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CACV 244/2015
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO 244 OF 2015
(ON APPEAL FROM FCMC NO 9052 of 2013)
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BETWEEN
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| YBL |
Petitioner |
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| LWC |
Respondent |
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Before: Hon Lam VP, Chu and Poon JJA in Court
Dates of Written Submissions: 12, 16, 25 January 2017, 3, 6, 8 February 2017 and 1, 6 March 2017
Date of Judgment: 12 April 2017
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JUDGMENT
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Hon Lam VP (giving the Judgment of the Court):
1. After we handed down our judgment on 30 December 2016 on the substantive appeal, three applications were outstanding:
(a) An application by the Respondent for variation of our costs order nisi in respect of the costs of the appeal;
(b) An application by the Respondent for the return of the bail money and the application by the Petitioner for the release of the bail money to her to satisfy the judgment debt;
(c) An application by the Respondent for leave to appeal to the Court of Final Appeal.
2. Written submissions were filed by parties on these applications and it is agreed that they should be processed on papers. We have read those submissions.
3. We now give our decisions on these applications.
Costs of the appeal
4. In our judgment of 30 December 2016, we made an order nisi that there be no order as to costs of this appeal.
5. Ms Lai submitted on behalf of the Respondent that as her client is the successful party in the appeal he should have the costs of the appeal. She also submitted the Petitioner had vigorously challenged each and every ground of appeal and the usual criteria for departing from costs following event cannot be satisfied.
6. On the other hand, Mr Tang submitted on behalf of the Petitioner that the Court should have regard to conduct of the parties, including conduct before the appeal was brought. He submitted that in light of the history of the matter it was not unreasonable for the Petitioner to resist the appeal. He further submitted that the Respondent’s past conduct pointed to the conclusion that the appeal was nothing but an inevitable litigation that he had to take because of circumstances of his own making. Counsel also submitted that the overall justice of the case warrants the deprivation of the Respondent of costs despite his success in the appeal.
7. Mr Tang referred to the following as relevant circumstances in these regards:
“ (1) It is indisputable that the present proceedings were caused by the Respondent’s failure to pay the Judgment Sums in the first place. Even the Respondent does not seem to dispute that.
(2) It is also indisputable that the Respondent’s default was serious. As rightly pointed out at §128 of the Judgment, “while committal should be a procedure of last resort, in light of the serious default by the respondent and the litigation history outlined above (see [113] onwards), the petitioner cannot be criticised for making a committal application.”
(3) The Respondent obtained $200,000 (allegedly) from his father for payment of his bail money almost immediately but there is no suggestion let alone evidence that he had made any effort to borrow money from his father or any other sources to pay maintenance. This effectively means the Respondent would rather spend money (whether of his own or borrowed) on legal costs to evade liability under the Committal Order than simply paying off the Judgment Sums which would have discharged the very Committal Order.”
8. Ms Lai submitted that since we are only concerned with the costs of the appeal (as the Respondent was content with our costs order regarding costs below), the conduct of the Respondent leading to the judgment summons proceedings is irrelevant. Further she submitted that taking account of such conduct infringes the presumption of innocence insofar as one is drawing an inference that the Respondent deliberately refused to pay the maintenance ordered notwithstanding he had the means to do so. She also cited the observation of Deputy District Judge Pang in TYM v WSP FCMP 309 of 2014, 19 December 2016.
9. In our judgment, the proper approach in determining costs is that succinctly put by the Chief Justice in Mimi Kar Kee Hung v Raymond Kin Sang Hung FAMV 10 & 11 of 2014, 7 July 2015 at [7]:
“ The discretion as to costs in this Court, as in any other Court, is to be exercised in a principled way with a view to reality and justice.”
