Wan Hin and Company Limited (in Liquidation) and Another v. Chung Chun Keung and Others

HCA 64/2020

[2024] HKCFI 292

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 64 OF 2020

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BETWEEN

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DECISION ON COSTS

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INTRODUCTION

1.This is my decision on the costs of the Plaintiffs’ summons filed on 22 August 2023 to strike out parts of Fung Kit Lin Stella’s Witness Statement dated 13 June 2023 (“Fung’s Witness Statement”), filed on behalf of the 1^st Defendant (“Striking Out Summons”). 

2.The Striking Out Summons was heard on 13 November 2023 and I made rulings regarding the disputed paragraphs of Fung’s Witness Statement. 

3.At the hearing of the Striking Out Summons, I invited submissions on costs to be disposed on the papers.  Mr Chu made written submissions on behalf of the Plaintiffs, and Mr Lau made written submissions on behalf of the 1^st Defendant, both dated 20 November 2023. 

4.I have reviewed the submissions on costs of the Plaintiffs and 1^st Defendant.  I confirm that I have considered all the materials submitted by both parties. 

SUMMARY OF SUBMISSIONS

5.I summarise the Plaintiffs’ submissions as follows:

(a)  The Plaintiffs sent a Calderbank offer well before the main hearing but the 1^st Defendant did not respond positively apart from turning it down despite some minor concessions. 

(b)  The Plaintiffs should be considered as the overall winning party of the entire Striking Out Summons.  They should have the costs of preparation of the Striking Out summons as of right. 

(c)  Fung’s Witness Statement caused the application and a large part of Fung’s Witness Statement was struck out.  As a minimum, they should have 75% of the costs of the hearing.  

(d)  The Plaintiffs should also have the costs of Tang’s 6^th Affirmation which set out the opposition to Fung’s Witness Statement independent from other decisions on costs.

(e)  The breaches of Fung’s Witness Statements were only partially conceded and remedied at the 11^th hour by the 1^st Defendant and the hearing could have been avoided.

(f)  The 1^st Defendant resisted in the 1^st and 2^nd call over hearings and increased costs substantially. 

(g)  The 1^st Defendant only partially conceded shortly before the main hearing.  The Plaintiffs should have the costs of Tang’s 6^th Affirmation and the first two hearings independent of any costs decision. 

(h)  The 1^st Defendant made two additional lever arch files which were not relied on at the hearing.  The 1^st Defendant’s solicitors should bear the costs of producing the bundles and the Plaintiffs should have the costs of perusing those two bundles independently of any costs decision. 

6.I summarise the 1^st Defendant’s submissions as follows:

(a)  The 1^st Defendant is the overall successful party.  The proper order is that the Plaintiffs should pay to the 1^st Defendant 2/3^rds of the costs of the Striking Out Summons, to be summarily assessed and payable forthwith. 

(b)  The usual costs rule is that costs should follow the event, although this Court may depart from it in exceptional circumstances: O 62 r 5 of RHC.  There is nothing in this particular case requiring the Court to depart from the usual rule. 

(c)  The Court may consider making a costs order to reflect which party succeeded on the majority of the discrete items: China Construction Realty Ltd v Lucky Dragon Ltd (unreported decision of Registrar Lung dated 14 July 2014 of HCA 1237/2012). 

(d)  Out of the 70 disputed paragraphs, the 1^st Defendant was the clear and obvious successful party in 49 of them, whereas the Plaintiffs were only fully successful on one single item.  In respect of the balance of the items, the proper view is that both parties are partially successful. 

(e)  Accordingly, this Court should make a costs order that the Plaintiffs should pay to the 1^st Defendant 2/3^rds of his costs of the summons (49-1)/70 = approximately 68.5%

7.The 1^st Defendant further submitted that this result, reflecting their success, is buttressed by the following factors constituting other circumstances of the case which this Court should consider:

(a)  The 1^st Defendant is obviously the successful party in respect of the substantive hearing where the bulk of the costs should have been incurred. 

