Hong v Smith
[2025] NZHC 770
•3 April 2025
NOTE: PURSUANT TO S 182 OF THE FAMILY VIOLENCE ACT 2018, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-2524
[2025] NZHC 770
UNDER the High Court Rules 2016 IN THE MATTER
of an appeal from a decision of the Family Court at Manukau
BETWEEN
LUCY HONG
Appellant
AND
SPENCER SMITH
Respondent
Hearing: 18 March 2025 Appearances:
K Koo and S Lye for Appellant S Gallagher for Respondent
Judgment:
3 April 2025
Reissued:
9 April 2025
JUDGMENT OF BECROFT J
This judgment was delivered by me on 3 April 2025 at 2pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors/Counsel:
Koo Telle Lawyers, Auckland Righteous Law, Auckland
HONG v SMITH [2025] NZHC 770 [3 April 2025]
What this case is all about
[1] Ms Lucy Hong1 appeals against Judge Goodwin’s refusal to grant her costs in respect of a substantive hearing in the Manukau Family Court.2 In the substantive hearing, she obtained a protection order, but not an occupation order or ancillary furniture order, against her then husband Mr Spencer Smith.3
[2] She argues, in brief, that Judge Goodwin wrongly exercised his discretion not to award her costs and was at fault in his decision-making process.
What led up to the costs decision?
Temporary orders obtained
[3] On 20 February 2020, just before the Covid-19 lockdown, Ms Hong was granted orders under the Family Violence Act 2018 (Act), on a without notice basis, as follows:
(a)a temporary protection order (TPO) which included her father as a protected person;
(b)a temporary occupation order for a Howick address (the House); and
(c)a temporary ancillary furniture order at the same address.
[4] Mr Smith filed a notice of intention to appear and an objection to attend an appropriate programme.
[5] Soon after, he filed an interlocutory application for variation of the TPO to allow for the collection of his personal items from the House. The application was resolved in his favour. Costs were reserved.
[6] A substantive hearing, to determine if the orders would be made final, was eventually set down for April 2024.
1 The names of the appellant and respondent have been anonymized in this judgment with the use of fictious names.
2 [Hong] v [Smith] [2024] NZFC.
3 [Hong] v [Smith] [2024] NZFC.
Settlement offers
[7] On 4 March 2024, shortly before the hearing, Ms Hong’s lawyers wrote to Mr Smith’s lawyers, amongst other things, making a final offer to resolve the family violence claim upon the following conditions:
(a)Mr Smith provides no contact undertakings to Ms Hong upon standard terms of a protection order; and
(b)Ms Hong withdraws her application to make the interim protection order final with no issue as to costs.
[8] Ms Hong’s lawyers noted that they expected actual costs for the hearing would be approximately $80,000 plus GST. The offer remained open until 18 March 2024.
[9]The letter was marked “without prejudice save as to costs”.
[10]No response was received.
[11] However, on 25 March 2024, Ms Hong’s lawyers again wrote with a final offer that differed from the previous offer and was on the following terms:
(a)Mr Smith provides no contact undertakings to Ms Hong upon standard terms of a protection order;
(b)Mr Smith consents to Ms Hong and her daughter remaining in occupation of the House until the resolution of the parties’ relationship property disputes without prejudice to Mr Smith’s position in relation to the relationship proceedings; and
(c)Ms Hong withdraws her application to make the interim protection order final with no issue as to costs provided the offer is accepted by 02 April 2024. Settlement is conditional upon the parties entering into a settlement agreement on terms acceptable to both parties.
[12] Mr Smith’s lawyers responded briefly on 3 April 2024. They made a counteroffer: in return for Ms Hong discontinuing not only her protection order application but also any relationship property proceedings together with the removal of all claims lodged against Mr Smith’s properties. Mr Smith would not seek costs.
[13] I accept that “offer” amounted to a total rejection of Ms Hong’s claims. Perhaps, unsurprisingly, it made the substantive family violence hearing inevitable.
