CWK v. YCHS AND ANOTHER
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FCMC 6082 /2014
[2018] HKFC 52
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES NO. 6082 OF 2014
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| BETWEEN | ||
| CWK | Petitioner | |
| and | ||
| YCHS | 1st Respondent | |
| CKY | 2nd Respondent | |
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| Coram: His Honour Judge G. Own in Chambers (Not Open to Public) |
| Dates of Hearing: 15 November and 29 December 2017 |
| Date of Decision: 18 April 2018 |
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D E C I S I O N
(Amendment/Variation of Costs Order Nisi)
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Introduction
1. This is an application by the Petitioner wife (“W”) seeking amendment/variation of 3 costs order granted by this Court on 11 November 2015 (“1st Order”), 10 December 2015 (“2nd Order”) and 3 June 2016 (“3rd Order”) all in favour of W payable by the 1st Respondent husband (“H”). W’s Summons was dated 13 April 2017.
2. The 1st Order was in relation to W’s application for specific discovery. The 2nd Order was in relation to W’s application for maintenance pending suit. The 3rd Order was in relation to H’s application for leave to appeal the maintenance pending suit decision.
3. The amendment/variation sought by W in respect of all the 3 costs orders was that those costs be taxed if not agreed and to be paid forthwith (myemphasis).
4. At the expense of repetition but for completeness sake, the terms of the 3 costs orders as perfected and sealed are now recited as follows :-
“1st Order - The 1st Respondent do pay the Petitioner’s costs of the Summons, including all costs reserved, to be taxed ifnot agreed; and
There be Certificate for Senior Counsel”
“2nd Order - The 1st Respondent do pay all costs of the Petitioner’s Summons dated 28 April 2015 including all costs reserved, to be taxed if not agreed; and There be Certificate for Senior Counsel”
“3rd Order – The 1st Respondent do pay the Petitioner’s costs of 1st Respondent’s Summons to be taxed if not agreed;
and
There be Certificate for Senior Counsel. This is a costs order nisi which will be made absolute if no application to vary the same is made within 14 days.”
5. For reasons unknown, though not an issue in the present application, the perfected and sealed copies of the 1st and 2nd Orders did not contain the provision that the costs ordered therein were ‘nisi’ which would become absolute if no application to vary it was made within 14 days. As seen, such ‘nisi’ provision was contained only in the perfected sealed copy of the 3rd Order. Nonetheless, in each of the respective written reasons for decisions that were handed down, this Court had expressly stated that the costs orders were ‘nisi’ amenable to variation upon application being made within 14 days after it was handed down before they would become absolute (see O.42 rule 5B (6) of the Hong Kong CivilProcedure 2016).
6. It is worth noting that W’s Summons dated 13 April 2017 was initially intituled to be issued under the inherent jurisdiction of the Court. By a letter dated 6 November 2017 (which is 6 ½ months after the Summons wasissued) from W’s lawyers to the Court and copied to H’s lawyers, leave was sought to amend the Summons as per the draft attached to the letter. The amendments sought was, in addition to inherent jurisdiction, to also include O.20 r.11 & O.1B r.1(2) of the Rules of High Court (“RHC”), as the basis of the application. The contents of the Summons were amended to add the words “amended or” varied the 3 costs orders and adding the words “by specifying” those costs to be taxed if not agreed and be paid forthwith to W. Apart from this letter, there was no formal application taken out by way of Summons to seek leave for such amendments to the Summons dated 13 April 2017 despite the fact that there was still enough time to do so before the substantive hearing on 15 November 2017.
7. At the substantive hearing on 15 November 2017, W’s Counsel Mr. Lau Ka Kin orally applied for the intended amendments to be accepted there and then which H’s Counsel Mr. Eugene Yim urged this Court to disregard for the fact that no proper summons for amendment had been taken out. Upon hearing submissions and with a view to save costs, this Court granted leave for the intended amendments, directed that time for service of the Amended Summons be dispensed with. Costs of the amendments be in the cause. The hearing proceeded there and then as Counsel Mr. Yim was well prepared for the hearing on the basis of the intended amendments would be allowed.
Petitioner’s (Wife’s) Grounds of Application
8. W’s Counsel in his written submissions sets out 3 limbs of argument as follows :
(a) Since this Court did not order “costs in any event”, on a proper construction, the Court had decided that W does not have to wait until conclusion of these proceedings to recover her costs. An amendment by specifying “forthwith” would put the matter beyond doubt;
(b) Alternatively, if this Court had not considered the timing of taxation and payment of the costs, this Court may now exercise its powers under O.20 r.11 to amend the costs orders;
(c) Alternatively, even if this Court had made a case management decision for the costs to be taxed after conclusion of these proceedings, this Court may exercise its case management power under O.1B r.1 (2) to amend the costs orders.
