Elite Dragon Ltd v. Bel Global Resources Holdings Ltd

HCCL 8/2014
(formerly HCA 1903/2012)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 8 OF 2014

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D E C I S I O N

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1.By summons issued on 10 May 2017, the Defendant applied for the costs order nisi made in the Judgment of 25 April 2017 to be varied, and to seek costs to be paid by the Plaintiff, Elite Dragon Limited (“Elite”), on an indemnity basis.

2.As the Judgment was pronounced on 25 April 2017, the costs order nisi made in paragraph 148 (“Order Nisi”), that Elite and Sy Lai Yin Sunny (“Sunny”) are to pay to Bel Global Resources Holdings Limited (“BG”) the costs of the original action and of the counterclaim, with certificate for two counsel, became absolute on 9 May 2017, 14 days after the date of its pronouncement (O42 r5B (6), O3 r2 (2)).

3.O42 r5B(6) states that where a written decision is given pursuant to r5B, the court may make therein an order nisi as to costs “and, unless an application has been made to vary that order, that order shall become absolute 14 days after the decision is pronounced” (emphasis added).

4.In Man Wan Farming Ltd v Chief Executive in Council & Anor (No 2) [1998] 2 HKLRD 314, the Court of Appeal referred to the 14 days specified in r 5B(6) as a time limit prescribed by the RHC for the doing of an act (ie to make the application to vary), but held that such time could be extended under O3 r5 upon an application made for extension, and where it was shown that there was no real prejudice.  According to Man Wan Farming, therefore, an application to vary a costs order nisi should be made within the period of 14 days specified in r 5B(6).

5.In the case of RTX Products Hong Kong Ltd v Li Yiu Fai, unreported, HCA 1777/2009, 12 November 2014, Anthony Chan J held that in view of the fact that r5B(6) is expressed in imperative terms, that the order nisi “shall become absolute” 14 days after it was made, any disagreement as to a costs order which has been made absolute must be pursued on appeal.  Of course, that case was decided on the peculiar fact of the application to vary being made 3 years after the judgment had been perfected.

6.In the present case, the Judgment with the Order Nisi was pronounced on 25 April 2017, and was perfected by the judgment order being drawn up on 22 May 2017.

7.Accordingly, any application to vary the Order Nisi should have been made by 9 May 2017, and since no application had been so made, the Order Nisi became absolute 14 days after the pronouncement of the Judgement.

8.There has been no application made by BG to extend the period of 14 days specified in O42 r5B (6).  Hence, I accept the submissions made on behalf of Elite, that the Order Nisi already became absolute on 9 May 2017, and that the variation cannot be sought.

9.Should I be wrong, and the Court does have jurisdiction to consider an application made after the period of 14 days specified in r5B(6) to vary the Order Nisi, I decline to vary the Order Nisi to provide for costs to be paid on an indemnity basis.  The summons to vary the Order Nisi only seeks variation of the costs to be paid by Elite.

10.Costs are in the discretion of the Court.  Despite the findings made in the Judgment, as to the liability of Elite and Sunny for damages and to account for profits, Elite’s liability is essentially on the basis of Stephen Sy (“Stephen”)’s knowledge being imputed to his company, Elite (para 141 of the Judgment).  An order for costs to be paid by Stephen on an indemnity basis would have been appropriate in this case, but the action has been discontinued against Stephen.  Having considered the role of Elite in the case, I decline to order costs to be paid by Elite on the indemnity basis sought.

11.The application for variation of the costs order nisi is accordingly dismissed, with costs to Elite.

Charles Chu & Kenneth Sit, for the plaintiff (by Original Action and by Counterclaim to Counterclaim)/for the 1^st & 3^rd defendants
(by Counterclaim)

Ince & Co, for the defendant (by Original Action and by Counterclaim to Counterclaim)/ for the plaintiff (by Counterclaim)