由此
A A
FCMC 2706 / 2008
B B
C IN THE DISTRICT COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D MATRIMONIAL CAUSES D
NUMBER 2706 OF 2008
E E
----------------------------
F F
BETWEEN
G G
CR Petitioner
H H
and
I I
MRQ Respondent
J J
------------------------
K K
L Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to L
public)
M M
Date of Hearing: 16 March 2010
N Date of Ruling: 22 March 2010 N
O O
P ----------------------- P
Q RULING Q
R
----------------------- R
S S
T T
U U
V V
由此
- 2 -
A A
1. This is a hearing to determine costs following my judgment of
B B
the 3 November 2009 in relation to ancillary relief. In the final paragraph
C of that judgment I said as follows: C
D D
Costs
E E
66. Taking into account the Husband’s approach to disclosure,
F which is not to be encouraged and the fact that the Wife’s own F
disclosure on income was found to be wanting, together with the
G G
fact that the Wife really had no option but to litigate this matter, I
will make an order nisi, to be made absolute in 14 days, that the
H H
Husband pay 2/3 of the Wife’s costs on a party and party basis to
I be taxed if not agreed. There shall be certificate for counsel. I
J J
2. The wife now says that she should have all of her costs
K because a) on a correct reading of the judgment she is entitled to her costs, K
b) she has matched and perhaps could be said to have slightly bettered the
L L
calderbank offer made prior to trial, and c) there is a duty to negotiate and
M the husband refused to do so. For his part, the husband says that a) there M
had been a long history of negotiation prior to proceedings being issued
N N
and that b) the order nisi simply reflected my findings in relation to the
O litigation conduct on both sides. The husband’s lawyer proposed that the O
wife should receive 75% of her costs as a reflection of those findings.
P P
Q Background Q
R R
3. I have set out the background to this case in my judgment of
S the 3 November 2009. I will not repeat the same here. As indicated in S
that judgment, this case centred on the wife’s entitlement to a share of the
T T
parties’ assets where the marriage was short, the husband was by all
U U
V V
由此
- 3 -
A A
accounts wealthy and the parties had enjoyed a very high standard of living
B B
during the course of the marriage. There were no children of the family.
C The husband’s approach during the trial was that the wife was not entitled, C
either morally or legally, to a share of the asset base.
D D
E The law E
F F
4. The law in relation to costs is well settled. I have referred to
G this in my Ruling of FCMC 11958 of 2006, unreported. In that Ruling I G
referred to the following excerpt from Butler-Sloss LJ in the leading case
H H
of Gojkovic v Gojkovic [1992] Fam 40 where it is stated as follows:
I “There are many reasons which may affect the court in I
considering costs, such as culpability in the conduct of the
J litigation: for instance (as I have already indicated earlier) J
material non-disclosure of documents. Delay or excessive
zeal in seeking disclosure are other examples. The absence of
K an offer or of a counter-offer may well be reflected in costs – or K
an offer made too late to be effective. ... It would, however,
be inappropriate, and indeed unhelpful, to seek to enumerate
L L
and possibly be thought to constrain in any way, that wide
exercise of discretion. But the starting point in a case where
M there has been an offer is that, prima facie, if the application M
receives no more or less than the offer made, she/he is at risk
not only of not being awarded costs, but also of paying the
N costs of the other party after communication of the offer and a N
reasonable time to consider it. That seems clear from the
O decided cases and is in accord with the Rules of the Supreme O
Court and the County Court Rules 1981 requiring the court to
have regard to the offer. I cannot, for my part, see why there
P is any difference in principle between the position of a party P
who fails to obtain an order equal to the offer made and pays
the costs, and a party who fails by the offer to meet the award
Q Q
made by the court. In the latter case prima facie costs should
follow the event, as they would do in a payment into court, with
R the proviso that other factors in the Family Division may alter R
that prima facie position”.
S S
5. Clearly the issue of costs lies in the discretion of the court and
T T
costs are normally expected to follow the event. This presumption is
U
more easily displaced in family proceedings that in others. Although I U
V V
由此
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A A
may be influenced by the existence of calderbank offers, they cannot be
B B
said to bind the exercise of my discretion. (See In re Elgindata Ltd (No.2)
C [1992] 1 WLR) C
D D
Discussion
E E
Litigation conduct of the parties
F F
G 6. When hearing argument on this matter the old maxim “two G
wrongs do not make a right” came to mind. To an extent both parties have
H H
been guilty of litigation misconduct.