9. W’s Counsel in his submissions then cited a number of authorities as follows :-
- Wingames Investments Limited & Ors v. Mascot Land Limited& Ors (HCA No.907/2011);
- Xcelom Ltd v. BGI-Hongkong Co. Ltd (No.2) [2017] 1 HKLRD 436;
- Midland Business Management Ltd v. Lo Man Kui (No.2) [2011] 2 HKLRD 667;
- Wing Fai Construction Co. Ltd v. Yip Kwong Robert (No.2) (2012) 15 HKCFAR 454;
- Re Jessop & Baird (Hong Kong) Limited (HCCW 352/2016);
- Gao Haiyan & Anor v. Keeneye Holdings Ltd & Ors [2014] 1 HKC 94;
- Big Boss Investment Ltd v. So Lai Kei [2010] 1 HKLRD 793;
- Man Ping Nam v. Man Hong Hang (No.2) (2007) 10 HKCFAR 140;
- Meier v. Meier [1948] p.89;
- Thynne v. Thynne [1955] p.272;
- Mercer Alloys Corp & Anor v. Rolls Royce Ltd [1971] 1 WLR 1520;
- Winston Camera & Radio Co Ltd v. Combi (Singapore) Pte Ltd [1988] HKC 156;
- Asia-Pac Infrastructure Development Ltd v. Ing Yim LeungAlexander [2011] 1 HKLRD 587.
10. In his submissions in reply to H’s Counsel, the following additional authorities were then produced by W’s Counsel :-
- Do Ye Tong Doreen & Wai Hei Wan Wesley (No.2), CACV No.124/2010;
- Sun Jiangrong v. Sun Shaohua & Anor, HCMP No.1526/2010;
- Re Good Idea International Investment Ltd, CAMP No.2598/2011;
- In re L and another (Children) (Preliminary Finding: Power to Reverse) [2013] 1 WLR 634.
Respondent’s (Husband’s) contentions
11. H’s Counsel first contention was that W’s Counsel’s skeleton submissions before this Court was presented as if leave for the intended amendments had already been granted by this Court. This is wrong and disrespectful. Secondly, W’s Summons is entirely misconceived and incapable of being rectified.
12. H’s Counsel Mr. Yim then submitted that the Court’s attention should be drawn to the fact that at no time had W ever commenced taxation of the 3 costs orders or attempted to do so, not to say have taken any enforcement proceedings. Such inactivity contradicts W’s Counsel’s first limb of argument that the proper construction of the costs orders was that W does not have to wait until conclusion of the proceedings to recover the costs awarded. If so, why W had not commenced taxation ?
13. Mr. Yim submitted that the post-CJR position in relation to taxation and payment of costs, citing Big Boss (supra), was that in the absence of the word “forthwith”, any costs order is not payable or taxable until after the conclusion of the whole action. Thus, the 3 costs orders should be taxed and be payable only at the conclusion of the action. There cannot be any slip or clerical error of which the Court should be asked to rectify. The Court’s intention under the 3 costs orders is clear and unambiguous.
14. Mr. Yim also referred to O.62 r 4(1) and r 9D of the RHC. In Hong Kong, O.62 r 9D was introduced after the Civil Justice Reform (“CJR”) where the wordings are substantially the same as the English rules under O.62 rr. 8(1) and 8(2). The English rules had reversed the position in the case of Allied CollectionAgencies v. Wood[1981] 3 All ER 176 and such case had been considered by the Hong Kong courts both in the Wingames and Xcelom (supra) cases.
15. Cases and authorities relied upon by Mr. Yim include :-
- RTX Products Hong Kong Limited v. Li Yiu Fai, HCA No.1777/2009;
- Dyson Technology Limited v. German Pool Group Company Limited, HCA No.838/2011;
- Bristol-Meyers Squibb Co v. Baker Norton Pharmaceuticals Inc (No.2) [2001] EWCA Civ 414.
The Chronology
16. This Court’s written decision on W’s specific discovery summons was handed down on 18 November 2015. This 1st Order was sealed and perfected on 29 December 2015.
17. This Court’s written decision on W’s maintenance pending suit was handed down on 10 December 2015. This 2nd Order was also sealed and perfected on 29 December 2015.
18. This Court’s written decision on H’s leave to appeal the maintenance pending suit judgment was handed down on 3 June 2016. This 3rd Order was sealed and perfected on 29 June 2016.
