C, K T v. G, T

FCMC 16278/2018

[2024] HKFC 35

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 16278 OF 2018

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DECISION

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1.  This is the Paying Party’s application for appeal against the decision of Master Newton Mak made on 1 February 2024. The relevant parts of the Order that touch upon appeal are as follows:-

“2. The Paying Party has leave to file and serve a List of Objections on Part 1 and Part 2 on Party and Party Costs on or before 6 March 2024 ON THE CONDITION that the Paying Party makes a payment into court in the sum of HK$80,700 at or before 4:00 pm on 21 February 2024 (“the Condition”).

3. If the Paying Party fails to comply with the Condition pursuant to paragraph 2 above or fails to file and serve a List of Objections on Part 1 and Part 2 on Party and Party Costs on or before 6 March 2024:-

(1) The Paying Party is debarred from filing and relying on any List of Objections at the taxation hearing; and

(2) The Receiving Party do write to the Court to seek a date to be fixed for the adjourned taxation hearing.”

2.  In fact, according to the Notice of Appeal dated 14 February 2024, the Paying Party only asks for “a reduced payment and a stay until the vary [sic] order hearing decision is made”.

3.  By the order of Deputy District Judge Grace Chow dated 19 February 2024, an interim stay of the Master’s Order was granted, pending the outcome of the re-fixed hearing scheduled before me at 2:30 pm today (22 February 2024).

4.  The Paying Party claims that this is an urgent application as the deadline for compliance with the Master’s Order for the payment into court was 4:00 pm yesterday, which has already expired.

BACKGROUND

5.  Divorce proceedings were commenced by the Paying Party on 24 December 2018 (see Judgment of [2020] HKFC 152). The action has now come to the stage of taxation proceedings on costs and was set down for a taxation hearing on 10 November 2023 before Master Athena Wong. The said hearing was attended by the Petitioner (the Paying Party) in person, the Respondent (the Receiving Party) represented by the law costs draftsman, and the Director of Legal Aid, being an interested party as the Receiving Party was legally aided in the proceedings.

6.  At the said hearing, the Paying Party claimed that he had not received, inter alia, the Notice of Commencement of Taxation (“NOCT”) and the Receiving Party’s Bill of Costs (“BOC”). He orally applied for leave to file his List of Objections and the application for such leave was adjourned to be heard by Master Newton Mak on 1 February 2024.

7.  In fact, the NOCT and BOC were filed and served by the Receiving Party back in early 2022 (on 10 February 2022) under O 62 r 21(2) of the Rules of the District Court. Pursuant to para 21(1) of Practice Direction 14.3, the Paying Party was required to file and serve a List of Objections within 28 days, but he failed to do so. The parties disputed whether the address provided by the Paying Party was correct and, as such, whether the NOCT and BOC were properly served.

8.  In any event, the dispute as to service of the NOCT and BOC had been dealt with by Master Newton Mak on 1 February 2024, and the learned Master granted leave to the Paying Party to file and serve the List of Objections, but on condition that the Paying Party needs to make a payment into court in the sum of HK$80,700.

9.  The only question before me today appears to be whether the amount of HK$80,700 (being the costs summarily assessed) ordered to be paid into court was a reasonable sum or should be reduced, as the Paying Party suggested.

10.  The Director of Legal Aid has no comment on the Paying Party’s application concerning the sum of HK$80,700 and its attendance was excused.

THE PARTIES’ SUBMISSIONS

11.  The Paying Party submitted his Skeleton Submissions at the eleventh hour before the hearing. In it, it appears that the Paying Party allegedly has an ongoing application to vary the costs orders nisi of all the previous costs orders made by the family court from 12 May 2020 onwards up to 20 December 2021, despite all those costs orders nisi had become absolute (“the Variation Application”). This court is not aware of such an application.

12.  The Paying Party says what he meant by “a stay until the vary order hearing decision is made” as stated in the Notice of Appeal was referring to the said application just mentioned, namely the Variation Application. He submits that the Master’s Order made against him for incurring extra costs for filing the List of Objections would be wrong if the Paying Party can succeed in the Variation Application in the family court. He therefore asks for a stay of the Master’s Order.