Substantive hearing and judgment
[14] The substantive hearing began shortly thereafter, on 15 April. It occupied approximately four days and resulted in a detailed reserved decision.4 Judge Goodwin carefully considered all the evidence. He concluded:
Violence is established by Ms [Hong]. I find that Mr [Smith] acted in both a psychologically abusive and physically abusive way to Ms [Hong]. There is a pattern of behaviour, Mr [Smith] has acted in ways that are both controlling and have caused cumulative harm to Ms [Hong]. The violence that has occurred is over several years and is prevalent around allegations of infidelity and financial rights.
[15] However, on some of the allegations of violence and economic abuse, Judge Goodwin either made no findings or discounted Ms Hong’s allegations.
[16] The Judge held that a protection order was necessary for Ms Hong’s protection and concluded that the grounds for making a final protection order were made out. Judge Goodwin confirmed that Ms Hong’s father would remain a protected person under the protection order.
[17] The Judge then considered the occupation order. Ms Hong had submitted that, despite having resided in China for the past three years, she needed occupation of the House so that she had somewhere to live when she comes to New Zealand. The Judge accepted that Ms Hong would have to visit New Zealand for relationship property hearings, however he was not satisfied that she needed an occupation order for the House. The Judge noted that Ms Hong had received roughly the equivalent of $1.7 million as the result of a divorce settlement in China. Therefore, he was satisfied that
4 [Hong] v [Smith] [2024] NZFC.
Ms Hong had the financial means to house herself in New Zealand. He also noted that there was another Auckland property, albeit in need of repair, that Ms Hong could make use of while in New Zealand. He concluded that Ms Hong had failed to establish a reasonable need for occupation of the House. He ordered that the temporary occupation order as well as the temporary ancillary furniture order be discharged.
Costs in the Family Court – legal principles
[18] The Family Court has jurisdiction to award costs pursuant to the Family Court Rules 2002. Rule 207(1) provides that the court has a discretion to award costs. The court may apply any or all of the District Court Rules 2014 (DCR) relating to costs, which are listed in r 207(2) as far as applicable and with necessary modification.
[19] Rule 207(3) provides that r 207 is subject to the family law Act under which the proceeding is brought. Here, the relevant statute is the Family Violence Act.
[20] In Pyke v Sherriff,5 Woolford J undertook a comprehensive analysis of the approach to costs in proceedings under the Domestic Violence Act 1995—the predecessor to the Family Violence Act. His Honour found that r 207 did not change the approach to determining questions of costs in the Family Court, at least for proceedings other than those under Property (Relationships) Act 1976.6 The approach is to consider such questions by reference to the objects and purposes of the legislation applying in the particular case.
[21] In that case, Woolford J held that where an application for a protection order, brought in good faith, was ultimately unsuccessful, the principle that costs follow the event would be inconsistent with the purposes of the legislation. To award costs against the applicant could have a chilling effect on the bringing of applications in the first place. Therefore, he set aside an award of costs made against a woman who had discontinued her application for a protection order against her former partner and ordered that costs should lie where they fall.
5 Pyke v Sherriff [2017] NZHC 1990.
6 At [19].
[22] The approach to costs was also helpfully traversed by Edwards J in Harrison v Michelle.7 There, after the applicant for a protection order gave her evidence at the substantive hearing, the respondent consented to a final protection order without denying the factual basis for it. Scale costs at a 2B level were awarded against the male partner. He appealed that award. Edwards J, setting out the principles highlighted in Pyke, was satisfied that the Family Court did not err in such an award of costs.
[23] Mr Koo, ably assisted by Mr Lye, who appeared for Ms Hong, also drew my attention to NLM v SAM8 where an appeal against a protection order was dismissed but the appeal against the occupation order and the furniture order was allowed. Notwithstanding that the Judge had set aside the occupation and furniture orders, costs on a 2B basis were nevertheless awarded to the woman who had been successful in maintaining her protection order. Heath J felt that was “the most significant aspect of the appeal”. The appellant, Mr NLM, did not succeed on that part of the appeal. In those circumstances, Heath J considered that costs should be awarded in favour of Ms SAM, notwithstanding he had set aside the occupation and furniture orders. I do note this was costs on appeal and not costs for the first instance hearing.
