Chung Suet Wan v. Chung Suet Han and Another

DCCJ 5534/2020

[2025] HKDC 463

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5534 OF 2020

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DECISION

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Introduction and Procedural Background

1.This is an application by Summonses both dated 5 November 2024 (“the Summonses”) by the 1^st Defendant and 2^nd Defendant respectively to vary the costs order nisi made in the Judgment handed down by me on 24 October 2024 (“the Judgment”): see [2024] HKDC 1699. For consistency and ease of reference, I shall continue to adopt the same terms and abbreviations as the Judgment.

2.The costs order nisi made in the Judgment at §97 was that P do pay Ds’ costs of this action (including all reserved costs) to be taxed, if not agreed, with certificate for counsel.

3.At the time when the Summonses were taken out both D1 and D2 were not legally represented. An affirmation of D1 (“D1’s Aff”) and affirmation of D2 (which simply referred to D1’s Aff) both dated 5 November 2024 were filed in support of the Summonses.

4.At the first hearing of the Summonses on 12 December 2024, Mr Wan, counsel who appeared on behalf of Ds, submitted that as Ds had only recently retained solicitors (a Notice to Act was filed on 3 December 2024) and himself to act for them, he wished to seek leave for filing of further evidence. Despite my granting of leave to Ds to file further evidence, ultimately Ds did not do so. P also did not file any affirmation in opposition.[1]

5.Written submissions were lodged by counsel for P and Ds pursuant to my directions for paper disposal of Ds’ application.

Discussion

6.In Mr Wan’s written submissions, he sought a variation of the costs order nisi to an order that P do pay Ds’ costs of this action with certificate for counsel (including all reserved costs):

(1)  At the High Court scale, to be taxed if not agreed, on an indemnity basis, up to the date of the order of transfer to the District Court on 5 October 2020 (“the Pre-Transfer Costs”); and

(2)  At the District Court scale: (a) from 6 October 2020 up to 19 June 2023 to be taxed, if not agreed, on a party and party basis; and (b) from 20 June 2023 onwards until payment to be taxed, if not agreed, on an indemnity basis with interest at the enhanced interest rate of 10% above the judgment rate, or at such higher rate and for such period as this Court deems fit (“the Post-Transfer Costs”).

7.For the Pre-Transfer Costs, the following were submitted as the basis for seeking costs at the High Court scale:

(1)  This action was commenced by P in the High Court;

(2)  It was only until 5 October 2020, after the filing of pleadings, P’s first witness statement and Ds’ first and supplemental witness statements, that the claim was ordered, by consent of the parties, to be transferred to the District Court; and

(3)  There is no information why P decided to unreasonably commence this action in the High Court rather than the District Court. There is no reason why Ds should not recover their costs incurred prior to the transfer to be taxed at the High Court scale.

8.As for the basis for seeking indemnity costs, Mr Wan relied on the following repeated delay by P and submitted that it amounts to unreasonable conduct:

(1)  After Ds filed their Amended Defence on 22 October 2018, P sought extension of time for 4 times to file her Amended Reply with no good reason and it took P five months to file her Amended Reply eventually on 11 March 2019;

(2)  Whilst P originally proposed to file her supplemental witness statements in September 2020, P again sought multiple time extension and only filed it in late January 2021 with a delay of 4 months; and

(3)  In breach of the Order of Master Maurice Lam dated 16 April 2021, and despite the letter from Ds’ solicitors dated 25 August 2021, P failed to set down the case for trial in May 2021 and only sought time extension on 15 September 2021, 4 months after time for setting down has expired.

9.Mr Wan further relied on P’s not responding to a Notice to Admit Facts served on P on 11 December 2017 which included facts which P herself agreed in her witness statements. It was submitted that a lot of time had been unnecessarily wasted at the trial which could have been saved had P responded to the Notice to Admit Facts.

10.Although I agree with Mr Wan that there is no evidence filed by P, nor for that matter any submissions made the written submissions of Mr Tang, counsel for P, that there was sufficient reason for bringing this action in the High Court, yet if Ds took the view that the action was wrongly commenced in the High Court, they could also have taken steps to have the proceedings transferred to the District Court sooner. In the exercise of my discretion, I will not allow the Pre-Transfer Costs at the High Court scale.

11.Furthermore, I do not regard the circumstances such as to warrant taxation on an indemnity basis. In respect of the extensions of time to file the Amended Reply, Ds had agreed to these extensions subject to it being made on an “unless order” basis and payment of costs to Ds. As for the extensions of time to file supplementary witness statements and set down for trial, again they were consented to by Ds. Whilst P had not admitted the Notice to Admit Facts, those facts essentially were based on Ds’ case on the parties’ agreement, their common intention and the Repayment Agreement which was contrary to P’s case. These matters were explored and tested at trial. The costs order against P would cover the costs of proving those facts. The fact that ultimately P failed to prove her case does not warrant costs on an indemnity basis. Nor is there any basis to find, nor has it been suggested, that P unreasonably prolonged the proceedings by not responding to the Notice to Admit Facts. In all, I do not find P’s conduct so unreasonable to a high degree or which otherwise deserves moral condemnation from the court to make an award of indemnity costs appropriate.

12.For the Post-Transfer Costs, Mr Wan submitted that P had failed to do better than a sanctioned offer made to P by letter dated 22 May 2023 (“Sanctioned Offer”), which he submitted was a valid offer that complied with O 22, r 5(7) of the Rules of the District Court, Cap 336H (“RDC”) and the consequences under O 22, r 23 of RDC shall follow from 20 June 2023 (being the latest day on which the sanctioned offer could be accepted without leave) onwards.

13.Mr Tang in his written submissions had not submitted that the Sanctioned Offer was not a valid one which complied with O 22, r 5 of RDC. However, he submitted that it was not a genuine offer such that it was unjust to apply the costs and interest sanction for the non-acceptance of the Sanctioned Offer by P.

14.Although Mr Wan submitted that from a comparison between the Sanctioned Offer and the Judgment, both required inter alia the Property to be sold, the interests of P, D1 and D2 were joint, each holding 1/3 of the beneficial interest and P do bear the costs of the action including all reserved costs, I also ordered for account and enquiries to be taken in respect of all incomes and expenses in relation to the Property: see Judgment, §96.

15.I therefore do not accept Mr Wan’s submissions that P has failed to do better than the Sanctioned Offer. In the circumstances, it is not necessary to consider Mr Tang’s submissions that the Sanctioned Offer was merely a tactical move and not a genuine offer.

Disposition and Orders

16.Accordingly, I will dismiss the Summonses and the costs order nisi is made absolute.

17.There is no reason why costs should not follow event. I therefore make a costs order nisi that Ds shall pay P the costs of the Summonses to be summarily assessed if not agreed. In the absence of any application to vary the costs order nisi within 14 days from the handing down of this Decision: (1) the costs order nisi shall become absolute; and (2) if costs are not agreed, P shall lodge and serve her Statement of Costs within 21 days from the handing down of this Decision; and Ds shall lodge and serve any objections to the Statement of Costs within 3 days thereafter.

Mr Hughes Tang, instructed by Chung & Kwan, for the plaintiff

Mr Kev L H Wan, instructed by KWC & Associates, for the 1^st & 2^nd defendants