Read the full judgment text of HCCT 33/2007 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 17 February 2017 before Hon L Chan J.
Costs — Indemnity costs — Dishonest and exaggerated claim — Instruction to Sub-contractor as conditional contract — Labour supply subcontract — Mismanagement by defendant — Court declined to order indemnity costs due to defendant's irresponsible conduct — Costs order nisi affirmed. The plaintiff, claiming HK$4,372,180.8 for labour and materials supplied under the KCRC East Rail Extensions contracts, relied on an Instruction to Sub-contractor dated 12 September 2003. The court held the ITS was conditional and required a confirming Work Order which was never issued; hence no binding contract arose. The plaintiff’s evidence was found unreliable and dishonest, with exaggerated claims unsupported by financial capability or accounting evidence. The defendant sought indemnity costs for the plaintiff’s conduct, relying on the precedent Choy Yee Chun v Bond Star Development Ltd. The court found that despite the plaintiff’s improper claim, the defendant’s management had been irresponsible by ignoring payment obligations and benefiting without payment for labour supplied. Punishment is not the civil courts' function, and ordering indemnity costs would be unjust. The defendant's alternative application for indemnity costs from 11 May 2016 was also refused. The $2 million paid into court by the defendant was ordered to be paid out to its solicitors. The defendant’s application to vary the costs order nisi was dismissed with costs awarded to the plaintiff for the application. The court’s reasoning emphasized balancing plaintiff's misconduct against defendant’s mismanagement, declining severe cost orders and maintaining fairness.
Legal issues: Indemnity costs order for pursuing dishonest claim · Whether ITS constituted a binding contract
Outcome: Application to vary the costs order nisi dismissed; defendant ordered to pay the costs of the costs application
Cited by 2 cases