MRS. A by LPCR her next friend v. The Executors of the Estate of A

FCMC 15415/2009 & FCMC 5060/2011

[2018] HKFC 231

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MATRIMONIAL CAUSES NO.15415 OF 2009 and

MATRIMONIAL CAUSES NO.5060 OF 2011

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BETWEEN

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RULING
( Paper disposal : Costs )

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Background

1.  The Next Friend of Mrs. A (“the Next Friend”) took out a Summons dated 27^th December 2017 (“the Next Friend’s Summons”) to seek leave to use certain documents filed in the ancillary relief proceedings in FCMC 5060 of 2011 and FCMC 15415 of 2009, (namely the Order of the Family Court dated 19^th April 2011 in FCMC 5060/2011 (“the Settlement Order”) and Form E filed by Mrs. A in FCMC 15415/2009) (“Form E”) to be used in the High Court Proceedings (“High Court Proceedings”).

2.  By a Ruling dated 7^th November 2018 (“the Ruling”), this Court granted leave to Mrs. A through the Next Friend to disclose, use and adduce Form E and the Settlement Order in the High Court proceedings and any appeal arising therefrom, and released Mrs. A/Next Friend from any applicable confidentiality restrictions or implied undertaking.

3.  At the same time, the issue of costs was reserved to be dealt with by paper disposal.

4.  At the hearing, the stance of the Executors of the Estate of Mr. A (“the Executors”) is that the Executors do not oppose the Next Friend’s proposed use of Form E in the High Court Proceedings.

5.  As for the Settlement Order, the Executors’ stance is that the Court may make an order to grant leave subject to the imposed conditions, namely, the undertakings and conditions referred to in the Executors written submission at paragraph 5.4 (“the Executors’ Proposal”).     

Discussion

6.  Parties have dispute over the applicable legal principle on costs in this case.

7.  The Next Friend submitted and accepted that in an application for leave to lift confidentiality restrictions or release of implied undertaking, in respect of the costs of the application itself, an applicant (i.e. the Next Friend) should generally pay the costs of third parties (which would include the Executors) who are not involved in the main proceedings in which the documents are sought to be used (i.e. the High Court Proceedings), as the costs would have to be incurred by the Next Friend in any event, and such costs may then be recoverable by the Next Friend in the High Court Proceedings against his adversaries there as part of his costs in the High Court Proceedings.

8.  The Next Friend submitted that the said principle only applies to the costs of the application (i.e. the issue of the Next Friend’s Summons), which would have to be incurred in any event, and the position is different for costs incurred after the issue of the application in relation to the Executors’ opposition to the Next Friend’s Summons, and that there is no reason why such costs should not follow the event.

9.  The Next Friend submitted that since the Executors did not accept any of the reasonable proposals put forward by the Next Friend, a contested hearing was therefore necessitated, and the Next Friend succeeded in obtaining an order in terms as originally sought in the Next Friend’s Summons. 

10.  The Next Friend argued that since the Executors failed entirely on the issues in dispute between the parties after the issue of the said application, and therefore the Executors should bear the costs of their opposition, particularly the Next Friend asked the Court to take into account that the Executors were actively advocating for a position, contrary to the guidance in Re Mong Man Wai [2013] 4 HKC 179.

11.  The Next Friend‘s stance on the costs is that :

(a) The Next Friend to pay the Executors’ costs of the Next Friend’s Summons; and

(b) The Executors to pay the Next Friend’s costs of the application from 12^th February 2018 (inclusive of that date), which is the date of the first directions hearing at which the Executors sought directions to file affirmation in opposition.

12.  The Executors’ stance on costs is that the Next Friend’s application is analogous to an application for discovery against non-party, and therefore the non-party (i.e. the Executors) is entitled to its costs of dealing with the application.

13.  In gist, the Executors submitted that the Executors’ participation in the Next Friend’s Summons, which was to not oppose the granting of leave to the Next Friend and was limited to suggesting ways in which Mr. A’s privacy and confidential could be protected, was entirely reasonable, and there is no reason to depart from the usual rule that in such a situation the Executors ought to be entitled to their costs of the application with certificate for 2 counsel, and it is the Court’s discretion to award on an indemnity basis or a party-and-party basis.

14.  The fall back position of the Executors is: since the Next Friend agreed that the starting point is that the applicant (i.e. the Next Friend) should pay the costs of third parties who are not involved in the main proceedings (i.e. the High Court Proceedings) in which the documents are sought to be used, and that such costs may then be recovered by the Next Friend as part of the costs of the High Court Proceedings.

15.  If the Court considers that the Executors should only be entitled to their costs up to a certain date, that date should not be 12^th February 2018 (being the first direction hearing).  It should be 5^th October 2018, being the date of the Next Friend’s counter-proposal.

