Oon Kim Koh, The Person Appointed To Represent the Estate of Koh Kim Chan, Deceased v. Quest Investments Ltd and Another

DCCJ 6960/2019

[2025] HKDC 1198

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 6960 OF 2019

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DECISION
(ON VARIATION OF COSTS ORDER NISI)

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(I)  Introduction

1.On 24 December 2024, I handed down my judgment[1] (“Judgment”) in favour of the Plaintiff, with a costs order nisi that the 1^st Defendant do pay the Plaintiff costs of the action including all reserved costs, to be taxed if not agreed, with certificate for counsel (“Costs Order Nisi”).

2.On 21 January 2025, the Plaintiff took out a summons pursuant to Order 42 rule 5B(6) of the Rules of the District Court (Cap 336H, sub leg)(“RDC”) for an order that the Costs Order Nisi be varied, such that the Plaintiff has her costs of the action with certificate for counsel be taxed on an indemnity basis, if not agreed.

3.I have considered parties’ written submissions and decided to determine the application on paper.

4.On 8 July 2025, the Plaintiff through her solicitors informed this Court that the 1^st Defendant had been wound up on 18 June 2025. Pursuant to section 186(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32), no action or proceeding shall be proceeded with or commenced against the company except by leave of the court when a winding up order has been made. The Plaintiff shall take steps to seek leave from the Court of First Instance to proceed with the present application.

5.On 23 October 2025, the Plaintiff through her solicitors informed this Court that upon her application jointly made with the provisional joint and several liquidators of the 1^st Defendant, the Court of First Instance had granted leave to proceed with this application.

6.In this Decision, I adopt the same definitions and abbreviations used in the Judgment.

(II)  Legal Principles

7.Order 62 rule 5 RDC set out the special matters to be taken into account when the court exercises its discretion as to costs. Matters relevant to the present case include (a) the underlying objectives in Order 1A rule 1 RDC, (b) the conduct of all the parties, and (c) whether a party has succeeded on part of his case, even if he has not been wholly successful. Conduct of the parties includes:-

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

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

(3)  conduct before, as well as during, the proceedings.

8.The Plaintiff referred to the Court of Final Appeal’s decision of Commissioner of Inland Revenue v Poon Cho Ming John (2020) 23 HKCFAR 74 which set out the following guidelines (paragraph 4 thereof):-

(1)  In certain circumstances, costs may be awarded on a more generous than usual basis of taxation so as to achieve a fairer result.

(2)  It is for the receiving party to show that the case has some special or unusual feature.

(3)  Such features are not confined to an ulterior motive, an improper purpose, deception or underhand conduct on the part of the paying party.

(4)  Neither the attributes of the parties nor the character of the proceedings are irrelevant to the question of whether a more generous than usual basis of taxation should be ordered.

(5)  The discretion to order a more generous than usual basis of taxation is not to be fettered or circumscribed beyond the requirement that such taxation be ordered only when it is appropriate to do so.

(6)  As to that, the grounds on which a more generous than usual basis of taxation is to be ordered must be connected with the case. That extends to – but not further than to – any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation.

9.The 1^st Defendant pointed out that Commissioner of Inland Revenue v Poon Cho Ming John (supra) referred to another Court of Final Appeal’s decision of Leung Chun Kwong v Secretary for Civil Service (No 2) (2019) 22 HKCFAR 282 which refused to award costs on indemnity costs:-

“14. The appellant submits that it is appropriate that costs should be taxed on the indemnity basis because these proceedings involve the public interest, the conduct of the respondents was unreasonable and their cases were wholly unmeritorious, and the appellant will be out of pocket because of the substantial contribution he was required to make in order to obtain legal aid for these proceedings.

15. Whilst we have some sympathy for the appellant because of the extent to which he will be out of pocket despite winning this litigation, we are satisfied that this is not an appropriate case for indemnity taxation of the appellant’s costs. We do not consider that the behaviour of the respondents in making the challenged decisions and thereafter in contesting the judicial review proceedings, then pursuing the appeal to the Court of Appeal and thereafter resisting the appeal to this Court was so unreasonable and without merit as to be deserving of a costs sanction usually reserved for those cases in which there has been something improper or inappropriate or wholly unreasonable in the administrative decision under challenge or in the conduct of the proceedings.”

