YSG (YX) v. LYAG

FCMC 15288/2015

[2020] HKFC 194

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO 15288 OF 2015

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D E C I S I O N
(Costs)

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THE APPLICATION

1.  This is an application made by the Respondent by summons filed on 5 June 2020 (“the Costs Summons”) to vary the costs order nisi made by HH Judge Melloy in the decision handed down on 25 May 2020, in which the learned Judge decided to recuse herself from these proceedings.

2.  While it was sought by the Respondent in the Costs Summons that this variation of costs order application shall be dealt with by HH Judge Melloy herself, the learned Judge had passed the Costs Summons onto this court for consideration, because Her Honour had acceded to the Petitioner’s application that she shall recuse herself forthwith from further hearing or deciding any matters in these proceedings.  The parties had not objected against this arrangement.  This court shall therefore deal with this application accordingly. 

3.  Upon the parties’ confirmation of their agreement to have this matter disposed of on paper, this decision is handed down without any oral hearing.

BACKGROUND OF THE PROCEEDINGS

4.  This case has a long history.  The initial proceedings were started under FCMC 11445/2014, which were subsequently stayed by consent upon the presentation of the Petition herein (FCMC 15288/2015).  While the first set of proceedings was commenced in 2014, the litigation on children matters herein did not come to an end until HH Judge Melloy handed down a Judgment on “Custody/joint custody and access” on 13 August 2019.

5.  The children matters had not been concluded earlier because, among other things, there had been a heated dispute on whether the Respondent (and his wider family) had a mental health issue.  This in turn had led to various applications to the learned Judge and an appeal to the Court of Appeal in relation to the expert evidence to be adduced.

6.  It was because of the above that while the trial on children matters was started on 24 April 2018, it did not conclude until 23 March 2019.

7.  The Judgment on children matters was then handed down, as aforesaid, on 13 August 2019, with an order nisi that there be no order as to costs.  The costs order was subsequently varied upon the Respondent’s application, to the extent that the Petitioner was ordered to pay a 20% contribution towards the Respondent’s costs of and occasioned by the children related litigation.  The reason for such a variation, in HH Judge Melloy’s own words, was that:

“This is in order to recognize the unacceptable manner in which the [Petitioner] chose to conduct the litigation on occasion and to penalize her for this and for her generally over aggressive litigation approach. The percentage is not higher in recognition of the fact that ultimately this was a children’s matter and the court has no doubt that many of the [Petitioner’s] concerns were genuinely held.”[1]

THE RECUSAL APPLICATION

8.  Soon after the Judgment on children matters was handed down, the Petitioner filed a summons on 17 October 2019 for recusal of the learned Judge (“the Recusal Summons”).  In support of the recusal application, it was submitted on behalf of the Petitioner that:

(1)     “…the Judge’s conduct within the proceedings gave rise to an apprehension of bias against [the Petitioner], in that there were a preponderance of hearings and occasions when the Judge made orders and directions in favour of [the Respondent] without justification.”[2]  

(2)     “The Judge made various criticisms of [the Petitioner] which would led (sic) an ordinary reasonable person to conclude that there was an apprehension of bias…”[3]

(3)     “…the Judge granted most of [the Respondent’s] requests and rejected most of [the Petitioner’s] requests….[there was also] inconsistency of the Judge’s directions on the same issues, especially on allowing and disallowing experts and their evidences, and the changing of the Judge’s directions with whatever [the Respondent] requested or with partiality to [the Respondent’s] point of view...”[4]

(4)     There were “prejudgement of questions and matters when they should not have been determined.  The possibility of an unfair trial already justifies recusal, let alone one that had been shown to be unfair and unjust, with its failure to address the best interests of the Children putting the Children and their future at risk.”[5]

(5)     “The Judge embraced and repeatedly used [the Respondent’s] argument that [the Petitioner] did not address ‘how [the Respondent’s] PDs impact access to the Children?’.  That answer was given by [the Petitioner’s] expert witnesses…and in [the Petitioner’s] 4^th and 5^th Affidavits…It was therefore, not a question of [the Petitioner] not addressing or providing evidence of [the Respondent’s] personality disorder, even when articulated by [the Petitioner’s] Counsel in trial but the Judge again ruling (sic) against [the Petitioner] due to bias.”[6]