19. It is common ground that W only took out her Summons dated 13 April 2017 long after the respective costs order nisi became absolute and some 16 months after the 1st and 2 Order was sealed and perfected; and around 10 months after the 3rd Order was sealed and perfected.
20. W in her supporting Affirmation (10th), insofar as the reasons for taking out the present application is concerned, deposed as follows :-
“4. I seek this honourable court for the 3 said orders be varied to the effect that the costs be payable forthwith, i.e. costs be immediately payable by the 1st Respondent instead of upon the conclusion of the proceedings by reasons set out hereinbelow.
5. I crave leave to refer to my 9th Affirmation in support of judgment summons be issued against the 1st Respondent for details on his default in payment for maintenance pending suit, rendering breach of the MPS Order. Since October 2016, the 1st Respondent has defaulted in paying MPS in hoping to give me financial pressure and put me in a disadvantageous financial position.
6. I am also informed by my solicitors that my legal costs as at the date of this affidavit has accumulated to an estimate of HK$3.5 million inclusive of the said 3 Orders.
7. As previously pleaded and accepted by this honourable court, I am earning a humble income of HK$9,880 per month as supporting staff at a bank. I am therefore wholly dependent on my savings and the monthly MPS, before payment defaulted in October 2016 by the 1st Respondent, to defray my monthly expenses and substantial legal costs that continues to accumulate.
8. The discontinuance of my maintenance has already caused depletion in my savings and, subject to the outcome of my associated judgment summons against the 1st Respondent, I fear my case in the present proceedings would soon collapse prematurely when I am no longer able to engage in legal representation due to financial exhaustion. I am therefore minded to seek all available remedies including this application to recover my awarded costs, of which the 1st Respondent has not contested against or denied responsibility to settle the said 3 Orders. It is only a matter of making an earlier payment by the 1st Respondent that is well within his financial means as found by the Court when arriving at the decision for the MPS Order.
9. I am also informed by my solicitors that the time limit for appealing against the said 3 Orders have already lapsed and therefore that his liability to settle my costs to the said 3 Orders is inevitable. The grant of variation to the said 3 Orders herein shall not affect the outcome thereto nor the 1st Respondent’s financial means.”
21. It is worth to mention the case of Poon Ching Man v. LamHoi Pun[2015] 3 HKLRD 57 where the plaintiff took out an application on 8/12/2014 to vary a costs order nisi which had already become absolute. The costs order nisi became absolute on 25/11/2014 by operation of O.42 r. 5B (6) and that the judgment was drawn up and sealed 2 days later on 27/11/2014. Thus, there was a delay of 13 days for the plaintiff to take out the application for variation of the costs order nisi. Deputy Judge Winnie Tsui (as she then was) in her Judgment succinctly sets out 4 different scenarios where the Court may “revisit” an order which had been made previously even though the order in question had been sealed and perfected. The learned judge made it clear that by using the term “revisit”, she intended to refer to situations where the court reconsiders, amends, supplements or otherwise alters the terms of the order, including any time limit imposed in that order (see §12 of the Judgment).
22. At paragraph 13 of the Judgment, the learned Judge said :
“13. Amongst the cases cited by Ms Chih, I shall classify those which involve a court revisiting its previous order which had been sealed into four categories :
(a) Where the court amends a previous order so as to reflect its original intention which is manifest as appearing from the body of the order or judgment – the “manifest intention” cases;
(b) Where the court amends a previous order in order to correct a clerical error or accidental slip – the “slip rule” cases;
(c) Where the court clarifies, amends or supplements a previous order under the “liberty to apply” provision – the “liberty to apply” cases; and
(d) Where the court, pursuant to applicable rules of court, amends a previous order, including but not limited to enlarging time specified in it – the “statutory rules” cases.”
23. Having rejected the “new modern approach” argued by Counsel Ms Chih in that case, the learned Judge then said at paragraph 21 of the Judgment :-
“21. Having rejected the “new modern approach”, it is, however, sufficiently clear from the authorities that there are indeed discrete categories of situations in which the court has the power to revisit its previous order which has been sealed – see the categories of cases identified in §13 above. It is equally clear that in those discreet situations, the power is to be exercised within well-settled confines (as opposed to the broad and blanket power as argued by Ms Chih). And, on a careful analysis of the relevant authorities, it will be seen that the presence of such power in those discreet situations does not violate the principle of functus officio.”
24. The Poon Ching Man case then went on appeal both on findings of liability in that case and also on costs. Though the appellate court hesitated to offer any concluded views as to whether the learned Judge had jurisdiction to entertain application for variation of costs order nisi after the order had become absolute, it was stressed that costs is very much a matter of discretion for the trial judge and the Court of Appeal would be very circumspect in intervening with such a decision with high discretion content (see paragraph 34 of the Judgment in CACV No.177/2015).
