Lye v Cww And Another

Court:Family Court (Hong Kong)
Judgement Number:FCMC14787/2002
Judgment Date:06 May 2005
FCMC014787/2002 LYE v. CWW AND ANOTHER

FCMC 14787 of 2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 14787 OF 2002

_________________

BETWEEN

  LYE Petitioner
  and  
  CWW 1st Respondent
HWL 2nd Respondent

_________________

Coram : Her Honour Judge Chu in Chambers

Date of Hearing : 29 March 2005

Date of Petitioner's Written Submission : 4 April 2005

Date of Respondent's Written Submission : 13 April 2005

Last Date of the Petitioner's Reply : 20 April 2005

Date of Ruling : 6 May 2005

________________________

R U L I N G ON
INDEMNITY COSTS

_______________________

1. At the hearing on 29th March 2005, I gave an order that

(i) The 1st Respondent do pay the Petitioner’s costs of and incidental to the suit up to 13th November 2003;
(ii) There be no order as to costs of 13th November 2003;
(iii) The 1st Respondent shall pay the Petitioner’s costs of 20th October 2004 and of the hearing on 29th March 2005.

2. The Petitioner’s solicitor submitted that for those costs of (i) and (iii) above, the 1st Respondent should pay the costs on an indemnity basis. I adjourned this issue and directed the parties to make written submissions thereon.

LEGAL PRINCIPLES

3. According to Rule 3 of the Matrimonial Causes Rules, the Rules of the High Court (RHC) shall apply with the necessary modifications to the commencement of matrimonial proceedings in, and to the practice and procedure in matrimonial proceedings pending in the Court of First Instance or in the District Court.

4. Rule 91A of the Matrimonial Causes Rules provides that where the costs of and incidental to any matrimonial proceedings are directed to be taxed, R.H.C. Order 62 shall have effect in relation to the costs of proceedings in the Court of First Instance, and R.D.C. Order 62 shall have effect in relation to the costs of proceedings in the District Court.

5. Order 62 Rule 28(3) in both R.D.C. and in R.H.C. provides that the Court in awarding costs payable to one party by another may in any case in which it thinks fit to do so order or direct that the costs shall be taxed on the common fund basis or on the indemnity basis.

6. Any order for costs is in the discretion of the Court. (see Headnote of Re Engindata Ltd (No. 2) 1993 1 All ER 232).

7. Section 53 of District Court Ordinance Cap. 336 (equivalent to Section 52A of High Court Ordinance Cap. 4) provides that the Court shall have full power to determine by whom and to what extent the costs are to be paid. See also Hong Kong Civil Procedure, 62/2/5 : -

“The Court of Appeal in Choy Yee Chun (The Representative of the state of Chan Pui Yiu) v. Bond Star Development Ltd [1997] H.K.L.R.D. 1327, CA reviewed the cases and summarised the law as follows. A taxation of the successful party’s costs on an indemnity basis could properly be ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner. Any proceedings instituted or prosecuted in such circumstances as to constitute an affront to the court could properly be the subject of a direction for the taxation of the successful party’s cost on the indemnity basis. However, the circumstances in which an indemnity award might properly be made were not restricted to circumstances beyond the requirement that taxation on an indemnity basis must be “appropriate”. The principle for the award of an order of costs on an indemnity basis applied equally to those who not only instituted proceedings but who defended them. If a plaintiff had been forced to institute proceedings by a defendant whose conduct had been not only hostile in the normal litigious sense, but oppressive and with base ulterior motive, and if the pursuit of a defence constituted conduct which was part of an oppressive game plan, then invocation of the power to award costs on an indemnity basis might well be justified”.

8. I have been referred by the Petitioner’s solicitor, Mr. Ko, to the case of Re Tang Hong Yeun Andy HCB 19585 OF 2003 (at paragraph 18) quoting Choy Yee Chun (The Representative of the estate of Chan Pui Yiu) v Bond Star Development Ltd. [1997] H.K.L.R.D. 1327 CA, where it was held that the discretion was not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be “appropriate”. See also Hong Kong Civil Procedure, 62/App/12.

9. I have also been referred to the Judgment of the Court of Final Appeal in Town Planning Board v Society for Protection of the Harbour Limited. FACV No. 14A of 2003, at paragraphs 12, 14, 15, 18 and 23 where the Court of Final Appeal has made the following comments : -

(a) The Court has a broad discretion to determine how costs shall be paid and whether indemnity costs should be ordered (paragraph 12).
(b) The successive party should show, in order to obtain an order for costs on an indemnity basis, that the case has some “special or unusual feature” (paragraph 15).
(c) In relation to the award of costs generally, it has been accepted, as Chu J pointed out, that while
“the ground [upon which costs are awarded] must be connected with the case. This may extend to any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation, but no further”.
There is no reason why this statement does not apply with equal force to the exercise of the discretion to award indemnity costs (paragraph 18).
(d) Other factors, such as the reasonableness of the conduct of the parties, may need to be taken into account (paragraph 23).

SEQUENCE OF RELEVANT EVENTS IN THE PRESENT CASE

10. The relevant events and without prejustice correspondence are as follows :

(i) On 18th December 2002, the Petitioner issued a petition for divorce on two grounds, namely unreasonable behaviour and adultery. In relation to the alleged adultery, the 2nd Respondent, being a good friend of both the Petitioner and the 1st Respondent, apparently moved to the parties’ home for temporary residence in about July 2001 with the agreement of the Petitioner. The Petitioner alleged that she discovered on about 16th July 2002 1st and 2nd Respondent were having a close relationship more than mere friends. She alleged that the 1st Respondent admitted his adultery with the 2nd Respondent upon further questioning by the Petitioner. Later on about 23rd September 2002 the Petitioner alleged that the three of them were having a discussion about their relationships during which the 1st Respondent assaulted her and as a result thereof she and the child moved out. Since then, the 1st and 2nd Respondent have continued to reside at the matrimonial home.
(ii) On 4th January 2003, the 1st Respondent and the 2nd Respondent respectively filed Acknowledgement of Service indicating that they would defend the case.
(iii) On 28th January 2003, the 1st Respondent through his solicitors wrote to the Petitioner’s solicitors, inter alia, that the Petitioner had intention to settle the matter by relying on separation for one year with consent of the 1st Respondent.
(iv) On 14th February 2003, the Petitioner’s solicitors replied to the 1st Respondent’s solicitors, inter alia, that the Petitioner was agreeable to a divorce on the sole ground of unreasonable behaviour. There was no reply to this letter from the 1st Respondent’s solicitors until 4th March 2003.
(v) On 4th March 2003, the 1st Respondent’s solicitors wrote to the Petitioner’s solicitors informing them again that the Petitioner had agreed to consent to divorce on the ground of “one year separation”.
(vi) On 5th March 2003, the Petitioner’s solicitors replied to say that it was impracticable to rely on the ground of “consent one year” as the Petitioner and the 1st Respondent only separated in September 2002. The Petitioner’s solicitors then proposed again to rely on the sole ground of unreasonable behaviour and indicated that if the matter were to be settled in an amicable way, they would only seek costs against the 1st Respondent based on the fixed costs scale.
(vii) On 19th March 2003, the 1st Respondent and the 2nd Respondent respectively filed Answers denying all the allegations in the petition. The 1st Respondent’s Answer also included a Cross Petition against the Petitioner alleging unreasonable behaviour on her part. The allegation of adultery was denied by the 1st
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