Tsang Hin Yi Hubert v. Cheung Lai Ping

DCMP 3110/2018

[2022] HKDC 366

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 3110 OF 2018

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Coram:  His Honour Judge H. Au-Yeung (Paper Disposal)

Dates of written submissions:  23 February, 9 & 17 March 2022

Date of Decision:  27 April 2022

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DECISION

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A.  THE APPLICATION

1.By a Judgment dated 11 February 2022 (“the Judgment”), this court made an Order for Sale in respect of the Property[1]. The terms of the order have been set out in paragraph 145 of the Judgment and I do not propose to repeat them herein, except to highlight that the net sale proceeds shall be shared between the parties equally. This court also made a costs order nisi that the defendant shall bear the plaintiff’s costs of the action (including all costs reserved), with certificate for counsel, to be taxed if not agreed.

2.On the basis of a sanctioned offer made by the plaintiff on 23 January 2019 (“the Sanctioned Offer”), the plaintiff applied to have the costs order nisi varied, pursuant to Order 22 rule 24 of the Rules of the District Court (“RDC”)[2], as follows:-

“(1) D shall bear P’s costs of the action (including all costs reserved), with certificate for counsel, to be taxed on the following bases if not agreed:-

(a) For costs up to and inclusive of 20 February 2019, on a party and party basis; and

(b) For costs from 21 February 2019 onwards, on an indemnity basis;

(2) Interest be paid by D on P’s costs incurred from 21 February 2019 onwards, at 4.5% per annum, for the period from 21 February 2019 up to the date of Judgment; and

(3) Costs of and incidental to this application for variation of the costs order nisi be paid by D to P to be taxed on an indemnity basis if not agreed.”[3]

3.The Sanctioned Offer was made by virtue of a letter dated 22 January 2019 sent by the plaintiff’s solicitors. It is evident that it was received by the defendant’s solicitors on 23 January 2019. The Sanctioned Offer provided that:

“1. The parties shall proceed to sell the suit property (‘the Property’) by private treaty;

2. The parties shall jointly instruct an estate agent to market the Property on the following terms:-

(a) The price shall be not less than $[amount to be agreed];

(b) Completion shall be 2 months from the date of the agreement for sale and purchase;

(c) The estate agent shall charge a commission of 1% of the sale price;

(d) The Property shall be sold with vacant possession;

(e) The stamp duty payable on the agreement for sale and purchase and the subsequent assignment shall be borne by the purchaser.

3. Messrs. Lo, Chan & Leung shall have conduct of the sale on behalf of the parties as vendor.

4. As a concession on the part of [the plaintiff], [the plaintiff] agrees to bear the estate agent’s commission in its entirety.

5. Upon completion of the sale of the Property, the net proceeds of sale, after deduction of all outstanding mortgage loan and incidental expenses (other than estate agent commission but including but (sic) legal fees and disbursements pertaining to the sale of the Property), shall be paid to the parties in equal shares Provided that the estate agent commission shall be deducted from [the plaintiff]’s share of the net proceeds and paid to the estate agent.”

(emphasis added)

B.  THE DEFENDANT’S GROUNDS OF OPPOSITION

4.The plaintiff’s application is opposed by the defendant on the following grounds:

“2.1 The offer made by P to D on 23 January 2019 (the ‘Offer’) did not constitute a valid sanctioned offer, as the Offer was not a genuine and realistic offer to resolve the dispute by agreement, but a tactical offer to secure indemnity costs and enhanced interest on costs.

2.2 Even if the Offer constituted a valid sanctioned offer, P has failed to do better than he proposed in the Offer, as required under O.22 r.24(1).

2.3 In any event, it would be unjust for the Court to make an order under O.22 r.24(2) and (3). Taking into account the factors set out under O.22 r.24(5)(a), (b) and (c), looking at the totality of the circumstances of the case, D submits that the Court should exercise its discretion not to impose sanctions.”[4]

C.  RULE 24

5.Rule 24 provides that:

“(1) This rule applies where—

(a) a defendant is held liable for more than the proposals contained in a plaintiff’s sanctioned offer; or

(b) the judgment against a defendant is more advantageous to the plaintiff than the proposals contained in a plaintiff’s sanctioned offer.

(2) The Court may order interest on the whole or part of any sum of money (excluding interest) awarded to the plaintiff at a rate not exceeding 10% above judgment rate for some or all of the period after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court.