(b)  In terms of the pre-substantive hearing costs, the costs of the 2^nd call over hearing were costs completely wasted due to the following:

a.  The Striking Out Summons was first heard on 11 September 2023.  At that hearing, Master Ho ordered that there be a 2^nd call over hearing because the Plaintiffs’ precise grounds for striking out each disputed paragraph had not been set out in the Striking Out Summons or the supporting affirmation; 

b.  Hence it was necessary for Master Ho to direct the Plaintiffs to file their Grounds of Striking Out, which they did on 22 September 2023;

c.  The 2^nd call over hearing was then heard before Registrar Kwang on 6 October 2023, where he was satisfied that the Striking Out Summons could proceed further; and  

d.  In order words, the 2^nd call over costs arose solely because the Plaintiffs failed to set out their position from the outset properly and should in any event be borne by the Plaintiffs. 

(c)  The Plaintiffs changed their case in the course of the Striking Out Summons.  It was not until their Skeleton that the Plaintiffs’ final position became clear. 

PRINCIPLES REGARDING COSTS OF INTERLOCUTORY PROCEEDINGS

8.The issue of costs is a matter of discretion for the court. Subject to certain well established legal principles, the court has wide discretion in costs, particularly in respect of costs of interlocutory proceedings. 

9.Under Order 62 rule 3(2A)  of the RHC:

“[i]f the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any interlocutory proceedings, it may, subject to this Order, order the costs to follow the event or make such other order as it sees fit.”

10.The commentary at § 62/3/6 of the Hong Kong Civil Procedure 2023 provides that:

“the costs of interlocutory proceedings are now dealt with under the new r.(2A). Under Recommendation 122 of the Working Party on Civil Justice Reform:

‘The principle that the costs should normally ‘follow the event’ should continue to apply to the costs of the action as a whole. However, in relation to interlocutory applications, that principle should be an option (which would often in practice be adopted)  but should not be the prescribed ‘usual order.’ Costs orders aimed at deterring unreasonable interlocutory conduct after commencement of the proceedings should be given at least equal prominence in practice, with the court being directed to have regard to the underlying objectives mentioned in relation to Recommendation 2. These powers should not apply to pre-action conduct.’ ”

11.Hong Kong Civil Procedure 2023 at § 62/3/6 goes on to state that “the principle that costs normally follow the event is no longer the prescribed usual order but is instead just an option.  In Melvin Waxman v Li Fei Yu [2013] 6 HKC 424, To J drew a clear distinction between the approach to costs in other proceedings and in interlocutory proceedings, which had not previously been argued before the courts.  The Plaintiffs sought to vary the costs order nisi on the basis that costs ought to follow the event in general and it is for the unsuccessful party to justify a departure from the general rule.  Whilst the onus of proof remained the same as it did prior to the Civil Justice Reform (ie that it is “the successful party’s burden to satisfy the court as to the type of costs order it is entitled”), To J commented that ‘In reality, having heard the interlocutory application, it would be quite obvious to the court what costs order would best serve the justice between the parties without relying on the burden of proof.’ ”  

12.In Melvin Waxman v Li Fei Yu [2013] 6 HKC 424 at 4-5 (as referred to in Hong Kong Civil Procedure 2023), To J commented on the court’s approach post-CJR to costs in interlocutory proceedings such as this Striking Out Summons, compared to other proceedings:

“15. …. As observed by the Working Party on Civil Justice Reform, costs to follow the event would often be the case, though it is no longer the prescribed rule. I now turn to examine some of the recent decisions. I shall not refer to the usual costs orders made in respect of ordinary interlocutory applications such as applications to amend pleadings, etc. In respect of those matters, justice obviously requires that costs to follow the event or that costs be awarded against the party who sought the indulgence of the court.

