Success Lane Development Ltd v. Fergurson Hong Kong Ltd t/a New World Millennium Hong Kong Hotel

DCCJ 2191/2023

[2024] HKDC 1219

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2191 OF 2023

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BETWEEN

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DECISION

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APPLICATION

1.This is an application of the Plaintiff (“P”) for variation of the costs order nisi (“Variation Costs Order Nisi”) made in §37 of the Decision (“Injunction VOC Decision”) given by this Court on 1 March 2024[1].

2.The background and procedural history of the present action has been concisely set out in the Injunction VOC Decision, which should not be repeated in details here. For the present purpose, it may be convenient just briefly set out the relevant procedural history as follows.

3.By the Decision handed down by this Court on 25 September 2023 (“Injunction Decision”)[2], this Court dismissed P’s application (“Injunction Application”) for continuation of the ex-parte injunction order granted by HHJ E Yip on 12 July 2023 (“Ex-parte Injunction Order”) with a costs order nisi in favour of the Defendant (“D”) (“Injunction Costs Order Nisi”).

4.The Injunction Costs Order Nisi provided that:-

“P do pay D costs of the Injunction Application, the D’s Stay Application[3], including the costs of the hearing on 18 July 2023, the Return Hearing and the [substantive] Present Hearing, in any event, on an indemnity basis, to be taxed if not agreed, with certificate for counsel.”

5.Subsequently, D applied for variation of the Injunction Costs Order Nisi (“Injunction VOC Application”)[4]. The Injunction VOC Application did not touch on liability issue. It only sought to vary the Injunction Costs Order Nisi to:

“(1) P do pay D costs of, incidental to and occasioned by the Present Summons, the D’s Stay Application, including the costs of the hearing on 18 July 2023, the Return Hearing and the Present Hearing, including all costs reserved, if any, on an indemnity basis, with certificate for counsel.

(2) D’s costs should be payable forthwith and summarily assessed by way of paper disposal.”

6.By the Injunction VOC Decision, this Court varied the Injunction Costs Order Nisi, in gist, to the extent that P shall pay D’s costs of the Injunction Application, the D’s Stay Application, including the costs of the hearing on 18 July 2023, the Return Hearing and the Substantive Hearing of the Injunction Application and all costs reserved, if any, on an indemnity basis, with certificate for counsel. Such costs to be assessed summarily and paid forthwith.

7.As to the costs of the D’s Injunction VOC Application, this Court made the Variation Costs Order Nisi, in gist, that costs of D’s Injunction VOC Application shall be paid by P to D, including all costs reserved, on party and party basis, to be summarily assessed and paid forthwith. Directions for lodging of documents for summary assessment were also given.

8.Dissatisfied with the Variation Costs Order Nisi, P took out the present summons on 15 March 2024 (“Present Summons”) seeking variation of the Variation Costs Order Nisi to “no costs order be made”, and, the costs of the Present Summons to be paid by D to P within 7 days after summary assessment by way of paper disposal.

LEGAL PRINCIPLES

9.I should not repeat the legal principles regarding the Court’s wide discretion on costs and power to make an order for summary assessment and immediate payment of costs which were summarized in §§17-19 of the Injunction VOC Decision.

10.The legal principles were further elaborated by the Court of Appeal in §§36-38 of Progetto Jewellery Co Ltd v Lau Chiu Ying and Another [2022] 2 HKLRD 845 that costs is very much a matter of discretion of the judge, who is the best person to exercise the discretion on costs because he is most familiar with the conduct of the case and the impact of the success and failure on each issue canvassed before him. The Court of Appeal would be very circumspect in intervening with such a decision with high discretionary content.

11.Pursuant to Practice Direction 14.3, the Court will give preference to summary assessment of costs where an interlocutory application is concerned, unless there is good reason not to do so, eg where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily. The rationale was echoed in the cases of Midland Business Management Ltd v Lo Man Kui (No 2) [2011] 2 HKLRD 667 and Seridom Servicios Integrados Idom SAU v Heng Wen Trade Co, Ltd [2019] HKCFI 761.

12.With these principles in mind, I now turn to consider the grounds of the present application.

P’s GROUNDS OF APPLICATION

13.In this application, P attempts to argue that in D’s Injunction VOC Application, D sought to vary the Injunction Costs Order Nisi in two respects:

(A) to extend the costs order to cover (1) D’s costs incidental to and (2) occasioned by the Injunction Application and D’s Stay Application as well as (3) all costs reserved, if any (“Extension Request”); and

(B) to ask for such costs to be (4) summarily assessed and (5) paid forthwith (“Forthwith Request”).

