CY v. WTW

FCMC 15393 / 2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 15393 OF 2014

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RULING ON COSTS

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1.  This is the hearing of the Respondent husband (hereinafter called “H”)’s application to vary the costs order nisi dated 27 October 2015 arose from the Petitioner wife (hereinafter called “W”)’s ex-parte application for a prohibition order against H by way of her 4^th Affidavit filed on 5 August 2015.

A. Background

2.  W, 64, is a housewife.  H, 67, is retired.  The parties married in April 2001.  There is one child of the family now living, namely a daughter born on 15 September 2001.  The said child is at present living with W in Hong Kong and has been taking care by W.  The divorce petition was issued by W on 19 November 2014 on the ground that H has behaved in such a way that W cannot reasonably be expected to live with him.  By the divorce petition, W prays for the custody of the said child, an order for maintenance pending suit (hereinafter called “MPS”), a periodical payments order, a secured periodical payments order, a lump sum payment order, a secured lump sum payment order, a property adjustment order and costs.

3.  H was ordinarily resident in Hong Kong and carried on business in Hong Kong.  W through her solicitors (hereinafter called “JL”) made an ex-parte application for the substituted service of the divorce petition and the accompanying court documents by the Affirmation of Fung Ting Ting filed on 13 January 2015.  In the said Affirmation of Fung Ting Ting, it was affirmed that despite that several personal visits were made to H’s residential address and working place in Hong Kong during the period from 19 November 2014 to 31 December 2014, the process server had not been able to locate or get in touch of him for the purpose of effecting personal service of the divorce petition and court documents.  JL also sent appointment letters to him at his residential address and working place for the purpose of making appointments with him for effecting personal service of the divorce petition and accompanying court documents.  He did not show up at the appointments.  By her 1^st Affidavit filed on 17 March 2015, W sworn that since H left the former matrimonial home in Kowloon on 24 September 2014, she had lost contact with him and despite numerous attempts she had been unable to get in touch with him, and he had also ceased contact with the said child.  On 23 March 2015, it is ordered by Deputy District Judge I. Wong that the service of the divorce petition and the accompany court documents be substituted by sending them to the said H’s residential address and working place in Hong Kong and by inserting an advertisement in a local Chinese newspaper.  Pursuant to the mode of service as prescribed by the said order, substituted service of the divorce petition and the accompanying court documents was effected by the end of May/ beginning of June 2015.

4.  The First Appointment that was initially fixed on 2 February 2015 was adjourned to 7 May 2015 and then further adjourned to 31 July 2015 due to that the divorce petition and the accompanying court documents had not been able to be served on H.

5.  On 27 July 2015 W filed her 3^rd Affidavit in support of the application for MPS for her and the said child.  In her 3^rd Affidavit, she sworn that when she received her bank statement for September 2014, it transpired to her that on 8 September 2014 i.e. about two weeks before he left the former matrimonial home H deposited a sum of HK$500,000 into her bank account.  On 26 February 2016 the said child received from the son of H and his ex-wife a Whatsapp message that H deposited the sum of HK$500,000 in September 2014 into W’s bank account as family expenses for W and the said child, and he would continue paying W HK$80,000 per month as family expenses from March 2015, to be paid at the beginning of each succeeding month.  He paid HK$80,000 for March 2015.  He has however unilaterally reduced the monthly payment from HK$80,000 to HK$70,000 since April 2015.  By the summons filed on 3 August 2015, W applied for an order for MPS for her and the said child in the sum of HK$80,000 per month.

6.  Despite that JL served H with W’s Bundle for the First Appointment dated 31 July 2015 and a copy of W’s 3^rd Affidavit together with the exhibits thereto by ordinary post with a covering letter on 27 July 2015, he was absent from the hearing dated 31 July 2015.  By the order dated 31 July 2015, it is ordered that the First Appointment be further adjourned to 27 October 2015, parties’ personal attendance at the adjourned hearing is required, penal notice be endorsed and to be personally served on H and the parties do file and serve the Form E.

