CTYY v. CCK

FCMC 198 / 1999

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 198 OF 1999

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RULING ON COSTS

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1.  The petitioner of this case is the wife. The respondent is the husband.

2.  On the last day of a 4-day’s trial in respect of the wife’s application for variation of child maintenance, the parties settled the matter with costs reserved for further handling.  This is my ruling on the costs.

Background

3.  The parties were married in 1986, but their marriage has long ended in 2000.  Their only daughter was born in 1994. She is now 23 years old but still receiving post-secondary education.

4.  The parties had a bitter fight on the custody of the daughter in the past.  In the end, custody was granted to the wife, with access to the husband.  On 2 November 2000, the couple reached a settlement on the ancillary relief which essentially provided that the husband shall pay periodical payment to the wife in the sum of $15,000 per month, being $7,500 for the maintenance of herself and $7,500 being maintenance for the daughter. On top of that, he gave his undertaking to pay the rental and tuition fee of the daughter (“AR Order”)

5.  Pausing here, it should be noted that the husband used to be a company director and financial consultant. He had a stroke in November 2006 and claims that he has ceased working since then. It is also agreed that the husband has been suffering from other illness, such as heart disease, end stage renal failure, depression, diabetes. As a daily routine, he has to undergo 4 times of peritoneal dialysis each day. He is now wheel-chaired bound.  Despite all these, the husband had no difficulty in complying with the AR Order.

6.  Starting from 2011, the husband had been giving the daughter large sums of money, with an intention that she would go to study in the UK. Since 2012 when the daughter reached 18, he began to give her share of maintenance directly to her. 

7.  In/about mid-2013, the daughter moved to live with the husband and his new family (including his present wife and their son), in the result of which, the parties reached a consensus in May 2014 that the husband’s duty to pay child maintenance to the wife was discharged upon his undertaking to pay for all living and education expenses of the daughter. They have also reached an agreement to the effect that there would be a clean break on spousal maintenance.

8.  It cannot be disputed that the daughter later went to study in the UK in 2013, and for that and up to then, the husband had given her over $1 million. Unfortunately, the daughter spent it all within a rather short period of time. Some of these money was used by her to buy, in my view, unnecessary items (such as scented candles at Harrods) and/or for travelling to various places around the world.

9.  When the money was all spent, the daughter was asked to return to Hong Kong by the end of 2014. At first, she continued to stay with the husband and his new family. But later an argument broke out on 6 July 2015 between the daughter and the husband, in which the husband alleged that the daughter had hit him and caused injuries to him (“July 2015 Incident”).  In the result, the daughter left and went to stay in a shelter home. She has now moved to live with the wife.  

The trial and the settlement

10.  On 3 December 2015, the wife took out an application for variation of maintenance for the daughter. The trial was fixed for 4 days between 3 – 6 January 2017 before this court.

11.  Both parties were represented during the trial, though the husband acted in person in previous call-over hearings leading to this trial.

12.  On the 4^th day of trial during cross-examination of the husband (ie 6 January 2017), he literally conceded that he had not paid any maintenance for the daughter after the July 2015 Incident, not because he had no money to pay her, but because he was angry that the daughter quarrelled with him and even hit him during that incident.

13.  On the consent of both parties, the trial was then stood down for the purpose of the legal representative of the husband to take instructions from him in view of the concession made by him as aforesaid. Subsequently, a consent summons, duly signed by the parties themselves and their respective legal representatives, was placed this court (“Consent Summons”). The terms therein provide that the husband shall pay the following by way of court order or undertaking until the daughter completes her education (only limited to the completion of her first degree):

(1) a sum of $7,600 per month for her living expenses;

(2) a sum of $3,900 being her rental subsidy;

(3) her school and relevant examination fees; and

(4) a lump sum of $45,040 to cover her maintenance between 8/2015 to 12/2016.

14.  In the Consent Summons, costs were said to be reserved, as the wife was on legal aid and no prior approval for waiving the claim for costs was obtained from the Director of Legal Aid yet.  I was told that the wife’s solicitors would write to the Director for Legal Aid to take instruction on costs. I was invited to approve the Consent Summons, with consequential direction that the parties should send a joint letter to report if the question of costs need to be restored for determination. Accordingly, the Consent Summons was approved on the 4^th day of the trial.

