FHY v. GJS

FCJA 973 / 2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

JOINT APPLICATION NO. 973 OF 2004

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J U D G M E N T
(Custody & costs)

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I. INTRODUCTION

1. The matters which this Court has to decide are the following:

(i)      whether the 1^st Applicant (“W”) and the 2^nd Applicant (“H”) should have joint custody of the two children of the family, upon H withdrawing his application for their care and control;

(ii)    whether H should pay W’s costs of his application for joint custody, care and control.

II.  BRIEF BACKGROUND

2. H is now 51, and was born in New Zealand.  W is now 44, and was born in Taiwan.  W moved to Hong Kong in August 1986 to work for an airline company here.  The parties met in 1987 in Hong Kong when H came here as a tourist.  Thereafter, they maintained contact and later commenced a relationship.  They were married on 23 February 1988   in New Zealand.

3. After marriage, H continued to live in New Zealand, and W returned to live and work in Hong Kong.  H moved to Hong Kong about 6 months later in September 1988, after the parties held a 2^nd marriage ceremony in Taiwan. 

4. The parties have two children: N, a daughter, born on 23^rd April 1996 and now 12 years old, and A, a son, born on 7^th January 2000 and now 8 years old (“the Children”).

5. At the time of their marriage, H was a managing director of a taxi company in New Zealand.  After he resigned to come to Hong Kong, the company kept him on a retainer for 12 months, and during this 12 month period, he had to return regularly to New Zealand to help train the company’s employees.  Thus, for about a year after he moved to Hong Kong, H did not take up any regular employment here but was travelling extensively with W.

6. In 1989, H formed a technology company in New Zealand with his young brother L and two other partners.  Later, H and one of the other two partners left to form their own computer company, but this business eventually failed and went into liquidation in 1996.

7. Thereafter, H was unemployed, and he “played” in the stock market, and apparently held a casual position as a financial analyst for some property developers here.  When the technology market crashed in 2002, followed by the Asian financial crisis, the parties had encountered immense financial pressure.

8. W has continued to work for the same airline company, and her work involves frequent travelling.

9. According to H, the parties started to drift apart after the birth of their son A, but W says that the marriage started to break down after she found a half used packet of condoms in H’s car in January 2002.   Anyway, the marriage had clearly broken down by about 1 April 2002, which was stated to be the date of separation in their joint application for divorce filed on 6 August 2004.

10. Notwithstanding their separation in April 2002, the parties were at that time able to maintain an amicable relationship and were able to communicate and co-operate over the matters concerning the Children.  

11. In August 2004, the parties issued a joint application for divorce.  About 3 months later, they reached agreement over the Children’s arrangements, and on 5^th November 2004, the parties signed the first Consent Summons (“the 1^st Consent Summons”).

13. About 6 months before their separation, in November 2001, H started employment as a director of operations for a US based company manufacturing and designing barbecue and kitchen products in China and importing such products to the United States.  In April 2004, H was apparently offered a 25% equity in this company, and was to travel to New York towards end of that year to sign an agreement to this effect.  He did go to New York, but the agreement was somehow not signed.  H explained that the reason was that he was not able to work with the company’s then managing director.  After his return from New York, in December 2004, H’s employment was then terminated.

14. After his employment was terminated, according to H, he and W came to the conclusion that unless he could secure a similar position and income in Hong Kong, he would have no choice but to return to reside in New Zealand.  Thus, according to H’s 1^st Affidavit, he started to wind up his affairs in Hong Kong in January 2005.

15. The parties’s relationship was then still amicable.  Their then agreement was for the Children to move with their father to New Zealand.   It is H’s case that during the marriage it was always the intention of the family to move back to New Zealand and it had always been envisaged that this would occur by the time N went to secondary school when fees would be much higher.

16. The parties and the Children went down to New Zealand in February 2005 and looked at appropriate schools to prepare for the Children’s move.  Then, according to H, W by chance overhead a telephone conversation between H and his girlfriend Irene (“Telephone Incident”).  It is H’s case that W became very hostile and threatened that she would no longer agree to the Children to move to New Zealand, and that she cut short her trip and returned to Hong Kong the next day with the Children.  W denied that the Telephone Incident took place in February 2005, and said it was during a later trip in August 2005.

17. Anyway, H later returned to Hong Kong.  In March 2005, he terminated his lease, moved out of his own flat, and temporarily moved into in W’s flat and slept in their daughter N’s room for about a month.   Thus, the parties’ relationship could not have been that hostile at that time.  This to this Court is an indication that, more probable than not, W’s recollection of when the Telephone Incident took place should be more accurate, that it was in August and not February. 

