TPL v. WYY formerly known as WYY

CACV 47/2014 AND CACV 61/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS. 47 AND 61 OF 2014

(ON APPEAL FROM FCMC NOS. 15519 OF 2010 AND 15332 OF 2011)

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CACV 47/2014

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(Heard together)

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J U D G M E N T

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Hon Cheung JA:

1. I agree with the judgment of Yuen JA and the orders she proposes to make.

Hon Yuen JA:

2. There are two appeals before us which arise from costs orders made in the Family Court in proceedings concerned with children.

3.1.   CACV47/2014 is an appeal from a costs order given by Deputy District Judge S. Lo (now District Judge S. Lo) on 3 October 2012 in FCMC15332/2011. Leave to appeal was given by this court (Fok and Chu JJA) on 8 May 2013 although the notice of appeal was not filed until 5 March 2014 for reasons which are not relevant to this judgment.

3.2.  CACV61/2014 is an appeal from a costs order given by Deputy District Judge A.N. Tse Ching on 3 January 2014 in earlier proceedings between the same parties in FCMC15519/2010.  The judge gave leave to appeal on 14 March 2014.

Background

4. Briefly, the background is as follows.  The children are a boy born in July 2006 and a girl born in August 2010 to the Petitioner (“the Mother”) and the Respondent (“the Father”).  Shortly after the boy was born, the Mother left the matrimonial home with the boy to live with her parents.  They did not return to live at the matrimonial home until the boy was 2½ years old.  Shortly after the girl was born, the Mother left the matrimonial home with both children. 

5. Three months later, in November 2010, the Mother commenced divorce proceedings in FCMC15519/2010 (“the 1^st Proceedings”).  She sought sole custody, and care and control of the children.  The Father opposed the petition.  There were some interlocutory proceedings regarding interim access, and directions were given for reports from a Social Welfare officer, as well as from a clinical psychologist after an assessment of the boy. 

6. In September 2011, the court gave leave to the Mother to issue fresh proceedings based on separation for one year with consent.  The costs of the 1st Proceedings were reserved.

7. In November 2011, the Mother commenced fresh proceedings in FCMC15332/2011 (“the 2^nd Proceedings”).  As before, she sought sole custody, and care and control of the children.  The Father did not oppose this petition for divorce, but for his part, he also sought sole custody, and care and control of the children. 

Parties’ positions

8. The hearing to determine custody and care and control took place in August 2012 before Deputy Judge Lo.  At the commencement of the hearing, the parties’ positions were as follows:

-  the Father proposed joint custody, whilst the Mother and the Social Welfare officer proposed that the Mother be given sole custody;

-  both parties sought care and control of the children. 

9. 1.  It is not necessary for present purposes to go into the details of the parties’ respective cases which have been set out in Deputy Judge Lo’s thorough judgment of 3 October 2012. 

9.2.  Suffice it to say that although these young children had always been cared for by the Mother who did not work outside the home, the Father nevertheless sought care and control because he wished to have a closer relationship with the boy. 

9.3.  Although the psychologist reported that the boy was “happy and enthusiastic” with the Father, he apparently suffered anxiety whenever he was separated from the Mother, and this anxiety affected his relationship with the Father. 

9.4.  Also the Father did not have an amiable relationship with the Mother’s family. Indeed, the Court had to make an order in May 2011 prohibiting the Mother’s family members from being present during the Father’s access. 

9.5.  The Father claimed that the Mother and her family had alienated the boy from him and therefore he wished to have care and control of the children.  He proposed that while he was at work, his mother (with whom he lived) would look after the children.  His mother gave evidence at the hearing, saying that if necessary a domestic helper would be employed to help look after the children. 

9.6.  The Father however did not disclose to either the Social Welfare officer or in his affirmations prior to the hearing that he had a girlfriend who was pregnant. It was only at the hearing that he admitted that the girlfriend was expected to give birth in September 2012 (a month after the hearing) and that she and their baby were expected to live with him in the matrimonial home.  The Social Welfare officer therefore never met with the girlfriend, nor did she give evidence in court.