(6)     A recusal at that point of time would not result in wasted costs or further delay.  It was “an appropriate juncture in (sic) which the Judge is requested to transfer the case, before interlocutory applications regarding finances which may need to be determined prior to FDR hearing.”[7]

9.  Having considered the Petitioner’s application, HH Judge Melloy made an order in terms of the Recusal Summons (save as to the costs thereof), but on a basis which is very different from those relied on by the Petitioner.  As Her Honour’s reasoning of recusal would have an important impact on this decision on costs, such reasoning is quoted at length below:

“Overview

13. I should say at the outset (although this is clearly trite and more for the benefit of the lay clients than the lawyers), that I stand by all of the Rulings and Judgments made in this case, together with all of the other orders and decisions made to date. If I have made an error, either as to the law itself or in the exercise of my discretion or otherwise then it was open for the parties to seek leave to appeal. On the occasions where matters did proceed to the Court of Appeal my decisions were upheld. I do not, as a general comment accept any of the accusations made against me in the [Petitioner’s] submissions, including the allegations of inconsistency or unfairness and of course, bias.

14. Having said that it is clear that the [Petitioner] is convinced that I am biased against her, and similar to the way in which she has conducted these proceedings generally it seems very unlikely indeed that she will ever be convinced otherwise. This is of particular concern given that the next stage in the litigation is for there to be a Financial Dispute Resolution hearing, which is a facilitative hearing, where the judge traditionally gives the parties an indication and encourages them to reach settlement with respect to their finances. I accept that the chances of any success in this respect with myself presiding as the FDR judge are virtually nil given the venom with which the [Petitioner] regards me.

15. In such circumstances I have further considered whether anyone reading the judgments and rulings for the first time, a fair minded observer if you will, might come to conclusion that there could be the possibility of ‘apparent bias’ going forward?  In particular, given the personal nature of the attacks made against me and my professionalism, would it start to become difficult to maintain the line of strict impartiality? I hope that this would be unlikely, however I accept that given the [Petitioner’s] open hostility towards me and the personal nature of her attacks, that an independent observer might come to that almost inevitable conclusion.  I have decided therefore that it would be more appropriate to err on the side of caution and to make the order that the [Petitioner] seeks.”

10.  Before I go on, I should point out immediately that I do not agree with what Ms Allison submitted for and on behalf of the Petitioner that:

“While the Judge did not accept [the Petitioner’s] accusations made against her, and stands by all of the Rulings and Judgments made in the proceedings, it is submitted that the Judge could not have done otherwise. If the Judge had accepted [the Petitioner’s] criticisms, then it would have necessitated those Rulings and Judgments being set aside and parties having to relitigate those issues. This would not have been an ideal situation for anyone and hence it is unsurprising that the Judge adopted this course of action.”[8]

11.  From my reading of the Ruling on the Recusal Summons, it is apparent that Her Honour stood by all her Rulings and Judgments made in these proceedings not because the learned Judge “could not have done otherwise” nor because accepting the Petitioner’s criticisms “would have necessitated…[the] parties having to relitigate those issues”.  It is plain that Her Honour rejected the Petitioner’s allegations simply because she maintained that those Rulings and Judgments had been correctly made without any bias, inconsistency or unfairness as alleged.

COSTS OF THE RECUSAL APPLICATION

The order nisi

12.  Since HH Judge Melloy took the view that the recusal application was “clearly arguable both ways”[9], she made an order nisi that there be no order as to the costs thereof.

The Respondent’s application

13.  By way of the Costs Summons, the Respondent seeks to vary the costs order nisi to an order that his costs of and incidental to the Recusal Summons be borne by the Petitioner on indemnity basis.

The legal principles

14.  It is trite that the court has a very wide discretion on the question of costs. 

15.  Before the implementation of Civil Justice Reform in April 2009, the general rule that “costs shall follow the event” applied equally to interlocutory and final judgments and orders pursuant to Order 62 rule 3(2) of the then Rules of the High Court (Cap.4A, Laws of Hong Kong).  Hence, back then, costs would follow the event unless there were circumstances in the case which justified the making of any other costs order.  However, the said rule 3(2) had been amended as part of the reform, and by virtue of such an amendment, interlocutory proceedings have been excluded therefrom.  As a result, the application of the general rule that “costs shall follow the event” has since then been restricted to proceedings other than interlocutory proceedings.  The reform further introduced a new paragraph (2A) under Order 62 rule 3, which stipulates that the court may order the costs of or incidental to any interlocutory proceedings to follow the event.  The overall effect of these amendments is that, in interlocutory proceedings, “costs follow the event” has become just one of the options available to the court, and is no longer the “default position”.