However, in the Injunction VOC Decision, D only succeeded in obtaining an order for prayers (4) and (5), with its application for prayers (1) and (2) being rejected and prayer (3) being allowed merely as a matter of prudence.

14.On such basis, P put forward 5 grounds[5] to argue that the Variation Costs Order Nisi should be varied to “no costs order be made”.

15.Grounds 1 and 2 can be dealt with together. In essence, P argues that as D only succeeded in the Forthwith Request but lost in the Extension Request, neither P nor D can be regarded as “the overall winner of the application”. Accordingly, there should be no order as to costs.

16.I am not convinced. Such arguments are an oversimplification of the nature as well as the extent and scope of the arguments involved in the Injunction VOC Application.

17.Simply put, a rough classification of D’s requests in the Injunction VOC Application into the Extension Request and the Forthwith Request for convenience purpose does not necessarily mean that the nature and complexity of the two classes of requests were the same. It is wrong to regard the two classes of requests as well as the costs incurred therein could be set-off against each other.

18.It is beyond dispute that the Extension Request was primarily concerned with straightforward procedural matter which did not involve any substantive arguments, still less of serious legal arguments. D just made flimsy submissions on it without solid substance. Contrary to P’s contention that it had successfully resisted the Extension Request, the truth is other than taking the stance of opposing the Injunction VOC Application as a whole, P had neither raised any specific objection to the Extension Request, nor made any solid submissions on it. It follows that the costs incurred in this aspect should be minimal if not none. Viewed in this light, the unsuccessful Extension Request could not have any significant impact on costs.

19.Further, P’s arguments in the present application chose to be silent on the fact that P had, in the Injunction VOC Application, not only focused on opposing the Forthwith Request, which was unsuccessful, but also unreasonably and unnecessarily raised a number of irrelevant or unmeritorious arguments and matters and attached to its skeleton submissions with 6 sets of documents. Some of those attachments were strictly irrelevant. A few examples are set out for illustration as follows.

20.The “P’s Skeleton Argument in Oppose to D’s Application to Vary the Cost Order Nisi” dated 22 November 2023 contained 28 paragraphs, which were categorized into 5 sections as follows:

Under Section 1 : “Overview”

(a) §1 (with attachment 1) was a complaint of the one-day delay of D’s service of written submissions.

(b) §2 (with attachment 2) set out its disagreements to the Injunction Decision and its intended grounds of appeal from that decision with attachment 2 annexed thereto for elaboration. Such arguments were costs-wasting bearing in mind that the Injunction VOC Application did not touch on the issue of liability. The Injunction VOC Application should not be manipulated as if it was the second forum for P to re-argue the application for leave to appeal again[6].

Under section 2 : “Impossibility of Revising Costs Orders”

(c) In §§3-7, P sought to argue that the Injunction Costs Order Nisi was not open to revision and this Court was debarred from varying it. Legal authority was cited in support. Such argument was plainly unmeritorious and rejected in §27 of the Injunction VOC Decision.

Under section 3 : “Circumstances Underscore the Merits of P’s Application”

(d) Under §§5-12, P repeatedly argued that the Injunction Decision was wrong. It went into details to justify the Injunction Application and how this Court was wrong in dismissing it. Not only repeating its arguments in the Injunction Application, P also raised and detailed a number of new matters allegedly occurred after the hearings of the Injunction Application as well as some new developments of the proceedings for arguments.

(e) Much criticisms had also been leveled at several decisions of another Judge given after the Injunction Decision in support of its arguments on the liability issue. Several decided cases were also referred to.

(f) Besides, P also argued that this Court was erred in granting the Stay Order[7].

(g) Given the Injunction VOC Application did not concern the issue of liability and no application for variation of the Injunction Costs Order Nisi was made by P, Section 3 was plainly irrelevant or unmeritorious and costs-wasting.

(h) Ironically, P, in the absence of an application for variation of the Injunction Costs Order Nisi, pressed for the costs of the Injunction Application and the Stay Application to be paid by D to P “payable forthwith and summarily assessed” in §12. Such argument was irrational and completely baseless. I should not burden this Decision with the reasons set out in §28-34 of the Injunction VOC Decision.

