CMJF nee T v. MGF

FCMC 7409 / 2013

[2019] HKFC 171

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 7409 OF 2013

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D E C I S I O N
(Directions/Recusal)

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Introduction

1.  There are 2 applications before this Court.

2.  First, there is an application by the Respondent Husband (“H”) by way of Summons dated 17 April 2019 seeking a Financial Dispute Resolution (“FDR”) hearing in this Court with 1 day reserved; failing settlement, for a trial of the Petitioner’s Wife (“W”) ancillary reliefs with 6 days reserved before a different trial judge in consultation with Counsel’s diaries.

3.  Prior to H’s Summons, W’s former solicitors Messrs. Stevenson, Wong & Co., had filed a Summons on 17 December 2018 (which was dated 6 December 2018) seeking various directions for the further conduct of trial of W’s ancillary reliefs.

4.  W’s Summons was first heard on 1 April 2019 when W, turned up by herself unrepresented claiming that she could not afford to pay her then lawyers and had to act in person, whilst H continued to be represented by Mr. Mark Side of Tanner De Witt. At the hearing, Mr. Side for H made submissions on the suitability of W’s ancillary reliefs to be heard by this Court.

H’s Position

5.  H’s position was that a “Xydhias Agreement” was reached between the parties using up the 6 days scheduled time for the trial of W’s ancillary reliefs back in January 2018. Though H acknowledged that this Court disagreed with H’s position and that his appeal against this Court’s decision was also dismissed by the Court of Appeal, it is inappropriate or procedurally incorrect for W’s ancillary reliefs to be tried by this Court for the reason that this Court had been exposed to prejudicial information and materials during the 6-day negotiation such that continued participation by this Court compromises the fairness of these proceedings.

6.  Since the parties had in mind the spirit of the Civil Justice Reform (“CJR”) and spent the bulk of the time scheduled for the trial of W’s ancillary reliefs in engaging last minute settlement negotiation, it was submitted that what had taken place within the 6-day trial in January 2018 was essentially an “Extended FDR”. As no consensus was reached at the end of the day, the parties should now appear before another judge who had not been exposed to the privileged information revealed during the “Extended FDR” to hear W’s ancillary reliefs.  It was well settled under PD 15.11 which provides that the FDR hearing is to be conducted in the circumstances of privilege.

7.  H is seeking this Court to recuse itself from further involvement in these proceedings save and except to hold one further FDR.

W’s Position

8.  W submitted a letter dated 2 May 2019 to set out her position and attached with a 6-page note reciting briefly what had happened during the 6 days scheduled for the trial which had ended up with protracted negotiation. It also sets out W’s intended claim for resumption of the interim payment order on legal costs contribution of HK$60,000 a month to backdate from February 2018 following the aborted trial. At the end of the note, W sets out a table showing her liabilities on legal fees to her then lawyers had run up to HK$3,134,320.

9.  At this hearing, this Court confirmed with W her position and grounds of objection.

Practice Directions 15.11

10.  As H had raised as an issue the applicability of the Practice Directions, namely, PD 15.11 to the present case in support of his Summons, I now set out the relevant parts of the said PD 15.11 for the sake of completeness.

11.  Under Paragraphs 8 and 9 of PD 15.11, it provides :

“8. The FDR hearing

a. The FDR hearing shall be by Notice in Form D which will be served by the Applicant on all parties concerned;

b. The judge conducting the FDR hearing shall have no further involvement with the Application, other than to conduct any further FDR hearing;

c. Evidence of anything said or of any admission made in the course of the hearing shall not be admissible in evidence in a court, save upon the trial of a person for an offence committed at the hearing;

d. No offer or proposal made by a party, whether orally or in writing, nor any response to any such offer or proposal, may be excluded from consideration at the FDR hearing by virtue of a claim of privilege;

e. Not later than 7 days before the FDR hearing the applicant shall apprise the Court of details of all such offers, proposals and responses thereto by delivering an indexed and paginated FDR bundle containing the relevant documents, and at the conclusion of the hearing the FDR bundle shall be returned to the Applicant or Respondent as appropriate and not retained on the Court file;

f. Parties attending the FDR hearing shall use their best endeavours to reach agreement on relevant matters in issue between them;

g. The FDR hearing may be adjourned from time to time, and at the conclusion thereof the Court may make such consent order as may be appropriate, but otherwise must give directions for the future course of the proceedings, including, where appropriate, the filing of evidence and fixing a final hearing date.