The governing rules and some important cases
25. The governing rules on costs are contained in O.62 of the RHC. O.62 r. 4(1) of the RHC provides :
“(1) Costs may be dealt with by the Court or tribunal at any stage of the proceedings or after the conclusion of the proceedings; and any order of the Court or tribunal for the payment of any costs may, if the Court or tribunal thinks fit, and the person against whom the order is made is not an assisted person, require the costs to be paid forthwith notwithstanding that the proceedings have not been concluded.”
26. With the coming into force of the CJR, rule 9D was added to O.62 of the RHC which provides :
“(1) Subject to paragraphs (2) and (4), the costs of any proceedings shall not be taxed until the conclusion of the action.
(2) If it appears to the Court when making a costs order that all or any part of the costs ought to be taxed at an earlier stage it may order accordingly.
(3) No order may be made under para. (2) in a case where the person against whom the costs order is made is an aided person.
(4) Where it appears to a taxing master that there is no likelihood of any further order being made in a cause or matter, he may order the person entitled to payment of the costs of any interlocutory proceedings which have taken place to commence taxation proceedings in accordance with r.21.”
27. In the case of Big Boss Investment Ltd v. So Lai Kei[2010] 1HKLRD 793 where Registrar Queeny Au Yeung (as she then was) considered and discussed the post-CJR position on costs and said :
“The Position after the Civil Justice Reform (“CJR”) in Hong Kong
9. The rules set out in paragraph 2 above have been retained in Hong Kong but Rule 9D is added to Order 62 since the coming into effect of the Civil Justice Reform on 2 April 2009.
10. Section 2 of the High Court Ordinance defines “an action” as “a civil proceeding commenced by writ of summons or in such other manner as may be prescribed by any law.
11. The effect of O.62 r.9D, in my view, is to reverse the “formula” and unsatisfactory position as described by Neill J. The “default position” under O.62 rr.9D(1) and 9D(2) is thus to allow taxation only after conclusion of an action unless the costs order specifies taxation to be “forthwith” or at some designated time. The adding of the words “to be taxed” without “forthwith” does not entail immediate taxation. This is because “taxation” is a matter as of right, whether or not “to be taxed” are specified in the costs order : see O.62 rr.9(1), 9A(1)(c) and 9A(2). By this construction, O.62 r.4(1) and O.14 r.7(1) will give the Court discretion to determine the incidence of costs. It will also have the discretion to specify taxation forthwith but in the absence of its exercise, the taxation will be done at the end of the action.”
28. In the case of Dyson Technology Limited v. German PoolGroup Company Limited, HCA No.838/2011, Hon To J after having gone through the governing rules and Big Boss (supra), concluded at paragraph 47 of the Judgment that on its true construction O.62 r.9D states the general rule that the costs of any proceedings, whether interlocutory or non-interlocutory, are to be taxed after the conclusion of the action. That rule applies to any proceedings and not solely to costs of interlocutory proceedings. The deciding factor is whether the action has concluded.
29. In the well-known and often cited Court of Appeal case of Andayani v. Chan Oi Ling [2000] 4 HKC 233 where Keith JA had said (at p.237C to E) :
“There must, of course, come a time in any proceedings when the court must be regarded as having completed its task. When that time is reached, the court is said to be functus officio. Once that stage has arrived, the court has no further jurisdiction over the case. But when does that stage arrive ? The answer given by the common law is when the judge’s order has been drawn up, entered or otherwise perfected.”
30. Given the decision in Andayani, Hon Anthony Chan J in the later case of RTX Products Hong Kong Limited v. Li Yiu Fai (supra) decided that if a judgment is perfected before the order nisi becomes absolute, it may be that in such a case it is inherent in the judgment that the costs order has yet to become absolute and the door remains open to an affected party to make an application to have it varied, including an application for an extension of time to make the variation application. However, once the order has become absolute, any disagreement will then have to be pursued on appeal (see §9 of the Decision).
31. In the RTX case, the Summons was issued on 1 August 2014 to seek to vary the costs order nisi dated 6 September 2011 (which is 3 years ago). Pursuant to O.42 r 5B (6), the costs order nisi became absolute on 20 September 2011 (14 days after it was made) since there was no application made to vary it. There was an appeal of the substantive judgment where there was no indication in the Notice of Appeal that the defendant in that case also sought to argue he ought not be liable for costs of the action being himself the losing party. At the end, the appeal was dismissed on 8 July 2013.
