W.Y.Y.P. v P.C. [2013] IESC 12 (28 February 2013)

Judgment Title: W.Y.Y.P. v P.C.

Neutral Citation: [2013] IESC 12

Supreme Court Record Number: 59/08

High Court Record Number: 2005 102 M

Date of Delivery: 28/02/2013

Court: Supreme Court

Composition of Court: Denham C.J., Clarke J., MacMenamin J.

Judgment by: Denham C.J.

Status of Judgment: Approved


Judgments by	Link to Judgment	Result	Concurring
Denham C.J.	Link	Appeal dismissed - affirm High Court Order	Clarke J., MacMenamin J.

Outcome: Dismiss

THE SUPREME COURT

[Appeal No: 059/2008]

Denham C.J.
Clarke J.
MacMenamin J.

Between/

W.Y.Y.P.

Applicant/Respondent

and

P.C.

Respondent/Appellant

Judgment delivered on the 28th day of February, 2013 by Denham C.J.

1. This is an appeal by P.C., the respondent/appellant, referred to as “the appellant” from the ruling and order of the High Court (Sheehan J.) of the 7th December, 2007, to make no order as to costs in the context of matrimonial proceedings.

Background facts
2. W.Y.Y.P., the applicant/respondent, referred to as “the respondent” was born in Hong Kong and the appellant was born in England. Both the respondent and the appellant hold passports from the United Kingdom. The appellant and the respondent met while both were working for a financial services company in Hong Kong and they married on the 10th September, 1991.

3. There are two children of the marriage: the first child was born on the 30th March, 1992, and the second child was born on the 10th December, 1993.

4. The respondent ceased work in 1991 and became responsible for the management of the household and the care of the children. The appellant retired early from his position in the financial services company in 2000.

5. The appellant instituted divorce proceedings in Hong Kong in January, 2002, and a decree absolute was granted on the 23rd July, 2002.

6. The appellant was granted custody of the children and leave to remove the children permanently from Hong Kong in the summer of 2002. However, access was granted to the respondent, who was a litigant in person.

7. The appellant and the children and the respondent moved to Ireland in 2002 and have been resident here since that time.

High Court proceedings
8. On the 16th December, 2005, the respondent brought an ex parte motion to the High Court (McKechnie J.) for leave to make an application pursuant to Part III of the Family Law Act, 1995, for ancillary relief following the divorce between the respondent and the appellant. Liberty was granted to issue an originating special summons against the appellant and costs were reserved. The need to apply to court for liberty arose because of the provisions of s. 523(3)(h) of the 1995 Act which requires the Court to be satisfied that there are substantial grounds for allowing the proceedings to be commenced and that the jurisdictional requirements of s. 27 were met.

9. The motion of the 16th December, 2005, was grounded by an affidavit of the respondent sworn on the 9th December, 2005. The facts averred in the affidavit constitute allegations that the appellant’s behaviour during the marriage and the divorce proceedings was psychologically and emotionally abusive and excessively domineering of the respondent’s activities.

10. In addition, at paragraph 45 of the affidavit, the respondent avers:

“I say and believe and am advised by my solicitors, who have consulted expert legal advice in Hong Kong, that had this Deponent participated in the Hong Kong Divorce proceedings and sought ancillary relief in that context, the Hong Kong courts would have possessed jurisdiction to make ancillary relief orders similar to those that can be made by both this Honourable court and by the English courts. I say and believe and am advised that in these circumstances, the orders that could have been made by the Hong Kong courts include maintenance pending suit, periodical payments, secured periodical payments, lump sum payments, transfer of property, settlement of property and variation of settlement orders. According to the expert advice received, I cannot now successfully apply for and obtain such orders in Hong Kong.”

11. The special summons was issued on the 21st December, 2005, and served on the 20th January, 2006.

12. On the 16th March, 2006, the appellant entered an appearance without prejudice to his right to contest the jurisdiction of the Court to hear and determine the proceedings.

13. On the 20th April, 2006, the appellant filed a notice of motion seeking an order, inter alia, setting aside the order of the High Court of the 16th December, 2005, which granted leave to the respondent pursuant to Part III of the Family Law Act, 1995.

14. The motion was grounded by an affidavit of the appellant, sworn on the 12th April, 2006. The appellant avers at paragraph 13 to 14:-

“I say and believe that the Affidavit sworn by the [respondent] is replete with falsehoods and untruths. In particular, I say that the averment made by her in paragraph 45 of her Affidavit that she could not seek any financial relief from the Courts of Hong Kong having regard to the Decree of Divorce which was made in July, 2002, is simply wrong and untruthful. […] I say and believe that it is apparent that the issue of Periodical Payments was left open to [the respondent] specifically by the Court and with her acquiescence and consent. In the circumstances her averment to the contrary in paragraph 45 of her Affidavit of 16th December, 2005, is at best mistaken, at worst misleading and false.

