CM v. GRP

FCMC 1915 / 2019

[2024] HKFC 51

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 1915 OF 2019

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DECISION
( Summary assessment of costs )

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Background

1.  In this decision, I shall continue to address the petitioner as the wife, and the respondent as the husband, despite that their marriage has ended in 2022 with the grant of the decree absolute.

2.  On 18 February 2022, I handed down my judgment of the ancillary relief trial (“Judgment“), ordering, among other things, that:

(1)  the matrimonial home (in Tai Po)  held in the sole name of the husband shall be sold within 6 months of the grant of the decree absolute at $11.38 million or market price agreed by both parties; and

(2)  upon its sale, the net sale proceeds, after deducting the necessary expenses of the sale, shall be apportioned to the wife and the husband under the ratio of 33.2% and 66.8% respectively.

3.  It is indisputable that after the Judgment, the wife has relocated back to Denmark with the children of the family, whereas the husband has returned to his home country, Germany.

4.  For reasons which will become clear later in this decision, the matrimonial home has not been able to be sold within the time ordered by the court, ie by November 2022.[1]

5.  On 7 August 2023, the husband (then no longer legally represented)  filed a summons (“Summons”), seeking an order like this:

(1)  the wife shall be ordered to vacate the ancillary relief notice registered at the Land Registry against the matrimonial home;

(2)  the husband shall be allowed to reduce the listing price of the matrimonial home within the range of 15% and accept the offer;

(3)  clarification should be made by the court that the redemption money of the existing mortgage of the matrimonial home shall be considered as part of the expenses of the sale and be shared equally by both parties;

(4)  his summons to be heard by way of a video call with the wife (living in Denmark)  and the husband (living in Germany);

(5)  costs of the application.

6.  The Summons was returnable before this court on 7 September 2023, which was further adjourned to 8 September 2023, but not to a later date because the husband had to fly back to Germany in the evening of 8 September 2023. Unfortunately, black rainstorm warning signal was issued for 8 September 2023. His summons had to be refixed to 27 December 2023, and further refixed to 29 January 2024 upon the joint application of both parties.[2]

7.  The wife did not appear in any of the hearings in relation to the Summons, nor has she filed any evidence to oppose the Summons.

8.  In the hearing of 29 January 2024, I gave time extension to the husband to sell the matrimonial home and ordered that an updated valuation of the matrimonial home be obtained. I directed that the ancillary relief notice registered by the wife against the matrimonial home at the Land Registry be vacated, in order to facilitate the sale of the matrimonial home. I awarded costs in favour of the husband, to be summarily assessed (“the 29/1/2024 Order”).

9.  For the purpose of such summary assessment of costs,  I directed that the husband shall file and serve an affirmation setting out in an itemized table the amount of the costs he is claiming, with all documentary proof on or before 5 February 2024, and that the wife shall file and serve her affirmation in opposition to the husband’s affirmation on or before 19 February 2024, failing which it will be deemed that she has no objection to his claimed costs.

10.  This is my decision on the summary assessment of costs of the Summons.

Respective stance of the parties

11.  The husband claimed a total costs of $72,447 which comprised of: [3]

	Items	Amount (HKD)
(1)	3 sets of return air tickets from Germany to Hong Kong	$43,260
(2)	Travelling expenses in Hong Kong	$800
(3)	Compensation for leave (3 days each return trip from Germany to Hong Kong)	$24,887
(4)	Legal fee for vacating the ancillary relief notice at the Land Registry	$3,500
		$72,447

12.  Simply put, the wife objected to all items of the husband’s claimed costs, arguing that such expenses could have been avoided “if [he] took a constructive and clear way of communication” with her. She said that she was all along “willing to compromise” and had in fact signed a consent summons filed on 20 March 2023 (“Consent Summons”), under which she agreed to extend the time limit to sell the matrimonial home at $11.38 million or other market price agreed by the parties, but if it was sold at a price lesser than $11.38 million, the sharing ratio would be varied to 46% (to the wife)  and 54% (to the husband). However, the Consent Summons was not approved by the court.

