AK v. MYNT

FCMC16285/2017

[2019]HKFC17

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 16285 OF 2017

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RULING ON COSTS

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1.  This is the hearing of the respondent husband (“H”)’s application for costs of his application for the direction that an independent appraiser/valuer (“SJE”) be jointly appointed by the parties to conduct inspection of the parties’ 4 landed properties situated in Hong Kong and overseas in the presence of the parties legal representative or their appointed overseas agent so that an inventory of antique furniture and valuable personal items can be complied with photograph taken on each and every one of them (H’s Application”). 

2.  H’s application was considered by the court at the First Appointment hearing on 21 May 2018.  At that hearing, the petitioner wife (“W”) questioned the family court’s jurisdiction in ordering the SJE to conduct personal inspection in the subject landed properties since two of them were situate in the US (the “Jurisdiction Issue”).  In response to W’s question, the court adjourned the hearing of the Jurisdiction Issue to 24 October 2018 for argument, with two hours reserved. Directions were also given for W to lodge and serve her submissions and list of authorities by 10 October 2018 and H to lodge and serve his submission and list of authorities in reply 7 days thereafter. 

2. On 25 May 2018, W took out a summons pursuant to s.17 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 to set aside a number of trusts of which H was the settlor and/or the beneficiary (“s. 17 Application”).  On 30 July 2018, the hearing of the s.17 Application was adjourned to 24 October 2018 for further directions, with 1 hour reserved.  On 14 September 2018, W filed her 2^nd Affirmation together with a schedule purportedly setting out the value and location of the antiques and valuable personal items that she believed were owned by herself.  W did not file the submissions and list of authorities in accordance with the court’s directions.  On 11 October 2018, H’s solicitors (“JML”) asked for the submissions and list of authorities.  On 12 October 2018, W’s solicitors (“OLN”) replied that since W filed her 2^nd Affirmation on 14 September 2018 providing the schedule of antiques and valuable person items, argument on the Jurisdiction Issue was no longer necessary.  ONL further confirmed that in the event H still insisted on a joint inspection in the 2 US landed properties, W was willing to consent to H’s proposed directions and suggested the parties to deal with the matter by consent.  ONL further proposed that the hearing dated 24 October 2018 should be kept for the s.17 Application and as such the duration of the hearing should be shortened to one hour.  On 19 October 2018, JML replied by alleging that the schedule provided in W’s 2^nd Affirmation were incomplete, self-contradictory and insisted H would consent to W’s above proposal only if W agreed to make a further verifying affirmation addressing H’s queries, and that unless and until W gave details of all her valuable possession and antiques, they would need to proceed with the upcoming hearing.  A draft consent summons containing H’s proposed directions to OLN was enclosed with JML’s letter dated 19 October 2018.  By letter from ONL to JML dated 22 October 2018, W denied the alleged non-disclosure and provided explanations and clarifications to answer H’s queries.  On the same date, OLN informed the court that W was agreeable to the appointment of the SJE and there was no longer the need to deal with the Jurisdiction Issue.  At the beginning of the hearing on 24 October 2018, a consent order was made in relation to the appointment of the SJE.  Both parties took issue on the question of costs.  Directions were given for the disposal of the question of costs on the papers then.

Legal principles

4.  The court has a wide discretion as to costs.  For the purpose of an interlocutory application, the relevant provisions in the Rules governing the exercise of discretion as to costs are Order 62 rules 3(2A) and 5.  The effect of Order 62 rule 3(2A) as explained in Melvin Waxman & Another v Li Fei Yu & Another [2013] 6 HKC 424 is that an order the costs follow the event is no longer a general rule in determining the costs of an interlocutory application, though it remains an option.  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 HK Civil Procedure at 62/3/3B.  When dealing with costs orders, under Order 62 rule 5(1) the court may take into account, among other things, the conduct of the parties and any admissible offer to settle made by a party, which is drawn to the court’s attention.  Rule 5(2) provides that conduct for this purpose 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.

Issues

5.  Applying the above legal principles, I take the view that the main issues are : -

(i) The merits;

(ii) Who can be regarded as the successful party; 

(iii) Conduct of the parties; and

(iv) Any admissible offer to settle made by a party, which is drawn to the court’s attention.

Merits

6.  I take the strong view that W’s challenge is unmeritorious.  H’s Application ought not to have been controversial. 

Who can be regarded as the successful party

7.  The starting point is that jurisdiction is something that the court either has or does not have, and jurisdiction cannot be conferred on the court by agreement made between the parties.  When W conceded the order she must be taken to have conceded that her previous assertion that the court had no jurisdiction was simply wrong.  I take the view that H should be regarded as the successful party. 

Conduct of the parties

8.  I take into consideration the following : -

(i) The challenge was unmeritorious and was unreasonably pursued as it was clearly provided under Practice Direction 15.11 that the court shall in the First Appointment give directions as to valuations of asset.;

(ii) Despite that W went further to deny it was her request for a substantive hearing on the Jurisdiction Issue, it was W who initially wished to question the court’s jurisdiction to order joint inspection of antiques and valuable personal items located out of the jurisdiction that led to a 2-hour hearing been fixed for argument. 

(iii) It was not until 12 October 2018 that OLN replied that since W filed her 2^nd Affirmation, argument on the Jurisdiction Issue was no longer necessary.  There was a delay of almost 5 months for the directions for inspection and appointment of SJE, which could otherwise have been given in May 2018.  

Any admissible offer to settle made by a party, which is drawn to the court’s attention

9.  I take notice that on 12 October 2018, OLN replied to JML that argument on the Jurisdiction Issue was no longer necessary and confirmed that in the event H still insisted on a joint inspection in the 2 US properties, W was willing to consent to H’s proposed directions and suggested the parties to deal with the matter by consent, and by the letter dated 22 October 2018, W furthermore provided explanations and clarifications to answer H’s queries on disclosure.  On 22 October 2018, OLN sent a letter to the court informing the court that W was agreeable to the appointment of the SJE and there was no longer the need to deal with the Jurisdiction Issue.  The matter was finally disposed of by consent order on 24 October 2018.

Conclusion

10.  I take notice that W’s challenge was unmeritorious and unreasonably pursued, that H is successful in his application, and W’s conduct set out in the above.  Looking at the matters in the round, I regard it is reasonable and just to make the order that W shall pay H of the costs of H’s Application from 21 May 2018 up to and including 12 October 2018, including all reserved costs, to be taxed if not agreed.  I take notice that the parties could have dealt with the Jurisdiction Issue by way of consent summons by as early as 12 October 2018, and that eventually, H’s application was disposed of by consent.  In the premises, I take the view that there should be no order as to costs after 12 October 2018.  I take the view that the complexity and difficulty arising from the present cause or matter are within the competence of solicitors.  I do not give certificate for counsel’s attendance.  Neither party is wholly successful in the costs argument, in a broad-brush way, I make no order as to costs of the costs argument.