XS v. LB

FCMC 11635 / 2016

[2021] HKFC 5

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 11635 OF 2016

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RULING ON COSTS

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1.  This is the hearing of the Petitioner Wife (‘W’)’s application for the costs of her Order 24 r.7A Summons dated 10 August 2020 (‘O.24 r.7A Summons’).

Background

2.  By an order dated 2 June 2020, it is ordered that H shall, within 49 days from the date of the order, provide to W for specific discovery the following documents/ information of H’s bank account no. 608-31xxxx-001 (the ‘said account’) and any other bank account with HSBC in his sole name and/or jointly with any other third parties from 1 January 2013: -

(a)  the account number(s);

(b)  whether the account(s) is in H’s sole name or jointly held with third parties;

(c)  if the account(s) is in joint name(s), name of the other account holder(s);

(d)  opening date and closing date (if appropriate);

(e)  bank statements of all such account(s) dated from 1 January 2013 to date (if the account(s) is now closed, dated from 1 January 2013 or 2 years prior to date of closure until date of closure, whichever is the longer period).

3.  On 10 August 2020, W took out the O.24 r.7A Summons against HSBC for an order that:

A.    HSBC shall provide to W the following documents within 14 days: -

(1)  copy of bank statements of the said account dated from 1 January 2013 to date;

(2)  in respect of all other account(s) H has or has had with HSBC in his sole name and/or jointly with any other third parties:

a.     copy of bank statements of such bank accounts dated from 1 January 2013 to date;

b.     account opening from(s) of the relevant account(s) evidencing opening date and name(s) of other account holder(s), if any;

(3)  if any of the account(s) referred to in sub-paragraph (2) above is closed:

a.     copy of bank statements of such bank accounts dated from 1 January 2013 or 2 years prior to date of closure, whichever is the longer period;

b.     account closing form(s) or statement of the relevant accounts evidencing the closure;

B.     If any of the documents referred to in paragraph A above are no longer in the possession, custody or power of HSBC, HSBC do file an affidavit explaining when it parted with them and what has become of them within 14 days.

4.  Unsurprisingly, HSBC has taken a neutral stance in respect of the O.24 r.7A Summons. Neither does H contest the application for an order for discovery against HSBC, despite that he takes issue on the question of W’s costs.

7.     On 5 November 2020, by consent it is ordered in terms of W’s application for third discovery against HSBC and that H shall pay HSBC’s costs of the O.24 r.7A Summons, and the question of W’s costs is directed to be dealt with on the papers.

Legal principles

5.  The court has a wide discretion as to costs. The relevant provisions in the Rules of the High Court governing the exercise of discretion as to costs are O.62 r.3(2A) and O.62 r.5. The effect of O.62 r.3(2A) was as explained in Melvin Waxman & Another v Li Fei Yu & Another [2013] 6 HKC 424 that the ‘rule’ that costs normally follow the event is no longer the usual order in an interlocutory application but remains an option.

6.  The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account the underlying objectives set out in Order 1A rule 1 as well as the other matters set out under O.62 r.5(1). One of the underlying objectives is the discouragement of unnecessary or unmeritorious applications: Hong Kong Civil Procedure Vol 1 62/5/A.

7.  In my view, the parties’ central contentions are about: -

(i)     The merits of W’s application, particularly looking at them in light of the litigation conduct of the parties (Underlying objectives, O.62 r.5(1)(d) & (e)); 

(ii)    Who can be regarded as the successful party (O.62 r.5(1)(f)); and

(iii)   Any admissible offer to settle made by a party, which is drawn to the Court’s attention (O.62 r.5(1)(g))

8.  O.62 r.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.

Merits of the O.24 r.7A Summons and Conduct of the parties

9.  W is very critical of H’s litigation conduct. W alleges that the issue of the O.24 r.7A Summons was necessitated by the following circumstances: -

(i)    H has failed to comply with the Order dated 2 June 2020;

(ii)   H has failed to supply the requested documents dated from January to June 2013;

(iii)  H has failed to draw HSBC’s attention to the Order dated 2 June 2020;

(iv)  H has failed to procure HSBC’s confirmation of whether he has or has had any other accounts.

10.  In view of W’s rebuke of H’s litigation conduct, it is pertinent to have a review of the chronology relating to the parties’ litigation conduct at the material time that is as follows: -

(i)      By a letter dated 9 June 2020 to HSBC, H’s solicitors (‘YL’) wrote for copy of documents/ information as required by the Order dated 2 June 2019.[1]

(ii)     By a reply letter dated 29 June 2020, HSBC said that it was processing H’s request.[2]

(iii)    By a letter dated 8 July 2020 to YL, W’s solicitors (‘HI’) wrote that H should procure HSBC’s confirmation of whether he has or has had any accounts other that the said account.[3]

(iv)    By a letter dated 14 July 2020 to YL, HSBC indicated that requested documents dated before June 2013 was ‘beyond the retention’.[4]

(v)     By a letter dated 21 July 2020, YL advised HI that the requested documents dated before June 2013 was beyond HSBC’s retention.[5]

(vi)    By a reply letter dated 24 July 2020, HI said that they have sent HSBC a letter dated 10 December 2019 for preservation of all documents in relation to the said account and any other account in H’s sole name or jointly with third parties and as such they could not understand why the requested documents dated before June 2013 were beyond retention.[6]

(vii)   On or about 31 July 2020, HI proposed that the parties should make a joint application under r.121(2), Cap 179A for a consent order for the disclosure of the relevant provisions of the Order dated 2 June 2020 to HSBC. YL did not pick up such proposal.

