Hebei Enterprises Ltd and Others v. Livasiri & Co (A Firm) and Others
Read the full judgment text of HCA 20094/1998 on BabelCite. This High Court CFI judgment was delivered on 7 July 2006.
1. This is the decision on the costs of this action.
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HCA20094/1998 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 20094 OF 1998 ----------------------- BETWEEN
----------------------- Before : Deputy High Court Judge Poon in Court Date of Hearing : 10 May 2006 Date of Decision : 7 July 2006 ------------------------------------------------------- DECISION ON COSTS NO. 2 ------------------------------------------------------- Introduction 1.This is the decision on the costs of this action. 2.I will adopt the abbreviations and references used in the judgment that I handed down on 4 November 2005 (“the Judgment”). There, I entered judgment against :
3.At paragraph 233 of the Judgment, I pointed out that the question of costs is a complicated matter. Accordingly, I did not make any order but invited the parties to make written submissions, which they subsequently did. I further heard the parties’ oral submissions on 10 May 2006. The main issue 4.The main issue arising from the parties’ submissions is whether the plaintiffs, though successful in their claims, are entitled to their costs of the action or whether they should be deprived of their costs or even ordered to pay part of the defendants’ costs. The general principles 5.I will preface my discussion with a summary of the general principles. 6.Pursuant to section 2A of the High Court Ordinance, Cap. 4, the costs of an incidental to all proceedings are in the discretion of the court and the court shall have the full power to determine by whom and to what extent the costs are to be paid. Wide though the discretion is, it is a judicial discretion and must be exercised on established principles, that is according to rules of reason and justice : see Hong Kong Civil Procedure, 2006, Vol. 1, paragraph 62/2/6 at p.921. 7.As a general rule, costs should follow the event except where it appears to the court that in the circumstances of the case some other order should be made. This general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in length or cost of the proceedings he may be deprived of the whole or a part of his costs. Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but order him to pay the whole or a part of the unsuccessful party’s costs : see Re Elgindata Ltd (No. 2) [1993] 1 All ER 232, per Nourse LJ at p.237e-h. 8.With these principles in mind, I now turn to consider how I should exercise my discretion in the present case. The costs as between the plaintiffs and the 1st defendant 9.I will first consider the costs as between the plaintiffs and the 1st defendant. 10.In section 2.1 of the Judgment, I categorized the plaintiffs’ pleaded case against the 1st defendant as (1) the Stakeholder Claim, (2) the Negligence Claim and (3) the Residue Claim. In section 7, I dealt with the plaintiffs’ attempt to adduce evidence in order to expand the role of the 1st defendant in respect of the project in two aspects by alleging (a) that the 1st defendant had provided various guarantees in relation to the control and profitability of the project and (b) that the 1st defendant was the stakeholder, guarantor and operator of the project. (For convenience, I will refer to this as the Attempt below.) In the end, I found against the plaintiffs. In section 8, after considering the evidence carefully, I rejected the Stakeholder Claim. I further ruled that the plaintiffs’ evidence was so unsatisfactory that there was no case to answer on this claim : see paragraph 180. 11.At paragraph 181 of the Judgment, I summed up my views on the plaintiffs’ evidence thus :
12.In my view, how the plaintiffs’ had conducted themselves in the Stakeholder Claim and the Attempt is deplorable. They well knew that those allegations were clearly unsustainable on evidence, including documents of their own. Yet they chose to pursue them relentlessly to the bitter end. They did not disclose some of the relevant documents (contained in trial bundle NCB6), which were supportive of the 1st defendant’s case until ordered by the court. The plaintiffs’ witnesses gave poor and inherently improbable evidence on those allegations, which unnecessarily and considerably lengthen the trial. Plainly, the plaintiff had improperly and unreasonably raised and persisted with the Stakeholder Claim and the Attempt. 