13.  The Paying Party also challenges the costs of the application for leave to file the List of Objections (including part of the costs of the hearing on 11 November 2023) summarily assessed by the Master at HK$80,700. He submits that the sum of HK$80,700 was “disproportionately high” and included “unreasonable” costs incurred. He also submits that the Master was wrong in taking into consideration any future costs to be incurred.

14.  Ms Lam, solicitor appearing on behalf of the Receiving Party, submits that the learned Master was right in considering that the amount of the payment into court should reasonably reflect the Receiving Party’s costs of dealing with the application and wasted costs. She disagrees that the learned Master has assessed the costs of the application by including any future costs.

15.  The Statement of Costs submitted by the Receiving Party comprises the work done by the solicitors in the sum of HK$$100,100 (including 2 hours of work of the law costs draftsman) and the wasted costs at HK$24,186.67.

16.  At the hearing on 1 February 2024, the Master summarily assessed the Receiving Party’s costs of the application at HK$80,000 and the Director of Legal Aid’s costs at HK$700 (See paras 5 & 6 of the Order), totaling HK$80,700.

LEGAL PRINCIPLES

17.  The Court will refuse to interfere with a taxation decision, unless it is shown to have involved a mistake of law or disregard of principle; or under a palpable misapprehension as to facts; or plainly in reliance on irrelevant matters; or to be such as to fall outside the generous ambit within which a reasonable disagreement was possible (Nam Chun Investment Co Ltd v Director of Lands (2007) 10 HKCFAR 523; Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512).

18.  As regards summary assessment, where costs are awarded on a party-and-party basis, only such costs as were “necessary or proper” for the attainment of justice or for enforcing or defending the rights of the receiving party are allowed, as they are allowed in an ordinary taxation: O 62 r 28(2), the Rules of the High Court. Pursuant to Practice Direction 14.3, the court will adopt a broad-brush approach to ensure the final figure assessed is not disproportionate and/or unreasonable having regard to the nature and circumstances of the application or matter and the underlying objectives stated in O 1A of the RHC, even if there is no challenge to individual items (Poon Shu Fan v Wong Tin Yan, supra).

19.  The appeal on costs is not to be dealt with by way of an actual rehearing of the matter while it is an appeal from a decision of a master (Wealth Growth (HK) Investment Ltd v Si Bun Bun Carmen Co Ltd [2021] HKDC 1363).

ANALYSIS

The stay application

20.  In addition to the 3 pages Skeleton Submissions submitted for today’s hearing, the Paying Party also lodged a bundle of 35 pages of documents, which included (at pages 4 to 16) a Skeleton Submissions of the Paying Party dated 31 January 2024, an undated Draft grounds of appeal, and an undated Affidavit of the Paying Party.

21.  The Paying Party clarifies to the court that these are all documents he lodged to the family court for the Variation Application. He said that, although the date shown on the Skeleton Submissions was 31 January 2024, ie one day prior to the hearing before Master Newton Mak on 1 February 2024, these documents have never been presented to the Master, nor were they filed in this general civil court of the District Court.

22.  Ms Lam confirms that the Receiving Party has received the set of documents filed by the Paying Party. However, she submits that no hearing date has been fixed for that application, and no direction has been given by the family court. She submits that the Variation Application is totally out of time and procedurally wrong. She further submits that the Variation Application is not relevant to the present appeal and was never discussed before the learned Master.

23.  In my decision, this is not the proper forum to hear the Paying Party’s application for a stay and I refuse to hear the application. My reasons are as follows. First, as it is not disputed between the parties that the issue of the Variation Application was never discussed before the Master, and there was never any stay application made before the Master, I see no reason why the granting of a stay can be a live issue for the present appeal.

24.  Secondly, in respect of the stay application, there was no summons taken out by the Paying Party, nor was there any affirmation filed by the Paying Party in support of the same.