16.  The Executors submitted that the Next Friend’s application is analogous to an application for discovery against a non-party. In such case, the non-party is entitled to its costs of dealing with the application. The Executors relied on Ngan In Leng and Chu Yuet Wah (No.1) [2013] HKLRD 717.

17.  The Executors argued that as reflected by the costs order made in respect of the non-party discovery application in Ngan In Leng, which was that (a) the plaintiff pay the non-party’s costs in the first instance, and (b) costs as between the plaintiff and the defendant to be dealt with at trial.

18.  In reply to the Executors’ argument, the Next Friend submitted that the source of “usual rule” as to costs of non-party discovery applications is statutory, therefore it could not be applied by analogy to the present case.

19.  In addition to that, the Next Friend also relied on the following cases, namely Yang Foo Oi v Wai Wai Chen [2013] 3 HKC 131, Anite Telecoms Ltd v World Best Cargo-Link Co Ltd HCA 2560/2013, DJ v LRM FCMC 8507/2013 and Liu Hing Sang v Miramar Travel Ltd DCEC 486/2010 and submitted that in all of these cases, the party resisting the application was not a party to the separate set proceedings in which the documents were sought to be used and the resisting party did not get costs.

20.  The Next Friend submitted that these authorities do not support the existence of the rule of the costs order akin to non-party discovery. Therefore, there is no analogy between the non-party discovery application and the present application whether as a matter of principle or authority.

21.  It was submitted that since there is a clear distinction between discovery applications against non-party and an application for leave to release confidentiality restrictions, there is no reason why the starting point in the present application should not be the usual starting point in interlocutory application, i.e. costs follow the event.

22.  I agree with the observation made by the Next Friend and found that the general legal principles should apply, i.e. no party shall be entitled to recover any costs of or incidental to any proceedings from another party to the proceedings except under an order by the Court and that in general terms, the starting point on costs in civil litigations, remains to be “costs follow the event”: Order 62, rule 3(1) & (2), RHC.

23.  It is also trite that the issue of costs is a matter of discretion by the Court.  The discretion is a wide one and of course must be exercised judicially.  Broadly speaking, in the exercise of its discretion, the Court will have to take into account, where appropriate in the circumstances, the special matters set out in Order 62, rule 5 of RHC, namely, the underlying objectives set out in Order 1A, rule 1, any offer of contribution, any payment of money into court and the amount of such payment, any written offer made under Order 33, rule 4A(2), any written “without prejudice save as to costs” offer (Calderbank offer), the conduct of the parties, whether a party has succeeded on part of his case, even if he has not been wholly successful; and any admissible offer to settle made by a party, which is drawn to the Court’s attention:  see Order 62, rule 5(1)(aa) to (g), RHC.

24.  In the present case, the Next Friend accepted that in an application for leave to lift confidentiality restrictions or release of implied undertaking, in respect of the costs of the application itself, the Next Friend should generally pay the costs of the Executors.

25.  However, the Next Friend argued that the costs incurred after the issue of the application in relation to the Executors’ opposition to the Next Friend’s Summons should be paid by the Executors to the Next Friend. 

26.  The Next Friend had pointed out that from the outset the Executors do not dispute the substance of the application, i.e. the documents sought are prima facie relevant and leave should be granted, and the only difference between the Next Friend and the Executors was as to the terms upon which leave should be granted.

27.  Since the Executors failed entirely on the issue in dispute between the parties after the issue of the application, the Executors should bear the costs of their opposition. Particularly, the Next Friend asked the Court to take into account the fact that the Executors were actively advocating for a position, contrary to the guidance in Re Mong Man Wai [2013] 4 HKC 179.

28.  While I accept that the Executors’ attendance was necessary to represent the interests of Mr. A and should not be just a rubber-stamping exercise, they should not exceed their role and actively advocating for a position.

29.  I accept that it is proper and necessary for the Executors to inform the Court and the Next Friend the Executors’ positions and to explore steps with the Next Friend to protect the interest of Mr. A. I also accept that it was proper for the Executors to file an affidavit in response to the Next Friend’s Summons.

30.  In Mr. Kwong’s affidavit, the Court was informed of the Executor’s position, i.e. they accepted the documents were apparently relevant, and that their only concerns is the issue of protection of privacy and confidentiality of Mr. A.

31.  It was submitted by the Executors that they took a neutral stance on whether the Settlement Order should be disclosed, and only proposed measures to protect the privacy and confidentiality of Mr. A’s private affairs.

