CHUI v. CHENG

CACV 339/2022, [2023] HKCA 774

On Appeal From [2022] HKFC 101

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 339 OF 2022

(ON APPEAL FROM FCMC NO 9395 OF 2019)

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REASONS FOR JUDGMENT

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Hon Chow JA (giving the Reasons for Judgment of the Court):

INTRODUCTION

1.  This is the Respondent (“W”)’s appeal against a number of case management/costs orders (collectively the “Orders”) made by Deputy District Judge J Lee on 21 April 2022, namely:

(1)  W shall pay the Petitioner (“H”) the “wasted costs” of the aborted trial from 19 to 21 April 2022 on an indemnity basis, which the Judge summarily assessed in the sum of $515,110 (“the Wasted Costs Order”);

(2)  unless W shall pay into court (i) the said sum of $515,110, and (ii) a further sum of $95,000 which the Judge ordered W to pay to H on 20 April 2022 (see §13 below), on or before 28 April 2022, W’s claim for ancillary relief be dismissed (“the Unless Order”), and

(3)  there be a trial de novo of the parties’ respective claims for ancillary relief, with 4 days reserved (“the Trial De Novo Order”), and that the oral testimony of H given on 19 April 2022 (“H’s Oral Evidence”) be expunged (“the Expunction Order”).

2.  At the conclusion of the hearing of the appeal on 8 June 2023, we partially allowed W’s appeal (to the extent as set out at the end of these Reasons for Judgment), ordered H to pay 40% of W’s costs of the appeal (including the costs of the applications for leave to appeal), and summarily assessed W’s costs, with reasons to be given later, which we now do.

BASIC FACTS

3.  H and W were married in July 2009. After the marriage, W gave birth to 2 children in 2013 and 2016. According to H, he found out, in or about June 2019, that he was not the father of the 2 children. In August 2019, he filed a divorce petition against W on the ground of her adultery. A decree nisi was granted by the Family Court in January 2020, leaving the issue of ancillary relief outstanding for determination.

4.  The major assets of the family comprised 36 pieces of art work of H, and the former matrimonial home in Tai Po.

5.  On 22 April 2021, H H Judge G Own gave certain expert directions concerning the valuation of the 36 pieces of art work, including: (i) Mr Marcello Kwan be appointed as H’s expert valuer, and (ii) Mr Ross X H Wang be appointed as W’s expert valuer.

6.  On 28 June 2021, a joint expert report of Mr Kwan and Mr Wang was filed in court. Mr Kwan valued the 36 pieces of art work at around $700,000, while Mr Wang valued them at over $1,100,000 (exclusive of commission and other costs of sale).

7.  On 3 September 2021, H H Judge C K Chan made an order that the ancillary relief trial shall take place from 19 to 21 April 2022 (with 3 days reserved), and the PTR shall take place on 7 March 2022.

8.  On 4 March 2022, the parties filed a consent summons in court, in which they agreed, inter alia, that (i) the estimated length of the trial was 3 days, and (ii) the parties and their experts shall attend the trial for cross-examination, failing which their evidence would be removed from the trial bundles and excluded from the trial. A consent order giving effect to the above matters was made by H H Judge T Kwan on 7 March 2022 (“the Consent Order”). The PTR hearing scheduled for 7 March 2022 was vacated.

9.  On 14 April 2022, shortly before the trial was due to commence on 19 April 2022, W’s solicitors:

(1)  served on H’s solicitors a summons seeking leave to file W’s 4^th Affidavit concerning her health conditions, which W contended was relevant to the question of whether she should be awarded nominal spousal maintenance; and

(2)  wrote to the Clerk to the Judge stating that Mr Wang was then in Shanghai and, due to the city-wide lockdown since 28 March 2022, might not be able to travel to Hong Kong to give evidence at the trial, and promising to inform the Court of any updates concerning Mr Wang’s situation.

THE TRIAL

(a)  Day 1

10.  At the commencement of the trial on 19 April 2022, W, through her counsel (Ms Leung), applied to the Judge for (i) leave to file and serve W’s 4^th Affidavit (“the Additional Evidence Application”), and (ii) an order that the trial be “part-heard”, ie a part of the trial be heard on a later date (to be fixed) so that Mr Wang could attend court to give evidence (“the Part-Heard Trial Application”)[1]. Ms Leung also informed the Judge that W would agree to the former matrimonial home being valued at $11,370,000, which was slightly lower than H’s valuation of the property. The Judge warned Ms Leung that there could be costs implications arising out of W’s applications, including the possibility that W might be ordered to pay costs thrown away on an indemnity basis. Upon Ms Leung’s application, the hearing was stood down for a short period so that Ms Leung could take further instructions from W. Upon the resumption of the hearing, Ms Leung confirmed in court the following matters:

(1)  W would agree to H’s valuation of the former matrimonial home at $11,552,666.67;

(2)  W would accept the valuation of the 36 pieces of art work by H’s expert at $743,000;

(3)  W would not pursue the Part-Heard Trial Application, and agreed that the evidence of Mr Wang should be expunged; and

(4)  W would also not pursue the Additional Evidence Application[2].