Judgment in application for custody and care and control in the 2^nd Proceedings

10. The judge found that both parties were good and loving parents, and made their best efforts to perform their parental roles. 

- Custody

10.1.  Regarding custody, the judge found that it was in the best interests of the children for there to be joint custody.  This was consistent with the Father’s position, and contrary to the positions advocated by the Mother and the Social Welfare officer. 

- Care and control

10.2.1.  Regarding care and control, the judge went through the list of factors to be considered, as set out in the English Children Act 1989 and proposed in section 9.29 of the Report on Child Custody and Access published by the Law Reform Commission of Hong Kong in March 2005. 

10.2.2.  It is clear from the list of factors that the Mother was in a better position than the Father to provide care and control, as she had been caring full-time for these young children since their birth, and as the judge took the view that there was insufficient evidence that the Mother was alienating the boy from the Father. 

10.2.3.  More importantly for present purposes, the judge was highly critical of the Father’s failure to disclose that if he were given care and control, the children would be living in the matrimonial home together with his girlfriend and her baby. The judge said this:

“47. Another important matter, I think, is that the Father testified in the Court that the Father’s girlfriend who is pregnant and due to deliver in about September this year will take part in looking after the Children since she and the new born baby will reside with the Father in the Matrimonial Home. He had acknowledged that he had not told Ms Wong about the pregnancy of the Father’s girlfriend at all and therefore, this piece of fact has not been mentioned in the updated social welfare report. Moreover, from the updated social welfare report, it does not appear that Ms Wong knows that the Father’s girlfriend is in fact living or going to live with him. In my judgment, the Father completely deprived Ms Wong (who is regarded as ears and eyes of the Court) of the opportunity to assess the role to be played by the Father’s girlfriend in relation to the Children.

48. I refuse to accept the Father’s excuse that he had just forgotten to tell Ms Wong. In view of the great importance of this matter, this excuse entirely flies in the face of any commonsense. Upon cross-examination by the Mother’s Counsel, he acknowledged that Ms Wong had interviewed him for around an hour. However, Ms Wong could only briefly mention in para 7 of her updated investigation report that the Father told her that he had an intimate girlfriend ie the Father’s girlfriend but had no plan for marriage yet. It clearly shows that the Father’s evidence in this regard is misleading and totally unbelievable. I am of the view that his dishonesty in this material aspect has greatly and adversely affected the welfare of the Children.

49. I also consider that the Father has not only deprived the Mother, but more importantly the Court, of the opportunity of canvassing with Ms Wong in relation to the possible impact of the baby to be delivered on the custody, care and control issues in relation to the Children. He did not bother to ask the Father’s girlfriend to file an affirmation or to attend the trial to tell the Court how she will participate in looking after the baby and the Children at the same time. The Mother’s Counsel has no chance to cross examine her at the trial. Furthermore, upon cross-examination, he did not appear to have any idea as to how he would tell the Children that he was going to have a younger brother/sister but of a different mother. However, the Father does not appear to have any idea at all as to how he will assist the Children to know and get along with these unfamiliar members of his family, ie the Father’s girlfriend and the baby, in the future if he is granted care and control of the Children.

 50. I consider that the Court is in total darkness regarding the relationship between the Father’s girlfriend and the Children.  The welfare of the Children will be in real risk if they are going to live with someone whom the Court has no idea at all.”

10.2.4.  The judge ordered that care and control should be granted to the Mother with defined access to the Father. 

- Costs

10.3.1.  Regarding costs, the judge’s discussion can be summarized as follows:

-  the general practice in children’s cases is that there should be no order as to costs (para. 66);

-  there is however a residual discretion to make a costs order against the unsuccessful party where eg the conduct of a party has been reprehensible or the party’s stance has been beyond the band of what is reasonable (para. 67);

-  the reference to “unreasonableness” means in the conduct of the litigation (para. 68);

-  a totally hopeless application may be regarded as unreasonable conduct (para. 69);

-  the issue was whether the Father had behaved unreasonably in the conduct of his application for custody of the children (para. 70).  Here the reference to “application for custody” presumably meant the application for both custody and care and control;

-  the Father had pursued an allegation that the Mother had alienated the son from him, for which the judge found insufficient evidence (para. 71);

-  the Father had deprived the Social Welfare officer and the court of the opportunity of assessing the role to be played by the girlfriend in caring for the children (para. 72);

-  the Father pursued his application for care and control even though it had not been recommended by the Social Welfare officer and the psychologist, and he only sought joint custody instead of sole custody at the start of the hearing (para. 73).