18. H says he tried again to apply for a job in Hong Kong in February and March, but was unsuccessful.  The parties signed a Memorandum of Understanding (“the Memorandum”) on 2 March 2005 regarding the Children’s arrangements, and entered into a second Consent Summons (“2^nd Consent Summons”) on 30 March 2005.  They also jointly signed a Supplemental Statement As to Arrangements of the Children on 30 March 2005 confirming the then agreed arrangements.   Both the 2^nd Consent Summons and the Supplemental Statement were filed in Court.

19. By the 2^nd Consent Summons, the parties agreed to have joint custody of the Children, with care and control to the Father and reasonable access to the Mother.  Further, by the 2^nd Consent Summons, the parties agreed to the Father being granted leave to permanently remove the Children from Hong Kong to New Zealand.

20. H then moved back to New Zealand in April 2005.

21. It is W’s case that at the time when she signed the Memorandum, the 2^nd Consent Summons, and the Supplemental Statement, she was already not in fact one hundred percent sure about the Children going to New Zealand, and that the Father was aware of her wavering.   It is interesting to note that in paragraph 7 of the Memorandum, it was agreed by the parties that “due to the relocation of one parent to NZ that whatever final arrangements are made for the children that initially it will be only for a trial period of three months where (sic) the arrangements will be reviewed”, and the next sentence “ The initial arrangement could be for both children to remain in HKG or to relocate to NZ, or a split arrangement but subject to funding appropriate education needs being met” was deleted.  Then paragraph 7 went on to state that “The 3 month review shall reconsider and review all possible arrangements including relocation.” Paragraph 9 then stated “Every 12 months the children’s domicile arrangement shall be reviewed to consider whether any change is required.”  The Memorandum appeared to be prepared by H and signed by the parties.  W’s solicitor also signed as a witness. 

22. It is also W’s case that after H’s move back to New Zealand, she had already told him that she needed time to re-think about the Children moving to New Zealand, and that was why H later came back again to Hong Kong shortly after his move, in about April/May 2005, to help to enrol the Children into schools here for their new term in September that year. 

23. The terms of the 2^nd Consent Summons were to be made an order at the time of the pronouncement of the Decree Nisi.  About 4 days before the hearing for the Decree Nisi on 13 June 2005, W instructed her then solicitors to write to the Court to indicate that she was withdrawing her consent to the 2^nd Consent Summons (the Letter).   

24. As a result of the Letter, upon granting of the Decree Nisi on 17 June 2005, all questions relating to custody, access and financial provision were adjourned by this Court.  The Letter was, regrettably, not copied to H, and at the time, H was not aware that the 2^nd Consent Summons had been adjourned by this Court.

25. The Children visited their father in New Zealand in August 2005 and stayed there for about 6 weeks.  W later went to New Zealand to bring the Children back to Hong Kong. 

26. After her return in September 2005, the parties had a heated argument over the telephone.  W said the argument was that because of the Telephone Incident, and H claimed that the argument developed because W wanted him to pay HK$13,000 per month for the Children’s maintenance.  Anyway, H claimed that it was only on 9 September that he was eventually told of W’s withdrawal of her consent to the 2^nd Consent Summons and the adjournment of the same, and that he was only eventually able to obtain a copy of the Letter sometime in November 2005.

27. Thereafter, the relationship between the parties became acrimonious, and communications between them started to break down.

28. After the Children’s visit to New Zealand in August 2005, there were initially some discussions between the parties regarding the Children visiting their father again in December that year and also in April 2006.  Neither of these proposed trips eventually materialized.  For summer 2006, H had to make an application to this Court for the Children to visit him, and this Court subsequently granted his application on 7 August 2006 and further ordered W to pay the costs of his application.

29. After summer 2006, the Children have not been to New Zealand again.  H last saw the Children when he was in Hong Kong during the first part of the trial in February and March last year.

30. Since H’s return to New Zealand, the Children have been residing with the Mother, who looks after them assisted by a domestic helper.  

31. H formally issued a summons through his solicitors on 15 February 2007 seeking joint custody of the Children, with their care and control to him and leave for him to remove the Children permanently from Hong Kong to reside in New Zealand.

32. Although there was no formal summons issued on behalf of W, it is clear that she opposed the Father’s application and seeks sole custody, care and control of the Children.

33. At the commencement of the trial, the parties agreed to call the social welfare officer and the officer from the Against Child Abuse last, i.e. after the parties’ and their witnesses’ oral evidence.  The first part of this trial commenced on 23 February 2007, and lasted 6 days.  As the trial was not able to finish then, it was adjourned part-heard, and resumed on 11 May 2007 for another 2½ days.  It still could not finish, and thus another 2 days were originally set aside on 10 and 11 October 2007.   Subsequently, these dates had to be vacated, mainly because the son A was then exhibiting some behaviour problems, and a psychologist report had to be obtained, and further the Father was unable to attend in October.  In any event, it then transpired that 2 days would not be sufficient to complete the trial.  Thus, both sides agreed to a further adjournment and the trial was then re-fixed for another 8 days from 7 April 2008 onwards.  A pre-trial review hearing was fixed on 29 February 2008.