11.  The parties then proceeded to argue on the question of the costs of and occasioned by the 2 withdrawn applications. After the lunch adjournment, the Judge gave a ruling that W shall pay three-quarters of H’s costs of the hearing in the morning of 19 April 2022, to be summarily assessed on an indemnity basis, with certificate for counsel[3].

12.  Afterwards, H’s counsel (Ms Chow) opened H’s case, followed by H’s examination-in-chief and cross-examination (commencing at about 3:40 pm). The cross-examination of H could not be finished in the afternoon of 19 April 2022. At the end of the hearing, the Judge discussed with counsel the progress of the trial, and expressed the view that the trial would unlikely be finished within 3 days, and 2 extra days (to be fixed as soon as possible) should be reserved[4].

(b)  Day 2

13.  At the commencement of the hearing on 20 April 2022, the Judge summarily assessed H’s costs which W had been ordered to pay on the previous day in the sum of $95,000 (“the Costs Order for Day 1”)[5].

14.  Afterwards, Ms Leung said to the Judge that since the trial would have to be part-heard in any event, W now wished to call Mr Wang to give evidence (notwithstanding her previous agreement that Mr Wang’s evidence should be expunged and that she would accept the evidence of Mr Kwan regarding the valuation of the 36 pieces of art work). The Judge said to the parties that, according to her estimate, if W did not call her expert to give evidence, it was just possible to conclude the trial within the allotted time[6]. Nevertheless, Ms Leung maintained that W wished to call Mr Wang to give evidence, and intimated that W would take out a summons within 7 days for that purpose. Ms Leung also confirmed that W would no longer accept Mr Kwan’s valuation of the 36 pieces of art work[7]. The Judge then indicated that she might make an order that W’s solicitors should bear the wasted costs personally, and suggested that W’s solicitors should consider whether they need to instruct another counsel to represent them on the question of whether they should be required to bear costs personally[8]. Ms Chow submitted that, in the circumstances, the trial would have to be “abandoned” and start afresh, and H would seek a wasted costs order against W and/or her solicitors[9].

15.  In the afternoon, the parties made submissions on the issue of wasted costs. The Judge reserved his decision to 21 April 2022.

(c)  Day 3

16.  On 21 April 2022, after confirmation with counsel that they had with them the necessary files and documents to enable the trial to continue, the Judge gave her decision on the issue of wasted costs, ordering W to pay H the costs of the 2^nd day of the trial, which the Judge summarily assessed in the sum of $53,370 (“the Costs Order for Day 2”). The Judge did not, however, make any order that W’s solicitors should bear those costs personally. The Judge also directed that only the following witnesses would be permitted to give evidence at the trial: (i) H, (ii) Mr Kwan, and (iii) W (“the Original Direction”)[10]. In other words, the Judge rejected W’s application to re-introduce the evidence of Mr Wang.

17.  The Judge then indicated that the trial would resume[11]. Thereupon, Ms Leung said that her understanding was that the trial had already been “abandoned”. The Judge told counsel that she had never made any such order[12], while Ms Chow indicated that H would not object to the position taken by Ms Leung that the trial be abandoned or terminated, but would seek an order that W should pay H the wasted costs of the trial[13]. Eventually, the Judge accepted the common position of the parties that the trial be abandoned[14], and proceeded to deal with the question of the costs thrown away, as well as other matters concerning the future conduct of the trial. After hearing further arguments from counsel, the Judge made the Orders mentioned at the beginning of this judgment. The Costs Order for Day 2 was effectively superseded by the Wasted Costs Order.

THE JUDGE’S REASONS FOR THE ORDERS

18.  The Judge’s reasons for making the Orders can be found in her Decision (Case Management Matters) dated 12 May 2022 (“the Decision”).

19.  In respect of the Wasted Costs Order, the Judge considered that:

(1)  But for the time wasted by W on the 1^st day of the trial to deal with the Additional Evidence Application and the Part-Heard Trial Application, the trial should be able to finish within 3 days.

(2)  W had failed to pay heed to the Consent Order, viz, that the parties and their experts were required to attend court for cross-examination, failing which their statements/reports would be removed from the trial bundles and their evidence would be excluded.

(3)  She had never said that the trial must be adjourned by reason of the absence of W’s expert. On the contrary, the Consent Order had provided that if any expert could not attend court for cross-examination, his evidence would be removed from the bundle and excluded from the trial. Thus, there was no need for any adjournment of the trial by reason of the inability of W’s expert to attend the trial. When Ms Leung made the Part-Heard Trial Application, she did not originally bring the Court’s attention to the Consent Order. It was only after Ms Chow’s strong objection to the application and her indication that H intended to seek a wasted costs order against W that W withdrew her applications. The Judge considered that the change of stance by W caused a serious waste of the court’s time.