7.  On 3 August 2015 W filed her 4^th Affidavit in support of the ex-parte for an order prohibiting H from leaving Hong Kong pursuant to s.52E of the District Court Ordinance.  In her 4^th Affidavit, W sworn that on 31 July 2015, after attending the First Appointment hearing, she had a telephone conversation with a friend, who told her that she had seen H 1 or 2 weeks ago at a cricket club in Hong Kong and she was told by him that he would leave Hong Kong for a period of time, and she therefore verily believed that H was about to leave Hong Kong.   W further sworn that by reason of the matters referred to in the above paragraphs 3 to 6, she verily believed that H was trying to avoid service of process in order to avoid filing his Form E and personally attending the next hearing or otherwise to delay and obstruct the ancillary proceedings.

8.  The Decree Nisi was granted on 28 August 2015.

9.  Withers, the solicitors for H, filed a Notice To Act in these proceedings on 23 October 2015.  On 26 October 2015 Withers wrote to seek the court’s leave to excuse H’s personal attendance at the hearing dated 27 October 2015 for H was in Canada and had been advised by doctor not to travel due to his cardiac problem.  H subsequently sworn in his 2^nd Affidavit that he left Hong Kong for retirement in March 2015.

10.  On 27 October 2015 upon H’s solicitor’s application for time, the First Appointment was further adjourned to 25 November 2015 and an extension of time for the filing of Form E was granted to H.  Both parties accepted that the ex-parte application for the prohibition order by W’s 4^th Affidavit is no longer necessary in view of that he has entered appearance in these proceedings by solicitors since 23 October 2015, though the parties held different views on the question of costs of the ex-parte application.  On 27 October 2015 it is ordered nisi that H is to pay W’s costs of the ex-parte application, and that the costs order nisi becomes absolute 28 days after the order is made unless a party has applied for varying the order.

11.  On 23 November 2015 Withers wrote to the court for the variation of the costs order nisi dated 27 October 2015 such that there should be no order as to costs.  On the same day, the said order dated 27 October 2015, regarding the costs issue of W’s ex-parte application, was perfected.

12.  On 2 December 2015 H took out the summons for variation of the costs order nisi such that there should be no order as to costs and for enlargement of time for the making of such application.  On the return date on 8 January 2016, H’s application for variation was adjourned to 23 February 2016 for argument, with half day reserved.

B. Procedural objections

13.  I shall deal with the procedural objections raised by W to H’s application for variation of the costs order nisi as follows.

14.  I take the view that W’s argument that on 25 November 2015 this court has already rejected H’s application to vary the costs order nisi by the letter dated 23 November 2015 is not supported by what was taken place.  On 25 November 2015 this court did not deal with the said letter dated 23 November 2015.  At the hearing dated 25 November 2015, I actually told the parties that it was not my intention to deal with the letter dated 23 November 2015 on that day, notwithstanding that at that time in relation to the said application I reminded the parties of Hon Ma CJHC (as he then was)’s observation as set out in PCCE-HKT Telephone Ltd v Telecommunications Authority (unrep. CACV No.274 of 2003, 7 September 2004.

15.  As to W’s argument that since the costs order dated 27 October 2015 was perfected, the court no long has jurisdiction to hear H’s application for variation, I entirely agree with H’s submission that that point is misconceived and can be quickly dealt with.  By the order dated 27 October 2015, it is directed that the costs order nisi becomes absolute 28 days after the order is made unless a party has applied for varying the order.  H therefore had until 24 November 2015 to take out the application.  The order dated 27 October 2015 was perfected on 23 November 2015 i.e. before the costs order nisi was to become absolute.  What was perfected was clearly only the costs order nisi.

16.  In this regard, Hon A Chan J held in RTX Products Hong Kong Ltd v Li Yiu Fai (unrep. HCA No 1777 of 2009, 12 November 2014) that: -

“9. The situation may be different if a judgment is perfected before the order nisi becomes absolute. It may be said that in such a case it is inherent in the judgment that the costs order has yet to become absolute and the door remains open to an affected party to make an application to have it varied, including an application for an extension of time to make the variation application. However, once the order has become absolute, I am inclined to the view that any disagreement will then have to be pursued on appeal. This is of course not the situation before this court.”

