YBL v. LWC

bjbj CACV 244/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL CIVIL APPEAL NO 244 OF 2015 (ON APPEAL FROM FCMC NO 9052 of 2013)

BETWEEN Petitioner Respondent _____ Before: Hon Lam VP, Chu and Poon JJA in Court Dates of Written Submissions: 12, 16, 25 January 2017, 3, 6, 8 February 2017 and 1, 6 March 2017 Date of Judgment: 12 April 2017 _______

JUDGMENT _____ Hon Lam VP (giving the Judgment of the Court): After we handed down our judgment on 30 December 2016 on the substantive appeal, three applications were outstanding: An application by the Respondent for variation of our costs order nisi in respect of the costs of the appeal; An application by the Respondent for the return of the bail money and the application by the Petitioner for the release of the bail money to her to satisfy the judgment debt; An application by the Respondent for leave to appeal to the Court of Final Appeal. Written submissions were filed by parties on these applications and it is agreed that they should be processed on papers. We have read those submissions. We now give our decisions on these applications. Costs of the appeal In our judgment of 30 December 2016, we made an order nisi that there be no order as to costs of this appeal. Ms Lai submitted on behalf of the Respondent that as her client is the successful party in the appeal he should have the costs of the appeal. She also submitted the Petitioner had vigorously challenged each and every ground of appeal and the usual criteria for departing from costs following event cannot be satisfied. On the other hand, Mr Tang submitted on behalf of the Petitioner that the Court should have regard to conduct of the parties, including conduct before the appeal was brought. He submitted

that in light of the history of the matter it was not unreasonable for the Petitioner to resist the appeal. He further submitted that the Respondent s past conduct pointed to the conclusion that the appeal was nothing but an inevitable litigation that he had to take because of circumstances of his own making. Counsel also submitted that the overall justice of the case warrants the deprivation of the Respondent of costs despite his success in the appeal. Mr Tang referred to the following as relevant circumstances in these regards: (1) It is indisputable that the present proceedings were caused by the Respondent s failure to pay the Judgment Sums in the first place. Even the Respondent does not seem to dispute that. (2) It is also indisputable that the Respondent s default was serious. As rightly pointed out at 128 of the Judgment, while committal should be a procedure of last resort, in light of the serious default by the respondent and the litigation history outlined above (see [113] onwards), the petitioner cannot be criticised for making a committal application. (3) The Respondent obtained $200,000 (allegedly) from his father for payment of his bail money almost immediately but there is no suggestion let alone evidence that he had made any effort to borrow money from his father or any other sources to pay maintenance. This effectively means the Respondent would rather spend

money (whether of his own or borrowed) on legal costs to evade liability under the Committal Order than simply paying off the Judgment Sums which would have discharged the very Committal Order. Ms Lai submitted that since we are only concerned with the costs of the appeal (as the Respondent was content with our costs order regarding costs below), the conduct of the Respondent leading to the judgment summons proceedings is irrelevant. Further she submitted that taking account of such conduct infringes the presumption of innocence insofar as one is drawing an inference that the Respondent deliberately refused to pay the maintenance ordered notwithstanding he had the means to do so. She also cited the observation of Deputy District Judge Pang in TYM v WSP FCMP 309 of 2014, 19 December 2016. In our judgment, the proper approach in determining costs is that succinctly put by the Chief Justice in Mimi Kar Kee Hung v Raymond Kin Sang Hung FAMV 10 & 11 of 2014, 7 July 2015 at [7]: The discretion as to costs in this Court, as in any other Court, is to be exercised in a principled way with a view to reality and justice. For present purposes, the relevant principles on the exercise of discretion as to costs can be summarized as follows: whilst the courts often start with the proposition of costs following event, it is no longer a general rule but a starting point, see Hung Fung

Enterprises v Agricultural Bank of China [2012] 3 HKLRD 683; there have to be some justifications for depriving a successful party of his costs; in measuring who is the successful party and the extent of his success, the court must examine the reality and justice of the case. Thus, in Hysan Development Co Ltd v Town Planning Board (No 2) (2016) 19 HKCFAR 635, the Court of Final Appeal made no order as to costs notwithstanding the success of the appellants in reversing the Court of Appeal s decision because they did not achieve the full objects of their appeals; in addition, under Order 62 Rule 5, the court in exercising its discretion shall take into account the matters set out in Rule 5(1) as may be appropriate in the circumstances; Rule 5(2) highlights some conduct which the court may take into account including whether it is reasonableness for a party to take an issue, the manner in which the matter was pursued or defended, the extent of success, and conduct before, as well as during the proceedings; if a successful party has brought the litigation upon himself or has done some wrongful act in the course of the transaction, he could be deprived of his costs. Whilst acknowledging that the Respondent is successful in that we agreed to set aside the order for committal made by the Judge, we do not accept that he has achieved full victory. His objective was to have the judgment