I I
7. In the judgment I criticized the husband’s approach to
J J
disclosure. Certainly I do not accept the suggestion made by his solicitor
K that at the end of the day his material non-disclosure “didn’t make any K
difference”. For the avoidance of doubt there is always a clear duty on all
L L
parties to make full and frank disclosure of their assets and their financial
M position generally. In this case the husband effectively ran a millionaire’s M
defence. In the post-White era, this is no longer an appropriate approach to
N N
take in any form of family litigation.
O O
8. I also found that the husband was wrong in law, as clearly the
P P
wife was entitled to something.
Q Q
9. But I also found that the wife’s own approach to disclosure
R R
was somewhat lacking. It is submitted on behalf of the wife that “...
S compared to the Husband’s lack of disclosure however, both in terms of S
the amounts involved and the overall impact on the case, this was
T T
proportionally insignificant”. Although that may be the case, that does not
U U
V V
由此
- 5 -
A A
in any way excuse the wife for her own non-disclosure. Two wrongs
B B
certainly do not make a right and she must bear some responsibility for the
C way in which the trial developed. C
D D
10. It is suggested that this would have been circumvented had
E the husband’s lawyer approached the issue of discovery correctly and had E
he filed a Request for Further and Better Particulars at the correct time. I
F F
accept this up to a point. Certainly the correct approach is to issue a
G Request where there are any factual queries arising out of the disclosure G
given. This was not done and I accept that it should have been. But over
H H
and above that, it was still open to the husband to cross-examine the wife
I on her own evidence. Even after the adjournment and even after having I
J
given the wife the chance to check the position fully she did not, in my J
view, fully come up to proof. It is suggested by counsel for the wife that
K K
this was “not fair” to the wife as she was trying to produce information
L
without having the benefit of being able to discuss the position fully with L
her legal team, as she was half way through giving her evidence at the time.
M M
Although that may be so, I remain unconvinced that the outcome would
N have been significantly different had the correct procedure been adopted. N
There was also an onus on the wife’s legal team to have anticipated the
O O
areas of concern identified by the husband, albeit somewhat late in the day.
P P
The history of offers made, including the calderbank offer
Q Q
R 11. It appears that the parties were negotiating prior to R
proceedings being issued. Unfortunately these negotiations broke down.
S S
On the 30 January 2009 the wife sent a calderbank letter to the husband in
T which she said that she was prepared to accept a lump sum of HK$5 T
million in full and final settlement, HK$4 million to be paid upon the
U U
V V
由此
- 6 -
A A
making of the order and the remaining HK$1 million to be paid within a
B B
year. At that time the wife’s legal costs stood at HK$220,000. She asked
C for a contribution towards her costs of HK$145,000. The husband did not C
respond to that letter. His stance until shortly before the trial was, as I have
D D
said, that the wife was entitled to nothing. At trial he said that he was
E prepared to pay her HK$2 million in full and final settlement. This offer E
was so late coming that it could be said to be “too late to be effective”.
F F
G 12. The wife was awarded HK$5 million payable within 28 days. G
The amount payable is the same. She can be said to have bettered the
H H
calderbank letter simply on the basis of the timing of the payment. Her
I costs to date now stand at just under HK$890,000. The husband’s costs I
J
were put at in the region of HK$600,000. It goes without saying that a J
great deal of money not to mention emotional angst and court time could
K K
and should have been saved had the parties settled.
L L
13. For the avoidance of doubt I would also like to reiterate the
M M
fact that there is a duty on the parties to negotiate and that where one party
N unreasonably refuses to do so then that party runs the risk of being N
penalized on costs. Here the husband refused to negotiate after the first
O O
round of negotiations. He must therefore bear some responsibility for that
P and the legal costs that amassed as a result. P
Q Q
Conclusion
R R
14. Having now considered all the relevant factors, I will order
S S
that the husband pay a greater contribution towards the wife’s costs than I
T originally ordered. The husband shall pay 90% of the wife’s costs to be T
taxed if not agreed. Given that neither party has been wholly successful in
U U
V V
由此
- 7 -
A A
relation to the costs, I shall make no order as to the costs of and occasioned
B B
by this hearing itself. It seems to me that this properly reflects each parties
C approach to the case, my findings and the additional information that has C
now been brought to my attention. All costs to be taxed on a party and
D D
party basis if not agreed. There shall be a certificate for counsel.