Why costs in favour of the husband

13.  To begin with, I have already awarded costs in favour of the husband in the 29/1/2024 Order. There is no appeal in respect of the said costs order. The only issue left for determination is the summary assessment of such costs.

14.  However, for the benefit of the wife (who chose not to attend all the relevant hearings of the Summons), I would explain the following.

15.  Since the Judgment, it is indisputable that the property market in Hong Kong has experienced a continuous downturn. However, the wife refused to give her consent to sell at a lower price.[4] She further rejected the husband’s proposal to have an updated valuation by an expert (fees to be shared equally), or to adopt online bank valuation.[5] She told the husband that he had no right to force her to accept a price lower than $11.38 million.[6] She proffered to offer 2 options to the husband[7]:

(1)  to rent out the matrimonial home for the time being in order to wait until the property market picked up again; or

(2)  if the matrimonial home was to be sold at a lower price than $11.38 million, the husband should compensate her the difference out of his share.

16.  As a result, the matrimonial home was not able to be sold within the time limit imposed by the Judgment, despite that there were offers to buy the matrimonial home at $10.5 million as in July 2022 or at $9.88 million as in January 2023.  This has created financial pressure on the husband, as he was shouldering the expenses of the matrimonial home, including monthly mortgage repayment (which has been adjusted upwards due to increase in interest rate)  and management fees etc.

17.  It was against such a backdrop that the parties filed the Consent Summons with the court. However, the court had grave concern as to the legal basis to vary the sharing ratio of the sale proceeds of the matrimonial home as ordered in the Judgment, and thus raised requisitions on 30 March 2023 to that effect. The requisitions were never satisfactorily answered, for at least 2 reasons:

(1)  It is trite to point out that the parties cannot, by their consent,  confer jurisdiction to the court;

(2)  A property sale order is not subject to variation : sections 6 and 11 of the Matrimonial Proceedings and Property Ordinance, Cap 192.

18.  As such, the Consent Summons was never endorsed and approved by the court.

19.  The wife had at some stage suggested to the husband that he should rent out the matrimonial home for the time being. However, the husband was right in replying that this would be in contradiction to the time limit imposed by the Judgment to sell the matrimonial home.

20.  At some other stage, the wife made another suggestion to the effect that if the Consent Summons was not able to be endorsed by the court, the parties should sign a private agreement to the same effect. This was rightly and legitimately rejected by the husband.

21.  It is thus clear to me that the wife was unreasonable in refusing to reduce the selling price of the matrimonial home and in suggesting that the husband should compensate her of the difference in price, to the extent that the sharing ratio of the sale proceeds given in the Judgment would be varied. The downturn in the property market is something beyond the control of the parties. It is unfair of the wife to ask the husband to solely take up the burden and consequences of the drop in market value of the matrimonial home.

Assessment of costs

22.  Both the husband and the wife were acting in person for the purpose of the Summons. Hence, Order 62 rule 28A of the Rules of the High Court, Cap 4A applies. The rule substantially provides,

(1)  On a taxation of the costs of a litigant in person there may, subject to the provisions of this rule, be allowed such costs as would have been allowed if the work and disbursements to which the costs relate had been done or made by a solicitor on the litigant’s behalf;

(2)  The amount allowed in respect of any item shall be such sum as the taxing master thinks fit not exceeding, except in the case of a disbursement, two-thirds of the sum which in the opinion of the taxing master would have been allowed in respect of that item if the litigant had been represented by a solicitor;

(3)  Where in the opinion of the taxing master the litigant has not suffered any pecuniary loss in doing any work to which the costs relate, he shall not be allowed in respect of the time reasonably spent by him on the work more than $200 an hour.

