YY v. CHOA

FCMC 7598 / 2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 7598 OF 2010

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RULING
(Costs)

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Introduction

1.  This is an application by a petitioner wife for costs following an agreement with respect to the husband’s application to vary the maintenance downwards and my Ruling in relation to the wife’s application for an attachment of income order, where I found in favour of the husband.

Background

2.  I have set out the background to this case in my previous Judgments and Rulings, to which reference can be made if necessary. It goes without saying that the findings made within those Judgments and Rulings continue to stand.

The law 

3.  The law in relation to costs is well settled. In the leading case of Gojkovic v Gojkovic [1992] Fam 40 Butler-Sloss LJ stated 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”.

4.  This general approach has been routinely adopted in Hong Kong. It has been said that the issue of costs lies in the discretion of the court and costs are normally expected to follow the event. It is also accepted that this presumption is more easily displaced in family proceedings than in others – especially where there are matters to be resolved concerning children. I have noted that in this instance that the outstanding issues although child related, where financial in nature.

Discussion  

5.  In the mother’s submission on costs she makes some very serious allegations against the husband. For example she accuses the husband of deliberately delaying providing full and frank disclosure, of being totally uncooperative, of providing information at the last minute, of bringing suit cases of documents to court and then expecting the mother’s solicitors to assimilate them at short notice and of completely failing to engage in any meaningful way in the process. These are not, however, findings that have been made by the court – given that settlement was reached – albeit late in the day. It is unfortunate given that, that settlement was not also reached with respect to costs – especially given the fact that I have stated on repeated occasions that I accept that the parties’ finances and those of the husband in particular are very stretched. I am concerned that he will not be able to afford to pay the level of maintenance that he has agreed to pay plus a substantial costs bill. Indeed the husband makes this very point in his submission on costs when he says as follows:

23)  If I was asked to pay for the Petitioner’s Legal Cost, these will again seriously affect my financial situation and my existing & present payment structure including payment of maintenance fees for children.  The problem would be I won’t be able to pay off the increasing debits and the consequence would be the Bank will call Loan and ended up bankrupting me;

24)  I must stress that I had no intention not to pay the maintenance fee; I tried many times via different channels, asking the Petitioner to mediate so to come up a realistic monthly maintenance fee that I can afford.  The Petitioner ignored all my settlement offers via the mediator, her father and our mutual friends but insisted the interim maintenance fee of HK$15,000 which I could not afford;

25)  I totally understand I have no money to pay for my legal cost and therefore act in person for almost one year for the Ancillary Relief application.  The Petitioner actually can act in person herself so to minimize her cost but she preferred to hire both her Solicitors and Counsel to represent her;

26)  In order to pay for the agreed amount of money for the maintenance, I have sacrificed not visiting my children in Shanghai or not having my children to come to HK every month, part of the arrangement in the order set in the relocation judgment;

27)  The Petitioner’s Counsel stated in the court that the wording would be “Cost be reserved” in the Consent Summon but I find it unfair, uncertain and unsatisfactory. To me, any drafting by the Petitioner’s Solicitors or Counsel that leaves any possibility of any confusion would be another ongoing horror story.

       From my experience with the Petitioner’s Solicitors, to me there have been lots of distortions about facts and situation on which they wanted to argue or to present untrue or misleading pictures for the court.  I am scared and feel most insecure if any drafting or wording of any court order leaves any uncertainty or even worse, the Petitioner might be encouraged to go after me so her lawyers can gain fees by going after me again and again;

28)  Given the history of that I took out a summons to vary the interim maintenance as early as November 2011, my down to earth approach in settling the matter via mediator & mutual friends, my frank disclosure and the fact that outstanding of the interim & the figure to be monthly payable now finally agreed & settled on 31^st July 2012, I think that court should not ask me to pay the Petitioner’s costs.

       After all the monthly figure now agreed on 31^st July 2012 between the parties is $8,000, a figure a lot & far less than $15,000 the interim figure.  I say that the outcome & the Petitioner’s handling should not entitle her to ask me for costs;

29)  It has been the Petitioner who did not give us the chance to settle peacefully out of the court or via Mediation or at least to seriously consider a down to earth and realistic maintenance figure that I can afford.  Her attitude and all the actions taken by her had seriously caused and prolonged the unnecessary arguments and disputes and incurred herself more and more legal costs.  I don’t know if very sadly she was encouraged by her lawyers in her attitude and actions.  But I can see there is more anxiety and bitterness which is worse in a divorce situation;

30)  All the legal costs for the Petitioner should therefore be borne by herself and it is unfair to ask me to pay;

31)  I sincerely hope the court can consider my objection to the Petitioner’s Legal Cost to be charged to me and I submit that there should be no order on legal costs.

6.  The wife takes issue with a lot of what the husband has said and in particular maintains that she has tried on repeated occasions to resolve matters. The difficulty that I have with many of the arguments advanced by each side is that I have not heard the parties give evidence on the points raised. Consequently I have not been able to form a firm view as to whether or not, for example, one side was deliberately obstructive when it came to the question of settlement. Nor have I found that the husband was guilty of not providing full and frank disclosure of his assets or that the wife was over zealous in her desire for further information. It is simply not possible for me to do so. 

7.  In such circumstances I do not find either party more culpable than the other with respect to their conduct of this litigation. Further it seems to me that given that the Family Court encourages parties to settle that they should not then be penalised in costs – except in very extreme circumstances - when settlement is achieved. This is even so, as in this case, when settlement came very late in the day.

8.  In so far as the attachment of income order is concerned I have of course found in favour of the husband in that respect – but would accept that it is almost impossible to separate that application from the other when trying to determine the issue of costs.

Conclusion        

9.  Given all of the prevailing circumstances I will therefore make no order as to costs with respect to the husband’s application to vary the maintenance downwards plus the wife’s application for an attachment of income order.