10.The Plaintiff also cited China Shanshui Cement Group Ltd and Others v Tianrui (International) Holding Co. Ltd and Others [2021] HKCFI 2745, in which Keith Yeung J applied the legal principles on awarding indemnity costs set out in Commissioner of Inland Revenue v Poon Cho Ming John (supra). In relation to the first summons for adducing an affirmation, the court granted indemnity costs because (a) the summons had been filed and served late without explanation as to the lateness and the relevance of the affirmation, (b) the summons was only withdrawn in the course of the hearing despite earlier invitation for withdrawal by the plaintiffs, and (c) as a result the plaintiffs’ time and costs had been unnecessarily wasted and their resources had been diverted. In relation to the second summons, the defendants filed extensive written submissions in relation to three out of five paragraphs of the second summons. In their written submissions in reply, the defendants on one hand stated that they would no longer rely on a part of those three paragraphs of the summons, but on the other hand continued to make submissions on other parts of those three paragraphs. It was only at the beginning of the hearing and at the court’s invitation for clarifications that the defendants clearly and unequivocally abandoned those three paragraphs. The court agreed (at paragraph 28 thereof) that the pursuit of unarguable, weak or thin points, or points which are plainly wrong in law, can result in indemnity costs. The court, while accepting that the abandonment had saved some of the hearing time, decided that the late abandonment resulted in wastage of time, costs and resources of the court and the plaintiffs, and in particular the costs, time and resources incurred by the plaintiffs’ team in dealing with those paragraphs could have been saved and the distraction could have been spared. The court found that such late and equivocal abandonment constituted on the facts of that case special and unusual features which justified indemnity costs. On a broad brush approach, the court apportioned 35% in respect of the costs of and occasioned by those three abandoned paragraphs of the summons, so that the same be assessed on an indemnity basis.

11.The Plaintiff further referred to Three Rivers DC v Bank of England [2006] 5 Costs LR 714, paragraph 25, which summarised the principles on awarding indemnity costs. In particular, the court can and should have regard to the conduct of an unsuccessful claimant during the proceedings, both before and during the trial, as well as whether it was reasonable for the claimant to raise and pursue particular allegations and the manner in which the claimant pursued its case and its allegations. Where a claim is speculative, weak, opportunistic or thin, a claimant who chooses to pursue it is taking a high risk and can expect to pay indemnity costs if it fails.

12.The Plaintiff submitted that notwithstanding that Three Rivers DC (supra) concerned an unsuccessful claimant, the said principles apply equally to a defence run by an unsuccessful defendant. In my view, since the said principles were summarised from authorities decided on Civil Procedure Rules rules 44.3(4) and (5) which have the same wording as those parts of Order 62 rule 5 RDC set out above, the Plaintiff’s submission is correct.

13.The 1^st Defendant submitted that indemnity costs was awarded in Three Rivers DC (supra) after the claimants’ abandonment of their claim on the 256^th day of the trial. It was a substantial and complex case involving serious allegations of dishonesty against many bank officials. There were many reasons justifying the court’s award of indemnity costs.

14.The 1^st Defendant also cited H Au-Yeung J’s decision of Holinail HK Limited v Mathias Pou & Ors [2025] HKCFI 1157. I summarise the principles relating to an application for costs on indemnity basis as follows:-

(1)  Costs are in the discretion of the court, and such discretion is not fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be appropriate.

(2)  The successful party has to show, either that the case is one of a type already recognised in the practice of the court as warranting a taxation on indemnity basis or that there is some feature in the case even more special or unusual than one which would justify a taxation on the common fund basis. Costs could properly be awarded on indemnity basis where (a) the proceedings were initiated or prosecuted by the unsuccessful party in a manner which constitutes that party’s proceedings an abuse of the process of the court, (b) the proceedings were scandalous, vexatious, had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner, and (c) any proceedings instituted or prosecuted in such circumstances as to constitute an affront to the court.

(3)  Litigants who conduct their cases with an ulterior motive or for an improper purpose, or in bad faith, or as a personal vendetta, or in an improper or oppressive manner, or who cause costs to be incurred irrationally or out of all proportion as to what is at stake, may also expect to be ordered to pay costs on an indemnity basis if they lose, and have part of their costs disallowed if they win.