…

17. In Mendlowitz & Associates Inc v Winner International Group Ltd & Another HCA 574/2009 , 14 May 2010, the plaintiff commenced action in Hong Kong and obtained a Mareva injunction against the defendants. After having commenced action in Canada, it sought to stay the Hong Kong action, discharge the injunction and later sought leave discontinue the Hong Kong action. Au J granted the applications. He awarded costs of the injunction to the plaintiff but awarded the costs of the stay application and costs of the action other than the costs of the injunction to the defendant. So, the costs of the interlocutory injunction followed the event. The defendants sought leave from Au J to appeal against that order, contending that they should be awarded those costs as the respondents’ costs in the cause. In rejecting that argument, Au J quoted Auld LJ’s dictum in Bushbury Land Rover Ltd v Bushbury Ltd [1997] FSR 709:

‘….

30. There is thus nothing wrong in principle for this Court, in the exercise of its discretion, to look at the merits of the application for the Injunction on its own to decide what proper costs order should be made in all the circumstances, without ‘linking’ it to what may happen at the end of trial or to the action itself.’

While Au J ordered costs to follow the event, he did not do so, at least expressly, by applying the general rule under the former Order 62 rule 3(2)  which was inapplicable post-CJR or under any other general rule as submitted by Mr Kam, but under the new rule 3(2A)  by looking at the merits of the interlocutory application. In fact, it has always been accepted, whether before or after CJR, that where the respondent consents to the interlocutory injunction for the purpose of holding the ring, the proper order would be costs in the cause, but where the injunction was ordered after a contested hearing, costs to follow that event is the appropriate or usual order. In my view, this approach best serves the interest of the justice in an interlocutory injunction application and such costs orders are the type of orders which the court would see fit to make, depending on the factual circumstances of the particular case. As for Au J’s order staying the action, against which there was no appeal, it must have been made on the ground that the court saw fit to do so as that was the end of the action and there would no longer be any trial. It was not, in my view, made pursuant to the general rule contended by Mr Kam.

19. Summing up on the post-CJR position, I think the court has much wider discretion as to costs in interlocutory proceedings. Unlike other proceedings, the general rule of costs following the events do not apply. The court is entitled to take into account all the circumstances of the case, including those set out in rule 5, to make such order as it thinks fit. In the exercise of its discretion, the court may take the issue-based approach or may take into account merit of the parties’ case or the possible outcome of the action. The circumstances of interlocutory proceedings are so numerous that it is impossible to make any general rule. Costs to follow the event and costs be to the successful party’s costs in the cause are obvious options.

20. As for the onus of proof, I think it is the same post-CJR as it was pre-CJR. It must be the successful party's burden to satisfy the court as to the type of costs order it is entitled. To begin with, the successful party is assisted by the general rule of costs to follow the event. By the mere fact of being successful, the successful party has discharged the evidential burden of showing it is entitled to costs. Thus, effectively, the evidential burden is on the unsuccessful party to adduce sufficient evidence or argument that some other or lesser order is appropriate, such as no order as to costs, costs be to the successful party’s costs in the cause or costs to the unsuccessful party. In the absence of evidence or convincing argument to the contrary, the successful party would also have discharged the legal burden. Costs to follow the event would be the appropriate order to make. If the unsuccessful party is able to discharge that evidential burden, it will be the legal burden of the successful party to show that he is entitled to the costs order which he seeks. In reality, having heard the interlocutory application, it would be quite obvious to the court what costs order would best serve the justice between the parties without relying on the burden of proof.” (my emphasis).

13.In Melvin Waxman, given the plaintiffs founded the action as of right in Hong Kong and that the claim was in respect of the breach of a shareholders’ agreement, the governing law of which is Hong Kong law, the Court was of the view that it was unreasonable to have challenged the jurisdiction of the court.  The 2^nd Defendant raised this jurisdictional issue and lost.  The Court held that consistent with the spirit of the CJR, such unreasonable interlocutory conduct should be deterred. It was therefore appropriate to order the 2^nd Defendant to bear the costs of the proceedings.  

