ACCURATE CONTRACTORS & RENOVATORS COMPANY LIMITED (Claimant in the Arbitration) v EVANGEL COLLEGE SCHOOL MANAGEMENT COMMITTEE LIMITED (Respondent in the Arbitration)

Read the full judgment text of HCCT 78/2021 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 3 February 2023 before Master D To.

Costs taxation — Arbitration — Calderbank offers — Variation of costs order nisi. The Applicant claimed approximately HK$12.9 million in costs following an arbitral award but only about HK$5 million were ultimately allowed after taxation and review. Both parties exchanged a series of without prejudice settlement offers, with the Respondent making a final Calderbank offer of HK$5.4 million. The Applicant narrowly beat the offer by HK$9,490.27 (0.17%), which was considered de minimus and insufficient to justify full costs recovery. The court considered the parties' conduct; the Applicant delayed setting down taxation for over six months and made multiple unrealistic offers, while the Respondent acted promptly and reasonably to settle. Given the substantial inflation of claimed costs and the minimal margin by which the offer was beaten, the court exercised its discretion under Order 62 r 32A RHC to vary the costs order nisi. The Respondent was ordered to pay Applicant’s taxation costs only up to 18 April 2022, and the Applicant to pay the Respondent’s costs thereafter. Additionally, the Applicant must pay the Respondent’s costs of the variation application, to be summarily assessed.

Legal issues: Costs of taxation allocation after Calderbank offer

Outcome: Respondent’s Summons allowed; costs order nisi varied so Respondent pays Applicant’s taxation costs up to 18 April 2022 and Applicant pays Respondent’s costs after that date.

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