(4)  Indemnity costs can be awarded if the conduct of the party was unreasonable to a high degree, and unreasonable in this context certainly does not mean merely wrong or misguided in hindsight.

(5)  The above are not determinative of the sort of case in which indemnity costs may be ordered.

(6)  While each application has to be considered on a case-by-case basis, legal representatives should be able to exercise their good common sense when deciding whether the seriousness of the case is to the extent that it worth incurring costs on pursuing for indemnity costs. Legal representatives should also consider proportionality in the process. As parties normally rely heavily on the advice of their legal representatives especially in relation to matters concerning costs, it is of utmost importance that appropriate advice be given, so that costs would not be incurred unnecessarily. Legal representatives should think through the matter including the merits carefully before suggesting their clients to apply for an indemnity costs order, and they should not simply “try their luck”.

(III)  Plaintiff’s Grounds of Application

15.The Plaintiff’s grounds for her present application are as follows:-

(1)  The 1^st Defendant ran an unreasonable and hopeless defence which lacked particulars from the outset up to trial.

(2)  The 1^st Defendant acted unreasonably by constantly changing its position throughout the litigation.

(3)  The 1^st Defendant wasted the Court’s time in running arguments at trial that had neither been foreshadowed in its pleadings nor its written opening submissions.

(4)  Therefore, the 1^st Defendant should pay the Plaintiff costs of the action on an indemnity basis in order to achieve a fairer result between the parties.

(IV)  Discussion

16.In its Defence, the 1^st Defendant, apart from:-

(1)  making no admission to the Plaintiff’s Grant of Probate by the Supreme Court of Queensland in paragraph 1 thereof; and

(2)  pleading, in paragraph 8 thereof, and I quote verbatim, that “…any right of action the Plaintiff had against the 1^st Defendant (which is denied) is “statute barred” and consequently the Plaintiff is prevented at law, statute and pursuant to the Limitation Ordinance (Cap.347 of the Laws of Hong Kong) (“LO”) from commencing, continuing and obtaining the relief sought against the 1^st Defendant”,

denied all the paragraphs of the Amended Statement of Claim against it (ie paragraphs 1 to 8).

17.In other words, the 1^st Defendant essentially denied the entire Plaintiff’s case including all factual allegations but pleaded no factual allegation at all or put forward no version of events which was different from that given by the Plaintiff. The only positive defence pleaded was one of limitation, yet no particulars such as the alleged date(s) of accrual of cause(s) of action or the alleged limitation period(s) was pleaded. In short, the Defence contained bare denials and a bare assertion of limitation defence.

18.I am aware that the Defence was signed by Chiang as director and filed by the 1^st Defendant without legal representation. However, the 1^st Defendant has been represented by its present solicitors since 23 February 2023 including at the trial, but no application for amendment of the Defence was made. Further:-

(1)  In the Listing Questionnaire filed by its former solicitors on 22 April 2022, the 1^st Defendant confirmed that its pleadings were in order and required no amendment.

(2)  In the Listing Questionnaire filed by its former solicitors on 22 October 2022, the 1^st Defendant again confirmed that its pleadings were in order and required no amendment, though also proposed to deal with the issue whether the Plaintiff’s claim under the Promissory Note was time-barred as a preliminary issue to save the costs of trial.

19.In paragraphs 43 to 50 of the Judgment, I ruled that the 1^st Defendant had pleaded bare denials such that all the facts pleaded in paragraphs 4 to 7 in support of the Plaintiff’s claim were deemed admitted. Such facts included:-

(1)  the 1^st Defendant’s promise, under the Promissory Note, to pay Mr Koh the Sum by 25 equal calendar monthly instalments in Australian dollars at an exchange rate equivalent to SGD$21,000 on the 28^th day of each month commencing on 28 December 2011;

(2)  the last day of payment under the Promissory Note being 28 December 2013;

(3)  the 1^st Defendant’s failure to pay any of the instalments due under the Promissory Note;

(4)  the 1^st Defendant’s payment of AUD113,300.00 in instalments of different sums on various dates; and

(5)  the 1^st Defendant’s failure to pay the balance under the Promissory Note.

