Tsang Woon Ming v. Tsan Hing Tat Heidi and Others
Read the full judgment text of CACV 18/2022 on BabelCite. This Court of Appeal judgment was delivered on 11 April 2024 before Chu VP, Cheung JA, G Lam JA.
Civil procedure – costs – variation of costs order – appeal – Calderbank offer made below – whether spent offer justifies higher basis of taxation on appeal – Order 22 of the Rules of the High Court – certificate for two counsel – Legal Aid Regulations. The plaintiff failed in his claim and the defendants succeeded in their counterclaim at trial; the plaintiff then appealed and the appeal was dismissed by judgment of 4 December 2023. Before trial, the defendants had made a Calderbank offer of $380,000 for the plaintiff to move out of the property and for both parties to withdraw their claims, which the plaintiff rejected on 12 June 2020. The trial court ordered the plaintiff to pay 90% of the defendants' costs on a party and party basis up to 12 June 2020 and on a common fund basis from 13 June 2020 onwards. The defendants applied to vary the costs order, seeking indemnity or common fund taxation for the appeal and a certificate for two counsel. Held, dismissing the application: a spent Calderbank offer made below is not by itself a relevant factor for the Court's discretionary exercise on costs of the appeal, whether as to extent or basis of taxation. Following Dah Sing Insurance Services Limited v Gill Gurbux Singh, a sanctioned offer made below does not entitle the offeror to invoke Order 22 for the appeal; the Court of Appeal may only take such an offer into account in its discretion. The line of cases beginning with MGA Entertainment Inc (reversed by the Court of Final Appeal in (2014) 17 HKCFAR 27) did not explain why a spent offer could be taken into account. For certainty, the Court preferred to ignore the spent Calderbank offer made below, and saw nothing in the plaintiff's conduct of the appeal warranting a higher basis of taxation. The Court also declined to certify the appeal as fit for two counsel. The application was dismissed with costs to the plaintiff, and the plaintiff's own costs were to be taxed according to the Legal Aid Regulations.
Legal issues: Whether a spent Calderbank offer made below justifies a higher basis of costs taxation on appeal · Whether the appeal merits a certificate for two counsel
Outcome: Defendants' application to vary the costs order dismissed; plaintiff awarded costs of the application.
Cited by 10 cases · Cites 7 cases
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CACV 18/2022, [2024] HKCA 320 ON APPEAL FROM [2021] HKDC 482 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 18 OF 2022 (ON APPEAL FROM DCCJ NO. 3791 of 2016) ____________________
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______________________________________ Decision on Variation of Costs ______________________________________ Hon Cheung JA (giving the Decision of the Court) : 1.The defendants apply to vary the costs order of our judgment of 4 December 2023. The defendants ask for a higher basis of taxation, namely either indemnity or common fund taxation and they also ask the Court to certify that the appeal is fit for two counsel. 2.In essence the defendants submit that before the trial in the Court below, they had made a Calderbank offer in which they would pay the plaintiff $380,000 for the plaintiff to move out of the property and for both parties to withdraw their respective claims. As it happened the plaintiff failed in his claim and the defendants succeeded in their counterclaim. The Court below upon being apprised of the Calderbank offer, ordered the plaintiff to pay 90% of the defendants’ costs of the action on a party and party basis up to 12 June 2020 (being the date of the plaintiff’s rejection of the Calderbank offer) and on a common fund basis from 13 June 2020 onwards. The defendants argue that as the plaintiff had failed in his appeal, he has continued to fail to beat the Calderbank offer and therefore he should be ordered to pay the defendants’ costs of the appeal on a higher basis. 3.Order 22 of the Rules of the High Court contains provisions for sanctioned offers and sanctioned payments. This Court (Cheung, Yuen and Kwan JJA) in Dah Sing Insurance Services Limited v Gill Gurbux Singh (unreported, CACV 255/2012, 27 April 2015), after referring to Ryder Industries Limited v Chan Shui Woo and Ryder Industries Limited v Timely Electronics Co Ltd, CACV 164/2013 and CACV 165/2013, 13 March 2015, summarised the position as follows :
4.This Court, however, went on to discuss the problem of relying on a spent offer made below :
5.It should be pointed out that the majority decision of the Court of Appeal in MGM Entertainment Inc was reversed by the Court of Final Appeal (2014) 17 HKCFAR 27 although there was no discussion on the indemnity costs order made by the Court of Appeal by reference to the sanctioned offer made before trial. Hence the factual basis in MGM Entertainment Inc to make such an order no longer existed and the majority decision did not explain why a spent offer could be taken into account. None of the cases that followed MGM Entertainment Inc actually discussed why a sanctioned offer made below could be taken into account. The Court in Dah Sing Insurance Services Limited was probably influenced by this line of cases beginning with MGM Entertainment Inc when it said the spent offer should be taken into account. 6.In line with the concern expressed in Dah Sing Insurance Services Limited, we are unable to subscribe to the notion that a spent Calderbank offer made below is by itself a relevant factor for the Court’s consideration in its discretionary exercise on costs in terms of either the extent of the costs to be awarded or the basis of taxation. There are well established principles on how to safeguard a party’s position on costs in an appeal. An example is CEP Ltd v. Wuxi Jiacheng Solar Energy Technology Ltd Co [2016] 1 HKLRD 960 where a Calderbank offer was made in respect of the appeal which was taken into account together with other factors when this Court ordered common fund taxation. In this case no fresh Calderbank offer was made in respect of the appeal itself and we do not see how the defendants could continue to rely on the Calderbank offer made in the Court below which did not say that it was also effective in respect of the appeal as well. In our view for the purpose of certainty, it is best to ignore the spent Calderbank offer that was made below. In any event even if, for the purpose of argument, such a factor may be taken into account, we do not see anything in the plaintiff’s conduct of the appeal which would cause us to exercise our discretion to order a higher basis of taxation. 7.We also do not see any reason to change our view that the case does not merit the granting of a certificate for two counsel. 8.Accordingly the application is dismissed with costs to the plaintiff. The plaintiff’s own costs are to be taxed according to the Legal Aid Regulations.
Mr. Benjamin Chain, instructed by Zebra H Y Kwan & Partners, assigned by Director of Legal Aid, for the Plaintiff Mr. Frederick H F Chan and Mr. Dexter Leung, instructed by Keith Lam Lau & Chan, for the 1st to 6th Defendants |
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