Mtr Corporation Ltd v. Ocean System Ltd and Another

HCMP 2140/2024

[2026] HKCFI 2244

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2140 OF 2024

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BETWEEN

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DECISION

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A. INTRODUCTION

1.This is a decision in relation to the costs of an originating summons issued by the plaintiff (“MTRC”)  dated 24 October 2024 (“the OS”)  against the 1^st defendant (“Ocean System”)  and the 2^nd defendant (“Ip Kwan”, the 1^st and 2^nd defendants collectively referred to as “Ds”).  It is also in relation to the costs of the inter-parte summons for speedy trial taken out by MTRC on 25 October 2024 for the determination of the issues stated under the OS (“the Summons”).  

2.On 1 November 2024, the parties appeared before me for the hearing of the OS and the Summons (“the Hearing”)  where counsel for MTRC (Mr Albert Chan)  and senior counsel for Ds (Mr Neville Sarony SC)  agreed to have the matters resolved in a practical manner after the court had expressed its strong views on how the applications should be dealt with.  This resulted in the order made by the court on the same day, based on the directions agreed by the parties’ counsel after they had the chance to discuss the matters amongst them during a short adjournment allowed by the court at the Hearing (“the Order”).  The costs for the OS and the Summons, as well as the costs for the Hearing, was reserved under the Order.

3.Pursuant to an order dated 28 February 2025, by consent, a direction hearing was to be fixed for the parties to argue on the issue of costs of the OS and the Summons (“the Costs Issue”).  By an order dated 9 June 2025, the court directed that an oral hearing on the Costs Issue should take place before me. 

4.The hearing for the Costs Issue took place before me on 23 July 2025 whereby MTRC was represented by Ms Audrey Eu, SC leading Mr Albert Chan, while Ds were represented by Mr William Wong SC leading Mr Martin Lau and Mr Victor Lui.  

B.   BACKGROUND

5.MTRC is the manager of Admiralty Centre.  Ocean System is the owner of the office units situated at Units 608-609, Tower 1, Admiralty Centre, 18 Harcourt Road, Hong Kong (“the Office”)  and Ip Kwan are its tenants.

6.MTRC, through the letters of MTRC’s solicitors, Messrs. Lo & Lo (“LL”), has since August 2024, requested access to the Office for the inspection, repair, and/or maintenance of Fire Damper (“FD”)  Nos 1-4.  These FDs are only accessible from inside the Office.  By their letters dated 13 August 2024, 14 August 2024, 24 September 2024 and 4 October 2024, LL has made at least 4 requests for entry.

7.On 30 September 2024, the Fire Service Department (“FSD”)  issued the Fire Hazard Abatement Notice (“the FSD Notice”)  requiring FD2 to be repaired and/or maintained by 29 November 2024 (“the FSD Deadline”), failing which all co-owners of Tower I would be liable to prosecution.

8.MTRC claims that while Ds clearly recognized the urgency and seriousness of the situation, they nevertheless refused LL’s requests, despite MTRC’s repeated assurance[1] that Ds were welcome to take any measures considered necessary and appropriate to record the status of the FDs and/or witness the process of the inspection, repair and/or maintenance. By their letter dated 4 October 2024, Ds effectively cut off any discussion by stating: “We are not to engage into further correspondence with you, which are only to generate costs.  If [MTRC] considers justified to take any other course of action, please proceed”.  In light of the FSD Deadline and Ds’ attitude, MTRC says it had no option but to issue the OS and the Summons on 24 and 25 October 2024 respectively for speedy entry and necessary works.

9.As said, the matter came before this court on 1 November 2024 and directions were given under the Order at the Hearing.  The Order facilitated the subsequent inspection, repairs, and/or maintenance of the FDs (which led to the discovery of FD5 adjacent to FD1).  The FSD Notice was complied with in time, and all works were completed by 11 February 2025.  As such, MTRC says the purpose of both the OS and the Summons has been achieved.  It is therefore no longer necessary for MTRC to seek any relief.  In the circumstances, MTRC seeks leave to formally discontinue and/or withdraw the OS and the Summons as part of the Costs Issue.

10.On the other hand, Ds say that the OS is a “satellite litigation” brought by MTRC.  Ds submit that it should be viewed against the wider context where an ongoing action between the parties in HCA 1283/2023 (“the HCA Action”)  was on foot.  In short, Ds say that:-

(1)  In the HCA Action, Ds complains that MTRC, being the building’s manager, had derelicted its duties;

(2)  Amongst other things, it is Ds’ case in the HCA Action that MTRC has failed to service and repair certain FDs physically situated within the Office. Ds therefore claim that the state of the FDs is a crucial piece of evidence;

(3)  Whilst the HCA Action is still pending, Ds claim that they were willing to discuss the terms of MTRC access.  However, Ds say MTRC did not engage in any constructive discussion.  Instead, MTRC took out the OS, by which MTRC seeks a near-unqualified right to access to the Office for the purposes of “repair” (in the case of FD2)  and “carrying out an annual inspection” (in the case of FDs 1, 3 and 4);

(4)  the OS made no attempt to address Ds’ concerns about preservation of evidence; and

(5)  MTRC further aggressively took out the Summons for speedy trial on 25 October 2024, when the alleged “urgency” was plainly induced by MTRC’s dereliction of duties and/or decision to stay put in the first place.

MTRC’s Primary Submissions

11.Ms Eu SC submits on behalf of MTRC that Ds ought to pay MTRC for the costs of (1)  these proceedings (including all reserved costs); and (2)  the Summons, on an indemnity basis for the following reasons:-

(1)  In light of Ds’ refusals even to discuss MTRC’s requests since August 2024 to allow entry into the Office, MTRC had no choice but to issue the OS in accordance with its duties and undisputed powers under the Deed of Mutual Covenant (“DMC”)  in the interest of all co-owners in view of the FSD Notice issued by the FSD (which required FD2 to be repaired the FSD Deadline);

(2)  It was only after the issue of the OS and the Summons that Ds allowed entry; enabling compliance with the FSD Notice before the FSD Deadline, and all works on the other FDs in the Office were completed by 11 February 2025.  Thus, it is no longer necessary for MTRC to proceed with the OS and the Summons.  MTRC is therefore the “effective winner” of both.  Ds had changed their stance upon commencement of proceedings.  Had Ds acted sooner and reasonably, MTRC would not have had to bring proceedings in the first place; and

(3)  As evident from what eventually transpired, none of Ds’ demands prior to the OS were good reasons to deny entry, and were merely Ds’ excuses/tactics to gain an advantage in the HCA Action, which has yet to go to trial.

Ds’ Primary Submissions

12.Mr Wong SC on the other hand submits on behalf of Ds that:-

(1)  The OS and the Summons were unnecessary;

(2)  MTRC did not, in any meaningful sense, succeed under the OS and the Summons; 

(3)  MTRC’s conduct of the proceedings was also unreasonable; and

(4)  On the other hand, Ds cannot be faulted in the conduct of the proceedings.

