Fine Right Enterprise Ltd v. Wealth Fine Ltd

HCA 524/2018

[2023] HKCFI 452

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 524 OF 2018

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BETWEEN

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DECISION ON COSTS

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1.I refer to my Judgment after trial handed down on 29 December 2022[1] (the “Judgment”). I adopt the same terms and abbreviations as used therein.

2.I refer to the costs order nisi (the “Costs Order Nisi”)  I made at §362 of the Judgment.

3.By letter of 18 January 2023, Tang & So for P apply to vary the Costs Order Nisi as it is to the following, that:

(a)  there be no order as to costs in respect of P’s claim for injunctive relief;

(b)  there be no order as to costs in respect of D’s Counterclaim;

(c)  D shall pay P the costs of and incidental to P’s monetary claim to be taxed if not agreed with certificate for 2 counsel;

(d)  alternatively, there be such other orders as this Court shall deem just; and

(e)  the costs of the application for variation be borne by D.

4.By letter of 19 January 2023, Cheng & Co resists the application, and submits that:

(a)  the Costs Order Nisi should either be made absolute,

(b)  or that in the alternative:

(i)  P shall bear the costs of and incidental to (1)  P’s claim for injunctive relief, (2)  D’s Counterclaim, and (3)  P’s monetary claim from 26 March 2019,

(ii)  whilst D shall bear P’s costs of and incidental to P’s monetary claim including and up to 25 March 2019,

(iii)  all costs to be taxed if not agreed with certificate for 2 counsel.

5.Pursuant to directions given by this Court, Mr Kenny Lin with Ms Sabrina Leung have since filed for P their submissions in support and reply (“P/Sub1” and “P/Sub2”), and Ms Carol Lee has also filed 2 sets for D (“D/Sub1” and “D/Sub2”).

6.I have considered the various authorities cited to me.

7.The trial is the result of a most unpleasant if not acrimonious dispute between the parties.  Issues have been many, both legal and factual.  No side has emerged as the overall winner of everything.

8.In respect of P’s claim for injunctive relief:

(a)  I repeat Section H of the Judgment;

(b)  P’s initial claim for demolition of the Red Structure was soon after issue of the Writ (within 8 months)  rendered unnecessary by D’s voluntary demolition of the same;

(c)  Even upon commencement of the trial, P was still seeking demolition of the Violet Structure.  In the written opening filed during the trial for P, at §144, Mr Lam for P submitted that:

“As this route was not intended to pass through any interior of J14, and in view of the fact that the Violet Structure subsequently built and not existing in the original plans is obstructing such an open route, this Court is invited to make a consequential order that D shall, within a reasonable time, demolish the Violet Structure or such part thereof, so that P’s workmen may access the Lane without passing through the interior thereof.”

(d)  This Court’s rejection of P’s case based upon the Intended Route means that P’s claim for removal of the Violet Structure would have failed;

(e)  If one is to look at aspects of the case in isolation, as Mr Lin is apparently seeking to, I am of the view that P’s proposal of there being no order as to costs in respect of its injunction claim is not justified, and that P would be ordered to bear the majority of those costs of and incidental by that part of the claim.

9.In respect of P’s monetary claim:

(a)  On the Means and Arrangement Issue, I do not accept Mr Lam’s submissions based upon the proposition of the Intended Route[2];

(b)  On the proper interpretation of the DMC, and upon rejection of Mr Lam’s submissions based upon the proposition of the Intended Route[3], I ruled that Options 1 and 2 were both reasonable and sufficiently convenient route;

(c)  On that basis, I ruled that that after 25 March 2019, it was P who had refused to accept the same and to enter upon the Lane to complete the Works, or in other words, P had since then failed to mitigate its loss;

(d)  At §6 of P/Sub2, Mr Lin submits that:

“Even though Option 1 and Option 2 were held by the Court to be sufficiently reasonable routes to access the Lane, it is submitted that P was sufficiently penalised for its failure to accept Options 1 or 2 by the Court’s denial of P’s claim for damages after 25 March 2019 …”

(e)  I do not accept that approach.  P has not been penalized for anything. It has simply failed to establish its case in respect of its alleged damage after 25 March 2019;

(f)  I repeat §§221(d)  and (e)  of the Judgment in relation to P’s conduct;

(g)  Had P accepted Options 1 or 2, years of litigation together with the time and costs involved could have been averted;

(h)  At §3 of P/Sub1, Mr Lin submits that:

“… while this Court found that Option 1 and Option 2 were to be regarded as sufficiently convenient routes of access onto the Lane, one must not lose sight that such options were only ever proffered to P out of ‘maximum goodwill’ instead of D recognising P’s rights under Clause A(4)  of the DMC …”

(i)  It is not clear which particular letter Mr Lin is basing that submission of his upon.  If it is Cheng & Co’s letter of 27 March 2019, I repeat §70 of the Judgment.  Reading the entire letter, I am of the view that D’s conduct shown thereby was both neighbourly and reasonable;

(j)  In any event, and I repeat, had P undertaken a practical approach consistent with DMC being “aimed at facilitating the management of the building by reducing conflicts among co-owners” and accepted Options 1 or 2, years of litigation together with the time and costs involved could have been averted.  If one reason for P insisting on going to court was to get D to recognise P’s rights under Clause A(4)  of the DMC (as opposed to getting the Works done), as paragraph 3 of P/Sub1 appears to suggest, that would be most unfortunate.

10.In respect of D’s Counterclaim, D has been successful to the extent I have allowed in the Counterclaim.

11.Having cited Commissioner of Inland Revenue v HIT Finance Ltd (No 2) [2014] 4 HKLRD 412[4], Mr Lin submits that §9 that of P/Sub1 that:

“The effect of an Order of there being no Order as to costs, although it does not deprive P of its right completely, would clearly have an adverse effect on the right it was forced by D to establish at trial as to make it valueless and its pursuit ruinous.”

12.I am not comparing the quantum that has been awarded to P with the amount of costs it has incurred, or whether its claim has become “valueless”.  What this Court has done is to take an overall view on the case as explained at §362 of the Judgement and above.  No party has emerged as the overall winner.  P would notionally need to bear the majority of those costs of and incidental by its claim for injunctive relief, and D’s Counterclaim.  D would on the other hand notionally need to bear part of the costs of P’s monetary claim.  Without requiring parties to go through complicated and potentially costly taxation which D’s alternative application would entail, I am of the view, having sat through the trial and considered the details of the case as set out in the Judgment, that those costs liabilities would broadly and in the round off-set each another.  In my view, the Costs Order Nisi remains the appropriate one.

13.I therefore dismiss P’s application, and also D’s alternative application to vary.

14.I make no further order as to costs in respect of the present applications.

Written Submissions by Mr Kenny Lin and Ms Sabrina Leung, instructed by Tang & So, for the Plaintiff

Written Submissions by Ms Carol Lee, instructed by ST Cheng & Co, for the Defendant