17.  It is worthy of noting that the letter dated 23 November 2015 was sent within time for the making of the application for variation of the costs order nisi.  In respect of this application by letter, W argued that the application to vary the costs order nisi should be made by way of summons and therefore the court should not entertain the application by letter.  She sought to rely on PCCE-HKT Telephone Ltd v Telecommunications Authority.  In the paragraph 11 of that judgment, Hon Ma CJHC (as he then was) observed that “Applications to court should be made by way of a summons or motion and not by the informal way that was chosen in the present case” The reason for this requirement is to enable the other side and the court to understand exactly the nature and extent of which is being asked for.  Otherwise, there is a danger that it becomes unclear just what is being sought from the court, thereby allowing parties to ask for relief in a haphazard manner. 

18.  I accept that an application to vary a costs order nisi should be made by way of summons or motion: see Order 32 r.1 Rules of the District Court.  I however also accept that the making of such an application by letter is at worst an irregularity.  The court may waive such irregularity under Order 2 r.1.  The main question is whether any prejudice has been caused by the fact that the application was made by letter and not by the filing of a summons.  In the present case, the nature and extent of the application are set out in the letter dated 23 November 2015.  It clearly said that the said application is for variation of the costs order nisi dated 27 October 2015 such that there should be no order as to costs.  On the evidence before me, I do not see that prejudice has been caused by the fact that the application was made by letter but not by way of summons.  I therefore regard that I should not reject the application by reason of the absence of a summons. 

19.  In view of my ruling in the paragraphs 14 to18 above, it is not necessary to deal with the summons dated 2 December 2015, save as to the question of costs thereof.

C. Legal principles on costs of interlocutory applications

20.  The court has a wide discretion as to costs.  The relevant provisions in the Rules of the District Court governing the exercise of discretion as to costs of interlocutory applications are Order 62 rr. 3(2A) & 5 that contain amendments introduced as a result of the Civil Justice Reform (“CJR”).

21.  The effect of Order 62 r. 3(2A) was as explained in Melvin Waxman & Another v Li Fei Yu & Another [2013] 6 HKC 424 that the “rule” that costs normally follow the event is no longer the usual order in an interlocutory application, but remains an option. 

22.  In considering the appropriate order the court must have regard to the underlying objectives of CJR: Order 62 r.5 (1)(aa).  One of these objectives is the discouragement of unnecessary or unmeritorious applications: see White Book at 62/3/3B (pp1162-1163 2016 HK Civil Procedure Vol 1). 

23.  When dealing with costs orders, under Order 62 r. 5(1)(e) the court may take into account the conduct of the parties.  Rule 5(2) provides that conduct for this purpose includes (a) whether it is 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, exaggerates his claim; and (d) conduct before, as well as during, the proceedings.

24.  Under Order 62 r. 5(1)(f), the court may take into account whether a party has succeeded on part of his case, even if he has not been wholly successful.

C My findings

25.  The District Court’s jurisdiction to make a prohibition order is provided by s.52E of the District Court Ordinance Cap. 336 (hereinafter called “DCO”).  Under subsection 1, the District Court shall have jurisdiction to make a prohibition order to facilitate the enforcement, securing or pursuance of- (a) a judgment against that person for the payment of a specified sum of money; (b) a judgment or order against that person- (i) for the payment of an amount to be assessed; or requiring him to deliver any property or perform any other act; or (c) a civil claim (other than a judgment)- (i) for the payment of money or damages; or (ii) for the delivery of any property or the performance or any other act.

26.  W had pursued her application on the basis that by reason of the matters referred to in the above paragraphs 3 to 6, she verily believed that H was trying to avoid service of process in order to avoid filing his Form E and personally attending the next hearing or otherwise to delay and obstruct the ancillary proceedings including but not limited to her application for MPS. It seems that her application is made under subsection 1(b) & (c) of s.52E of the DCO.

27.  S.52E(2) of the DCO provides that the court shall not make an order under subsection 1(b) unless it is satisfied that there is probable cause for believing that: (a) the person against whom the order is sought is about to leave Hong Kong; and (b) by reason of paragraph (a), satisfaction of the judgment or order is likely to be obstructed or delayed. 

28.  S.52E(3) of the DCO provides that the court shall not make an order under subsection 1(c) unless it is satisfied that there is probable cause for believing that: (a) there is a good cause of action; (b) the person against whom the order is sought- (i) incurred the alleged liability, which is the subject of the claim, in Hong Kong while he was present in Hong Kong; or carries on business in Hong Kong; or is ordinarily resident in Hong Kong; (c) that person is about to leave Hong Kong; and (d) by reason of paragraph (c), an judgment that may be given against that person is likely to be obstructed or delayed. 