32.  Regarding the Settlement Order, the Executors invited the Court to make an order to grant leave subject to the imposed conditions, namely, the undertakings and conditions referred to in the Executors written submission at paragraph 5.4 which I had reproduced in my Ruling at paragraph 19.

33.  In my Ruling, I found that the Executors’ proposal if granted would defeat the purpose of the Next Friend’s application. Therefore, my view is that the Executors by advocating such stance in effect resisted the Next Friend’s application and went beyond their role of exploring the measure of protecting the privacy and confidentiality of Mr. A after they rejected the counter-proposal of the Next Friend and proceeded with their argument at the hearing.

34.  I therefore consider that the Executors should only be entitled to their costs up to 5^th October 2018, being the date of the Next Friend’s counter-proposal.

Order

35.  Accordingly, I will make the following order:

(1) Costs of and occasioned by the Next Friend’s Summons be paid by the Next Friend to the Executors up to and inclusive of the date of 5^th October 2018 including all reserved costs to be taxed if not agreed;

(2) The Executors to pay the Next Friend’s costs of the Next Friend’s Summons from 6^th October 2018 thereafter (inclusive of that date) including all reserved costs to be taxed if not agreed, and

(3) There be certificate for 2 counsel for both sides.

55.  Lastly, I thank all the counsels for their assistance.

Representation:

FCMC 15415/2009 & FCMC 5060/2011

[2018] HKFC 196

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MATRIMONIAL CAUSES NO.15415 OF 2009 and

MATRIMONIAL CAUSES NO.5060 OF 2011

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RULING
( Leave under Rule 121 of Cap. 179A )

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Introduction

1.  The Next Friend of Mrs. A (“the Next Friend”) took out a Summons dated 27^th December 2017 (“the Next Friend’s Summons”) to seek leave to use certain documents filed in the ancillary relief proceedings in FCMC 5060 of 2011 and FCMC 15415 of 2009, (namely the Order of the Family Court dated 19^th April 2011 in FCMC 5060/2011 (“the Settlement Order”) and Form E filed by Mrs. A in FCMC 15415/2009) (“Form E”) to be used in the High Court Proceedings (“High Court Proceedings”).

2.  The background of the case was set out in the Next Friend’s submission which I shall not repeat here.

3.  The stance of the Executors of the Estate of Mr. A (“the Executors”) is that the Executors do not oppose the Next Friend’s proposed use of the Form E in the High Court Proceedings.

4.  As for the Settlement Order, the Executors’ stance is that the Court may make an order to grant leave subject to the imposed conditions, namely, the undertakings and conditions referred to in the Executors submission at paragraph 5.4 (“the Executors’ Proposal”).     

Applicable Legal Principles

5.  The Next Friend referred me to the Court of Appeal case of Re Mong Man Wai [2013] 4 HKC 179 and submitted that :

(1)     Ancillary relief proceedings are held in Chambers, not open to public pursuant to rule 81(2) of the Matrimonial Causes Rules;

(2)     By virtue of the obligation of full and frank disclosure in ancillary relief proceedings, documents disclosed by parties to ancillary relief proceedings are covered by the implied undertaking; and

(3)     The key interest to be protected by the implied undertaking is the privacy and confidentiality of a litigant’s private affairs, given that the compulsion to disclose documents amounted to a serious invasion of the same.

MCR rule 121 (2)

6.  Rule 121(2) of the Matrimonial Causes Rules, Cap. 179A (“MCR”) provides that no document filed or lodged in the registry, other than a decree or order made in open court, shall be open to inspection by any person without leave of the court, and no copy of any of such document, or of an extract from any of such document, shall be taken by, or issued to, any person without such leave.

7.  The rationale of such rule is that matrimonial proceedings are private in nature. For the protection of the parties involved in the proceedings, the documents filed in such proceedings shall not be disclosed in public unless leave of the court seized with the matrimonial proceedings has been obtained: see Horst Joachim Franz Geicke v 1-Onasia Ltd, HCA 2379/2009, 17 October 2011 §32, per DHCJ Lok (now Lok J).

8.  On top of MCR rule 121, the Family Court has the general power of control over access to documents within its custody in common law, and the exercise of the inherent jurisdiction is subject to a balancing test in terms of weighing the relevant conflicting interests and rights: see Secretary for Justice v FTCW & Ors [2014] 1 HKLRD 849, at §§16, 27-28, per Hon Lam VP.

9.  At §114 of the abovementioned judgment, Lam VP at 85 referred to R (Guardian News and Media Ltd) v Westminster Magistrates’ Court [2013] QB 618 and adopted Toulson LJ’s approach as follows:

“In a case where documents have been placed before a judge and referred to in the course of proceedings, in my judgment the default position should be that access should be permitted on the open justice principle; and where access is sought for a proper journalistic purpose, the case for allowing it will be particularly strong. However, there may be countervailing reasons. … I do not think that it is sensible or practical to look for a standard formula for determining how strong the grounds of opposition need to be in order to outweigh the merits of the application. The court has to carry out a proportionality exercise which will be fact-specific. Central to the court’s evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others.”