(4)  She did not make any order to terminate or “abandon” the trial on 20 April 2022. The cross-examination of H could have continued on the 2^nd day of the trial. However, the continuation of the trial was disrupted by W’s sudden application to re-introduce the evidence of Mr Wang, and the court had to spend time to deal with that application. W was responsible for the disruption of the normal progress of the trial.

The Judge took the view that W’s conduct was unreasonable and amounted to an abuse of the court’s process, and she ought to be responsible for the wasted costs as a result of the abortion of the trial on an indemnity basis. The Judge summarily assessed those costs in the sum of HK$515,110 (§§34-36 and 43 of the Decision).

20.  In respect of the Unless Order, the Judge took into account the litigation conduct of W, in particular her failure to pay heed to the Consent Order, and agreed with the submission of Ms Chow to make the Unless Order to protect H’s rights or interests.

21.  Finally, in respect of the Trial De Novo Order and Expunction Order, the Judge considered that the majority of the 3 days of hearing had been spent on case management matters, and the cross-examination of H had only just started. In the interest of efficiency of the trial, it was more appropriate for the trial to start afresh. That course of action was not objected to by either party. Also, the Judge agreed with Ms Chow that H’s Oral Evidence should be expunged from the court’s record (§48 of the Decision).

THE APPEAL

22.  W’s application for leave to appeal against the Orders was dismissed by the Judge on 14 June 2022 (“the Leave Refusal Decision”), but allowed by an order of Kwan VP and Yuen JA dated 15 August 2022.

23.  On 22 August 2022, W filed a Notice of Appeal against the Orders, raising 5 grounds of appeal.

DISCUSSION

GROUND (1)

24.  Ground (1) concerns the Trial De Novo Order and Expunction Order. Under this ground, W argues that:

(1)  The Judge failed to afford proper opportunity to her to make full submissions on her opposition to Ms Chow’s oral application that H’s Oral Evidence be expunged.

(2)  The Judge was wrong to treat the retrial as a trial in which no consideration could reasonably be given to H’s Oral Evidence.

(3)  The Judge was wrong to expunge H’s Oral Evidence prior to hearing and determining its admissibility in the retrial.

(4)  The Judge failed to take into account the relevance of H’s Oral Evidence in the retrial.

(5)  The Judge erred in principle in ordering a trial de novo when it was not necessary in the interests of justice or for effective case management to do so.

25.  We shall first deal with W’s contention that the Judge erred in principle in ordering a trial de novo on 21 April 2022. By the time that the Judge made the Trial De Novo Order on the 3^rd day of the trial, only 1 witness (H) had been called, and he was still under cross-examination. If, instead of ordering a trial de novo, the Judge were to decide to adjourn the trial part-heard, having regard to the state of the Judge’s diary, it was likely that the trial could not be resumed before her until many months later. As mentioned by the Judge, at that time, cases were being fixed in her diary for hearing in 2023[15]. It would be unfair to H to require him to return to court for continuation of his cross-examination after a long time gap. Also, the assessment of H as a witness by the Judge would be rendered more difficult if his evidence was to be given in such a piecemeal manner. As can be seen from the transcript of the hearing, W’s counsel in fact agreed that there should be a trial de novo.[16] The decision to order a trial de novo is a case management decision. It is well established that the Court of Appeal will not interfere with a case management decision made by a judge, unless it can be demonstrated that the judge made a palpable error, or the decision is plainly wrong. In our view, in the circumstances of the case before her, it was reasonably open to the Judge, in the proper exercise of her discretion, to order a trial de novo. We do not consider the Trial De Novo Order to be plainly wrong, nor are we satisfied that the Judge committed any palpable error in making that order. Nevertheless, having regard to what occurred during the trial from 19 to 21 April 2022, we consider that the new trial ought to be fixed before another judge.

26.  As regard the Expunction Order, the complaint that the Judge failed to afford to W a proper opportunity to make full submissions on this matter has no substance. Ms Leung was at liberty to, and did, make submissions to the Judge on whether H’s Oral Evidence should be expunged[17].

27.  Ms Leung argues that H’s Oral Evidence should not be expunged because it may be admissible as “hearsay” evidence and may be deployed, for example, for the purpose of cross-examination of H should he give evidence in the new trial which is inconsistent with what he previously said on 19 April 2022. In our view, it is important to understand what is the effect of the Expunction Order. In view of the Judge’s order for a trial de novo, plainly H’s evidence should be taken afresh, and his oral testimony on 19 April 2022 should not be regarded as evidence given in the new trial, particularly if the new trial is to be fixed before another judge[18]. On the other hand, as pointed out by counsel for H, the Judge did not make any ruling that H’s Oral Evidence could not be used whatsoever in the new trial. Also, H does not object to his oral testimony given on 19 April 2022 being adduced in the new trial as admissible hearsay evidence[19].

28.  We see no sufficient ground to interfere with the Judge’s order that H’s Oral Evidence should be expunged, in the sense that it should not be regarded as part of his evidence in the new trial. This having been said, we see no reason why H’s Oral Evidence may not, where appropriate, be used for the purpose of cross-examination of H in the new trial. How it may actually be used in the new trial is a matter to be determined by the trial judge.

