WJT v. YATM

FCMP 79/2017

[2021] HKFC 22

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 79 of 2017

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DECISION
(Variation of Costs Order Nisi)

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The Present Application

1.  This is the Respondent Father’s application to vary the costs order nisi (“Order Nisi”) given after trial.  The related judgment (“Judgment”) was handed down on 28 September 2020.  The abbreviations in the Judgment will be adopted.

2.  The issues which were determined at the trial are :

(a)     the Mother’s application for financial provision for the benefit of her son, V, pursuant to section 10 of the Guardianship of Minors Ordinance, Cap. 13, under the Originating Summons filed on 28 April 2017 (as amended on 1 June 2017) (“Mother’s Claim); and

(b)     the Father’s application for variation of, discharge or release from the 2017 Undertakings (given on 26 May 2017) under the Father’s Summons filed on 28 January 2019.

3.  Other issues in dispute in these proceedings, the issues of paternity, custody and relocation as well as the related costs, were all resolved by the 2018 Order (dated 7 March 2018). 

4.  By the Judgment, this Court ordered, in gist, that the Father shall pay the Mother : -

(1)     a lump sum of US$108,400 for relocation cost;

(2)     a monthly sum of US$8,000 for the maintenance of V, until V reaches the age of 18 or ceases full time education, whichever is later.  The first payment to be date-backed to 1 August 2018. Credit be given to the Monthly Sum (of HK$35,000) made by the Father under the 2017 Undertakings on or after 1 August 2018;

(3)     a monthly sum of US$2,500 for carer’s allowance for 8 years with the first payment to be date-backed to 1 August 2018;

(4)     The Father’s undertakings on the interim financial provisions under the 2017 Undertakings shall be discharged retrospectively from 1 August 2018.

(“Judgment Order”)

5.  I further granted the Order Nisi that the Father do pay the Mother’s costs of the Mother’s Claim as well as the Father’s Summons including all costs reserved, on a party and party basis, to be taxed if not agreed, with certificate for counsel.

6.  Dissatisfied with the Judgment, the Father took out two Summonses respectively on 12 and 27 October 2020.  The former (“Variation Summons”) is the application now before the Court for variation of the Order Nisi and the latter (“Appeal Summons”) was for leave to appeal against the Judgment.  This Court’s invitation to have the two Summonses dealt with together was declined by the Parties for they needed time to adduce evidence for determination of the Variation Summons. 

7.  The Appeal Summons was dismissed on 20 November 2020.

8.  For the Variation Summons, the Parties lodged into Court, on 3 December 2020, an agreed bundle which contained copies of 3 without prejudice letters from the Mother’s solicitors dated 12 May 2017, 16 May 2018 and 9 April 2019 respectively (collectively, “WP Offers”) and 1 reply letter from the Father’s solicitors dated 25 May 2017.

9.  By the Variation Summons, the Father seeks an order that  there be no order as to costs of the Originating Summons and of the Father’s Summons.

10.  The Father’s argument is premised on the Mother’s failure to obtain an order for the full amount she claimed.  It is said that while the Court considers the Mother had no option but to issue the Originating Summons to pray for the financial claim and that she had beaten the Father’s open offer by a significant amount, the same “costs reasoning” applies equally to the Father for he had no option but to resist the Mother’s inflated claim. 

11.  He argues that given the Mother obtained by the judgment very significantly less than she claimed; whilst the Father made offers which are ultimately less generous that those ordered by the Court, neither party are wholly successful and therefore, there shall be no order as to costs as in CWYW v CCH (FCMP 124/2013, 19 August 2016 unrep.).

12.  The Mother resists the application and makes reference to the WP Offers, which are summarized as follows : -

(a)     On 12 May 2017, the Mother offered 3 settlement options including, inter alia, an option for : -

(i)     lump sum of HK$1,000,000 for relocation cost;

(ii)     monthly sum of HK$50,000 for maintenance of V;

(b)     On 25 May 2017 , the Father strictly rejected the offer without counter-proposal.

