Pc Enterprises (HK) Ltd and Another v. Chan Wai Ching

DCCJ 375/2019

[2020] HKDC 722

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 375 OF 2019

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Before:  His Honour Judge KC Chan in Chambers (Paper disposal)

Date of the plaintiffs’ written submissions:  20 August 2020

Date of the defendant’s written submissions:  20 August 2020

Date of Decision: 27 August 2020

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DECISION

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1.The trial of this action could not be finished on 14 July 2020.  To finish the trial, an addition trial date on 7 September 2020 was fixed that day after consultation with all concerned.

2.On 17 July 2020, this court received a letter from the defendant personally, though she has been legally represented, asking that the trial date of 7 September 2020 be adjourned and re-fixed to 2021, the reason being that she was required by her employer in Mainland to stay there to handle the company’s finance and therefore could not attend on 7 September 2020 to finish her evidence.

3.This court then directed the defendant to make a formal and proper application within the next 14 days.

4.On 29 July 2020, the defendant issued a summons supported by her 6^th affirmation seeking the adjournment (“the Adjournment Summons”), which was fixed to be heard before me on 7 August 2020 (for 15 minutes).  By the defendant’s solicitors’ letter dated 31 July 2020 (a Friday), this court was informed that the parties have agreed to hear the matter substantively on that occasion, and this court so directed on 3 August 2020.

5.In the meantime on 31 July 2020, the defendant’s employment with the Mainland company was terminated. She therefore could now attend the last day of trial as scheduled.

6.By an email sent by the defendant’s trial counsel to the plaintiffs’ trial counsel late in the evening of 1 August 2020, the latter was asked to withhold all further work relating to the Adjournment Summons and was informed that the defendant would be seeking to withdraw it on the coming Monday.

7.On Monday 3 August 2020, the defendant’s solicitors’ by letter to the plaintiffs’ solicitors sought their consent to withdraw the Adjournment Summons.  It was there indicated that the defendant was willing to pay the costs of and occasioned by the Adjournment Summons to be taxed if not agreed.  The plaintiffs’ solicitors responded by letter the same day saying that they were agreeable to the withdrawal “on the condition that costs of and occasioned by the Application be assessed summarily for the sum of HK$124,000 and be paid forthwith” (original emphasis).  The plaintiffs’ statement of costs was there enclosed.

8.Failing agreement and by her 7^th affirmation filed on 4 August 2020 exhibiting the correspondence, the defendant applied ex-parte for the withdrawal of the Adjournment Summons and for the hearing on 7 August 2020 to be vacated.  So applying ex-parte by affirmation was clearly wrong procedurally.

9.In the circumstance and on the same day, this court first ordered the hearing on 7 August 2020 be vacated and then directed the defendant to issue within 3 days an inter-partes summons to seek leave for the withdrawal of the Adjournment Summons, which would be disposed of on paper, and that (failing agreement between the parties as to its disposal within 5 days of its issuance) parties were to file their short written submissions on or before 20 August 2020.

10.Pursuant to my said directions and on 6 August 2020, the defendant issued a summons seeking leave for the withdrawal (“the Withdrawal Summons”).

11.Parties then engaged in another round of correspondence trying to reach agreement.  In it the plaintiffs demanded a substantive response to their statement of costs, presumably in the form of objections to items with reasons, and also insisted that costs of preparing an affirmation in opposition incurred over the weekend (31 July to afternoon of 3 August) were payable.  The defendant replied essentially that such costs should be taxed and parties should not further spend time (and costs) on arguing these detail costs matters.

12.The parties therefore could not come to an agreement and submissions were filed.

13.This is my decision.

14.After CJR, parties are expected to act sensibly and reasonably in line with the underlying objectives.

15.In the present circumstances, clearly leave to withdraw the Adjournment Summons ought to and would be given.  The disagreement was on the question of costs.  The defendant all along offered to pay costs of and occasioned thereby to be taxed if not agreed.  However, the plaintiffs rejected it and

(a)  insisted initially (on 3 August), on payment by the defendant forthwith of costs “summarily assessed” at HK$124,000; and

(b)  after 6 August, insisted on essentially doing a summary assessment by correspondence to try to achieve an agreed sum.

16.Firstly, the plaintiffs were clearly not entitled to insist on the payment of the costs in the sum of HK$124,000 as a condition for giving consent.  The label of “assessed summarily” in the condition was superfluous and meaningless, as summary assessment is a process (albeit a summary one) for the court to determine the amount and in which the paying party is afforded a fair opportunity to be heard before the determination.  Thus, the plaintiffs’ condition was in fact a simple out-right demand to agree and then for payment forthwith of costs in the sum of HK$124,000.  The question of whether the costs should be summarily assessed (in its proper sense) was never really engaged in the parties’ negotiation for consent on 3 August 2020.

17.Moreover, I agree with the defendant that the amount of HK$124,000 is grossly excessive.

18.Secondly, I think it is trite and good sense that the receiving party cannot force on the paying party, against his wish, to spend time and costs to undergo together a sort of “taxation on correspondence” to try to achieve an “agreed” sum, which was what the plaintiffs’ solicitors were doing and insisting after 6 August, so as to force an agreement for a fixed sum.  If the plaintiffs’ stance was that such costs should be summarily assessed (in its proper sense), then it should have counter-proposed a costs order to that effect, which they never did.  I should also mention that even if the defendant were to agree to summary assessment and the parties by consent jointly applied for it, it would still be up to the court to decide whether it would so order.

19.Yet, the plaintiffs’ written submissions focus entirely on arguing that summary assessment ought to be ordered, which as analyzed and explained above, was not really the matter that divided the parties.

20.In my view, the plaintiffs had acted unreasonably (a) in withholding the consent sought in the defendant’s solicitors’ letter dated 3

August 2020 unless the defendant paid forthwith costs in the sum of HK$124,000, (b) in insisting against the defendant’s wish to conduct “taxation over correspondence”, and (c) in refusing the defendant’s offer all along to pay taxed costs.  Had the consent been not so unreasonably withheld, the application for leave to withdraw could have been sensibly disposed of by consent in a timely manner with minimal time, costs and judicial resources, and without the need even to issue the Withdrawal Summons.

21.I therefore order:-

(1) Leave be given to the defendant to withdraw the Adjournment Summons;

(2) Costs of and incidental to the Adjournment Summons incurred up to and including 3 August 2020 be paid by the defendant to the plaintiffs to be taxed if not agreed (for the avoidance of doubt, with no certificate for counsel; and without prejudice to the defendant’s argument in taxation that preparation work ought to have been put on hold upon receipt of her counsel’s said email); and

(3) Costs of and incidental to the Adjournment Summons incurred from 4 August 2020 onwards and costs of the Withdrawal Summons be paid by the plaintiffs to the defendant to be taxed if not agreed (again, for the avoidance of doubt, with no certificate for counsel).

22.I would not order summary assessment of the above costs as the action is coming to a close and these costs could be assessed together with the other costs of the action in one convenient go.

GPS McQuhae LLP, for the 1^st plaintiff and 2^nd plaintiff

TKC Lawyers, for the defendant