GROUND (2)

29.  Ground (2) concerns the Wasted Costs Order. Before we consider the merits of this ground of appeal, we wish first to clarify a matter of terminology. The expression “wasted costs” is normally used in the context of the personal liability of a legal representative for costs under Order 62, rule 8 of the Rules of the High Court, Cap 4A/Rules of the District Court, Cap 336H, whereas the expression “costs thrown away” is normally used to refer to the situation where proceedings or any part of them have been ineffective or have been subsequently set aside by some unjustifiable act or conduct of a party, an order is made in favour of the other party for his costs incurred in those proceedings or that part of the proceedings (see Hong Kong Civil Procedure 2023, Vol 1, §62/1/3). We mention this distinction because, in the proceedings below, the Judge and counsel seemed to have used the expression “wasted costs” to refer to both situations, or used the two expressions interchangeably. It would, we believe, promote clarity if the two expressions are kept separate and used to refer to the two different situations mentioned above.

30.  In the present case, although the Judge did consider the question of whether W’s solicitors should be held personally liable for the costs thrown away as a result of W’s application to reintroduce the evidence of Mr Wang, ultimately the Judge did not make such order. Thus, strictly speaking, the order made by the Judge on 21 April 2022 referred to in §1(1) above is not a “wasted costs order”, but is simply an order that W shall pay to H the “costs thrown away”.

31.  In respect of the question of whether W ought to be required to pay the costs thrown away, while one may comment adversely on the manner in which the Judge dealt with W’s various applications or managed the trial (as to which we will say something more at the end of this judgment), the fact remains that the bulk of the 3 days originally allotted for the trial was used to deal with W’s unsuccessful and/or withdrawn applications, and the trial was eventually “abandoned” because of those applications. In the circumstances, it was within the Judge’s discretion to order that the costs thrown away should be borne by W.

32.  We shall now deal with various arguments raised by W in support of Ground (2) of appeal.

33.  First, W argues that the Judge was wrong to direct a hearing on wasted costs on 20 April 2022 prior to hearing and determining W’s intended application to reintroduce her expert’s evidence. Instead, the hearing on costs should follow the conclusion of the proceedings or the intended application, but not the other way round.

34.  By the time that the Judge considered H’s application for costs thrown away against W, it was the common position of the parties that the trial should be abandoned, and dates should be fixed for a new trial. Thus, the matter had come to a natural break. The Judge did not make any order that the new trial should be fixed before her, and thus there was no certainty that she would be the trial judge in the new trial. In those circumstances, we consider that it was open to the Judge, in the exercise of her discretion under Order 62, rule 4(1) and/or rule 8A(4) of the Rules of the District Court, to decide to deal with the question of costs at that stage. Ms Leung argues that the objective of the general rule that the issue of wasted costs against solicitors should not be heard or dealt with until the conclusion of the proceedings is to avoid wasted costs being used by the other party as a means of intimidation. We do not, however, consider that there is any basis to suggest that H used the application for “wasted costs” against W’s solicitors as a means of intimidation in the present case. In fact, it was made clear by Ms Chow at the hearing that H’s only concern was that he should have the costs thrown away, and he was not pushing for a wasted costs order against W’s solicitors personally[20].

35.  Second, W argues that the Judge was wrong to direct a hearing on 20 April 2022 on “trial abandonment” and wasted costs, or consider that an abandonment of the trial could be reasonably necessary. This argument is disingenuous, and turns the matter on its head. The Judge in fact indicated to the parties that the trial should resume after she gave the Original Direction[21]. However, Ms Leung responded that she understood that the trial had already been abandoned. The position taken by Ms Leung eventually led to the trial being abandoned, and an order being made that new trial dates should be fixed. It is plain that Ms Leung did not object to the trial being abandoned, and was content that it should be aborted.

36.  Third, W argues that the Judge erred in regarding the lateness of the application and W’s application to withdraw her expert evidence on 19 April 2022 as determining factors, and failed to take into account other relevant factors, namely:

(1)  W’s decision on 19 April 2022 to forgo her expert’s evidence was made after the Judge stated she would not start the trial and there would be wasted costs implications on an indemnity basis against W;

(2)  W’s oral application on 20 April 2022 to reintroduce her expert’s evidence was made after the Judge had indicated towards the conclusion of the hearing on 19 April 2022 that the trial had to be part-heard in any event with 2 additional days reserved; and

(3)  the expert evidence was relevant and necessary to the ancillary relief trial, leave to adduce expert evidence had been granted, expert reports had been prepared and included in the trial bundles, and the parties were fully prepared to cross-examine the experts.

37.  This argument has no substance or validity:

(1)  There is no basis for W’s submission that the Judge regarded the lateness of the Part Heard Trial Application and/or her decision to withdraw the evidence of Mr Wang on 19 April 2022 as determining factors in making the Wasted Costs Order. The factors which the Judge took into account were set out in §§32 to 36 of the Decision which we have summarized in §19 above.