10.  The Next Friend also submitted that it is a balancing exercise of whether what is sought to be achieved by relaxing the implied undertaking is more important for the administration of justice generally than in maintaining confidentially. The Court should take into account factors such as the nature of the documents, the nature of the information in the document, any prejudice the author of the document may sustain, and the likely contribution of the document to achieving justice in the second proceedings; see Secretary for Justice v FTCW & Ors [2014] 1 HKLRD 849, at §§130-131, per Hon Lam VP.

11.  The Next Friend further submitted that the position of a party to matrimonial proceedings who has passed away has been considered in Re Mong Man Wai, and though there is no clear authority as to whether the right to privacy survives the death of the party, the right to enforce the implied undertaking conferred on the deceased party would pass to the estate : §§54-59.

12.  The executors of the deceased party may appear in an application for disclosure to provide assistance, but they should not advocate any particular outcome. They should set out all the relevant circumstances including an update of the latest development of the case, if necessary, and make submissions on the applicable law. They should not oppose the application for disclosure but should adopt a neutral stance and render any assistance to the Court as may be directed: §§60-61.

13.  I trust that there will not be any dispute as to the above principles.

Discussion

14.  The Next Friend submitted that Form E and the Settlement Order are highly relevant to the High Court Proceedings. The stance of the Executors is that they do not dispute the relevance of the documents sought to the resolution of the High Court Proceedings, (see Kwong’s Affirmation §10 [A/5/21-22]) and the Executors accepted that on the face of it, there is a reasonably arguable basis for suggesting that the whole Settlement Order is relevant to the High Court proceedings.

15.  The Executors however say that they have an interest in protecting the privacy and confidentiality of Mr. A, and thus they raised concerns as to the scope of any order of disclosure to be granted by the Family Court related to the Settlement Order.

16.  The main issue here is that what scope of the order should be given for the use of the Settlement Order in the High Court Proceedings, namely, the terms of the disclosure.

17.  The Executors’ Proposal aims at preserving the privacy and confidentiality of the information contained in the Settlement Order to a certain scope and limits even leave was granted to be used in the High Court Proceedings.

18.  The Next Friend considered that the Executors’ Proposal is impracticable and the Next Friend’s stance is that it is necessary for the whole of the Settlement Order to be used in the High Court Proceedings, and the order by the Family Court for an in camera hearing in the High Court Proceedings is totally unworkable.

19.  According to the Executors’ Proposal, the Executors suggested that except with the leave of the Family Court

(1)     The content of the Settlement Order shall not be referred to or otherwise disclosed in open court, or to any persons other than:

(i)       the Judge hearing the High Court Proceedings; and

(ii)     the parties (and their advisors), and the parties’ witnesses (and those witnesses’ advisers) (the “Approved Persons”).

(2)     Any reference to the contents of the Settlement Order in written submissions or evidence shall not be read out in open court or disclosed to any persons other than the judge hearing the High Court Proceedings and the Approved Persons.

(3)     Notwithstanding the above, the amount of the settlement sum in the Settlement Order may be referred to as “the settlement sum”.

20.  The Executors submitted that where disclosure is considered necessary, the Court nevertheless has a very broad and flexible discretion to devise solution to preserve confidential information to the extent possible.

21.  The Executors relied on TCWF v LKKS [2013] HKFLR 456 §30-35 [E#1] and explained that in the context of balancing the interests of open justice with other concerns, there are different aspects of open justice, which may involve different balances being struck.

22.  The Executors further submitted that open justice implies members of the public (including the public media) would have access to the hearing, may seek access to the documents filed and used at the hearing but not expressly read out at the hearing, and report or publish information on what actually happened at the hearing.

23.  It was also submitted that open justice means that the judgment of the court is published generally without any redaction and that the names of the parties would be made known to the public without any anonymity.

24.  The argument of the Executors is that the curtailment of one aspect of open justice does not necessarily dictate the curtailment of another aspect.

25.  The chief concern of the Executors is that what measures could be adopted to, on the one hand, allow the Settlement Order to be used, and on the other hand, protect Mr. A confidentiality and privacy.

26.  I accept that the Settlement Order is relevant to the High Court proceedings and disclosure is necessary, otherwise the Next Friend will not be able to proceed with the case and put forward the argument in the High Court proceedings.