The Family Court costs decision
[24] Mr Smith was granted costs on a 2B basis for his April 2020 application to vary the temporary ancillary furniture order mentioned at [5] above. The Judge regarded it as a one-off, stand-alone application. He said it should, and could, have been dealt with in a more appropriate and mature manner. Ms Hong could have consented, and it need not have necessitated a Family Court application. No issue is taken with this part of the decision.
[25] In respect of the substantive proceedings, Ms Hong relied on the 4 March letter as a “Calderbank letter” as part of her application for increased or indemnity costs. In considering that letter, the Judge noted that although it met all of the explicit requirements for a Calderbank offer as set out at r 14.10 of the DCR it lacked clarity
7 Harrison v Michelle [2021] NZHC 979.
8 NLM v SAM [2015] NZHC 935.
on the issue of occupation (and ancillary furniture). Indeed, it was silent on the issue— both in the context of the legal status of the application and the practical arrangements regarding occupation of the House. The Judge considered the occupation question was a crucial aspect of the hearing left unresolved by the letter. He observed that Ms Hong was in occupation of the House at the time and also noted the specific reference in the open letter later in March, as part of the “final offer”, for Ms Hong to remain in occupation of the House.
[26] Given the lack of clarity, Judge Goodwin considered the Calderbank letter lacked sufficient certainty for him to conclude that costs should be awarded on an indemnity or increased basis. He also concluded that, given the “neutral outcome of the proceedings”, there should not be any award of costs in the substantive proceedings. They should lie where they fell.
Approach on appeal
[27] An award of costs is an exercise of discretion. Accordingly, the High Court may only interfere with the Family Court decision if satisfied that the Judge acted on a wrong principle, failed to take into account some relevant matter, took account of some irrelevant matter or was plainly wrong.9
The argument on appeal and its resolution
[28] Mr Koo recognised from the outset the challenge in overturning the exercise of a judicial discretion. Undeterred by that task, he pointed to specific errors allegedly made by Judge Goodwin which either singularly, or when combined, meant that his decision was fatally flawed. I address them in turn. I note that many of them overlap.
[29] Broadly, Mr Koo and Mr Lye’s submissions highlighted two main “flaws” in the Judge’s decision. First, it was said that he erred in his consideration of the Calderbank offer. Second, it was said that he erred in his conclusion not to make any award of costs because the outcome of the proceeding was “neutral”. I address each in turn.
9 May v May (1982) 1 NZFLR 165 (CA) at 170; and Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32].
Did the Judge err in his consideration of the Calderbank letter?
[30] Counsel for Ms Hong made two main points under this head. First, they submitted that the Judge erred in deciding that the letter lacked clarity because it did not address occupation. Mr Koo said the letter was clear on its face. In support of this submission, counsel relied on s 116 of the Act which provides that an occupation order cannot be made without a protection order in place. Therefore, the letter did not need to address occupation; it was axiomatic that the occupation order would fall away. By erring in this respect, counsel submitted that the Judge did not then go on to undertake the analysis of whether accepting the offer would have left Mr Smith in a better position than he has achieved through the substantive Court judgment. In Mr Koo’s submission, he clearly would have been and the Judge ought to have taken that into account.
[31] With respect, I disagree with this submission. The Judge considered that the occupation issue was a “crucial aspect of the hearing”. The Judge had heard all the evidence and presided over the case. I am not prepared to substitute my assessment for his. In the context of the case, his assessment of the occupation issue as being crucial was his to make and well within his discretion to do so. I cannot and will not override his assessment. The Calderbank letter did not explicitly address that point. Therefore, it left open a significant question that would require resolution.
[32] I acknowledge Mr Koo’s point that if the protection order had been withdrawn, there would have been no basis for an occupation order, and for that matter a furniture order, as they each depend upon a protection order being made. Therefore, if Mr Smith had accepted the settlement offer, the occupation order and ancillary furniture order would have lapsed when Ms Hong withdrew her application to make the TPO final. However, the Judge was alive to this issue and expressly noted so in the judgment. The Judge’s view was that the silence as to the ongoing practicalities of occupation was significant especially given Ms Hong had occupation of the property at the time. The Calderbank offer therefore was only an offer to settle the protection order part of the proceedings. It was not at all clear how the other matters in dispute—the occupation order and furniture issues would be resolved. I consider the Judge was
entitled to come to that view, given he considered occupation was a crucial aspect of these family violence proceedings.