(2)  As mentioned by the Judge at §34(3) of the Decision, she did not say that the trial would be adjourned because of the inability of W’s expert to attend court to give evidence. On the contrary, the Judge took the view that it had been provided in the Consent Order that the failure of an expert to attend the trial would result in his evidence being excluded from the trial. That being the position, there was no reason to adjourn the trial merely because W’s expert was unable to attend court to give evidence.

(3)  The fact that W’s oral application on 20 April 2022 to reintroduce her expert’s evidence was made after the Judge had indicated that the trial had to be part-heard in any event with 2 additional days reserved may explain why W, somewhat opportunistically, made the application, but does not affect, negate or militate against the Judge’s reasons for ordering W to pay the costs thrown away. Further, after the Judge had rejected W’s application to reintroduce the evidence of her expert and indicated that the trial should resume, W could have proceeded with the trial instead of alleging, incorrectly, that the Judge had made an order that the trial be abandoned.

(4)  The other matters referred to in §36(3) above likewise do not affect, negate or militate against the Judge’s reasons for ordering W to pay the costs thrown away.

38.  Fourth, W argues that the Judge was wrong to attribute the wasted costs of the trial, as opposed to the wasted costs of the time spent on 20 April 2022 in dealing with W’s application to reintroduce her expert’s evidence, in the Wasted Costs Order.

39.  As a matter of fact, the Judge originally only ordered W to pay the costs of the hearing on 20 April 2022 which had been used to deal with her application to reintroduce the evidence of Mr Wang[22], and indicated that the trial should resume. However, the trial was subsequently abandoned following Ms Leung’s intervention that she understood the Judge to have made an order to abandon the trial. In fact, after listening to the relevant part(s) of the audio recording of the hearing on 20 April 2022, Ms Leung accepted that the Judge had not made any such order[23].

40.  Notwithstanding such acceptance, Ms Leung persists in her argument before us that the Judge did abandon the trial in the morning of 20 April 2022, and relies on the fact that the Judge made an order to release H from the witness box in support of this argument[24]. However, as pointed out in the Skeleton Argument of H dated 24 May 2023 (at §5(5)), the Judge only released H from the witness box at that point in time, which was immediately before the lunch adjournment, in order to deal with the issue of whether the trial had been or should be abandoned and the issue of wasted costs. Having considered the relevant part of the transcript, we do not consider that the Judge had made an unconditional order that H be released from the trial[25].

41.  None of the matters raised by W under Ground (2) shows that the Wasted Costs Order made by the Judge is wrong in principle, or plainly wrong. The Judge was entitled to take the view that the root cause of the abortion of the trial was the series of unsuccessful and/or withdrawn applications made by W on 19 and 20 April 2022, and, on that basis, order W to pay the costs thrown away as a result of the abortion of the trial.

42.  These having been said, we consider that W should have been ordered to pay only those items in the Statement of Costs dated 21 April 2022[26] which have truly been thrown away in consequence of the abortion of the trial. We consider Item D4 (Attending trial) and Item E5 (Refresher) to be such items. On the other hand, we are not satisfied, on the information and materials before us, that the other items of work done by H’s solicitors or counsel were thrown away. For example, Item E3 (Brief for PTR) and Item E4 (Brief for trial) could not be said to have been thrown away. Work done in connection with the PTR would still be useful in the new trial, and counsel will generally not be allowed to charge another brief for the new trial (taking into account the fact, as confirmed by Mr Ng, that it is H’s intention to retain the same legal team in the new trial). We consider that the costs thrown away by the abortion of the trial which W ought to pay to H should be $154,320 (made up of $46,320 (solicitors’ costs for attending the original trial) + $36,000 (refresher) x 3), instead of $515,110 as assessed by the Judge.

GROUND (3)

43.  Ground (3) concerns the Unless Order. Under this ground, W argues that:

(1)  The Judge, who erred in making the Wasted Costs Order, also erred in making the Unless Order, the latter being premised upon the former.

(2)  The Judge erred in principle in failing to take into account relevant considerations as set out at §(3)(b)(i)-(iv) of the Notice of Appeal.

(3)  The Judge placed undue weight on W’s possible breach of the Consent Order that if any expert was unable to attend the trial, his expert report would be expunged, when prior to W’s expert being called to give evidence and prior to the abortion of the trial, he could not reasonably be said to have failed to attend the trial to give evidence. W’s expert was the last witness to be called and therefore unlikely to be called within the 3 days scheduled for the trial in any event, and every effort could be made to secure his attendance at the part-heard trial when he was due to be called to give evidence.

(4)  Insofar as the Unless Order covering payment under the Costs Order for Day 1 was made to penalize W for the disruption caused to the trial on 19 April 2022 by her expert’s inability to return to Hong Kong, the matter had been determined on 20 April 2022 and W had already been penalized by the Costs Order for Day 1.

