KK, H v. PK, H (formerly known as PS, V)

CAMP 312/2022

[2023] HKCA 176

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 312 OF 2022

(ON AN INTENDED APPEAL FROM FCMC 8332/2017)

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J U D G M E N T

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Hon Barma JA (giving the Judgment of the Court):

1.  This is the petitioner’s renewed application for leave to appeal against the decision on costs given by HH Judge Melloy (“the Judge”)  on 7 April 2022[1] (“the Decision”), by which she ordered (i)  the petitioner to pay the respondent’s costs (assessed on a party and party basis)  for the period from 6 November 2018 to 7 January 2019; and (ii)  the petitioner to pay 30% of the respondent’s costs (also assessed on a party and party basis)  from 8 January 2019 to the commencement of the trial, with certificate for counsel in respect of both periods.

2.  The petitioner’s application for leave to appeal in the court below was dismissed by the Judge on 11 August 2022[2] (“the Leave Decision”).

Background

3.  The background to the parties’ dispute and litigation history was set out by the Judge in the Decision at [1] to [4], and also in her judgment dated 10 November 2020[3] (“the 2020 Judgment”).  The factual background to the parties’ relationship and familial history have also been summarised by this court (differently constituted)  in its judgment dated 24 May 2021[4] (“the 2021 CA Judgment”)  at [8] to [22].

4.  For present purposes, we highlight the following:

(1)  the petitioner and respondent are respectively the father and mother of their only child, a daughter, who is around 7 years of age (“the Child”);

(2)  following a divorce petition filed by the petitioner in June 2017, a decree nisi was granted in January 2019.  By a court order dated 15 December 2017, the parents had joint custody of the Child, with interim care and control given to the respondent and interim defined access to the petitioner;

(3)  initially, the issues between the parties were mainly limited to the way in which the Child’s time was to be shared, until the petitioner changed his stance and applied instead for sole care and control of the Child, by his summons dated 7 January 2019 (“the C&C Summons”).  This application was subsequently amended on 17 June 2019 and reverted to one for shared custody of the Child;

(4)  the original trial of the C&C Summons was fixed to commence on 5 May 2020 for 7 days;

(5)  however, around 2 months before the trial, on 12 March 2020, the respondent issued a summons (“the Relocation Summons”), seeking to remove the Child permanently out of the jurisdiction of Hong Kong in order to relocate to Singapore;

(6)  as a result, the original trial dates of the C&C Summons were vacated, and both summonses were fixed for a trial commencing on 7 July 2020 (for 8 days)  before the Judge;

(7)  by the 2020 Judgment, the Judge ordered inter alia that leave be granted for the relocation of the Child to Singapore (“the Relocation Order”), with the respondent being granted care and control of the Child with defined access to the petitioner as set out in the order made by the Judge.  The Judge further adjourned the First Appointment hearing to 26 November 2020, with “any outstanding issues with respect to costs” adjourned to be determined on the same date;

(8)  meanwhile, the petitioner, after failing to obtain leave to appeal against the 2020 Judgment from the Judge, was granted leave to appeal by this court on 25 February 2021, with the order for relocation stayed pending appeal;

(9)  by the 2021 CA Judgment, this court (Lam VP (as Lam PJ then was)  Yuen JA and B Chu J)  allowed the petitioner’s appeal and set aside the Relocation Order (save in respect of the order for defined access for the petitioner);

(10)   this court further directed that the C&C Summons be refixed before the Judge for determination of the Child’s care and control in the event of there being no relocation, and acknowledged that costs in relation to the C&C Summons and the Relocation Summons were yet to be determined by the Judge (see [100] to [101] of the 2021 CA Judgment).

The Judge’s Decision

5.  By the Decision, the Judge held that there should be no order as to costs in respect of the C&C Summons and the Relocation Summons (see [22] to [23] of the Decision).  The costs orders in respect of these summonses are not the subject of any appeal.

6.  In the Decision, the Judge also dealt with the issues of whether adverse costs orders should be made against the petitioner by reason (i)  that costs were wasted because he retracted from his agreement to proceed to a truncated trial; and (ii)  of his approach to the evidence which the Judge found had resulted in further wasted costs (see [8] of the Decision).  The Judge found against the petitioner on these issues, which are the subject of the intended appeal, for the following reasons.

7.  At the outset of these divorce proceedings, the petitioner had accused the respondent of alienation in his witness statements.  However, the Judge found that there was no substance to these allegations, as the petitioner has had regular contact with the Child (see [10] of the Decision).

