Choy Yuen on, David v. Lam Kin Chung and Another

HCA 2599/2014 & HCA 110/2018
(Heard Together)

[2021] HKCFI 2290

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTIONS NO 2599 OF 2014 & 110 OF 2018

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BETWEEN

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Before: Hon K Yeung J in Chambers

Date of Written Submissions by the Plaintiff: 7 April 2021

Dates of Written Submissions and Reply Submissions by the 1^st Defendant: 16 March and 26 April 2021

Date of Decision on Costs: 6 August 2021

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DECISION ON COSTS

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1.By my Decision handed down on 4 February 2021 (the “Decision”), I allowed P’s appeal with conditions. I made a costs order nisi (the “Costs Order Nisi”) at §95.

2.By the letter of 10 February 2021 and the written submissions of 16 March 2020 by Mr Pow, D1 seeks an order varying the Costs Order Nisi as underlined and struck-through below:

“ (a) The costs of and occasioned by P’s Summonses be to D1 (in the sense as explained in §87(d) above, but excluding including the hearing before the Master);

(b) If P fails to meet the Condition, the costs of and occasioned by P’s Summonses, including the hearing before the Master and the appeals shall be to D1, with certificate for 2 counsel;

(c) If P meets the Condition, the costs of the hearing before the Master and the appeals shall be P’s costs in the cause, to be taxed if not agreed.  P shall pay to D1 50% of the costs of the appeals, or alternatively, there shall be no order of costs for the appeals.”

I will call for ease of reference the proposed variation to §(a) the “1^st Proposed Variation”, and that to §(c) the “2^nd Proposed Variation”.

3.In his written submissions in support, Mr Pow:

(a) cites a number of authorities (including re Elgindata Ltd (No.2) [1992] 1 WLR 1207 at 1214 and Chen Ningning v King & Wood (a firm) [2002] HKCFI 602 at §56) which I have considered;

(b) summarizes the grounds relied upon as follows:

(i) P’s conduct in these applications is lamentable and unreasonable;

(ii) P had failed to make any reasonable offer to Ds on costs that would become wasted by reason of the intended change of expert before issuing the Summons and had been extremely late in making concession on such wasted costs; and

(iii) P’s written arguments for the hearing have not been relied on by the Court in the Decision as the basis for allowing the change of expert.

4.In his 16-page submissions of 7 April 2021, Mr Chong opposes the application and submits as follows:

(a) In respect of P’s conduct, D1’s complaint of P’s delay in taking out the application is unfair and contrary to the evidence, and that until the second opinion had become available (30 October 2019) and properly digested, it would not be proper or prudent for P to make the application.  P has in any event been compensated in respect of the costs wasted;

(b) Whether P has made a reasonable offer for consideration of D1 to save costs is to be deduced from the steps taken by P in the course of the litigation.  Those steps are set out.  It is submitted that D1 ought to consent to P’s application with costs to be argued.  It is further submitted that D1’s conduct in resisting P’s application should also be put into the weighing scale;

(c) Certain matters raised in the written submissions made on P’s behalf have been accepted by this Court as “good reasons” supporting the application. In any event, in the exercise of its discretion in deciding the appeal, this Court was concerned with the overall factual background that have been placed before this Court;

(d) The overall consideration is what costs order would best serve the justice between the parties, that this Court has a complete discretion in the matter, that this Court has neither failed to exercise its discretion properly nor on erroneous basis, so that D1’s application must fail.

5.On 26 April 2021, Mr Pow filed his reply.

6.I agree with Mr Pow that the post-CJR regime affords the court wider discretion on costs matters in interlocutory proceedings, that costs to follow the event is just an option, and that Order 62 rule 5 has application.

7.I accept also Mr Pow’s submission that this being an application for variation of costs order nisi, the Court is entitled to look at the matter afresh, and that D1 does not have any burden of proving that this Court has erred in principle in granting the Costs Order Nisi.

8.I have considered P’s conduct highlighted by Mr Pow.  I regard the following as of particular importance:

(a) P’s complaint on the conflict ground, which P relied upon in support of his application, is in my view unsubstantiated afterthought;

(b) P’s delay in making the application, resulting in wastage of costs during the interim, coupled with his failure to make any clear offer to compensate D1 for those wasted costs until my exchange with Mr Chong during the appeal;

(c) D1’s opposition of the application is therefore reasonable;

(d) P is seeking the indulgence of the Court.

9.However, as I have pointed out in Chen Ningning at §57, it is important to draw a distinction between depriving a successful party of his costs on the one hand, and ordering him to pay the costs of the losing parties on the other.  For the latter, impropriety or unreasonableness on the part of the successful party has to be demonstrated.

10.I have ruled that there are matters which in my view lend support to P’s case that he has lost confidence in Charles Chan.

11.In all the circumstances, I regard as fair that I:

(a) refuse the 1^st Proposed Variation; but

(b) allow part of the 2^nd Proposed Variation, to the following extent:

“ If P meets the Condition, there be no order as to costs for both the hearing before the Master and the appeals.”

12.I make therefore a costs order absolute in the following terms:

(a) The costs of and occasioned by P’s Summonses be to D1 (in the sense as explained in §87(d) of the Decision, but excluding the hearing before the Master);

(b) If P fails to meet the Condition, the costs of and occasioned by P’s Summonses, including the hearing before the Master and the appeals shall be to D1, with certificate for 2 counsel;

(c) If P meets the Condition, there be no order as to costs for both the hearing before the Master and the appeals.

13.Neither party is entirely successful in the present application to vary, I make no order as to costs for the application.

Written Submissions by Mr K M Chong and Mr Alvin Chong, instructed by T K Tsui & Co, for the Plaintiff

Written Submissions and Reply Submissions by Mr Jason Pow SC leading Mr Peter K C Wong, instructed by Nixon Peabody CWL, for the 1^st Defendant