MCYP v. CWYW

FCMC 11432 / 2018

[2024] HKFC 187

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. 11432 OF 2018

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DECISION

( Case Management Hearing, Costs,
Legal practitioners’ duty to comply with
court orders and case management directions )

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1.  This is the case management hearing (“CMH”) of the parties’ ancillary relief dispute. Today’s hearing was fixed about 7 months ago by an order of Master J Chow dated 8 March 2024 (“the Order”), whereby it was also ordered that:

1.1.  The Petitioner (“P”) shall lodge and serve the CMH bundles, two joint tables, agreed chronology and agreed list of disputed issues not later than 21 days prior to the CMH, that is on or before 12 September 2024; and

1.2.  Both parties shall lodge and serve submissions with proposed directions and certificate of time estimate for trial on ancillary relief dispute not later than 14 days prior to the CMH, that is on or before 19 September 2024.

2.  Both parties failed to comply with the above orders.

2.1.  The Respondent (“R”) only lodged a submission dated 30 September 2024 (two working days[1] before the CMH) without a certificate of time estimate for trial.

2.2.  P only lodged a submission yesterday (2 October 2024), also without a certificate of time estimate for trial.

2.3.  The CMH bundles (7 lever arch files of 1,555 pages), two joint tables, agreed chronology and agreed list of disputed issues were also lodged very late and were only received by this court yesterday afternoon.

3.  On 30 September 2024, seeing that no documents for the CMH were lodged by either party despite reminder from this court the week before, I directed the parties to lodge a written explanation for their non-compliance of the Order.

4.  The parties’ solicitors lodged a joint letter yesterday stating that:

“The parties have attended a Private FDR with … on 13 and 15 August 2024, and some agreements in principle have been reached. Since then, the parties have spent considerable time and efforts in sorting out the details and preparing relevant documents including the Consent Summons for a full and final settlement, in the hope that the CMH and subsequent litigation could be avoided. Unfortunately, a Consent Summons for a global settlement has not yet been agreed and finalized. The parties sincerely apologize for the delay in complying with paragraphs 3 and 4 of the said Order.”

5.  The above is not a reason for non-compliance of court order. Solicitors acting for the parties, being officers of the court, ought to know that the Order stipulated time for compliance, failure to comply within the stipulated time is a breach of court order.

6.  Legal practitioners ought to know the elementary principles that engagement in settlement discussion does not operate as a stay of the legal proceedings, nor a reason to ignore court orders and case management directions.

7.  Legal practitioners should not erroneously treat the court’s encouragement to reach an amicable settlement as a permit to allow non-compliance of court orders or case management directions. The court encourages parties to engage in settlement discussion because in most situations, both parties will stand to gain by reaching a settlement instead of pursuing their matrimonial dispute in court that intensifies the acrimony of the parties and contributes to the depletion of matrimonial assets by payment of legal costs. This does not override the court’s duty to actively manage the case including giving directions to advance certain steps in the litigation while the parties are negotiating for settlement so that adjudication of the dispute will not be unduly delayed.

8.  The provisions in the Rules of the High Court (“RHC”) apply to matrimonial proceedings with necessary modifications: Matrimonial Causes Rule, Rule 3; Practice Direction 15.12 §§3, 6. Among the underlying objectives set out in Order 1A rule 1 of RHC are to ensure that a case is dealt with expeditiously as is reasonably practicable, and the resources of the court are distributed fairly. The parties and their legal representatives shall assist the court to further these underlying objectives: Order 1A rule 3 of RHC.

9.  The Order was made in March 2024 requiring the parties to lodge documents in mid-September for the CMH today. According to the parties, the Private FDR was concluded in mid-August with agreements in principle. There is sufficient time for the parties to prepare for the case, either to finalise the settlement agreement before mid-September or to comply with the Order in time. I do not see any hurdle stands in their way if they truly wish to comply.

10.  The parties’ extreme lateness at lodging the documents in breach of the Order inevitably affects the proper conduct of the CMH and causes delay in the timely resolution of the dispute. It is interesting to note that both parties had previously complained against the other party in this case for delay.