[33] Overall, I am not satisfied that the Judge erred in principle in deciding that the Calderbank letter lacked clarity. Nor was that part of the decision plainly wrong. His view that the letter left the practicalities of occupation unresolved was a perfectly legitimate reason for his discretionary decision declining to take the offer into account for costs purposes. I emphasise that r 14.11 of the DCR begins by stating “the effect (if any) that the making of an offer under r 14.10 has on the question of costs is at the discretion of the court.” The Judge articulated a clear reason for not taking the offer into account and he did not err in principle by doing so.
[34] Counsel’s second submission about the Calderbank letter is that the Judge took into account an irrelevant consideration when he referred to the subsequent open letter of 25 March. The Judge noted that the open letter included a position as to occupation, whereas the Calderbank letter did not. Mr Koo submitted that given the offer of 4 March was to lapse on 18 March, the Judge should not have considered the 25 March letter at all.
[35] In my view, the reference to the 25 March letter was simply to reinforce his already reached conclusion that occupation was obviously a live and unresolved issue and the 4 March letter failed to address it. The Judge was not wrong to refer to the 25 March letter, and there was no error in doing so.
[36] Overall, there is no demonstrated error in the Judge’s consideration of the Calderbank letter.
Did the Judge err in declining to make any award of costs?
[37] Counsel for Ms Hong relied on three main points in support of their jointly made submission that the Judge erred in failing to make any award of costs. First, the Judge failed to take into account the principles of the Act. Second, the Judge failed to consider reducing the award of costs under r 14.6 instead of declining an award altogether. Third, the Judge was plainly wrong in deciding the outcome of the proceeding was “neutral”.
[38] On the first point, counsel submitted that the Judge was required by r 207(3) to take into account the principles of the Act and failed to do so. Mr Koo and Mr Lye were particularly concerned about a failure to refer to s 3(a) and s 4(a), (h), and (o) of the Act, which provide:
3Purpose of this Act
Purpose
(1)The purpose of this Act is to stop and prevent family violence by—
(a)recognising that family violence, in all its forms, is unacceptable.
…
4Principles
The following principles are to guide the achievement of the purpose of this Act:
(i)family violence, in all its forms, is unacceptable:
…
(h)perpetrators of family violence should face effective responses to, and sanctions for, family violence:
…
(o)access to the court should be as speedy, inexpensive, and simple as is consistent with justice.
[39] I agree that the Judge was required to take these principles into account. Self- evidently, he did not explicitly do so. However, the Judge is a very experienced Family Court Judge and can be taken to well know these provisions. In any case, a costs decision should not stand or fall on whether or not there has been some form of “incantation” or recitation of the words of r 207(3). The real question is whether the decision can be demonstrated to have been necessarily different if those objects and purposes had been explicitly applied. Ms Hong’s counsel submitted that it would have.
[40] In the circumstances of this case, it is hard to see how that would be so. It was not a situation, for instance, as the Judge noted, where one party had been successful and the other not. The comments made by Woolford J in Pyke, in my view, would not have advanced the decision here. At least, it would not have advanced the decision given Judge Goodwin’s assessment that each party had been successful and unsuccessful in terms of the overall case. Judge Goodwin needed to analyse the details of the Calderbank letter and the outcome of the case—which he regarded as neutral. It is not as if explicit application of the objects and purposes in this situation would necessarily have resulted in a “slam dunk” for Ms Hong’s argument. In other words, I cannot see how explicit reference to the purposes and principles of the Act would
have made any difference. Therefore, I am not satisfied there has been any error of law or failure to take into account a relevant consideration in this respect.
