TYCZ v. SKY

FCMC 6549 / 2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 6549 OF 2002

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DECISION

(Amendment of costs order under slip rule)

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Introduction

1. Under Order 20 rule 11 of the Rules of the High Court (“RHC”) or the slip rule, clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the court on summons without any appeal.

2. Relying on this rule, the respondent (for convenience, I shall still call her the “wife”) now seeks to amend the costs provisions of a consent order made on 27 January 2014 (“Consent Order”) to include a certificate for counsel as follows:

“7. The Petitioner do pay the costs of and occasioned by the Judgment Summons and the Inter Partes Summons dated 8^th November 2013 [1] and 6^th December 2013 [2] respectively including a certificate for counsel’s attendance 2 December 201[3][3], to be taxed if not agreed.” (proposed amendment is underlined)

3. The petitioner (for convenience, I shall still call him the “husband”) opposes this application. He argues that since the Consent Order was perfected, this court is now functus officio. Further, he advocates that the slip rule has no application to this case because (i) it was not the manifest intention of this court to grant counsel’s certificate for the hearing of 2 December 2013; and (2) there was no mutual agreement for inclusion of counsel’s certificate under the Consent Order.

4. Hence, put in very broad terms, there is only one issue before this court: can the Consent Order (which has been perfected) be amended under the slip rule or Order 20 rule 11 of the RHC to include a certificate for counsel?

Events leading to this application

5. For the purpose of this decision, I do not have to concern myself with the background and marital history of both parties. It is quite suffice for me to point out that the parties had long been divorced, as Decree Absolute was granted in August 2006. They have twin daughters (now 14) born within their wedlock. The wife has the custody of the twins.  Pursuant to an order made on 5 May 2011, the husband is required to pay $66,000 per month to the wife for the maintenance of the twins ($33,000 each daughter) (“Maintenance Order”). 

6. However, the husband started to default on payment since September 2011. The wife thus took out various applications, including a judgment summons, to enforce the Maintenance Order.

7. The judgment summons came before me for a call-over hearing on 2 December 2013 (“Hearing”).  The wife was represented by leading counsel, Mr David Pilbrow. The husband failed to turn up, nor to give instruction to his solicitors to appear on his behalf in the Hearing.  Nevertheless, since no notice to act or cessation to act has been filed and/or approved, his solicitors still attended the Hearing as a matter of courtesy to this court, but refrained from making any submission on behalf of the husband.

8. At the end of the Hearing, I issued a warrant of arrest for the arrest of the husband and reserved the costs of the Hearing. 

9. It is indisputable that the wife had not asked for certification of counsel’s attendance during or at the end of the Hearing.

10. After the Hearing on 8 January 2014, the solicitors for the husband made an offer to settle the arrears on payment including payment of costs of the judgment summons to be taxed if not agreed.  On the next day (9 January 2014), the wife’s solicitors replied and gave their comment on calculation of outstanding interest. They also invited the husband to agree on her costs (including counsel’s fee of $45,000) instead of going for taxation.

11. Despite further correspondences between the parties, the husband refused to agree on her costs. He insisted to go for taxation.

12. A summons dated 10 January 2014 essentially containing proposals for settlement of the arrears (about $1.65 million plus interest) was taken out by the husband.  Eventually, a consent summons dated 27 January 2014 (“Consent Summons”) was filed by the parties, which became the Consent Order.

13. About 3 months later, ie on 7 May 2014, the wife, upon advice of her law costs draftsman, invited the husband to agree amending the Consent Order to include certificate for counsel.  The husband rejected the proposal on 13 May 2014; he took the view that the attendance of counsel was “totally unreasonable and unnecessary”.  As a result, the wife took out this application for amendment under the slip rule.

Applicable legal principles

14. Generally speaking, an order or judgment cannot be amended after the same is sealed and perfected. But the court may at any time upon application order that a clerical mistake or that an error arising from accidental slip or omission in an order be corrected under the slip rule or Order 20 rule 11 of the RHC: see Hong Kong Civil Procedure 2014 (Vol. 1) at §20/11/1.  Sealing of an order is no bar to its application.