27.  The Next Friend submitted that Mrs. A stated that the total value of her asserts following her divorce were not less than HK$15 billion. The case that needs to be established in the High Court proceedings is that the HK$15 billion figure comprised of (1) the settlement sum under the Settlement Order (2) the value of Mrs. A assets listed in the Form E; and (3) an element of appreciation in the value of the property referred to as 8MA.

28.  Based on the aforesaid principle, the Court has to carry out a proportionality exercise which will be fact-specific.  Central to the Court’s evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others.

29.  The Next Friend argued that in order to explain the composition of the HK$15 billion figure, it needs to be shown that the HK$7 billion settlement sum was the only significant amount provided for under the Settlement Order and that no other assets of appreciable value were included, and this can only be done if the Settlement Order is disclosed in full which I accept and agree with the Next Friend’s observation.

30.  The Next Friend further argued that the order by the Family Court for an in camera hearing in the High Court proceedings is unworkable. It is very likely that other parties and the Court would need to refer to the Settlement Order, the witnesses would be cross-examined on the composition of the HK$15 billion figure and that any decision by the High Court would also need to make reference to the Settlement Order when ruling on the issue and explaining its reasoning.

31.  The Next Friend also argued that to require the High Court to hear the matter in camera in part may inhibit the High Court from making findings touching on the documents and explain its reasoning in an open judgment, and it hardly seems appropriate for the Family Court to prescribe how the trial judge in the High Court should conduct the proceedings in the High Court, given that, quite apart from the question of jurisdiction, the case management decision of how to handle the High Court proceedings should plainly be left to the High Court.

32.  My view is that the Executors suggested to impose a condition that the contents of the Settlement Order shall not be referred to or otherwise disclosed in open court except with the leave of the Family Court is not only unworkable but also causing injustice to the parties in the High Court proceedings.

33.  Firstly, I consider that imposing a condition to the effect that an in camera hearing will be necessary in the High Court proceedings is inappropriate, as the Family Court will as a result take control of not only the case management decision of the trial judge in the High Court proceedings but also seized the jurisdiction of the trial judge in the High Court to decide which part of the evidence should be heard in open court.

34.  Secondly, if the Executors’ proposal were to be granted, I cannot imagine how it can be executed smoothly without causing disruption to the proper conduct of the trial of the High Court proceedings.

35.  I agree with the observation made by the Next Friend that the whole of the Settlement Order will be relevant, as one of the main issues and facts finding to be determined in the High Court proceedings will be the composition of the HK$15 billion figure.

36.  By reason of the aforesaid, I can appreciate that parties and witnesses in the High Court proceedings would be cross-examined on the composition of the HK$15 billion figure and would inevitably need to refer to the content of the Settlement Order and the figure of the settlement sum.

37.  If they are inhibited from referring to the content and the figure in open court, it will make it difficult for them to explain the calculation, and there will probably be a need to come back to the Family Court again to ask for further leave. This would imply further delay and substantial disruption to the High Court proceedings. This result would cause severe injustice to all the parties in the High Court proceedings.

38.  My view is that the potential value of the material, namely the full content of the Settlement Order in advancing the purpose of putting forward the Next Friend’s case in the High Court proceedings will be defeated if the content of the Settlement Order could not be referred to freely.

39.  My view is that weighing the relevant conflicting interests and rights, the use of the Settlement Order without restriction shall prevail over Mr. A’s privacy and confidentiality to the Settlement Order.

Order

40.  Accordingly, I will make the following order:

(1)     leave be given to Mrs. A through the Next Friend to disclose, use and adduce in HCA 1739/2010 and CACV 241/2016 and any appeal arising therefrom, the Form E filed by Mrs. A in FCMC15415/2009 and the Order of the Family Court dated 19^th April 2011 in FCMC 5060/2011, and

(2)     For the purpose of the order above, Mrs. A and/or the Next Friend be released from (1) any confidentiality restrictions imposed by the Court in previous orders made herein, and (2) any implied undertaking not to use the above documents for any purposes not relating to the proceedings herein.

55.     As to the issue of the costs, parties have agreed that it shall be deal with by paper disposal and written submissions only.

56.     Parties had also agreed to file and exchange their respective written submission in the following manner, namely:

(1)          respective written submissions be filed and exchanged within 14 days from the date of this order, and

(2)          respective written submission in reply be filed and exchanged 7 days thereafter.

57.     I now give the direction that the issue of costs be dealt with by paper disposal and further submission on costs be filed and exchanged as per paragraph 56 above.