44.  This ground of appeal can be disposed of briefly. Whilst one can readily understand the Judge’s unfavourable view of W’s conduct in changing her stance concerning the admission of Mr Wang’s evidence, it has to be borne in mind that the adverse consequence of a failure on W’s part to comply with the Unless Order would be visited not only upon her but also upon her two children. In family matters, the welfare or best interests of the child should always be a paramount consideration. The Judge seems, however, to have failed to take that matter into account when she made the Unless Order. Thus, although the Unless Order is in the nature of a case management order, the failure of the Judge to take into account a material consideration means that it is open to the Court of Appeal to re-consider the matter afresh.

45.  On behalf of H, Mr Ng argues that the two children are not the children of H, and thus he should not be responsible for their maintenance. Mr Ng also submits that W has more resources than H, and the trial is mainly about H’s claim for ancillary relief, not the other way round. In our view, these are matters to be argued at the new trial. It would not be appropriate to pre-judge them at this stage.

46.  Overall, we consider that it was plainly wrong for the Judge to make the Unless Order with potential adverse consequences on the two children. We would allow W’s appeal against the Unless Order, and set it aside.

GROUND (4)

47.  Under this ground, W contends that the Orders were so unreasonable and disproportionate that no reasonable judge could have made them.

48.  We have already dealt with the merits of W’s complaints against each of the Orders individually above. This ground of appeal adds nothing of substance to Grounds (1) to (3), and does not require separate consideration.

GROUND (5)

49.  Under Ground (5), W contends that the Judge’s conduct on 19 to 21 April 2022 was such that it would have caused an informed bystander observing the case to say that W had not had a fair trial or that there was a reasonable apprehension of bias. 4 sub-grounds are raised in W’s Notice of Appeal:

(a)  Before and during the trial, the Judge’s tone, intimations and conduct gave an appearance that the Judge had predetermined issues that were in dispute.

(b)  Before and during the trial, the Judge’s tone, intimations and conduct gave an appearance of predisposition to disallowing W from legitimately pursuing issues that were in dispute.

(c)  The Judge acted unreasonably and irrationally in her management of the case.

(d)  The conduct of the Judge leading to the misconceived Trial De Novo and Expunction Orders, the Wasted Costs Order and the Unless Order, either cumulatively or separately, gave an appearance of bias.

Sub-grounds (a), (b) and (c) have been somewhat refined in §13 of Ms Leung’s Submissions for the Respondent/Wife dated 10 March 2023. Accordingly, in this judgment, we shall focus on Ms Leung’s submissions instead of the detailed points mentioned in Ground (5)(a), (b) and (c) of the Notice of Appeal.

50.  The test for apparent bias is well settled: “The court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased” (Deacons v White & Case [2004] 1 HKLRD 291, at 298A-B).

51.  Where apparent bias is based on an alleged predetermination of issue(s) by a judge, the question is “whether a reasonable, objective and informed person would on the correct facts reasonably apprehend that the judge has not brought or will not bring an impartial mind to bear on the adjudication of the case, that is, a mind open to persuasion by the evidence and the submissions of counsel” (President of the Republic of South Africa v South Africa Rugby Football Union, 1999 (4) S.A. 147 at 177, quoted with approval by Kwan JA (as she then was) in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Ltd [2014] 3 HKLRD 375, at §51).

52.  The fact that a judge has some preconceived views, or has expressed such views, on a disputed issue or on the merits of a case is not sufficient to establish apparent bias. What is required to be shown is that the judge is not willing to listen fairly to argument contrary to such views. As remarked by the Supreme Court of South Australia in IOOF Australia Trustees Ltd v SEAS Sapfor Forests Pty Ltd (1999) 78 SASR 151:

“The relevant principles are directed towards ensuring the appearance and the reality of a fair hearing. That is, one in which the case on each side is fairly considered. Just as that does not require that a judge approach the merits of the case with no preconceived views about issues that might arise in the case, so long as the judge is willing to listen fairly to argument on either side, so the principle does not require that the judge not have, or at least not disclose, any adverse views about a particular counsel appearing in the case. What is important is that the judge be willing to consider the case presented by that counsel fairly.”

53.  In this regard, a distinction should be drawn between judicial interventions during the oral evidence of a witness and counsel’s submissions (being the position in the present case). In M&P Enterprises (London) Limited v Norfolk Square (Northern Section) Limited [2018] EWHC 2665 (Ch), Hilyard J observed as follows:

“[18] It is a most important facet of the judicial function that the judge should always remain above the arena so as to maintain the detachment required of a judge. The judge must not take on the role of an advocate. If a judge intervenes in the process of the presentation and eliciting of evidence he runs the risk by such intervention of ‘descending into the arena’, so as to become (per Lord Greene MR in Yuill v Yuill [1945] P 15 at 20)

‘…liable to have his vision clouded by the dust of conflict.’

[19] That necessity to remain above the arena persists notwithstanding the modern emphasis on active case management. To quote further from Jonathan Parker LJ’s judgment in the Kofi-Adu case:

‘Nowadays, of course, first instance judges rightly tend to be very much more proactive and interventionist than their predecessors…That said, however, it remains the case that interventions by the judge in the course of oral evidence (as opposed to interventions during counsel’s submissions) must inevitably carry the risk so graphically described by Lord Greene MR. The greater the frequency of the interventions, the greater the risk; and where interventions take the form of lengthy interrogation of the witnesses, the risk becomes a serious one.’”