20.The ruling on the deemed admitted facts was based on fundamental principles and requirements relating to pleadings set out in Order 18 rule 13 RDC and Hong Kong Civil Procedure (paragraphs 44 and 49 of the Judgment). The 1^st Defendant had pleaded not even a single factual allegation or version of event of its own, while barely denied all the paragraphs of the Amended Statement of Claim which constituted the Plaintiff’s claim against it. With legal representation, the 1^st Defendant must have, or at least should have, realised the negative consequences, namely that it could only run its only positive defence of limitation based on the facts as pleaded by the Plaintiff which were deemed admitted.

21.In paragraph 47 of the Judgment, I dismissed the 1^st Defendant’s contention that the Plaintiff only raised the argument of bare denials and deemed admissions for the first time at trial. In paragraph 48 of the Judgment, I also dismissed the 1^st Defendant’s argument that paragraph 6 of the Plaintiff’s Reply operated as an express joinder to join issue with the bare denials in the Defence. I repeat my reasoning therein without reproduction of the same, and suffice it to say that those arguments were hopeless.

22.With the Defence containing deemed admitted facts which constituted the Plaintiff’s claim, the 1^st Defendant sought to rely on the “limitation defence”. However, such limitation defence was just a one-liner without stating how the Plaintiff’s claim was time-barred. No date(s) of accrual of cause(s) of action, corresponding limitation period(s) or date(s) of time-bar of the cause(s) of action was pleaded. Order 18 rule 8(1) RDC clearly provides that a party must in any pleading subsequent to a statement of claim plead specifically any matter, for example, any relevant statute of limitation which he alleges makes any claim of the opposite party not maintainable, or which if not specifically pleaded might take the opposite party by surprise. Hong Kong Civil Procedure 2025, Volume 1, rubric 18/8/26 also states that it is necessary to deal with each pleaded cause of action separately and individually, and to set out when the defendant says those causes of action first accrued and when the relevant limitation periods expired. These, again, are fundamental principles and requirements of pleadings.

23.The 1^st Defendant argued that the Plaintiff could have sought further and better particulars if considered necessary. I disagree. It is not the function of particulars to take the place of necessary averments in the pleading, nor to state the material facts omitted by filling the gaps, nor to make good an inherently bad pleading. See Hong Kong Civil Procedure 2025 (supra), rubric 18/12/1.

24.Whilst the 1^st Defendant did not particularise its limitation defence, I went on to consider the Plaintiff’s pleaded case at paragraph 4 of the Reply (see paragraph 58 of the Judgment), namely:-

(1)  the primary position that the maturity date of the Promissory Note was 28 December 2013 and so the Plaintiff’s claim was made within the limitation period which expired on 28 December 2019 (“Primary Position”);

(2)  the first alternative position relying on 3 confirmation letters of the 1^st Defendant’s auditors, which the Plaintiff no longer pursued at trial; and

(3)  the second alternative position that by operation of section 23(3) of LO, the cause of action was deemed to have accrued on 17 June 2016 being the date on which the 1^st Defendant made part payment of the debt owed to the Plaintiff, and therefore the Plaintiff’s claim was within the limitation period which expired on 17 June 2022 (“Second Alternative Position”).

25.Notwithstanding that written opening submissions was no substitute for a proper pleading, the 1^st Defendant ought to have made clear arguments on the limitation defence in its written opening submissions for trial in order to inform the Court and the Plaintiff as to what to expect from the 1^st Defendant on the issue. Nonetheless, the 1^st Defendant’s 5-page written opening submissions for the trial did not contain any submission on the limitation defence. Instead, it contained the following paragraph:-

“20. It is for [the Plaintiff] to prove her case on the balance of probabilities. [The 1^st Defendant] reserves its position on this until [the Plaintiff] closes her case, and will decide how to proceed with its Defence.”