32. His Lordship at paragraphs 11 and 12 of the Judgment in RTX said :
“11. To allow an application to vary the ON after a lapse of almost 3 years is, prima facie, a serious erosion of the principle that there should be finality to litigation. This is all the more so when the defendant had unsuccessfully appealed against the Judgment. The potential injustice to the plaintiff is obvious.
12. I do not believe that the delay in question has been properly explained. In particular, there is no explanation as to why it had taken the defendant so long to obtain advice in respect of the SO. The defendant is not an unsophisticated person. He was employed by the plaintiff as a Senior Product Engineer and he can read English.”
33. In the present case, W was at all times legally represented by the same law firm (my emphasis) who had also arranged the sealing and perfection of the 3 costs orders. More importantly, they are now also representing W in pursuing the present application for “amendment/variation”. Thus, there will be no excuse for W to say that she had not been legally advised earlier of her rights to seek variation if she wishes to seek immediate taxation and payment of costs forthwith. She must also have been legally advised of the 14-day period to do so stipulated under O.42 r 5B (6) or set forth in the contents of this Court’s written reasons for decisions that were handed down.
34. Furthermore, the ‘reasons’ set out by W in her 10th Affirmation hinge upon her financial constraint as a result of H’s non payment of the maintenance pending suit so ordered by this Court rather than telling the Court why she had to wait for 10 or 16 months before seeking variation. In my view, H’s persistent breaches of court orders are matters for enforcement rather than providing any explanation for W’s substantial delay in seeking variation. Given careful consideration, I find W had provided no explanation whatsoever for the substantial delay for her present application. Such unexplained and substantial delay had, in my view, not only eroded the concept of finality at common law, it is also incompatible with any acceptable litigation conduct.
35. The facts of the present case are indistinguishable from the RTX case. In both cases the application for variation of the costs order nisi was only filed after (my emphasis) the order became absolute and had also been sealed and perfected. Though the period of delay here is shorter than in the RTX case where it was around 3 years, I am minded to say the unexplained delay or lapse of 10 or 16 months in the present case to seek variation is also sufficiently long to erode any concept of finality.
36. The whole regime behind the litigation process of having costs orders to start with nisi and then become absolute after 14 days (see O.42 r 5B (6) of the Hong Kong Civil Procedure 2018) is to achieve finality. A party seeking indulgence of the Court to extend the time for variation beyond the time after absolute and also after perfection of the order is invariably putting the concept of finality in abeyance to the prejudice of the other party. This is the more so when the lapse of time is long. Mere fact of impecuniosity or financial duress is insufficient.
37. Having said, I wish to mention the case of Pak Sai Ming v. JV Fitness Limited, DCEC No.494/2014, where His Honour Judge Alex Lee applied RTX (supra) and decided that he had not yet been functus officio. In that case, the summons seeking extension of time and variation of the costs order nisi was issued on 15/7/2016 and the judgment was sealed and perfected only 5 days later on 20/7/2016. In that case, the costs order nisi had become absolute on 2/7/2016. The learned Judge noted that there was a delay of only 14 days from the date of order absolute when the summons was issued on 15/7/2016 but before it was sealed and perfected. Thus, there is no issue as to functus officio.
38. RTX is a case of the Court of First Instance which I am bound by it. None of those other cases referred by W’s Counsel suggest that RTX does not represent the law at present or distinguishable from the factual matrix of the present case. Thus, applying RTX, I now decided that W’s application to vary the 3 costs orders at this stage (that is, after all the orders had become absolute and having been sealed and perfected) must fail. None of the 4 discreet categories of situations set forth in Poon Ching Man (supra) exists in the present case.
39. Had I been wrong in arriving at the decision that I am being functus officio, I find W’s application would also fail on procedural irregularity grounds as follows.
40. First, there is no application in the terms of the Amended Summons before this Court for setting aside the order absolute (see Appellate Court’s comments at §42 (g) of the Judgment in Poon Ching Man (supra)), which is a pre-requisite relief to be sought before seeking variation of the costs order nisi. Unless and until the order absolute was set aside, there is no room to go directly to consider the order nisi. Secondly, those factors set out in Order 2 rule 5 of the RHC would have to be canvassed with evidence in support (see Appellate Court’s comments also at §42 (g) in Poon Ching Man (supra) case). Surprisingly, W’s Counsel had not addressed this Court on any of those factors nor had he made any reference to them. Thirdly, assuming W had been able to set aside the order absolute, W would still need to first seek extension of time to vary the costs order nisi. W’s Summons (as amended) had not sought for any such extension of time. Fourth and lastly, whether there are any legitimate grounds for varying the costs order nisi. Having said, I agree with H’s Counsel who had submitted at the outset that W’s Summons was misconceived and incapable of being rectified.