23.  In Cheuk Shu Yin v Law Yeuk Kan & Another [2018] 2 HKLRD 249, Chu JA (as she then was)  explained the costs of a litigant in person as follows:

“4. As to the legal principles applicable, since the two defendants are not represented, the provisions in Order 62, rule 28A of the Rules of the High Court, Cap 4A, apply. The Court of Appeal gave a clear explanation on the amount of costs a litigant in person may be awarded in FOK Siu Wing v ICAC (unreported, CACV341/2005, 27 April 2006):

(1)  If a litigant in person, who is gainfully employed, needs to do the work in relation to the litigation during his working hours, the maximum costs allowed is two-thirds of the sum which would have been allowed to a solicitor for doing that work.

(2)  If the litigant in person has no job or could handle the work in relation to the litigation at his spare time, he has not suffered any actual pecuniary loss and hence shall not be awarded costs under the indemnity principle of the common law. However, pursuant to Order 62, rule 28A(3), he may be allowed costs of not more than $200 per hour. The number of hours allowed in Order 62, rule 28A(2)  is the time a solicitor would have spent on that item, not the time the litigant in person has actually taken.

(3)  If the litigant in person has no job but claims to have suffered pecuniary loss, he will need to prove his claim by an affirmation, which would include providing proof of his academic qualifications, working experience, loss of income etc.

5.  Moreover, it is also stated in paragraphs 13 and 14 of Practice Direction 14.3 that a broad-brush approach will be taken by the Court in the summary assessment procedure; the Court will not embark on a mini-taxation; also, the Court will, so far as possible, ensure that the figure of the costs is not disproportionate and/or unreasonable having regard to the nature and circumstances of the case and the legal proceedings and the underlying objectives stated in Order 1A of the Rules of the High Court.  The Court will carry out the assessment by a global approach and an item by item approach.  If the costs as a whole are not disproportionate, then the Court can accept all reasonably incurred items and allow a reasonable amount.  If the costs as a whole appear disproportionate, then the Court must be satisfied that the work in relation to each item was necessary and that the cost of the item is reasonable before the cost of the item will be allowed: Poon Shu Fan v. Wong Tin Yan [2012] 5 HKLRD 512.  The Court may refuse to accept an exaggerated bill of costs and tax the costs as a whole by a broad-brush approach according to the complexity of the case and the participation of the Receiving Party without carrying out an item by item assessment.”

24.  Applying the above principles to this case, I have the following comment and ruling:

(1)  The husband was all along legally represented in the ancillary relief trial. However, he represented himself in the Summons;

(2)  In order to take out and attend the hearings of the Summons, he claimed that he had to fly back from Germany to Hong Kong 3 times. However, in my view, the fees of air tickets are excessive. It was not justified for him to fly on Business Class or Premium Economy to Hong Kong;

(3)  The court has experience in dealing with similar applications in other family cases, whereby the party/parties therein sought further directions from the court as to, eg, further conduct of sale of a property, the determination of selling price, time extension to comply with a property sale order, etc. The legal costs awarded to the applicant party, who was legally represented, are in the region of $20,000 to $25,000;[8]

(4)  The husband’s claimed costs are roughly three times more than the usual costs awarded to a legally-represented party. This is grossly excessive;

(5)  Taking a broad-brush approach and in the overall circumstances of this case, there is no reason why the court should not rely on Order 62 rule 28A(2)  and award “two-thirds of the sum which in the opinion of the taxing master [and in this case, this court] would have allowed in respect of that item if the litigant had been represented by a solicitor”;

(6)  Hence, I am of the view that two-thirds of $25,000 would be the amount of costs awarded to the husband by way of summary assessment. I round up the figure to $17,000, which may be deducted from the wife’s share of the net sale proceeds of the matrimonial home upon completion of the sale.

25.  Lastly, I make no order as to the aforesaid Consent Summons (filed on 20 March 2023), with no order as to costs.