Prosper Entertainment Ltd. v. Ng Yiu Kuen t/a Andy Production House

HCA001280A/2000

HCA 1280/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1280 OF 2000

____________

____________

Coram: Deputy High Court Judge A Cheung in Chambers

Date of Hearing: 21 February 2003

Date of Judgment: 21 February 2003

_______________

J U D G M E N T

_______________

1.On 20 December 2002, I handed down judgment after trial in this action. In the judgment, I took the view that given the results and the judgment amounts in the action and counterclaim respectively, it would be fair and reasonable to order each party to bear its own costs of the action and counterclaim. I made a costs order nisi accordingly.

2.This is an application by the Defendant to vary the costs order nisi. The Defendant asks for an order that two-thirds of the costs of the action including the counterclaim be paid by the Plaintiff to the Defendant.

3.Three specific reasons are advanced. Before I deal with those three reasons individually, I should say that the results and the respective judgment amounts in the action and counterclaim are material and indeed important factors that should be taken into account in considering how my discretion on costs should be exercised.

4.I should also say that in this type of situations, the Court is entitled to take a global view of the matter, and as the trial judge, I am in a relatively confident position to take a global view of the matter.

5.The Defendant argues that his success rate in terms of the actual judgment amount in proportion to the amount claimed for is much better than that of the Plaintiff's. Superficially, this is correct, but in my judgment, the action (including the counterclaim) as well as the trial involve three issues, i.e. the two contracts in question as well as the quantum of the Plaintiff's claim.

6.At one stage, the actual quantum of the Defendant's counterclaim was in issue because the Defendant put forward two alternative claims on quantum. But by the beginning of the trial, the position had become clear in that the Defendant only went for the anticipated remuneration under the two contacts in question had they not been pre-maturely terminated.

7.It is fair to say that the Plaintiff was successful with one contract and failed in relation to the second contract. In relation to the quantum issue, it is true that superficially the Plaintiff only got a fraction of what it claimed for in the pleadings. But this alone should not be determinative of the incidence and responsibility for costs.

8.One should go further and investigate whether and to what extent this issue or the Plaintiff's failure in relation to this issue caused the incurring of costs on both sides.

9.In my judgment, the Plaintiff failed on this issue not so much for the reason that the Court rejected the Plaintiff's oral or documentary evidence in relation to the quantum matters; rather the Plaintiff failed on this issue for want of evidence. Taking a global view of the matter, very little time was actually expended on the quantum issue, because the Plaintiff simply failed to adduce much evidence on this issue and that explained why the Plaintiff failed substantially on this issue.

10.So although in a sense, the Defendant was successful with two issues whereas the Plaintiff was only successful in relation to one, the difference between the two parties in terms of responsibility for the costs of the whole action including the trial was not great.

11.Further, one must also take into account the fact that prior to trial, the Defendant also ran an alternative case on quantum, which was only dropped at the beginning of the trial. It would be fair to take that into account. To be more specific, the wasted costs caused by this alternative case on quantum put forward by the Defendant by way of counterclaim that was only dropped at the beginning of the trial should be put into the scales. To a significant extent, this would tend to neutralize the effect of the failure of the Plaintiff in relation to the quantum issue at trial.

12.Of course, I agree with the general principle that where a plaintiff in an action has substantially failed at the trial and the defendant substantially succeeded, the plaintiff should pay the defendant's costs or a substantial portion thereof: see Hong Kong Civil Procedure 2002 Vol. 1 para. 62/3/2. In my judgment, this is not such a case. The Plaintiff was successful to a not insignificant extent in relation to its claim regarding one contract, whereas the Defendant was substantially successful in relation to the other contract in question. So on that basis, the principle cited to me by counsel for the Defendant is not directly applicable to this present application.

13.Secondly, the Defendant argues that given the judgment amount, the action ought to have been commenced or transferred to the District Court in which event the Defendant would not have to incur counsel's fees.

14.When the action was commenced in this Court back in February 2000, the District Court's jurisdiction had yet to be increased. So there can be no legitimate criticism of the Plaintiff's commencing the present action in this Court.

15.The jurisdiction of the District Court was only increased in September that year. But judging from the amount of the Plaintiff's pleaded claim, the issues raised in the pleadings, and the Defendant's counterclaim that was put in two alternatives, although ultimately the Plaintiff failed substantially in relation to the quantum claimed, I am not in a position to say that at the time in question, the Plaintiff was totally unreasonable in not applying for the transfer of the present action to the District Court. Certainly, the Defendant never suggested to the Court or to the Plaintiff that such a course should be attempted. In any event, given the complexities of the dispute in terms of the factual disputes as well as the legal issues involved, which fact is well evidenced by the judgment that I handed down, I am unable to say that this case should have been more suitably tried in the District Court as opposed to this Court. In any event, I am not at all convinced that if this case had been transferred to the District Court for trial, the Defendant's side would not have likewise engaged counsel whose service at the trial at this Court, I must say, was instrumental in securing the Defendant's eventual partial success in defending the Plaintiff's claim as well as in relation to his own counterclaim.

16.Finally, the Defendant argues that much time has been wasted by the Plaintiff's wavering over its true case at the trial, which resulted in several applications to amend pleadings.

17.Here I must take a global view of the matter. Certainly there were applications to amend and there were objections raised in relation to pleadings. Indeed, there was at the beginning of the trial an objection on pleadings raised by counsel for the Defendant, which led to some loss of time and thus costs. To some extent that was contributed to by the Court's then less than perfect understanding of the true state of the pleadings. To some extent that was contributed to by counsel for the Plaintiff's confusion relating to his client's pleaded case. But to a great extent, that was caused by the Defendant's counsel who raised the objection on pleadings in the first place.

18.After some initial confusion, the true situation was found out as was set out in my ruling, which was made after hearing submissions and which went against the Defendant. So viewed from that angle, indeed the Defendant should be held responsible for the loss of time and costs in question.

19.Certainly, there were other applications to amend pleadings by the Plaintiff and there were arguments relating to the sufficiency of the Plaintiff's then pleadings, which I eventually ruled against the Plaintiff. But taking a global view of the matter, I am not convinced that those matters, whether by themselves or when taken together with all other relevant factors in this case, were sufficient to displace what I perceive to be the fair and reasonable order in this case after trial, as set out in paragraph 88 of my judgment.

20.So for all those reasons and having reconsidered all the relevant matters and circumstances pertinent to the question of costs, I am of the view that the costs order nisi is the correct order to make. In the circumstances, I refuse the application to vary the costs order nisi; instead I order that the costs order nisi be made absolute.

21.Having heard counsel further, I am of the view that the costs of today's hearing should in all fairness be regarded as part of the costs of trial and therefore be covered by the costs order absolute that I just made, i.e. each party bears its own costs.

Representation:

Mr Raymond Lau, instructed by Messrs Kitty So & Tong, for the Plaintiff

Ms Anita Ma, instructed by Messrs Wong & Chan, for the Defendant