C v. H

FCMC 14600/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 14600 OF 2009

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BETWEEN

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Coram: HH Judge C.K. Chan in Chambers (not open to public)

Dates of Hearing: 11-12 January 2011

Date of Handing Down Judgment: 31 January 2011

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JUDGMENT (ON COSTS)

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The Hearing

1.This is a hearing on the Petitioner Wife (hereinafter called “the wife”)’s application for costs against the Respondent Husband (hereinafter called “the husband”) after the parties have settled their dispute on the issue of custody of the 2 children of the family.

Background

2.The parties married in 1989 and two children were born within wedlock.  The daughter is now aged 17 and the son aged 13.

3.The wife issued a petition for divorce based on the husband’s behaviour.  At the last hearing, the parties were able to come to some form of agreement for a new petition to be issued based on 1 year separation with consent.  Although there may still be some uncertainty on whether the husband would raise a challenge on the issue of forum, it can be safely assumed that the husband would at least consent to a decree nisi of divorce to be granted by this court.  In pursuance of the husband’s unequivocal consent given during the hearing, I have ordered that the wife’s new petition based on 1 year separation with consent be set down in the Special Procedure List.

4.During the 1^st Appointment hearings, the husband has indicated that he would ask for the sole custody, care and control of the 2 children of the family.  As the parties have failed to reach a compromise even after the preparation of the Social Investigation Report, I adjourned the matter of final custody for trial, with 8 days reserved.  I have also given consequential directions for the parties and their respective witnesses’ affidavits to be filed and served.

5.At the first day of trial, the husband indicated that he would no longer contest the custody, care and control of the 2 children.  The parties’ agreement includes:

(1)   Sole custody, care and control of both children of family be granted to the wife;

(2)   Defined access be granted to the husband on every Sunday between 5:00pm and 9:00pm in the presence of a social worker and a person to be appointed by the wife with the consent of the husband; and

(3)   There be a supervision order for 1 year.

6.Despite the above agreement, counsel for the wife indicated that he would ask for costs with arguments on which to be heard forthwith.  The husband objected by saying that such costs should be reserved to be argued after the conclusion of the whole proceedings. I saw no reasons why the issue of costs should not be dealt with forthwith and so I proceeded to hear arguments from both parties on this issue.

The Legal Principles on Costs in Children Matters

7.I think there is no dispute that generally speaking, the usual order on costs in children matters is for no order.  The rationale for such an approach was succinctly summarised by Wilson J in Sutton London Borough Council v. Davis (Costs)(No.2) [1994] 2 FLR 569 at 570H-571C:

“ The point is based on the proposition, enunciated by Butler-Sloss LJ in Gojkovic v Gojkovic (No 2) [1992] 1 All ER 267 at 271, [1992] Fam 40 at 57 and applied every day for many years in the division, that ‘it is unusual to order costs in children cases’…. Where the debate surrounds the future of a child, the proceedings are partly inquisitorial and the aspiration is that in their outcome the child is the winner and indeed the only winner. The court does not wish the spectre of an order for costs to discourage those with a proper interest in the child from participating in the debate. Nor does it wish to reduce the chance of their co-operation around the future life of the child by casting one as the successful party entitled to his costs and another as the unsuccessful party obliged to pay them. The proposition applies in its fullest form to proceedings between parents and other relations; but it also applies to proceedings to which a local authority is a party…”

8.However, this general rule does not apply in cases where the conduct of a party has been reprehensible or totally unreasonable, as Wilson J continued to say in the case of Sutton Borough Council (supra):

“…But the proposition is not applied where, for example, the conduct of a party has been reprehensible or the party’s stance has been beyond the band of what is reasonable (see Havering London BC v S [1986] 1 FLR 489 and Gojkovic (No 2)[1992] 1 All ER 267 at 271, [1992] Fam 40 at 60).”

9.As to the kind of conduct that would justify a departure from the general rule, it has been suggested in the case of R v R (Costs: Child’s Case) [1997] 2 FLR 95 that the unreasonable conduct which might justify an order for costs was not unreasonableness in relation to the child concerned but unreasonableness in the conduct of the litigation.

10.Pursuance of a totally hopeless case, can, in certain circumstances be regarded as unreasonable conduct that would justify a costs order.  In Re G (Costs: Child Case) [1999] 2 FLR 250, Butler-Sloss LJ had this to say at 252G:

“ If this judge in this case had found that this father had behaved unreasonably in the litigation and had gone beyond what many fathers do, seeking orders which are hopeless, the point will come at which pursuing a hopeless application becomes unreasonable. But hopelessness and unreasonableness are not necessarily the same thing. Indeed, particularly where there is a litigant in person, a degree of generosity towards a litigant may be more appropriate than to a litigant which is on legal aid generally advised by counsel and solicitors as to the extent to which they should continue to litigate.”