16.  The rationale of such a change can be found in Recommendation 122 made by the Working Party on Civil Justice Reform:

“The principle that the costs should normally “follow the event” should continue to apply to the costs of the action as a whole. However, in relation to interlocutory applications, that principle should be an option (which would often in practice be adopted) but should not be the prescribed “usual order.” Costs orders aimed at deterring unreasonable interlocutory conduct after commencement of the proceedings should be given at least equal prominence in practice, with the court being directed to have regard to the underlying objectives mentioned in relation to Recommendation 2. These powers should not apply to pre-action conduct.”

17.  Order 62 rule 5 of the Rules of the High Court has given further guidance as to what special matters the court should take into account in exercising its discretion on costs.  Insofar as this application is concerned, the Respondent relied on “the conduct of all the parties” under rule 5(1)(e).  As to this sub-paragraph, rule 5(2) provides further that:

“For the purpose of paragraph (1)(e), the conduct of the parties includes –

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

18.  The ultimate question which this court has to answer is: what costs order would be a fair and just one in light of all the circumstances of the case.  The court’s hands are not bound by any “default position” as such. 

The Respondent’s argument

19.  The main grounds which the Respondent has relied on in support of his application to vary the costs order nisi are as follows:

(1) The basis of the Petitioner’s recusal application was muddled and unclear; all her allegations had been rejected by the court, and as a matter of fact she had attempted to argue a point (actual bias) which had already been rejected in the learned Judge’s Judgment on children matters.

(2) The court acceded to the Petitioner’s recusal application only because (i) the learned Judge found that the unreasonable hostility and conduct on the part of the Petitioner had rendered the chance to have a successful FDR unrealistic if Her Honour remained the presiding judge at the FDR, and (ii) of the Petitioner’s intimation that she would sabotage the collaborative process of the FDR.

(3) The recusal was caused by the Petitioner’s litigation misconduct, and her unreasonable and improper assault on the learned Judge’s bona fides.

(4) The Petitioner did not prosecute her application for recusal with promptitude.

(5) The Petitioner had conducted the recusal application in a personal and intimidatory way.

(6) The Petitioner’s behaviour in these proceedings as a whole was disgraceful and thus meriting condemnation in costs.

(7) The Petitioner was engaging in a “judge-shopping” exercise by virtue of the recusal application.

(8) The Respondent was acting perfectly reasonably in challenging the Petitioner’s recusal application and put the Recusal Summons to proof, and the Petitioner had failed that proof.  He should therefore not be left out of pocket thereby.

Discussion

20.  First of all, I do not think there is much room for the Respondent to argue that it was unreasonable for the Petitioner to raise or pursue her allegations as she did in the recusal application at all for the following reasons:

(1) Although the Petitioner did raise certain accusations against the learned Judge at the trial on children matters, one must not lose sight of the fact that no recusal application was made at the trial.  The central question considered in the recusal application, namely, whether there was “apparent bias”, was never considered by the court in these proceedings before the recusal application was made.  As a result, the Respondent’s argument on res judicata is totally beside the point, and indeed, HH Judge Melloy did not rule that there was any issue estoppel as such in her Decision on the Recusal Summons.

(2) Furthermore, it was HH Judge Melloy’s finding that the Recusal Summons was “clearly arguable both ways”[10]. This must be a basis which this court should act upon in its deliberation of the Respondent’s Costs Summons.

