NAV v. JTMW

FCMC 4191 / 2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 4191 OF 2012

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R U L I N G

on Costs

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1.  I am asked to rule on the costs of an application taken out by the respondent husband (the respondent) for the removal of certain parts of the petitioner wife’s affidavit (“the petitioner’s affidavit”) and for the return of the respondent’s personal documents. 

Background and the Application

2.  The petitioner is an XXXX and the respondent XXXX.  They were married in February 2008 in XXXX and they moved to live in Hong Kong in June, 2008 when the respondent obtained a job as a XXX here. 

3.  There are two children of the family, both are boys.  The first was born in April 2007, now aged 6 and the second was born in February 2010, now nearly 4 years old. 

4.  It is unfortunate that marital discord developed.  On 26 March 2012 the petitioner petitioned for divorce on the ground of the respondent’s unreasonable behaviour. 

5.  At the initial stage, the parties were apparently able to come to terms by entering into an agreement dated 28 April 2012 dealing with all the ancillary relief and children matters. 

6.  Apart from the matrimonial assets which are not relevant here, as far as the two children of the family are concerned, the parties agreed that both of them would have the custody of the children and they would share the care and control on approximately equal basis.  The agreement went well for sometime but conflicts soon developed.  I have to say that as I have been living with this case for some time, my observation is that both parties have now developed deep mistrust against each other, the present application being a live illustration of this situation.  I think it is fair to say that the conflicts between the parties centre much on the care and control arrangement of the children.  In brief, the petitioner is complaining about the situation where whether the respondent would be available to take care of the children depends on whether he has any XXX duties and these in turn depends on his monthly duties roster issued by his employer.  The result is that the arrangement of the children’s care is seen by the petitioner to have been dominated by the monthly roster which she finds it difficult to cope with.  In short, she feels it unfair that her lives should continue to be manipulated by the duties roster. 

7.  It is against this background that the parties sought to resolve their differences before this court. 

8.  On 2 July 2013, on the basis that the parties would have the joint custody and the joint care and control of the children of the family, the respondent took out an application seeking directions from the court regarding the care arrangement of the children.  In support of his application, he also filed his affidavit dated 3 July 2013. 

9.  The petitioner swore an affidavit in reply on 3 July 2013.  In paragraph 8 of the petitioner’s affidavit and at Exhibit “AVN-1”, the petitioner referred to certain correspondences exchanged between the respondent and his former solicitors in Hong Kong and his lawyers in XXXXX.  The respondent took the view that these communications were privileged and confidential and hence inadmissible.  In the absence of a favourable response from the petitioner to remove these materials, he took out the present application asking for :

1. Paragraph 8 of the Affidavit of NAV sworn on 19^th July 2013 be removed or redacted from the Court File and/or the hearing bundle for the use in Court and expunged in its entirely.

2. The documents marked exhibit “AVN-1” to the Affidavit of NAV sworn on 19^th July 2013 be removed from the Court File and/or the hearing bundle for the use in Court and expunged in its entirety.

3. The Petitioner do return to the Respondent forthwith his personal documents as marked “AVN-1” exhibited to the Affidavit of NAV sworn on 19^th July 2013.

4. ...

5. Costs be to the Respondent.

10.  As the parties were unable to come to any sensible solution, the application was fixed to be heard for argument on 28 January 2014. 

11.  Some time before the date due for the argument, on 10 January 2014 the petitioner eventually conceded to the respondent’s application but refused to pay the costs of the present application.  The hearing of 28 January 2014 was therefore on whether the petitioner should bear the respondent’s costs. 

The Respondent’s Arguments

12.  The respondent’s arguments are simple and straight forward.  The petitioner has conceded to the respondent’s application and therefore costs should follow the event. 

13.  Further, the matter could have been dealt with amicably and expeditiously.  However the petitioner chose not to do so and therefore, the respondent has incurred unnecessary costs and should be compensated.

The Petitioner’s Arguments

14.  Ms Todd, for the petitioner, maintained that since this is first and foremost a children’s matter, the proper order should be no order as to costs.   

15.  She relied on the following general principle :-

‘There should be no order as to costs save when one party has been unreasonable in the conduct of the litigation, as parents should not be deterred from putting cases concerning children before the Court.’ Sutton London Borough Council v Davis (Costs) (No 2) [1994] 2 FLR 569 and Gojkovic v GojkKovic (No 2) [1992] 1 AER 271

16.  She also referred to S v S HCMP 5547/1999 (unreported) where Deputy High Court Judge Gill went through the authorities then available and summarised how the Court may determine a contest on costs in a case involving children :

(1) In general circumstances there should be no order for costs.  Parties who have a reasonable case to put forward going to a child’s welfare should not be dissuaded from doing so by threat of an adverse costs order if they do not succeed.  And in a child related case there should be no perceived winner or loser, save that it is the child who is the winner.

(2) If a party has by virtue of improper conduct attracted the proceedings which but for that may have been avoided then that might well warrant an adverse costs order.

