Meniscus motion in a capillary tube is a very common type of flow in thermal management devices such oscillating and pulsating heat pipes. It is well known, that the thin film deposited on the wall, which is due to liquid shear force, plays a major role in heat and mass transfer of those devices. This study focuses on the hydrodynamics of this flow using a CFD axisymmetric model of a 1mm diameter capillary, with the approach of volume of fluid (VoF). The CFD-VOF approach is tuned to capture the liquid film deposition from a receding meniscus at different constant velocities. Due to high required grid resolution, the moving overset mesh technique is used. In doing so, a fine meshed domain consists of meniscus slides over the background domain with a coarse mesh. By using this technique, the number of cells and computational time reduced considerably in comparison with regular meshing approach. With water as a working fluid, the numerical results for the liquid film thickness, at different velocities, compare well with experimental data from the literature. The simulations also show that at higher capillary number, the axial location where the film thickness becomes constant moves away from the meniscus nose. The shear stress distribution indicates higher values near the meniscus compared to uniform film and liquid plug zones which is due to the interface curvature in this zone. Also, a recirculating flow was observed within the liquid film left behind the receding meniscus which could have favourable effects in terms of heat and mass transfer. The present work on hydrodynamics is the first step toward complete modelling of an oscillating meniscus with mass and heat transfer inside the capillaries.