15.  On 17 January 2017, the wife’s solicitors reported to this court that the Director of Legal Aid has instructed them to seek costs of this application. Since this court has heard nothing further from the husband on costs, I set the costs issue down for argument before me.

The hearing of 5 June 2017

16.  Notice of hearing was sent by this court to the parties. The notice of hearing for the husband is sent to the address provided by him in a notice to act in person filed by him on 10 January 2017 by ordinary post. The said notice of hearing was not returned.

17.  However, the husband was absent in the argument hearing of 5 June 2017. 

18.  Since he is now a litigant in person and given that he had the history of being absent on some occasions due to his poor health/hospitalisation, I adjourned the argument hearing and gave the following directions (where applicable):

(1) The husband shall file and serve his written submission in opposition to the wife’s written submission on/before 30 June 2017;

(2) In the event that the husband does not file his written submission by 30 June 2017, he shall be deemed to have waived his right to lodge a written submission to this court, whereby this court shall dispose of the costs issue forthwith;

(3) This order shall be served on the husband by inserting into the letter box of his last known address, being the address stated in his notice to act in person.

19.  By an affirmation filed on 20 June 2017, the process server acting for the wife confirms that the aforesaid order has been served on the husband by ordinary mail, as well as by insertion into his letter box, on 8 June 2017 and 9 June 2017 respectively. The process server further confirms that the same has not been returned via mail.

20.  I am satisfied that the husband has been duly notified of the directions/order given in the hearing of 5 June 2017. He has not complied with the directions to lodge his written submission in opposition by 30 June 2017. He is thus deemed to have waived his right to do so. I see no reason why I should not proceed to give my written ruling on costs.

Applicable legal principles

21.  There can hardly be of any dispute that in family matters, the basic principles on costs are that costs are in the discretion of the court, but that costs should follow the event, except when it appears to the court, judged by way of overall impression, that some other order should be made in the circumstances of the case.

22.  Reference can be made to Order 62 rule 3 (2) of the Rules of High Court which read as follows:

“ If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings (other than interlocutory proceedings), the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.”

23.  In HK v BD, CACV 252 of 2009, date of judgment 15/10/2010, Hartmann JA (as he then was) cited the English case of Gojkovic v Gojkovic [1992] Fam 40 and expounded on the legal principles on costs in family matters as follows: 

“78. In family matters, as in all civil proceedings, the basic principles are that costs are in the discretion of the court but that costs should follow the event except when it appears to the court that, in the circumstances of the case, some other order should be made. In family matters, because of their particular dynamics, the exercise of discretion is broader-based than in other civil proceedings. However, as was observed by Butler-Sloss LJ in Gojkovic v Gojkovic [1992] Fam 40, there still remains the necessity for some starting-point. That starting-point, as we have indicated, is that costs prima facie follow the event.

79. On behalf of the wife, the oblique criticism was made that the judge proceeded on the basis of “honours even”, that seemingly being the essential reason why he came to his determination that both parties should bear their own costs. We do not see that the judge can be criticised in that respect. If costs were to prima facie follow the event, it was necessary for the judge to identify who had been successful and who had not.

80. But there were of course many issues which the judge in the present case had to take into account in considering how best to exercise his discretion as to costs. It is a long established principle that, after analysing the case of each party, costs must be judged by way of overall impression. They are not to be assessed by breaking down the litigation into its many component and interlocking parts in order to draw up some kind of profit and loss account…” (my emphasis added)

24.  The above legal principles have been adopted by Melloy DJ in LCHJ V SYMA, FCMP 28 of 2014, date of judgment 23/7/2014.

Discussion

25.  On behalf of the wife, Ms Cheung submits that there are 2 reasons that the husband should bear her costs, namely:

(1) Costs should follow the event; and

(2) The “overall impression” of the case is that the conduct of the husband was unreasonable, while that of the wife reasonable.

26.  The case law is clear that although the family court has a wider discretion on costs than in other civil proceedings, the starting point is that costs prima facie follow the event. And if costs are prima facie to follow the event, it is incumbent for this court to decide who is the winner of the case.