(3) If in the course of the proceedings one party behaves unreasonably in his or her conduct of the litigation then that might be recognised in an adverse costs order.

(4) The financial circumstances of the parties and how an order for costs will impact on the parties is a factor for consideration.

(5) The general rule of not ordering costs should not deter a court from exercising its discretion to do so in circumstances it finds to be exceptional not necessarily limited to a particular category of cases.

17.  Ms Todd argued that there is no good reason for there to be a costs order when agreement has been reached on the substantive matter and for which has done away the need to proceed with the time, cost and emotion of a hearing.

18.  She submitted that the central issues in dispute in the respondent’s summons are complicated as they are evidence concerning aspects of the respondent’s behaviour that the petitioner was seeking to adduce for the purpose of the Children’s hearing.  As stated in the petitioner’s affidavit, the respondent installed spyware on the home computer so as to obtain unauthorized access to the petitioner’s personal conversation in the computer.  He was successful in unlawfully obtaining communications that he considered were relevant to these proceedings and sent them to his divorce lawyer he had engaged in XXXX without the petitioner’s knowledge or consent.  Subsequently, the petitioner observed this exchange between the respondent and his XXXX Solicitor on the respondent’s I-pad which was left password unlocked and unattended.

19.  The evidence that the petitioner sought to adduce in her affidavit was the respondent’s gross misconduct and unlawful act of installing spyware on her computer.  This is relevant to the day to day relationship the petitioner has with the respondent and their ability to co-parent.  The petitioner absolutely had the right to highlight the dishonest and unlawful character of the respondent, which might affect the court’s decision on the care arrangements issue, when such matters are in issue.

20.  She further added that but for the reprehensible act of the respondent, the petitioner would not have needed to include paragraph 8 and Exhibit AVN-1 in the affidavit, and there would not be a need for the respondent to take out the Summons.

21.  However, in the interest of saving time, costs and emotions, the petitioner did agree with the respondent to remove paragraph 8 and the Exhibit.

22.  It is submitted that for the above reasons the petitioner should not bear the responsibility for both parties’ costs of the Summons when the origins of the matter in issue is traced to that of the respondent.

23.  In the alternative, it is submitted by Ms Todd that the court cannot make a determination on the costs without hearing the substantive argument.  It is submitted that the petitioner does not fall in the category of cases where costs orders have been made as identified by the Court in MAO v NCB, FCMC 14742/2010 (unreported) where costs orders were made in cases which had been fully determined by the Court. There is no way for the court to ascertain the fault of the petitioner without hearing and determining the issues in a substantive way.  In that respect, the petitioner has sensibly conceded the issues and the court is bound to make no order as to costs when there is no finding that a costs order should be made, particularly when it relates to a children’s related matter.

24.  Therefore the reasonable costs order should be no order as to costs.

25.  Further, as per Deputy High Court Judge Gill in S v S, supra, the financial circumstances of the parties and how an order for costs will impact on the parties is a factor.  The petitioner has limited income of about $5,000 per month only.  There is no contribution of legal costs to the petitioner by the respondent.  By comparison, the respondent is a high income earner and has benefits from his employment.  A costs order made against the petitioner in the context of her financial circumstances would not be appropriate.

Discussion

26.  To start with, I accept that for Children’s cases, the general practice is that there should be no order to costs save when one party has been unreasonable or reprehensible in the conduct of litigation, as parents should not be deterred from putting cases concerning children before the courts. 

27.  It has been held that the general practice of no order for costs in children cases applies to interlocutory matters as it does upon the substantive hearing:  Rayden & Jackson on Divorce and Family Matters (18^th Edition), at para. 52.21 and C v. FC (Children Proceedings:  Costs) [2004] 1 F.L.R. 326; [2004] Fam. Law 104.

28.  The thrust of the respondent’s case is that these materials, in particular the exhibit are communications between him and his lawyers and hence are privileged and inadmissible.  I have not been assisted by the parties in this respect but I do not think it is in dispute that the contents exhibited are communications between the respondent and his lawyers and as such, they should be subject to the protection of legal professional privilege.  There is no suggestion that the respondent has waived his privilege over these communications.

29.  That said, while these materials may be privileged, whether they are inadmissible is another matter. As has been said by the learned author of Phipson on Evidence (17^th Edition) in para 23-16,

“The fact that a document may be privileged does not affect its admissibility, as privilege may be waived. Where one party has obtained privileged materials, even improperly, the evidence remains admissible even though an injunction may be granted in advance of its use to prevent it…”

30.  The learned author quoted Galcraft v Guest [1898] 1 Q.B.D. 759 as the authority for the above commentary.  I do not think I need to go into its details. 

31.  In my view, what the respondent does in the present application is essentially to injunct the petitioner from the use of these privileged materials, and on that basis, I accept that he has justification to take out the application as he did. 

32.  That said, the question remains to be whether the petitioner falls within any of the exceptional circumstances that make her liable for costs. 