In the premises, the leave granted by [the High Court] was granted on a false and incorrect premise and accordingly the leave granted by [the High Court] should now be set aside.”

15. An exhibit to the appellant’s affidavit was a transcript of the court hearing in Hong Kong on the 29th May, 2002.

16. In the respondent’s replying affidavit, sworn on the 4th April, 2007, the respondent avers at paragraph 8:

“I say and believe that it is clear from the transcript exhibited by the [appellant] (which transcript I had no knowledge of until it was so exhibited) and the orders made that I was under duress and pressure at the time of the court proceedings and I also say it is as a result of the same duress and pressure that prior to the court hearing I waived my entitlement to make all claims against the [appellant] and that I have no remaining entitlement to seek by way of ancillary relief a secured periodical payment order, a lump sum order or property adjustment order of any nature whatsoever. I say it was my understanding I also could not seek any periodical payment order at a future date and it came as a surprise to me that there is a possibility that I could do so.”

High Court judgment and ruling
17. In a judgment of the High Court (Sheehan J.) of the 23rd November, 2007, the learned trial judge considered that the Court had jurisdiction to set aside leave granted pursuant to s. 23(3) of the Family Law Act, 1995, on a ground other than mala fides and adopted the principles set out by Hardiman J. in Adam v. Minister for Justice [2001] 3 IR 53

18. Sheehan J. found that:

“there has been a material non disclosure of a serious nature in the wife’s affidavit on foot of which leave was obtained. To use the words of McGuinness J. in [

Adam v. Minister for Justice]

this is a ‘plain case’. Accordingly I hold that the order of this court made on the 15th December, 2005, granting the wife leave to apply be set aside.”

Sheehan J. also considered whether, having set aside the original leave, he should grant fresh leave based on the facts which were before the court for the reasons set out in his judgment. Sheehan J. concluded that he should not grant said leave.

19. On the 7th December, 2007, the counsel for the appellant made an application to Sheehan J. for costs on three grounds: (a) costs normally follow the event; (b) the appellant brought the motion to set aside because the original application for leave was based on inadequate disclosure and it affected his interests; (c) part of the motion dealt with a part of the case that was withdrawn on the day prior to the motion’s hearing date.

20. The High Court ruled:

“My attention has been drawn to the Court report of the Irish Times on the 7th December, 2007. Mr Dominic Dunne took proceedings against the Minister for the Environment, Heritage and Local Government. The Chief Justice is quoted as saying ‘That costs went to the winning party unless the court ordered otherwise. There was no fixed rule or principle governing the court’s discretion on costs and no overriding principle which determined it should be exercised in favour of an unsuccessful plaintiff in specified circumstances, or in a particular class of case.’

I adopt the above remarks of the Chief Justice. It appears to me this Court has a discretion in relation to costs. I hold that in all the circumstances of this case, the just thing to do is to make no order as to costs.”

Notice of appeal
21. The appellant filed a notice of appeal on the 19th February, 2008, on the following grounds:

“i. That the learned High Court judge misdirected himself in law in refusing to grant [the appellant] his costs of the motion/hearing;

ii. That the exercise of discretion by the learned High Court judge in refusing to grant [the appellant] his costs of the motion/hearing was unreasonable and/or unjust having regard to the circumstances of the case and the outcome of the motion/hearing;

iii. That the learned High Court judge failed to give any reasons for the manner in which he exercised his discretion;

iv. That no reason existed in the particular circumstances why costs should not follow the event.”

Submissions
22. The appellant filed detailed written submissions. At paragraph 5 of the submissions it is stated:

“The primary argument that the appellant intends to rely on can be summarised as follows. The serious breach of the respondent’s duty to the Court, combined with the absence of the factors which would normally mitigate in favour of making no order as to costs in family proceedings (in substance this was a interlocutory procedural/jurisdictional matter, not a distribution of assets matter), and the appellant’s success in all matters before the Court, means that the learned High Court judge should have exercised his discretion in favour of awarding the appellant his costs, and that the arguments in favour of the exercise of his discretion in that fashion are so strong that [the Supreme Court] should intervene in that order.”

