The Secretary for Justice v. Wembley International (HK) Ltd. and Another
Read the full judgment text of HCA 8518/1998 on BabelCite. This High Court CFI judgment was delivered on 5 September 2000 before Hon Chung J.
Civil procedure – costs – interlocutory proceedings – re-amendment of pleadings – costs occasioned and thrown away by re-amendment – whether costs to be taxed and payable forthwith or in any event – principles governing immediate taxation of interlocutory costs – appeal from costs order of Registrar – test for appellate review of Master's costs discretion – costs of the hearing below – Court of First Instance – Plaintiff re-amended its Amended Statement of Claim by deleting substantial and discrete parts and abandoning a number of allegations – Defendants incurred substantial time, effort and expenses in their own pleadings, discovery of documents and draft witness statements, alleged to amount to about HK$520,000 – Defendants applied for immediate taxation of those costs – Registrar ordered costs to the Defendants in any event with no order as to costs of the hearing – Defendants appealed and Plaintiff cross-appealed – held: Defendants' appeal dismissed; Plaintiff's cross appeal allowed – the usual rule that costs of interlocutory proceedings are taxed in any event applies – immediate taxation is exceptional and 'penal', warranted only by conduct amounting to an affront to the court or analogous circumstances – related costs may be difficult to ascertain at an interlocutory stage and may be minute in relation to overall costs – Registrar did not err in following the usual rule – alleged 'present trend' of immediate taxation applies only to 'time' summonses extending prescribed time, not generally – the test on appeal from a costs order of the Master or Registrar is that the appeal should not be allowed unless the order was unreasonable or erred in law by failing to take into account relevant matters or taking into account irrelevant matters, and this test applies even where costs are the only issue – the Plaintiff was entitled to its costs of the hearing below because, although it did not expressly raise the difficulty of immediate taxation, it did so by implication by relying on the usual rule, and the Registrar effectively found in its favour – sympathy with a party's position does not justify departing from the rule that costs should follow the event – costs of the hearing below ordered to be paid by the Defendants in any event.
Legal issues: Whether costs of and occasioned by the Plaintiff's re-amendment should be taxed and payable forthwith · Test on appeal from a costs order of the Master or Registrar to a Judge in chambers · Whether there should be no order as to costs of the hearing before the Registrar
Outcome: Defendants' appeal dismissed; Plaintiff's cross appeal allowed. Costs of the hearing below to be paid by the Defendants in any event.
Cites 2 cases
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HCA008518/1998 HCA 8518/1998 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 8518 OF 1998 ____________
____________ Coram: Hon Chung J in Chambers Dates of Hearing: 17 July 2000 and 5 September 2000 Date of Decision: 5 September 2000 Date of Handing Down Reasons for Decision: 9 September 2000 _______________________ REASONS FOR DECISION _______________________ Introduction 1. This is the Defendants' appeal against the Order of Mr Registrar C Chan dated 26 May 2000 whereby he ordered that:-
2. The Defendants argue that:-
3. At the end of the hearing on 5 September 2000, I dismissed the Defendants' appeal and allowed the Plaintiff's cross appeal. The following are the reasons for the decision. The Defendants' Appeal 4. Mr G Lam for the Defendants does not dispute the usual rule that costs of interlocutory proceedings (including costs of an application for amendment of pleadings) should be taxed in any event: see, for example,
He submits that the Court's discretion should be exercised differently in this case because of the following reasons. 5. First, the Plaintiff's re-amendment consisted of deleting substantial and discrete parts of the Amended Statement of Claim and abandoning a number of allegations made therein. As a result, substantial time, effort and expenses were incurred by the Defendants in relation to their own pleadings, discovery of documents and other matters, including draft witness statements. There is no valid reason why the Defendants should be kept out of those costs until the end of this action (which may be quite some time later). 6. Secondly, the learned Registrar did not have the benefit of the draft bill of costs lodged in the appeal. He therefore did not take into account a relevant matter. 7. The third point is related to the second point above. The Defendants filed evidence stating that the learned Registrar said in his decision that the present trend was that orders awarding costs to be paid forthwith are more common. The learned Registrar opined that it was inappropriate in this instance to order immediate taxation because he considered it would be difficult for a taxing master to tax such costs before the conclusion of this action. The Defendants contend that there is either no such difficulty in this case or, if there is such difficulty, the taxing master could be faced with the same difficulty even after this action was concluded. 8. I shall deal with these arguments globally instead of dealing with each individually. I commence by setting out the usual reasons why immediate taxation is not ordered for the costs of interlocutory proceedings:-