14.Apart from O 62 r 3(2A), rule 5 empowers the court to take into account special matters in exercising its discretion of costs. O 62 r 5 is of general application and applies to costs in interlocutory proceedings as well as to other proceedings:

“5(1)  The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account-

(aa)  the underlying objectives set out in Order 1A , rule 1;

(a)  any such offer of contribution as is mentioned in Order 16, rule 10, which is brought to its attention in pursuance of a reserved right to do so;

(b)  any payment of money into court and the amount of such payment;

(c)  any written offer made under Order 33, rule 4A(2);

(d)  any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings, but the Court may not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22;

(e)  the conduct of all the parties;

(f)  whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(g)  any admissible offer to settle made by a party, which is drawn to the Court’s attention.”

(2)  For the purpose of paragraph (1)(e), the conduct of the parties includes -

(a)  whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b)  the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c)  whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d)  conduct before, as well as during, the proceedings.”

15.§ 62/5/A of the Hong Kong Civil Procedure 2023 sets out the principles in respect of the underlying objectives and costs of interlocutory applications.  In respect of costs of interlocutory applications, it was observed in Predicine Holdings Ltd v Bianchi (Hong Kong)  Ltd [2021] HKCFI 631 that:

“Amongst the matters that the court should take into account, perhaps being appropriate in every set of circumstances, are the underlying objectives set out in Order 1A rule 1. Those objectives include increasing the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the court, and promoting a sense of reasonable proportion and procedural economy in the conduct of proceedings, as well as ensuring fairness between the parties and facilitating settlement of disputes. One way of achieving those objectives is, when appropriate, making immediate costs orders relating to interlocutory applications (and making summary assessments), so that the parties know where they are on costs as the proceedings progress, rather than leaving matters ‘hanging over’ to the end, with the degree of uncertainty that entails…”

16.Rule 5 was referred to in China Construction Realty Ltd v Lucky Dragon Ltd (unreported decision of Registrar Lung dated 14 July 2014 of HCA 1237/2012).  In that case, the Court ruled that the appropriate order as to costs was for the defendant to pay 65% of the plaintiff’s costs as it was partially successful in its application for specific discovery. 

DISCUSSION

17.I will approach the decision on costs by considering the following issues:

(1)  Who was the successful party in the Striking Out Summons?

(2)  Has the unsuccessful party adduced sufficient evidence or argument that some other or lesser order is appropriate than costs follow the event?

(3)  Are there any other special matters to take into consideration in the exercise of the Court’s discretion?

(4)  What is the quantum of costs? 

(1)  Who was the successful party in the Striking Out Summons?

18.There were 70 disputed items in Fung’s Witness Statement.  The Plaintiffs submit that they should be considered as the overall winning party of the entire Striking Out Summons.  They should have the costs of preparation of the Striking Out Summons as of right.  The Plaintiffs also submit that Fung’s Witness Statement caused the application and a large part of Fung’s Witness Statement was struck out. As a minimum, they should have 75% of the costs of the hearing.  

19.First, I do not think the Plaintiffs are entitled to their costs as of right.  This is not a case of, for example (i)  an amendment made without leave in the writ of summons or any pleading; or (ii)  an application to extend time fixed by these rules, or any direction or order thereunder, for serving or filing any document or the doing of any act, which the costs of and occasioned of such amendment or application shall be borne by the party making the amendment or application, unless the Court otherwise orders: see O 62 r 3(3)  and (4)  of the RHC. 

20.Second, the Plaintiffs are not the overall successful party of the Striking Out Summons. 

21.Given my rulings on Fung’s Witness Statement, the 1^st Defendant is the overall successful party.  I disagree with the Plaintiffs’ submissions that a large part of Fung’s Witness Statement was struck out and they should be entitled to 75% of the costs of the hearing.  Considering the Court’s rulings on the disputed paragraphs/sub-paragraphs of Fung’s Witness Statement, the Striking Out Summons should not have been made in the first place.  The 1^st Defendant was the overall successful party: out of the 70 total disputed paragraphs/sub-paragraphs: (a)  49 items are those on which the 1^st Defendant is the clear and obvious successful party; (b)  the Plaintiffs were only fully successful on one item in paragraph 7(e); and (c)  both parties were partially successful in 20 items (partial removal or 1^st Defendant’s proposals for removal before the hearing of the Strike Out Summons). 