41. Now I will move on to consider briefly each of the 3 limbs of argument advanced by W’s Counsel in his written submissions.
The 3 limbs of argument
42. The first argument was framed on the supposition that since the words “costs in any event” were not expressly stated by this Court, W would be entitled to recover her costs forthwith. As rightly pointed out by H’s Counsel Mr. Yim at the outset, had this been the case, why there was never any taxation commenced on any of the 3 costs orders for the past 10 or 16 months ? As a fall back observation by this Court, had this been the case, why W would need to take out the present application under the disguise of seeking “clarification” and not directly proceed to taxation and persuade the taxing master that they are entitled to tax the costs right away ? W’s Counsel was unable to provide any satisfactory answer.
43. The cases relied upon by W’s Counsel are Wingames and Xcelom (supra). However, from reading the Judgment of Deputy High Court Judge Pow, SC in the Wingames case, there is no reference as to the time when the application for variation was filed. Was it before or after the costs order nisi was perfected or became absolute ? The question of functus officio was not discussed by the learned Deputy Judge in the Judgment which I believe was not an issue in that case. This is in sharp difference from the present case as I have found myself functus officio.
44. In the other case of Xcelom, the application for variation by the plaintiff (paying party) was filed on 6 October 2016. There is also an application for variation by the defendant (receiving party) on 12 October 2016. The costs order nisi was granted on 22 September 2016. From reading the Judgment of Deputy High Court Judge Kenneth Kwok, SC, there was no reference as to when the costs order nisi was perfected. Nonetheless, the plaintiff’s application was taken out on the last day of the 14-day period for variation which poses no issue as to functus officio. This is distinguishable from the present case as I have found myself functus officio.
45. Though both the Wingames and Xcelom cases are from higher authority and binding upon me, I find the present case distinguishable from them on the ground that in here there is the issue of functus officio which W was not able to overcome.
46. The second limb of argument, which was put forward by W’s Counsel as an alternative, again was framed on the supposition that this Court had not considered the timing of taxation and payment of costs. Therefore, the “slip rule” under O.20 r.11 could be applied to amend the costs order nisi. Such contention could be cross referenced to the 1st and/or 2nd category of cases which the learned Deputy Judge (as she then was) had cited in the Poon Ching Man case (supra). In my view, since W’s Counsel was not able to show that there was any accidental slip or omission of this Court not to spell out the word “forthwith”, there is no room for applying the “slip rule” in favour of W.
47. The Court of Final Appeal decision in Man Ping Nam v. Man Fong Hang (No.2) (2007) 10 HKCFAR 140 was on the premise that if the court’s intention appearing in the body of the judgment or order is manifest, it matters not that the judgment or order had been sealed, there exists an inherent or implied discretionary power to clarify the original judgment or order. It does not involve the court acting when functus officio. However, in the present case and in fact is my finding, that the manifest and only intention of this court in respect of all the 3 costs order nisi is that they are to be taxed and paid after conclusion of these proceedings.
48. The third limb of argument, again was put forward as a further alternative, referred to the Court’s case management powers under O.1B r 1(2) of the RHC. The submission made was that had this Court decided those costs to be taxed after conclusion of these proceedings, this Court could and indeed should now exercise its powers to amend the costs order nisi and bring forward taxation and payment of costs.
49. On such limb of argument, it is worth to first mention the case of Fortune Asset Development Ltd v. De MonsaInvestments Ltd [2009] 4 HKLRD 439 where Registrar Queeny Au Yeung (as she then was) had said :-
“The Principles for Seeking Extension of Time
12. Under the Civil Justice Reform, the Court shall further the underlying objectives by actively managing cases: Order 1A, rule 4(1). Active case management includes fixing of timetables or otherwise controlling the progress of the case: Order 1A, rule 4(2)(g). These rules are applicable equally to the main action as for interlocutory applications.
13. Time laid down by legislation, court order or practice directions should be complied with. Before a timetable is to be laid down by a court, the parties should give realistic estimates of time. If a party permits time (however laid down) to lapse without doing anything, the case/application simply moves on to the next step. Although the innocent party is at liberty to apply for e.g. an unless order with appropriate sanctions, it is incumbent upon the party in default to take the necessary steps to seek any needed extension of time.
14. The Court has power to extend time even if an application for extension is made after the time for compliance has expired: Order 1B, rule 1(2)(a). In exercising this power, the court will take into account all the circumstances including but not limited to the following matters:
(i) What was the original time allowed and when has it expired ? The more the original time allowed, the more difficult it is to justify an extension.