8.  By around November 2018 (after the filing of the divorce petition and before the grant of the decree nisi), the court had made detailed orders for access and the petitioner appeared to be agreeable to them.  On this basis, the possibility of a truncated trial was discussed and agreed to by the parties, leading to the Judge’s directions dated 6 November 2018 for the filing of Scott Schedules (see [9] of the Decision). 

9.  Contrary to the apparently amicable agreement to the court’s orders for access, on 7 January 2019, the petitioner by the C&C Summons applied for sole custody and care and control of the Child, repeating his allegations of alienation against the respondent albeit with some additional allegations (the bulk of which had been rejected by the Judge).  As noted, he later (in June 2019)  amended his application to one for shared care.  The petitioner’s explanation for the initial change of stance was that he had no alternative given the respondent’s behavior – an explanation which was rejected by the Judge (see [11] of the Decision).

10.  Thus, the Judge was of the view that by reason of the petitioner’s repeated change of stance from one that was “contained and appropriate” to one that was “needlessly aggressive and not child centred”, he should bear the costs of the respondent on a party and party basis from 6 November 2018 to 7 January 2019, i.e. from the date of the directions on the filing of the Scott Schedules to the date of the filing of the C&C Summons, as she was of the view that the costs involved in the preparation of the case in that period had been substantially wasted, causing the respondent to unnecessarily incur legal costs.

11.  The second issue concerned the petitioner’s approach to the evidence.  The Judge observed that as at the second pre-trial review (“the 2^nd PTR”)  on 2 May 2019 (with the trial due to commence on 7 July 2020), the parties (notwithstanding that they were legally represented at the time)  were not ready for trial, in part due to the “unwieldy” and “inappropriate” state of the evidence (see [15] of the Decision).

12.  At the 2^nd PTR, it was agreed in court that the petitioner would first review his evidence within 14 days, followed by the respondent’s review of her own evidence.  However, on 20 May 2019, the petitioner filed new affirmation evidence and his Children’s Form J without agreement of the respondent or leave of the court.  The Judge also noted the manner (which she considered to be inappropriate)  in which the petitioner continually tried to include evidence from third parties by attaching their witness statements to his affirmations.  The petitioner subsequently withdrew the evidence filed (see [17] to [19] of the Decision).

13.  For these reasons, the Judge considered the petitioner’s litigation conduct to be “far from helpful” and inappropriate and found that he had on occasion ignored or attempted to circumvent clear directions from the court.  Thus, the Judge was of the view that the petitioner’s conduct was so unreasonable as to merit a sanction in costs, and further ordered that he should pay 30% of the respondent’s costs from 8 January 2019 up to the commencement of the trial on 7 July 2020 on a party and party basis.

14.  Dissatisfied with the Decision, by a summons filed on 20 April 2022 (with a draft Notice of Appeal attached), the petitioner applied to the Judge for leave to appeal. 

15.  The four proposed grounds of appeal in essence complained that the Judge had, for various reasons, erred in the exercise of her discretion by awarding costs to the respondent against the petitioner.  She was said to have so erred by, (i)  misunderstanding the facts and evidence which rendered her decision plainly wrong; (ii)  relying on misstatements of facts and thus wrongly finding that the petitioner’s litigation conduct was unreasonable; (iii)  having regard to wrong factual premises with respect to the petitioner’s approach to evidence (such as adducing what the Judge called evidence “arguably improperly obtained” and unilaterally filing further evidence without agreement); and (iv)  (a)  failing to take into account the impact of the respondent’s Relocation Summons, and its lateness, on wasted costs incurred by the parties between its filing date and the commencement of the trial in July 2020, (b)  failing to have regard to the respondent’s litigation behavior, and (c)  failing to have regard to the prejudice that the making of the costs orders before the proceedings were completely concluded would cause to the petitioner.

16.  Noting that the intended appeal is one against an exercise of the court’s discretion and that the petitioner needed to overcome a high threshold in establishing that the Judge had made an error in law, or that the Decision was plainly wrong, the Judge maintained her views and conclusions and by the Leave Decision, dismissed the petitioner’s application to her for leave to appeal.

The present application

17.  The petitioner renewed his application before this court by a Summons filed on 24 August 2022.  No draft Notice of Appeal was attached to the Summons, and we shall proceed on the basis that the proposed grounds of appeal in this renewed application are the same as those set out in the draft Notice of Appeal considered by the Judge in the application before her.