summons dismissed which we refused to do. If one were to examine the reality and overall justice of the case, we agree with Mr Tang that the Respondent had brought this appeal upon himself. The points taken on appeal were not points taken before the Judge. Despite repeated reminders by judges in the Family Court as to the seriousness of the matter, the Respondent adopted a cavalier attitude towards his liability to pay maintenance for his children and the judgment summons application. He only engaged counsel to represent him after he was committed by the judge. Further, in the present circumstances, given the nature of the claim of the Petitioner, Mr Tang was justified in asking us to take account of the fact that the Respondent had been able to procure the $200,000 bail money and the fees of his lawyers instead of meeting his obligation to pay maintenance. In this connection, at the leave hearing before Lam VP and Chu JA, the Petitioner (whilst she was still unrepresented) sensibly indicated that her primary concern was to receive maintenance payment for the children as opposed to the imprisonment of the Respondent. Apparently, the bail money and the legal costs of the Respondent would probably add up to more than the outstanding amount set out in the judgment summons. It would suggest that the Respondent has chosen to spend money on litigation than to pay maintenance for his

own children. In taking account of such conduct of the Respondent, we are only having regard to the reality and the overall justice of the case. We are not impressed by Ms Lai s submission on infringement of presumption of innocence. We do not pre-empt in any way the adjudication as to the personal means of the Respondent. However, in the exercise of our discretion on costs, we are entitled to take the stance that even if the bail money and legal fees were not from the Respondent s own means, his priority and conduct of the proceedings is unreasonable in that he chose to deploy the funds on litigation instead of meeting his obligations to the children under the court order. Such conduct on the part of the Respondent (and his financial backers, assuming in his favour that the funds were not his own) is not conducive to the proportionate and procedural economy in resolution of dispute and as such is contrary to Order 1A Rule 1(c) and (e). In the present case, we should also bear in mind that the Petitioner was simply following the rules and using the prescribed form in the judgment summons application. Though there were points taken by Mr Tang in the appeal which we do not accept, the appeal was argued by him without excessive zeal and we had derived assistance on some of the points canvassed by him. Viewed in that manner, and bearing in mind the history of the case set out at

[115] to [124] of our main judgment, we agree with Mr Tang that there is sufficient justification in the present circumstances to deprive the Respondent of his costs in the appeal. For these reasons, we refuse to vary our costs order in respect of the costs of the appeal and dismiss the summons of the Respondent of 13 January 2017. The order that there be no order as to costs in the appeal shall become absolute. We also order the Respondent to pay the Petitioner the costs of the application for variation. Disposal of bail money Ms Lai submitted that the bail money had served its purpose of securing the appearance of the Respondent and it should be returned to him. She submitted that the money was held by the Respondent for his father on a Quistclose trust. She further submitted that the Court has no jurisdiction to direct that the bail money be paid to a person other than the Respondent. On the other hand, Mr Tang applied under Order 49 Rule 9 for the money to be paid to the Petitioner to partially satisfy the arrears in maintenance. Rule 9(1) provides: Where money is standing to the credit of the judgment debtor in court, the judgment creditor shall not be entitled to take garnishee proceedings in respect of the money but may apply to the Court by summons for an order that the money or so much thereof as is sufficient to satisfy the judgment or order sought to be enforced and

the costs of the application be paid to the judgment creditor. Thus, this Court clearly has the power to order whatever sum standing to the credit of the Respondent to be utilized for satisfaction of any judgment sum against him. As Ms Lai acknowledged, this possibility was canvassed at the hearing of 2 November 2015 when the Respondent applied for bail. Hence, whoever provided the funds for the bail money did so with his eyes open to the power of the court in that regard. No evidence has been filed by the Respondent or his father to support the assertion of Quistclose trust. Nor is there any explanation as to the extent to which the father took account of the risk of the Court exercising the power under Order 49 Rule 9(1) when he provided the money. In the circumstances, even assuming (subject to what we shall say below) that there could still be some kind of Quistclose trust, it could only be a trust subordinated to the legitimate power of the Court in disposing of the bail money, including the power under Order 49 Rule 9(1). Though the argument of Quistclose trust in respect of money held in court had been accepted by Keith J in Goodpoint Holdings v Mark Anthony Seabrook [1997] HKLRD 869 and the English Court of Appeal in Common Professional Examination Board ex p Mealing-McCleod [2000] All ER (D) 588, in our judgment the better view is the one set out by the Chief Justice