58.     Lastly, I thank all the counsels for their assistance.

Representation:

FCMC 5060/2011

[2018] HKFC 119

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MATRIMONIAL CAUSES NO.5060 OF 2011

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RULING
Paper disposal
( J O I N D E R )

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Introduction

1.  The Next Friend of Mrs. A (“the Next Friend”) took out a Summons dated 27^th December 2017 (“the Next Friend’s Summons”) to seek leave to use certain documents filed in the ancillary relief proceedings in FCMC 5060 of 2011 and FCMC 15415 of 2009, (namely the Order of the Family Court dated 19^th April 2011 in FCMC 5060/2011 and Form E filed by Mrs. A in FCMC 15415/2009) (“the documents”) to be used in the High Court Proceedings (“High Court Proceedings”).

2.  The intended Intervener (“V”) had taken out a Summons dated 9^th February 2018 (“the Joinder Application”) to add as a party to the proceedings in relation to the Next Friend’s Summons. This is the hearing of the Joinder Application as to whether V can be joined and as a result can take part in the Next Friend’s application for leave to use the documents.

3.  The Joinder Application was opposed by the Next Friend while the Executors of the estate of A (“Executor”) adopted a neutral position in respect of the Joinder Application.

4.  The background of the case was set out in their respective submissions which I shall not repeat here.

Applicable Legal Principles

5.  The Next Friend relied on the Court of Appeal case of Re Mong Man Wai [2013] 4 HKC 179 and submitted that :

(1)     Ancillary relief proceedings are held in Chambers, not open to public pursuant to rule 81(2) of the Matrimonial Causes Rules; and

(2)     By virtue of the obligation of full and frank disclosure in ancillary relief proceedings, documents disclosed by parties to ancillary relief proceedings are covered by the implied undertaking.  

6.  It was further submitted that the undertaking not to use documents disclosed for any collateral or ulterior purpose without the consent of the party who gave discovery might be released or modified by the party giving discovery.

MCR rule 121 (2)

7.  Rule 121(2) of the Matrimonial Causes Rules, Cap. 179A (“MCR”) provides that no document filed in the matrimonial proceedings, other than a decree or order made in open court, shall be open to inspection by the public without the leave of the court. 

8.  The rationale of such rule is that matrimonial proceedings are private in nature. For the protection of the parties involved in the proceedings, the documents filed in such proceedings shall not be disclosed in public unless leave of the court seized with the matrimonial proceedings has been obtained: see Horst Joachim Franz Geicke v 1-Onasia Ltd, HCA 2379/2009, 17 October 2011 §32, per DHCJ Lok (now Lok J).

9.  On top of MCR rule 121, the Family Court has the general power of control over access to documents within its custody in common law, and the exercise of the inherent jurisdiction is subject to a balancing test in terms of weighing the relevant conflicting interests and rights: see Secretary for Justice v FTCW & Ors [2014] 1 HKLRD 849, at §§16, 27-28, per Hon Lam VP.

10.  At §114 of the abovementioned judgment, Lam VP at 85 referred to R (Guardian News and Media Ltd) v Westminster Magistrates’ Court [2013] QB 618 and adopted Toulson LJ’s approach as follows:

“In a case where documents have been placed before a judge and referred to in the course of proceedings, in my judgment the default position should be that access should be permitted on the open justice principle; and where access is sought for a proper journalistic purpose, the case for allowing it will be particularly strong. However, there may be countervailing reasons. … I do not think that it is sensible or practical to look for a standard formula for determining how strong the grounds of opposition need to be in order to outweigh the merits of the application. The court has to carry out a proportionality exercise which will be fact-specific. Central to the court’s evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others.”

11.  The Next Friend also submitted that O15 r6 requires the proposed intervener should have some interest which is directly related or connected with the subject matter of the action, a mere commercial interest in the outcome is not enough : Hong Kong Civil Procedure 2018 §15/6/8, and that in the commentary in §15/6/1, the Court will not give leave for joinder of parties, when to do so would increase rather than prevent a multiplicity of contested proceedings contrary to the purpose of the role.

Discussion

12.  The Next Friend submitted that the chief concern in considering whether documents filed in the ancillary relief proceedings should be used for other purposes is confidentiality and privacy.

13.  This is reflected by the fact that if the party who gave discovery of the document consents, the implied undertaking would then be released, and this is also the reason why the party who gave disclosure had to be heard.

14.  The Next Friend further submitted that V has no interest in whether the Family Court should give leave to Mrs. A through the Next Friend to use the documents filed in ancillary relief proceedings because the documents are not V’s documents and they were not disclosed by V and were not confidential to her. Nor is there any concern about her privacy.

15.  Therefore, there is plainly no need for V to be joined as a party in the hearing of the Next Friend’s Summons because there is no need for any order of the Family Court granting leave to use the documents to bind V for the simple reason that V has no interest in the hearing of the Next Friend’s Summons.