26.The 1^st Defendant’s stance was totally unsatisfactory, particularly in the absence of a proper plea of the limitation defence. As stated in paragraph 26 of the Judgment, at trial I exercised my case management power to request the 1^st Defendant to make oral submissions on its pleaded case before Madam Koh’s oral evidence, citing Hong Kong Civil Procedure 2024, Volume 1, rubric 62/5/6, which read “the judge should consider whether or not the parties have conducted the litigation in accordance with a system of civil litigation which is designed to enable the parties to know where they stand at the earliest possible stage and at the lowest practicable cost, so that they may make informed decisions about their prospects and the sensible conduct of their cases”. Eventually, Mr Andrew Hart, Solicitor Advocate for the 1^st Defendant, made three points which were not submissions substantiating the limitation defence but simply further replies to the three alternative positions of the date of accrual of cause of action in paragraph 4 of the Plaintiff’s Reply. Mr Hart submitted that the three alternative dates were all incorrect and in any event the relevant limitation period had expired. See paragraph 58 of the Judgment.

27.Worse still, in its written closing submissions, the 1^st Defendant, for the first time at trial, made the Multiple Maturity Date Argument. The Plaintiff was completely taken by surprise as this new point had never been pleaded or raised in the written opening submissions or in the course of the trial, and the Plaintiff did not have any opportunity to deal with this point. In any event, costs and time were wasted for this Court and the Plaintiff to deal with this new point, despite my ruling that the 1^st Defendant was not entitled to pursue this unpleaded point. See paragraph 60 of the Judgment.

28.Turning to the merits, in paragraph 62 of the Judgment, I found in favour of the Plaintiff’s Primary Position, holding that time started to run on 28 December 2013 which was the maturity date of the Promissory Note, and that the relevant limitation period expired on 28 December 2019, and so the present action was not time-barred. In paragraphs 64 and 65 of the Judgment, I went on to consider the merit of the Multiple Maturity Date Argument in any event and dismissed the argument. In paragraph 68 of the Judgment, I further ruled that even if I was wrong in ruling in favour of the Primary Position, and even if I was wrong in dismissing the Multiple Maturity Date Argument on merit, the Second Alternative Position would prevail, namely that by operation of section 23(3) of LO, time ran afresh on 17 June 2016, as it was a deemed admitted fact by the bare denials (or otherwise the fact found on evidence) that on 17 June 2016 the 1^st Defendant made a partial payment of AUD 20,000.00 under the Promissory Note to Mr Koh.

29.It is crystal clear that, by reason of the deemed admitted fact that the 1^st Defendant made a partial payment of AUD 20,000.00 under the Promissory Note to Mr Koh on 17 June 2016, irrespective of whether the Plaintiff’s Primary Position or the 1^st Defendant’s Multiple Maturity Date Argument should prevail, time was deemed to have started to run afresh by operation of section 23(3) of LO, and the limitation period only expired on 17 June 2022, and the Plaintiff’s claim was brought well within time. Therefore, even if benefit were given to the unparticularised limitation defence or the unpleaded Multiple Maturity Date Argument, the limitation defence was hopeless and bound to fail as the Plaintiff’s Second Alternative Position would prevail.

30.In my judgment, applying the principles in Order 62 rule 5 RDC, Commissioner of Inland Revenue v Poon Cho Ming John (supra), Leung Chun Kwong (supra), China Shanshui Cement Group Ltd (supra), Three Rivers DC (supra) and Holinail HK Limited (supra) cited above:-

(1)  the 1^st Defendant’s plea and the subsequent maintenance (through trial) of a hopeless defence, namely bare denials of essentially the entirety of the Plaintiff’s Amended Statement of Claim, and an unparticularised, one-liner “defence of limitation”, without pleading a single factual allegation or version of event;

(2)  the 1^st Defendant’s failure to make any submission on the only pleaded positive defence, namely the one-liner “defence of limitation”, in the written opening submissions; and

(3)  the running of the unpleaded Multiple Maturity Date Argument for the first time in the written closing submissions, which was dismissed and was bound to fail by reason of the Second Alternative Position,

are such conduct being highly unreasonable and constituting an abuse of the process of the court and an affront to the court, and an award of costs on indemnity basis should be made. Time and costs of the Court and the Plaintiff were unnecessarily but seriously wasted by such conduct of the 1^st Defendant. An award of indemnity costs against the 1^st Defendant is conducive to the underlying objectives of (a) increasing the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the court, (b) promoting a sense of reasonable proportion and procedural economy in the conduct of the proceedings, (c) ensuring fairness between the parties, and (d) ensuring that the resources of the court are distributed fairly.