23. In the written submissions of the respondent, it is stated at paragraph 14:-

“The conduct of the parties is undoubtedly a factor that Sheehan J. was bound to take into consideration when determining costs. However, the respondent’s conduct is only one of a number of factors that he was entitled to have regard to. Material non disclosure on the part of a party does not necessitate an adverse costs order against that party (

Kerwin v. Aughinish Alumina Ltd

., Supreme Court, 20 February 2003). Sheehan J. retained his discretion as to costs and it is submitted that the conduct of the respondent cannot be characterised as a factor that renders Sheehan J.’s decision to make no order as to costs an improper exercise of that discretion.”

24. The Court heard oral submissions in the matter from counsel for the appellant and for the respondent.

Law
25. Order 99 of the Rules of the Superior Courts sets out the practice and procedure of the superior courts in relation to the award of costs in proceedings. Rule 1, sub-rules 1 and 4, of Order 99, as adopted at the time of the High Court’s ruling in these proceedings, provided:

“Subject to the provisions of the Act s and any other statutes relating to costs and except as otherwise provided by these Rules:

(1) The costs of and incidental to every proceeding in the Superior Courts shall be in the discretion of those Courts respectively.

[…]

(4) The costs of every issue of fact or law raised upon a claim or counterclaim shall, unless otherwise ordered, follow the event.”

26. The judgment to which the learned High Court judge referred in his ruling is Dunne v. Minister for the Environment [2007] IESC 60, [2008] 2 IR 775. This Court allowed the defendants’ appeal and ordered that the plaintiff should pay the defendants their costs in a constitutional challenge to s. 8 of the National Monuments (Amendment) Act, 2004. Murray C.J., as he then was, stated at pp. 783 to 784, paragraphs 26 to 27:-

“The rule of law that costs normally follow the event, that the successful party to proceedings should not have to pay the costs of those proceedings which should be borne by the unsuccessful party, has an obvious equitable basis. As a counterpoint to that general rule of law, the court has a discretionary jurisdiction to vary or depart from that rule of law if, in the special circumstances of a case, the interests of justice require that it should do so. There is no predetermined category of cases which fall outside the full ambit of that jurisdiction. If there were to be a specific category of cases to which the general rule of law on costs did not apply that would be a matter for legislation since it is not for the courts to establish a cohesive code according to which costs would always be imposed on certain successful defendants for the benefit of certain unsuccessful plaintiffs.

Where a court considers that it should exercise a discretion to depart from the normal rule as to costs, it is not completely at large but must do so on a reasoned basis, indicating the factors which, in the circumstances of the case, warrant such a departure. It would neither be possible nor desirable to attempt to list or define what all those factors are. It is invariably a combination of factors which is involved. An issue such as this is decided on a case by case basis and decided cases indicate the nature of the factors which may be relevant but it is the factors or combination of factors in the context of the individual case which determine the issue.”

27. The respondent relied upon Kerwin v. Aughinish Alumina Ltd, (Unreported, Supreme Court, 20th February, 2003) where the plaintiff had sued for breach of agreement by his past employers. The plaintiff won his action but it was accepted in the High Court that:-

“the plaintiff had started off his case on the basis which was wholly unfounded and that it was only towards the end of the eight or ninth day of the case, that the plaintiff put his case on a proper basis and that it would be unjust to saddle the defendant with the costs of all of that.”

However, the Supreme Court considered the entire course that the proceedings took and awarded the plaintiff the full costs of the proceedings.

28. In family law proceedings, Murray C.J. noted in Roche v. Roche [2010] IESC 10 that:-

“Litigation between spouses on issues related to the matrimonial relationship often gives rise to particular circumstances in which the Courts consider it just and equitable to depart from the general rule of costs following the event.”

29. In M.K. v. J.P.K. (No. 3) (Divorce: Currency) [2006] IESC 4, [2006] 1 IR 283, McCracken J. noted the Supreme Court’s reluctance to interfere in an award of costs by a trial judge but considered the justice of following, in a family law case, the general rule in actions for damages where a retrial had been ordered that the costs of a first trial should follow the result of a second trial and found it would be unfair and unjust if the respondent had to bear both sets of costs of the first trial out of the assets remaining to him after the provisions made for the applicant.

At p. 291, paragraphs 26 to 27, McCracken J. stated:-

“These are family law proceedings in which the court must have regard to the interests of both parties. This is not a case in which damages have been awarded to the applicant for some wrongdoing or injury caused to her by the respondent. In family law cases there is a pool of assets, comprising those of both the respondent and the applicant, which assets are to be used both to make proper provision for both spouses and any dependant members of the family and to pay the costs of both parties. There is no question of either party having further assets which could be used to pay costs. In my view, therefore, the general rule does not necessarily apply in family law proceedings.

It is indeed very unfortunate that the assets available to the parties have to be reduced by the amount of the costs of the first trial. In the circumstances of family law cases the court must look at the effect of the award of costs on both parties.”