16.  Nor could the proposed joinder be justified simply because V might want to check that discovery in the High Court Proceedings is properly made. It is submitted by the Next Friend that V can make whatever application or submissions V feels appropriate in the High Court Proceedings, but that does not give V any standing to oppose or inhibit the Next Friend’s seeking of leave from the Family Court.

17.  The Next Friend submitted that the ultimate question is whether the party who seeks to be joined have a proper interest in the proceedings, and whether the joinder would unnecessarily increase multiplicity and expand the scope of argument, and the Court should not grant leave where to do so would expand the limited scope of the original application.

18.  In gist, V submitted that essentially two relevant issues need to be determined (i) whether V is a relevant party with a legitimate legal and financial interest in the Next Friend’s Summons to ask leave from the Family Court to use the documents requested by the Next Friend, and (ii) whether it is necessary, just and convenient to grant leave to V to intervene.

19.  V submitted that the first condition is clearly satisfied because the outcome of the Next Friend’s Summons will have a direct impact on the court’s ability to fairly adjudicate between the competing claims of Mrs. A, V and V’s sister (“V’s sister”) in the High Court Proceedings.

20.  V further submitted that V’s interest in ensuring that all relevant evidence is placed before the Court in the High Court Proceedings was recognised at paragraph 2-4 of the Order dated 28^th November 2017 (“the High Court Order”) in the High Court Proceedings, where the Court directed the parties to (a) seek leave to use evidence in other proceedings as they saw fit within a certain period of time, and (b) to inform the other party of any such application.

21.  It was submitted that the High Court Order specifically directed V and the Next Friend to inform each other of application for leave to use evidence so that they would be given the chance to intervene and/or take out corresponding applications for leave to use evidence in reply, and that both parties should be given fair opportunity to participate and be heard in such proceedings.

22.  It was argued by V that V’s concerns have nothing to do with discovery and that if the Next Friend obtains leave to use a redacted and incomplete version of the documents, V cannot compel him to dispose an unredacted and complete version by taking out an application for specific discovery.

23.  V’s stance is that she is not asking this court to grant her leave to use the documents, she only seeks to ensure that the documents so disclosed by the Next Friend is complete and is not misleading.

24.  My view is that the position will be different if the Next Friend and V, both seek to obtain leave from this court to use the documents.

25.  If and when V seeks leave to use the documents in the Family Proceedings in the High Court Proceedings, it is V who wants to use the documents. In that case, she will have to make the application, and justify her cause against the privacy and confidentiality of the parties to the Family Proceedings.

26.  The current position of V is that she is not going to use the documents in the High Court Proceedings, and her sole purpose of intervening is to ensure that relevant evidence will be placed before the court in the High Court Proceedings, and that is the legitimate interest she referred to.

27.  My view is that the documents can only be produced in the High Court Proceedings after leave be given by this court, but even if leave be given by this court to the Next Friend to use the documents in the High Court Proceedings, it did not automatically follow that the Next Friend is required to produce the documents in its complete form.

28.  No matter what happen in this court for the leave application, there is an independent obligation on the part of the Next Friend to disclose the documents which are relevant to the issues in the High Court Proceedings. There is nothing to deny V of her right to insist the Next Friend to disclose the documents which are relevant in the High Court Proceedings in its complete version.

29.  As I see it, so long as the documents are directly relevant documents, the Next Friend should be allowed to make use of the documents in whatever manner that is best in the interest of the Next Friend’s case in the High Court Proceedings, and it is not appropriate for this court to limit the scope as to how the Next Friend should present Mrs. A’s case or evidence in the High Court Proceedings.

30.  After leave be given to use the documents, whether the Next Friend present the documents in its complete or redacted version can be accepted as evidence in the High Court Proceedings will be the issue of the parties in the High Court Proceedings.

31.  If the Next Friend refused to produce the documents unredacted in the High Court Proceedings when the documents were relied on, the proper procedure will be an order for specific discovery in the High Court Proceedings.

32.  Parties in the High Court Proceedings are free to argue why the documents being redacted cannot be used, the focus will be one of relevancy of the evidence by that time and not the rationale of Rule 121 of MCR.

33.  Therefore, I am of the view that the proper forum for the parties to argue whether the documents can be adduced in their entirety and in proper formats or redacted version (whether justified or not) is in the High Court Proceedings and not in the Family Court who is not seized of the High Court Proceedings and should not be called upon to decide what should or should not be disclosed in that action.

34.  V’s argument that V cannot compel the Next Friend to dispose an unredacted and complete version by taking out an application for specific discovery is misconceived.