18.  The petitioner and the respondent (neither of whom are now represented)  lodged their written submissions on 24 August and 13 September 2022 respectively.

19.  The petitioner’s contentions before us are that (i)  the Judge exercised her discretion on costs based on misstatements of various facts, and (ii)  had failed to take into account relevant considerations in the exercise of her discretion. 

20.  The first alleged misstatement of fact on which the Judge is said to have relied in reaching the Decision, related to the petitioner’s claims of alienation against the respondent in respect of the Child (see [7] of the petitioner’s submissions), which were rejected by the Judge and which she considered had resulted in unreasonable litigation conduct on the petitioner’s part.  The second main alleged misstatement of fact was the Judge’s view that the petitioner had refiled his affidavit evidence after the 2^nd PTR, without agreement or leave of the court.  As to this, the petitioner says that he had an “honest and genuine belief” that he had in fact been directed by the Judge at the 2^nd PTR to refile his evidence (see [9] of the petitioner’s submissions).  The petitioner also complains that the Judge wrongly held it against him that he had sought to attach recordings of conversations to his evidence.

21.  Apart from these complaints, the petitioner also says that the Judge wrongly failed to consider important aspects of the proceedings, which rendered her Decision plainly wrong.  These were the lateness of the Relocation Summons, issued by the respondent 2 months prior to the original trial dates, which caused the refixing of the trial, the failure to have regard to poor litigation behavior by the respondent, and the fact that the proceedings had not concluded.

22.  In reply, the respondent submitted that the Judge had been dealing with this case since its inception in 2017, and was in the best position to form a clear and accurate view of the parties’ conduct (see [3] of the respondent’s submissions).  The respondent supported the Judge’s rejection of the petitioner’s claims of alienation (see [5]), and contended that the petitioner was wrong to say that the Judge was mistaken in holding the petitioner’s refiling of evidence was without agreement (see [7]).  She also submitted that the Judge had clearly considered the lateness of the Relocation Summons in her decision on costs, as reflected by her order that there should be no order as to costs of the Relocation Summons (see [10]), and had also had regard to the other matters allegedly overlooked.

Legal principles

23.  Section 63A of the District Court Ordinance, Cap 336, provides that leave to appeal shall not be granted unless this court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.

24.  It is well-established that an applicant for leave to appeal against a costs order, which is quintessentially an exercise of discretion by the judge, faces a very high hurdle.  The Court of Appeal will not interfere with a first instance judge’s decision on costs unless it is wrong in principle or the judge is plainly wrong in the exercise of discretion.  See CCMJ v SSM (formerly known as SKL) [2019] HKCA 267 at [27]. 

25.  The general practice of the court in relation to the determination of an appropriate costs order in applications related to children was summarised by Yuen JA in TPL v WYY (formerly known as WYY), unrep., CACV 47 & 61 of 2014, 15 December 2014 as follows:

“‘General practice’ - no order as to costs

14.1. One starts with the ‘proposition’ or ‘general practice’ (though not a ‘principle’: see London Borough of Sutton v Davis (Costs)  No.2 [1994] 2 FLR 569 at p570H)  that in applications to do with children, the usual order should be no order as to costs.

14.2. This approach stems from the aspiration that in these applications the court is seeking to find an arrangement which is best for the children, so that the only ‘winner’ is the children, and neither parent should be regarded as the ‘winner’/‘loser’, although they had mutually exclusive proposals regarding custody and care and control.

14.3. The rationale is that when a court considers custody and care and control of children, the proceedings are inquisitorial rather than adversarial. In the court’s search for the best option available, it 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’ (LB of Sutton v Davis (No.2) at pp570H -571C).

14.4. As the English court of appeal observed in R v R (Costs: Child Case) [1997] 2 FLR 95 at p97, there is a ‘possibility that in effect a costs order will add insult to the injury of having lost in the debate as to what is to happen to the child in the future; it is likely to exacerbate rather than to calm down the existing tensions; and this will not be in the best interests of the child’.

14.5. Having said that, this general practice is not a rigid rule. In particular, the court must be careful that this approach to costs should not be abused eg in cases where one parent has more means at his disposal than the other who does not qualify for, or prefers not to use, legal aid. The practice should not provide the opportunity for one parent to wear the other down financially by means of multiple interlocutory skirmishes.