13.For the reasons stated in Ds’ written submissions which were expanded in his oral submissions at the hearing before me, he says that MTRC should pay Ds’ costs of and occasioned by the OS, including but not limited to the Summons, the Hearing and all costs reserved.[2]

C.   DISCUSSION

The HCA Action

14.There is no dispute that a fire happened at the Office in 2018 which had caused severe damage to it.  It necessitated large-scale renovations.  Ds allege the Office was also disturbed by smell generated by the operation and activities performed in the plant room after the fire.  Ds further allege that since 2018, the Office has been suffering from nuisance of various forms. They claim that the situation worsened in 2022 when the Office was attacked by sudden and loud “bong” noises for multiple times daily. 

15.In May 2023, Ip Kwan engaged an acoustic and heating, ventilation and air-conditioning (“HVAC”)  expert.  The expert advised that the cause of the noises could be “due to the automatic opening or closing of the dampers/values installed for the ductworks and/or pipeworks”. The expert also explained that Regulations 5 and 5A of Building (Ventilating Systems)  Regulations (Cap. 123J)  required every FD to be inspected and certified annually to ensure safe and efficient working order.  It is claimed that Ds then became aware of the issues concerning the maintenance and inspection of the FDs. 

16.Ds’ complaints were disputed by MTRC, including the noise nuisance.

17.Ds then commenced the HCA Action on 14 August 2023 against MTRC as 1^st defendant and its contractor responsible for the ventilation and air-condition system of Admiralty Centre, namely, The Jardine Engineering Corporation, Limited (“Jardine”)  as 2^nd defendant in that case.  Part of Ds’ claim against MTRC and Jardine concerns the failure to inspect and manage the FDs.  Both MTRC and Jardine deny liability.

18.The HCA Action remains pending and discovery has not been completed yet.

The Issues in Dispute under the OS

19.While the HCA Action provides a useful background to the dispute between the parties under the present proceedings, I note that it does not involve the same issues as what MTRC had asked the court to resolve under the OS and the Summons. Hence, one must not conflate the issues raised by Ds in the HCA Action and those raised by MTRC under the OS.  In my view, they involve very different issues.  They also involve different parties as Jardine is not a party to the OS.

Events leading to the issue of the OS

20.It is not disputed by the parties that the inspection of the FDs was as a result of an inspection carried out by the FSD officers at the Office of Ip Kwan on 7 August 2024.  On that occasion, two FSD officers attended the Office and performed inspection of the 4 FDs according to the layout plan provided to them by Ms Corrina Kwan (“Ms Kwan”)  of Ip Kwan: see §§57 and 58 of Ms Kwan’s affirmation filed on 21 March 2025 (“KLYC 1^st”).

21.It is also not disputed on that occasion neither MTRC nor Jardine’s representatives were present as they were not invited to nor notified of the FSD’s inspection. It was arranged by Ip Kwan without the knowledge of MTRC: see §29 of affirmation of Chau Wing Kit filed on 25 October 2024 on behalf of MTRC (“CWK 1^st”).

22.Following the FSD’s inspection on 7 August 2024, MTRC was orally informed by the officers on site of the following matters:-

(i.)  FD2 was malfunctioning and that it was required to be repaired within 60 days to abate the fire hazard;

(ii.)  FD4 was functioning normally;

(iii.)  As regards FD1 and FD3, there was no access panel and therefore, an inspection could not take place; and

(iv.)  MTRC shall cause and carry out inspection and repair of the 4 FDs as soon as possible.

23.On 13 August 2024, MTRC through its solicitors LL wrote to Ip Kwan requested Ds to grant access to the Office so that an inspection of FDs 1, 3 and 4 could be arranged on 15 or 16 August 2024.  If those 2 dates were not convenient, Ds were invited to propose other alternative dates.  To facilitate the proposed inspection, LL included a 9-page method statement prepared by Jardine (“the August Method Statement”)  to inform Ds of the nature, procedure, and duration of the works to be performed.

24.As regards the repair of FD2, LL informed Ds that the FSD required maintenance work to be carried out as soon as possible, and in any event within 60 days; and invited Ds to confirm when would be the best time for such repairs to be carried out by MTRC’s contractor.

25.This was the first time MTRC asked for an inspection of the Office in relation to the FSD Notice.  

26.It should be noted here that the above letter of LL dated 13 August 2024 (as in all their subsequent correspondence on the subject matter)  was written under the caption of “Fire Damper Inspection Admiralty Centre”.  This is in contrast to Ip Kwan’s reply letter on 13 August 2024 (and in all their subsequent correspondence on the subject matter)  which was written under the caption of “Re: HCA 1283 of 2023”.  This marked a fundamental difference of how the parties viewed the FSD Notice issued by the FSD and the inspection and repair of the FDs.

27.In a highly emotional reply letter dated 13 August 2024, Ip Kwan pointed out what they considered as the “false” contents of LL’s letter.  A lot of serious accusations have been made against MTRC regarding its conduct under that letter.  In particular, Ip Kwan accused MTRC of fabricating the suggestion that FD 1&3 were blocked by Ds’ false ceiling or decorative structures, and also acting dishonestly, wilfully, and with an intention to mislead Ds into believing that the fault was on them.  Further, Ip Kwan dismissed the August Method Statement “is not the information requested by us” and the “irrelevant material” would cost them time and costs in reading them.  They were also unable to see how it would assist them to “understand and plan for the inspection and make precaution and measurements to address the interferences caused to our operation.”  They asked MTRC to contact Ms Kwan immediately to discuss “the issues involved and the logistics for the carrying out of the inspection”.

28.In a letter dated 14 August 2024 in reply to the above letter, LL suggested “it may be useful for the purpose of planning the inspection and repair work if [MTRC] and [Jardine]’s representatives can attend [the Office] to briefly review the 4 fire dampers.”  They suggested this preliminary inspection should take approximately 30 minutes only.  This was MTRC’s second request for an inspection.

29.In a lengthy reply to the above letter of LL, Ip Kwan in their letter dated 14 August 2024 started by stating “we do not understand ‘what contents’ in our letter which justifies an inspection of the fire dampers for 30 minutes inside the office”.   After a lengthy complaint of the conduct of MTRC and Jardine since the fire in 2018, the letter ended with “[W]e await the opportunity to discuss the issues in relation to the requested inspection of the fire dumpsters.” but without making any concrete proposal as to when MTRC could enter the Office for the purpose of carrying our either the preliminary inspection and/or the inspection and repair itself.

30.On 26 August 2024, LL wrote to Ip Kwan and explained the reason why MTRC considered a brief review of the 4 FDs in order to assess the situation and draw up an inspection and repair work procedures (or method statement)  suitable to the situation of the Office.  LL stated clearly that it would be difficult for MTRC to discuss the logistics of the inspection and repair work if they are unable to conduct the requested preliminary visit.  LL made it clear in their letter that the inspection of the FDs was necessary regardless of the HCA Action. If preservation of evidence was their concern, LL suggested that the parties could take photographs of the relevant FDs and their surrounding areas as appropriate before carrying out any inspection and/or repair work.