54.  Ground 5(a) and (b) can be considered together. Ms Leung argues that:

(1)  there was an appearance of pre-determination by the Judge in respect of the following issues: (i) value of disputed artworks, (ii) clean break v nominal maintenance, (iii) hidden assets, (iv) exposition on merits mid-trial, and (v) wasted costs[27]; and

(2)  there was an appearance of a disposition by the Judge to disallow W from legitimately pursuing the following disputed issues: (i) value of disputed artworks, and (ii) clean break v nominal maintenance[28].

55.  We have read the parts of the transcript of the trial relied upon by Ms Leung, and also listened to the audio recording of the relevant parts of the trial referred to in Ms Leung’s written submissions in support of these complaints[29]. While the Judge did express her views on various issues referred to in §54 above, we are not satisfied that the views expressed by the Judge, or the manner or tone in which she expressed them, should be treated as anything other than the Judge’s provisional views, or as indicating that the Judge had closed her mind and was not willing to listen fairly to arguments contrary to those views. We are also not satisfied that the Judge had shown a pre-disposition to disallow W from legitimate pursuing disputed issues.

56.  It is not necessary for us to deal with the complaints raised by Ms Leung in detail in this judgment, suffice it for us to comment briefly as follows:

(1)  In respect of the issue of the “value of disputed artworks”, the complaint that the Judge put pressure on W into accepting the offer of $360,000 by threatening to adjourn the trial and ordering indemnity costs against her should she insist on her application that her expert be permitted to give evidence is not borne out by the various references to the transcript of the hearing on 19 April 2022 relied on by Ms Leung. It seems to us that the Judge was pointing out the possible consequences of acceding to W’s Part-Heard Trial Application. Before the Judge made any ruling on that application, it was Ms Leung who requested for the matter to be stood down so that she could take further instructions from her client, and she later informed the Judge that W agreed that the evidence of Mr Wang should be expunged and also that she agreed with the valuation of the 36 pieces of art work by H’s expert. While one may not necessarily agree with the Judge’s comments made in the course of the hearing, we are not satisfied that they should be regarded as improper pressure put on W to prevent her from legitimately pursuing the issue of the value of the 36 pieces of art work.

(2)  In respect of the issue of “clean break v nominal maintenance”, the Judge expressly stated that it would be necessary to look at the whole factual situation[30], and that achieving a clean break was only a “preliminary view”[31].

(3)  In respect of the issue of “hidden assets”, it seems to us that what Judge was saying, in the part of the transcript relied upon by Ms Leung[32], was that it was not sufficient for W to merely allege that H had hidden assets without evidence or proof of the same, and that it would be difficult to take enforcement action against alleged hidden assets which could not be located. The Judge was not making any finding, or pre-determination, that H had no hidden assets.

(4)  In respect of the complaint about “exposition on merits mid-trial”, as earlier mentioned, the mere fact that the Judge expressed some views on the merits of the case is not sufficient to establish apparent bias. While it would not normally be appropriate for a judge, in the middle of a trial, to give indications of his/her views on the merits of the case that is being tried, to be fair to the Judge, she did so upon the invitation of Ms Chow, who sought the Judge’s indication of views in the hope that the parties could reach settlement with the benefit of the Judge’s views[33], with no apparent objection from Ms Leung.

(5)  In respect of “wasted costs”, although the Judge did express the possibility that a wasted costs order might be made against W’s solicitors, in the end, having listened to the parties’ submissions, the Judge did not make any costs order against W’s solicitors; instead she only ordered W to pay costs thrown away as a result of the abortion of the trial. This demonstrates that any view that the Judge might have expressed on the issue of “wasted costs” in the course of counsel’s submissions was nothing more than a provisional view.

In passing, we would mention that, in respect of issues (i) to (iv) referred to in §54(1) above, they are issues for determination in the trial proper. Now that we have decided that the new trial should be fixed before another judge, there should not be any concern by W that she will be prejudiced by whatever views that the Judge might have expressed on those issues.

57.  Under Ground 5(c):

(1)  Ms Leung complains that the Judge gave an appearance that she was more concerned with penalizing W and W’s legal team for legitimately pursuing W’s case than effective management of the case[34]. In support of this ground of complaint, Ms Leung relies on the following matters: (i) on 19 April 2022, the Judge repeatedly warned that she would adjourn the trial and order indemnity costs of the trial against W and possibly against W’s solicitors should W insist on calling her expert to give evidence, (ii) in the morning of 20 April 2022, the Judge directed a hearing in the afternoon on H’s application for abandonment of the trial and wasted costs and then abandoned the trial prior to the said hearing, (iii) on 21 April 2022, the Judge initially ordered that the trial should continue part-heard with wasted costs against W in respect of the time spent on 20 April 2022 and then changed her mind (upon invitation by H’s counsel) by aborting the trial and ordered wasted costs in respect of the whole trial against W after her counsel indicated that she wished to preserve her position that the Judge had already abandoned the trial, and (iv) the Judge expunged H’s Oral Evidence prior to ruling on its admissibility, without affording W an opportunity for full argument on this issue. We have already dealt with these complaints elsewhere in this judgment (see §§27-28, 35, 37(2) and 39-40 above), and do not propose to repeat our views on them.