9. While the costs of and occasioned and thrown away by the re-amendments herein may be substantial (the draft bill of costs alleges they amount to about $520,000.00), I do not find it justifies immediate taxation in the context of this action. 10. Regarding the 2 errors allegedly made by the learned Registrar:-
11. Taking into account all the matters put before me (including the Defendants' draft bill of costs), I do not find that the learned Registrar has erred in ordering costs to be taxed in any event. In fact, I agree with him, in particular as regards the difficulties in taxing the costs at this stage. For example, it is uncertain whether some of the documents now considered to be unnecessary would become relevant at a later stage and hence how much costs should be allowed cannot properly be ascertained. The same applies to the contents of the witness statements. I also do not find that there is any other reason which should justify immediate taxation of costs to be ordered. 12. For the above reasons, the Defendants' appeal relating to the costs of and occasioned and thrown away by the Plaintiff's re-amendment is dismissed. 13. The test to be adopted in an appeal against a costs order made by the Master (or, in the present case, the Registrar) to a Judge in chambers is disputed. The Plaintiff submits the proper test is that the appeal should not be allowed unless it can be shown that the Master's costs order was unreasonable or erred in law, that is, he either failed to take into account relevant matters or took into account irrelevant matters: see the cases referred to at p. 6 of the transcript of Paul Y-ITC Construction v. Kin Shing Co. Ltd HCA 2220/1998. The Defendants argue this test is inapplicable when the decision of the Master on costs is the only issue raised at the hearing before him. I disagree with the Defendants' argument for the following reasons:-
14. There is a further consideration of relatively less importance in relation to whether costs ought to be taxed immediately. Already too much judicial time has been taken up by taxation hearings. Ordering interlocutory costs to be taxed in any event would have the additional advantage of lessening judicial time which has to be spent for such purposes: parties may agree to set off one set of costs against another, litigation may be settled at some later stage. The Plaintiff's Cross Appeal 15. The remaining issue is the learned Registrar's Order that there be no order as to costs of the hearing. This is also the subject-matter of the Plaintiff's cross appeal. Mr G Lam agues (correctly) that the burden is on the Plaintiff to show that this part of the learned Registrar's Order is unreasonable or wrong. The Defendants' evidence is that the Plaintiff did not raise the argument that there would be difficulties in ordering immediate taxation in this case and this point was only raised by the learned Registrar. Further, the learned Registrar was sympathetic to the Defendant's application. I understand from Mr P Lam for the Plaintiff that the Plaintiff argued before the learned Registrar that the usual rule was that interlocutory costs are only payable in any event. 16. One of the underlying reasons for such a usual rule is the difficulties inherent in immediate taxation. Thus, although the ground was not expressly raised by the Plaintiff, it must have been raised by implication when the Plaintiff relied on the said usual rule. The learned Registrar has in effect found in the Plaintiff's favour in concluding that immediate taxation should not be ordered by reason of the potential difficulties in such a taxation. As regards the question of the court's sympathy, I do not consider that it should justify a departure from the usual rule that costs should follow the event. I therefore find that the learned Registrar has erred in refusing the Plaintiff its costs of the hearing before him. The Defendants' appeal is dismissed in this regard as well and the Plaintiff's cross appeal is allowed. Costs of the hearing below should be paid by Defendants in any event.
Representation: Mr Paul Lam, instructed by the Department for Justice, for the Plaintiff Mr Godfrey Lam, instructed by Messrs Barlow Lyde & Gilbert, for the 1st and 2nd Defendants |
Cases cited in this judgment
Further hearings and rulings under HCA 8518/1998