31.In another lengthy reply to the above letter of LL on the same day, ie 26 August 2024, Ip Kwan stated, inter alia, the following:-

“…on the exchange between by Mr Mok of the management office of MTRC with Ms Kwan on 16 August 2024. Ip Kwan concluded that as result of the conversation between Ms Kwan and Mr Mok, it shows what LL has stated in the letter dated 14 August 2024 ie it requests for his visit was not truthful. Further, Ip Kwan claimed that the request to inspect the FDs will inevitably alter or temper the condition of the FDs in the cost of inspection. The issue will require tactful handling. Ms Kwan requested the person in charge the case to tactful her directly to discuss the logistics and pre-conditions put the logistics and the pre-conditions in ‘further acquisition be made in MTRC will try to post what they wanted on Ocean System and Ip Kwan as they were the subordinates’. Ip Kwan insists that the ‘parameters for the caring out of the inspection and the conditions which preserve (Ds’)  position need to be agreed appoint.’”

32.Ip Kwan also stated that the issues could not simply to resolve by taking of pictures.  The examination of the FDs and the subsequent repair involved technical special knowledge and skills. Ds maintained that they needed to be assisted by specialists throughout.  They said that these costs need to be incurred solely because of the current condition of the FDs which were MTRC’s responsibility.  They also said there were other issues which need to be resolved and requested the person in charge of the matter at MTRC or the handling solicitor at LL should immediately approach Ms Kwan for discussion and sorting out the issues.

33.In any event, no consent has been given by Ip Kwan to allow MTRC to carry out the preliminary inspection and/or the inspection and repair needed in order to comply the FSD Notice.

34.Further correspondence had been exchanged between Ip Kwan and LL from 26 August to 10 September 2024 but they were in relation to the discovery of the Section 5A Certificates under the HCA Action and not about the FD inspection.

35.In reply to Ip Kwan’s letter dated 26 August 2024, LL wrote in a short letter dated 10 September 2024 summing up the position of MTRC as follows:-

“The purpose of the preliminary visit as requested in our letter of 14 August 2024 (copy enclosed)  is to plan ahead for the fire dampers inspection and repair. The intention was clear, i.e. to simplify and expedite matter and our client did not expect that such a simple request would elicit a flurry of letters from your clients alleging, inter alia, that:

1. Our client is untruthful and unreasonable;

2. Our client has been treating your clients as if they were its subordinate; and

3.   A parameter should be set and agreed upon before conducting the visit.”

36.From the above letter, what MTRC asked for (through its solicitors LL)  was very simple.  They only wanted a preliminary visit in order to ascertain how the inspection of the FDs on the Office could be carried out.  LL strenuously denied the allegations of (1)  and (2)  above.  They pointed out that such allegations served no useful purpose to the planning, arranging and/or conducting the preliminary visit, fire damper inspections and repair.  They also did not agree that the condition of the FDs would “inevitably the altered or tampered in the course of inspection” as suggested in Ip Kwan’s letter.  LL also pointed out that Ocean System and Ip Kwan’s rights in the HCA Action could well be preserved by taking of photographs.  They put on record that in related to these engaged specialists, MTRC would not agree to bear their costs and would ask the court to disallow such costs during taxation (if any).

37.LL’s letter ended with the sensible suggestion that in order to facilitate instructions being taken by them from the client, they say it would be helpful if Ip Kwan could specify in writing “the exact parameters or conditions for the proposed preliminary visit”.

38.This short letter dated 10 September 2024 from LL invoked yet another lengthy reply from Ip Kwan on 10 September 2024.  This letter again linked the issues of the HCA Action rather than dealing with the simple request made by MTRC for carrying out the preliminary inspection first and then to agree on the method statement for the inspection and repair of the FDs.  For example, this letter included the following matters which were highlighted by Mr Wong SC in his submissions:-

“5.  Not accepting that your client has any locus or basis so to do, would your client also state as to who your client considers suitable to perform the picture and evidence taking on the part of the Plaintiffs?  The Plaintiffs’ staff?  The FDs were installed at above the false ceilings and the inspection will involve “Work Above Ground” and fire services facilities which are prescribed by law to be handled by someone with the license and training.

……

9.  The Plaintiffs are legitimately concerned that any record or photograph taken in the requested inspection will be used to assist in disguising the truth of what had happened in the past or to accuse our Ms. Kwan to be barbaric and unreasonable, given how your client has handled the evidence and the contents of your client's affirmation filed in these proceedings.

10. In the telephone conversation with Mr Mok of your client on 16^th August 2024, Mr Mok said that he was not aware of the condition of the FDs and hence requested to inspect. Our Ms Kwan courteously asked him if he had ascertained the condition from the 2^nd Defendant, i.e. your client's contractor for the upkeep and maintenance of the FDs.  Mr Mok was unable give an answer.  As Ms Kwan explained that the matter was urgent, asked Mr Mok to have the one who was familiar with and in charge of the case to call her back. But up to the time of this letter, we have not heard from anyone from your client at all.

12. Understandably, the Plaintiffs are unable to set out all the conditions and consider the position when on an uninformed basis. Depending on whether your client will provide the clarification and discovery as sought above, the Plaintiffs will need to impose condition to pre-empt any attempt to perform other tasks inside the office which had nothing to do with the FDs.

13. Likewise, we have never expected that your client would refuse the simple request that the one in charge of this case on the part of your client should communicate verbally directly and requested to communicate in writing, which must be the only reason for elicitation of a flurry of letters. Plaintiffs' intention was clear i.e. to simplify and expedite matter.”

39.In the reply letter by LL dated 24 September 2024, LL pointed out that there was no reason or basis to accuse MTRC of tampering with the evidence or attempting to perform unrelated tasks during the proposed preliminary visit and/or the inspection and maintenance of the FDs.  The specifically mentioned that the purpose of the visit to the Office was strictly for “the inspection and maintenance of the FDs”.

40.In the same letter, LL also repeated the position that they had time and again invited Ip Kwan to set out the proposed conditions for the visit (if any), then it was considered necessary to record the status of the FDs.  Up to that date, Ip Kwan insisted there are conditions to be imposed, but yet refused to state what they are, despite having been clearly informed of the purpose of the visit.  Again, they repeated MTRC’s position on the preliminary visit as follows: -

“The idea of the proposed preliminary visit was first raised in the hope that it can ascertain the current condition in relation to the fire dampers and ensure the smooth and efficient conduct of the subsequent inspection and maintenance of the fire dampers in compliance with the FSD's request of inspection and maintenance of fire dampers. As such proposed preliminary visit is not accepted, our client would proceed with inspection and maintenance of the 4 fire dampers directly.”

