and pay off..you will save two years. Keeping aside your ego think practically exhausting the resources on legal battle is not going to do any good be it HK or india or dubai.

I will find employment in few months and support ourselves not sure if it is going to be enough as cost of living in HK is way too high but before that I need to pay off my debts (credit cards legal debts and loans from banks are something that can’t wait) and we need accommodation and some capital to sustain as well as take care of [Daughter]’s needs.  I am giving a practical solution wherein I won’t bother you for future expenses be it for [Daughter]’s education but I need substantial amount in order to do that.  This is the best solution I can think of you will save on legal cost and time which you can earn and pay off your debts from the companies you own.  Anyway sleep over it and think of some solution this is the best offer and best solution for us both.”

From H to W – 1 February 2023 at 10:11pm

“Without Prejudice (Save as to costs)

Let’s me clarify a few things:-

1. As you said in few years I will earn from these companies. I am finding it difficult to pass this year I am not sure if everything will collapse or if I can turn it around the damage that you guys have done, which is immense, you have no clue. As the case proceeds you will see yourself what I mean.

2. My situation is such thanks to you all that no one is lending me money I am sure my financials says it all I don’t have to repeat again and again.

3. I can make final offer if you don’t agree I suggest we continue the case as I am sure high court will see all evidences then take decisions.

My Final Offer is: -

HKD7M in 7 Years breakdown is as follows:-

1M every year plus I can pay HKD30,000 for [Daughter] every month until she turns 18, which amounts to HKD3m.

Your name and only your name will be removed from all cases.

[Daughter] HK Passport signature you will get.

You can keep Spaze and Homestead Property.

You will get HKD 1M as first instalment once decree nisi is absolute.

Please think about it and let me know.

Trust me when I say this is the best offer you can get. If you don’t believe me let the case continue and you will see for yourself. Don’t blame me then that I didn’t tell you, you should have taken FDR proposal you made a mistake as the situation has worsened further. It will be unwise to pass on this offer also, in reality I can’t really pay what I’m offering but only to achieve a clean break, I’m willing try and finish this somehow.

If you can’t agree to this, I’m afraid we’ll have to proceed on in the court and let the Judge decide.”

From W to H – 2 February 2023 at 8:44am

“Without Prejudice Save as to costs

I can propose a solution that works for us both think about it and get back to me.

1^st instalment upon signing the consent summons 13 million hkd (retained earnings in [HH HK])

2^nd instalment within 3 months of signing consent summons and 30 days prior to Decree Absolute – transfer [the 9A Flat] on my name mortgage free ([Sister] pays back 3.8 million we paid as down payment for our second apartment [the 12D Flat] and remaining amount you may pay from retained earnings of [WIRE LTD] approximately 4 million)

3^rd instalment 5 million hkd in 2024 on 1^st anniversary of signing the consent summons

You continue to pay [Daughter]’s maintenance 30k until she turns 18 or completes her full time education.

You will receive 19 million HKD from [WIRE LTD], 8 million AED from [PIE] sponsor, monies lent to related companies and friends, you have other assets and companies like [XLTD], WIRE LTD], DIS, [BSP Limited], etc which can help you sustain business and pay off your alleged debts.

You are also saving 2 years of time and legal cost.”

36.There were a few more rounds of messages which had been exchanged subsequently between the parties.  However, I do not think they are relevant.  Therefore they are not quoted herein.

37.It can be seen that, pursuant to W’s Subject Offer, in gist, W offered that there be a lump sum payment by H for the sum of HK$39 million.

D3.     Legal principles

38.In Gojkovic v Gojkovic [1992] Fam 40, Butler-Sloss LJ set out the matters that the court might consider when considering the issue of costs. It was held at 59E – H that:

“There are many reasons which may affect the court in considering costs, such as culpability in the conduct of the litigation: for instance (as I have already indicated earlier) material non-disclosure of documents. Delay or excessive zeal in seeking disclosure are other examples. The absence of an offer or of a counter-offer may well be reflected in costs - or an offer made too late to be effective. The need to use all the available money to house the spouse and children of the family may also affect the exercise of the court's discretion. It would, however, be inappropriate, and indeed unhelpful, to seek to enumerate and possibly be thought to constrain in any way, that wide exercise of discretion. But the starting point in a case where there has been an offer is that, prima facie, if the applicant receives no more or less than the offer made, she/he is at risk not only of not being awarded costs, but also of paying the costs of the other party after communication of the offer and a reasonable time to consider it. That seems clear from the decided cases and is in accord with the Rules of the Supreme Court and the County Court Rules 1981 requiring the court to have regard to the offer. I cannot, for my part, see why there is any difference in principle between the position of a party who fails to obtain an order equal to the offer made and pays the costs, and a party who fails by the offer to meet the award made by the court. In the latter case prima facie costs should follow the event, as they would do in a payment into court, with the proviso that other factors in the Family Division may alter that prima facie position.”

D4.     Discussion

39.The first question which this Court has to consider, as a starting point, is whether H has achieved after trial more than W’s Subject Offer.

40.On this question, W submits that H has failed to do so, because the Court has ordered H to make a lump sum payment of HK$41.7 million which is more than the sum of HK$39 million under W’s Subject Offer. 