(3) The Court may also order that the plaintiff is entitled to—

(a) his costs on the indemnity basis after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court; and

(b) interest on those costs at a rate not exceeding 10% above judgment rate.

(4) Where this rule applies, the Court shall make the orders referred to in paragraphs (2) and (3) unless it considers it unjust to do so.

(5) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3), the Court shall take into account all the circumstances of the case including—

(a) the terms of any sanctioned offer;

(b) the stage in the proceedings at which any sanctioned offer was made;

(c) the information available to the parties at the time when the sanctioned offer was made; and

(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated.

(6)   The power of the Court under this rule is in addition to any other power it may have to award interest.”

6.I am of the view that, where an application for variation of costs order nisi is made by relying on the effect of rule 24 (on the assumption that the sanctioned offer has complied with all the formal requirements imposed by Order 22 of the RDC), the court has to consider the application in 3 stages:

(1)  In the first stage, the court has to consider whether the operation of rule 24 is triggered by virtue of rule 24(1) by asking:

(i)  Is the defendant held liable for more than the proposals contained in the plaintiff’s sanctioned offer; or

(ii)  Is the Judgment against the defendant more advantageous to the plaintiff than the proposals contained in the plaintiff’s sanctioned offer?

(2)  If the hurdle under first stage is passed by the plaintiff, then in the second stage, the court has to consider whether it is unjust to make an order under rule 24(2) and (3);

(3)  If it is not unjust for the court to make an order under rule 24(2) and (3), then the court, in the third stage, would have to consider the precise orders to be made.

7.Viewed in such light, the arguments raised by the defendant are two-fold. Firstly, it is said that since the plaintiff did not do better than the terms of the Sanctioned Offer after trial, rule 24 is not triggered at all. Secondly, it was argued that even if the plaintiff has indeed obtained a more advantageous Judgment than the terms of the Sanctioned Offer, it is unjust for the court to make an order under rule 24(3)[5].

8.I should add that insofar as it was alleged by the defendant that the Sanctioned Offer was “invalid” for the reason that it was not “genuine and realistic”, I am of the view that this argument is misconceived. Whether the offer was a valid one is dependent on the question of whether the formal requirements under Order 22 were fully complied with (for example, pursuant to Order 22 rule 5 of the RDC), but not on the genuineness of the terms of the offer. However, as I shall explain further below, even if an offer is valid, the court still retains a discretion not to impose the consequences stipulated under rule 24, and it is at that stage (i.e. stage 2 as referred to above) that the genuineness of the offer would be taken into account.

D.  CONSIDERATION OF THE DEFENDANT’S GROUNDS

D1.  Is the Judgment more advantageous than the Sanctioned Offer?

9.The plaintiff submitted that he had done better than what he proposed in the Sanctioned Offer because while he had offered to bear the entirety of the estate agent’s commission in the sale of the Property therein, the court ordered by virtue of the Judgment that the parties have to bear such commission in equal shares.

10.Mr Ho for the defendant argued that, in making this submission, the plaintiff had disregarded other components in the Sanctioned Offer.

11.Firstly, the defendant highlighted the fact that the sale price under paragraph 2(a) of the Sanctioned Offer was not set at all, and therefore the Sanctioned Offer cannot be compared with the terms of the Judgment under which the minimum price of the sale was fixed at $10.5 million.

12.It should be borne in mind that, at the trial, the only main issue which the court had to resolve was whether the defendant had any beneficial interest in the Property. The price level at which the Property should be sold (if an order for sale were to be made) had never been an issue between the parties. In such circumstances, in my judgment, the court simply should not take the “minimum price” set in the Judgment (which was arrived at by mutual consent of the parties) into account when considering whether the Judgment is more advantageous than the Sanctioned Offer.

13.This argument is therefore rejected.

14.Secondly, Mr Ho pointed out that the terms of the Judgment did not provide for the obligation to pay stamp duty of the sale and purchase transaction. Hence, in theory[6], at the end of the day, the stamp duty payable might be borne by the parties as vendors and the purchaser jointly. It is said that, as such, it cannot be said that the Judgment is more advantageous than the Sanctioned Offer.

15.As Mr Ho recognised himself, it is only in theory that the stamp duty payable in the sale of the Property might be partly borne by the parties herein.

16.However, in reality, since it is the common practice in Hong Kong that purchasers in a sale and purchase transaction of land property would be responsible to pay for stamp duty, I am of the view that the theoretical situation is too remote to be taken into account.