(2)  Has the unsuccessful party adduced sufficient evidence or argument that some other or lesser order is appropriate than costs follow the event?

22.Under O 62 r 3(2A)  of the RHC, by the mere fact of being successful, the 1^st Defendant, being the successful party, has discharged the evidential burden of showing it is entitled to costs.  The evidential burden is now on the Plaintiffs, being the unsuccessful party, to adduce sufficient evidence or argument that some other or lesser order is appropriate.  I now address the Plaintiffs’ submissions to examine if there is such evidence or argument. 

Calderbank offer

23.The Plaintiffs’ submissions referred to a Calderbank offer. 

24.In paragraph 2 of the 1^st Defendant’s skeleton submissions for the hearing dated 7 November 2023, the 1^st Defendant submitted that at the last call-over hearing, the parties were urged to try and narrow down the number of allegedly problematic passages in Fung’s Witness Statement.  The 1^st Defendant stated that without prejudice negotiations between the parties were unsuccessful.  

25.According to the 1^st Defendant’s submissions on costs, 13 items were abandoned by the Plaintiffs prior to the substantive hearing, 12 items were dealt with in effect by the 1^st Defendant’s proposals prior to the substantive hearing (in respect of no argument was necessary), and in 4 items, the 1^st Defendant made proposals for partial removal prior to the substantive hearing, but the Plaintiffs insisted on complete removal and were refused.  The Court ruled in favour of the 1^st Defendant’s pre-hearing position. 

26.In respect of the Calderbank letter sent by the Plaintiffs, this Court does not have enough information or evidence for it to determine whether it would affect its decision on costs.  All that is submitted is “[t]he Plaintiffs sent a Calderbank Offer well before the main hearing but the 1^st Defendant did not response [sic] positively apart from turning it down despite some minor concessions.  Thus no reliance could be placed by the 1^st Defendant in rejecting such an offer Whitebook §62/5/8.”  The Court does not have a copy of the Calderbank offer and its terms.  I cannot ascertain when the offer was sent, the terms, and whether the offer was beaten by the 1^st Defendant.  The Plaintiffs’ submissions do not suggest that the Calderbank offer would have saved time and costs of the hearing if the 1^st Defendant accepted the Plaintiffs’ offer.  The Court notes the 1^st Defendant’s submissions that it made proposals for partial removal prior to the substantive hearing, but the Plaintiffs insisted on complete removal and were refused.  The Court ruled in favour of the 1^st Defendant’s pre-hearing position.  The 1^st Defendant also succeeded in 49 out of 70 disputed paragraphs/sub-paragraphs. 

Avoidance of the hearing; 1^st and 2^nd call over hearings

27.The Plaintiffs submit that the breaches of Fung’s Witness Statements were only partially conceded and remedied at the 11^th hour by the 1^st Defendant and the hearing could have been avoided. 

28.Further, the Plaintiffs submit the 1^st Defendant resisted in the 1^st and 2^nd call over hearings and increased costs substantially and only partially conceded shortly before the main hearing.  The Plaintiffs should have the costs of Tang’s 6^th Affirmation and the first two hearings independent of any costs decision. 

29.I do not think these are convincing arguments for the Court to order a lesser costs order than costs follow the event.  First, the Court views the “event” being the Striking Out Summons made by the Plaintiffs, which necessarily includes the filing of Tang’s 6^th Affirmation and the first two call over hearings.  Second, pursuant to Master Ho’s Order of 11 September 2023, the Plaintiffs were ordered to provide to the 1^st Defendant the precise ground(s)  for striking out the blue pencil parts of Fung’s Witness Statement.  On 22 September 2023, the Plaintiffs provided their precise grounds in their Grounds for Striking Out.  The hearing was adjourned for a 2^nd call over on 6 October 2023 (§2 of Master Ho’s Order).  I agree with the 1^st Defendant’s submissions that the costs of the 2^nd call over hearing were costs that arose solely because the Plaintiffs failed to set out their position from the outset properly. 