41.In the same letter, LL also gave notice pursuant to Clause 9(a)(7)  of the DMC to attend Ip Kwan’s office on 2 alternative time given to them either on 27 September 2024 or 4 October 2024.  LL invited Ip Kwan to make necessary arrangements to facilitate the inspection and maintenance of the 4 FDs.  They also invited Ip Kwan to take any measures as they consider necessary and appropriate to record the status of and/or witness the process of the inspection and maintenance, with the issue of costs reserved.

42.On the same day, ie 24 September 2024, Ip Kwan replied to the above letter of LL.  Again, writing under the heading of the HCA Action, Ip Kwan tried to link the inspection and examination of FDs issue with the issues under the HCA Action.  For example, the following matters which were not related to the request from MTRC for the preliminary inspection have been stated:-

“May we remind your client through you that both the conditions of the fire dampers and the compliance of the DMC are live issues being litigated in the above proceedings. Your client WILL NOT BE allowed to change the condition and the status of the fire dampers without addressing the issues identified in our letter dated 11^th September 2024.

Before we deal with the substantive matter, may we refer to your reference to the telephone conversation between Mr Mok and Ms Kwan on 16^th August 2024. Mr Mok was known to our Ms Kwan who has never been personal to him. While our Ms Kwan has no knowledge of the hierarchy of position in the management office, it sounds illogical that our Ms Kwan should need to say to Mr Mok directly that he was a low level staff at all. Our Ms Kwan did say that despite the repeated requests (since pre-action)  to speak to the one in charge of the various issues involved in these proceedings (Mr Mok said that he was not the one in charge)  and the issues were urgent and serious, the said requests were still ignored and it should sufficiently show how your client has disregarded and disrespected our Ms Kwan which was offensive. This is what our Ms Kwan had said to Mr Mok.”

43.The letter ended with Ip Kwan asking LL to provide answers to the 5 questions they have set out in the previous letter without agreeing to MTRC’s request for the preliminary inspection in order to comply with the FSD Notice:-

“May your client provide the answers to the questions raised with them in our said letter as follows,

1. Please confirm if the 4 fire dampers inside the Office was treated in the s.5A certificate dated 11.1.23 to be ‘in safe and efficient working order’ or they were excluded due to ‘Tenants’ Installations’.

2. Please confirm if your client and/or its contractor has/have kept records of the ‘Tenants’ Installations’ referred to in the s.5A certificate which said to apply to the 4 dampers. If no, please state that neither your client nor the contractor has/have kept any record (such as pictures, reports, notes, etc)  at all.

3. If your client and/or its contractor has/have kept records of the ‘Tenants’ Installations” including pictures, please disclose them.

4. Subject to your client’s answer to para no. 1 and 2 above, please confirm that your client agrees that all costs and expenses incurred by our client's engagement of the experts and specialists to attend the inspection of fire dampers will form part of costs of these proceedings to be taxed if not agreed (which means that your client withdraws its threat to ask the Court to disallow such costs. We do not agree that costs should be reserved - when court directions for expert inspections are given, those costs will inevitably be ordered to be in the cause).

5.   Subject to your client’s confirmations to the above matters, we shall further inform you of the logistic which will protect our client's position in respect of other issues alive in the above proceedings. If your client will not response reasonably to the above questions, the Plaintiffs’ position has been sufficiently stated in our said letter of 11^th September 2024.”

44.Further letters were written by Ip Kwan on 25 September 2024, 27 September 2024 and 2 October 2024.  Suggestion has been made by Ip Kwan for appoint a mediator so that “the parties could discuss the differences directly and the concerns and logistics could be addressed and sorted out ASAP”.

45.In the letter dated 2 October 2024, Ip Kwan mentioned that they had just been served with the FSD Notice by the FSD.  They understood that the FSD Notice would be sent to all co-owners of Admiralty Centre.  Instead of focusing on the request only by MTRC for arranging the inspection of FD2 which was the subject matter of the FSD Notice, Ip Kwan again linked the request by MTRC for preliminary inspection to the issues in the HCA Action as the following paragraphs in that letter would demonstrate:-

“5. It is the Plaintiff’s case that after the 2018 fire, when the JBC representatives attended this office allegedly to perform the inspection of the fire dampers (which was not done every year), they had never inspected the fire damper no. 2.

6. The condition of the fire dampers is a live issue of the above proceedings and the evidence thereon should be adduced in accordance with rules of the court applicable in litigations.

7. Nevertheless, for eliminating the fire risk per the Notice which is your client’s duty under the DMC, if your client will confirm by return that there had not been any inspection of the damper no. 2 under Cap 123J after 2018 (and therefore no record could be produced), the inspection of the fire damper no. 2 could be arranged by the parties discussing the logistics immediately e.g. the date, time, duration, etc of the preliminary inspections.

8. If your client will refuse to so confirm but will contend that the fire damper no. 2 had been inspected after 2018 as your client has engaged JEC to perform the job, etc, please then confirm by return which year after 2018 did the inspection of fire damper no. 2 take place. Please also disclose the records of the inspections which showed the findings with support of picture(s)  taken etc. Your client must have the rights and be able to seek these records from its sub-contractors.

9.  When your client has confirmed to the above, the Plaintiffs will instruct their experts to attend inspection(s)  with costs and expenses incurred for the inspections be the cause of the above proceedings.”

46.In the reply to the Ip Kwan’s 2^nd letter dated 24 September 2024, letters dated 25 September 2024, 27 September 2024 and 2 October 2024, LL in their letter dated 4 October 2024, writing under the heading of “Fire Damper Inspection, Repair and/or Maintenance Fire Hazard Abatement Notice dated 30 September 2024 Admiralty Centre”, set out MTRC’s position clearly as revealed in the ensuring paragraphs:-

“2. We agree that litigation should be conducted in a professional and sensible manner. Hence we have repeatedly informed you that our client does not engage in litigation by correspondence, and our letters are not intended to be a full response to every single point made in your flurry of letters. By demanding our client to answer all sorts of questions raised by your letters and preventing our client from complying with FSD’s lawful request for inspection, repair and/or maintenance of the fire dampers unless they yield, your clients are in fact fishing for answers and bypassing the rules and procedures of the court, thereby attempting to reverse the burden of proof. Please refer to our client’s filed pleadings for our client's pleaded case in response to your clients’ pleaded case. We repeat paragraph 8 of our letter dated 24 September 2024.

3. The inspection, repair and/or maintenance arrangement contained in our letter dated 24 September 2024 is fair, reasonable and necessary in order to comply with FSD’s request. In particular, we have already expressly informed you that your clients are welcome to take any measures as they may consider necessary and appropriate to record the status of the fire dampers and/or witness the process of the inspection, repair and/or maintenance. Whether the costs incurred in doing so shall be recoverable as costs of the proceedings is a matter for the court to decide when the occasion arises. That was why we suggested to reserve the issue of costs, and your clients are not entitled to demand our client to give up any right of objection or taxation, let alone before your clients put forward any claim for costs.