35.  The court should not be deterred to make an order for specific discovery of the documents in its complete or unredacted version upon V’s application in the High Court Proceedings simply because of Rule 121 of the MCR.

36.  V submitted that the object of the jurisdiction under O.15 r.6 is to ensure that all relevant matters in dispute can be effectively adjudicated upon and that all relevant parties are before the Court, and that O.15 r.6 should be given a liberal interpretation so as to ensure, as far as possible, that all matters in dispute between the parties are completely and finally determined and that multiplicity of legal proceedings is avoided.

37.  V further submitted that all persons who have a legitimate legal or financial interest in the outcome of the matter are relevant parties and that a person may be a relevant party even though there is no cause of action for or against him.

38.  I agree with the submission made by the Next Friend that V wrongly assumed that because the Next Friend is seeking to use the documents filed in the Family Proceedings against V in the High Court Proceedings, and V has a reason to desire a particular outcome in the High Court Proceedings, she then has a right to intervene in the Family Court.

39.  Ultimately, the court retains a discretion to refuse to join a relevant party and the test is whether joinder is necessary, just and convenient.

40.  V quoted a scenario that if this court only gives leave to use a redacted version of the documents in question, V cannot obtain an unredacted version by taking out an application for specific discovery in the High Court because the Next Friend may refuse to disclose the unredacted version on the ground that the redacted information is subject to a confidentiality order expressly imposed by the Family Court.

41.  Therefore, V would have to take out another application to this court for leave to use the unredacted version. This would result in multiplicity of proceedings.

42.  The Next Friend submitted that the interests to be guarded by the Family Court in this application are the privacy and confidentiality of the parties to the ancillary relief proceedings.

43.  V admitted that she already had access to the documents, as the documents were given to her by the guardian ad litem of Mr. A and V is not using intervention as an excuse to obtain private and confidential documents to which she had no access.

44.  My view is that the primary concern of V is the documents adduced by the Next Friend in the High Court Proceedings should be complete version. If the Next Friend adduced incomplete version of the documents, V had no difficulty in pointing out the importance of the missing information in the documents and raise objection in the High Court Proceedings, and an order for specific discovery of the documents in complete version can be made because they are relevant evidence.

45.  If the Next Friend is not going to adduce the documents in its entire form in the High Court Proceedings and an order of specific discovery is made against him, the Next Friend should come to the Family Court to ask for leave, because it is the Next Friend, not V, who is seeking to lift the confidentiality restrictions which normally attach to documents disclosed in ancillary relief proceedings and to use them in open court.

46.  My view is that V’s participation would unnecessarily increase multiplicity and the scope of argument in the respective Courts. The High Court, seized of the High Court Proceedings, is the forum to police discovery and the Family Court, seized of the Family Proceedings, is the forum to guard the privacy and confidentiality interest of the Husband and the Wife. The focus and the test on V’s argument is different in the respective Courts.

47.  As I have previously pointed out, the ruling of this Court has nothing to do with an order of specific discovery. There is no reason why V cannot be protected in the usual way in the High Court Proceedings, even if there is any concern about redactions.

48.  V submitted that if V can show that the Next Friend wrongly redacted relevant materials, the most the trial judge in the High Court Proceedings can do is to suggest that the parties come back to the Family Court to seek leave to disclose what the High Court holds to be discoverable.

49.  My view is that if the High Court holds certain material not to be discoverable, there is no basis under the open justice principle for the Family Court to become satisfied in granting leave for such material to be used.

50.  On the contrary, if the High Court holds the redacted material to be discoverable, then this court will evaluate whether leave should be given, based on the following criteria, namely the open justice principle, the potential value of the material in advancing for that purpose and whether there is any risk of harm which access to the material may cause to the legitimate interests of others.

51.  If an order of specific discovery was made against the Next Friend, it should be the Next Friend who should come to the Family Court to ask for leave.  I cannot see any reason why V needs to come to ask for leave under those circumstances.

52.  In the premises, I cannot see any reason why V is necessary to intervene in the Next Friend’s Summons.

Conclusion

53.  By reasons of the aforesaid, I dismiss V’s application. I see no reason why the costs should not follow the event.

Order

54.  Accordingly, I will make the following order:

(1)     the Summons dated 9^th February 2018 taken out by V to add as a party to the proceedings in relation to the Next Friend’s Summons(“the Joinder Application”) be dismissed;

(2)     I will make a decree nisi that the Next Friend’s and the Executor’s costs of and occasioned by the Joinder Application including all the reserved costs be borne by V to be taxed if not agreed, such order to be made absolute upon the expiration of 14 days;

(3)     There shall be certificates for counsels for the Next Friend and the Executors.

55.  Lastly, I thank all the counsels for their assistance.