17.This argument is therefore rejected.

18.Thirdly, the defendant submitted that since the Judgment provided a maximum amount that the plaintiff’s solicitors might charge in the sale and purchase transaction, this protection affords an advantage to the parties, and therefore the plaintiff did not do better after trial.

19.This argument is not understood. The question to ask is whether the plaintiff has done better after trial. Even if the conveyancing fee is a proper factor to be taken into account (I have some doubts about it because this was not one of the issues between the parties), it is clear that by virtue of the terms of the Judgment, the plaintiff has indeed done better, because the said cap on conveyancing fee did not appear in the Sanctioned Offer. In other words, the plaintiff was better protected by the order for sale in the Judgment.

20.Hence, this argument cannot assist the defendant.

21.I therefore hold the view that the Judgment is more advantageous than the Sanctioned Offer. The operation of rule 24 is triggered.

D2.  Is it unjust to make the orders sought?

22.Under stage 2 of the consideration, the court has to see whether it would be unjust to make the orders under rule 24(2) and (3). The burden to show it is unjust to make such orders falls on the defendant.

23.In this regard, Mr Ho invited the court to take the following matters into account:

(1)  the terms of the Sanctioned Offer (rule 24(5)(a));

(2)  the stage in the proceedings at which the Sanctioned Offer was made (rule 24(5)(b)); and

(3)  the information available to the defendant at the time when the Sanctioned Offer was made (rule 24(5)(c)).

24.I will consider these matters in turn below.

D2.1 Terms of the Sanctioned Offer

25.The defendant submitted that the Sanctioned Offer was not a genuine and realistic offer because, by merely offering to bear the entirety of the estate agent commission in the Sanctioned Offer, the plaintiff was in effect asking the defendant to settle for 100% of his claim. It was said that this was therefore just a tactical step taken by the plaintiff, which was designed to secure the benefit of the incentives under rule 24.

26.Mr Ho had drawn this court’s attention to the case of Gill Ajmer Singh v Wah Hing Scaffolding Engineering Limited & Another [2014] 1 HKC 495 in which Deputy Judge R Lai, among other things, referred to what Jonathan Parker LJ held in the English Court of Appeal case Huck v Robson [2003] 1 WLR 1340 that:

“it is in my judgment implicit in r 36.21 that, consistently with the philosophy underlying Pt 36 (to which I have already referred), in order to qualify for the incentives provided by paras (2) and (3) of the rule, a claimant’s Pt 36 offer must represent at the very least a genuine and realistic attempt by the claimant to resolve the dispute by agreement. Such an offer is to be contrasted with one which creates no real opportunity for settlement but is merely a tactical step designed to secure the benefit of the incentives. That is not to say that the offer must be one which it would be unreasonable for the defendant to refuse; that would be too strict a test, and would introduce considerations of punishment and moral condemnation which (on the authority of Petrotrade Inc v Texaco Ltd [2001] 4 All ER 853, [2002] 1 WLR 947 and McPhilemy v Times Newspapers Ltd (No 2) [2001] 4 All ER 861, [2002] 1 WLR 934) are irrelevant in the context of para (3) of r 36.21. Indeed, the terms of the offer may reflect a degree of optimism and confidence on the part of the claimant/offeror. Provided only that the offer represents a genuine and realistic offer to resolve the dispute by agreement, it is for the claimant to decide at what level to pitch his offer. In some cases, an offer which allows only a small discount from 100% success on the claim may be a genuine and realistic offer; in other cases, it may not.”[7]

27.His Honour further quoted Tuckey LJ who stated in the same case as follows:

“I would however add that if it was self-evident that the offer made was merely a tactical step designed to secure the benefit of the incentives provided by the rule (eg an offer to settle for 99.9% of the full value of the claim) I would agree with Jonathan Parker LJ that the judge would have a discretion to refuse indemnity costs.”[8]

28.The cases of Gill Ajmer Singh and Huck v Robson were also referred to by our own Court of Appeal in Antwerp Diamond Bank NV v Brink’s Incorporated (No 2) [2015] 4 HKLRD 628. In resisting the variation of costs order nisi application, the 3^rd defendant therein argued that:

“The sanction offer offered only a miniscule discount (of only 0.27%) on the amount claimed, and should not therefore be regarded as a genuine offer which should attract the benefit of the Order 22 regime, particularly in light of the allegedly unsatisfactory way in which the claim was pleaded with the consequence that it could not be regarded as a strong claim so as to justify regarding the offer as a genuine one.”