4. The inspection, repair and/or maintenance of fire dampers plainly has nothing to do with “client confidence” inside your office as suggested in your letter dated 27 September 2024. The scope of the inspection, repair and/or maintenance is limited to the fire dampers only. We have made it clear that our client is willing to accommodate your availability as to the date and time of inspection, repair and/or maintenance, even on a Saturday at flexible hours if it suits you.

5. We put on record that as a result of your clients’ refusal of access to their office, the inspection, repair and/or maintenance of fire dampers originally scheduled on 27 September 2024 at 3 p.m. was unable to take place. Notwithstanding our client’s invitation for your clients to indicate alternative available dates and times, your clients failed and/or refused to do so.

6. Your proposal in your letter dated 27 September 2024 to appoint a mediator to discuss terms of access does not make your aforesaid conduct any less unreasonable or oppressive. We have already informed you that your clients are free to take any measures as they may consider necessary and appropriate to record the status of the fire dampers prior to repair and/or maintenance. On that basis, there does not appear to be any particular issue in relation to access which is suitable for mediation. We must point out that it is your clients who continue to refuse to indicate the available dates and times of their office in any of your letters.

7. Your latest letter dated 2 October 2024 adds nothing new. Essentially, it contains the same inappropriate demand that unless our client either admits to or disproves your clients’ alleged case now by way of correspondence, your clients will continue to refuse to co-operate or indicate availability for the inspection, repair and/or maintenance of fire dampers to take place. We repeat that our client has already responded to your clients’ pleaded case by way of pleadings. In any event, your clients’ demand has nothing to do with the fact that fire damper No. 2 inside your office needs to be repaired and/or maintained now pursuant to the FSD’s Fire Hazard Abatement Notice dated 30 September 2024 (“Abatement Notice”). The Abatement Notice does not provide any basis for your clients to impose irrelevant conditions on the inspection, repair and/or maintenance.

8.  We reiterate that our client remains ready, willing and able to arrange the inspection, repair and/or maintenance of the fire dampers in your office at your clients’ convenience upon reasonable notice.  In order to comply with the requirements of the Abatement Notice, please take final notice that our client shall arrange contractors to attend your office, i.e. Units 608-609 of Tower 1, for the inspection, repair and/or maintenance of the 4 fire dampers inside your office, including fire damper no. 2 on the wall between Unit 608. & 609 and common corridor on 6/F as identified in the Abatement Notice, on 10 October 2024 (Thursday)  at 3:00p.m.. Alternatively, if your office is not available at the aforesaid date and time, our client is ready, willing and able to arrange inspection, repair and/or maintenance of the said fire dampers on any Monday to Saturday (but excluding public holiday)  between 9 a.m. and 8 p.m. on or before 18 October 2024 (Friday), upon at least 48 hours' prior written notice being given to our client. You are welcome to take any measures as you may consider necessary and appropriate to record the status of the fire dampers and/or witness the process of the inspection, repair and/or maintenance, with the issue of costs reserved.  Given the time-sensitive nature of the fire dampers’ inspection, repair and maintenance, if the outstanding inspection, repair and/or maintenance remain incomplete by 18 October 2024 (Friday), we shall advise our client to consider taking such further action as may be necessary to ensure that the Abatement Notice is complied with and that the inspection repair and/or maintenance of fire dampers can be conducted in time in the best interest of all owners of the building.”

47.In the reply letter of the same day, ie on 4 October 2024, Ip Kwan disputed the contents of the LL’s letter and concluded by stating the following:-

“13. We are not to engage into further correspondence with you, which are only to generate costs. If your client considers justified to take any other course of action, please proceed.”

48.Given Ip Kwan’s position on the matters as stated clearly in the above letter, MTRC took out the OS on 24 October 2024.

Events after the Issue of the OS on 24 October 2024

49.Under the OS, MTRC basically was seeking the same things as they had been asking for all along from Ip Kwan through the correspondence of its solicitors LL.  For the sake of completeness, the following are the orders which MTRC were seeking under the OS:-

“1. A Declaration that MTRC, as the manager of Admiralty Centre, has the power under the Deed of Mutual Covenant of Admiralty Centre dated 27 December 1980 (“DMC”)  (including pursuant to Clause 9(a), Clause 4, and Paragraph B sub-clause 1(a)  of the First Schedule)  to enter Units 608-609, Tower I, Admiralty Centre, 18 Harcourt Road, Hong Kong (“Subject Office”)  for the purposes set out in paragraphs 2 and 3 below;

2. An Order that the 1^st Defendant and the 2^nd Defendant do allow MTRC (and its agent(s), sub-contractor(s), and/or authorized representative(s))  to enter the Subject Office, at reasonable hours (including between 9 a.m. and 8 p.m.)  upon 2 days’ prior written notice, for the purpose of repairing Fire Damper No. 2 (the location of which is identified in the floor plan of 6/F of Tower I, Admiralty Centre, annexed hereto (“Annex 1”));

3. An Order that the 1^st Defendant and the 2^nd Defendant do allow MTRC (and its agent(s), sub-contractor(s), and/or authorized representative(s))  to enter the Subject Office, at reasonable hours (including between 9 a.m. and 8 p.m.)  upon 2 days’ prior written notice, for the purpose of carrying out an annual inspection of Fire Damper Nos. 1, 3, 4 (the location of which is identified in Annex 1); and if necessary, to carry out the repair and/or maintenance of the same;

4. The 1^st and 2^nd Defendants do make all necessary arrangements to facilitate the inspection, repair, and/or maintenance of Fire Damper Nos. 1 to 4 as ordered in paragraphs 2 and 3 above;

5. Costs; and

6.  All other relief which the Honourable Court sees fit.”

50.The OS was supported by CWK 1^st which consisted of 28 pages, summarizing MTRC’s position on this matter and the basis of the application.

51.Somehow this caused Ms Kwan to file a 77-page long affirmation in reply on 21 March 2025. Two shorter affirmations (2^nd affirmation consisted of 3 pages and 3^rd affirmation consisted of 7 pages)  were filed by Ms Kwan on 14 April 2025.  Mr Chau filed his 2^nd affirmation on 9 May 2025 in reply to Ms Kwan’s above three affirmations.

52.I note that, after the issue of the OS by MTRC, there has been a noticeable change of attitude and stance on the part of Ds.  For example, in the letter dated 28 October 2024, for the first time since LL made the first request for inspection on 13 August 2024, Ip Kwan responded positively to the proposal of a preliminary inspection to locate the 4 FDs.  For the first time in over 2 months, they stated that:-

“We are of the view that a preliminary inspection to ascertain the location of the 4 fire dampers would be helpful.”

53.The letter went on to say the following:-

“In the proposed preliminary inspection, the false ceiling will be open for visual inspection to take place. Before any actual repair works are to be undertaken, your client should provide us with a method statement (referable and applicable to the reality and actual situation)  which explained the precautionary measures to be adopted in preventing damage caused to our property and the Office.”

