Canadian International Education Org Co Ltd and Another v. Karen Teresa Ferris Cole and Others

HCA 1683/2020

[2022] HKCFI 2725

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1683 OF 2020

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(by Original Action)

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(by Counterclaim)

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Before:  Mr Recorder Maurellet SC in Chambers (Paper Disposal)

Date of Written Submissions by the 1^st and 4^th Defendants:  26^th July 2022 and 23^rd August 2022

Date of Written Submissions by the 1^st and 2^nd Plaintiffs:  9^th August 2022

Date of statements on costs by the 1^st and 4^th Defendants:  23^rd August 2022

Date of statements on costs by the 1^st and 2^nd Plaintiffs:  24^th August 2022

Date of Decision: 28^th September 2022

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D E C I S I O N

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INTRODUCTION

1.On 8^th June 2022, I dismissed the summons issued by 1^st and 2^nd plaintiffs (“the Plaintiffs”) dated 23^rd July 2021 (“the Summons”) seeking summary judgment, but I reserved costs for the reasons explained below.

2.I also gave directions so that the trial could be heard expeditiously and provided tentative dates on which the matter could be tried. The matter is now fixed to be tried before me at the end of April 2023.

3.The 1^st and 4^th defendants (“the Defendants”) then filed a summons for leave to appeal against my decision to reserve costs on 21^st June 2022.

4.On 11^th July 2022, I directed that the matter be determined by way of written submissions at the first instance, and I would then determine whether to resolve the application on the papers or fix a hearing.

5.Having had the benefit of the written submissions from the parties, I have decided that it is both unnecessary and more appropriate both in terms of time and costs to determine the application on the papers.

Grounds of appeal

6.In their draft notice of appeal, the Defendants argue that I have erred in principle by reserving costs, notwithstanding that I had dismissed the Summons.

7.They point out that by reference to, O.14, r.7 of the Rules of High Court that where the case is not within the Order or where the plaintiff knew, before the issuing of the summons, that the defendant was relying on an arguable defence, the court may dismiss the O.14 application and require costs to be paid by the plaintiff forthwith. They go on to argue that on the dismissal of an O.14 application the normal costs order should be for the plaintiff to pay the cost of the summons to be to the defendant either on a forthwith basis or in any event.

8.The ‘event’ in this case would be the trial to be heard at the end of April 2023.

9.In so far as the first limb is concerned, it is argued that the Plaintiffs have failed to properly invoke the O.14 process as they had failed to file affidavit or affirmation evidence which is required under O.14, r.2 of the Rules of High Court.  There was no properly sworn and notarized affidavit evidence as required under the rules.  Thus the Defendants submit that while I rightly dismissed the Summons I should have made the usual costs order, which is said to be costs be payable by the Plaintiffs to the Defendants either forthwith, pursuant to O.14, r.7 of the Rules of High Court, further or alternatively, to follow the event under O.62, r.3(2A) of the Rules of High Court.

10.In addition, the Defendants submit that although they recognize the court had an unfettered discretion, that the discretion must be exercised judicially seeking to achieve practical justice in the particular circumstances of the case and that to simply reserve costs would lead to procedural laxity and “damaging proliferation of interlocutory or satellite litigation”.

11.I pause here to observe that I agree that any satellite litigation or unnecessary interlocutory application is undesirable and should be avoided. This is precisely why I have decided in the present case to fix trial dates so that the parties focus on the real issues to be determined and that judicial resources and the litigants resources are not disproportionately and unnecessarily used.

12.Finally,the Defendants submit that the effect of the court reserving costs is that unless and until the court makes a specific order dealing with them at the conclusion of the proceedings, these are not cost included in the action and therefore I have in effect deferred the decision about costs to a later occasion which is said to be against the normal principle that the winning party to an application should be entitled to costs forthwith.

Decision

13.Leave to appeal should only be granted if it could be shown that there are reasonable prospects of success for the proposed appeal. Reasonable, for these purposes, meaning more than fanciful but without having to be probable. Leave to appeal can also be granted if there are other reasons in the interest of justice why the appeal should be heard.

14.It is uncontroversial and I accept that on the dismissal of an O.14 application, the usual order would be for the plaintiff to pay for the costs of the summons to the defendant, either forthwith or in any event. As is evident from the above, the application was dismissed on the basis that there was an irregularity in terms of the lack of a properly sworn and admissible affidavit before me.

15.At that hearing, I had already indicated that the matter would be tried before me in a matter of months and that some of the materials may well be re-used, for example the affirmations could be largely reused as witness statements for the trial.

16.In terms of taxation if it had to be done it would not be obvious which costs would have been incurred in any event irrespective of whether or not an application for summary judgment had been taken out.  Given the relatively modest size of the claim, I had also indicated to the parties that I would probably be dealing with the costs of the whole proceedings myself after trial and it would make sense for everything to be dealt with at one go and in one composite judgment.

17.All in all, I accept it is perhaps possible that another order for costs could also reasonably have been made apart from the one that I made, namely, to decide not to decide immediately on costs, i.e. to reserve costs.

18.I do not however, with respect, accept that this was a conclusion which was reached outside the “generous ambit within which a reasonable disagreement is possible”, given that I have only decided to reserve that decision to a date which was going to be a few months away.

19.I have no hesitation in concluding that it would not in any event be in the interests of justice that the appeal should be heard. On the contrary it seems to me that precious judicial resources would be wasted by the Defendants wishing to have the matter dealt with now rather than in a few months’ time.

Conclusion

20.For those reasons, I will dismiss this application.

21.I will also deal with the cost of this discrete application on a gross sum assessment basis, on the basis of the schedule before me and using a broad brush basis, I order that the Defendants pay the Plaintiffs the costs of this application to be taxed on a gross sum basis in the amount of HK$65,000 to be paid within 28 days of today.

Mr Vincent Chiu, instructed by Yang Chan & Jamison LLP, for 1^st and 2^nd Plaintiffs (by original action)

Ms Tina Mok, instructed by CFN Lawyers in association with Broad and Bright, for the 1^st and 4^th Defendants (by original action)