10.3.2.  In para. 74, the judge held that the Father had behaved unreasonably in the conduct of the application in pursuing a “totally hopeless application” and that no generosity should be given to him as he had the benefit of legal representation.  The judge also noted that the Mother was legally aided and thus “funded by public money”.  The judge found that it was justifiable to make an order that the Father pay the costs “of and incidental to the custody application to the Mother, including all reserved costs in relation thereto ...”. 

Appeal

11. This court gave leave to the Father to appeal the costs order.  The grounds of appeal are that the judge should not have taken into account the fact that the Mother was legally aided, and that the judge failed in applying the general rule relating to costs orders in children cases. 

Discussion 

12. It is well-established that a costs order is a matter of discretion for the judge.  However an appellate court can (and should) intervene if the judge had taken into account any irrelevant considerations when exercising his discretion. 

13.1.   In the present case the judge said in para.74:

“I also bear in mind that the Mother is legally aided and funded by public money. Hence, it is justifiable to make a costs order against the Father”.

13.2.  With respect, this is contrary to the general principles governing the exercise of discretion in making costs orders.  The general principle is succinctly stated in Hong Kong Civil Procedure 2015, vol.1, p.1133, para.62/2/9:

“The fact that one or both parties were legally aided did not alter the ordinary principles governing the court’s approach to costs”.

13.3.  As the judge had taken into account an irrelevant consideration in exercising his discretion, his costs order must be set aside and it is necessary for this court to reconsider the matter afresh. 

“General practice” - no order as to costs

14.1.   One starts with the “proposition” or “general practice” (though not a “principle”: see London Borough of Sutton v Davis (Costs) No.2 [1994] 2 FLR 569 at p570H) that in applications to do with children, the usual order should be no order as to costs. 

14.2.  This approach stems from the aspiration that in these applications the court is seeking to find an arrangement which is best for the children, so that the only “winner” is the children, and neither parent should be regarded as the “winner”/“loser”, although they had mutually exclusive proposals regarding custody and care and control. 

14.3.  The rationale is that when a court considers custody and care and control of children, the proceedings are inquisitorial rather than adversarial.  In the court’s search for the best option available, it does not wish “the spectre of an order for costs to discourage those with a proper interest in the child from participating in the debate.  Nor does it wish to reduce the chance of their co-operation around the future life of the child by casting one as the successful party entitled to his costs and another as the unsuccessful party obliged to pay them” (LB of Sutton v Davis (No.2) at pp570H -571C). 

14.4.  As the English court of appeal observed in R v R (Costs: Child Case) [1997] 2 FLR 95 at p97, there is a “possibility that in effect a costs order will add insult to the injury of having lost in the debate as to what is to happen to the child in the future; it is likely to exacerbate rather than to calm down the existing tensions; and this will not be in the best interests of the child”.

14.5.  Having said that, this general practice is not a rigid rule. In particular, the court must be careful that this approach to costs should not be abused eg in cases where one parent has more means at his disposal than the other who does not qualify for, or prefers not to use, legal aid.  The practice should not provide the opportunity for one parent to wear the other down financially by means of multiple interlocutory skirmishes. 

Exceptional circumstances

15.1.   Accordingly the courts have said that this approach to costs does not apply in exceptional circumstances, such as where the conduct of one party has been reprehensible, or the party’s stance has been beyond the band of what is reasonable (LB of Sutton v Davis (No.2) at p571B-C, following Havering LBC v S [1986] 1 FLR 489 and Gojkovic v Gojkovic (No. 2) [1992] Fam 40). 

15.2.  However, in considering whether the exception applies in a particular case, the court should not be too quick to label a parent’s conduct as “unreasonable”.  As Hale J (now Baroness Hale SCJ) observed in R v R at p98B,

“The fair point is made that in children cases one must not confuse unreasonableness in relation to the child – because one might say that we are expected to be unreasonable in our attitudes to our children – and unreasonableness in the attitude to the litigation”.