(emphasis added)

29.The Court of Appeal had the following to say when it rejected such an argument:

“18.  The suggestion that in order to attract the consequences of Order 22, a sanctioned offer (or payment) must be a “genuine” rather than a “tactical” one was made by Tuckey LJ in Huck v Robson [2002] 3 All ER 263, at paragraph 71. In that case, which involved a claim for personal injuries arising out of a traffic accident, Tuckey LJ expressed the view that an offer that gave only a 0.1% discount on the amount claimed might be regarded as merely “tactical”, and thus not one that would attract the consequences of the English equivalent of Order 22. Further, in the same case Jonathan Parker LJ at paragraph 63 contrasted between offer which represented a genuine and realistic attempt to resolve dispute by agreement and offer which created no real opportunity for settlement but is merely a tactical step designed to secure the benefit of the incentives. The approach was applied by Deputy Judge Lai in Gill Ajmer Singh v Wah Hing Scaffolding Engineering Ltd [2014] 1 HKC 495 in an employee compensation case in which a respondent had made a sanctioned offer on the basis that the applicant shall discontinue with the claim.

19.  In Kai Min Fashion (HK) Limited v Fond Express Logistics Limited and anor [2013] 1 HKC 563, a misdelivery case (like the present) where a discount of 2% was offered, Recorder Jat SC said (at paragraph 14 of his judgment):

“… Huck v Robson was a traffic accident case and in that type of cases [sic] issues of contributory negligence often arise, making it uncertain as to the extent of the parties’ respective responsibility for the accident. Thus making a sanctioned offer of the kind described by Tuckey LJ may be seen as a tactical move. This case, on the other hand, is what may be called a “mis-delivery” case and claimants in such cases are often, and justifiably, confident of success if the carrier has delivered the goods without production of the original bills of lading. I do not see why the Plaintiffs should not offer a small discount in this type of case to reflect their reasonably justified confidence in the strength of their claims.”

20. In the present case, the extent of the discount offered is even less than that in Kai Min Fashion. But it does not follow that it would therefore be unjust to make orders of the sort envisaged by Order 22 rules 24(2) and (3). Just as in Kai Min Fashion, the Plaintiff here could well have genuinely regarded its claim as an extremely strong one (and there is no reason to suppose that it did not). We therefore do not think that the smallness of the discount offered of itself renders it unjust to make the orders which the Plaintiff seeks on the basis that the offer was to be castigated as merely “tactical”. Moreover, in this regard, we would, with respect, agree with the observations of Norris J in Wharton v Bancroft [2012] EWHC 91 at paragraph 22 that:

“The concept is not an easy one to apply. All Part 36 offers are tactical in the sense that they are designed to take advantage of the incentives provided by Part 36. A low offer in a case in which the offeror considers that the offeree’s position has no merit cannot be written off as self evidently ‘merely a tactical step’.”

21.  In this connection, there is no reason why a recipient of a sanctioned offer of a relatively small discount to the claim should not give it serious consideration. Such consideration may lead the recipient to respond with (from his point of view) a more realistic sanctioned offer or sanctioned payment. If this is done, the party who put forward the original sanctioned offer would have to give serious thought to this counter sanctioned offer or counter sanctioned payment. The process may go on and it may take several rounds of offer and counter offer before one gets to a point where an offer acceptable to both sides emerges. Even if that point is not reached, the process would have driven the parties (together with their lawyers) to give serious and realistic consideration to the possible options of settlement as opposed to the ordinary adversarial mindsets which unfortunately have a tendency to dominate the thinking of those involved in litigation. To that end, the whole process initiated by the original sanctioned offer can achieve what the sanctioned offer and sanctioned payment regimes are designed to achieve.

22.  For our part, while we would not rule out the possibility that there may be cases in which it would be appropriate to regard a purported sanctioned offer as being “not genuine”, so as to render it unjust to make orders of the sort envisaged by Order 22 rules 24(2) and (3), we do not regard the present case as falling within that category. We therefore do not think that it would be unjust to order, as provided for by Order 22 rules 24(3) and (4), that the Plaintiff’s costs of the trial incurred on or after 6 August 2011, should be paid by the 3^rd Defendant on the indemnity basis, and we shall vary the costs order nisi to so provide.”