34. Throughout the trial, H was under legal aid.  However, his legal aid was discharged on 6 February 2008 when apparently H decided not to pay to the Director of Legal Aid the required additional contribution.  His previous solicitors then ceased to act for him.

35. At the pre-trial review on 29 February 2008, H was absent.  2 days before the pre-trial review, he had sent a letter indicating that he was withdrawing his application for care and control, and only sought joint custody.   This Court thus made an order on 29 February 2008, granting W care and control of the Children, with reasonable access to H, and gave directions for written submissions to be filed by both parties in relation to joint custody and costs.

36. At present, W still works for the same airline company.  N started attending secondary school in September 2007.  By September 2008, A should be attending the same secondary school, which is partly funded by the Government and partly funded by the English School Foundation. 

37. After his return to New Zealand, H apparently worked part-time as a surveillance technician for a while.  He then decided to undertake further academic studies, first taking a number of short courses in the third quarter of 2005 before commencing his formal MBA studies in January 2006.  He completed his PGDipBus in December 2006, and completed his MBA in December 2007.  H has decided to undertake a Ph.D. at the University of Auckland in international business.  He has apparently also been invited to become a lecturer and following training, he has recently commenced part time lecturing.

III.   SOCIAL WELFARE REPORTS

38. On 21 December 2005, this Court called for a Social Investigation Report from the Social Welfare Department in Hong Kong (“HKSWR”) and an International Social Welfare Report (“ISWR”) in New Zealand. 

39. The 1^st ISWR was dated 1 March 2006, and the 1^st HKSWR was dated 24 March 2006.  In the 1^st HKSWR, the recommendation of the Hong Kong social welfare officer was that W should have sole custody, care and control of the Children. 

40. As the international social welfare workers did not have an opportunity to interview the Children at the time of the preparation of the 1st ISWR, this Court then called for a further ISWR, so as to give an opportunity for the international social welfare workers to interview the Children when they were down in New Zealand in the summer of 2006.

41. In the 2^nd ISWR dated 25 September 2006, international social workers revealed that they were introduced to H’s partner Irene.  Irene was then pregnant.

42. After the trial was adjourned part-heard, this Court then called for updated reports.

43. The 3^rd ISWR was dated 12 September 2007.  H was by then living with Irene and their baby daughter. 

44. In the updated 2^nd HKSWR dated 10 October 2007, it was again the recommendation of the Hone Kong social welfare officer that W should have sole custody, care and control of the Children.

45. As H did not attend the resumed trial, the Hong Kong social welfare officer responsible for preparing the 1^st HKSWR and the 2^nd HKSWR was not called and was not cross-examined.

IV.     JOINT CUSTODY

Grounds H relies on for Joint Custody

46. From what I could gather from H’s Written Submissions, his grounds are:

(i)      Article 18(1) of the UN Convention on the Rights of the Child obliges state parties to use their best efforts to ensure recognition of the role of parents in protecting the interests of children and that both parents have common responsibilities for the upbringing and development of the child.

(ii)     The philosophy behind the 1989 Children Act in England is that children are generally best looked after by both parents playing a full part in the children’s upbringing, and that the intent of the Act is that a parent who does not have the child living with him should still be regarded as a parent so that he can be given information and an opportunity to take part in his child’s upbringing because this encourages continuation of parental relationships with the children.

(iii)     A key principle of the New Zealand Care of Children Act 2004 is that the child should have continuing relationships with both his or her parents.

(iv)    It is in the welfare and paramount consideration of the Children for their parents to have joint custody.

(v)     As W is often travelling due to her work, in the past, H had been contacted by the school and the maid regarding the Children, as W could not be contacted.

(vi)    The current acrimony between the parties has only arisen because of the nature of these proceedings which has fostered a climate of tension and a culture of uncooperative behaviour because of the adversarial system and not because W and he cannot work together towards the same end.

(v)  Geographical distance in the modern world is not an impediment to joint decision making given modern telecommunication systems.

(vi)    Social welfare reports are only one of the matters that the court should pay regard.

(vii)   He does not accept that he has only communicated with W through the Children.

(viii)  The criticism against him for embarking on studies was focused on the short run, as in the long run, he would become well equipped to facilitate the Children’s future education needs particularly at tertiary level. 

Grounds W relies on for opposing Joint Custody

47. On behalf of W, Mr. Erving has submitted that:

(i)     The Hong Kong social welfare officer has recommended sole custody to W

(ii)     H & W have great difficulty in communicating.