30.As the 1^st Defendant was unable to ascertain the precise grounds for striking out, no agreement to narrow down the disputed items could be reached until closer to the hearing.  In any event, the Plaintiffs’ Grounds for Striking Out for some items stated in the Plaintiffs’ skeleton argument were different from those contained in the Grounds for Striking Out dated 22 September 2023 and initially contained in the Striking Out Summons.  At the hearing, the parties made submissions based on the Plaintiffs’ skeleton submissions and not the Striking Out Summons or the Grounds for Striking Out dated 22 September 2023. 

31.The Plaintiffs, by not initially providing the precise Grounds for Striking Out, and then changing their case on certain items from the Grounds for Striking Out dated 22 September, acted contrary to the underlying objectives under O 1A r 1 of the RHC which inter alia, aim to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court, ensure fairness between the parties, and to facilitate the settlement of disputes. 

32.The Plaintiffs also insisted on going ahead with the hearing of the Striking Out Summons for the other items which it did not succeed on.  

(3)  Are there any other special matters to take into consideration in the exercise of the Court’s discretion?

33.I have addressed the Calderbank offer and the underlying objectives set out in Order 1A, r 1 above.  I do not think there are any other special matters to take into consideration in the exercise of the Court’s discretion on costs. 

34.The Plaintiffs submit that the 1^st Defendant made two additional lever arch files which were not relied on at the hearing.  The Plaintiffs submit that the 1^st Defendant’s solicitors should bear the costs of producing the bundles which were not relied on at the hearing and the Plaintiffs should have the costs of perusing those two bundles independently of any costs decision.  These consisted of the affirmations of the 1^st Defendant, Chung Chun Keung (“Dr Chung”)  (in respect of HCCW614/1997), and five other affirmations of Dr Chung, and their exhibits.  Only Dr Chung’s affirmation in HCCW 614/1997 was referred to in the 1^st Defendant’s skeleton (at §63 of the 1^st Defendant’s skeleton). 

35.The Court has power to disallow, or order legal representatives to meet, the whole or any part of any costs which have been wasted by reason of the conduct of the legal representatives: section 52A(4)  High Court Ordinance; O 62 r 8 of the RHC.  Under section 52A(6)  of the High Court Ordinance, “wasted costs” means any costs incurred by a party as a result of - (a)  an improper or unreasonable act or omission; or (b)  any undue delay or other misconduct or default, on the part of any legal representative, whether personally or through an employee or agent of the legal representative. 

36.Hong Kong Civil Procedure 2023 at § 62/8/1 sets out the underlying principles as to wasted costs orders:

(a)  The Court has a right and a duty to supervise the conduct of its solicitors, and visit with penalties any conduct of a solicitor which is of such a nature as to tend to defeat justice in the very cause in which he is engaged professionally (Myers v Elman [1940] AC 282 ; Ho Lee Man v Wong Wai Kai (No 2)  [1993] 1 HKC 193 (CA); KB Chau & Co (a firm)  v China Finance Trust & Investment Corp [1995] 2 HKLR 567 (CA)).

(b)  Cases have stressed that the wasted costs jurisdiction should only be invoked and orders made in clear cases: eg Wall v. Lefever [1998] 1 FCR 605.  

(c)  A mere mistake or error or judgment is not generally sufficient, but a gross neglect or inaccuracy in a matter which it is a solicitor’s duty to ascertain with accuracy will suffice.  It need not involve personal obliquity.  The term of professional misconduct has often been used to describe the ground on which the court acts.  It would perhaps be more accurate to describe it as conduct which involves a failure on the part of the solicitor to fulfil his duty to the court and to realise his duty to aid in promoting in his own sphere the cause of justice ( Myers v Elman [1940] AC 282 ; KB Chau & Co (a firm)  v China Finance Trust & Investment Corp [1995] 2 HKLR 567 (CA).  The conduct must be inexcusable and such as to merit reproof ( J v C [1995] 1 HKLR 19).  The test was whether the conduct amounted to a serious dereliction of duty (Que Jocelyn Co (t/a Scented Delights)  v Broadair Express Ltd [1999] 3 HKLRD 104). 