[41] On the second point, counsel submitted that the Judge erred by failing to consider making a reduced award of costs to Ms Hong under r 14.7. This argument rests on the assumption that Ms Hong was the successful (or at least significantly successful) party and was prima facie entitled to some costs. However, that is not how the Judge saw the matter. He considered that each party had a measure of success such that the result of the proceeding was neutral so that costs should lie where they fell. In those circumstances, a Judge is not required to consider a smaller award of costs to one party. I am not satisfied the Judge fell into any error by failing to explicitly consider r 14.7.
[42] Finally, counsel submitted that the Judge was plainly wrong in his decision that the outcome of the proceeding was neutral. What I understand the Judge to have meant by that, is that while Ms Hong was successful in obtaining a final protection order, she was unsuccessful in obtaining an occupation order for the House (which he described as a crucial aspect of the case).
[43] On the other hand, while a protection order was made against Mr Smith, the hearing could be regarded as successful from his point of view to the extent that no occupation order was made in favour of Ms Hong.
[44] Judge Goodwin had already made his position clear on this aspect when he delivered his reserved decision. The final sentence of that decision reads:
In addressing any costs claimed, counsel and parties need to consider that both have been successful and unsuccessful.
[45] Thus, while the Judge did not put it this way, he regarded the success, or for that matter the lack of success, for each party, as being about 50/50.
[46] Mr Koo and Lye took strong exception to the Judge’s assessment. In their view, the crucial aspect of the case, for Ms Hong, was the protection order and the occupation issue must be considered as ancillary.
[47] At the most unfavourable from their client’s point of view, they would have thought that about 75 per cent of the case was directed towards the protection order and only 25 per cent devoted to the occupation issue.
[48] Ms Gallagher, counsel for Mr Smith, on the other hand, would assess the proportion as being 60/40, at worst for her client.
[49]All of this goes to show that perceptions may differ.
[50] The Judge had the advantage of hearing all the evidence and argument. In his view, not only was the occupation issue “crucial” but that in the end the outcome of the case was “neutral”. I cannot say that the Judge was “plainly wrong” in this decision. It may be, as was submitted, that other Judges may have awarded Ms Hong costs on a reduced basis to reflect her success in the protection order part of the case, but other Judges may have not. This just goes to show there is a wide discretion available to a Family Court Judge.
[51] Mr Lye relied heavily on NLM, where costs on appeal were awarded to the woman whose protection order was upheld. But in that case, Heath J was explicit in concluding “[t]he most significant aspect of the appeal was the challenge to the protection order.”10 That is not the situation here. Judge Goodwin’s finding was quite different. He concluded that the occupation issue was a crucial aspect of the case such that the result was neutral. NLM, based on different factual conclusions about the case, does not assist Ms Hong.
[52] I acknowledge Mr Lye’s strongly presented submission that the protection order issue was at the heart of the proceeding and, as Ms Hong was successful, she ordinarily would expect a costs order for that part of her case. But that was not the Judge’s assessment of the case.
10 At [33].
[53] Ms Gallagher was emphatic that the Judge’s decision could not be said to be plainly wrong. In her view, he addressed all the relevant matters. She submitted his was a very careful application of principle to the facts of this case. His decision was correct and entirely within the Judge’s discretion.
[54] Clearly Judge Goodwin brought his considerable experience and expertise in the Family Court to bear on the issue, and he reached an entirely supportable and understandable decision. By no means can I say it was plainly wrong in the sense that no other judge could have reached that conclusion.11
Result and costs
[55] Mr Koo and Mr Lye have been valiant in their arguments. However, none of the four recognised grounds for interfering with an exercise of discretion a court below have been made out.
[56]The appeal is dismissed. Judge Goodwin’s costs orders must stand.
[57] As to costs on this appeal, I repeat what I said to counsel during argument. Given the long history of this case, given the clear emotions still at play, given that Ms Hong’s arguments were brought in good faith, and given the need for finality, I conclude that costs should lie where they fall. There may be something of a paradox in all of this. But I record that Ms Gallagher, for Mr Smith, was responsibly inclined to accept it. The real issue for the parties is now the still unresolved relationship property issues. That is where their energy should be directed and not any longer on this case.
Becroft J
11 Hines v R [2024] NZCA 384 at [17].
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