(iii)     H has not seen the Children since February/ March last year, and there is nothing to stop him obtaining part time employment in order to finance trips to Hong Kong to see the Children.

48. During the hearing on 8 April 2008, Mr. Erving indicated that W is prepared to provide an undertaking to consult with H over major decisions on education, medical treatment, place of abode and religion. 

Legal Principles

49. s. 3 of the Guardianship of Minors Ordinance sets out :

“(1)      In relation to the custody or upbringing of a minor, and in relation to the administration of any property belonging to or held in trust for a minor or the application of the income of any such property-

(a)        in any proceedings before any court (whether or not a court as defined in section 2) the court -

(i)       shall regard the welfare of the minor as the first and paramount consideration and in having such regard shall give due consideration to -

(A)         the wishes of the minor if, having regard to the age and understanding of the minor and to the circumstances of the case, it is practicable to do so; and

(B)         any material information including any report of the Director of Social Welfare available to the court at the hearing;

50. For the avoidance of doubt, s. 48C Matrimonial Causes Ordinance, Cap. 179 states that :

“…… section 3 of the Guardianship of Minors Ordinance (Cap 13) (which provides that the welfare of the minor shall be the first and paramount consideration) shall apply in relation to any order for the custody care or supervision of a child which may be made under this Ordinance or the Matrimonial Proceedings and Property Ordinance (Cap 192)”

51. The Law Reform Commission of Hong Kong has published a Report on “Child Custody and Access” on 7 March 2005 (“the Report”), which sets out the present state of the law on children in Hong Kong and makes recommendations for change.  On custody it says :

“2.16    ‘Custody’ comprises the bundle of rights that parents have over their children.  This includes the right to ‘care and control’ and the right to make all important decisions affecting the child, such as decisions regarding his education, religion and medical treatment”.

52. It would appear that the term “custody” means making the important decisions about a child’s life.  However, in the case of Dipper v Dipper [1980] 2 ALL ER 722, it has been stated that :

“It is wrong to suggest that the parent with custody has the right to control the children’s education, religion or other major matter in their lives.   Neither parent has any pre-emptive right over the other, each being entitled to be consulted and disagreements between them must be resolved by the court”.

53. As stated by Judge Melloy in her Judgment dated 10 September 2007 (unreported) in S and Z FCMC No.  14535 of 2005, joint custody means that the parents should be able to make the major decisions concerning their children’s life together.   Although there have been cases where joint custody has been ordered where the parties find it difficult or indeed impossible to co-operate with each other, the general rule of thumb is that joint custody should only be ordered where the parents are able to work together effectively.   The Report describes it thus

“2.32    Joint custody is where the court grants custody to both parents, although physical care and control is usually granted to only one of them.   Liu explains the rationale behind the joint custody order: that instead of one party being given the right to decide important matters affecting the upbringing of the child, both parties are given that right.  ‘Such order symbolizes divorced or separated parents playing a joint role in the upbringing of the child and neither is excluded’”.

54. Judge Melloy has further said in paragraph 15 in S and Z : “Sometimes orders for joint custody are aspirational.   They are made in the hope that the parties’ will be able to work towards co-operating with each other in the future.”  

55. In a recent unreported decision of Recorder Rimsky Yuen SC dated 23rd May 2007 in ML and YJ HCMC 13 of 2006, which was also referred to by Judge Melloy in S and Z, Recorder Yuen SC analyses both English and Hong Kong authorities and summarises that

“the position can be stated as follows :

(1)        In considering whether to grant joint custody to both parents or sole custody to one of them, the first and paramount consideration is the welfare of the child.

(2)        Whether or not a joint custody is workable depends very much on whether the parents can co-operate.  A court may refuse to grant joint custody if there is no reasonable prospect that the parties will co-operate.  Whether or not there is such reasonable prospect is a question of facts.  If there is no reasonable prospect of co-operation between the parties, an order of joint custody can be a recipe for disaster and contrary to the best interest of the child.

(3)        A joint custody order may in appropriate cases be made for the purpose of encouraging parents to overcome their differences and co-operate for the benefit of their children.   Joint custody in such circumstances can serve the purpose of recognizing the role of both parents in the children’s upbringing.   However, if it is clear that a joint custody order is not workable, it seems unlikely that the Court will nevertheless make such a joint custody order solely for the purpose of encouraging the parties to overcome their differences or to recognize the continuing role of the parties.  As stated above, a joint custody order which is unlikely to be workable cannot be in the best interests of the children as the adverse consequences will far outweigh the benefits that it may bring.

(4)        A custody parent does not have the right to make all the decisions about the children in spite of disagreements of the other parent.  Should there be any disagreements over major matters affecting the children, the party who does not have custody can bring the matter to the Court for determination.”

56. Mr. Erving has not in fact referred this Court to the Report or the above cases but I believe that the above general principles should not be disputed by him or by H.