30.In CEP Ltd v Wuxi Jiacheng Solar Energy Technology Co Ltd [2014] 4 HKLRD 44, the issue before Mr Recorder Jat SC was whether the sanctioned payment made by the defendant therein in the sum of $1,105 was so small (the sanctioned payment was described by the plaintiff therein (whose claim was dismissed in that case) as a “nominal offer”) that it was unjust to make an order under Order 22 rule 23(4) of the Rules of the High Court. In his Decision, his Lordship held that:

“10. […] I fail to see why a sanctioned payment for a nominal (or very small) sum is, in itself, unreasonable. The sanctioned payment was plainly made in order to protect the defendant’s costs position, and to put pressure on the plaintiff to take a realistic look at its claim. If the plaintiff had accepted the sanctioned payment, it would automatically be entitled to its costs up to that stage. It cannot be said that the sanctioned payment was not a genuine offer to settle the case. I see no reason to exclude such a payment from the ordinary operation of the rule.

11.  To accept the plaintiff’s argument would mean that a ‘valid’ sanctioned payment must be ‘substantial’ (as opposed to ‘nominal’) in order to attract the operation of Order 22, r 23. I am unable to add such a gloss on the rule. It would mean that a defendant who considers its case to be very strong might be deprived of the protection given by Order 23, r 23 unless it is prepared to make a ‘substantial’ (or at least more than ‘nominal’) sanctioned payment. In my judgment, there is no reason to introduce a qualification which is not only absent from the rule, but is contrary to the purpose of the rule itself. I do not find support for that approach from the cases relied on by the plaintiff: Singapore Airlines Ltd v Fujitsu Microelectronics (Malaysia) Sdn Bhd (No 2) [2001] 1 SLR 532 (Singapore Court of Appeal); AB v CD [2011] EWHC 602 (Ch D, Henderson J); Quinlan Brothers Ltd v Coady, 2012 NLTD(G) 194 (Supreme Court of Newfoundland, LeBlanc J). Indeed, Julstar Property Ltd v Hart Trading Pty Ltd [2014] FCA 108, 20 February 2014 (Federal Court of Australia, Greenwood J) at §§76-80, also cited by the plaintiff, seems to be inconsistent with that proposition.”

31.While the case of CEP Ltd concerned about a sanctioned payment, I cannot see why the same reasoning cannot be applied to a case where the offer was made in the form of a sanctioned offer.

32.On my part, I cannot see why the plaintiff’s Sanctioned Offer cannot be regarded as a genuine and realistic attempt to settle. The plaintiff could well have genuinely considered that he had a very strong case against the defendant.

33.Furthermore, as pointed out by the Court of Appeal, the defendant, upon receipt of the Sanctioned Offer, could have responded to the plaintiff with what she considered to be a more realistic settlement proposal. However, it is undisputed that she had never done that. She had simply ignored the plaintiff’s offer.

34.By reasons of the above, the terms of the Sanctioned Offer would not render it unjust for the court to make an order herein under rule 24(3).

D2.2  Timing of the Sanctioned Offer and the information available

35.The factors under rule 24(5)(b) and (c) can be dealt with together.

36.This action was initially commenced by way of an Originating Summons on 31 October 2018, which was followed by the plaintiff’s filing of his supporting affirmation on 27 November 2018.

37.On 7 January 2019, the defendant filed her affirmation in opposition, in which she alleged that:

“In order to achieve a break between us, the Plaintiff and I formed a common intention that the beneficial ownership of the Property would change; in particular, that the Plaintiff would gift all his beneficial share in the Property to me as remedy for the end of the said relationship.” (at paragraph 6 thereof)

38.On 21 January 2019, the parties filed a consent summons for, among others, an order that the Originating Summons shall continue as if begun by writ.

39.The Sanctioned Offer was made a day later on 22 January 2019[9].

40.At the end of the day, the plaintiff only filed his Reply and Defence to Counterclaim on 24 May 2019. In other words, he only disclosed his defence to the defendant’s case of common intention constructive trust (in particular, in reliance of the defendant’s email dated 13 September 2013) by then.

41.In the light of the above procedural background, it was argued by the defendant that it would be unjust for the court to order her to bear the consequences under rule 24 for not accepting the Sanctioned Offer.

42.The court’s attention was also drawn to the fact that the defendant’s case was rejected on the basis of the following information and/or documents which were only available to the defendant after the Sanctioned Offer was made:

(1)  The defendant’s email dated 13 September 2013;

(2)  Communications between the parties between 2013 and the commencement of these proceedings;

(3)  The evidence of the plaintiff’s daughter.

