Z v X

CourtCourt of Appeal (Hong Kong)
Judgment Date08 March 2013
Judgement NumberCACV166/2011
Subject MatterCivil Appeal
CACV166A/2011 Z v. X

CACV 166/2011
CACV 251/2011
CACV 252/2011




CIVIL APPEAL NOS. 166, 251 & 252 OF 2011)

(On Appeal from HCMC No. 1 of 2007)



C Intervening Party


Before : Hon Cheung, Yuen and Chu JJA
Date of Respondent’s Written Submissions : 11 December 2012
Date of Intervening Party’s Written Submissions : 11 December 2012
Date of Petitioner’s Written Submissions : 12 December 2012
Date of Judgment on Costs : 8 March 2013




Hon Cheung JA (giving the judgment of the Court) :

1. In our judgment of 13 November 2012, we allowed partially the Wife’s appeal on her ancillary relief application, we also allowed partially the Husband’s cross appeal but dismissed the Intervener’s cross appeal. We directed the parties to lodge written submissions on the costs of the appeal and below.

2. In our judgment we referred to the Husband’s and the Intervener’s appeal in CACV 251/2011 and CACV 252/2011 respectively. They are in respect of the costs order made by Saunders J dated 30 September 2011 when he discharged a mareva injunction that was issued on the application of the Wife.

3. At the appeal we ordered that all costs issues be reserved for determination after our determination of the appeal on the ancillary relief.

4. This Court will now address these issues.

1) Costs of trial before Saunders J

(1) Saunders J’s Order

5. Saunders J ordered the Husband and Intervener to pay the whole of the Wife’s costs, including any costs in interlocutory matters which have been reserved and not otherwise dealt with, as to 50% on a party and party basis, and as to 50% on indemnity basis.

6. Saunders J’s reasonings are as follows :

‘ 21. I am accordingly of the view that I am bound, in the exercise of my discretion, that even in a big-money case, the usual rule will be that costs follow the event.

22. The starting point of therefore, notwithstanding the payments made by the husband to the wife over a seven-year period, is that the wife is entitled to her costs at least on a party and party basis.

23. A particular feature of the defence advanced by the husband and the intervener was summarised by Mr Clough in his skeleton in the following way:

“Had the husband disclosed his assets, as he is required by law to do, then:

(1) there would never have been a need for a trial of preliminary issue on the ownership of (X Ltd) at all. Likewise, there would never have been any appeal on this issue;

(2) the ancillary relief trial (if any were necessary) would have been speedy and focused on the remaining narrow issue;

(3) the presence of (the intervener) throughout the entire proceedings would have been dispensed with; and

(4) the array of satellite litigation that has grown around the case would never have occurred, including the subpoenas against the banks.”

24. I agree. The greater proportion of the 16 days of trial and the fact that the trial which began on 14 April 2010, did not conclude until 18 February 2011, is attributable to the examination of the assertion by the husband that the intervener owned 87.5% of X Ltd [i.e. NAIGL], and in pursuing matters of disclosure. Mr Chan is right when he says that the wife succeeded in establishing only that the husband owned 83.1% of X Ltd [i.e. NAIGL] and the intervener was able to preserve 4.4%, which on the valuations can be said to be worth some $16 million. But that can hardly be characterised as a success to be taken into account in the assessment of costs.

25. I accept Mr Coleman’s submission that some account must be taken of the fact that the payments made to the wife over a seven-year period would to some extent have gone on costs. At the end of the day, and taking a broad view of the matter, in order to do it [sic] appropriate justice to the wife, there will be in the order of the husband and the intervener must pay the whole of the wife’s costs, including any costs in interlocutory matters which have been reserved and not otherwise dealt with, as to 50% on a party and party basis, and as to 50% on an indemnity basis.’

(2) The parties’ position

7. The Husband submitted that there should be no order as to costs of the hearing before Saunders J since this is a ‘big money case’. Further there should be no indemnity costs order.

8. The Intervener also submitted that there should be no order as to costs below.

9. The Wife maintained that Saunders J was correct.

(3) Our view

10. Although Saunders J in W v K & Anor (Costs) [2008] HKFLR 378 stated that in ‘big money case’ each party should bear its own costs, this Court’s approach on costs in ancillary relief application is that costs should follow the event although because of the special dynamics of family litigation (e.g. where the case involved children, or where financial resources were inadequate) the discretion may be broader than in civil matters generally : L v C (CACV 169/2006, Judgment 19 March 2008) applying Gojkovic v Gojkovic (No 2) [1991] 2 FLR 233; TL v SN (Ancillary Relief) [2010] HKFLR 506.

11. In England the approach has now been changed where the general rule is that the Court will not make an order requiring one party to pay the costs of another. However, costs orders may be made because of the litigation conduct of another party. The factors to be considered include, for example, whether an open offer to settle has been made, whether it was responsible to raise, pursue or contest a particular allegation or issue and the financial effects on the parties of any costs order. (See Rayden and Jackson on Divorce and Family Matters, 18th Ed, Noter up to Vol 1(2) [52.17] ‒ [52.20] and see further the Noter up on Family Procedure Rules 2010).

12. The changes in England were carried out by prescribed rules. The position in Hong Kong has remained unchanged since L v C and TL v SN.

13. In our view Saunders J who adjudicated the 16-day trial was the best person to decide on the appropriateness of the costs orders below. We are not satisfied that any error has been committed which requires this Court’s intervention.

2) Costs of the appeal [CACV 166/2011]

(1) Wife and Husband

14. The Wife asks for the costs of her appeal against the Husband on an indemnity basis.

15. The Husband said that costs of the appeal should be based on the outcome of the individual issues as determined by this Court. In summary they are as follows :

1) the duration of the marriage : no order as to costs;

2) the ownership of the 83.1% shares in NAIGL : no order as to costs as between the Wife and the Husband;

3) the valuation of the Husband’s interest, if any, in NAIGL : the Wife to pay the Husband’s costs;

4) the valuation of...

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