Introduction
An order for security for costs requires a Plaintiff to pay into the Court an amount of money that the Court considers appropriate for the Defendant’s costs of the proceedings. Whilst it is common for a party to take out an application for security for costs in civil proceedings (such as shareholder disputes), it is rare for parties to matrimonial proceedings to apply for security for costs. In RM v SRM [2019] HKFC 93, Father applied for security for costs order against Mother to secure his costs in a proceeding concerning Mother’s application for relocation of their children. The Family Court concluded that the order for security for costs would only be granted under most exceptional circumstances against a party who is one of the parents in a children relocation case.
Factual background
Father (a British) and Mother (a Japanese) married in the United Kingdom in March 2004. Father, Mother and their first son (“G”) moved to Hong Kong in 2007 and Mother gave birth to another son (“L”) in August 2012 in Hong Kong. On 27 June 2014, Mother filed petition for divorce. Subsequently on 23 January 2015, Mother applied to have the boys relocated to Japan, her home country, but the Court gave judgment against Mother on 7 September 2016 (the “2016 Relocation Judgment”). On 28 September 2016, Mother returned to Japan with her new boyfriend. A decree nisi (namely, a tentative court order for divorce) and a final order for divorce were granted on 9 January 2017 and 16 June 2017 respectively.
Subsequently on 27 October 2017, Mother took out the 2nd relocation application (“Second Relocation Application”) to have G and L relocated. However, following the social investigation report, the international social investigation report, and a failed Children Dispute Resolution Hearing, the Mother subsequently changed her mind to apply for the relocation of L only. Father then took out the present security for costs application on 15 August 2018 for security of HK$750,000 under Order 23 of the Rules of the High Court (“RHC”).
It is noteworthy that Social Welfare Officer (“SWO”) is of the view that it is to the best interests of L and G to stay in Hong Kong under the care of their father, and it will be more favorable for L and G to reside in Hong Kong, where they maintain their social network. WSO also comments that L and G have been under the proper care of Father.
The law
Rule 3 of the Matrimonial Causes Rule, Cap 179A (“MCR”) states that RHC is applicable to matrimonial proceedings (including the present proceedings) with necessary modification. Steps are currently being taken to implement the security for costs provisions in matrimonial proceedings. Nevertheless, the matrimonial proceedings that involve children differ in a relatively material way from the normal civil proceedings.
Generally, in civil actions where the Plaintiff ordinarily resides out of Hong Kong, the Court will order security for costs to be paid if the Plaintiff does not have a high probability of success in the action and there is a real risk that the Defendant could not recover its costs if the Defendant wins.
Nevertheless, in civil proceedings, the general principle is that costs are to follow the event (i.e. the successful party is entitled to recover its costs against the losing party), whereas in children cases, generally there would be no order as to costs unless a party has been unreasonable or reprehensible in the conduct of litigation, according to TRL v WYY [2015] HKFLR 75.
In children cases, the Court may only make a party liable for the costs under “exceptional categories”, namely, the conduct of a party is highly blameworthy, or the party’s position or behaviour is extremely unreasonable. Moreover, costs will only be awarded against one of the parents if the Court regards it is in the best interests of the children. As such, the Court will only grant an order for security for costs if it is very likely that Mother would be ordered to pay costs in the Second Relocation Application.
The Family Court’s decision
Father argued that Mother’s perusal of the Second Relocation Application is a reprehensible litigation conduct since Mother is bound by the findings in the 2016 Relocation Judgement, and Mother is seeking to separate L and G which is against the interests of the children and unsupported by the SWO.
The Court held that Mother is entitled to file the Second Relocation Application and not debarred from re-issuing the same relocation application in the manner she did since the Court has an inquisitorial duty to consider the relevance of a previous finding and investigate into what is in the best interests of the children in children relocation case. However, the Court did opine that, unless there are strong and good reasons put forward by Mother for re-opening the findings by the Judge made in the 2016 Relocation Judgment, it fails to see how Mother would be allowed to not following the 2016 Relocation Judgment.
The Court also deems that there is not a high likelihood that Mother would be awarded an adverse cost order in her Second Relocation Application. This is because, firstly, the Court considers the 2016 Relocation Judgment was not a fairly balanced one and Mother was evidently highly criticized therein. Secondly, it also considers that the outcome of the Second Relocation Application would not be known until the Court has considered all the events happened prior to and subsequent to the 2016 Relocation Judgment, Mother’s childcare plan, and the financial situation of Father and Mother in trial.
As such, since it is not very likely that Mother will be ordered to pay Father’s costs in the Second Relocation Application if Mother loses in her application, it follows that Mother does not need to pay “security” for Father’s costs in the proceedings. The Court also considers that Mother’s conducts are not highly blameworthy or extremely unreasonable. Therefore, the Court refused to order Mother to pay security for costs.
Conclusion
This is the first case concerning an application for security for costs in application for children relocation whether in Hong Kong or in England & Wales. The reasoning of the Family Court implies that the Hong Kong Court would regard the best interests of the children as the first and paramount consideration, and will not easily order security for costs against one of the parents in cases involving children, unless there is exceptional circumstance to depart from such practice.
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This article was originally published on ONC Lawyers.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to a practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.