The present case

57. Mr. Erving in fact agreed that prior to the Children’s Act in England, the starting point in respect of custody was that joint custody should be ordered in the absence of good reason for not so doing.   

58. It is clear that a joint custody order may sometimes in appropriate cases be made for the purpose of encouraging parents to overcome their differences and co-operate for the benefit of their children.   Joint custody in such circumstances can serve the purpose of recognizing the role of both parents in the children’s upbringing.

59. In the present case, after the parties separated, they were able to work out a successful and workable arrangement for the Children and up until September 2005, the parties were still able to communicate.   Although W was still being cross-examined, and had not finished her oral evidence, from the evidence given by the parties so far, I accept that W was already having second thoughts about the Children going to New Zealand by about March/ April 2005, and H was aware of her wavering.   H was clearly prepared to give her time as he came back in about April/May to help N to get back into her previous school, and to find a new school for A, since the parties had by then cancelled the Children’s places for the new term at their previous school.

60. At the time when W changed her mind, she should have instructed her solicitors to write to H to make it clear and to explain to H why she was changing her mind about the Children going to New Zealand, and a copy of the Letter should have been sent to H.   Unfortunately, this was not done.  Thus, H accuses W of going behind his back.

61. W’s accidental discovery of H’s affair with Irene clearly also affected her trust in H.  Although W and the Children had met Irene, W did not know the extent of Irene’s relationship with H.  H should have disclosed to W his relationship with Irene, which started in Hong Kong in about June 2003, almost 2 years before his move back to New Zealand.

62. But, does this mean that the parties will not be able to communicate or co-operate in future over the children?

63. Mr Erving told this Court that W recently had a flight to Auckland, and she voluntarily delivered gifts from the Children to their father, and brought back gifts from their father to them.  Mr. Erving told this Court that W accepts a duty to consult H, and she is prepared to provide an undertaking to consult H over major decisions on education, medical treatment, place of abode and religion.  I give W credit for her efforts.

64. One reason why W opposes joint custody is that there is geographical difficulty, and a long history of inability to communicate.   In my view, geographical distances these days should not cause difficulty since communications can be by telephone or email.

65. So far as long history of inability to communicate is concerned, it appears that communication between the parties started to break down only about 2 1/2 years ago.  By comparison, however, the parties were able to communicate and co-operate over the Children for almost 3½ years since their separation in April 2002 until September 2005, and also presumably during their cohabitation, since there has been no evidence otherwise.  

66. Looking at the overall picture, the period of inability to communicate/co-operate so far has been relatively short in the Children’s lives.  W has recently demonstrated an ability to break the ice a bit, and from H’s Written Submissions, it seems that he is of the view that following the end of these proceedings the conflict will dissipate and communication will improve.

67. Mr. Erving has submitted that H has had no involvement in the Children’s lives at all since he went down to New Zealand.  This is not entirely correct.

68. H did come back in about May 2005 to help the Children enrolling into schools for the new term.  H has also referred to an incident in September 2007 when allegedly the son A’s school found it necessary to contact him about A’s anti-social behaviour because W was flying and could not be contacted.  In view of the nature of W’s job, I agree that when she is flying, there may be a problem contacting her in case of emergency.  I understand that she may try and arrange for shorter flights, but still when she is in the air, she may not be immediately contactable.

69. Although H has not seen the Children for over a year, and has not contributed towards maintenance of the Children for a long time, one cannot say he has had no involvement in the Children’s lives. 

70. The Children were close to their father and have remained so.  According to the 2^nd HKSWR, N has maintained regular communication with her father through telephone and email, and she would like to have face-to-fact contacts with him.  A missed his father and hoped that he could stay with his father in New Zealand during long school holidays.

71. Mr. Erving also relies on the recommendations in the social welfare reports.  Although the Hong Kong social welfare officer had recommended sole custody to W, it appears that the officer’s recommendation was simply that W’s parenting capacity in that she was in a better position look after the Children, the mother-children relationship and continuity of care.  As pointed out by H, the social welfare report is only one of the matters that the court should pay due regard to in determining what is the best interest of the child (see WSM v FSY (A Minor, Custody Appeal) 2005 3 HKC 319).  In my view, the reasons given by the officer are not sufficient to exclude consideration of joint custody.

72. W is prepared to undertake to consult H over major decisions over the Children.  Mr. Erving has submitted that the main difference between sole custody and joint custody in this case is that if there is disagreement between the parties over any such decisions, then if W has joint custody, she will have to come back before the court to seek an order before making that decision; whereas if she has sole custody, in case of any disagreement, then H will be the one making an application for to object the decision made by W.  The present trial has already caused a financial strain on W, and she is extremely concerned that H may take advantage of a joint custody order.  I appreciate W’s concerns, and the order I am making should help allay her concerns in this respect.