Exceptional circumstances

15.1. Accordingly the courts have said that this approach to costs does not apply in exceptional circumstances, such as where the conduct of one party has been reprehensible, or the party’s stance has been beyond the band of what is reasonable (LB of Sutton v Davis (No.2) at p571B-C, following Havering LBC v S [1986] 1 FLR 489 and Gojkovic v Gojkovic (No. 2)  [1992] Fam 40).

15.2. However, in considering whether the exception applies in a particular case, the court should not be too quick to label a parent’s conduct as ‘unreasonable’. As Hale J (now Baroness Hale SCJ)  observed in R v R at p98B,

‘The fair point is made that in children cases one must not confuse unreasonableness in relation to the child – because one might say that we are expected to be unreasonable in our attitudes to our children – and unreasonableness in the attitude to the litigation’.

15.3. Merely because a judge, dealing with a case dispassionately and objectively, considers one parent’s proposals hopeless does not justify a costs order against him/her. As Butler-Sloss LJ said in Re G (Costs: Child Case) [1999] 2 FLR 250 at p252G:

‘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 who is on legal aid generally advised by counsel and solicitors to the extent to which they should continue to litigate’.

15.4.    To that I would add this proposition, that even if a court finds a parent’s conduct reprehensible, or his/her conduct in the litigation unreasonable, and the court orders that one party should pay the other’s costs, the costs so ordered should be no more than is necessary to reflect the exceptional circumstances.  This is because of the policy consideration in the rationale discussed above, ie that it is in the best interests of the children that there should be no order as to costs.”

26.  It is thus well established that the general practice is that there should be no order as to costs in applications involving children matters, save that where there exist exceptional circumstances, such as the reprehensible or unreasonable litigation conduct of a party, it is open to the court to make a proportionate adverse costs order to reflect the same.

27.  Notwithstanding that the parties are unrepresented, they have been able to lodge comprehensive written submissions with the court.  Having considered the papers, we think it appropriate to exercise the power under Order 59 rule 2A(5)(a)  of the Rules of the High Court, Cap 4A to determine the matter on paper, and we have therefore determined this application without an oral hearing on the basis of the written materials filed.

Discussion

28.  As stated above, the grounds of appeal contend that that the Judge had erred in her exercise of discretion on costs, either by making mistakes as to the underlying facts, or by failing to have regard to relevant matters.  In the discussion below, we shall focus on those complaints that we regard as being at the crux of the petitioner’s contention that the costs order made by the Judge in the Decision was plainly wrong.

29.  As mentioned above, one of the petitioner’s main submissions is that the Judge was wrong to have formed the view that his litigation conduct was “needlessly aggressive and not child centred” by reference to his claims of alienation against the respondent (which were rejected by the Judge)  to, for instance, initially seek sole custody of the Child by way of the C&C Summons. 

30.  The petitioner essentially seeks to support this submission by stating that he “had grounds and evidence to honestly believe that [the respondent’s] conduct amounted to alienation at the time he issued the [C&C Summons]” (see [7] of his submission).  However, this was clearly rejected by the Judge.  In our view, the Judge, who had presided over the proceedings since their inception and had the benefit of examining and assessing the evidence of the parties first hand, was in the best position to adjudicate on this issue. Moreover, this court expressed the view in the 2021 CA Judgment (at [92] to [98])  that there was no basis to interfere with the Judge’s findings on (and thus her rejection of)  the petitioner’s claims of alienation.  We therefore do not think that there is any substance in this complaint.

31.  Separately, the petitioner submits that the Judge was mistaken in stating that the refiling of the petitioner’s affidavit evidence was “without agreement”.  He claims that he understood from his then counsel and was “under the honest and genuine belief” that he had been directed by (and thus had permission from)  the Judge to refile his evidence (see [9] of the petitioner’s submissions), so that the Judge was not justified in regarding this as unreasonable litigation conduct on his part.

32.  The respondent submits that this is factually wrong (see [7] of the respondent’s submissions), in that the Judge had made clear to the parties at the 2^nd PTR that due to the undesirable state of the parties’ evidence, she was not prepared to accept refiling of evidence without the parties first reviewing the same. 