41.On the other hand, H argues, among other things, that the Court should not assess the situation by reference to one headline number alone, because W’s proposals were always premised on a very rapid payment schedule that were impossible for H to meet, and that while H has been ordered to pay a lump sum of HK$41.7 million, he has been given a longer time to pay by this Court.  To recap, this Court ordered on 6 January 2026 that, for the said lump sum payment of HK$41.7 million:

(1)     The 1^st instalment of HK$7 million be paid within 14 days after the date of the Decree Absolute;

(2)     The 2^nd instalment of HK$3.5 million be paid within 6 months after the date of the Decree Absolute;

(3)     The 3^rd instalment of HK$3.5 million be paid within 1 year after the date of the Decree Absolute;

(4)     The 4^th instalment of HK$3.5 million be paid within 18 months after the date of the Decree Absolute;

(5)     The 5^th instalment of HK$3.5 million be paid within 2 years after the date of the Decree Absolute;

(6)     The 6^th instalment of HK$3.5 million be paid within 30 months after the date of the Decree Absolute;

(7)     The 7^th instalment of HK$3.5 million be paid within 3 years after the date of the Decree Absolute;

(8)     The 8^th instalment of HK$3.5 million be paid within 42 months after the date of the Decree Absolute;

(9)     The 9^th instalment of the balance of the outstanding sum be paid within 4 years after the date of the Decree Absolute.

42.I agree with H that, in the context of ancillary relief, the Court should not, as in other civil cases, simply compare the figure of the offer with that of the award made by the Court.  When considering the reasonableness of the offeree not accepting the offer made by the other side, and whether the offeree has achieved more after trial, the proposed payment schedule must also be a relevant factor to be taken into account.

43.In the present case, W’s Subject Offer only stated that she would accept a lump sum payment of HK$39 million but stopped short of proposing a payment schedule. 

44.Without any proposal of payment by instalments, the only reasonable interpretation of W’s Subject Offer is that the offeror required the lump sum payment to be made in one go.  If that is so, then in my view this cannot be said to be a better result when compared to the ultimate decision of this Court on the payment schedule, despite the fact that the total lump sum amount offered was lower (particularly when the difference is only HK$2.7 million herein).

45.When dealing with this argument made by H, W’s counsel referred this Court to W’s words of “Take your time figure out something” in the email which contained W’s Subject Offer.  If these words meant that she was open to H’s suggestion of payment schedule which was to be further negotiated, then that would in turn mean that W’s Subject Offer was not a complete one which H could accept.  In this regard, it should be borne in mind that the whole variation application made by W is only premised upon the email sent on 1 February 2023 at 8:08pm.  Hence, I do not think it is permissible for W to rely on other subsequent emails.  Indeed, if W’s application is made also on the basis of any subsequent emails, she would not have asked for an order that H pays her costs as from 1 February 2023 (not to mention that, in fact, a reasonable period time should be given to H to consider her offer).

46.Even if it is permissible for W to rely on her subsequent emails, that in my view would not assist her.  This is because the only subsequent email sent by W which touched on payment schedule was the one dated 2 February 2023 at 8:44am, which proposed a payment schedule that required H to make full payment of the lump sum within 1 year after the date of the decree absolute.  By comparing this with the Court’s decision on payment schedule, it can be seen that H has achieved a better result in that he is able to obtain an order which has a much lengthy schedule, even though the total lump sum amount which is payable under the Judgment is slightly higher.

47.In the circumstances, I do not think it would be right for the Court to order H to pay costs of the AR Trial (whether as from 1 February 2023 or otherwise) despite the fact that he did not accept W’s Subject Offer. 

E.      DISPOSITION

48.For reasons of the aforesaid, both H’s Variation Summons and W’s Variation Summons are dismissed.

49.The Costs Order Nisi is hereby made absolute.

F.      COSTS

50.I make a costs order nisi that there be no order as to the costs of H’s Variation Summons and W’s Variation Summons.

51.The above order nisi shall become absolute in the absence of application to vary (which, if any, and will be disposed of on paper) within 14 days hereof.

G.      POSTSCRIPTS

52.On 6 February 2026, for the purpose of disposing of both W’s Variation Summons and H’s Variation Summons at the same time, this Court gave, inter alia, the following directions (“the Directions”):

“(1) The Petitioner shall lodge and serve full written submissions in support of the Petitioner’s Application (and authorities, if any) together with an agreed paginated bundle (containing all documents filed for the purposes of the aforesaid applications) on or before 2 April 2026.

(2) The Respondent shall lodge and serve full written submissions in support of the Respondent’s Application (and authorities, if any) and in opposition to the Petitioner’s Application on or before 13 April 2026.

(3) The Petitioner shall lodge and serve full written submissions in reply in relation to the Petitioner’s Application (and authorities, if any) and in opposition to the Respondent’s Application (and authorities, if any) on or before 17 April 2026.

(4)  The Respondent shall lodge and serve full written submissions in reply in relation to the Respondent’s Application (and authorities, if any) on or before 23 April 2026.”

53.It is clear that, by virtue of the Directions, H was only given leave to lodge written submissions in reply on 23 April 2026 for the purpose of dealing with his own application, but not to further respond to W’s written submissions lodged on 17 April 2026, as W should have the last word on her application.

54.However, in H’s written submissions dated 23 April 2026, he did not only include submissions on his own application, but also replying to W’s submissions in reply.  This is not permissible.  I have therefore disregarded those parts of H’s submissions.

Mr Shaphan Marwah, instructed by Hugill & Ip, for the petitioner

Ms Madeleine Booth, instructed by Haldanes, for the respondent