15. However, the error or omission to be corrected must be an error in expressing the manifest intention of the court.   In Yau Wah Hing & Another v Yuen Kay Ming, CACV 46 of 2012, unrep, 19 March 2013, Lam JA (as he then was) said,

“52. … The jurisdiction under the slip rule and Order 20 Rule 11 should be confined to cases which are truly inadvertent or accidental errors or omissions. As stated at para 20/11/1 of Hong Kong Civil Procedure 2013 the error or omission must be an error in expressing the manifest intention of the court: the court cannot correct a mistake of its own in law or otherwise, even though apparent on the face of the order. Though it may also cover accidental omission on the part of counsel or solicitor (see Man Ping Nam v Man Fong Hang (No 2) [2007] 10 HKCFAR 140 para 20), it cannot be relied upon to claim a relief which had not been canvassed in pleadings or evidence...” (underlined added)

16. The Court’s power to amend its order under the slip rule also applies to consent order or judgment: Moores Rowland (a Firm) v Grant Thornton (a firm) & Ors, HCA 745/2010, HCA 1126/2010, HCA 1873/2010 and HCMP 1284/2011, unrep, 8 June 2012.

17. In Cathay Pacific Airways Flight Attendants Union v Cheung & Choy (a firm), HCMP 1863/2007, 3 February 2009, Deputy Judge Au (as he then was) summarized the general principles concerning the court’s power to vary a consent order at §28 as follows:

“(1) A consent order may evidence a contract between the parties, in which case the court has no power to set it aside or vary its terms unless the usual grounds recognised in law to set aside or interfere a contract, such as fraud, mistake or misrepresentation, are established: Leung Yee v Ng Yiu Ming [2001] 1 HKLRD 309 (CA), 321H-J per Woo JA; Purcell v FC Trigell Ltd (t/a Southern Window & General Cleaning Co) [1971] 1 QB 358, 365F-G per Winn LJ.

(2)  However, a consent order may only mean the parties to it not objecting to the order being made, in which case, the court has a discretion to vary its terms according to normal principles: Leung Yee, supra, 321H-J; Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185; CY Tsun Investment Co Ltd v The Incorporated Owners of Hoi To Court (unrep., HCSA 16/2003, 2 July 2004, A Cheung J), paras 30-32.”

Discussion

18. The issues that arise can conveniently be considered under the following subheadings.

(i) Accidental slip/omission

19. Mr David Pilbrow, senior counsel for the wife, seeks to rely on the case of Winston Camera & Radio Co Ltd v Combi (Singapore) Pte Ltd [1988] HKC 156, in which the Court of Appeal applied the slip rule to correct an order, already perfected, where there was omission of counsel to seek costs and interests consequential upon the appeal judgment. He submits that this is the authority to confirm that,

“a mistake deriving from an accidental slip or omission of counsel in failing to ask for relief consequential on a judgment may come within the perimeters of O. 20 r 11.”

20. Putting aside the fact that the wife’s proposed amendment relates to a consent order (where separate and/or additional considerations apply), I think one needs to differentiate between the following scenarios:

(1) Where a party wins but no general costs order of the proceedings has been made yet (as in the case of Winston Camera (supra));

(2) Where a party wins and a general costs order of the proceedings has been made (as in para 7 of the Consent Order).

21. With respect, I am of the view that the case of Winston Camera (supra) should be distinguished.

22. Further, since certification for counsel’s attendance in the Hearing was not originally asked for, the wife cannot now use the slip rule to insert into the original order a provision which was not there.

23. In The Bank of China v Xinyuan Trading Co, CACV 276/1998, 21 June 2000, the appellant won the appeal and a costs order to the effect that “the costs of the appeal and of the application below should be to the appellant” was made. The appellant later made an application under the slip rule to include an order of a certificate for 2 counsel. Godfrey VP refused to amend the order and said this (which I humbly beg to agree):

“What is now sought to be done is to use the slip rule to insert, into this court’s original order as to costs, a provision which is not there, not because of any slip in exercising the court’s intention but because it was not originally asked for…The purpose of the slip rule is to enable the court to correct an error or omission made in an order ‘in expressing the manifest intention of the court…There was here no error ‘in expressing the manifest intention of the court’.”