Decision
30. The context of these proceedings is a family law matter. Although the motion concerned a jurisdictional point, the context of that motion is the financial maintenance of a spouse and other matters, including custody of the children.

31. In this case, counsel for the appellant stressed the conduct of the appellant and that the learned trial judge found there was “a material non disclosure of a serious kind” by the respondent; although, he held there was no evidence of mala fides.

32. The context of these findings is the consent order of the Hong Kong court of the 30th May, 2002, which was exhibited in these proceedings. Paragraph 3 relates to the respondent’s claims against the appellant, it states:

“The respondent’s claims for ancillary relief against [the appellant] and/or his estate for maintenance pending suit, secured periodical payments, lump sum provisions and property adjustment and property transfer provision, whether under the Matrimonial Causes Ordinance, the Matrimonial Proceedings and Property Ordinance, the Inheritance (Provisions for Family and Dependents) Ordinance or any other relevant Ordinance in any jurisdiction shall be dismissed upon the making of this Order.”

There is no reference to unsecured periodical payments in the Order and, in particular, there is no statement that a claim for unsecured periodical payments is preserved.

33. In order to understand the position in relation to unsecured periodical payments, it is necessary to examine the transcript of the hearing before the Hong Kong court. In an exchange between the Court and the respondent, it was stated:

“COURT: Now, I understand your concern. Or perhaps your first priority would be to be close to the children as much as possible so that you can see them regularly. And that may be – well, as I said, it may well be your first priority. Something so important to that you are prepared to give up your statutory right to claim maintenance against your former husband in the future, but which is the reason why I asked you what would you do or what would happen to you if I refused to endorse this particular clause.

I am still very unhappy about endorsing this particular clause. I have no problem with the other clauses in the agreement Because you are asking me to take away your statutory rights, which is one of the most important rights of yours which you were given by statute as a result of your marriage to your former husband. And to take that away from you, even by agreement without any other good reason, and knowing your limited financial position, I have to say I am very reluctant to do that.

[RESPONDENT]: I understand your Honour. That is no an important point to me if you don’t grant that. So long as we get our marriage resolved, and my former husband does not hold anything against me personally for – it’s not – I mean so long as he understands that I do not apply to have this – for you not to grant that, then I’m sure he will understand.”

The Hong Kong court then addressed counsel for the appellant who suggested that the claim for periodical payments for each party remain open. It was then stated:-

“COURT: Right. I know what, if you [Counsel for the appellant] simply just take out those two words, ‘periodical payment’ in clause 2 and 3, my clerk will make a copy of it, you give it to my clerk, and then I will direct that this case be put in a special procedure tomorrow.

[COUNSEL FOR THE APPELLANT]: Well, that would be very helpful, your Honour. I can do that now.

COURT: I will give you 10 minutes to sort this out and get [the respondent] to just initial the deletion to clause 2 and 3.

[COUNSEL FOR THE APPELLANT]: Right. Your Honour, it will hardly take 10 minutes.”

As stated previously, the respondent was a litigant in person at the Hong Kong hearing and as per the respondent’s affidavit of the 4th April, 2007, she avers that she did not have knowledge of the transcript, which was exhibited by the appellant; she asserts that she was acting under duress and pressure at the time of the Hong Kong court proceedings; and, that it was her understanding that she could not seek any periodical payment order at a future date.

34. While the conduct of a party is a factor for the trial judge, it is only one of a number of factors.

35. Material non disclosure by a party is a serious matter but it does not necessitate an adverse costs order: Kerwin v. Aughinish Alumina Ltd, (Unreported, Supreme Court, 20th February, 2003.)

36. In the instant case, the High Court had evidence of the order and transcript in Hong Kong; part of which has been set out earlier in this judgment. The position of periodical payments was not addressed in the order. While periodical payments were addressed in the transcript, the transcript does not wholly support the appellant’s position.

37. These matters were before the High Court and the learned High Court judge retained a discretion to exercise on the matter of costs.

38. It is an important factor that the High Court found that the respondent’s allegations of duress and undue influence were prima facie supported by the evidence.

39. The award of costs is an exercise of discretion of the trial judge, who has considered all the circumstances of the proceedings before her or him, and decided the issues. This Court is very reluctant to interfere with the exercise of such discretion.

40. In this case, the learned High Court judge had regard to the general rule and the discretion afforded to him not to follow the general rule when the interests of justice required it, especially in the context of matrimonial proceedings. The High Court exercised its discretion within jurisdiction.

41. I would not interfere with the order of the High Court. I would dismiss the appeal.

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