33.  A copy of the transcript of the hearing of the 2^nd PTR on 2 May 2019 was provided in the bundles for this application, and we have had the opportunity to examine material excerpts from the same.  It is clear from that transcript (in particular between p 4G and p 7E)  that the Judge made it abundantly clear that she was not permitting the wholesale refiling of evidence, but that she was calling on the parties to review their respective evidence, decide whether any matters should be taken out, after which the Judge would consider the evidence and decide whether or not it should be refiled.  As the hearing in question was in chambers and not open to the public, we do not think it appropriate to set out the exchanges in this judgment.  However, it is clear that the petitioner (who was then legally represented)  had no reasonable basis for thinking that it was open to him to simply refile his evidence, without the respondent’s agreement or the leave of the court (neither of which was sought or obtained).  There was therefore no error of fact by the Judge in this regard.

34.  As to the complaints about the Judge’s views as to the inclusion of audio recordings, we do not think, reading the Decision fairly, that this was a significant factor in the Judge’s assessment of the petitioner’s litigation conduct.

35.  We therefore do not consider it reasonably arguable that the Judge had erred by relying on erroneous statements of fact in reaching her conclusions on the petitioner’s litigation conduct, which led her to come to the decision which she did as to the costs orders made against the petitioner.

36.  The petitioner’s other complaints related to matters allegedly overlooked by the Judge.  The main such matter (referred to in his written submissions at [13])  was the lateness of the respondent’s Relocation Summons, which the petitioner contended that the Judge had failed to consider in reaching her decision on costs.  However, as the respondent rightly submitted, the Judge had in the Decision specifically decided that neither party should be penalised for the lateness of their applications, and thus had consciously made no order as to costs in respect of either the Relocation Summons or the C&C Summons.  As we have noted in [5] above, this part of the Decision is not challenged.

37.  As is apparent from the Decision, the Judge all along had in mind the lateness of the Relocation Summons (and also that of the amendment of the C&C Summons).  The lateness of these applications and amendments, and whether such lateness warranted any penalty in costs against either the respondent or the petitioner, were issues expressly identified for determination by the Judge (see [8] of the Decision).  Having declined to penalise the respondent in costs for the late filing of the Relocation Summons (and by the same token, having declined to penalize the petitioner in costs for his late amendment to the C&C Summons), there was no reason for the Judge to take account of this matter in considering how to deal with the costs of the earlier periods in respect of which she made the adverse costs orders against the petitioner.

38.  As to the complaint that the Judge overlooked aspects of the litigation conduct of the respondent, it seems to us that the Judge, having had oversight of the matter over a considerable period of time, would have had well in mind the respective parties’ conduct in coming to her conclusions as to costs, and we do not think there is any merit in this complaint either.

39.  Finally, as to the suggestion that the Judge should have had regard to the potential adverse impact of the costs order on the petitioner’s position in the ongoing proceedings, we agree with the Judge that it is difficult to see any adverse impact arising, having regard to the limited and self contained nature of the costs orders made against the petitioner.

40.  We accordingly do not consider it reasonably arguable that the Judge had failed to consider relevant considerations in making her costs order in the Decision.

41.  For completeness, we should add that in view of the parameters specified in the costs orders made by the Judge, namely that the petitioner is to be responsible for (i)  the respondent’s costs for the specific period between 6 November 2018 (date of order made for the filing of Scott Schedules)  and 7 January 2019 (date of filing of the C&C Summons seeking sole custody); and (ii)  a specified portion (30%)  of the respondent’s costs for the period between 8 January 2019 (date since the C&C Summons)  to the commencement of the first trial, we do not consider it reasonably arguable that the cost sanctions imposed was more than was necessary to reflect the unreasonable litigation conduct on the part of the petitioner as found by the Judge.

Disposition and costs

42.  The petitioner has therefore failed to establish that it is arguable that the Judge had misunderstood the law or the evidence or that the exercise of her discretion was plainly wrong. Accordingly, the threshold requirement for granting leave to appeal has not been met.  In our view, there is no reasonable prospect of success in this intended appeal, nor is there some other reason in the interests of justice why the appeal should be heard.

43.  For the above reasons, we do not grant leave to appeal to the petitioner, and accordingly the Summons dated 24 August 2022 is dismissed.

44.  As the leave application is in our view wholly without merit, we make a further order pursuant to Order 59 rule 2A(8)  that no party may under rule 2A(7)  request the determination of this application to be considered at an oral hearing inter partes.

45.  Costs should follow the event.  We make an order nisi that the petitioner do pay the respondent the costs of this application, to be taxed if not agreed, on a party and party basis. 

46.  Any party seeking to vary the costs order nisi shall lodge written submissions within 7 days of the handing down of this judgment, failing which the order shall become absolute.