(c)     On 16 May 2018 , the Mother offered : -

(i)     lump sum of HK$500,000 for relocation cost;

(ii)     monthly sum of HK$65,000 for maintenance of V

(iii)     costs of 3 economy class airfare tickets

(d)     On 9 April 2019, the Mother complained that the Father had not put forward any substantive offer or alternative undertaking for his application for discharge of the 2017 Undertakings under the Father’s Summons and reserved her position to claim for costs on an indemnity basis.

Rules of the District Court

13.  The power of the court to award costs is governed by Order 62 Rules of the District Court, Cap.336H (“RDC”).  The court has a wide discretion on the question of costs.  Of the costs of the proceedings other than interlocutory proceedings, the general rule that “the costs to follow the event” unless there are special circumstances in the case which justifies making of any other costs order is preserved in Order 62 rule 3(2). Of interlocutory proceedings, the general rule remains an option as provided in Order 62 rule 3(2A).

14.  In exercising the discretion on costs, the court is to take into account the special matters as set out in Order 62 rule 5.  Insofar as this application is concerned, of particular concerns are without prejudice offers, the conducts of the parties, whether a party has succeeded on part of her case, even if she has not been wholly successful and the underlying objectives set out in Order 1A rule 1.  Rule 5(2) provides that the conduct of the parties includes : -

(a)  whether it was 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, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

The Judgment Order

15.  To understand the Parties’ contentions, it is necessary to go briefly into the parties’ respective positions as compared with the Judgment Order as follows : -

Item	(HK$) Judgment	M’s claim	M’s WP 12.5.2017	M’s WP 16.5.2018	F’s offer
Lump sum	845,520	1,302,920.8	1,000,000	500,000	0
For V	62,400	90,000	50,000	65,000	20,000/ 11,874
Carer’s allowance	19,500	50,000	0	0	0

16.  It can be seen from the figures that the Father’s arguments in the present application are bound to fail.  Undoubtedly the financial provision eventually awarded by this Court is much closer to the Mother’s claim than the Father’s offer, not to mention that the Mother actually obtained a judgment better than her without prejudice offers which the Father strictly rejected without making any counter-proposal.  

17.  It is said for the Father that he had indicated his intention to pay a monthly sum of HK$20,000 plus the private school tuition fees for the maintenance of V in his 5^th Affirmation dated 11 May 2018.  Suffice it to say that such a statement did not constitute a valid offer. Worse still, his election to reduce his financial provision to the Monthly Sum (of HK$35,000) since August 2018 notwithstanding his undertaking to pay the Direct Payment under the 2017 Undertakings and the repeated protests of the Mother has rendered such argument untenable.  After all, his indicated amount is far less than the Judgment Order.

18.  Thus analysed, the Mother is the successful party who managed to obtain an order in her favour, which is not only far closer to her claim than the Father’s offer, but actually far more than her without prejudice offers.  Accordingly, she is entitled to the costs of the proceedings.

Other factors

19.  Besides, the conducts of the Father have left the Mother with no option but turn to the court for assistance.  The Father has unilaterally reduced his financial provision to the Monthly Sum and ceased making any Direct Payments since August 2018, shortly after V’s relocation to the US. Despite the Mother’s repeated requests through solicitors and at court hearings, he chose not to make any proposal of maintenance in place of the 2107 Undertakings, still less of any realistic offer for settlement of the Mother’s Claim.  The court’s invitations to the Parties to explore the possibility of formulating substitute undertakings was welcomed by the Mother but met with no success with the Father. 

20.  The Father’s conducts indicated his firm determination of unilaterally and unreasonably reducing his financial provisions from more than the monthly sum of HK$80,000 to HK$35,000 since V’s relocation and further down to as low as HK$11,817 as elaborated in §§23-25 of the Judgment.

21.  The Monthly Sum of HK$35,000 was plainly insufficient as elaborated in §§215-226 of the Judgment.  That is why the Judgment Order was ordered to be back-dated to August 2018.