E E
F F
G G
H H
(Sharon D. MELLOY)
I District Judge I
J J
Mr. C Erving of Messrs Erving Brettell for the Petitioner
K Ms. M Rattigan instructed by Messrs Hampton Winter & Glynn for the K
Respondent
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V
由此
A A
FCMC 2706 / 2008
B B
C IN THE DISTRICT COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D MATRIMONIAL CAUSES D
NUMBER 2706 OF 2008
E E
----------------------------
F F
BETWEEN
G G
CR Petitioner
H H
and
I I
MRQ Respondent
J J
------------------------
K K
L Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to L
public)
M M
Date of Hearing: 16 March 2010
N Date of Ruling: 22 March 2010 N
O O
P ----------------------- P
Q RULING Q
R
----------------------- R
S S
T T
U U
V V
由此
- 2 -
A A
1. This is a hearing to determine costs following my judgment of
B B
the 3 November 2009 in relation to ancillary relief. In the final paragraph
C of that judgment I said as follows: C
D D
Costs
E E
66. Taking into account the Husband’s approach to disclosure,
F which is not to be encouraged and the fact that the Wife’s own F
disclosure on income was found to be wanting, together with the
G G
fact that the Wife really had no option but to litigate this matter, I
will make an order nisi, to be made absolute in 14 days, that the
H H
Husband pay 2/3 of the Wife’s costs on a party and party basis to
I be taxed if not agreed. There shall be certificate for counsel. I
J J
2. The wife now says that she should have all of her costs
K because a) on a correct reading of the judgment she is entitled to her costs, K
b) she has matched and perhaps could be said to have slightly bettered the
L L
calderbank offer made prior to trial, and c) there is a duty to negotiate and
M the husband refused to do so. For his part, the husband says that a) there M
had been a long history of negotiation prior to proceedings being issued
N N
and that b) the order nisi simply reflected my findings in relation to the
O litigation conduct on both sides. The husband’s lawyer proposed that the O
wife should receive 75% of her costs as a reflection of those findings.
P P
Q Background Q
R R
3. I have set out the background to this case in my judgment of
S the 3 November 2009. I will not repeat the same here. As indicated in S
that judgment, this case centred on the wife’s entitlement to a share of the
T T
parties’ assets where the marriage was short, the husband was by all
U U
V V
由此
- 3 -
A A
accounts wealthy and the parties had enjoyed a very high standard of living
B B
during the course of the marriage. There were no children of the family.
C The husband’s approach during the trial was that the wife was not entitled, C
either morally or legally, to a share of the asset base.
D D
E The law E
F F
4. The law in relation to costs is well settled. I have referred to
G this in my Ruling of FCMC 11958 of 2006, unreported. In that Ruling I G
referred to the following excerpt from Butler-Sloss LJ in the leading case
H H
of Gojkovic v Gojkovic [1992] Fam 40 where it is stated as follows:
I “There are many reasons which may affect the court in I
considering costs, such as culpability in the conduct of the
J litigation: for instance (as I have already indicated earlier) J
material non-disclosure of documents. Delay or excessive
zeal in seeking disclosure are other examples. The absence of
K an offer or of a counter-offer may well be reflected in costs – or K
an offer made too late to be effective. ... It would, however,
be inappropriate, and indeed unhelpful, to seek to enumerate
L L
and possibly be thought to constrain in any way, that wide
exercise of discretion. But the starting point in a case where
M there has been an offer is that, prima facie, if the application M
receives no more or less than the offer made, she/he is at risk
not only of not being awarded costs, but also of paying the
N costs of the other party after communication of the offer and a N
reasonable time to consider it. That seems clear from the
O decided cases and is in accord with the Rules of the Supreme O
Court and the County Court Rules 1981 requiring the court to
have regard to the offer. I cannot, for my part, see why there
P is any difference in principle between the position of a party P
who fails to obtain an order equal to the offer made and pays
the costs, and a party who fails by the offer to meet the award
Q Q
made by the court. In the latter case prima facie costs should
follow the event, as they would do in a payment into court, with
R the proviso that other factors in the Family Division may alter R
that prima facie position”.
S S
5. Clearly the issue of costs lies in the discretion of the court and
T T
costs are normally expected to follow the event. This presumption is
U
more easily displaced in family proceedings that in others. Although I U
V V
由此
- 4 -
A A
may be influenced by the existence of calderbank offers, they cannot be
B B
said to bind the exercise of my discretion. (See In re Elgindata Ltd (No.2)
C [1992] 1 WLR) C
D D
Discussion
E E
Litigation conduct of the parties
F F
G 6. When hearing argument on this matter the old maxim “two G
wrongs do not make a right” came to mind. To an extent both parties have
H H
been guilty of litigation misconduct.