(as Ma CJHC, as he then was) in Registrar District Court v Li Kai [2006] 2 HKLRD 499 at [27], a judgment which is binding on us. We respectfully agree with these observations set out in that paragraph: Any payment made into court [for the purpose of bail] is, therefore, as far as the court is concerned, a payment made by the accused himself, regardless of who is actually providing him with the money and under what conditions. Neither the CPO nor any other Ordinance recognizes anyone other than the accused who is granted bail as being the person who has paid the cash bail even though someone else might physically have paid the money into court. Once money is paid into court as cash bail, that money is not held on trust by the court for the accused or anyone else. All that the accused possesses is the right to claim back the money providing it is not otherwise legitimately disposed of by the court. any money paid into court become subject to the possibility of an appropriation order under s 73(3) and once an order is made, this will give priority to the victim over the interest of the convicted person (and his assigns). Ma CJHC was then concerned with the power of the court to make a compensation order under Section 73(3) of the Criminal Procedure Ordinance and we acknowledge that that provision is more specific on the use of bail money to satisfy compensation payable to a victim

under a Section 73 order. However, we cannot see any reason why the analysis as to the nature of the bail money and the obligation of the court in relation to the bail money should vary when dealing with a situation under Order 49 Rule 9(1). The significance of such analysis is that the power of the court in the disposal of bail money is not to be fettered by constraints imposed by whatever arrangement between the person putting forward the cash bail and his financier (except perhaps in the context of a dispute between these two persons). The court does not hold the money on trust for any person and the person on bail only has a chose in action to seek the return of the bail money. In this connection, there was no reference to Order 49 Rule 9(1) in Goodpoint Holdings v Mark Anthony Seabrook, supra or Common Professional Examination Board ex p Mealing-McCleod, supra. Insofar as these authorities suggested that the existence of a Quistclose trust as between a person seeking bail and his financial backer can be a fetter on the exercise of the court s legitimate power to dispose of the bail money on account of Order 49 Rule 9(1), we respectfully disagree. We also respectfully disagree with the observations in Mealing-McCleod that the court provided no consideration for the money standing in court. That case concerns security for costs instead of bail money. In the context of bail

money, if the sum was not paid, the person would not be released on bail. In other words, whatever may be the arrangement between the immediate parties concerning the funding for bail money (viz if Quistclose trust exists and its effect when the court considers the return of the money to the person on bail), as long as the money is held by the court these parties only have a chose in action to seek the return of the money after the court has legitimately exercised its power over the sum as money of the person on bail. The subject matter of the Quistclose trust is the chose in action instead of the money and innate in that chose in action is the court s legitimate power to dispose of the money (including the power under Order 49 Rule 9) other than returning the same to the person who answered bail. Hence, as far as this Court is concerned, the bail money in the present case is money standing to the credit of the Respondent and the Petitioner, as judgment creditor, can properly seek an order under Order 49 Rule 9(1) in respect of the same. We therefore make an order in terms of paragraph 1 of the summons of 23 January 2017 taken out on behalf of the Petitioner under Order 49 Rule 9. We also order the Respondent to pay the costs of the Petitioner in respect of this application. Leave to appeal to the Court of Final Appeal By a Notice of Motion of 25 January 2017, the Respondent

sought leave to appeal to the Court of Final Appeal. He relied on the following as questions of great general or public importance to be submitted to the Court of Final Appeal: 2. Question 1:- In the situation where the Court of Appeal has quashed a committal order for civil contempt made by the Family Court on substantive grounds (i.e. other than by reason of the Family Court s excess of jurisdiction), whether the principle of autrefois acquit is engaged and whether the Court of Appeal may remit the judgment summons back to the Family Court in the absence of any statutory provisions abrogating the respondent s right against double jeopardy. In particular:- (1) Whether the Court of Appeal s decision to quash the committal order constitutes an acquittal for the purpose of Art 11(6) of the Hong Kong Bill of Rights or the common law principle against double jeopardy (see eg The State v Keane [1968] IR 348 at p 355; Nevin v Judge Crowley [1998] IEHC 160 at pp 1-5; Fitzgerald v Judge O Neill [2008] IEHC 416 at 17); (2) If so, whether the language of section 50 of the High Court Ordinance (Cap 4) has expressly or by necessary implication abrogated the respondent s right against double jeopardy whether under Art 11(6) of the Hong Kong Bill of Rights or the common law.