73. Having considered all the circumstances, I am not satisfied that this is a case where there is no reasonable prospect of the parties communicating or co-operating in future.  They should be encouraged and given an opportunity to try and rebuild their communication.  After all, if there appears to be continuing difficulty, it will be open to W to seek to vary the order.  I am therefore prepared to allow H’s application for joint custody.

74. To allay W’s concerns over having the burden of having to bring any matters to court in case of any disagreement, I will further order that in case of any disagreement over any major decisions over the Children, W’s decision will be final, unless this Court orders otherwise on application by H.  Thus, if H disagrees with any of W’s decisions, the burden will be on him to make an application to this Court.  I am of the view that this is not contradictory to the principles behind joint custody.   Further, the main reason why I decide to make a joint custody order here is to hopefully encourage the parties to build up communication and co-operation again and to give a recognition to H’s role as a father.

V.  COSTS 

W’s Grounds for seeking costs

75. Mr. Erving has put forward 3 distinct reasons as to why W should be awarded her costs:

(i)      H has acted unreasonably in pursuing his application in light of the recommendations made in the HKSWRs as long ago as 24 March 2006.  

(ii)    The manner in which H’s case was presented, argued and prosecuted has resulted in lengthening the trial.

(iii)     because H was legally aided, and W was not entitled to legal aid, it was not an equal contest.   W had to fund the litigation from her own resources, and has incurred legal costs amounting to about HK$750,000, a large proportion of which remains unpaid, despite the fact she has borrowed from her provident fund, which inevitably will deprive the Children of such use over time.

H’s Grounds for opposing paying costs

76. H says:

(i)      He has not acted unreasonably in pursuing his application, and that the entire saga could have been avoided if W had not gone behind his back thereby setting the foundation from which conflict fuelled by third parties arose.

(ii)    There was an original agreement, and a signed consent summons, and that W reneged on that agreement and did so behind his back.  Thus, his application was justified.

(iii)     He does not accept the social welfare report.

(iv)    He does not believe that W had borrowed from her provident fund.

(v)    He made an offer for mediation, but was refused by W.

(vi)    Vast sums have been spent in New Zealand by W on private investigators and lawyer and the proportionality of that suggests that someone was looking for more than information for W’s care and control case, and H believed that the information sought was to assist third parties whom H seems to be now embroiled in litigation with.  H suspects the persons driving W’s case were such other third parties.

General Principles

77. Mr. Erving has referred this Court to F v F (HCMP 4/2001) on Costs, and relies on a statement quoted from Butler-Sloss LJ (as she then was) in Gojkovic v Gojkovic 1991 2 FLR (CA) 233 referred to in paragraph 12 in F v F:

“…….there still remains the necessity for some starting-point.  That starting-point, in my judgment, is that costs prima facie follow the event (see Cumming-bruce LJ in Singer v Sharegin 1984 FLR at p 119), but may be displaced much more easily than, and in circumstances which would not apply, in other Divisions of the High Court.  One important example is, as the judge pointed out, that it is unusual to order costs in children cases.”

78. Costs are clearly in the discretion of the court.  In a recent case L v C  (on Costs) CACV 169 of 2006, Yuen JA has set out certain pointers as to how that discretion should be exercised which include the following:

“(1)  in family cases, as in others, costs should normally follow the event;

 (2)  however because of the special dynamics of family litigation (e.g. where the case involved children, or where financial resources were inadequate to meet the needs of both parties, etc.), the discretion may be broader than in civil matters generally (Gojkovic v Gojkovic [1991] 2 FLR 233, F v F (No.2) [2003] 3 HKLRD 977);  

 (3)   the court also retains a discretion to deprive successful litigants of costs under the Elgindata principles (In re Elgindata Ltd (No.2) [1992] 1 WLR 1207);

 (4)   where a litigant succeeds on appeal but only on a new point, the court can deprive him of the costs below (Farquharson v Morgan [1894] 1 QB 552)or even order him to pay those costs (Yip Lai Fong v Sin Tung Hing [2004] 3 HKLRD 230), and the court can deprive him of the costs of appeal (Chard v Jervis (1882) 9 QBD 178)”

79. The general principle in children’s cases is that 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 courts ( see R v R (Costs:Child Case) 1997 2 FLR 95, H v H CACV 42 of 2002 , dated 25 July 2002). 

The Present Case

80. Mr. Erving informed this Court that neither side has sent out any settlement proposals, whether without prejudice or not.  In his Written Submissions, H has referred to a letter dated 23 December 2005 from his solicitors to W’s then solicitors offering mediation.  He claims that this offer was refused.  Mr. Erving has informed this Court that this was not the case and has referred this Court to the reply letter.   What W’s then solicitors wrote was : “ In respect of attending mediation our client is not unwilling provided each party contributes equally to the cost.  However in her opinion the parties are so far apart on this issue mediation is unlikely to succeed and a recommendation would be better left to Social Welfare Department especially as a Social Welfare Report has been ordered.”