33.  In my view, two of the considerations identified by Deputy High Court Judge Gill in S v. S, HCMP 5547/1999 (unreported) referred to in Para. 16 above are relevant here. They are (1) whether the petitioner has by virtue of improper conduct attracted the proceedings; and (2) whether in the course of the proceedings the petitioner has behaved unreasonably in her conduct of the litigation.

Whether the petitioner has by virtue of improper conduct attracted the proceedings

34.  I must say I am persuaded by Ms Todd.  During the hearing, I questioned about the relevance of the materials.  Relevancy must be seen in the context of the disputes between the parties.   Upon reflection, I am prepared to accept that they are relevant, as contended by Ms Todd, as they are relevant to the issue of co-parenting relationship between the parties.  The reason being that while the parties agree on joint custody, the respondent is asking for joint care and control and the petitioner is asking for shared care and control.  Hence, these materials are relevant to the extent that they may cast light on the level of co-operation and trust the parties have on each other.

35.  Thus, the petitioner’s inclusion of these materials in her affidavit cannot be said to be an improper conduct that attracted the present proceedings; and further that, whether these materials are inadmissible are yet to be determined.

Whether in the course of the proceedings the petitioner has behaved unreasonably in her conduct of the litigation

36.  Ms Sum, for the respondent, argued that the matter could have been dealt with amicably and expeditiously but the petitioner chose not to do so and therefore the respondent has incurred unnecessary costs. 

37.  Ms Sum referred me to the correspondences between the parties at the relevant time. 

38.  According to Ms Sum, well before the present application was taken out, the respondent’s solicitors had written to the petitioner, who at that time was acting in person but assisted by a qualified lawyer as a McKenzie friend requesting for the removal of the offended parts but this did not meet with any constructive response.

39.  Shortly thereafter on 15 August, 2013, the petitioner was represented by the present firm of solicitors. On 28 August 2013, the respondent’s solicitors made another attempt to resolve the matter by writing to the petitioner’s solicitors.  In the absence of any response, the respondent took out the present application on 4 September 2013. The next day, ie 5 September 2013, the petitioner’s solicitors responded by stating that the she did not agree to remove the paragraph.

40.  On 18 September 2013, the respondent’s solicitors wrote to the petitioner’s solicitors making another attempt to resolve the issue as there would be no benefit to the parties to further debate over it. 

41.  On 23 September 2013, the petitioner replied and indicated, inter alia, that if the matter was not resolved then she would proceed with her affidavit as it was.

42.  It was against this background that in the hearing of 24 September 2013 that the court set the application down for argument. 

43.  Then after a lapse of nearly 4 months, the respondent took the initiative again to invite the petitioner to resolve the matter and it was not until 10 January 2013 that she eventually acceded to the demands but refused to pay costs.

44.  I do not think the above sequence of events is in dispute.  The petitioner was at the time of the petitioner’s affidavit assisted by a qualified lawyer and before the respondent took out the application, she was already represented by her solicitors.  In my view, the issue of legal professional privilege is real and apparent and must be obvious to the minds of the petitioner and her legal advisers but there was no response from her until the 10 January 2014.  There is simply a dearth of explanation as to why the matter could not be resolved earlier.  

45.  The present proceeding is an interlocutory proceeding relating to children’s matter.  The parties are not dealing with the main subject matter here.  There are ways that the petitioner could have dealt with the matter expeditiously and to save costs if she does not wish to argue on the summons.   For instance, as what Ms Todd has indicated, the petitioner may apply to file another affidavit referring to the incident complained of but without exhibiting the communications.  I wish to make it clear that it does not mean that this alternative has the endorsement of the court.  I only wish to point out that there must be other alternative to resolve the matter much earlier on.  It is high time to sound a warning that the parties should take a more sensible approach to resolve their differences.

46.  Ms Todd argued that it was the respondent’s reprehensible act of spying into the petitioner’s correspondence that led to the present dispute.  This is strenuously denied. Since the petitioner has not proceeded to argue but has conceded to the respondent’s application, this issue is yet to be determined.   

47.  For the above reasons, I consider that the petitioner should be responsible for the costs incurred arising from her procrastination.

The Petitioner’s Financial Situation

48.  Ms Todd also argued that the petitioner is earning merely a meagre sum of $5,000 only and the respondent is in a much better financial position.  Whilst I am prepared to accept that the respondent is earning more than that of the petitioner but I have not been referred to any evidence on the petitioner’s income or how an order for costs would impact on her financial situation.  On the contrary, the objective fact is that the petitioner has the means to instruct her solicitors to argue costs on her behalf.

Conclusion

49.  Considering all the above and taking the matter in a round, I am satisfied that the petitioner should bear part of the respondent’s costs.  In my judgment, the fairest order is for the petitioner to bear one-third of the respondent’s costs.  

50.  To conclude, I give an order in terms of paragraphs 1, 2, and 3 of the Summons dated 3 September 2013.  I also give an order that the petitioner do pay one-third of the respondent costs, to be summarily assessed if not agreed.