21.  I do not think it is fair for the Respondent to accuse the Petitioner of having intimated that she would sabotage the collaborative process of the FDR, as she never did.  All the Petitioner was saying in the recusal application was that “this is an appropriate juncture in (sic) which the Judge is requested to transfer the case, before interlocutory applications regarding finances which may need to be determined prior to FDR hearing.”[11].  Similar submission was made in the Petitioner’s reply submissions, in which it was stated that “it would be far better for the matter to be transferred to a different court at this juncture than to continue bearing in mind, that there may be interlocutory financial applications which may be made prior to the FDR hearing”[12].  While at the end of the day, the chance of success of the FDR was indeed one of the main reasons for the learned Judge to recuse herself, it seems to me that this matter was considered by Her Honour only out of her abundant experience sitting in the Family Court, but not because of any intimation as such on the part of the Petitioner.

22.  While HH Judge Melloy did comment that the Petitioner’s allegations had been made in a way which bordered on the improper, the learned Judge had also expressed her views that many of the Petitioner’s concerns were genuinely held[13] and that it is clear that the Petitioner is convinced that Her Honour was biased against her[14].  Hence, this is not a case where it can be said that the Petitioner had jumped at an available opportunity for “judge-shopping” purpose.  In my judgment, it would make a difference when it comes to the exercise of the court’s discretion if the Petitioner’s view was held genuinely, even if mistakenly.

23.  While it is the Respondent’s right to resist the Petitioner’s application, this does not mean that the Respondent is bound to be “costs-proof”.  The fact that the Respondent had acted perfectly reasonably in challenging the Petitioner’s recusal application is just one of the matters to be taken into account.

24.  It is true that the learned Judge had rejected all criticisms made by the Petitioner against Her Honour.  Be that as it may, the learned Judge had acceded to the Petitioner’s application at the end of the day by, among other things, applying the “apparent bias” test.  Hence, both parties can be regarded as successful, but at the same time, both of them can be said to be losers.  It all depends on how one looks at the matter.  In my view, the costs order should adequately reflect such outcomes of the recusal application.

25.  I do not accept that this court should take the Petitioner’s conduct in the children’s matters into account when considering the matter on costs in relation to the Recusal Summons, since the Petitioner has already been penalised by the court by virtue of the order to pay a 20% contribution towards the Respondent’s costs of and occasioned by the children’s matters.  The Petitioner’s past conduct should have been considered already in the process. Therefore, the same conduct should not be considered again herein.  Hence, this court should only consider the conduct of the Petitioner in the recusal application.

26.  Neither do I think the alleged delay in the making of the Petitioner’s recusal application should have any bearing on the application on costs.  It can be seen that many of the accusations made by the Petitioner were in relation to incidents which took place after the commencement of the trial on children matters.  If the Petitioner did not wait but made her recusal application there and then, the progress of the trial on children matters would no doubt have been affected.  Hence, I do not think the Petitioner’s decision to wait until the conclusion of the children matters before making the recusal application can be made a factor which works to the Petitioner’s disadvantage in the present application.

27.  In the Respondent’s reply submissions, it was further argued that the Petitioner’s forcing a change of the docket judge has delayed matters[15].  While delay must have been occasioned by the Petitioner’s recusal application, I do not think this is a matter which the court should place much weight.  In the same paragraph, the Respondent further referred to the Petitioner’s failure to file an updated Form E, which in my view is totally irrelevant as far as this application is concerned.

28.  Having taken all the above matters into account, I am of the view that a fair order to be made is “no order as to costs”. 

ORDER

29.  I therefore order that the costs order nisi made by HH Judge Melloy on 25 May 2020 be made absolute.

COSTS OF THE COSTS SUMMONS

30.  I make a costs order nisi that:

(i) the Respondent shall pay the Petitioner’s costs of and incidental to the Costs Summons.  For the avoidance of doubt, such costs shall include counsel’s fee incurred in opposing the Costs Summons;

(ii) such costs shall be assessed summarily on paper, pursuant to Order 62 rule 9A(1)(a) of the Rules of the District Court (Cap.336H); and

(iii) the assessed costs shall be paid within 14 days after summary assessment.  

31.  In the absence of any application made within 14 days to vary, the above costs order nisi shall become absolute.

32.  For the purpose of summary assessment of the Petitioner’s costs of and incidental to the Costs Summons:

(i) The Petitioner shall lodge and serve her statement of costs (see Appendix A of PD 14.3) within 7 days after the costs order nisi above has been made absolute;

(ii) The Respondent shall lodge and serve his statement of objection within 7 days thereafter.