3. Question 2:- Alternative to Question 1 above, in the situation where the Court of Appeal has quashed a committal order for civil contempt, what are the factors to be considered by the Court before deciding whether to order a re-trial of the committal proceedings? In particular:- (1) Whether the factors enumerated in HKSAR v Ng Chun To Raymond, CACC 178/2010 (unrep, 19.11.2013) 8 in relation to the exercise of power of re-trial in the criminal context are applicable? (2) If so, in gauging the strength of the applicant s case, whether the Court of Final Appeal s holding in Ting James Henry v HKSAR (2007) 10 HKCFAR 632 at 41 that the power of re-trial must be exercised with reference to the parameters set out by the statement of offence and the particulars of the offence in the indictment applies mutatis mutandis to the statement of facts in the context of a charge of civil contempt? (3) If the answer to sub-paragraph (2) above is in the affirmative, would the complete absence of any statement of facts in support of the committal application, which is analogous to the indictment in criminal cases, and that leave to apply for committal has not even been obtained (see Judgment 107, 143), mean that the Court should not exercise the power of re-trial?

4. Question 3:- Whether the direct use of compelled answers in the examination process in the committal proceedings is a justifiable infringement of the respondent s privilege against self-incrimination. In particular:- (1) Whether and to what extent has the common law privilege against self-incrimination been unmistakably, expressly or by necessary implication , abrogated in the committal proceedings by Rule 87 of the Matrimonial Causes Rules (Cap 179A)( )? (2) Whether the extent of the abrogation of the privilege as held by the Court of Appeal, which in effect compels the respondent to provide oral evidence relating to each and every element of the charge of contempt against himself/herself, destroys the very essence of the privilege (Heaney and McGuinness v Ireland (2001) 33 EHRR 12 55; Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170 at 84), and hence direct use of such compelled answers in the committal proceedings cannot be justified by any public interest considerations whatsoever as per the European Court of Human Rights jurisprudence (see eg Bykov v Russia [2009] ECHR 4378/02 92-93)? (3) whether the aim of ensuring effective enforcement of court orders in the context of matrimonial proceedings (Judgment 82-83) is a sufficient public interest that can legitimately override the privilege in allowing direct use of compelled answers in the committal

proceedings? At paragraph 5 of the Notice of Motion, he also contended that Question 2 ought to be submitted under the or otherwise limb in Section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance. In this application, the Respondent was represented by Mr Ho as well as Ms Lai. Mr Ho did not take part in the substantive appeal whilst Ms Lai has acted for the Respondent ever since the bail application on 2 November 2015. Before we addressed these questions, it is useful to remind ourselves the context in which the application is brought: By our main judgment of 30 December 2016, we set aside the order of the Judge but we did not dismiss the judgment summons of 13 August 2014. Instead, we remitted the judgment summons to the Family Court and directed it be proceeded in accordance with the law and procedures as set out in our judgment; The intended appeal by the Respondent is on our decision to remit the case to the Family Court; We also directed that the Family Court should process the variation summons first before it considers the remitted judgment summons; Given the imponderables as to the outcome of the variation summons, the course of the remitted judgment summons is uncertain and it may not be profitable to consider an appeal against the remittance; Further, by reason of our analysis at [58] of the main judgment, the outstanding arrears that can validly constitute

the subject matter under the judgment summons is $220,000: see [120] of the judgment; In light of our decision above with regard to the release of the bail money of $200,000 to the Petitioner to satisfy part of the judgment debt under the judgment summons, the arrear is reduced to $20,000; It is of course up to the parties to consider whether it is worthwhile to proceed with the remitted judgment summons in light of this (though the variation summons would have an independent life of its own). However, this is a matter which this Court is entitled to take into account in the context of the application for leave to appeal. Based on the attitude of the Petitioner when she appeared on her own before us, she was only concerned with obtaining maintenance payment for the children as ordered by the court and she did not pursue the application in order to procure the imprisonment of the Respondent. It should now be absolutely plain to the Respondent (as it should have been right from the hearing for bail) that the legal costs in these proceedings are totally out of proportion to the payment of his outstanding liability on maintenance. In such circumstances, if this Court were minded to grant leave to appeal to the Court of Final Appeal, we would seriously consider granting leave only on condition that the Respondent should pay the costs of the appeal covering not only his own costs but