15.3.  Merely because a judge, dealing with a case dispassionately and objectively, considers one parent’s proposals hopeless does not justify a costs order against him/her.  As Butler-Sloss LJ said in Re G (Costs: Child Case) [1999] 2 FLR 250 at p252G:

“If this judge in this case had found that this father had behaved unreasonably in the litigation and had gone beyond what many fathers do, seeking orders which are hopeless, the point will come at which pursuing a hopeless application becomes unreasonable. But hopelessness and unreasonableness are not necessarily the same thing. Indeed, particularly where there is a litigant in person, a degree of generosity towards a litigant may be more appropriate than to a litigant who is on legal aid generally advised by counsel and solicitors to the extent to which they should continue to litigate”.

15.4.  To that I would add this proposition, that even if a court finds a parent’s conduct reprehensible, or his/her conduct in the litigation unreasonable, and the court orders that one party should pay the other’s costs, the costs so ordered should be no more than is necessary to reflect the exceptional circumstances.  This is because of the policy consideration in the rationale discussed above, ie that it is in the best interests of the children that there should be no order as to costs.

16. Coming then to the present case, the application before Deputy Judge Lo was for custody and care and control.  Although connected, they are two separate issues. 

16.1.1.  Regarding custody, the Father’s proposal at the start of the hearing was for joint custody.  The result was that the judge adopted this proposal, contrary to the proposals of the Mother and the Social Welfare officer.  There is no appeal from this order. 

16.1.2.  Counsel for the Mother argues that the judge’s order was only “marginally correct”.  In my view, there is no room for an appellate court to measure the “margins” of correctness.  An order, which a judge applying the relevant legal principles was entitled to make on the evidence, remains entirely correct even though the individual judges making up the appellate court might have gone the other way had he/she been sitting at first instance. 

16.1.3.  Consequently there is no reason whatever why the Father should have to pay the costs relating to the issue of custody. 

16.2.1.  Regarding care and control, it is clear from an objective point of view that the Father’s application was unlikely to succeed.  These young children had been cared for by their mother since birth, and it was only for a brief period that the Father’s own mother had helped in looking after the boy. 

16.2.2.  However before one can declare the Father’s application was unreasonable, one has to consider the facts of the particular case to see why the Father nevertheless made an attempt.  It was an undisputed fact that unfortunately the Father did not enjoy the usual close relationship that a father enjoys with a 6-year old son, even though (as the judge found) he was a good and loving parent.

16.2.3.  Although the judge found “insufficient” evidence that the Mother had alienated the boy from the Father, the Mother was not entirely blameless.  For instance she had changed the boy’s name without consulting the Father.  Further there was evidence that the Mother’s relatives had interfered with the Father’s access to the boy.  Indeed a court order had to be made in May 2011 that they should not be present during access. 

16.2.4.  As was reported by the Social Welfare officer on 13 July 2012, the Father’s view was that the Mother was “easily influenced by her maiden family members, she had never stopped them from speaking ill about him and his family.  As a result, his relationship with the children ... had been adversely affected.  He worried about possible negative influence to the children’s psychological well-being if they continued to live with [the Mother] and her maiden family” (para.27).

16.2.5.  The judge also accepted the Father’s belief that “the root of the problem between [the] parties partly stems from the family members of the Mother” (para. 64). 

16.2.6.  In those circumstances, one can understand why the Father felt that in order to salvage his relationship with his son, he wished to persuade the court that the children should not continue to live with his in-laws.

17.1.   If the matter had remained there, in my view the general practice would have been applicable, and the proper order would be for there to be no order as to costs.

17.2.  However, the Father’s failure to disclose the fact that the children would be sharing the matrimonial home with his girlfriend and their new baby was regrettably, in my view, reprehensible conduct for which the court must manifest its disapproval. 

17.3.  All litigants have a continuing duty of disclosure of relevant information, and family cases are no exception.  The Father was legally advised throughout and must be taken to have been aware of this duty. 

