Ip, Patrick v. Chan Meanne Ching Man

DCCJ 1717/2024

[2025] HKDC 1967

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1717 OF 2024

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BETWEEN

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DECISION

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Background

1.In my Judgment handed down on 18 September 2025 (“Judgment”)  I allowed the Plaintiff’s claim, dismissed the Defendant’s counterclaim, and made a Costs Order nisi that the Defendant should pay for the Plaintiff’s costs of these proceedings, to be taxed if not agreed.  I shall adopt in this Decision the definitions used in the Judgment, and this Decision shall be read in conjunction with the Judgment.

2.By Summons dated 25 September 2025 (“Summons”), the Plaintiff applied to vary the Costs Order nisi contained in the Judgment.  The variation sought is as follows:-

“The Defendant do pay the Plaintiff all costs (including all costs previously reserved, as well as costs in HCA 1105/2020)  to be taxed if not agreed on an indemnity basis, with certificate for counsel.”

3.This is the hearing of the Summons.  The Defendant did not attend the hearing, which is not surprising, as she did not attend the Trial following her previous solicitors’ application to cease to act.

4.As detailed in the Affirmation of Wang Jiaqi dated 11 November 2025, attempts to serve the Judgment and Summons on the Defendant were made.  Ultimately, the Judgment and Summons were served by ordinary posts to the work address of the Defendant as shown on the Lingnan University Website, and they were not returned.

5.In the circumstances, it is appropriate to proceed with the hearing of the Summons under O 32, r 5(1)  of the Rules of District Court.

Legal principles

6.The principles in relation to the order of indemnity costs are well established.  In Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004)  7 HKCFAR 114, at paragraphs 16-17, Li CJ said:-

“16. The courts have rejected the proposition that an award of indemnity costs will only be made where a case has been brought with an ulterior motive or for an improper purpose or where there is some deception or underhand conduct on the part of the losing party…

17. courts have emphasized the undesirability of attempting to define the circumstances in which orders for indemnity costs are to be made. It has been said that:

“…the discretion is not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be “appropriate”. ”

7.In KJ v KMLM [2014] HKFLR 227 at paragraphs 21-23, To J summarised the relevant principles as follows:-

(a)  The starting point in hostile litigation is that costs should be taxed on party and party basis.  To qualify for costs on indemnity basis, the successful party should show some special or unusual feature in the case.  The proceedings must be instituted or prosecuted in circumstances as to constitute an affront to the court.  Usually there must be something disgraceful in the conduct of the losing party or his legal representatives such as to cause the court to feel a proper sense of indignation (paragraph 21).

(b)  If unreasonable conduct is relied on, the losing party’s conduct would need to be unreasonable to a high degree.  In this context, “unreasonableness” does not mean merely wrong or misguided in hindsight.  Advancing a case which is difficult, unlikely to succeed or which in fact fails, or without any foundation in law or fact, or devoid of merits, is not necessarily in itself a sufficient reason for an award of indemnity costs (paragraph 22).

(c)  The court’s finding that the claim or ground of defence is plainly and obviously incredible on the fact, or that the evidence has been deliberately untruthful will not necessarily in itself warrant an order for indemnity costs.  The conduct of the losing party must be of a more venal kind and the conduct of the litigation has in some sense been wicked (paragraph 22).

(d)  The court may also mark its disapproval of the conduct pertaining to part only of a party’s case by ordering costs of that part only to be assessed on an indemnity basis, with the rest assessed on party-and-arty basis (paragraph 23).

8.In Monat Investment Ltd v All Person(s)  in Occupation of Part of the Remaining Portion of Lot No 591 in Mui Wo DD 4 No 16 Ma Po Tsuen, Mui Wo, Lantau Island HCMP 1894/2015 (18 September 2020)  [2020] HKCFI 2442, DHCJ To as he then was, noted:-

“11. Honesty is the corner stone of our judicial system. People come to court to seek justice on the basis of their sworn evidence of what they allege is the truth. Dishonesty must be condemned …

12. [counsel] referred me to the case of Grant David Vincent Williams v Jefferies Hong Kong Ltd in which the court cited with approval the principle found in Bank of Baroda v Panessar that “if a person conducted himself on a wholly false basis, the true state of affairs being within that person’s knowledge, or at least capable of ascertainment if properly investigated, and the proceedings were thereby significantly prolonged and the costs commensurately increased the court was entitled to order that the person so adversely affected by that conduct should receive its costs on an indemnity basis.” That principle applies to indemnity costs. A fortiori, it also applies to liability for costs where a party deliberately pleads and attempts to prove a false case, even though he turns out to be successful. The court should not countenance such dishonesty, otherwise it would encourage litigants to try their luck…”

Discussion

9.For the following reasons, I consider that this is an appropriate case for an indemnity costs order to be made, in order to mark the Court’s disapproval of the Defendant’s conduct:-

(a)  As I noted in the Judgment, the Defendant in the present case made against the Plaintiff a number of serious allegations in the nature of sexual assault and harassment.

(b)  However, having put the Plaintiff through all the litigation process and the Trial, it became clear that the Defendant’s allegations are unfounded, and none of the Defendant and her witnesses came forward and testified.

(c)  The Defendant’s refusal to sign the Mediation Agreement and perform the substantive obligations under the Heads of Agreement are blatant breaches of the binding Heads of Agreement.  This necessitated the present unpleasant litigation brought by the Plaintiff against the Defendant, which could have been avoided had the Defendant honoured her obligations under the Heads of Agreement.

(d)  As explained in paragraphs 71-79 of the Judgment, I found that the Defendant had produced into evidence altered versions of email communications between the Parties, which suggested a less intimated relationship between the Parties than what actually was the case.  This attempt to mislead the Court is deplorable.

(e)  I am conscious of the fact that the Defendant did not attend Court to explain why and how the altered versions of the emails came about, and thus the precis method of such alterations is not known.  However, it would not be right for the Defendant to be able to avoid an order of indemnity costs by choosing not to testify in Court, when the objective evidence stacked overwhelming against the Defendant’s case.

Conclusions

10.For the reasons explained above, I shall make an order that  the Defendant shall pay the Plaintiff all costs (including the cost of the Summons and all costs previously reserved, as well as costs in HCA 1105/2020)  to be taxed if not agreed on an indemnity basis, with certificate for counsel.

11.I thank Mr Cheung for his assistance rendered to the Court.

Mr Cheung Albert, instructed by LIMS, Solicitors, for the Plaintiff

The defendant was not represented and did not appear