(2)  Ms Leung contends that the Judge gave an appearance of a lack of reasonable detachment from the case when she initially ordered that the new trial must be fixed before her rather than the first available judge as submitted by Ms Leung, but subsequently changed her mind by stating that H’s Oral Evidence should be expunged as other judges had not had the benefit of observing the giving of evidence by H on 19 April 2022[35]. This complaint has no validity. Although the Judge did initially indicate that the new trial should be fixed before her in view of the fact that she had already read the papers in the case[36], she eventually accepted Ms Leung’s submission that the “first available date” should be fixed for new trial[37], and did not make any order that the new trial should be fixed before her[38]. We do not see how, in these circumstances, it can be said that the Judge gave an appearance of a lack of reasonable detachment from the case.

(3)  Ms Leung argues that there was differential treatment between the parties on the adducing of new evidence, in that in contrast to the draconian orders made against W for her late applications to adduce W’s 4^th Affidavit and reintroduce the evidence of her expert, the Judge allowed H to substantially change his evidence and adduce new documentary evidence dating back as early as February 2022 relating to his financial position during his evidence in chief without any prior notice to W or any application by H to do so[39]. This allegation also has no validity. The “new evidence” sought to be adduced by H was to update his Form E to reflect his latest financial position. Ms Leung expressly stated that she would not object to such evidence being adduced provided that W would be given a similar opportunity to update her financial position. The new evidence that W wish to adduce (ie her 4^th Affidavit), and her application to reintroduce the evidence of her expert, were of a different nature, and different considerations arose as to whether W’s applications should be acceded to.

58.  In respect of the Ground 5(d), we have concluded that it was open to the Judge, on the facts and circumstances of this case, to make the Trial De Novo Order, the Expunction Order and the Wasted Costs Order. Although we have come to the view the Judge was wrong to make the Unless Order, we do not see that the making of this order by the Judge gave rise to any appearance of bias on her part.

DISPOSITION

59.  W’s appeal is allowed in parts, as follows:

(1)  in respect of the Trial De Novo Order, we make an order that there be a new trial to be fixed before another judge, with 4 days reserved, in consultation with counsel’s diary;

(2)  the Wasted Costs Order is set aside and substituted by an order that W shall pay H the sum of $154,320 as costs thrown away as a result of the abortion of the original trial from 19 to 21 April 2022; and

(3)  the Unless Order is set aside.

Save as aforesaid, W’s appeal is dismissed, and the orders made by the Judge on 21 April 2021 shall stand.

60.  In relation to the issue of costs, taking into account that W has only been partially successful in her appeal, we make an order that W shall have 40% of the costs of the appeal (including the costs of the applications for leave to appeal). We have considered the 3 statements of costs prepared by W’s solicitors relating to (i) the application for leave to appeal made to the Judge in FCMC 9395/2019, (ii) the application for leave to appeal made to the Court of Appeal in CAMP 217/2022, and (iii) the substantive appeal in CACV 339/2022, and counsel’s submissions on the costs claimed by W. We make a global summary assessment of W’s costs in the sum of $192,000. Accordingly, the amount of costs payable by H to W shall be $76,800 ($192,000 x 40%).

POSTSCRIPT

61.  We cannot let this judgment end without saying a few words about the unsatisfactory manner in which the ancillary relief trial in present case was managed by the Judge. This was not a “big money” case, and the trial was fixed for 3 days of hearing only. It was in the interests of all parties concerned that the trial should be heard and completed expeditiously, within the 3 days allotted for the trial. The various applications made by W, regardless of whether they had any merits, were very simple. The points that could reasonably be advanced in support of or against the applications could, in our view, have been made succinctly in a few sentences. Counsel should not be permitted to make prolonged submissions on those applications, and should be required to make her submissions in one go. The Judge would only need to give very brief reasons to either uphold or reject the applications at the end of counsel’s submissions. She could, and should, have disposed of the various applications swiftly, and got on with the trial proper. Instead, the Judge engaged in a long and protracted discourse with counsel on the applications and on consequential matters (including the question of possible adjournment of the trial and costs), in the course of which she made a lot of unnecessary comments, and permitted counsel on both sides to constantly and repeatedly get to their feet to respond to or comment on points made by the other side or by the Judge. The efficient management of a trial by a judge requires proper discipline, a firm approach and a sense of proportion, which unfortunately were absent in this case. At the end of 3 days of hearing, only a small part of H’s evidence was received. As events have turned out, a trial de novo was ordered. Practically nothing useful was achieved after 3 days in court. Substantial costs, time and resources of the parties and the court were incurred or spent, and wasted. The sort of waste of time and costs seen in the present case should not be allowed to occur again in the future.