SUZANNE RUTH HENDERSON v. SCOTT HENDERSON

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO1780 OF 2013

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REASONS FOR DECISION

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The application

1.  I shall use the abbreviations in my Decision dated 27 August 2014.

2.  Upon the plaintiff’s summons, I made an order on 27 August 2014 (a) to make 2 amendments to the Hartmann Order under the slip rule and (b) an order for the defendant to forthwith pay the Support Payments that have accrued since the Hartmann Order.  I then ordered, on a nisi basis, the defendant to pay the plaintiff’s costs on indemnity basis, summarily assessed and allowed at $100,000.

3.  The defendant now seeks to vary the order nisi to one of no order as to costs.

4.  After the hearing, I dismissed the defendant’s application and made the order absolute.  Here are my reasons.

The legal principles

5.  Costs are in the discretion of the court.  For interlocutory applications, the court may order costs to follow the event: Order 62, rule 2A of the Rules of the High Court. 

6.  The court is entitled to take into account the conduct of all parties in making an award for costs: Order 62, r5 (1) (e).  Such conduct, as defined in Order 62, r5 (2) 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.”

7.  Mr Leung, counsel for the defendant, cites the case of Re Elgindata (No.2) [1992] 1 WLR 1207, 1214 A-C but that is a case on costs after full trial and not applicable to the present situation.

8.  For costs on indemnity basis,

“If a plaintiff had been forced to institute proceedings by a defendant whose conduct had been not only hostile in normal litigious sense, but oppressive and with base ulterior motive, and if the pursuit of a defence constituted conduct which was part of an oppressive game plan, then invocation of the power to award costs on indemnity basis might well be justified.”

Hong Kong Civil Procedure 2014, Vol 1, at §62/App/12, p1186.

9.  In Town Planning Board v Society for Protection of the Harbour Ltd (No.2) [2004] 2 HKLRD 95, §17, the Court of Final Appeal makes it clear that the discretion is not to be fettered or circumscribed beyond the requirement that taxation on indemnity basis must be appropriate.

Liability for costs

10.  Mr Leung submits that the plaintiff’s summons had 2 limbs.  She failed to achieve what she had intended to achieve under the 1^st limb to amend the Hartmann Order.  The plaintiff had consented to the draft Hartmann Order prepared by the defendant’s solicitors.  The 1^st limb of the application should never have been taken out.

11.  Accepting, however, that the plaintiff has been successful on the second limb of her application (for payment of accrued Support Payments), Mr Leung asks me to “set off” the costs under each limb.

12.  With regard to the 1^st limb, for present purposes, I have disregarded the relatively trivial amendment to the Hartmann Order that made a reference to the 4^th affidavit of the defendant.  That aside, the plaintiff was largely unsuccessful in relation to the 1^st limb.

13.  The amendment by addition of the paragraph requiring the mechanism to be set up for payment of arrears and future Support Payments and for the defendant to keep the plaintiff informed of such payments (“the Mechanism”) was at my instigation.  It was a glaring omission from the Hartmann Order which contributed to the defendant’s withdrawal of more salary than he was entitled to under the Hartmann Order and failure to pay the Support Payments. 

14.  However, the plaintiff made submissions on construction of the Hartmann Order under the 1^st limb.  Even if her application was limited to the 2^nd limb, she would still have to run similar arguments (see paragraph 43 of the Decision).

15.  Viewing all circumstances, the plaintiff was substantially successful in her summons. Applying the principles in paragraph 5 above, costs should follow the event and be to her.

Indemnity costs

16.  As far as conduct is concerned, Mr Leung made the correct reference to my disapproving remarks in the Decision that the defendant has been adopting a “catch me if you can” attitude and that it has been a very draining exercise on the plaintiff’s already bad health and strained financial resources. 

17.  He, however, submits that the Mareva injunction was taken out under section 21M of the High Court Ordinance, Cap 4.  The Ontario AR Order sought to be registered in Hong Kong has been refused by the District Court Registrar. 

18.  Further, he submits that the defendant’s withdrawal of his salaries after the Hartmann Order could be justified by his treatment of his provident fund as his asset for the purpose of the Mareva injunction.  The defendant was not adopting a “catch me if you can” approach when he was withdrawing his salary.

19.  In my view, whilst the Ontario AR Order could not be registered in Hong Kong as of today, that does not mean the Mareva injunction has no effect.  There are pending proceedings for judicial review in Hong Kong and the AR proceedings are still pending in Ontario.  The Mareva injunction has not yet been discharged.

20.  As for the arguments on provident fund in paragraph 18 above, it has been rejected in the Decision.  Nothing that Mr Leung says today can persuade me to come to a different view on the facts.

21.  This is a thoroughly bad case of the defendant reneging from his position before Deputy Judge Hartmann (paragraph 21 of the Decision), persistently breaching the Hartmann Order for a year even on Mr Leung’s construction of that order (paragraph 26), not denying the breach (paragraphs 8 & 12 of the Decision), not repenting it and ran desperate arguments to avoid payment (paragraph 24 of the Decision). 

22.  I maintain my view that the defendant has been adopting a “catch me if you can” attitude.  Applying the principles in paragraphs 6, 8 and 9 above, his conduct was totally unreasonable and oppressive and in clear defiance of the Hartmann Order.  The plaintiff was forced to take out her summons.

23.  I decline to vary the costs order.  There is no challenge to quantum. The order for costs on indemnity basis against the defendant is made absolute.

Costs of this application

24.  There is no merit in the application to vary the costs order.  Costs should be to the plaintiff, also on indemnity basis. 

25.  I apportion the costs so that today’s hearing time is only 5 minutes.  The application involves only legal arguments.  No affidavit has been filed by any party, nor is it needed.  The work is principally that of counsel’s.  I do not allow any costs for solicitors’ research.  I make an order that the defendant should pay the plaintiff a quarter of counsel’s brief and some costs for solicitors to consider counsel’s submission and liaison with counsel and client.  I summarily assess the costs of this summons and order the defendant to pay the plaintiff $14,500 forthwith.

26.  I thank counsel for their assistance.