25.  Thirdly, and more importantly, it was understood by the Receiving Party and the Director of Legal Aid that the “stay” requested by the Paying Party was only an interim stay pending the outcome of today’s appeal hearing, not a stay pending for the outcome of the Variation Application, which has just clarified by the Paying Party in court just now. The Director of Legal Aid requested that they needed not attend today’s hearing on the basis that this appeal hearing would only deal with the amount of the $80,700 summarily assessed, and their excuse from today’s hearing has been granted by this court. They have no notice of the Paying Party’s change of application for stay.

26.  In the premises, the Paying Party’s application for a stay of execution of the Master’s Order pending the outcome of the Variation Application is dismissed on procedural flaw.

The Summary Assessment on costs

27.  The Paying Party contends that the Statement of Costs submitted by the Receiving Party for summary assessment was lack of details. He refers to the handwritten statement at page 17 of his bundle. He said that such Statement of Costs only comprises two components without giving any details of work done:

(1)  P’s Application for leave to file his List of Objections

KL: 25 hours x $3,860 = $96,500

LCD: 2 hours x $1,800 = $3,600

Total: $100,100

(2)  Wasted Costs

KL: 5 hours 20 mins x $3,860 = $20,586.67

LCD: 2 hours x $1,800 = $3,600

Total: $24,186.67

28.  Ms Lam refers to a table which she compiled to explain the breakdown of costs for this HK$100,100 (see paragraph 16 of her Hearing Note filed for this hearing). The table includes further details of KL’s work done and LCD’s work done. She confirms to the court that the entire breakdown of costs, as shown in the table, was indeed mentioned and discussed in court before the learned Master, and the parties had made submissions in relation to the items set out therein before the Master.

29.  The Paying Party then submits that, as a layman, he could only suggest to the Master that the amount charged by the solicitors of the Receiving Party was excessive, as he did not have the knowledge to understand how the solicitors of the Receiving Party would entail the number of hours for the work done.

30.  In my view, it is important to note that the Paying Party agreed that he was given the opportunity to make submissions in relation to the Statement of Costs. Therefore, the learned Master must have considered the submissions of both parties before arriving at the figure of HK$80,000 (or HK$80,700 if the DLA costs are included).

31.  The Paying Party then alleges that the Master incorrectly took into account of the costs of some future hearings. Ms Lam disagrees that it was the case. Since there is no transcript of the hearing of the learned Master, this court is unable to see any evidence that the Master took future costs into account as suggested by the Paying Party. I reject the Paying Party’s submission.

32.  The Paying Party argues that the Master should have included a provision in his costs order that, in the event the Paying Party is successful in the Variation Application, the Receiving Party should reimburse the Paying Party for the costs, ie the payment into court, he is going to pay.

33.  I do not agree. In my view, the costs summarily assessed by the learned Master are independent of the alleged Variation Application. I do not see any direct correlation existing between the two. Even if the Paying Party were to succeed in the Variation Application, he would still have to pay for the costs order assessed by the learned Master, at HK$80,700, for his application for leave to file the List of Objections.

34.  Since the Paying Party is not able to show to the court which part of the summary assessment involved a mistake of law or disregard of principle, this court will not disturb the Master’s assessment.

35.  However, having considered the Paying Party’s situation in a round, I will grant an extension of time (until next Wednesday, ie 28 February 2024) for the Paying Party to make the payment into court.

CONCLUSION

36.  In the circumstances, the Paying Party’s appeal is dismissed with costs.

37.  I make a costs order nisi that the Paying Party shall pay to the Receiving Party the costs of this appeal forthwith, to be summarily assessed. The Receiving Party’s own costs shall be taxed in accordance with the Legal Aid Regulations.

38.  The Receiving Party has submitted a statement of costs to the court at the end of the appeal hearing. I direct that the Paying Party to file a statement of objections (if any) within 7 days. I shall assess the costs summarily on paper thereafter.

39.  Leave be granted to the Paying Party to make the payment into court in the sum of HK$80,700 at or before 4:00 pm on 28 February 2024 in compliance with paragraph 2 of the Order of Master Newton Mak dated 1 February 2024.