Dragon Workshop Ltd and Another v. Treasure Express Industrial Ltd and Another

DCCJ 2497/2018 and DCCJ 4006/2018

(Consolidated)

[2022] HKDC 310

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NOS 2497 OF 2018 AND 4006 OF 2018

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BETWEEN

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(Consolidated by Order of Registrar Ho dated 16 October 2018)

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DECISION
(variation of costs order nisi)

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1.On 25 March 2022, this court handed down its decision giving leave to the defendants to amend their Re-Amended Defence and Counterclaim and ordering on a nisi basis that the costs of D’s Summons for amendment be to the plaintiffs but the defendants shall have the costs of the written submissions.

2.By their letter dated 30 March 2022, the plaintiffs applied for the variation of the costs order nisi to the extent that while the plaintiffs pay the costs of the defendants’ written submissions dated 23 February 2022 and 22 March 2022, the defendants are to pay the plaintiffs the costs of the plaintiffs’ written submissions dated 3 March 2022 (“Ps’ 1^st Submissions”) .

3.The plaintiffs’ contentions for this variation are, as I understand it:-

(a) The plaintiffs would not have opposed and submitted as they did in Ps’ 1^st Submissions had the defendants in the first place sought the amendments in terms of the revised draft;

(b) There was a great change of stance by the plaintiffs after the defendants were allowed on 9 March 2022 to substitute the original draft with their revised draft, to the extent that the plaintiffs effectively did not oppose the amendment after the revised draft was substituted;

(c) Ps’ 1^st Submissions were in fact helpful as they alerted the defendants to “rectify the defects” by putting in the revised draft; and

(d) The defendants should pay for the costs caused by their omission in not properly preparing the draft necessitating the introduction of the revised draft at a late stage.

4.Let me first set out the changes to the original draft introduced by the revised draft, which consisted of

(a) adding the formal legal basis for the implication of the terms by adding these words mutatis mutandis to paragraph 2(a) and 2(b) of the original draft:-

“and/or contractual duties and/or obligations which were implied by law and/or in order to give business efficacy to Lease A and/or to reflect the true intention of the parties and/or as an obvious inference from the express terms of Lease [A]”; and

(b) adding the following words to paragraph 13:

“If, which is denied, the Plaintiffs suffered from any loss and damage, it was caused by the said respect (sic) breaches of the Implied Terms in Lease A and Lease B by the 1^st and 2^nd Plaintiffs”.

5.I do not agree that the plaintiffs would not have opposed if the amendment was sought in the first place in terms of the revised draft (as the plaintiff is suggesting now) or that there was “a great change of stance” by the plaintiffs after the introduction of the revised draft.

6.Indeed, the plaintiffs first strongly opposed the defendants’ application to substitute the original draft by the revised draft. Then, when the substitution was allowed, they did not indicate that they would consent to leave being granted to amend in terms of the revised draft. Instead, they lodged their supplemental written submissions on 16 March 2022 pursuant to the leave granted by me on 9 March 2022 limiting the plaintiffs’ supplemental written submissions to “only addressing the parts newly introduced by the defendants in the Revised Draft”.

7.In 9 out of a total of 10 paragraphs in the supplemental written submissions, the plaintiffs continued to make the arguments along the line of those made in Ps’ 1^st Submissions (among others) as to how the defendants failed to give particulars. Then in paragraph 10 there, the plaintiffs said

“If the phrase “and/or to reflect the true intention of the parties” is deleted, Ps have no strong view against Ds’ application for re-re-amendment, but will claim costs of Ds’ Summons and amendment of their Summons to be assessed summarily forthwith …”. (my emphasis)

8.It was thus a conditional position. Moreover, an opposition that does not carry “strong view” is still an opposition and not an agreement or consent. Further, as understood against the limited ambit for this round of supplemental written submissions as directed by me, the plaintiffs were understood to be merely saying that they had no “strong view” regarding the newly introduced parts set out above if the said phrase is deleted. Thus, there remained the opposition to the introduction of the implied terms per the original draft.

9.In any case, I also rejected the plaintiffs’ position and argument that the words “and/or to reflect the true intention of the parties” ought not be allowed to be introduced in the amendment, and allowed the amendment per the revise draft.

10.That said, I agree that the belated introduction of the revised draft would necessarily have caused an increase in and wastage of costs which would not have been occasioned had a proper draft been prepared by the defendants in first place.

11.In the premises, I will not award to the plaintiffs their costs of Ps’ 1^st Submissions, but think it fair that the defendants should be deprived of part of their costs of the written submissions, which I assess in a broad brushed manner as below. Also, as per the plaintiffs’ request to clarify that which was indeed a slip, I will add back the words “and occasioned by” to the costs order nisi. Thus, the costs order nisi is hereby varied to: save that the plaintiffs pay to the defendants 80% of the defendants’ costs of their written submissions, costs of and occasioned by the defendants’ summons dated 11 February 2022 be to the plaintiffs, to be taxed if not agreed.

12.I think it fair that there be no order as to the costs of this application for variation, and so order on nisi basis.

Huen & Partners, for the 1^st and 2^nd plaintiffs

K H Mak & Co Solicitors, for the 1^st and 2^nd defendants