Sandex Investment Ltd. v. Marlane International Ltd.

DCCJ01558A/2000

DCCJ 15587/2000

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.15587 OF 2000

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Coram: H.H. Judge Barnes in Court

Date of Hearing: 15 November 2002

Date of Handing down of Judgment: 19 November 2002

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JUDGMENT ON COSTS

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Background

1.I have set out the full background of this case in my Judgment dated 17.10.2002. In short I found the Defendant succeeded in its counterclaim against the Plaintiff to the extent of $ 31,860.61 ($15,000 + 8,116.50 + 1,581 + 4,434.11 + 2,729). I dismissed the balance of the counterclaim. I ruled that the Defendant was entitled to set off the sum of $31,860.61 against the Judgment sum of $325,338.97. I made a nisi Costs Order in respect of the balance of the Plaintiff's claim, the Notice Disputing Authenticity and on the Defendant's counterclaim. The Defendant applies to vary that part of the said Costs Order concerning the Defendant's counterclaim, which was under para. 50 of the judgment:

"50. As to the counterclaim, the Defendant succeeded in part only. On the basis that costs to follow the event, the Defendant should have costs of the counterclaim relating to those Debit Notes it succeeded while the Plaintiff should have costs against the Defendant on those Debit Notes which the Defendant failed. Costs to be taxed if not agreed."

General Principle

2.It is not in dispute that as a general principle, a successful party to an action should not be ordered to pay any part of the costs of the hearing simply because he has failed to prove all the allegations made. The successful party should not pay any of the costs unless he acted improperly or unreasonably in raising issues. See Re Elginadate (No.2) [1992] 1 W.L.R. 1207 and Hong Kong Civil Procedure 2002 62/3/3). It is also not in dispute that costs are in the discretion of the court.

Proper Costs Order to be made

3.Mr. Wong, counsel for the Defendant urged me to consider awarding costs to the Defendant for the counterclaim on the above general principle, saying that the Defendant was the successful party. Alternatively it is submitted that the 9 debit notes were so closely related that the Defendant should get the costs of the counterclaim even not fully successful in view of the way the case was heard.

4.Mr. Ng, in opposing the application has referred me to the case of A.E.I Ltd v Phonographic Performance Ltd (C.A.) [1999] 1 W.L.R. 1507 in which Lord Wolfe M.R. has reiterated the position that the 'costs to follow the event' principle was a starting point from which a court could readily depart. The learned judge referred to Order 62 of the 'new' Rules (i.e. The Civil Procedure Rules 1998) in the United Kingdom and said the new Rules 'are reflecting a change of practice which has already started' in that they 'require courts to be more ready to make separate orders which reflect the outcome of different issues' (see page 1523 of the judgment).

5.In essence the Defendant relied on 9 debit notes to establish the counterclaim. Of course for the proper administration of justice all 9 debit notes should be heard together and any suggestion to have 9 actions/hearings would have been absurd. Nevertheless it is still clear from the evidence before me that there were 9 separate and distinct claims represented by those 9 debit notes which were heard together. Different documents were adduced/referred to in support of those 9 claims. This is not a case where a party is suing on, say, a breach of contract, and only succeeded in proving some of the allegations made; or a claim based on tort where only some of the heads of damages are proved. The fact that the Defendant did not succeed in all 9 claims means that it is not a successful party in respect of all of them and cannot be said to be a successful party regarding the counterclaim. Having considered Mr. Wong's alternative submission I maintain that the Costs Order I have made on 17.10.2002 fairly reflected the position, i.e. costs to follow the event. I refused the Defendant's application to review the said Order is dismissed with costs.

Apportionment

6.In order to assist the Taxing Master, should no agreement on costs be reached, I accede to the request of Mr. Wong which was supported by Mr. Ng to make an apportionment in respect of the three-day trial. It is my estimate that 65% of the trial time was spent on those debit notes which were successful and 30% on those not successful with 5% on evidence relating to the issue of authenticity. I have already made no order as to costs regarding the said Notice Disputing Authenticity (see para 49 of the judgment dated 17.10.2002). It is my ruling that there will be no order as to costs regarding the 5% trial time I have apportioned.

Certificate for counsel

7.Mr. Wong asked me to certify his attendance as counsel being proper in the circumstances of the case as the amount recovered by the Defendant does not exceed $150,000 (see Schedule 1, Part II Rule 2 (3) under Order 62 of the Rules of the District Court, Cap. 336). Mr. Ng opposed the application on the basis that a solicitor could have represented the Defendant in these proceedings. In my view the Defendant's counterclaim in relation to the 9 debits notes, in itself, was not complicated. In my judgment dated 17.10.2002 I have already pointed out that the Defendant's legal representative had failed to exercise care to ensure only relevant documents in chronological order were placed before me (see para 15 of the said Judgment). Such failure had made it difficult for me to follow the Defendant's counterclaim and I spent a lot of time getting things in order. I do not think the legal or factual issues involved in this case were such that counsel should have been briefed. I therefore declined Mr. Wong's request.

Representation:

Mr. NG Man Kin of M/s Kwok Ng & Chan for the Plaintiff

Mr. William M F Wong ins't by M/s Au Yeung Cheng Ho &Tin for Defendant