54.A further letter written by Ip Kwan on the same day agreed that arrangement should be made regarding the preliminary inspection of the 4 FDs to take place on 30 October 2024.

55.On 30 October 2024 and 31 October 2024, Ds further suggested the parties to jointly apply to the court to vacate the Hearing returnable on 1 November 2024, so that they would have time to work out the logistics. However, MTRC declined the offer of an adjournment on the grounds that “Ds still took [sic] issue of remaining paragraphs in the OS including the logistic in carrying out the inspection’” and “[a]s a consequence, entry to the [Office] for purpose of dealing with the 4 FDs remain unresolved”.

56.On 1 November 2024, the Hearing of the OS and the Summons took place before me.  At the Hearing:-

(1)  the court made its view clearly to the parties that the inspection of the FDs issue needs to be revolved in a sensible and practical manner so as to allow the FSD to carry out the inspection to be followed by the repair or maintenance;

(2)  The court stood down the matter in order to allow the parties (led by counsel)  to discuss the logistics of allowing the FSD to carry out the inspection outside of the court room; and

(3)  The parties were directed to agree on the “broad method statements” and the dates for the inspection.   

57.As a result, the parties were able to reach consensus which resulted in the court making the Order based on the agreement of the parties.

58.As both Ms Eu SC and Mr Wong SC have repeatedly stated during the hearing on the Costs Issue before me on 23 July 2025, the parties were only able to come up with a practical solution on the method and timing of the inspection (in the form of the draft consent order reached between counsel outside of the court room)  after the court had “knocked some sense into the heads” of them.

APPLICABLE LEGAL PRINCIPLES

59.The principles governing costs are well-established.  The court takes into account holistic considerations including those set out in Rules of the High Court (Cap. 4A)  O. 62 r. 5.

60.In Cheung Kong Property (Business Development)  Ltd v. Gold Brilliant Investment Ltd [2021] HKCFI 2330, the court held at §39 that:-

“…the Court’s overall discretion as to costs is unfettered, with the ultimate concern being to make a costs order that best serves justice between the parties. To that end, the Court may take into account the conduct of the parties and whether it was reasonable for a particular issue or application to have been pursued in the first place.”

61.Where a case is settled save as to costs, the principles set out in Famous Marvel Co Ltd and Others v. Conversant Group Ltd and Ors HCA 2153/2009 (Unreported, 29 October 2012)  at §22 are relevant:-

“(i)  The Court is to decide if the party seeking costs has substantially obtained the reliefs sought in the litigation: Re Chinese United Establishment Ltd, HCCW 291/1994, 5 October 1995, Rogers J (as he then was), approved in CACV 214/1995; Lai Yuet Chun v Super Deluxe International Limited & ors, HCCW 186/2001, 3 June 2003 Kwan J (as she then was).

(ii)  At each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the Court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties. Brawley v Marcynski (No.1) [2003] 1 WLR 813.

(iii)  The Court will first consider if it is in a position to say what the likely outcome after trial would have been. If it is not in a position to do so, the order may well be no order as to costs: Brawley v Marcynski (No.1), at para 18, Longmore LJ; followed in BCT Software Solutions Ltd v C Brewer & Sons Ltd [2004] FSR 150.

(iv)  The Court may permit parties to adduce evidence on the question of costs: Ta Tung China & Arts Ltd v Fontana Restaurant Ltd [1999] 1 HKLRD 404; Lai Yuet Chun v Super Deluxe International Limited & ors, at para 12. However, to say that the parties must go to trial in order to resolve any outstanding questions of costs would be contrary to the underlying objectives enshrined in RHC Order 1A rules 1 and 2: Graham M Morley v Kwan Wo Wan & others, HCA 4366/2003, 30 December 2009, Recorder Jat SC.

(v)  A broad brush can be taken by referring to all matters already laid before the Court, eg pleadings, correspondence, witness statements, transcripts of evidence and the terms of the settlement order: c.f. BCT Software Solutions Ltd v C Brewer & Sons Ltd, at para 9; Graham M Morley v Kwan Wo Wan & others.

(vi)  The objective is to do justice between the parties without incurring unnecessary Court time and consequently additional cost: Brawley v Marcynski (No.1).”

62.Litigants who conduct their cases in bad faith, or who cause costs to be incurred irrationally or out of all proportion as to what is at stake, may not only expect to pay costs, but also be ordered to pay costs on an indemnity basis if they lose, and have part of their costs disallowed if they win: see Chan Chung Sing v. Chan Andy Yuan [2024] 2 HKLRD 828 at §74.

63.The court has a wide discretion as to what, if any, terms should be imposed when giving leave to withdraw: see §28 of WSSA v SYH [2024] HKCA 1150.  Generally speaking, upon an application for leave to discontinue proceedings, the discontinuing party will be required to pay the costs of the other party, unless exceptional circumstances can be shown to justify a different order: see §29 of WSSA.  The overriding objective is to do justice between the parties; and a broad-brush approach is justified: see §32 of WSSA.

64.If a plaintiff withdraws an action or a summons because the defendant had done something, after the issuance of writ of summons or summons, which renders it unnecessary or academic for the plaintiff to proceed with the action or application, the court has a full discretion to award costs to the plaintiff after taking all the circumstances of the case into consideration, including that the respondent could have acted sooner: see §27 of Lo Siu Tim [2022] HKCFI 2946 per DHCJ Leung; §28 of Perrine Chamonix Limited (HCA 1139/2017, 13 Sep 2017)  per DHCJ William Wong SC; §§4, 8 of Osman Mohammed Arab [2025] HKCFI 545 per DHCJ Grace Chow.

65.The authorities recognize the “effective winner” principle: see §§20, 29 of China Shanshui Cement Group Limited v Ng Sau Man Clifford [2020] HKCFI 2677 per K Yeung J, as explained at §§20-24, 28 thereof:-

(1)  [§21] The correct approach[3] to determining costs in cases which do not involve the court granting substantive relief is for the court first to consider the terms of settlement and assess whether the petitioner has obtained substantially what he sought in his petition.  If he did it will not be necessary or appropriate for the court to consider evidence and arguments directed to the merits of the case and whether or not the petitioner would have been successful if the petition had gone to trial.  The petitioner will be treated as having been successful and entitled to his costs (citing §§14-15 of Re Lucky Ford Industrial Ltd [2013] 3 HKLRD 550,[4] per Harris J);

(2)  [§23] If, but for a plaintiff’s or an applicant’s application, he or she would not have obtained the relief he or she seeks in a writ of summons or a summons, then he or she is in effect the substantive winner of the case.  The fact that a defendant consents to the claims by a plaintiff or an applicant which renders it unnecessary for the plaintiff or the applicant to continue the action or summons should not be a reason for denying the plaintiff or the applicant his or her costs (citing Perrine Chamonix); and

(3)  [§28] Discontinuation, withdrawal or settlement of proceedings, where the merits of the underlying claims have not been substantively determined, potentially give rise to similar consideration on costs.