27.  In the trial, it is the wife’s latest open proposal that the husband do pay for the benefit of the daughter (i) $7,500 per month; (ii) half of current rental, ie $4,000 per month; and (iii) her school fees, to be back-dated to July 2015. On the other hand, the husband’s latest open proposal is that he would be responsible for: (i) the daughter’s school fees; and (ii) monthly maintenance of $6,000 inclusive of her rental expenses.

28.  In the end, the case was settled per the terms set out in the Consent Summons. It needs no further elaboration that the wife is the winner of the trial, as the settlement terms are basically what the wife was seeking in the trial.

29.  As to the overall impression of the case, Ms Cheung argues that since the July 2015 Incident, the husband had refused to make any offer or reasonable offer for the daughter’s maintenance. The wife had no alternative but to make this application in order to obtain the outcome now recorded in the Consent Summons.  Ms Cheung also submits that the conduct of the husband in the trial is not reasonable. For example, his lawyer spent 1 whole day in cross examining the daughter of how she spent the $1 million that was given by the husband to her, and on the various overseas journeys made by her and shown on her social media platforms, in order to make out his case that the daughter had concealed assets. However, when the husband gave evidence, he conceded that the daughter had truly spent the said $1 million and that she had not concealed any assets. Another example is that the husband’s original case is that he lacked the financial ability to pay the level of maintenance sought by the wife. Yet, in his oral evidence, he confesses that he had not paid any maintenance to the daughter since the July 2015 Incident because he was not happy about the daughter’s assaulting him, not because he did not have the ability to pay her.

30.  In my view, I do not agree that the husband has spent unreasonable time in questioning the daughter of how she had spent the said $1 million by, for example, numerous overseas trips. After all, it is indisputable that the said sum was supposed to be her education fund in the UK, but not for her to spend away lavishly.

31.  However, it is true that the husband, who had all along been financially supporting the daughter, abruptly stopped his financial assistance to her since July 2015. And since then, he had not made any offer or reasonable offer for the daughter’s maintenance, save and except that he had paid her school fees at the last minute.  The wife had no alternative but to make this application. Had she not done so, she would not have obtained the amount now agreed under the Consent Summons.

32.  Also pertinent it is for me to point out that the parties had, in one of the call-over hearings of 1 March 2016, attempted to settle the matter. In that hearing, the wife indicated via her solicitors that she wanted to save costs and time. Hence, she offered openly to settle with the husband, if he would pay the daughter a monthly maintenance of $6,000 (inclusive of rental expenses) and her school fees. The husband at first seemed to be agreeable with the proposal; but after some discussion with his relatives who were waiting outside the courtroom, rejected the wife’s proposal. As a result, the trial had to be fixed.  Be that as it may, the husband literally conceded to the wife’s claim on the last day of the trial and settled with the wife at a much higher sum than she had offered on 1 March 2016.

33.  Had the husband exercised good sense and settled the matter on 1 March 2016 and at a much less amount, the trial would have been avoided. Time and costs would have been saved.

34.  Under all the circumstances, I conclude that costs should follow the event. It would be unfair not to let the wife have her costs, subject to the following point that I am about to make.

35.  Originally, the wife’s application was set down for trial for 3 days from 17-19 August 2016. However, the court was informed on the 1^st day of trial that the husband was admitted into Kwong Wah Hospital due to fever and diarrheal.  As a result, the trial could not go ahead. Costs were reserved on that occasion. I take into account that the husband has a long history of various illness. I am of the view that he should not be blamed for failing to attend the trial on that occasion.  I shall exercise my discretion to order that there be no order as to costs of the hearing of 17 August 2016.

Conclusion

36.  Due to all the matters aforesaid, I shall rule and order that:

(1) the husband shall bear the wife’s costs of and incidental to her application dated 3 December 2015 (including all costs reserved, the trial and this argument hearing), to be taxed if not agreed, save that there be no order as to costs in respect of the hearing of 17 August 2016;

(2) the wife’s own costs be taxed in accordance with Legal Aid Regulations.