Her Ladyship continued at 253D of the judgment:

“ It seems to me that the case of R v R does not change the normal situation that it is unusual to order costs, although it will be appropriate to order costs when a parent, even a litigant in person, goes beyond the limit of what is reasonable to pursue the application before the court.”

11.Therefore, the main issue now is whether the husband has behaved unreasonably in the conduct of his application for the sole custody of the 2 children of the family that would justify a costs order against him.

12.Apart from unreasonable litigation conduct, the court may also take into account of the disparity in financial resources in the exercise of its discretion on the matter of costs.  As Wilson J said in Keller v Keller and Legal Aid Board [1995] 1 FLR 259, at 265:

“…Equally a marked disparity in wealth, such that, for example, the wife’s costs would bear harshly upon her economy but could be discharged by the husband without significant impact upon his economy, might give rise to an order against him.”

The Husband’s Conduct

13.It has been argued on behalf of the wife that the husband’s case for sole custody, care and control was so hopeless that the pursuance of which amounted to unreasonableness in the conduct of the litigation.  In his submission, counsel for the wife reminded me of the following indisputable facts:

(1)   Both children are not of very young age.  The daughter is aged 17 and the son aged 13.  The husband should know that their views, especially the view of the daughter will be taken very seriously by this court.  As there will only be a few months before the daughter attaining majority, her view is almost determinative of the issue of her custody, which in turn will also have a profound effect on the custody of the son.

(2)   Both children have been taken care of by the wife with the help of the maternal grandmother since they were very young and they have resided separately from the husband for a lengthy period before the present proceedings.

(3)   Both children have expressed their unequivocal view on their desire to continue to live with the wife.

(4)   Despite the granting of an interim access order in favour of the husband for almost a year, he has not exercised his right, not even once to see the children.  He has not attempted to communicate with the children even though there were numerous chances to do so.

(5)   At the call over hearing, the husband requested for the preparation of a psychologist report on the children but after the children were seen by the psychologist, the husband decided not to go for an interview himself.

14.I agree with counsel’s submission that the behaviour of the husband shows that he never had any real interest in having the sole custody of the children.  Furthermore, the above facts clearly indicate that the husband’s application for sole custody, care and control was so hopeless that such an application should not have been brought in the first place, and certainly not to be insisted upon up to the last moment before trial.

15.As far as the husband’s other litigation conduct is concerned, I take note of the fact that the trial date was fixed on 22 June 2010.  During the 6 months or more before trial, numerous affidavits have been filed incurring large amount of legal costs on both sides.  The children had to go through the trouble of seeing the clinical psychologist for a report to be prepared; and the social investigation officer for an up-dated Social Investigation Report.  Despite the wife’s efforts in trying to resolve the dispute amicably, the husband’s offer for settlement only came at the 11^th hour.  From the correspondence, I can see that the first realistic offer from the husband came by a letter dated 31 December 2010 which was only received on 3 January 2011.  That was 8 days before trial.   Even by that time, the parties still failed to reach agreement on access.  The final settlement was only reached in court on 11 January 2011 or shortly before.  By that time, it was already too late for the hearing to be avoided.

The Disparity in the Parties’ Financial Strength

16.It is beyond dispute that the wife has all along been dependent on the husband for financial support.  At the MPS hearing, I have ordered the husband to pay a MPS at the rate of $323,000 per month, including $100,000 per month being provision for legal costs.  Due to the rather acrimonious nature of the litigation, I was informed by counsel that the legal costs incurred so far by the wife in the whole litigation already amounts to $5,000,000.   Although there is not a detailed breakdown of that figure, I believe the wife’s legal bill on custody will not be small.  If the wife has to bear those costs on her own, it will have a serious detrimental effect on her finances, which in turn will be detrimental to the welfare of the children.

17.On the other hand, I was satisfied at the MPS hearing that the husband has come from a reputable and rich family.  There was suggestion that in 2002, it was declared in a document submitted that the husband was in control of assets of about $4,110,000,000. Furthermore, there is no dispute that the husband has been residing alone in a 7,000 sq ft apartment in the mid-level for the past 2 decades or so.  I do not think a costs order against him will have a significant impact on his economy.

Conclusion

18.After considering all the circumstances of this case, it is my view that a departure from the general rule of no costs order is justified and therefore, I would order the husband to pay the costs of the application for custody, including all costs previously reserved, with certificate for one counsel, to be taxed if not agreed and payable forthwith.

Representation:

Mr. Eric Leung, instructed by Messrs. C. T. Chan & Co., for the Petitioner

Mr. P. K. Chan, instructed by Messrs. Tso, Au Yim & Yeung, for the Respondent

Please refer to HCMC3/2011 for the relevant appeal(s) to the Court of First Instance.