The Crux of the Costs Issue

66.In my view, the real crux of the Costs Issue is who was the effective winner of the OS and the Summons in the present proceedings – was it MTRC or Ocean System/Ip Kwan?

67.For the reasons stated below, I have little doubt that the effective winner of the OS and the Summons was MTRC.

General comments on Ds’ conduct

68.First and foremost, I consider these whole proceedings was unnecessary and avoidable had Ds been acting more reasonably with some common sense and objectivity.  Instead of agreeing to a practical solution to the repeated requests made by MTRC on the inspection and repair of the FDs, Ds tried to conflate the issues stated in the OS with the issues in the HCA Action.  In particular, multiple disproportionally lengthy and rather personal letters had been written by Ip Kwan trying to argue Ds’ case (by linking to the issues raised by them in the HCA Action)  without really providing any definite reply to the rather simple and modest request made by MTRC for the inspection and repair to the FDs in order to comply with the FSD Notice.

69.While the court can understand the strong sentiments of Ds against MTRC after the fire which took place in the Office in 2018, it is most unfortunate in my view that Ds saw fit to link the issues raised in the HCA Action with the simple and modest request made by MTRC for the inspection and repair. It is apparent  to me that Ds were trying to get as much mileage or leverage out of the inspection / repair of the FDs to bolster their claims in the HCA Action when the case is nowhere even close to the trial stage.

70.Second, it is clear that there was a marked change in Ds’ attitude after the commencement of the present proceedings. I have already mentioned the change in their attitude in §§52-55 above.  I do not propose to repeat them here.  I am of the view that had MTRC not issued the OS and the Summons, Ds would not have changed their stance and would not have agreed to the method statement and subsequent inspection.  They had repeatedly refused to do so since LL made the first request on behalf of MTRC on 13 August 2024.  Thus, in my view, it was the steadfast refusals on the part of Ds to agree to the requests made by MTRC that had caused MTRC to issue the OS and the Summons.  

71.Third, in my view, had the court not forced the parties to put their heads together at the Hearing and “knocked some sense into their heads”, Ds would not have agreed to the method statement and the subsequent inspection.  This again shows that the issue of the OS and the Summons by the MTRC were necessary.

Ds’ irrelevant and unreasonable demands

72.In my judgment, Ds have made a number of irrelevant and unreasonable demands making the issue of the OS and the Summons by MTRC inevitable.

73.First, they included the unreasonable demands/conditions for allowing entry into the Office.  Ds have by their letter dated 27 September 2024 claimed that no entry will be permitted as it is a law office “with large volume of client confidence retained” unless MTRC provided the information demanded in its letters dated 16 September 2024 and 24 September 2024.

74.However, in my view, these demands have nothing to do with preserving client confidence.  Similar inspections had been carried out by MTRC before without any objection.  I cannot see how the inspection and repair would affect client’s confidentiality of Ip Kwan at all. Further, as pointed out by MTRC, the entry was for the inspection and repairs to FDs located in the ceiling, and had nothing to do with any files.  Any confidential materials could simply be put away; and any “concern” can sensibly be resolved by the use of screens/curtains/pieces of cloth.

75.Second, against the background that Ds have made claims in the HCA Action which related to the FDs’ condition, Ds have, by Ip Kwan’s letter dated 24 September 2024, accused MTRC: “If, before [Ds]’ experts have performed the examination and taken record of the condition of the fire dampers…[MTRC] has asked to inspect them singly and change their conditions, the request is clearly and undoubtedly an attempt to tamper of [sic] the evidence and to prejudice [Ds] irretrievably so much so that [Ds] would not be able to call evidence on the pleaded issues.” 

76.However, even before that letter was issued, LL had on 10 September 2024[5] already indicated that “[Ds] may engage specialists as they think fit…”; and LL also gave further assurances on 24 September 2024 and 4 October 2024 that Ds were welcome to take any measures considered necessary and appropriate to record the status of the FDs and/or witness the process of the inspection, repair and/or maintenance.  In my view, this should alleviate Ds’ concerns.  In KLYC 1^st at §115, Ds relied specifically upon LL’s aforesaid assurance and engaged experts to inspect the FDs, but this was only after these proceedings started.  No explanation has been provided as to why this was not done earlier. 

77.As it turned out, this was exactly what happened during the subsequent inspection and repair after the Order was made.  On several occasions during inspection and repair to the FDs from November 2024 to February 2025, both sides’ experts were present[6].  

78.Third, Ds had, in contrast to their stance contained in Ds’ 29 October 2024 Skeleton, made the mere discussion of logistics conditional upon MTRC’s concession to its demands.  These demands related to Ds’ claims in the HCA Action and not related to the FD inspection or repair.  In my judgment, Ds were trying to extract and/or fish for admissions, evidence, documents, and an advantageous costs order for the purpose of the HCA Action.  LL had already pointed this out by letter dated 4 October 2024 which I have set out in §46 above.

79.In my judgment, Ds have sought to capitalize on the urgency and seriousness created by the FSD Notice.  What Ds basically said was that if MTRC wanted to comply with the FSD Deadline, it would have to make concessions in the HCA Action.  Such a tactic in my opinion is oppressive and done at the expense of all the other owners.  In my judgment, Ds have conducted themselves in bad faith, as a personal vendetta, in an improper/oppressive manner, and/or caused costs to be incurred irrationally out of all proportion to what is at stake.  I am therefore of the opinion that it is appropriate to award costs on an indemnity basis.

MTRC was the effective winner of the OS

80.Specifically, I consider that MTRC was the effective winner of the OS as they managed to obtain what they have asked for under the OS.  I shall briefly deal with each of them below.

§1 of the OS:  Declaration that MTRC has the power to enter

81.I note it was only after the commencement of the proceedings that Ds were willing to concede that MTRC had the power to enter the Office.  Ds confirmed by §3 of Ds’ 29 October 2024 Skeleton that they would not contest the declaration sought by §1 of the OS, which is based on DMC Clauses 9(a)(5), (7); 4 and paragraph B sub-clause 1(a)  of the First Schedule.  Accordingly, MTRC has obtained what it specifically sought in §1 of the OS. 

82.As a consequence of Ds’ concession, there is no dispute MTRC also has the power under the DMC to enter the Office at reasonable hours upon 2 days’ notice for the purposes of: (1)  repairing FD2; and (2)  carrying out an annual inspection of FDs 1, 3 and 4; and if necessary, to carry out their repair and/or maintenance.  Pursuant to Paragraph B sub-clause 1(a)  of the First Schedule, MTRC has the “full right and privilege” to do so.

83.These clauses were drawn to Ds’ attention by letter dated 24 September 2024 (ie prior to the OS).  Nevertheless, Ds refused access, necessitating the issuance of the OS.

84.Thus, I am of the view that MTRC was the effective winner on this matter.