29.  W is therefore required to satisfy the court that there is probable cause for believing that H is about to leave Hong Kong.  In her 4^th Affidavit, W further sworn that during a telephone conversation, her friend told her that she was told by H that he would leave Hong Kong for a period of time and W therefore verily believed that H was about to leave Hong Kong.  In his 2^nd Affidavit, H sworn that he did not see W’s said friend in July 2015 or anytime thereabout, and he therefore certainly did not tell her that he was leaving Hong Kong.  He also raised the query that what W deposed of in this respect is double hearsay evidence that was inherently not reliable.  He further remarked that given the time sensitive nature of her application and the seriousness of her allegation against him, one would expect W to have at the least clarified with her friend whether the said conversation was taken place 1 or 2 weeks ago, but evidently W did not do so and she was not even able to tell when exactly the alleged conversation between her friend and him took place, that there was no evidence as to the relationship between her said friend and him or whether he or her said friend would regularly turn up at the said cricket club that is not one of the club memberships disclosed in the parties’ Forms E, and that W was also silent on why she did not ask her friend to make an affirmation or whether the same could be done if required.  Despite that double hearsay evidence is admissible under Order 41 r.5 provided that the chain of information was given (see White Book at 41/5/3 pp857 HK Civil Procedure 2016 Vol 1), having carefully considered I take the view that W’s evidence in this respect is flimsy and not reliable.  I would therefore regard that W’s ex-part application by her 4^th Affidavit is unmeritorious.

30.  Furthermore, it seems that the statement allegedly made by H to W’s friend at the cricket club does not actually show that H was about to leave Hong Kong imminently.  All that H said was that he would leave Hong Kong sometime in the foreseeable future.  There was no indication that that would happen imminently.  In order to satisfy the requirement that H is “about to leave Hong Kong”, there should be evidence to show that his departure should be imminent (see White Book at 44A/2/5 pp895 HK Civil Procedure 2016 Vol 1)  The evidence adduced by W falls short of what is required.

31.  In view of my findings in the paragraphs 29 & 30 above, it is not necessary to deal with the parties’ arguments on whether H had been avoiding the service of the divorce petition and the accompanying court documents or otherwise obstructing or delaying W’s claim for ancillary reliefs.

D. Conclusion

32.  I place particular significance on the finding that the ex-parte application is unmeritorious. 

33.  Inasmuch as the ex-parte application was discontinued, I take the view that W cannot be regarded as the successful party. 

34.  While the general rule is that a party withdrawing a claim should pay for the costs of the opposite party, the court has complete discretion in dealing with the issue of costs and to do justice between the parties (see White Book at 21/5/12 pp511 HK Civil Procedure 2016 Vol 1), and in the present case where the discontinuance of the proceedings is due to the matter having become academic, rather than to any acknowledgment by W of likely defeat, I take the view that the general rule may be departed from.

35.  I remind myself of the provisions of Order 62 rules 3(2A) and 5 of the Rules of the District Court and caution myself of the need to consider the overall justice of the situation and examine all the relevant factors and circumstance.  Looking at the matters in the round, I regard that it is reasonable and just to make no order as to the costs of the ex-parte application by W’s 4^th Affidavit. 

36.  As to the costs of the application for variation of the costs order nisi, I presently do not see any reason why costs should not follow the event, except that I should take into consideration that had H made the application for variation by way of summons on 23 November 2015, the parties would have saved the arguments on procedural objections that took about half of the time and paper pushing of the present application.  Approaching with broad brush, I make the order nisi that W is to pay 50% of the costs of the application for variation.

37.  It is therefore ordered that:

(1) The costs order nisi dated 27 October 2015 be varied to the effect that there be no order as to costs of the application by W’s 4^th Affidavit; and it is further ordered nisi that

(2) W shall pay 50% of H’s costs of the application for variation of the costs order nisi dated 27 October 2015 by the letter dated 23 November 2015 and by way of the summons dated 2 December 2015, including reserved costs, with certificate for counsel’s attendance.  The order nisi becomes absolute 14 days after the order is made unless a party has applied to the court for varying the order.