(viii)  On 10 August 2020, W issued the present application.

(ix)    By a letter dated 11 August 2020, HSBC replied to HI that it was not the bank’s intention to contest the O.24 r.7A Summons.[7]

(x)     By a letter dated 18 August 2020, HI informed YL that the bank did not contest the O.24 r.7A Summons and sought confirmation of H’s position.[8]

(xi)    By a letter dated 24 August 2020, YL replied that H disputed the costs of the O.24 r.7A Summons and proposed costs in the cause.[9]

(xii)   By a letter dated 3 September 2020, HI pursued W’s costs of the O.24 r.7A Summons.[10]

(xiii)  On 14 September 2020, YL wrote to the Court with copy to HI, reported the progress and proposed that the question of W’s costs was to be disposed on the papers.[11]

(xiv)  On 18 September 2020, HI wrote to that Court that they did not wish to trouble the Court with the parties’ negotiations and they were instructed to follow up on the negotiations.[12]

(xv)   On the same date, HI wrote a without prejudice save as to costs letter to YL and proposed W’s costs be in the cause while H would pay HSBC’s costs (Not in the bundle, annexed to W’s replying Submissions on de bene esse basis).

(xvi)  On 27 October 2020, YL wrote to HI and proposed that there be no order as to costs (Not in the bundle).

11.  W takes the position that it is inappropriate for YL to disclose HI’s without prejudice save as to costs letter dated 18 September 2020 at this stage, given it seeks to settle these costs proceedings but not the substance of the O.24 r.7A Summons, and that the said letter is only to be taken into account when the question of the costs of this costs application is to be dealt with. Despite W’s position to the contrary, upon a fair reading of the said letter dated 18 September 2020, it is clear that it is a proposal on the disposal of the substance of the O.24 r.7A Summons and accordingly I see no reason why the Court should not consider it. Yet, W’s said without prejudice save as to costs offer was not accepted.

12.  H rejects W’s criticism of litigation conduct. H resists liability to W’s costs of the O.24 r.7A Summons primarily on the ground that he should not be faulted for HSBC’s position that the requested documents dated from January to June 2013 were beyond retention, inasmuch as he has done all he can do in order to comply with the Order dated 2 June 2020. H stresses that he has promptly written to HSBC for the requested documents. W however remarks that: (1) W cannot understand the alleged unavailability of the requested documents dated from January to June 2013 given that she through solicitors has already made request for preservation of the same; (2) The copy of the requested documents dated from 19 June 2013 to 6 January 2013 were sent to HI on 18 August 2020. That is to say, they were late and were sent after the O.24 r.7A Summons was issued on 10 August 2020. To take up point (2) first, I take notice that no satisfactory explanation of the lateness was given. As to the question of the availability of the requested documents dated from January to June 2013, I consider that it is unfortunate that YL has not chased after HSBC for the requested documents dated from January to June 2013 after they have learnt that W has already made request for preservation. It seems that they have wrongly somehow taken HSBC’s position dated 14 July 2020 that the requested documents were beyond retention as the end. In view of W’s request for preservation, obviously it should not be. Against the above backdrop, I accept that it is reasonable for W to issue the O. 24 r.7A Summons.

13.  In regard of W’s complaint of that H has failed to draw HSBC’s attention to the Order dated 2 June 2020 or to procure the bank’s confirmation of whether he has or has had any accounts with the bank, I tend to accept that H is not obliged to do W’s requests for the same as they are not within the purview of the Order dated 2 June 2020.

Who can be regarded as the successful party

14.  It should be beyond dispute that W is the successful party in the O.24 r.7A Summons. 

Any admissible offer to settle made by a party

15.  I take the view that W should have taken up H’s proposal by the letter dated 14 September 2020 that the question of W’s costs be disposed on the papers. I take notice that HI has instructions to continue the negotiations but apparently the proposed disposal of the matter will not in any way prejudice any ongoing negotiations. Had W accepted such offer, the matter could have been dealt with by way of consent summons setting out the terms of the agreement already made between the parties together with the proposed directions for paper disposal on W’s costs, and the hearing dated 5 November 2020 could have been vacated and costs thereof could have been saved.

Disposal

16.  I remind myself of the provisions of O.62 r.3(2A) and O.62 r.5, which set out the factors which the court shall have regard in exercising its discretion as to costs. I place significance on the fact that W succeeds in the O.24 r.7A Summons. I caution myself of the need to consider the overall justice of the situation and examine all the factors and circumstance. I also place significance on my view that W should have taken up H’s proposal by the letter dated 14 September 2020 and the hearing dated 5 November 2020 could have been vacated and costs thereof could have been saved. Looking at the matters in the round, I regard it is reasonable and just to make the order that H shall pay W 60% of the costs of the O.24 r.7A Summons, including all reserved costs with certificate for counsel, to be taxed if not agreed.

Costs of the costs application

17.  In view of my decisions in the above paragraphs, there be a costs order nisi that H shall pay W 60% of the costs of the costs application with certificate for counsel, to be taxed if not agreed. The costs order nisi becomes absolute 14 days after the order is made unless a party has applied to the Court for varying the order.