Fairmile Consultants Ltd v. Esquel Enterprises Ltd
Read the full judgment text of HCA 251/2019 on BabelCite. This High Court CFI judgment was delivered on 22 January 2020.
1. This is the application of Esquel Enterprises Ltd (“the defendant”) by summons dated 29 November 2019 (“the defendant’s summons”) to vary the costs order nisi granted on 15 November 2019.
Cited by 3 cases · Cites 7 cases
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HCA 251/2019 [2020] HKCFI 253 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 251 OF 2019 ________________ BETWEEN
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__________________________ DECISION ON COSTS _________________________ 1.This is the application of Esquel Enterprises Ltd (“the defendant”) by summons dated 29 November 2019 (“the defendant’s summons”) to vary the costs order nisi granted on 15 November 2019. 2.In the Decision dated 15 November 2019, the Court granted the defendant unconditional leave to defend and ordered nisi that costs of and incidental to the plaintiff’s application by summons dated 22 March 2019 for summary judgment against the defendant (“the plaintiff’s application”) be the defendant’s costs in the cause. 3.Reference should be made to the Decision for the Court’s reasons for rejecting the plaintiff’s various submissions and granting the defendant unconditional leave to defend. The defendant’s variation application 4.The thrust of the defendant’s is that the costs awarded in its favour should be payable forthwith. The summons seeks an order to the effect that:
5.The variation sought by the defendant is made on the basis that prior to issuing the summons for summary judgment, the plaintiff knew full well that the defendant relied on contentions which would entitle it to unconditional leave to defend. 6.Several months prior to the date of the writ issued on 18 February 2019 and the summary judgment summons on 22 March 2019, in response to the plaintiff’s solicitors’ letter before action advancing the plaintiff’s claim for commission, by letters dated 29 November 2018 and 28 December 2018 (“the defendant’s letters”) to the plaintiff, the defendant disclosed its defence to the plaintiff. 7.Thus, it was submitted that prior to the issuance of the Order 14 summons, the plaintiff was well aware that there were serious factual disputes between the parties as to whether there was a concluded agency agreement including the rate of commission and whether the plaintiff was the effective cause for the defendant’s acquisition of the premises. Those contentions entitled the defendant to unconditional leave to defend and hence the summons should never have been issued. 8.In any event, at the latest by 16 May 2019 when the evidence in opposition was filed (specifically the affirmation of Teresa Fung), the plaintiff was left in no doubt of the factual disputes of the parties giving rise to triable issues. Absent good reason for continuing with the plaintiff’s summons thereafter, the plaintiff should be ordered to bear the costs incurred by the defendant thereafter: see Alveiro Martini SpA v Bubble Retail Management Limited, HCA 1937/2008, [2009] HKEC 1635, 2 October 2009 where DHCJ L Chan (as he then was) stated (at §26) that:
9.Those observations were made following a reference (at §24) to Skink Ltd (In Liquidation) v Comtowell Ltd & Anor, CACV 74 of 1994 where Godfrey JA had opined (at p. 10) that “a plaintiff who starts O.14 proceedings believing that the defendant has no defence should be advised, as soon as a credible defence is shown, to give up trying to obtain summary judgment: to do so otherwise is simply to waste time and money.” 10.The defendant highlighted the Court of Final Appeal’s judgment in Liquidator of Wing Fai Construction Co (Compulsory Liquidation) v Yip Kwong Robert FACV No. 3 of 2011 (unrep. 24 May 2012) where Ribeiro PJ (at §7), noted that ordering costs to be “in the cause” might lead to “procedural laxity and a damaging proliferation of interlocutory or satellite litigation”. 11.In ordering an immediate taxation in the Wing Fai case, Ribeiro PJ approved the approach adopted by Lam J (as he then was) in Midland Business Management Limited v Lo Man Kui (No. 2) [2011] 2 HKLRD 667 where it was stated that:
12.It was submitted that the same rationale was applicable in the present case, warranting the variation sought. 13.The alternative variation put forward (see §3(b) above) is that, in any event, after the defendant filed its affirmations in opposition on 16 May 2019 clearly revealing the defendant’s defence, the plaintiff ought not have proceeded with its application. It was submitted that in respect of costs incurred after that date, an immediate taxation is warranted. 14.The plaintiff opposed the variation application on, inter alia, the following grounds: that
15.As to (i), the Court of Appeal’s endorsement of the standard order in Greater China Capital Inc (at §12.2) has to be read in conjunction with what was stated in §12.4:
Lam VP then referred to the Alveiro Martini SpA case, citing the failure to communicate in that case as an example. 16.It follows that the court is not bound to make the standard order in every case where it grants unconditional leave to defend. In an appropriate case, the court may depart from the standard order. Obviously, whether it ought to do so would depend on the facts of the particular case. The exercise of that discretion is particularly highly fact-sensitive and other decisions involving different sets of facts are seldom of assistance. 17.In so far as proposition (ii) is concerned, in Chen Lip Keong, the plaintiff’s summary judgment application was dismissed and were ordered to be in the cause. As Suffiad J explained, the reason for dismissal was only because the defence and counterclaim of the defendant had already been filed and it would have been futile for the court order unconditional leave to defend and not because the plaintiff should not have made such an application. 18.In that case, the judge ordered costs to be in the cause because the defendant failed to persuade him that the solicitor’s letter sent to the plaintiff prior to the application for summary judgment adequately showed that the defendant relied on an arguable defence. On that basis, it was not a case where the plaintiff knew before the issue of the summons that the defendant was relying on an arguable defence. Ruling on costs 19.Turning to the present case, it was all too clear from the affirmations filed for the hearing that the plaintiff’s application could not be determined without first determining the factual issues arising from the affirmations. While the court was taken through the evidence in great detail, the court was simply not in a position to conclude from the affidavit evidence, for example, whether there was any concluded agreement between the parties said to have been made “orally, by correspondence and/or by conduct from or about 12 to or about 26 March 2018”[1] entitling the plaintiff to summary judgment. 20.A more unsuitable case for summary judgment is difficult to imagine. Hence the court’s observation (at § 64) that it was not a suitable case for seeking summary judgment. 21.On any view, after the filing of the defendant’s evidence, the plaintiff should not have pursued its summons for summary judgment. By then, it was crystal clear that the factual disputes were not capable of summary determination. 22.In Harbour Hero Enterprises Ltd v Chau Nung Tai [2019] HKCA 565, in the context of setting aside a regular default judgment, the Court of Appeal endorsed the approach[2] of the court below: once the merits of the defendant’s case have been disclosed, the costs for resisting the setting aside application should follow the event and should be borne by the plaintiff. 23.Until the present application, the court was unaware of the defendant’s letters exhibited to the affirmation filed by Hung Kin Wing on 29 November 2019 in support of this application. Those letters make it clear that the defendant’s position throughout was that there was no concluded agency agreement including the rate of commission. 24.Had the court been aware of the defendant’s letters, the plaintiff’s summons might have been disposed of differently. 25.Having been reminded of the observations made in the Court of Final Appeal’s judgment in the Wing Fai case[3] and to the underlying objectives set out in Order 1A, rule 1(a) – (d), and in view of the order made, I consider this an appropriate case to order immediate taxation as regards costs incurred after 16 May 2019. 26.Accordingly, there will be an order in terms of paragraph 1 (b) (i) and (ii) of the defendant’s summons save with the deletion of the words “to be summarily assessed or alternatively” in (ii) thereof.
Written Submissions by Mr Thomas W K Wong, instructed by Wilkinson & Grist, for the plaintiff Written Submissions by Mr Kenny C P Lin, instructed by Vivien Chan & Co, for the defendant | |||||||||||||||||||
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