9. Both parties shall personally attend every hearing unless the court otherwise orders.”

12.  Further, under Paragraph 11 of PD 15.11, it provides :

“11. Statement of Open Proposals

a. Unless otherwise directed by the Court, not less than 21 days before the date fixed for the final hearing of an Application for ancillary relief, the Applicant shall file with the Court and serve on the other party to the Application a concise statement setting out the nature and amount of the orders which he or she proposes to invite the Court to make.

b. Not more than 7 days after service of a statement under Paragraph 11(a) above the Respondent to the Application shall file with the Court and serve on the applicant a concise statement in answer setting out the nature and amount of the orders which he or she proposes to invite the Court to make.

c. No privilege shall attach or be capable of attaching to either of the statements referred to in Paragraph 11(a) or (b) above.”

13.  Furthermore, the following paragraphs under the Explanatory Note to PD 15.11 are also relevant :

“Application and extent

3. The Practice Direction provides for an early First Appointment at which directions will be given with the objective of defining the issues and saving costs. Provision is made for there to be a Financial Dispute Resolution (“FDR”) hearing where proposals for resolving the Application can be discussed in circumstances of privilege. The extent of discovery will be limited. Written estimates of costs will be required to be provided at each hearing so that the parties are fully aware of the costs that are being incurred in the proceedings.

Judge

5. The Judge before whom the FDR hearing is held will have no further involvement with the Application other than to conduct any further FDR hearing or give further directions.”

The Court’s Views

14.  Given H’s contention and Mr. Side’s submissions, I believe the following questions need to be considered :-

(a) Had the 6-day trial of W’s ancillary reliefs scheduled to commence on 18 January 2018 become, or could be said to become, an “Extended FDR” so submitted in paragraphs 5 to 8 of Mr. Side’s Note of Hearing dated 21 June 2019 ?

(b) Had this Court taken any part in the parties’ negotiations which ended up with the signed document named “Heads of Agreement” or, the “Xydhias Agreement” (so alleged by H) and presented before this Court ?

(c) The practice of “FDR” generally.

An Extended FDR ?

15.  According to the records, the FDR in this case was held before my sister Judge Melloy but unfortunately failed at the end.  The case was then set for Pre-Trial Review and scheduled for trial in this Court.

16.  As PD 15.11 so provides, the FDR hearing is to be conducted in circumstances of privilege.  Thus, this Court having been designated to be the trial Court, could not and in any event should not be apprised of any discussion or negotiation that had taken place at the FDR hearing before Judge Melloy.  Having said, any submission that the 6-day trial had become, or could be said to become, an “Extended FDR” is a red herring and could not stand for 3 reasons.

17.  First, this Court was not provided with any FDR bundle or being apprised of any offers or proposals by the parties so required for a FDR hearing[1]. Secondly, it is unprecedented for one FDR to be “extended” and to be handled by a different Judge (my emphasis) who knows nothing whatsoever of what had happened in the earlier FDR hearing allegedly from where the “extension” comes from.  Thirdly, H could not go through the back door by “pick and choose” those paragraphs in PD 15.11 which are in his favour and sought for changing Judges, namely, by asserting that this Court had conducted an “Extended FDR” in January 2018 but at the same time completely disregard those pre-requisites under paragraph 8(e) of PD 15.11 for a FDR hearing. 

18.  H’s submission of “Extended FDR” must fail.

Had this Court taken any part in the process of negotiation?

19.  Throughout the entire 6 days of negotiation in January 2018, both parties were represented by reputable law firms with expertise in matrimonial litigation and with experienced Counsel Mr. Robin Egerton instructed to act for W and Counsel Mr. Giles Surman to act for H. 