22.  Given the Mother’s sincere attempts to settle and reasonable offers met with no constructive reply, the Mother actually had no alternative but to proceed to trial for relief and to reserve her positon to claim for costs in her WP Offer dated 9 April 2019.  In the circumstances, she should not be blamed for having proceeded to trial, nor be penalised with costs.

23.  The Counsel for the Father seek support from the case of CWYW v CCH to argue that as the Mother’s claim was extortionate as the applicant’s claim in that case, the same costs order of no order as to costs in that case should be adopted in the present case.  I am not convinced. Each case turns on its own facts and no general principle in this aspect can be formulated on the peculiar facts in that case.

24.  It remains to be the general rule as expounded in F v F (No 2) [2003] 3 HKLRD 976 that costs follow the event does not cease to apply simply because the successful party has in certain instances been found to exaggerate her case or claim, or because she has failed on certain issues or allegations, but that she could be deprived of her costs in whole or in part where she had caused a significant increase in the length of the proceedings.

25.  I am also alive to Order 62 rule 5(2)(a) and (b) RDC that the court should consider the conduct of the parties including whether it was reasonable for him to raise or contest a particular allegation or issue and the manner in which a particular allegation or issue was pursued.

26.  In my view, the Parties’ arguments at trial in their overall impact have left this Court in no doubt that the Father shall pay the Mother’s costs.  My findings in the Judgment resolved against the Father in respect of most of the issues in dispute.

27.  In this case, the Mother’s financial position was the major issue in dispute which was hotly argued by the Father.  He put forward  a number of arguments as well as factual allegations against the Mother, ending up with plenty of the trial time being spent on these, most of which were rejected, including, inter alia, allegations about the Mother’s several hidden landed properties, secret business, his gifts of more than one million US dollars over the years, as well as his challenge on the Mother’s loans, her liabilities and financial obligations, her earning capacity and prospect of employment. 

28.  Further, his claim for the Mother’s contribution to V’s expenses achieved no success.  His opposition to her claim for carer’s allowance and lump sum payment failed to the extent that he only managed to reduce the amount awarded and strike out minor claim as club membership out of her substantial claims.

29.  Likewise, his attacks on many major expenses of V were marked with disapproval, i.e. housing needs, all general expenses (except minor claim as club fee), private school fees, nanny fees.

30.  I should not ignore the Father’s failure in his application for time extension for cross-examination during trial, nor should I penalize the Mother with costs for resisting the Father’s Summons for the reasons set out in §215-240 of the Judgment which I should not repeat here.

31.  No doubt the quantum of the Mother’s claim was discounted and some of her allegations as the funding of the Duarte Property and the club membership were rejected.  Some of her receipts did not come up to proof.  Such matters were nevertheless limited which only consumed a small part of these proceedings.

32.  Apparently, the trial was forced upon the Mother to obtain the relief which the Father had all along strenuously opposed.  She is the overall winner who succeeded in most of the arguments and items claimed.  This would have been a more straight forward case but for the Father’s unsuccessful allegations and arguments on which substantial time and costs have been spent.  It is fair to award her with costs. 

Conclusion

33.  Having considered the Parties’ submissions and all the relevant circumstances of this case, I take the view that the Mother is the overall successful party, having an award made in her favour more advantageous than her without prejudice offers. The conducts of the Parties and the need of the Mother to come to court for the relief also form the valid basis for a costs order in her favour.  The Order Nisi is appropriate in all the circumstances.  I order that the Variation Summons be dismissed and the Order Nisi be made absolute.

Costs

34.  Taking into account the outcome of this application and the relevant circumstances, the Father should pay the costs of this application.  By making reference to the structure and the fee scale of the Mother’s legal team as indicated in the Statement of Costs lodged previously, I order that the Father do pay forthwith the Mother’s costs of the Variation Summons, including the cost of the Consent Summons filed on 5 November 2020 and all costs reserved, summarily assessed at HK$35,000.