(ii) Was the original time laid down by consent or at the suggestion of the applicant ? Under the Civil Justice Reform, a party is held more to his own bargain.
(iii) Why was the original time not adhered to ?
(iv) When was the application for extension of time taken out ? The greater the delay, the more difficult it is to obtain an extension.
(v) …….
(vi) …….
(vii) ……
(viii) ……
(ix) ……
(x) ……
(xi) Will the extension of time sought have impact on any hearing date or milestone date ?”
50. As I mentioned earlier, the reason for the delay of some 10 to 16 months before seeking variation went unexplained in W’s Affirmation evidence. Whilst W’s Counsel urged this Court to exercise its case management powers under O.1B r 1(2) of the RHC, he made no submissions on any of those matters set out in the case of Fortune Best Developments Ltd (supra) which the Court should take into account before exercising its case management powers.
51. Having said and given careful consideration, I find the third limb of argument also fails.
Conclusion
52. For all the above reasons, I find W’s application completely fails.
53. On the question of costs of this application, which is interlocutory by nature, the governing provisions are contained in O.62 rr.3 (2A) and 5 of the Rules of the District Court (“RDC”) which contain amendments after the CJR.
54. Suffice to say the effect of O.62 r. 3 (2A) is that the “rule” that costs normally follow the event is no longer the usual order in interlocutory applications but only remains as an option (see Melvin Waxman& Anor v. Li Fei Yu & Anor [2013] 6 HKC 424).
55. Moreover, when it comes to consider the appropriate costs order, the Court must have regard, inter alia, to the underlying objectives set out in O.1A r.1 of the Hong Kong Civil Procedure 2018 (see O.62 r.5 (1)(aa)); the conduct of the parties (see O.62 r.5 (1)(e)) and whether a party has succeeded on part of his case, even if he has not been wholly successful (see O.62 r.5 (1)(f)).
56. Under O.62 r.5 (2) of the RDC which provides :
“(2) For the purpose of paragraph (1)(e), the conduct of the parties includes –
(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation of issue;
(b) the manner in which a party has pursued or defended his case or a particular allegation of issue;
(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and
(d) conduct before, as well as during, the proceedings.”
57. Given all my reasons above, I find W’s application for amendment/variation of the 3 costs order nisi unreasonable, if not unwarranted or unmeritorious, which falls within the ambit of O.62 r.5 (1)(e) and O.62 r.5 (2)(a) of the RDC. Hence, I do not see any reason why costs should not follow the event.
58. I am minded to consider whether it is fair and reasonable that costs of this application should be taxed and paid forthwith, an approach which W had urged for in respect of the 3 costs order nisi but had failed.
59. In Midland Businss Management Ltd v. Lo Man Kui (No.2) [2011] 2 HKLRD 667 where Johnson Lam J (as he then was) said :
“9. Under Civil Justice Reform, the court is encouraged to order immediate payment of costs of interlocutory proceedings and if possible by way of summary assessment of costs. The objective is to discourage unnecessary and disproportionate interlocutory applications. It is recognised that the lack of immediacy of orders to pay costs “in the cause” or “in any event” weakens costs as a sanction against unwarranted applications or resistance, see paras.529-536 of the Final Report of the Chief Justice’s Working Party on Civil Justice Reform.
10. By reason of O.62 r.5 (1)(aa), the court should take into account the underlying objectives in O.1A r.1 in the exercise of its discretion. The objectives in r.1(a), 1(c) and 1(d) are particularly relevant in the present context. In my view, the approach recommended by the Working Party should be adopted in furtherance of these objectives. Unwarranted interlocutory applications should normally be sanctioned by an immediate costs order.
11. In so saying, I must not be taken as saying that an immediate costs order should be made against every unsuccessful party in an interlocutory application. I can readily see that there are cases where such a party may have a propery justification for making an interlocutory application even though he fails at the end of the day. There could also be cases where the court considers that it would be more appropriate to make an order “in any event” or “in the cause” or to reserve costs.
12. However, what I do say is that after Civil Justice Reform the court is more astute to the impact of costs on legal proceedings and an order for immediate payment of costs will be made more readily as a discipline against unmeritorious interlocutory applications.”
60. The Midland case was approved by the Court of Final Appeal in the case of Wing Fai Construction Co. Ltd v. Yip Kwong Robert (No.2) (2012) 15 HKCFAR 454. Ribeiro PJ at paragraphs 6 to 9 added :-
“6. And as his Lordship pointed out, O.62 r.5 (1)(aa) requires the court in exercising its discretion as to costs, to take appropriate account of the underlying objectives set out in O.1A r.1.
