Ho Lai King v. Kwok Fung Ying and Another

HCA 305/2014

[2019] HKCFI 2737

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 305 OF 2014

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Before: Hon K Yeung J in Chambers

Date of Hearing: 18 March 2019

Date of Written Submissions by the Plaintiff: 15 April 2019

Date of Written Submissions by the 1^st and 2^nd Defendants: 25 April 2019

Date of Decision on Costs: 4 November 2019

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DECISION ON COSTS

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1.On 31 January 2019, I handed down my judgment (“Judgment”) granting Declarations #1 and #2^[1] sought by P and dismissing Ds’ Counterclaim. I made a costs order nisi (the “Costs Order Nisi”) that P shall have the costs of the Claim and the Counterclaim, to be taxed if not agreed.

2.Each side has taken out one summons for variation of the Costs Order Nisi. By Summons dated 14 February 2019 (“Ds’ Summons”), Ds seek an order that they shall have the costs of the action.  By Summons dated 22 February 2019 (“P’s Summons”) and supported by the 1^st Affirmation of Chu Kin Wing dated 11 February 2019 (“Chu/Aff#1”), P seeks an order that she shall have the costs of the action on an indemnity basis, to be taxed if not agreed.

3.Those summonses first came before me on 18 March 2019.  On that date, I gave directions on the filing of evidence and further submissions.  I directed further that the Summonses be dealt with on paper.

4.On 25 March 2019, Ds caused to be filed the affidavit of Sun Po, a partner of Messrs Yu Sun Yau Mak & Lawyers (“Sun/Aff” and “YSYM” respectively).  In reply P caused to be filed the 2^nd Affirmation of Chu Kin Wing dated 1 April 2019 (“Chu/Aff#2”).  Mr YL Cheung of P’s counsel on 15 April 2019 filed his submissions in support of P’s Summons and in opposition of Ds’ Summons.  On behalf of Ds, YSYM filed their submissions dated 25 April 2019. 

Ds’ Summons

5.I granted in favor of P Declarations #1 and #2.  I dismissed Ds’ Counterclaim.  Declarations #3 and #4 were refused merely because I had dismissed Ds’ Counterclaim, so that they had as a result became academic ^[2].

6.I have considered Sun/Aff and the submissions of YSYM.  I agree in this regard Mr Cheung’s submissions ^[3] that “…the basis (or justification, if any) deposed in [Sun/Aff] with regard to [Ps’] main claim (i.e. declaratory relief) is virtually non‑existent”.  The Counterclaim has also been dismissed.  I can see no discernible basis in support of Ds’ rather bold request for costs of the action. 

7.I dismiss Ds’ Summons.

P’s Summons

8.I have considered the authorities cited to me by Mr Cheung.  I have in particular considered Huge Dragon Corp Ltd v Lun Mun Oasis [2014] 3 HKLRD 286 wherein Jeremy Poon J (as he then was) explained that what constitute appropriate circumstances to award indemnity costs must be fact sensitive.  I have also considered Leung Lai Kwan v Lo Kai Wing [2015] 3 HKLRD 152 (per Deputy Judge Saunders at §§22‑24 ^[4]) and Choi Tak Man v Chan Yuk Lan Didi [2017] 5 HKLRD 619 (per Deputy Judge Anson Wong SC at §23), which support the proposition that an offer which does not qualify as a sanction offer can nonetheless be taken into account as a matter of discretional consideration as what is in effect a Calderbank offer.

9.Mr Cheung has also referred me to Order 62 rule 5 (in particular rule 5(e)) and the Underlying Objectives of Order 1A rule 1, which I have considered.

10.One important plank of P’s application is the non‑acceptance of the offers for settlement made by P to Ds. 

11.I have considered the relevant correspondence referred to in Chu/Aff#1 and Chu/Aff#2.  On 5 February 2015, a lump sum of RMB1,000,000 with no order as to costs was offered by P.  That offered amount was “tendered on the basis that roughly represents 1/3 of the compensation amount received by our client…The rest of 2/3 belongs to our client and [the Son]”.

12.Ds turned down that offer.  In a letter of 16 February 2015, YSYM said on Ds’ behalf that “The compensation money received by your client is RMB3,000,000, your client has orally agreed to split the compensation into half, and the same will be distributed to our clients.  In the circumstances, minimum amount of RMB1,500,000 should be offered by our client”.

13.What YSYM said therein appears to me to be referable to the Oral Agreement, and in particular the 4^th Pleaded Term ^[5] thereof.

14.I have stated ^[6] that on the existence of the 7 July Telephone Conversation, the contents of the same, and the existence of the Oral Agreement, I preferred D1’s evidence to that of P and her witnesses.  I have further found as a matter of evidence that the Oral Agreement existed ^[7].  I dismissed Ds’ Counterclaim on the issue of intention to be legally bound thereby.

15.In my view, whilst there can be no denial that Ds have (and have repeatedly) rejected P’s offer for settlement, that rejection will have to be viewed in the light of my findings on the existence of the Oral Agreement.

16.The alleged justification for P having pleaded and then subsequently withdrawn her claim based on nuisance has been gone into in some details.  That part of the claim was not before me.  Nor has the relevant evidence been tested.  I do not find it appropriate to go into them at this stage based solely on affirmatory evidence.

17.I have observed that Ds had been equivocal and inconsistent on the question as to Kwok Chun’s testamentary intent ^[8]. I take that into account.  I am however of the view that P can in terms of costs be adequately compensated therefor without any enhanced basis.

18.In all the circumstances, and on the facts of this case, I am not satisfied that this is an appropriate case for indemnity costs.

19.I dismiss also P’s Summons.

Disposition

20.In the circumstances, I dismiss both Summonses.  The Costs Order Nisi stands, and will become absolute.

21.I have dismissed both Summonses.  The appropriate costs order for me to make is no order as to costs.

Mr Cheung Yiu Leung, instructed by Wong Yuen Chi & Co, for the plaintiff

Mr Ho Siu Man of Yu Sun Yau Mak & Lawyers, for the 1^st and 2^nd defendants