31.Further, during the cross-examination of Madam Koh, Mr Hart sought to ask questions on the unpleaded Capacity to Sue Point, but those questions were rejected by this Court. Yet, the 1^st Defendant raised and argued the Capacity to Sue Point again in its written closing submissions. I declined to consider the Capacity to Sue Point. See paragraphs 76 to 80 of the Judgment. Nonetheless, the costs and time of the court and the Plaintiff were unnecessarily wasted and diverted by this unpleaded point. This is another unusual and highly unreasonable feature of this case that justifies an award of indemnity costs.

32.The 1^st Defendant submitted that the Plaintiff had not found its defence to be so hopeless as to warrant an application for summary judgment. However, the 1^st Defendant did not cite any authority suggesting that no indemnity costs can be awarded if a plaintiff did not apply for summary judgment but chose to participate at trial. In my view, applying the legal principles in Commissioner of Inland Revenue v Poon Cho Ming John (supra) cited above, if, having considered all circumstances of the case including parties’ conduct and the fact that the plaintiff did not apply for summary judgment but chose to participate at trial, it is still appropriate to grant indemnity costs, then the same should be ordered.

33.At this juncture, I have to mention that the Plaintiff also relied on the 1^st Defendant’s ever-changing position during the course of this action and its attempts to reserve its position on various matters including the making of various potential interlocutory applications to perfect its case as such conduct warranting the award of indemnity costs. The conduct complained of are as follows:-

(1)  in the Timetabling Questionnaire filed by its former solicitors on 9 June 2021, the 1^st Defendant indicated that if mediation fails, it will “…apply to amend its Defence to plead, inter alia, that in view of agreements/promises made or given between [Mr Koh] and [Chiang] (a director of the 1^st Defendant), the Plaintiff is estopped from making a claim against the 1^st Defendant.”

(2)  In the Timetabling Questionnaire filed by its former solicitors on 24 November 2021, the 1^st Defendant indicated that “…after the witness statement of the [1^st Defendant’s] replacement witness has been prepared, [the 1^st Defendant] intends to obtain counsel’s advice on whether an application should be made to strike out [the Plaintiff’s] claim on the ground that the claim is statute barred under the [LO]. [The 1^st Defendant] intends to make the appropriate application if so advised by counsel.”

(3)  As mentioned above, in the Listing Questionnaire filed by its former solicitors on 22 April 2022, the 1^st Defendant confirmed that its pleadings were in order and required no amendment.

(4)  As mentioned above, in the Listing Questionnaire filed by its former solicitors on 20 October 2022, the 1^st Defendant, despite its confirmation of no amendment to pleadings required, proposed to deal with the issue of time-bar by preliminary issue to save the costs of a trial.

(5)  In the 1^st Defendant’s Pre-Trial Review Note dated 13 March 2024, Mr Hart indicated that his solicitors’ firm was taking steps to issue a summons to cease acting for the 1^st Defendant. However, at the Pre-Trial Review hearing, Mr Hart confirmed to the Court that he had instructions to proceed.

(6)  As mentioned above, in its written opening submissions for the trial, the 1^st Defendant reserved its position and failed to address its case, and there was no mention of any requirement to amend the Defence.

34.In the 1^st Defendant’s written submissions, an explanation was given for the conduct in paragraph 33 above, namely that upon the death of its crucial witness Mr Chiang during these proceedings in July 2021, the 1^st Defendant was forced to review its options regarding the running of its Defence, and while different ways forward were considered, it hardly amounted to an “ever-changing position” on the part of the 1^st Defendant. It should be noted that such an explanation is not contained in any sworn evidence adduced by the 1^st Defendant, so I decline to consider the same. In any event, even without the said explanation from the 1^st Defendant, I accept that a party may re-evaluate its position from time to time in the course of the proceedings especially before the setting down for trial, and this is the reason why the court gives directions, especially at case management conferences, for parties to seek counsel’s advice and thereafter take out all interlocutory applications. Hence, I do not find the 1^st Defendant’s conduct in paragraph 33 above as so highly unreasonable or constituting an abuse of the process of the court or an affront to the court which warrant indemnity costs.