(d)  Failures to appear, conduct which leads to an otherwise avoidable step in the proceedings or the prolongation of a hearing by gross repetition or extreme slowness in the presentation of evidence or argument are typical examples: Harley v McDonald [2001] 2 AC 678. 

37.According to footnote 1 of the 1^st Defendant’s skeleton submissions dated 7 November 2023, the 1^st Defendant prepared a Bundle further to the hearing bundle prepared by the Plaintiffs.  It was alleged that the Plaintiffs failed to provide sufficient time to the 1^st Defendant to comment on the draft hearing bundle index (the hearing bundle index was given to the Plaintiffs on 28 October 2023 and the Plaintiffs’ skeleton was already filed on 30 October 2023), and the Plaintiffs failed to respond to the 1^st Defendant’s letters requesting additions to the hearing bundles. 

38.Even if this was the case, only documents necessary for determination of the issues before the Court should be included in the hearing bundles.  However, I do not think that this is conduct which involves a failure on the part of the solicitors to fulfil their duties to the court, or amounts to a serious dereliction of duty.  This can be described as a mere error or mistake or judgment which is insufficient for this Court to invoke its wasted costs jurisdiction.  The wasted costs jurisdiction should only be invoked and orders made in clear cases. 

39.The Court can deduct the costs of the preparation of the bundles from the costs claimed by the 1^st Defendant in its summary assessment of costs. 

40.I do not think it is proper for the Plaintiffs to be awarded the costs of perusing those two bundles independently of any costs decision.  No such costs were ringfenced in the Plaintiffs’ Statement of Costs submitted for summary assessment, and no particulars of time spent was provided in support of its submissions. 

(4)  What is the quantum of costs?

41.I have reviewed the 1^st Defendant’s Statement of Costs for Summary Assessment of Costs which claims HK$211,159.  The photocopy charges for the 1^st Defendant’s bundle (3 copies)  which were unused amounted to HK$1,809 which need to be excluded based on my reasoning above. 

42.The 1^st Defendant submits that this Court should make a costs order that the Plaintiffs should pay to the 1^st Defendant 2/3^rds of its costs of the summons (49-1)/70 = approximately 68.5% (HK$143,404.75).  This is before the Court’s summary assessment of costs. 

43.I adopt a broad brush approach to the summary assessment of the 1^st Defendant’s costs and direct that HK$143,404.75 (*65%)  being HK$93,213 be paid by the Plaintiffs to the 1^st Defendant. 

CONCLUSION

44.Adopting the approach of Registrar Lung in China Construction Realty Ltd v Lucky Dragon Ltd, the 1^st Defendant is the overall successful party on the Striking Out Summons.  I accept the 1^st Defendant’s submissions that it is entitled to 68.5% of its costs (before summary assessment of costs), amounting to HK$93,213 after summary assessment.  There is no convincing evidence or argument that some other or lesser order is appropriate than costs follow the event, and there are no other special circumstances to take into consideration in the order as to costs.  There was a contested hearing of the Plaintiffs’ Striking Out Summons.  It is obvious to the Court that a costs order in favour of the 1^st Defendant in this interlocutory matter would best serve the justice between the parties. 

DISPOSITION

45.For all the reasons above, I order and direct that the Plaintiffs pay to the 1^st Defendant HK$93,213 forthwith. 

46.I thank both counsel for their helpful submissions to the court. 

Mr George Chu, instructed by Damien Shea & Co, for the Plaintiffs

Mr Kevin Lau, instructed by Ernest Li & Co, for the 1^st Defendant