Wong To Yick Wood Lock Ointment Ltd v. Singapore Medicine Co. 星洲藥業 (A Firm) and Others

HCA 600/2014
HCA 595/2014
(Consolidated)

[2022] HKCFI 3706

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 600 OF 2014 AND 595 OF 2014

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(Consolidated pursuant to the Order of Registrar Lung dated 8 July 2016)

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Before:  Hon Wilson Chan J in Chambers

Date of last written submissions: 10 August 2021

Date of Decision on Costs: 12 December 2022

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D E C I S I O N  O N  C O S T S

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1.This is the plaintiff’s application to vary the costs order nisi by Summons dated 29 April 2021. The plaintiff seeks to vary the costs order nisi as set out at paragraph 124 of the Judgment herein dated 8 April 2021 ([2021] HKCFI 920) to the extent that the costs of this action (including all costs reserved, if any) be paid by the defendants to the plaintiff “on an indemnity basis” with certificate for 2 counsel.

2.In support of its application, the plaintiff prays in aid the legal principles on indemnity costs as succinctly summarised in New Century Credit Services Co Ltd v Yeung Hung [2020] HKCFI 2651 at §44:

“(1) The court has a broad discretion to determine the taxation basis. In order to obtain an order for costs on an indemnity basis, it is necessary to have some ‘special or unusual feature’ in the case.

(2) Indemnity costs are not confined to cases where the paying party’s conduct lacks moral probity or deserves moral condemnation for which the court wishes to express disapproval. Conduct which falls short of that can be so unreasonable as to justify an order for indemnity costs. But such conduct would need to be unreasonable to a high degree. Unreasonable in this context does not mean merely wrong or misguided in hindsight.

(3) Usually, merely pursuing a weak claim would not justify indemnity costs. On the other hand, to maintain a claim that one knows, or ought to know, is doomed to fail on the facts and on the law, is conduct that is so unreasonable as to justify indemnity costs.

(4) Ultimately what the receiving party must demonstrate is something in the conduct of the action or other circumstances of the case that ‘takes it out of the norm’ which warrants an order for indemnity costs.”

3.The court’s discretion to order indemnity costs is not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be “appropriate”: Practice Note 62/App/12 of the Hong Kong Civil Procedure 2023.

4.The defendants oppose the plaintiff’s application on the basis that this is an ordinary hostile litigation with no special or unusual feature and no reprehensible conducts that warrant a more generous than usual basis of taxation.

5.Having considered the written submissions lodged by the parties, I agree with the defendants that the plaintiff has the burden but failed to substantiate its claim that the defendants’ conduct in this action was “so unreasonable” that took the case “out of the norm”.

6.In short, I agree that the defendants’ conduct of these proceedings is no way near the “oppressive”, “unarguable”, “unmeritorious, unreasonable and improper” conducts condemned in the New Century case referred to above.

7.Accordingly, the plaintiff’s application for indemnity costs is dismissed, with costs of the application be paid by the plaintiff to the defendants, such costs are to be taxed if not agreed with a certificate for 2 counsel.

Written submissions by Ms Winnie Tam, SC, leading Ms Stephanie Wong, instructed by Messrs William W L Fan & Co, for the plaintiff

Written submissions by Mr Douglas Clark (solicitor advocate) and Ms Amanda PS Lee, instructed by Messrs Benny Kong & Tsai, for the 1^st to 7^th defendants