24. In my view, the wife’s argument on accidental slip or omission cannot be sustained.

(ii) Costs reserved

25. Mr Pilbrow S.C. submits that since the costs of the Hearing were reserved, the question of certifying the attendance of counsel for the Hearing was also reserved for argument now.  It thus becomes irrelevant that he had not asked for certificate for counsel in the Hearing.

26. With the greatest respect to Mr Pilbrow S.C., this line of argument does not sit well with the general rule on costs reserved that it will be lost and not recoverable on taxation, as explained by the learned authors of Hong Kong Civil Procedure 2014 (Vol. 1) at §62/1/3:

“Meaning of related phrases –

…

(5) “Costs reserved” means that the costs will be lost and will not be allowed on taxation unless the court makes a specific order dealing with them at the conclusion of the proceedings (British Natural Premium Provident Association v Bywater [1897] 2 Ch. 531; Beckley v Colley (1904) 48 Sol. Jo. 261; How v Earl Winterton (No. 4) (1904) 91 L.T. 763). Such costs are not included in the costs of the action.”

27. The Consent Order purported to settle all arrears of maintenance, interest thereon and costs in respect of the wife’s judgment summons and other enforcement summonses. In other words, there was already conclusion of the wife’s enforcement proceedings.  In strictly technical sense, the reserved costs of the Hearing, since not expressly mentioned in the Consent Order, are lost and thus not recoverable on taxation.  Once lost, it cannot be re-visited in the circumstances proposed by the wife.  The wife’s line of argument has to be rejected.

28. However, I would add one observation. It seems to me fair to point out that the opposition of the husband in this hearing was limited to whether certificate for counsel should be included; he has not sought to argue that he was not required to pay the costs of the Hearing at all.  His stance was that a reasonably competent solicitor having the conduct of litigation could have attended the Hearing.[4]

29. In such circumstances, I would invite the parties to consider agreeing to amend the Consent Order to reflect their true mutual intention that the costs provision in para 7 therein covered the reserved costs of the Hearing, in order to save costs and time.

(iii) Amending a consent order

30. Mr Pilbrow argues that it was always the intention of the wife that the husband should bear the costs of counsel for the Hearing, indicative from her solicitors’ letter of 9 January 2014.  It was merely an “oversight” that the Consent Summons leading to the Consent Order failed to include a certificate for counsel in its para 7.

31. Mr Henry Fung, counsel for the husband, referred me to the case of Somerset and anor v Ley and anor [1964] 1 WLR 640. In that case, the parties entered into a compromise for costs to be paid to the plaintiffs (executors) on common fund basis, subject to approval of the court because an infant defendant was involved.  The consent order was silent as to the fees of leading counsel for the plaintiffs.  The plaintiffs subsequently applied for fees of their leading counsel in their bill.  The taxing master took the view that the matter before the court was a chambers hearing and he refused leading counsel’s fees for lack of a certificate.  In dismissing the motion for the grant of a certificate for such fees, Cross J held (at p 645):

“As to what I think is the main issue, counsel for [the executors] agrees that this is in substance a consent order. The court has no power to compel a guardian ad litem and her counsel to agree to any compromise. The court’s function is to give its consent, if it thinks fit, to a compromise to which the guardian ad litem and her legal advisers have provisionally agreed, subject to the consent. What is argued by [counsel] is, first, that under paragraph 2(3) [of Pt.10 of App.2 to the Supreme Court Costs Rules 1959], the court can give a certificate at any time before taxation in a suitable case without invoking the slip rule and, secondly that on the facts of this case the order can be properly amended under the slip rule.

