APP v. PKD

FCMP 208 / 2015

[2018] HKFC 133

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS

NUMBER 208 OF 2015

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R U L I N G
(Costs)

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Introduction

1.  This is an application on paper to determine costs following an agreement reached between the parties at a hearing on the 5 June 2018. The hearing was in relation to an application made by the Applicant mother, in an Originating Summons dated the 24 September 2015, inter alia for maintenance for the minor child, T. Agreement was reached on all outstanding matters (save for the costs) as follows:  

C.  AND UPON the Applicant and the Respondent undertaking to each other and to the Court that the amount of periodical payments in Paragraph 1 below will be discussed and reviewed by them during the Summer of 2019 prior to the Child commencing Primary School in September when the costs of the Child attending Primary School are known with a view to vary up the amount of the periodical payments.

D.  AND UPON the Respondent undertaking to the Applicant and to the Court that the periodical payments referred to in Paragraph 1 below shall be made by direct transfer to the Applicant’s Nominee’s Bank Account, namely the Hang Seng Bank Account of DDM, account number 7XXXXXXXXXXX or such account that the Applicant may designate (“Bank Account Nominated by the Applicant”).

E.  AND UPON the Applicant and the Respondent agreeing, acknowledging and confirming to each other that the periodical payments for the Child for June 2018 to October 2018 as set out in Paragraph 1a below take into account his needs for new accommodation, electrical appliances and increase rental from April 2018.

F.  AND UPON the Applicant undertaking to the Respondent and to the Court that she will provide the Respondent with documentary evidence from the landlord and/or property agency once she and the Child have moved to new accommodation up to rent of HK$7,000.00 per month.

BY CONSENT, IT IS HEREBY ORDERED THAT:-

1.  The Respondent do pay the following periodical payments to the Applicant for the benefit of the Child:

a. The sum of HK$16,648 per month from 1^st June 2018 to 1^st October 2018 (both months include); and

b. The sum of HK$11,588 per month from 1^st November 2018 to be paid on the 1st day of each and every subsequent month thereafter until the Child attains the age of 18 years old or until the Child finishes full time education, whichever is the later, this amount to be increased annually on the anniversary of the date of the Order to be made by reference to the Hong Kong Composite Consumer Price Index and Annual Report on Consumer Price Index released by the Hong Kong Consensus and Statistics Department or by the inflation index of the Child’s place of habitual residence should he relocate outside Hong Kong.

2.  It is trite but worth repeating therefore, that the court has not made any findings of fact nor come to any conclusions in relation to the issues, given that there was no trial and no judgment following a trial. Normally, in such a situation, the parties are also able to also reach an agreement on the issue of costs. Unfortunately, that was not to be in this instance. In part that was because the mother was legally aided and duty bound to ask for her costs.

The issue

3.  The only issue then is what order should be made for costs?

The law 

4.  As set out by the solicitors for the Applicant in their submission, the law in relation to costs is well settled and not in dispute. Reference is made quite properly to Order 62 of the Rules of the High Court, Cap 4A. I accept as stated by them that

The issue of costs lies in the discretion of the court.  Whilst in civil proceedings the general rule is that costs are expected to follow the event, the general rule is more easily displaced in family cases.

5.  Reference is also made to the leading case on costs, namely Gojkovic v Gojkovic [1992] Fam 40, where Butler-Sloss LJ said inter alia as follows:

“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. ... 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 application 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”.

With respect I agree with this analysis.

Discussion

6.  In this instance the Applicant mother, who, as I have said is legally aided, is seeking her costs on the premise that a) the father only made a realistic offer to settle this case very late in the day i.e. on the 21 May 2018, which was just two weeks before the trial. Up until then he had been paying interim maintenance as ordered of HK$8,000 per month. In addition, she says that b) he was not prepared to negotiate further after making his late offer and c) his position remained unclear on a number of points up until the date of trial. 

7.  I am also asked to take into account the father’s litigation conduct as follows:

a.  Cost were spent by M as she was forced to apply for substituted service [AB /18]. F has never explained how the proceedings came to his attention;

b.  F’s delay in filing the DNA Test Report dated 22nd July 2016 which was only filed by F on 8th September 2016. F has never explained when he collected the DNA Test Report and why there was delay in filing [AB/18]. He ignored M’s Solicitors correspondence [CB/1, 3,-4, 5-6, 9];

c.  F’s insistence that he would oppose a Declaration of Parentage in FCMP 226/2016 even though the DNA Test Report confirmed he was T’s Biological Father. This was eventually agreed by consent and a Costs Order made against F;

d.  The events leading to a Costs Order being made against F in relation to the Birth Certificate issue [PB /102 - 104, CB / 52 - 75, 76 - 82];

e.  F’s claim that he would apply for custody, and care and control of T [AB/27, CB/42-45] whilst never actually taking out any application;

f.  F’s refusal to make full and frank disclosure of his income and assets, whilst at the same time refusing to confirm in writing that he was relying on the Millionaire's Defence (see BCC letter of 18.10.17 [CB/95] to which F never responded;

g.  Despite the acknowledgement in the Order of 11^th January 2017 that any outstanding issues with regard to disclosure would be dealt with by way of correspondence [PB/92], F insisted that he did not need to answer the questionnaire by correspondence and said he would obtain the transcript of the hearing. It was only after the Court ordered F to answer the questionnaire by way of correspondence on 20th June 2017 [PB/99] that F eventually provided Answers on 1^st September 2017, 9 months after the Order of 11^th January 2017 was made (and even then, F's disclosure was not complete). The relevant correspondence can be found at [CB/22 - 27, 31- 35]; and

h.  F’s delay or refusal to respond to letters from M’s Solicitors has increased costs as multiple chasing letters have had to be sent.

I accept much of what is said here and that the father’s litigation approach has increased the mother’s costs unnecessarily.

8.  I do not accept the father’s initial argument that as this is a chid related matter it follows that there should be no order as to costs. This is essentially an issue concerning maintenance and therefore the standard approach applies as set out in paragraphs 4 and 5 above.  Although the mother was imprisoned during the course of this litigation for being an over stayer, I do not accept the suggestion that she has behaved inappropriately in the course of this litigation.   

Conclusion

9.  I am mindful of the fact that parties should be encouraged to negotiate settlements and that they should not be unnecessarily penalised when agreement is reached by an adverse costs order made against them. But I am also of the view that litigants should also be encouraged to settle early without the necessity of coming to court. I am also conscious of the fact that in this case the mother had no option but to issue her application and that the father’s final substantive offer only came very late in the day and even then did not cover all of the outstanding issues that remained in dispute. I also agree that the father’s litigation conduct generally, as set out in paragraph 7 above has left a lot to be desired. In such circumstances I will order that the father do pay the mother’s costs of and occasioned by the Originating Summons dated the 24 September 2015, including all costs reserved, on a party and party basis to be taxed if not agreed. The mother’s own costs to be taxed in accordance with Legal Aid regulations. Further it follows that the costs of this application shall also be to the mother, to be paid by the father on the same basis.