81. Although I accept W did not refuse the offer of mediation, there was clearly a lack of enthusiasm on W’s part.

82. In fact, there was also an earlier email from H on 31 August 2005, suggesting that he and W to participate in the Family Court’s Pilot Scheme for Mediation, but when W’s then solicitor replied informing H that the free “Pilot Scheme” had ended and the parties would have to pay for the mediation process, there was then no follow up.

83. It is a pity that both sides have not followed up on the mediation proposal.  H and W have been represented by solicitors well known in the matrimonial field, and it has come to the surprise of this Court that neither side has attempted to explore the possibility of mediation any further after the above exchanges.   There are social workers or organizations where charges for mediation are low, and in any event, even a private mediator’s fees would be low by comparison to the costs of litigation incurred by W.   It is widely accepted that in children cases, litigation should be of last resort, since this will no doubt increase acrimony and hostility between the parties.  In my view, there is a duty on both parents to try mediation first in case of any differences, and after all, recommendations from social welfare reports are not conclusive.  In many cases, the courts have not followed such recommendations.

84. Not only has there not been any follow up on any mediation, it appears that no further letters were written in relation to exploring any possibility of compromises or alternatives.  The only evidence of any discussion was of W saying that she had a discussion with H in late 2006 in a hotel in Auckland when she was down there on a flight, by proposing to H that she would look into re-instating H’s travel benefits, if H were to agree to the children remaining in Hong Kong.  This would increase H’s chance of seeing the Children, although this proposal would be detrimental to her as this would require her to switch to a new scheme offered by the airline company instead of remaining on her old scheme.  Now it is too late, since W apparently is not able to switch any more, and there is no chance of reinstating H’s travel benefits.  After her return from Auckland, W should have instructed her solicitors to write to H to formally put these proposals forward so that there would no misunderstanding as to what her proposals were.  This was not done.  H’s case was that W was threatening him during this discussion, namely if he did not give up the fight and let her have sole custody, care and control, then he would never see the Children again.  

85. The trial then started in February 2007, and both sides took aggressive stance.

86. Mr. Erving says he did send a letter to H’s then solicitors after the 2^nd HKSWR on 22 October 2007 inviting H to concede to custody, care and control, but there was no reply or even an acknowledgment to his letter.  

87. It is clear to me that by March/April 2005 H was already aware that W was having second thoughts about the Children going to New Zealand at the time of his move.  Certainly, after he moved back, no accommodation was arranged for the Children, and it was his evidence that he would need at least a month to arrange for a 3 bedroom house in the area of the Children’s school.  During cross-examination, he himself had said W was extending the time initially for the Children to stay in Hong Kong until the end of their school year in June and then later until end of calendar year, and he was trying to be accommodating.  H knew W was procrastinating and delaying the Children’s departure.   

88. H blamed W for going behind his back.  There is no evidence that not sending a copy of the Letter to H was deliberate. 

89. W, however, was clearly the one who unilaterally withdrew her consent to the 2^nd Consent Summons.   It has been said that agreements entered into by husband and wife of their own free will and under proper legal advice should be upheld, but this usually refers to financial agreements.  Not withstanding any agreement between the parents, a child’s welfare and best interests are of paramount consideration to the courts, and the courts have the power to override such agreements. 

90. It has often been said that social welfare officers are the “eyes and ears of the court”.  H has challenged certain parts of the social welfare reports, but in the 1^st HKSWR dated 24 March 2006, the clear indication from N was that she preferred to remain living with her mother in Hong Kong and she did not want to reside in New Zealand then as she had many good friends in Hong Kong and she was enjoying studying at her school.  Although A wanted his parents to live together, he liked living with his mother and studying at his then school.  N and A were then respectively 10 and 6.   A child’s wishes is one of the matters this Court is required to give due consideration to under s. 3 of the Guardianship of Minors Ordinance, having regard to the child’s age and understanding.  The Children’s wishes were the same 18 months later, as reflected in the 2^nd HKSWR (10 October 2007).  H has submitted that the reports were “static” and they did not cater for the possibility of a change in future circumstances or indeed for the children’s future wishes in view of their educational needs.  

91. I agree that the social welfare reports are based on the circumstances at the time of the preparation of the reports.  However, if there is any material change at any time, it is always open for either party to make an application for variation.

92. H has alleged that there were other third parties driving W’s case.  There is not sufficient evidence before this Court that this was the case. 