I I
7. In the judgment I criticized the husband’s approach to
J J
disclosure. Certainly I do not accept the suggestion made by his solicitor
K that at the end of the day his material non-disclosure “didn’t make any K
difference”. For the avoidance of doubt there is always a clear duty on all
L L
parties to make full and frank disclosure of their assets and their financial
M position generally. In this case the husband effectively ran a millionaire’s M
defence. In the post-White era, this is no longer an appropriate approach to
N N
take in any form of family litigation.
O O
8. I also found that the husband was wrong in law, as clearly the
P P
wife was entitled to something.
Q Q
9. But I also found that the wife’s own approach to disclosure
R R
was somewhat lacking. It is submitted on behalf of the wife that “...
S compared to the Husband’s lack of disclosure however, both in terms of S
the amounts involved and the overall impact on the case, this was
T T
proportionally insignificant”. Although that may be the case, that does not
U U
V V
由此
- 5 -
A A
in any way excuse the wife for her own non-disclosure. Two wrongs
B B
certainly do not make a right and she must bear some responsibility for the
C way in which the trial developed. C
D D
10. It is suggested that this would have been circumvented had
E the husband’s lawyer approached the issue of discovery correctly and had E
he filed a Request for Further and Better Particulars at the correct time. I
F F
accept this up to a point. Certainly the correct approach is to issue a
G Request where there are any factual queries arising out of the disclosure G
given. This was not done and I accept that it should have been. But over
H H
and above that, it was still open to the husband to cross-examine the wife
I on her own evidence. Even after the adjournment and even after having I
J
given the wife the chance to check the position fully she did not, in my J
view, fully come up to proof. It is suggested by counsel for the wife that
K K
this was “not fair” to the wife as she was trying to produce information
L
without having the benefit of being able to discuss the position fully with L
her legal team, as she was half way through giving her evidence at the time.
M M
Although that may be so, I remain unconvinced that the outcome would
N have been significantly different had the correct procedure been adopted. N
There was also an onus on the wife’s legal team to have anticipated the
O O
areas of concern identified by the husband, albeit somewhat late in the day.
P P
The history of offers made, including the calderbank offer
Q Q
R 11. It appears that the parties were negotiating prior to R
proceedings being issued. Unfortunately these negotiations broke down.
S S
On the 30 January 2009 the wife sent a calderbank letter to the husband in
T which she said that she was prepared to accept a lump sum of HK$5 T
million in full and final settlement, HK$4 million to be paid upon the
U U
V V
由此
- 6 -
A A
making of the order and the remaining HK$1 million to be paid within a
B B
year. At that time the wife’s legal costs stood at HK$220,000. She asked
C for a contribution towards her costs of HK$145,000. The husband did not C
respond to that letter. His stance until shortly before the trial was, as I have
D D
said, that the wife was entitled to nothing. At trial he said that he was
E prepared to pay her HK$2 million in full and final settlement. This offer E
was so late coming that it could be said to be “too late to be effective”.
F F
G 12. The wife was awarded HK$5 million payable within 28 days. G
The amount payable is the same. She can be said to have bettered the
H H
calderbank letter simply on the basis of the timing of the payment. Her
I costs to date now stand at just under HK$890,000. The husband’s costs I
J
were put at in the region of HK$600,000. It goes without saying that a J
great deal of money not to mention emotional angst and court time could
K K
and should have been saved had the parties settled.
L L
13. For the avoidance of doubt I would also like to reiterate the
M M
fact that there is a duty on the parties to negotiate and that where one party
N unreasonably refuses to do so then that party runs the risk of being N
penalized on costs. Here the husband refused to negotiate after the first
O O
round of negotiations. He must therefore bear some responsibility for that
P and the legal costs that amassed as a result. P
Q Q
Conclusion
R R
14. Having now considered all the relevant factors, I will order
S S
that the husband pay a greater contribution towards the wife’s costs than I
T originally ordered. The husband shall pay 90% of the wife’s costs to be T
taxed if not agreed. Given that neither party has been wholly successful in
U U
V V
由此
- 7 -
A A
relation to the costs, I shall make no order as to the costs of and occasioned
B B
by this hearing itself. It seems to me that this properly reflects each parties
C approach to the case, my findings and the additional information that has C
now been brought to my attention. All costs to be taxed on a party and
D D
party basis if not agreed. There shall be a certificate for counsel.
E E
F F
G G
H H
(Sharon D. MELLOY)
I District Judge I
J J
Mr. C Erving of Messrs Erving Brettell for the Petitioner
K Ms. M Rattigan instructed by Messrs Hampton Winter & Glynn for the K
Respondent
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V