17.4.  Further the Father cannot possibly say that he did not think it was important information.  Quite simply, nothing is known about the girlfriend.  She may or may not welcome the idea of having two other young children in the premises, even if the paternal grandmother takes primary responsibility in caring for them. 

17.5.  More importantly in the present case, from the children’s side, it is clear from the psychologist’s reports that the boy is a sensitive child who suffers anxiety when separated from his mother.  He may or may not react adversely to seeing another person in the role of mother in the matrimonial home.  This important aspect in the well-being of the children was not examined because of the Father’s failure to disclose the arrangements with the girlfriend.

17.6.  Therefore it is clear that the Father’s non-disclosure was material.  No matter how much the Father wanted to have the children live with him, it cannot justify this failure to inform the court of a significant arrangement which would have a direct impact on the children’s daily lives.

18.1.   In my view the court must reflect its disapproval of this failure with an appropriate order of costs against the Father.  However in my view it would be wrong simply to order that the Father bear all the costs of the custody and care and control application.  In this case the judge accepted the Father’s proposal of joint custody, and his application for care and control was understandable, for the reasons discussed above.  More importantly, the general practice of no order as to costs is for the benefit of the children, and so the deviation from that practice should be no more than is necessary to reflect the exceptional circumstances of any particular case. 

18.2.  In the course of the hearing we have discussed with both counsel the option of limiting the costs order against the Father to the issue of care and control only, separating it from the issue of custody.  However we understand that it is usual for custody and care and control to be dealt with together, and as both issues were proceeded with at the same time, we can see the difficulty that such an option would cause for those drafting a bill of costs and the taxing master.

18.3.  The alternative option would be to have a cut-off point chronologically.  This would obviously be easier for the billing and taxation process.  Taking a practical approach I take the view that the appropriate costs order would be for there to be no order as to costs of the custody and care and control application, save that half of the costs of the hearing itself (including briefs delivered prior to the hearing) should be paid by the Father.  Clearly by the time of the hearing, his arrangement with his girlfriend whereby she and their baby would move into the matrimonial home would have been finalized, and he was therefore bound to make that disclosure to the court by that time.  

Order in CACV 47/2014  

19. For the reasons set out above, I would allow the appeal, set aside the judge’s order on costs and substitute it with an order that there be no order as to costs of the custody and care and control application, save that the Respondent in FCMC15332/2011 should pay half of the costs of the hearing, the Petitioner’s own costs to be taxed in accordance with Legal Aid Regulations.  There will be an order nisi that there be no order as to the costs of the appeal. 

CACV61/2014

20. This appeal arises from Deputy Judge Tse Ching’s order made on 3 January 2014.  This arose in the following way. 

20.1.  Deputy Judge Lo’s order had been made in the 2^nd Proceedings, and on 18 October 2013 he clarified that his costs order of 3 October 2012 did not cover the costs under the 1^st Proceedings.

20.2.  The issue of the costs in relation to the custody and care and control application in the 1^st Proceedings, which had been reserved, had therefore not been dealt with, and it came before Deputy Judge Tse Ching on 3 January 2014.  As the Father had not yet filed his notice of appeal from Deputy Judge Lo’s order in the 2^nd Proceedings at that time, not unexpectedly the judge decided that she should deal with the costs in the 1^st Proceedings in the same way as Deputy Judge Lo’s order.  Consequently she ordered that the costs of and incidental to the custody (and care and control) application in the 1^st Proceedings be to the Mother as well.

20.3.  In due course when the Father obtained leave to file his notice of appeal in the 2^nd Proceedings, the judge gave leave to appeal her order in the 1^st Proceedings as well. 

Order in CACV61/2014

21. In light of the reasons for my proposed order discussed in paras. 14-19 above, I take the view that there should be no order as to costs in the 1^st Proceedings in relation to the custody and care and control application, and so I would also allow the appeal, set aside the judge’s order on costs and substitute it with an order that there be no order as to costs, the Petitioner’s own costs to be taxed in accordance with Legal Aid Regulations. There will be an order nisi that there be no order as to the costs of the appeal. 

Hon Chu JA:

22. I agree.