93. Mr. Erving submits that H should have accepted as early as 24 March 2006 the inevitability of the outcome of his application.  Notwithstanding the recommendation in the social welfare report, H did have a case for joint custody, and the reasons put forward by him for care and control included that, being a student, he would have a more flexible schedule, and could provide “hands on ” care for the Children, and that W was frequently out of Hong Kong.  By the time of the trial in February 2007, however, H had left Hong Kong and the Children had remained under their mother’s care in Hong Kong for almost two years.  Notwithstanding H’s allegations against W, the social welfare officer had found the Children leading a stable life under the care of their mother, and the Children wanted to remain staying with their mother.  Certainly by the time of the trial, there was increasing possibility that the Children’s status quo would be maintained and that W would have their care and control.  However, even if there is very little prospect of H succeeding in his application for care and control of the Children, such by itself is not necessarily a reason why H should pay costs (see H v H referred to above).

94. In his Written Submissions, Mr. Erving has set out a list of H’s manner in which his case was presented.  I will not repeat the list here, save that I did find certain parts of H’s case too much of a co-incidence and parts of his evidence unsatisfactory, such as the alleged accidental damage of Irene’s passport in the washing machine after H’s solicitors agreed to produce the same, the failure to produce Irene’s immigration file, or at least copies of his letters written in support of Irene’s application for work/residence permit and also the alleged burglary into his home when H’s computer notebook and a file containing personal documents were allegedly stolen.  All these and the very lengthy affidavits he filed had resulted in lengthy cross-examination on H’s credibility.

95. H’s lack of full and prompt disclosure regarding his finances, and his decision to only work part time and to go back to studying has further attracted considerable cross examination regarding his financial situation.  H says he is now well equipped to facilitate the Children’s future educational needs, particularly at tertiary level where his area of academic expertise and research is on high demand internationally.  Whatever he may say, in my view, H’s decision to go back to studying instead of working full time is irresponsible, as by his doing so, he has caused the burden of maintaining the Children to fall solely and squarely on W.  This is extremely unfair to W.   

96. H’s evidence took almost 6 days out of the 9 days of the trial last year.  Mr Erving had provided an estimate of W’s costs on 15 May 2007.   As at 15 May 2007, the total estimate was HK $420,146 of which HK$267,000 had been paid by W and HK$153,146 was then outstanding.   In Mr. Erving’s recent Written Submissions, the total figure has now gone up to about HK$750,000.  I am not clear as to why it has gone up so much since 15 May 2007.  Further, according to what Mr. Erving told this Court at the hearing on 8 April 2008, W borrowed from her provident fund HK$400,000 over a 12 month period from July 2007, and that she will have to start repaying from July 2008 onwards with interest.  Mr. Erving told this Court that HK$250,000 was paid by W to his firm over different instalments, the last payment was in December 2007.  It appears that this HK$250,000 would therefore be a different amount from the HK$267,000 which was already paid by W by 15 May 2007.

97. Notwithstanding it is not clear what amounts of costs have been paid by W, and what amounts are now outstanding, I accept that W’s costs for this litigation are high.  Whether W has borrowed from her provident fund to pay for legal costs or other purposes, she is not on legal aid, and she needs to fund her own litigation.

98. As I have indicated earlier, both parties have a duty to pursue mediation or negotiation through their solicitors to try and resolve their differences earlier to avoid this lengthy and expensive trial, and in my view they have not tried hard enough.  W therefore has to bear some responsibility towards her own costs as after all, it was her who changed her mind, and the Letter and/or her changing of mind was not properly communicated to H.  In fact, when H’s solicitors wrote on 27 October 2005 seeking an explanation as to how the 2^nd Consent Summons was withdrawn without consultation with H, W’s then solicitors replied in their letter of 9 November 2005 that W’s decision to withdraw her consent was a matter for her and her alone, and at the time, they had no instructions from W to consult H.  Her then attitude was not certainly not conducive or helpful towards any settlement proposals.  

99. H withdrew his application for care and control only shortly before pre-trial review at end of February this year.  By comparison, H has paid only very little towards legal costs/contribution to the Director of Legal Aid.  H has succeeded in his application for joint custody.   However, having considered H’s conduct during this litigation, which has lengthened the litigation, and that H withdrew his application for care and control only early this year, there is no reason why he should not contribute towards part of W’s costs.

100. Considering all the circumstances, I exercise my discretion and order H to pay personally one half of W’s costs.

VI.  MY ORDER 

101. My order is thus:

(i)      The 1^st Applicant and the 2^nd Applicant shall have joint custody of the two children of the family.

(ii)     In case of any disagreement over any decisions over the children, the 1^st Applicant’s decision shall be final, unless the Court orders otherwise on application by the 2^nd Applicant.

(iii)     The 2^nd Applicant shall pay personally one half of the 1^st Applicant’s costs of his application for custody, care and control of the children, to be taxed, if not agreed, on party and party basis.