Tam Yuk Ching and Others v. Hoosenally & Neo (A Firm)

HCA 1511/2020

[2026] HKCFI 2498

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1511 OF 2020

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DECISION ON COSTS

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I.  INTRODUCTION

1.Upon trial, I handed down judgment on 6 January 2026 (the “Judgment”) ([2026] HKCFI 122) dismissing the 1^st Plaintiff (“Madam Tam”) and the 3^rd Plaintiff’s (“Blissful Voice”) (collectively, the “Plaintiffs”) claim against the 1^st Defendant (“HN”), and making a costs order nisi Madam Tam and Blissful Voice should jointly and severally pay HN costs of this action (including any costs reserved), to be taxed if not agreed. By a Summons filed by HN on 20 January 2026 (the “Costs Variation Summons”), HN seeks to vary the costs order nisi to be as follows (and I add [1], [2], and [3] for easy reference in this Decision):-

“Madam Tam and Blissful Voice shall jointly and severally pay HN the costs of this action (including any costs reserved), [1] with certificate for two counsel for the trial, to be taxed on a party-to-party basis up to 26 June 2025, and [2] thereafter on an indemnity basis, and [3] interest on such indemnity costs at 5% from 27 June 2025 to 6 January 2026.”

II.  CERTIFICATE FOR TWO COUNSEL?

2.In relation to [1] seeking certificate for two counsel, I accept HN’s submissions made by their counsel Mr Ryan Chan that the allegations against HN were serious allegations in that at least allegations of negligence and arguably also fraud (and professional misconduct in this sense) were mounted against HN, and serious allegations are a consideration in determining whether certificate for two counsel should be granted. However, in my view, no complicated legal principles were involved, and the evidence was not also not complicated. Overall, despite the seriousness of the allegations against HN and understandably, HN’s concern that their defence would be effectively conducted in the light of such serious allegations, I think there is no sufficient justification for two counsel. Therefore, I refuse to grant certificate for two counsel.

III.  INDEMNITY FOR COSTS INCURRED AFTER EXPIRY OF SANCTIONED OFFER

3.In relation to [2] seeking indemnity costs after 26 June 2025, HN relies on a sanctioned offer made in HN’s letter dated 29 May 2025 (the “Sanctioned Offer”) sent to the Plaintiffs’ solicitors, about a month before the Pre-trial Review Hearing on 27 June 2025 (the “PTR”). The Sanctioned Offer is in the following terms:-

“Pursuant to Order 22…we sent you herewith, by way of service, our client’s sanctioned offer of HK$1,000 relating to your clients’ whole claim, to be paid within 28 days from acceptance, in full and final settlement of the Action.”

4.Ms Prisca Cheung, counsel for the Plaintiffs, submits that the Sanctioned Offer was nominal and tactical, and the consequence of attracting indemnity basis in such circumstances would be unjust. Ms Cheung points out that the HK$1,000 in the Sanctioned Offer was just 0.018% of the claim of Madam Tam and Blissful Voice for the amount of HK$5,508,000, and draws my attention to Antwerp Diamond Bank NV v Brink’s Inc and Others (No 2) [2015] 5 HKC 329 at §22, where the Court of Appeal said that:-

“…we would not rule out the possibility that there may be cases in which it would be appropriate to regard a purported sanctioned offer as being ‘not genuine’…” (emphasis added)

5.Whether the Sanctioned Offer was a genuine offer or not is a question of fact. The Court determines this question of fact after considering all the relevant evidence. The starting point must be that a nominal sum in a sanctioned offer itself is not unreasonable: see CEP Ltd v Wuxi Jiacheng Solar Energy Technology Co Ltd [2014] 4 HKLRD 44 at §§10-11. In her submissions, Ms Cheung suggests that the following factors are relevant to the determination of whether a sanctioned offer is genuine or not:-

(1)  Whether the offer bears any “rational relation to the subject in dispute”, or represents “a considered evaluation of risk or merit, particularly where the Judgment accepted much of the Plaintiffs’ factual case”;

(2)  Whether the offer was “designed to take advantage of the incentives provided by [Order 22]”, but “[a] low offer in a case in which the offeror considers that the offeree’s position has no merit cannot be written off as self-evidently ‘merely a tactical step’”: see Maureen Wharton v Timothy John Bancroft and Others [2012] EWHC 91 (Ch) at §21;

(3)  Proportionality and context;

(4)  Whether proper information was available for the offeree to assess its case;

(5)  The real strength of the Plaintiffs’ case could only be measured after the factual inquiry was complete; and

(6)  Whether the Plaintiffs’ rejection of the offer was objectively reasonable.

6.The above factors are no doubt relevant, but obviously not exhaustive. Further, as in any evaluative assessment of evidence in determining a question of fact, different factors bear different weights in different context.

7.In the present case, by the time when the Sanctioned Offer was to expire on 26 June 2025, the matter was, as confirmed at the PTR on 27 June 2025, ready for trial. In other words, all the information available (except the oral evidence) at trial was already by and large available to the Plaintiffs for their assessment of the real strength of their claim. If the oral evidence added any element of surprise, it was Madam Tam’s evidence for the first time at trial that back on about 26 December 2014, Mr Lee came to her office in Fotan to ask her to sing documents in respect of some other transactions and Madam Tam asked Mr Lee to do the KM Properties transaction properly (see §25 of the Judgment). In the circumstances, and given my judgment that the Plaintiffs claim was dismissed, I do not think that the Plaintiffs have discharged the burden to establish that the Sanctioned Offer, though apparently low, was not genuine.

8.In the circumstances, by virtue of Order 22 rule 23, I order that the costs incurred after 26 June 2025 shall be taxed on indemnity basis.

IV.  ENHANCED INTEREST?

9.In relation to [3] seeking enhanced interest, HN adduces no evidence of any actual payment of costs or costs on account. Such evidence is normally required for ordering enhanced interest, which is compensatory in nature. Ms Cheung points out this obvious in her written submissions. In reply, Mr Chan submits that such evidence is not necessary. After Mr Chan’s reply, I directed the Plaintiffs to file evidence on such payments. Then, by letter dated 27 March 2026 to the Court, HN stated that “upon careful reflection”, HN made “a considered and pragmatic decision to abandon its application” for the enhanced interest. Therefore, I do not have to deal with [3].

V.  CONCLUSION AND COSTS

10.For the above reasons, I vary the costs order nisi to be:-

“Madam Tam and Blissful Voice shall jointly and severally pay HN the costs of this action (including any costs reserved), to be taxed if not agreed, on a party-to-party basis up to 26 June 2025, and thereafter on an indemnity basis.”

11.The Plaintiffs have failed on [1] and [3], and succeeded on [2]. Not much submissions have been made on [1], but significant submissions have been made on [2] and [3]. On a broad-brush approach, I make no order as to costs on a nisi basis in respect of the Costs Variation Summons.

12.It remains for me to thank Mr Chan and Ms Cheung for their assistance.

Ms Prisca Cheung, instructed by Kok & Ha, for the 1^st to 3^rd Plaintiffs

Mr Ryan Chan, instructed by NEO Solicitors LLP, for the 1^st Defendant