20.  At the requests of Counsel, this Court had repeatedly given the parties’ legal teams time to negotiate and explore chances of settlement; such course no doubt falls within the underlying objectives and spirit of the CJR and is commendable.  Having checked the records of hearing for those days, this Court from time to time was invited to accommodate parties with more time for negotiation after each intermittent period of adjournment throughout each day.  More importantly, no suggestion or comments over the evidence had ever been given by this Court or indication made by this Court over the strength of the parties’ respective cases whenever the hearing was resumed after each intermittent adjournment.  This Court was not even invited by parties’ Counsel, probably because of their massive experience in matrimonial cases, to assist on any issues not being resolved between themselves during the continual negotiation save and except that parties’ Counsel had only disclosed to this Court what items or issues that was unresolved.  

21.  In such circumstances, it is my decision that there is no risk of compromising H’s interests or fairness of these proceedings if W’s ancillary reliefs were now to be heard and determined by this Court.  In any event, Mr. Side is unable to show where the compromise, be it on credibility, chances of success or failure on any particular issue or otherwise, if there is any, would lie.  In my decision, this Court had not participated in any part of the process of parties’ negotiation in the way which a Judge conducting a full and proper FDR would do. 

The case of AB v. MAW

22.  Mr. Side in his Note referred me to the case of AB v. MAW [2016] HKEC 2597, CACV 147/2016 where the Court of Appeal stressed the underlying philosophy is the same for protection of information in a FDR hearing which are privileged and confidential even though the FDR procedure in Hong Kong was only governed by a Practice Direction rather than the situation in England that privilege and confidentiality was governed by the English Family Proceedings Rules 1991 at Rule 2.61E (2). 

23.  I am bound by the decision in AB v. MAW (supra).  However, my decision against H on his contention of an “Extended FDR” having been conducted before this Court in January 2018 rendered the AB v. MAW case readily distinguishable from the present case.

The practice of FDR generally

24.  It is not uncommon for parties to put forward statement of open proposals prior to commencement of trial. This is permissible in all civil cases and family dispute is no exception. This was expressly provided for under paragraph 11 of PD 15.11 (supra) and the word “shall” thereunder connotes some degree of imperative rather than an option.

25.  The Heads of Agreement eventually signed by the parties containing terms discussed or negotiated, although falling short of a global settlement on all aspects of W’s ancillary reliefs, should be taken as the parties’ respective positions somewhat akin to open proposals before the Court.  The notion of open proposals has been clearly set out under Paragraph 11 of PD 15.11.  There is no issue of this Court being possessed of information which are privileged or confidential to warrant recusal from hearing the trial of W’s ancillary reliefs.

26.  H by seeking the trial of W’s ancillary reliefs to be set down before a different Judge, he in essence is seeking my recusal in these proceedings save and except to hold one further FDR as prayed for in his Summons.

27.  I have considered those well settled grounds justifying recusal, such as presumed and apparent bias and perception of lack of impartiality, I find none of those grounds exists in this case which call for recusal.  In any event, Mr. Side in his submissions at this hearing and his Note had not been able to identify any of those grounds for seeking recusal save and except purely on the procedural aspect of there was an “Extended FDR” before this Court which contention had, for those reasons aforesaid, failed completely.

Decision

28.  For all the reasons herein, I decided that H’s Summons should be dismissed with costs.

29.  For the reliefs sought under W’s Summons, I decided that there be a directions hearing on 2 August 2019 at 2:30 p.m. (with one hour reserved).

Costs

30.  I decided that the costs of H’s Summons be to W, to be taxed if not agreed.

31.  I decided that the costs of W’s Summons be in the cause of the ancillary reliefs.

32.  This is a costs order nisi which would become absolute if no application to vary the same is filed within 14 days from the date of this Decision.

Orders

33.  I now grant the following Orders :-

(a) Petitioner’s (W’s) Summons dated 6 December 2018 (filed on 17 December 2018) be adjourned to 2 August 2019 at 2:30 p.m. for directions (with one hour reserved);

(b) Costs of Petitioner’s (W’s) Summons be in the cause of the ancillary reliefs;

(c) Respondent’s (H’s) Summons dated 17 April 2019 be dismissed; and

(d) Costs of Respondent’s (H’s) Summons be to the Petitioner (W), to be taxed if not agreed.