§§2-4 of the OS:  Orders to allow entry into the Office

85.By §3 of Ds’ 29 October 2024 Skeleton, Ds state they “only took issue of the remaining paragraphs in the OS including the logistics in carrying out the inspection.”  At §4, Ds refer to their “Logistics Proposal” contained in their letters dated 28 October 2024.  However, I note that this only came after the issue of the OS and just before the Hearing.  There is no explanation why Ds could not have made this Logistics Proposal earlier and since 13 August 2024.

86.In Ds’ belated Logistics Proposal:-

(1)  Ds (for the first time)  stated that “We are of the view that a preliminary inspection to ascertain the location of the 4 [FDs] would be helpful.”.  The parties thereafter agreed for this to take place on 5 November 2024;

(2)  Ds (for the first time)  stated that before any repair works are to be undertaken, MTRC should provide a method statement referable to the reality of the situation, explaining the precautionary measures.  This was precisely what LL had been saying since its letter dated 26 August 2024, and the August Method Statement had already been provided to Ds on 13 August 2024 which Ds refused to comment on; and

(3)  Ds (for the first time)  stated that only personnel relevant to the inspection and repair (and for the taking of evidence)  would be permitted entry, and required MTRC to provide a personnel list.  MTRC would not have objected, as evidenced by LL’s quick letter in reply dated 30 October 2024.

87.Hence, on this matter, I agree with the following submissions made by Ms Eu SC.

88.It was only by these proceedings that MTRC secured a preliminary inspection and a rational discussion as to logistics.  Before all this, Ds’ stance was that a preliminary inspection was not necessary; and Ds had (by letters dated 24 September 2024 and 2 October 2024)  made even the mere discussion of logistics conditional upon agreeing to their demands.  As MTRC’s request for a preliminary inspection was made on 13 August 2024, Ds could and should have agreed much sooner.  Instead, such agreement only came belatedly (ie after the issue of the OS on 24 October 2024)  and as a result of having to attend court at the Hearing. 

89.As to the Ds’ assertion at that the Hearing should have been vacated, I find that (1)  Ds have not agreed to MTRC’s method statement or logistics for carrying out works on the FDs; (2)  the FSD Deadline was imminent (as explained in LL’s letter of 31 October 2024); (3)  Ds were only compelled to discuss the logistics for carrying out the necessary work outside the court room at the Hearing which led to the Order.

90.Thus, on this issue, I am of the view that MTRC was the effective winner. 

§§2-4 of the OS:  Orders to allow entry into the Office

91.In my view, the terms of the Order also reflect that MTRC was the effective winner.

92.By §1 of the Order, MTRC was to provide a broad written method statement addressing (1)  the protective measures and any necessary reinstatement to be undertaken in the course of repairing FD2 and carrying out an annual inspection of FDs 1, 3 and 4 (and if necessary, their repair and/or maintenance); and (2)  the estimated time (“the Method Statement”). 

93.The fact of the matter is that MTRC had never been opposed to this.  In fact, the August Method Statement was provided to Ds before the OS but Ds did not comment on it at the time.

94.Importantly, the August Method Statement had already outlined the following:-

(1)  The method statement for an inspection, a repair, and a replacement; and the “Work Duration” for each category;

(2)  The protective measures:  All belongings and objects located near the FD would be cleared, basic protection on all furniture and decoration would be carried out, and protection works with plastic sheets and/or protection boards would be done in the working area (Steps 1-2)  (Steps 3-4); and

(3)  The reinstatement works: (Steps 13-17/Work Impact)(Steps 11-13/Work Impact)(Steps 15-17).

95.Ds have had ample time and countless opportunities to express any suggestions it may have in relation to the August Method Statement to be adopted but they did not.

96.MTRC duly provided the Method Statement on 7 November 2024.  The protective works described were essentially those in the August Method Statement, but with specifics in view of the preliminary inspection on 5 November 2024.  That was also the case with the reinstatement works.  A time estimate was also provided.

97.In accordance with §2 of the Order, Ds replied on 8 November 2024, and no objections were raised to the Method Statement (as supplemented by correspondence exchanged between the parties).  As such, pursuant to §3, Ds allowed MTRC entry on 9 and 16 November 2024.  No affirmations were filed in accordance with §§4-5 and the hearing fixed for 21 November 2024 was vacated by Order dated 19 November 2024 in view of the parties’ joint letter dated 18 November 2024.

98.Thus, FD4 and FD2 (which was subject to the FSD Deadline)  were dealt with on 9 November 2024 and 16 November 2024 respectively.  In respect of FDs 3, 1, 5, the parties (as evidenced by the joint letter dated 18 November 2024)  required more time to discuss the logistics of the examination, inspection, and repair.  Ultimately, FDs 3, 1, 5, were dealt with on 12 December 2024, 8 January 2025, and 11 February 2025.

99.In light of the above, MTRC had entered the Office for the purposes of repairing FD2 and carrying out an annual inspection of FDs 1, 3, 4 (and 5)  and their repair/maintenance (where necessary).  This was the relief sought in §§2-4 of the OS.  In this regard, I agree with Ms Eu SC that, but for the OS and the Summons, MTRC would not have obtained the relief it needed to comply with the FSD Deadline.  Again, had Ds acted sooner and reasonably, MTRC would not have had to commence these proceedings in the first place.

100.Thus, on this matter, I consider MTRC was the effective winner also.

Was the issue of the Summons necessary and was MTRC the effective winner?

101.I agree with Ms Eu SC that in view of the FSD Deadline, MTRC had to proceed speedily with the Hearing and obtain the Order.

102.Pursuant to §§4-7 of the Order, if the parties were unable to agree on the method statement, they were to file evidence by 11 and 15 November 2024 respectively; and a hearing was fixed for 21 November 2024 to resolve such differences.  This was in line with the timetable sought by the Summons, whereby parties were to file evidence by 8 and 15 November 2024, with a hearing fixed not later than 29 November 2024.  Thus, the Order provided an expedited timetable in view of the FSD Deadline. In my view, the timetable in the Order shows that MTRC was the effective winner of the Summons. 

103.With the benefit of the Order, MTRC was able to deal with FD2 before the FSD Deadline. This was one of the main purposes of the OS, and the reason why the Summons for a speedy trial was sought. 

104.Thus, I find MTRC was the effective winner of the Summons and/or the key purpose of the action has been achieved.

D.   CONCLUSION

105.In the aforestated premises, I grant leave to MTRC to withdraw and/or discontinue the OS and the Summons, with costs to be paid by Ds to MTRC on an indemnity basis, including all the costs reserved, with certificate for two counsel, such costs to be taxed if not agreed.

106.It remains for me to thank counsel on both sides for their helpful assistance.

Ms Audrey Eu SC leading Mr Albert Chan instructed by Lo & Lo for the plaintiff

Mr William Wong SC leading Mr Martin Lau and Mr Victor Lui instructed

by Ip, Kwan & Co. for the 1^st defendant and the 2^nd defendant