WSN v. BOM

FCMC 3210/2023

[2025] HKFC 65

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 3210 OF 2023

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J U D G M E N T
(Variation of Costs Order Nisi)

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1.  This is the Respondent’s application to vary the costs order nisi made on 1 November 2024.  In my judgment dated 1 November 2024, I ordered the costs of the Respondent’s summons dated 11 August 2023 (hereinafter referred to as “the Respondent’s Summons”) be to the Petitioner to be summarily assessed with certificate for counsel (“the Costs Order Nisi”).

2.  The Respondent now seeks to vary the Costs Order Nisi so that the costs of the Respondent’s Summons will be in the cause of the ancillary relief proceedings.  Alternatively, the Respondent asks for the costs to be in any event so that the Respondent can pay the costs at the end of the proceedings.  

3.  As this is an ex-tempore decision, I shall not repeat the background of this case and submissions of counsel.  Suffice to say, I have considered the submissions of both parties in reaching my decision on the Respondent’s application to vary the Costs Order Nisi.

4.  To summarise, the Respondent raises the following arguments to vary the Costs Order Nisi:

(1)  It is more equitable and appropriate to consider the costs order holistically at the end of the proceedings so that matters such as Calderbank offers, etc, can be considered.  

(2)  The Respondent’s Summons was not without merit and the Respondent was warranted in taking out the said Summons to challenge jurisdiction.  

(3)  There is a huge financial disparity between the Petitioner and the Respondent.  Ordering the Respondent to pay the Petitioner’s costs immediately would bring about grave financial hardship to the Respondent.

5.  I shall swiftly deal with the first two arguments.  

6.  I agree with Ms Allison’s submissions relating to the merits of the Respondent’s application to challenge jurisdiction.  I agree that whether the Respondent should pay the costs of the interlocutory application is unrelated to the outcome of the ancillary relief proceedings.  The challenge to jurisdiction is an independent application from the decision on ancillary relief and hence the costs of the Respondent’s Summons is separate and independent of the outcome of the final ancillary relief trial.  I therefore do not agree that the costs of the Respondent’s Summons is intertwined with the ancillary relief proceedings.  

7.  As for the argument about the merits of the Respondent’s Summons, I agree with Ms Allison that those arguments have been dealt with in my judgment.  Ordering the payment of costs following the event does not mean the court is necessarily penalising the applying party for taking out the application.  Costs following the event simply means the unsuccessful party should bear the costs of their application regardless of whether the applying party had any cause to take out the application or not.  Parties may feel that they were justified in bringing an application but once unsuccessful, the successful party should generally receive their costs of defending against the application.  In the present case, the court was not penalising the Respondent for challenging jurisdiction.  

8.  As for the Respondent’s application to have the costs in the cause, I reject the Respondent’s submissions on the same.  The Respondent was privately legally represented when she made her application to challenge jurisdiction.  The Respondent, being legally represented, must have been advised of and aware of the litigation risks of her application, including a possible costs order against her if she lost.

9.  The Respondent must have known that in the event she lost on her application, not only would she have to pay the Petitioner’s legal costs but she would have to pay her own legal costs as well.  Form Hs were filed before the substantive hearing of the Respondent’s application.  The Petitioner’s estimate of costs of the Respondent’s application was over $600,000.  The Respondent’s lawyers indicated the costs already incurred before the hearing of the Respondent’s application was over $500,000.  

10.  In other words, the Respondent must have known that in the worst case scenario, she could be liable to over $1 million in costs just on her application to challenge forum.  Yet, she nevertheless chose to proceed on her Summons. The Respondent was ultimately unsuccessful in her application and an adverse costs order is the natural consequence of her unsuccessful application.  For the Respondent now to argue she should not be liable for the costs or that costs should be in the cause is untenable.  I simply see no reason why the Petitioner should not be awarded his costs. 

11.  As for the Respondent’s financial situation and her means to pay being a ground to vary the Costs Order Nisi, I have considered the parties’ Form Es.  Although impecuniosity of a party is generally not a reason to delay costs to a successful party in general civil litigation, I am of the view that the same does not necessarily hold true in matrimonial litigation.  

12.  It is not for this court to make any determinations on the parties’ Form Es or any determination as to whether in fact the Respondent is impecunious at this preliminary stage of the proceedings.  It is anticipated the parties will be heavily contesting each other’s financial position in the ancillary relief proceedings.  Hence, I can only take the parties’ respective Form Es at face value with full knowledge that their purported financial situation may or may not be accepted by the trial judge in the end.  

13.  Although I am of the view the Petitioner should not be deprived of his costs, I accept that any costs order I make should not have the effect of impacting the parties’ ancillary relief trial and should not cause any parties’ financial situation to be detrimentally affected such that it would have an adverse impact on the future course of the ancillary relief proceedings.  I accept that matrimonial litigation is somewhat different from general civil litigation in that the court has a broader discretion relating to costs and is required to have a more holistic view of the family finances when considering costs orders.

14.  If the financial situation stated in the Respondent’s latest Form E is accepted by the trial judge to be true, and given the Petitioner’s estimate of costs of the Respondent’s Summons is of a substantial sum, any immediate costs order I make now will not only severely deplete the Respondent’s financial resources before the division of matrimonial assets.  Moreover, if the Respondent’s impecuniosity is accepted by the trial judge, an immediate costs order by myself at this stage could detrimentally affect her ability to meet her daily financial needs prior to a result of the ancillary relief trial.  This would be especially true given her latest medical financial needs.  

15.  I have weighed the Respondent’s position against that of the Petitioner. It is clear the Petitioner is not any financial difficulty in meeting his reasonable financial needs.  I see no financial hardship to be caused to the Petitioner if the costs were not immediately paid.  

16.  Having the above matters in mind, I accept Ms Booth’s alternative submissions in that the costs order should be in any event.  I therefore vary my costs order nisi as follows: Costs of the Respondent’s Summons dated 11 August 2023 be to the Petitioner in any event, with certificate for counsel, to be taxed if not agreed.  

17.  I shall add a note of caution, this decision should not be read by the Respondent as a blank pass for her to take out interlocutory applications without immediate costs consequences whenever she cries of financial hardship.  The Hong Kong courts have now seized jurisdiction of this case and future arguments relating to financial hardship will no longer hold any water especially if the Respondent fails to take out any application for maintenance pending suit and/or litigation funding.  

18.  Lastly, I thank counsel for their able submissions.  

(Discussion re costs)

19.  Costs of today’s hearing be to the Petitioner in any event, with certificate for counsel, to be taxed if not agreed.