35.That said, the various indications and reservations made by the 1^st Defendant before setting down for trial (paragraph 33(1)-(4) hereof) suggested that the 1^st Defendant had not committed to a definite position as to whether its defence would be perfected or how its defence would be conducted, be it by amendment application or application for striking out or for trial of a preliminary issue. In the circumstances, it was totally understandable that the Plaintiff acted cautiously without making any application for summary judgment, in which she would have to carry the heavy burden of showing no triable issues or no defence. After the setting down for trial, generally speaking interlocutory applications should not be lightly made, and in the present case the absence of any summary judgment application on the Plaintiff’s part after the setting down cannot be faulted, especially having regard that such an application would probably waste rather than save time and costs of the court and the Plaintiff.

36.Therefore, I do not find that the absence of any application for summary judgment on the Plaintiff’s part militates against the unusual features in this case which warrant an award for indemnity costs.

37.The 1^st Defendant also contended that the Plaintiff, by not seeking indemnity costs in the written closing submissions for trial or at the hearing for oral closing submissions, did not consider its defence was hopeless. I reject this argument. At the end of the oral closing submissions, I indicated that judgment was reserved to be handed down later. As I had not heard parties on costs, I made the Costs Order Nisi in the Judgment, and the Plaintiff is entitled to apply for variation of the same pursuant to Order 42 rule 5B(6) RDC. I add that it is not uncommon that the court makes, or the parties invite the court to make, a costs order nisi in the reserved judgment, which may contain comments or observations on parties’ conduct which are relevant to the award of costs. As stated in Holinail HK Limited (supra), an authority cited by the 1^st Defendant, legal representatives should think through the matter including the merits carefully before suggesting their clients to apply for an indemnity costs order, and they should not simply “try their luck”.

38.The 1^st Defendant further submitted that its case was not hopeless as it had filed an application for leave to appeal to the Court of Appeal against the Judgment. In fact, by another decision today[2], I dismissed the 1^st Defendant’s application for leave to appeal. As I made it clear above, irrespective of whether the Plaintiff’s Primary Position or the 1^st Defendant’s Multiple Maturity Date Argument should prevail, time was deemed to have started to run afresh by operation of section 23(3) of LO, and the limitation period only expired on 17 June 2022. I held in that other decision that since no palpable error could be pinpointed against the finding of deemed admitted facts including the payment of AUD 20,000.00 on 17 June 2016 or the conclusion on the Second Alternative Position, the intended appeal was bound to fail. As I said above, the legal consequences of bare denials and deemed admitted facts are based on fundamental legal principles and requirements of pleadings which the 1^st Defendant must have, or at least should have, known. Yet, the 1^st Defendant pursued the trial with the hopeless defence containing bare denials of essentially the entire Plaintiff’s claim and an unparticularised one-liner defence of limitation, and further pursued the intended appeal without identifying any palpable error in the Judgment.

39.I should also add that by paragraph 81(3) of the Judgment, I ordered parties to agree to such rate or rates for calculating pre-judgment interest awarded to the Plaintiff, and failing such agreement each party shall file and serve evidence and written submissions so that this Court shall determine the rate or rates on paper. However, as noted in paragraphs 2 to 4 of my decision on pre-judgment interest handed down on 28 March 2025[3], the 1^st Defendant did not reply to the letter of the Plaintiff’s solicitors which sought to reach agreement on the rate(s), and further did not file any evidence or written submissions. The 1^st Defendant did not offer any explanation for its failure to comply with my order. This is highly unreasonable and also constitutes an affront to this Court. I find this as another unusual feature, in addition to those identified above, which warrants an award of costs on indemnity basis.

(V)  Conclusion

40.I allow the Plaintiff’s application and order that the Costs Order Nisi be varied, such that the Plaintiff has her costs of the action including all reserved costs, with Certificate for Counsel, to be taxed on an indemnity basis if not agreed.

(VI)  Costs of this Application

41.In the summons, the Plaintiff asks for her costs of this application. In her written submissions, the Plaintiff asks for her costs be summarily assessed on an indemnity basis and payable forthwith.

42.Costs should follow the event. The consideration of the written submissions on costs should be regarded as part of the trial. Hence, I make the following costs order nisi:-

(1)  The 1^st Defendant do pay the Plaintiff’s costs of this application on an indemnity basis, to be taxed if not agreed.

(2)  This order nisi shall become absolute in the absence of application to vary within 14 days.

Munros, for the plaintiff

Hart Giles, for the 1^st defendant