7. Whether or not the immediate payment of costs should be ordered is quintessentially a matter within the court’s discretion. The former practice was generally to order interlocutory costs to be “in the cause”, to be settled up at the end of the proceedings whether orders which may have been made in favour of the respective parties might be set-off against one another and when he overall result of the proceedings can be taken into account. However, it is now generally recognized that such an approach may lead to procedural laxity and a damaging proliferation of interlocutory or satellite litigation. The first four of the underlying objectives are relevant to redressing such tendency by emphasising the need :
(a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;
(b) to ensure that a case is dealt with as expeditiously as is reasonably practicable; (c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings; (d) to ensure fairness between the parties…..
8. In pursuing the underlying objectives, it is of course necessary to factor in any possible unfairness or prejudice which the party against whom an order for immediate payment of costs is sought may suffer in consequence of such an order.
9. In the present case, the application to dismiss for want of prosecution is severable and self-contained from the rest of the action. The outcome of the misfeasance proceedings will not have any impact on the costs orders made at each stage of the dismissed application.
The costs involved are of a sufficiently significant amount to justify the expense of a separate taxation……..….Underlying objectives (c) and (d) militate in favour of ordering the immediate payment of the costs orders made in respect of the failed application to dismiss for want of prosecution. Accordingly, in our view, discretionary considerations are substantially in favour of such an order.”
61. In my discretion broadly exercised, I am minded to draw an analogy between the failed application taken out in the Wing Fai case to dismiss for want of prosecution with the present failed application taken out to “bring forward” taxation and payment of the 3 costs orders. In so doing, I have reminded myself of any possible unfairness or prejudice which W may suffer if costs forthwith are to be ordered. I have also taken note of the severability and self-contained nature of the present application from the rest of these proceedings.
62. W is the Petitioner and also the claimant for ancillary reliefs in these proceedings. Decree Nisi has been granted on 24 July 2014 (some 33 months ago) and there are no children of the family. The only issue is ancillary reliefs. Upon review of the progress of the case, W had only made her first attempt to enforce the maintenance pending suit order by way of judgment summons by filing the requisite praecipe on 23 November 2017 (by the time the maintenance pending suit had remained outstanding and unpaid for some 23 months since 15 December 2015) but, for no apparent reasons, not taken any further. No Judgment Summons was issued. Worse still, there has been a further period of inactivity since then of around 5 months up until now (from November 2017 to April 2018) where no steps were taken by W to proceed with her ancillary reliefs, be it for another 1st Appointment hearing, Financial Dispute Resolution (“FDR”) or otherwise. There is no further scheduled hearing down the line. This is undesirable and incompatible with the spirit of the CJR where cases should be dealt with expeditiously and in a costs effective way.
63. I am satisfied that there happened procedural laxity on the part of W in pursuit of her ancillary reliefs, even on her enforcement of maintenance pending suit against H. Though these are not matters of litigation conduct of which the Court should penalise, say for instance, by ordering indemnity or common fund basis of costs orders, it does fall within the criteria set out in the Midland case which was cited with approval in the Wing Fai case justifying Court’s sanction by an immediate costs order.
64. As regards the severability and self-contained requirement; namely, (a) the extent to which the proceedings on taxation were severable and self-contained from the rest of the action; (b) the justice of making such an order having regard to the effect on the cash flow of the parties; and (c) whether the amount at stake on taxation was sufficient to justify the expense of a separate taxation for it rather than bringing it in on the final taxation (see WingFai, supra), I am satisfied that all of them are in favour of ordering an immediate taxation and payment of costs. I will so order accordingly.
65. Last but not least, I wish to express my gratitude to H’s Counsel Mr. Yim who had fairly and sensibly avoided costs for not further insisting upon the procedural aspect of the need to amend W’s Summons dated 13 April 2017 in advance of the substantive hearing and by way of a proper application. According to the records, W’s lawyers only filed the requisite Inter Partes Summons on 16 November 2017 after (my emphasis) leave was granted on the first day of the substantive hearing, that is, 15 November 2017.
Orders
66. I now make the following orders :-
(a) W’s Summons dated 17 April 2017 (as amended) be dismissed; and
(b) W do pay H’s the costs of this application, including all costs reserved, to be taxed if not agreed, and be payable forthwith.
67. I also grant Certificate for Counsel.
68. This is a costs order nisi which will become absolute if no application to vary the same is made within 14 days from the date of this Decision.
| (George Own) | |
| District Judge |
Mr. Lau Ka Kin, instructed by Messrs. Cheng & Co., Solicitors for the Petitioner
Mr. Eugene W.T. Yim instructed by Messrs. Hastings, Solicitors for the 1st Respondent