LAI CHI HING trading as KWONG YUEN DECORATION COMPANY (First Plaintiff) v CHUN YIP ENGINEERING COMPANY (A Firm) (Second Plaintiff)

Read the full judgment text of 1996, No. CON 25; 1996, No. CON 64 on BabelCite. This HIGH COURT OF HONG KONG COURT OF FIRST INSTANCE judgment was delivered on 3 December 1997 before The Hon Mr Justice Findlay.

Civil procedure — Costs — Preliminary issue — Binding contractual agreement — Pleadings amendment — Deconsolidation — Indemnity costs — Wasted costs — The plaintiffs, comprised of several engineering companies, sued COLLECTIONS INTERIOR LIMITED based on an alleged agreement dated 23 September 1994. FLEXIWALL ENGINEERING COMPANY LIMITED, initially a defendant in a related action, amended its pleadings to assert a prior oral agreement, complicating the preliminary issue and causing deconsolidation of actions. The court held that the September 1994 agreement was binding on the plaintiffs and defendant, rejecting the defendant's baseless defences. The defendant's conduct caused unnecessary expenditure on the preliminary issue. Consequently, costs of the preliminary issue were awarded to the plaintiffs on an indemnity basis payable forthwith. Flexiwall was ordered to pay wasted costs arising from its pleadings amendment. The court emphasized that parties should not raise meritless defences that multiply costs and delay proceedings unjustifiably.

Legal issues: Liability under the agreement of 23 September 1994 · Costs of preliminary issue trial · Costs wasted due to amendments by Flexiwall

Outcome: The agreement of 23 September 1994 is binding on the plaintiffs and defendant; defendant to pay plaintiffs' costs of the preliminary issue on an indemnity basis forthwith; Flexiwall to bear wasted costs caused by its pleadings amendment.