Chu Yin Fan v. Inter Rivers Ltd

DCCJ 4314/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4314 OF 2012

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REASONS FOR DECISION

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1.By the decision handed down on 19 April 2017, I dismissed the plaintiff’s application for leave to appeal out of time against my decision (“the Decision”) dated 19 August 2016 and made an order nisi (“the Order Nisi”) that “costs of the plaintiff’s summons dated 5 September 2016 be paid by the plaintiff to the defendant with certificate for counsel, such costs to be taxed if not agreed”.

2.By summons (“the Summons”) dated 28 April 2017, the defendant applied to vary the Order Nisi to the extent that the costs be paid forthwith. 

3.After hearing submissions from the parties on 22 May 2017, I made an order in favour of the defendant.  I indicated that I should deliver the reasons for my decision which I hereby do.

4.Mr Wong who appeared for the plaintiff opposed to the defendant’s application and submitted that generally the costs of the interlocutory proceedings should be awarded to be “in any event” unless it appeared to the court that all or part of the costs ought to be taxed at an earlier stage (see Order 62, r 9D(1) & (2) of the RDC).

5.In this connection, considerations relevant to the court’s exercise of its discretion whether to order the costs of an interlocutory application to be paid forthwith could be summarised as follows:-

(a)  whether the proceedings in question were severable and self-contained from the rest of the action;

(b)  the justice of making the costs order having regard to the effect on the respective parties’ cash flow.  In this regard, it was stated in the Affirmation of Yuen Kwong Keung[1] dated 5 September 2016 that the plaintiff was not a person of means and had to make arrangement with her husband to pay for the legal fees.  This statement however in my judgment was too general and could not be taken to mean that the plaintiff would be unable to meet her liability to pay costs;

(c)  whether the amount at stake was sufficient to justify the expense of a separate taxation (this consideration is of little significance if a summary assessment of costs is to be ordered by the court);

(d)  the underlying objectives in Order 1A, r 1 of RDC.  In particular, Lam J, as he then was, said in Midland Business Management Ltd v Lo Man Kui (No 2)[2011] 2 HKLRD 667 that,

“9.  Under the Civil Justice Reform, the court is encouraged to order immediate payment of costs of interlocutory proceedings and if possible by way of summary assessment of costs. The objective is to discourage unnecessary and disproportionate interlocutory applications. It is recognised that the lack of immediacy of orders to pay costs “in the cause” or “in any event” weakens costs as a sanction against unwarranted applications or resistance.......

12.  ...... after Civil Justice Reform the court is more astute to the impact of costs on legal proceedings and an order for immediate payment of costs will be made more readily as a discipline against unmeritorious interlocutory applications.”

(e)  the conduct of the parties, including the manner in which a party has pursued or defended his case or a particular allegation or issue.  As I found it, there was no such misconduct on the part of either party.

6.In the present case, I accepted that plaintiff’s application for leave to appeal was self-contained and severable from the rest of the action.  The eventual outcome of the trial of this action would not have any impact on the costs order made by the court at this stage.  I also considered that the plaintiff’s application was unmeritorious and in the circumstances it was justified to order payment of the costs without waiting for the conclusion of the action. 

7.However, given that the plaintiff has applied to the Court of Appeal for leave to appeal against the Decision, I consider it proper that there should be no execution of the costs order unless and until after the disposal of the plaintiff’s appeal by the Court of Appeal.  In effect, the defendant’s cost should be payable only after the conclusion of the plaintiff’s appeal.

8.I also invited parties to make submissions as to whether it was appropriate to order summary assessment of the defendant’s costs.  In this regard, Mr Wong largely repeated his previous submission that generally the costs of the interlocutory proceedings should be awarded to be “in any event” and should not be paid forthwith.  Having taken into account the nature of the plaintiff’s application and the length of the hearing involved, I considered that the assessment of the defendant’s costs should not be a complicated one. As such, I considered it appropriate to make a summary assessment of the defendant’s costs pursuant to Order 62, r 9A(1)(a) of RDC. 

9.By reasons of the aforesaid, I allowed the defendant’s application to the extent by ordering that:-

(a)  costs of the plaintiff’s summons dated 5 September 2016 be paid by the plaintiff to the defendant forthwith, with certificate for counsel; and

(b)  there be no execution of the costs order unless and until after the resolution of the plaintiff’s application for leave to appeal against the Decision by the Court of Appeal, or where leave to appeal against the Decision was granted, after the resolution of the plaintiff’s appeal against the Decision by the Court of Appeal, whichever of the two is later.

10.I also ordered that there be summary assessment of the defendant’s costs under Order 62, r 9A(1)(a) of RDC and made the following directions:-

(a)  the defendant shall within 7 days file and serve a statement of costs for summary assessment;

(b)  the plaintiff shall file and serve her statement of objections within 14 days thereafter; and

(c)  unless within 7 days thereafter either of the parties requests for an oral hearing, giving reasons for the same, the court will conduct the summary assessment on paper without a hearing.

Costs of the Summons

11.It was contented by Mr Wong that the plaintiff should be entitled to costs since the plaintiff was managed to resist immediate payment of costs which relief was sought by the defendant in the Summons.  Contrary to Mr Wong’s suggestion, I consider that it was the defendant who successfully persuaded the court to order payment of its costs without waiting until the conclusion of the action and substantially achieved what it asked for in the Summons.

12.In the circumstances and for similar reasons canvassed above, I ordered that:-

(a)  costs of the Summons be paid by the plaintiff to the defendant forthwith, without certificate for counsel; and

(b)  there be no execution of the costs order unless and until after the resolution of the plaintiff’s application for leave to appeal against the Decision by the Court of Appeal, or where leave to appeal against the Decision was granted, after the resolution of the plaintiff’s appeal against the Decision by the Court of Appeal, whichever of the two is later.

13.I also ordered that there be summary assessment of the defendant’s costs under Order 62, r 9A(1)(a) of RDC and made the following directions:-

(a)  the defendant shall within 7 days file and serve a statement of costs for summary assessment;

(b)  the plaintiff shall file and serve her statement of objections within 14 days thereafter; and

(c)  unless within 7 days thereafter either of the parties requests for an oral hearing, giving reasons for the same, the court will conduct the summary assessment on paper without a hearing.

Mr Tim Wong, instructed by Wong, Fung & Co, for the plaintiff

Mr Jeremy Cheung, instructed by Jimmie K S Wong & Partners, for the defendant