11.  The parties extended apologies to the court in the joint letter. Expression of apologies may indicate their regret but the parties and their legal representatives should not assume that there will be no consequence because an apology is extended.

12.  The two firms of solicitors before this court, being solicitors on record, owe duty to the court under Order 1A rule 3 of RHC to timely and expeditiously comply with case management directions and orders, and are accountable for any defaults. Lack of instructions is not a cause for non-compliance. If the parties truly require time to finalise a settlement, they shall make appropriate and timely application to the court. If it transpires that there are difficulties in complying with court directions due to unforeseen developments, a solicitor should make application to the court as soon as practicable so that the court can consider making appropriate orders including time extension, unless order or dismissal of a claim: China Metal Recycling (Holdings) Limited (in compulsory liquidation and others v Chun Chi Wai and others, CACV 109/2016 and CACV 155/2016, 27 January 2017.

13.  The parties and their legal representatives are not entitled to ignore court orders and take the matter in their own hands simply because the parties are engaging in or finalising settlement negotiation. A breach of case management directions or orders may result in costs sanction, orders mandating or prohibiting certain conduct of the case, wasted costs orders and/or referral to the appropriate disciplinary body for investigation.

14.  It is with much regret that both parties and their legal representatives chose to ignore the Order. Worse still, this is not an isolated incident insofar as the two firms of solicitors before this court are concerned. Similar breaches have been recently committed by them in another case before me. Despite serious warning has been given in that case, they, as officers of the court, committed the same breach again. This could be a matter for referral to the Law Society for investigation.

15.  To move the case forward, I make case management directions today having regard to the practical situations of the parties. This petition was commenced 6 years ago. There shall be active case management to avoid further delay. I urge the parties to move on expeditiously to close the settlement which they have agreed at the Private FDR if they so wish. They are given some time to finalise their settlement agreement (if they wish to) and further stipulated time to move forward the preparation of the trial.

16.  It bears stating the obvious that legal practitioners shall come to court with full preparation for the hearing.

17.  P asks this court to adjourn the CMH to the court’s next available date so as to allow the parties to conclude the settlement negotiation. However, P has not told this court how long is the intended adjournment, what efforts have been made since mid-August to finalise the agreement, whether there is any real basis to say that the agreement can be finalised within the intended adjournment, and what is the plan and intended timeline for concluding the settlement agreement. All these are basic information for the court’s consideration of his adjournment application. It appears that P and his legal representatives have not thought through these matters. The request to adjourn the CMH to the court’s next available date is another ill-thought-out application, as illustrated by P’s immediate retraction when the court told them that it so happens this court is available to hear a CMH next week.

18.  R seeks to set the case down for trial. A party seeks to set the case down for trial should come with necessary information, including evidence showing the readiness of the case for trial, a realistic estimate of the trial duration, a certificate of time estimate for trial and proposed directions to deal with matters up to the trial. None of these information is before the court.

19.  I also reject P’s submission to reserve costs of today’s hearing. P submits that it is common to reserve costs and hence should be followed. Reserving costs order is certainly not commonly made by this court. In my view, it is wrong to simply reserve costs of a hearing without good reason. The court is tasked with the making of costs order. This should be done at the end of the hearing (including interlocutory and case management hearing) having regard to the matters set out in Order 62 rule 5(1) and (2) of RHC instead of having it reserved unless there is good reason to do so. The judge who conducts the hearing is best apprised of the details and is most suited to determine the costs of that hearing. To reserve costs of a hearing without good reason may create problems because memory will fade as time passes, or the matter will fall to be determined by another judge who has no direct knowledge of the conduct of the previous hearing.

20.  I shall determine the costs of today’s hearing. Both parties are in default as set out above. If there is evidence showing that any of the legal representatives has caused wasted costs, this court will proceed to consider whether a wasted costs order under Order 62 rule 8 of RHC shall be made. There is no such evidence before me today. I make no order as to the costs of today’s hearing.