also the costs of the Petitioner. Moreover, Question 2 is raised with a false premise: that this Court did not offer the Respondent a fair opportunity to make submissions on whether there should be a re-trial. It should be recalled that right from the very beginning of this appeal, the prospect of having a retrial was a live issue. Thus, this Court had every reason to expect counsel for the Respondent to be properly prepared to argue at the substantive appeal on whether there should be any retrial. Ms Lai advanced submission against the exercise of the power to remit at para 29 of her supplemental submissions of 10 August 2016. On 17 August 2016, Ms Lai repeated such submissions, principally relying on the double jeopardy principle, citing extracts from Arlidge, Eady & Smith. Ms Lai however did not cite the Irish authorities (on which Mr Ho now placed reliance). Nor did she cite to us HKSAR v Ng Chun To Raymond CACC 178 of 2010, Ting James Henry v HKSAR (2007) 10 HKCFAR 632 and LWS v TNN CACV 183 of 2010. In a recent judgment by another division of this Court, it has been explained why counsel should acknowledge in the application for leave new arguments are to be advanced in the intended appeal: see Jonathan Lu v Paul Chan Mo-po CACV 251 and 252 of 2015, 5 April 2017. Further, this Court may refuse leave on a new point even if it is a pure point of law as it is more

appropriate for the Appeal Committee to consider whether leave should be granted when it does not have the benefit of assessment of the new points by this Court: see The Law Society of Hong Kong v A Solicitor CACV 78 of 2014, 10 July 2015. Against these backgrounds, we are not minded to grant leave. We shall comment briefly on each question. Though Ms Lai had argued double jeopardy before us, the scope of her argument was much narrower than Question (1). Notwithstanding the benefit of citation of additional authorities, including the Irish cases, we are not satisfied it is reasonably arguable that the principle of autrefois acquit is applicable in the present circumstances. Mr Ho fairly and properly drew our attention to Duo v Osborne [1992] 1 WLR 611 which shows that it is within the power of this Court to remit the matter back to the Family Court. We are not persuaded it is reasonably arguable that Section 50 of the High Court Ordinance is unconstitutional. As we said, Question (2) is advanced on a false premise and it has never been canvassed before us. We do not read Ting James Henry v HKSAR (2007) 10 HKCFAR 632 as prescribing that in every case the Court must give an opportunity to a party to address it after handing down its substantive judgment on the question of retrial. In civil proceedings, we often hear submissions on such an issue together with other submissions on

a substantive appeal. As we see it, it is ultimately a matter of affording a fair opportunity to the parties to address the court. In the present case, the Respondent has been given a fair opportunity to address us on the question of remitting the matter to the Family Court. Nor do we read HKSAR v Ng Chun To Raymond CACC 178 of 2010 and LWS v TNN CACV 183 of 2010 as laying down absolute legal rules which prescribe against having a re-trial in circumstances like the present one. It is quite plain that the default of the Respondent was a serious one if it was wilful and the evidence we have seen does warrant a retrial. We did not spell it out in our main judgment because Ms Lai only contested a retrial by reference to the principle of double jeopardy. According to our guideline, the Petitioner would have to file a proper Statement before the committal process is pursued further. Question 2 is, in our view, not reasonably arguable. Question 3 concerns our analysis regarding the use of evidence obtained in the ancillary relief, variation or examination process in the committal process. With respect, we do not agree with Mr Ho that our holdings would destroy the very essence of the privilege against self-incrimination. We have set out our views in that regard at [90] of the main judgment. In any event, it is not a question which should be examined by the Court of Final Appeal in the

abstract. The proceedings in the Family Court have yet to reach a stage which provide proper factual basis for the question to be considered by the Court of Final Appeal. We do not see any exceptional circumstances to warrant this Court giving leave on the or otherwise limb. For these reasons, we refuse to grant leave and dismiss the Notice of Motion of the Respondent with costs. We are minded to do a summary assessment of the costs of these applications. We direct the Petitioner to lodge and serve statements of costs within 7 days to facilitate the same. The Respondent may lodge and serve his objection to such statements within 7 days thereafter. We shall give our assessment on paper. We further order that the Petitioner s own costs be taxed in accordance with the Legal Aid Regulations. (M H Lam) Vice President (Carlye Chu) Justice of Appeal (Jeremy Poon) Justice of Appeal Mr Edward HM Tang, instructed by Waller Ma Huang & Yeung, for the petitioner Mr Martin Ho and Miss Crystal Lai, instructed by Chan & Chan, for the respondent

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