10. For present purposes, the relevant principles on the exercise of discretion as to costs can be summarized as follows:
(a) whilst the courts often start with the proposition of costs following event, it is no longer a general rule but a starting point, see Hung Fung Enterprises v Agricultural Bank of China [2012] 3 HKLRD 683;
(b) there have to be some justifications for depriving a successful party of his costs;
(c) in measuring who is the successful party and the extent of his success, the court must examine the reality and justice of the case. Thus, in Hysan Development Co Ltd v Town Planning Board (No 2) (2016) 19 HKCFAR 635, the Court of Final Appeal made no order as to costs notwithstanding the success of the appellants in reversing the Court of Appeal’s decision because they did not achieve the full objects of their appeals;
(d) in addition, under Order 62 Rule 5, the court in exercising its discretion shall take into account the matters set out in Rule 5(1) as may be appropriate in the circumstances;
(e) Rule 5(2) highlights some conduct which the court may take into account including whether it is reasonableness for a party to take an issue, the manner in which the matter was pursued or defended, the extent of success, and conduct before, as well as during the proceedings;
(f) if a successful party has brought the litigation upon himself or has done some wrongful act in the course of the transaction, he could be deprived of his costs.
11. Whilst acknowledging that the Respondent is successful in that we agreed to set aside the order for committal made by the Judge, we do not accept that he has achieved full victory. His objective was to have the judgment summons dismissed which we refused to do.
12. If one were to examine the reality and overall justice of the case, we agree with Mr Tang that the Respondent had brought this appeal upon himself. The points taken on appeal were not points taken before the Judge. Despite repeated reminders by judges in the Family Court as to the seriousness of the matter, the Respondent adopted a cavalier attitude towards his liability to pay maintenance for his children and the judgment summons application. He only engaged counsel to represent him after he was committed by the judge.
13. Further, in the present circumstances, given the nature of the claim of the Petitioner, Mr Tang was justified in asking us to take account of the fact that the Respondent had been able to procure the $200,000 bail money and the fees of his lawyers instead of meeting his obligation to pay maintenance. In this connection, at the leave hearing before Lam VP and Chu JA, the Petitioner (whilst she was still unrepresented) sensibly indicated that her primary concern was to receive maintenance payment for the children as opposed to the imprisonment of the Respondent. Apparently, the bail money and the legal costs of the Respondent would probably add up to more than the outstanding amount set out in the judgment summons. It would suggest that the Respondent has chosen to spend money on litigation than to pay maintenance for his own children.
14. In taking account of such conduct of the Respondent, we are only having regard to the reality and the overall justice of the case. We are not impressed by Ms Lai’s submission on infringement of presumption of innocence. We do not pre-empt in any way the adjudication as to the personal means of the Respondent. However, in the exercise of our discretion on costs, we are entitled to take the stance that even if the bail money and legal fees were not from the Respondent’s own means, his priority and conduct of the proceedings is unreasonable in that he chose to deploy the funds on litigation instead of meeting his obligations to the children under the court order. Such conduct on the part of the Respondent (and his financial backers, assuming in his favour that the funds were not his own) is not conducive to the proportionate and procedural economy in resolution of dispute and as such is contrary to Order 1A Rule 1(c) and (e).
15. In the present case, we should also bear in mind that the Petitioner was simply following the rules and using the prescribed form in the judgment summons application. Though there were points taken by Mr Tang in the appeal which we do not accept, the appeal was argued by him without excessive zeal and we had derived assistance on some of the points canvassed by him.
16. Viewed in that manner, and bearing in mind the history of the case set out at [115] to [124] of our main judgment, we agree with Mr Tang that there is sufficient justification in the present circumstances to deprive the Respondent of his costs in the appeal.
17. For these reasons, we refuse to vary our costs order in respect of the costs of the appeal and dismiss the summons of the Respondent of 13 January 2017. The order that there be no order as to costs in the appeal shall become absolute.
18. We also order the Respondent to pay the Petitioner the costs of the application for variation.
Disposal of bail money
19. Ms Lai submitted that the bail money had served its purpose of securing the appearance of the Respondent and it should be returned to him. She submitted that the money was held by the Respondent for his father on a Quistclose trust. She further submitted that the Court has no...
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