Under section 4 : “Order immediate costs against P is unjust and inequitable” and section 5 “Ordering summary assessment of costs against P is unjust and inequitable”

(i) Under these two sections, P’s disagreement to an order for immediate summary assessment and payment of costs premised heavily on an argument that the Injunction Application was not severable and self-contained from the rest of the action. It even referred to some of the court proceedings and events occurred subsequent to the Injunction Application for assistance. Such arguments were rejected in §21-26, 34 of the Injunction VOC Decision.

Under section 6 : “Conclusion”

(j) §§27-28 are a summary of P’s arguments.

21.As summarized above, P’s opposition to the Injunction VOC Application was filled with unmeritorious and irrelevant arguments and matters. Hence, there was no reason that P should not be ordered to pay the costs of the application. Indeed, the efforts and time which were wasted to deal with the many irrelevant matters and arguments raised by P far exceeded the costs incurred in the unsuccessful Extension Request.

22.Thus analyzed, Grounds 1 and 2 are without merits.

23.In Ground 3, P contends that the costs of the Injunction VOC Application should not be awarded forthwith. I found all of its arguments on this contention devoid of logic.

24.Suffice it to say that P’s complaint that this Court’s decision to order immediate payment of costs was solely grounded in my prior ruling that indemnity costs had been awarded against P in the Injunction Decision is plainly a baseless speculation.

25.In brief, the Injunction VOC Decision was made in accordance with the legal principles regarding costs as set out above. Contrary to P’s unjustified complaints, P’s conducts in the Injunction VOC Application were treated separately and independent from the Injunction Application for the purpose of determination of the costs of the Injunction VOC Application.

26.Besides, P contests that as its opposition to the Injunction VOC Application was not unreasonable, out of bad faith or dishonest, an order for summary assessment and immediate payment of costs should not be made against it. Such proposition is misconceived which runs counter to the legal principles on costs as set out above. The law does not confine the application of such order solely to bad faith and dishonesty. It also applies to unmeritorious or unreasonable opposition to an application.

27.Moreover, P’s complaint that this Court should not consider keeping D out of its costs for an extended period as a relevant factor is without merit. Given the Injunction VOC Application was determined and concluded around the close of the amendments of pleadings, there was no reason to keep D out of its costs for a prolonged period until after the final disposal of the whole action. It is necessary for the Court to ensure the fairness to the parties in exercising the discretion as to costs and to keep a successful party from its costs may amount to prejudice: §§16 & 21 Seridom Servicios Integrados Idom SAU v Heng Wen Trade Co, Ltd [2019] HKCFI 761.

28.Further, it is difficult to see how a general statement of P that this Court “should look at the merits of the evidence summons and injunction themselves as at the time of the application to decide what should be the proper costs order for that application in all the circumstances.” could advance P’s position in this application any further.

29.Likewise, P’s general assertion under Ground 4 that its application for leave to appeal from the Injunction Decision at the Court of Appeal would end up with an overturn of the Injunction VOC Decision is a mere speculation which does not take the present application any further. It in any event would not render the Injunction VOC Application not severable and self-contained as suggested by P. Nor could it form a valid basis for a “no costs order” as P now prays for.

30.Under Ground 5, P challenges that summary assessment should not apply so as to avoid the risk of deceptive inflation of costs by D. Such challenge is unjustified bearing in mind that this Court seized of the Injunction Application, Stay Application, Injunction VOC Application and various other related applications, was in a better position to assess the costs than a taxing master and to guard against duplication of work as well as double claims for costs.

31.After all, it was open to P to raise objections to the items and quantum of costs claimed by D and to state its grounds of objection in its List of Objections.

32.I am also alive to the legal principles as set out above. The adoption of summary assessment is encouraged in order to save the parties from embarking on a separate costly and time-consuming taxation proceedings. In fact, P failed to put forward any valid substantial ground of disputing the applicability of summary assessment.

33.Coupled with the fact that the Injunction VOC Application was self-contained and severable from the rest of the action with the costs incurred therein were capable of being ascertained and assessed as the application was determined and concluded, summary assessment of costs should be adopted.

DISPOSITION

34.Having considered all the submissions of both parties, I found all of the P’s arguments are unmeritorious.

35.I make an order that : -

(1) the Present Summons be dismissed;

(2) the Variation Costs Order Nisi be made absolute; and

(3) P do pay D the costs of the Present Summons, summarily assessed at HK$21,000, payable forthwith.

The Plaintiff acting in person

Messrs Y T Chan & Co, for the Defendant