William Teh Yee Lee t/a Hong Kong Kowloon First Securities Co v. The Nikko Securities Co (Asia) Ltd

CACV000078/1983

Costs - O.14 - successful appeal against order for summary judgment - where unconditional leave to defend is given it is wrong to deny defendant the costs of the appeal on the ground that his defence is shaky and suspicious.

BETWEEN

Coram: Sir Alan Huggins, V.-P., Cons & Fuad JJ.A.

Date of Judgment: 13th October 1983.

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JUDGMENT

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Sir Alan Huggins, V.-P.:

1. The Plaintiff brought an action against the Defendant. Thereafter he instituted 0.14 proceedings for summary judgment. Before the Master the Plaintiff succeeded. The result was that the Defendant was barred from the seat. of justice. It felt that it had been unfairly treated and it appealed to the judge in chambers. After a full hearing the learned judge came to the conclusion that there was a possible defence. He did, it is true, observe that the defence might prove to be "shaky and suspicious" but, nevertheless, he reversed the order of the Master and gave leave to defend unconditionally. Now that is important: this was not a case where conditional leave was given by the judge on the basis that he was almost prepared to enter judgment. The learned judge was asked to make a special order as to costs and in the event the order he made was that the costs be costs in the cause. He heard full argument on the matter and he observed that the normal rule governing the award of costs was that costs would follow the event. However, he thought that this was a case where he was justified in making a special order, because of the nature of the defence. The question on this appeal is whether that was right:

2. This is not in my view a case where we are being asked to vary the discretion of the judge: it is suggested that the learned judge exercised his discretion upon a wrong principle, and in my view he did.  The practice is that on an appeal in Order 14 proceedings a successful defendant will get his costs, because it is only by bringing his appeal that he can get leave to defend. Otherwise he is, as I say, barred from the seat of justice. If only conditional leave had been granted then in effect the result of the appeal before the judge in chambers would have been that neither side had been wholly successful: the Plaintiff would not have got what he asked for - namely, summary judgment - and the Defendant would not have got unconditional leave. In such a case it would be reasonable that the costs should be costs in the cause, but here the Appellant was forced to go before the judge in chambers in order to get leave to defendant at all and it was granted unconditional leave. In my view it was entitled to its costs. That being so, I would allow this appeal and substitute an order that the Plaintiff pay the Defendant's costs before the judge in chambers. The costs before the Master, of course, we are not disturbing.

3. There is in this case a special agreement that the Defendant is entitled to only three-quarters of the costs below because there were in fact two appeals before the judge in chambers (the second being against an order allowing the Plaintiff to amend the writ) and it was successful on the one and unsuccessful on the other. The judge himself apportioned the costs as to one-quarter and three-quarters and therefore the order which we should make is that which he himself would have made, i.e. that the Defendant have only three-quarters of the costs.

Cons, J.A.:

4. It is very rare for this court to interfere with an order for costs, which is a matter very much in the discretion of the judge at first instance. It seems to me, however, and with every respect to the Commissioner below, he clearly went wrong in principle. The issue on which he made the recovery of the costs before him depend was whether or not the plaintiff should recover the money which he claimed in the action. But that was not the issue which was before him. The issue before him was whether there ought to be summary judgment or leave of some kind to defend. These are completely independent. issues. They should not have been confused.  I agree with the order my Lord the Vice-President has just suggested.

Fuad, J.A.:

5. I agree that the appeal should be allowed and with the Order proposed by my learned brothers.

13th October 1983.