For my part, I cannot see how the first argument, even if it is formally right, really gets [the executors] any further. Even if I assume that a judge can, if he likes, give what one may call a ‘collateral certificate’ without amending the original order, it seems to me that it could not possibly be right to give such a certificate in the case of a consent order if the order which did not contain such a certificate in fact carried out the agreement between the parties. That would mean that somebody could put himself in a better position by refraining from asking for the certificate at the time when the order was made than he would have been if he had asked for it.

So, really, as I see it, the issue is this: did the settlement which the guardian ad litem and her legal advisers put before me for my approval contain an implied term that the fees of leading counsel for [the executors] should be included in the taxation? If it did contain such an implied term, then it must be right for me to amend the order, assuming that as it stands it does not carry out that term. If, on the other hand, it did not contain such an implied term, then it would be wrong for me to vary the order, or (if I could do so) issue any collateral certificate.” (underlined added)

32. I agree with Mr Fung that the principles stated in Somerset (supra) should be followed. I also accept his submission that the mere intention of the wife that the husband should bear the costs of counsel for the Hearing is not sufficient to amend the Consent Order.

33. Further, the wife has not expressly deposed in her supporting affidavit that there was an implied term between the parties that certificate of counsel for the Hearing was to be included under the Consent Order. The fact that the husband raised no query to the recoverability of counsel’s fees mentioned in her letter of 9 January 2014 cannot be escalated to infer that there is such an implied term, least to say that it has always been the husband’s stance that he is not prepared to agree on her wife’s costs of the judgment summons but would prefer to go for taxation.

34. In making the Consent Order, it is my manifest intention to adopt the terms of the parties as appeared in the Consent Summons. As the wife has failed to show that there was an implied term between the parties that certificate of counsel for the Hearing was included under the Consent Order, only one conclusion can be reached, ie the Consent Order cannot be amended under the slip rule.  

(iv) Complexity of the matter & reasonableness of fees

35. It is the submission of Mr Pilbrow S.C. for the wife that the complexity of the matter warrants the attendance of counsel and his fees charged are reasonable. 

36. However, it does not occur to me that these 2 factors would come into play in an application for amendment under Order 20 rule 11 of the RHC.

37. There only remained for me to point out that the Hearing is a call-over hearing of judgment summons. Admittedly, the wife had prior notice that the husband himself would not turn up in the Hearing. Therefore, one would not expect that the Hearing would be a substantial hearing. Mr Fung for the husband has set out the salient points about what happened in the Hearing.[5] I do not find any need to repeat them here. I would agree with Mr Fung that the Hearing did not deal with any complicated matters that might require the attendance of counsel, let alone a leading counsel.

38. In so saying, I take note that Mr Pilbrow has been representing the wife since 2002 in various contentious applications taken out by either party over the years.  But I regret to say, with respect, that this alone is not sufficient to support the requirement of his attendance in the Hearing.

Conclusion

39. Due to the matters aforesaid, the wife’s application under Order 20 rule 11 of the RHC must be dismissed.

40. Both counsel have agreed at the end of this hearing that costs should follow the event and that certificate for counsel should be granted. I cannot see why the otherwise should be done.

41. In the premises, I shall make the following order:

(1) The respondent’s summons filed on 25 August 2014 be dismissed;

(2) The costs of this application be to the petitioner to be taxed if not agreed, with certificate for counsel.

42. I invite both parties to follow up on what I have indicated in para 28-29 of this decision.

43. Lastly, I am grateful for the assistance rendered by both counsel to me in this hearing.

[1]  The wife’s summons for leave to enforce arrears of maintenance for more than 12 months pursuant to section 12 of the Matrimonial Proceedings and Property Ordinance, Cap 192.

[2]  The wife’s application for time for payment by the husband of arrears of maintenance pursuant to Order 45 rule 6 of the RHC.

[3] There is a typo in the wife’s summons in that the date of the relevant hearing should be 2 December 2013 (not 2014).

[4] See §§15-16 of the husband’s written submission.

[5] See §§1-14 of the husband’s written submission