43.A similar argument had been made in Qvist Henrik v Clatronic Far East Ltd [2020] 1 HKLRD 703, and Mr Recorder Stewart Wong SC had the following to say while dealing with this argument:

“21. While I do accept that a defendant should not be required to make a decision whether to accept or to reject a sanctioned offer without a careful review of the case with proper information (and this is made clear by Order 22, rule 24(5)(b) to (d)), it is a question of fact in each case as to whether a defendant is able to do so when the sanctioned offer is made, depending on the nature and complexity of the case and the issues involved. Further, on receiving a sanctioned offer which a defendant considers he is unable to evaluate properly because of insufficient information or evidence, he should seek further information if possible. A balance must be struck between fairness to the defendant in that he should not be required to make a decision whether to accept a sanctioned offer without proper information to assess the merits of the case, and the spirit behind the sanctioned offer regime of encouraging settlement of actions as early as possible. The principle that a defendant ought to be allowed to make a decision with proper information must be applied with circumspection because it is always open to a defendant to say that the proper assessment cannot be made with only the pleadings, without full discovery and the exchange of witness statements. That is, on this argument, it can be said that no sanctioned offer ought to be made or accepted until quite an advanced stage of the proceedings are reached, which would be quite contrary to the whole intent behind the sanctioned offer regime.

22.  A defendant ought to make reasonable efforts to settle the matter as early as possible, and a defendant who does not react to an early sanctioned offer at all but simply sits on his hands without attempting to seek any further information required will need to convince the Court that he has not been acting unreasonably.”

44.First of all, I accept Mr Cheng’s argument that the information/document which the defendant referred to above should have been known to her:

(1)  The email dated 13 September 2013 was sent by the defendant herself;

(2)  The defendant admitted in court that she did receive the 2015 Email and the 2015 Letter[10];

(3)  It was the finding of this court that the defendant did not miss the SMS messages sent by the plaintiff to her in 2017/2018[11];

(4)  The evidence of the plaintiff’s daughter mainly covered the conversation between her and the defendant, and in particular what the defendant said in those conversations. The defendant should know well what she said herself.

45.The present situation must be contrasted from those cases in which, for example, the defendant could not assess the level of damages that the court would possibly award in favour of a plaintiff before the defendant had sight of the plaintiff’s medical report so as to have knowledge of the plaintiff’s extent of injury.

46.Secondly, the fact that the defendant did not ask for leave to accept the Sanctioned Offer out of time upon the completion of the discovery procedure or after witness statements had been exchanged herein shows that the defendant’s argument here is just an afterthought. She is just an opportunist who tries to make use of whatever excuse she can think of to avoid the potential grave consequences for failing to accept the Sanctioned Offer.

47.To conclude, I do not think it is unjust to make an order under rule 24(3) against the defendant.

E.  THE ORDER

48.As far as the terms of the costs order are concerned, Mr Ho for the defendant did not raise any objection against the order as proposed by Mr Cheng in paragraph 2 of his written submissions (except on costs of this application which I will deal with below). I therefore order that the costs order nisi made in the Judgment be varied to the following extent:

(1)   The defendant shall bear the plaintiff’s costs of the action (including all costs reserved), with certificate for counsel, to be taxed on the following bases if not agreed:-

(a)  For costs up to and inclusive of 20 February 2019, on party and party basis; and

(b)  For costs from 21 February 2019 onwards, on indemnity basis;

(2)   Interest be paid by the defendant on the plaintiff’s costs and disbursements (to be taxed on indemnity basis if not agreed) incurred from 21 February 2019 onwards up to the date of Judgment at 4.5% per annum.

F.  COSTS

49.The defendant submitted that the costs of the application herein should be taxed on party and party basis because it was reasonable for the defendant to resist this application. I do not think the question is whether the defendant is reasonable or not. In my view, since the costs for this application were incurred after the time when the defendant could have accepted the Sanctioned Offer without leave had expired, the same consequence under rule 24(3) should apply.

50.I therefore order that the defendant shall bear the costs of the plaintiff (including any costs reserved) of the application herein, with certificate for counsel, to be taxed on indemnity basis if not agreed.

Mr Henry Cheng, instructed by Lo, Chan & Leung, for the plaintiff

Mr Lok Ho, instructed by K B Chau & Co, for the defendant