13.Further, the Stakeholder Claim and the Attempt had raised serious accusations against the 1st defendant with grave implications on the personal and professional reputation of the 1st defendant and the individuals in the firm who were involved in the handling of the plaintiffs’ monies. It was much more serious than a mere case of negligence. The 1st defendant was entitled to vigourously defend those allegations. When it succeeded in doing so, it should be able to recover the costs so incurred from the plaintiffs. 14.In the circumstances, the plaintiffs should pay the 1st defendant the costs of the Stakeholder Claim and the Attempt, while the 1st defendant should pay the plaintiffs the costs of the Negligence Claim and the Residue Claim, which should follow the event. 15.The next question is how to apportion the costs. Mr Hoo, SC, appearing for the 1st defendant, submitted that the plaintiffs should pay the 1st defendant 75% of its costs of the action and the 1st defendant should pay the plaintiffs 25% of their costs of the action and that there shall be a set-off. I agree. The Stakeholder Claim and the Attempt formed the bulk of the trial. This apportionment is very reasonable indeed. Mr Aiken, SC, appearing for the plaintiffs, submitted that if the costs are to be apportioned, then the apportionment should only be made for the first 19 days of the trial, 19 days being the original estimate of the length of the trial. With respect, I disagree. It was mainly due to how the plaintiffs had conducted the Stakeholder Claim and the Attempt that the trial had overrun so extensively. It was legitimate for the 1st defendant to explore and tax the plaintiffs’ evidence in length in defending those unfounded allegations. 16.For the above reasons, as between the plaintiffs and the 1st defendant, I will order that :
The costs as between the 3rd plaintiff and Mr Ho 17.I now turn to the costs as between the 3rd plaintiff and Mr Ho. 18.Mr Ho accepted in principle that the 3rd plaintiff is entitled to have costs against him, to be taxed if not agreed. However he took a number of further points, which are dealt with in turn below. 19.First, there should be an apportionment between the pre-trial costs and the costs of the trial proper. With respect, I fail to see any justification for such apportionment. 20.Second, the court should exercise its discretion to apportion the defendant’s respective liability for the plaintiffs’ costs. I agree. The 3rd plaintiff’s claim against the 3rd defendant is simple and straightforward. It is essentially based on the Undertaking. No allegation of impropriety had been pleaded against Mr Ho personally. In order to succeed against Mr Ho, the 3rd plaintiff had to establish, among other things, that the Transfers were made with its consent and authority. But the 3rd plaintiff had neither pleaded nor adduced evidence to prove such a case. On the contrary, it took issue with the 1st defendant that the Transfers were made with the plaintiffs’ consent and authority, while Mr Ho had through out the trial adopted a neutral stance over the related factual disputes. In the end, I found against the plaintiffs on those matters. In the circumstances, it will be unfair to ask Mr Ho to bear any of the costs relating to this issue if the Transfers were made with the plaintiffs’ consent and authority. It is only fair that Mr Ho should only bear a proportion of the 3rd plaintiff’s costs of the action which represents the costs incurred for establishing the other matters that found its claim against him. Having considered the matter in the round, I think 10% is a reasonable figure. 21.Third, Mr Ho argued that if an apportionment is to be made on the costs between the plaintiffs and the 1st defendant, then he should be able to benefit from the apportionment as well. I am unable to accept this contention. For those costs relate to the Stakeholder Claim and the Attempt, which did not concern Mr Ho. 22.For the above reasons, I will order that Mr Ho do pay 10% of the 3rd plaintiff’s costs of the action, to be taxed if not agreed. Costs between the plaintiffs and other defendants 23.I see no reason why the general rule that costs should follow the event should not apply to the costs as between the plaintiffs and the other defendants. Accordingly, the 1st plaintiff shall have its costs of the action against the 4th and 5th defendant, to be taxed if not agreed and the plaintiffs shall have their costs against the 6th and 7th defendants, to be taxed if not agreed. Other matters 24.For completeness, there are three other matters that I need to dispose of. 25.First, on liability. For avoidance of doubt, if more than one party is liable for the same set of costs, the liability of the parties concerned will be joint and several. 26.Second, on costs reserved in the proceedings. The parties agreed that no order should be made on them. I agree that it is a sensible way to dispose of them. I will therefore make no order as to costs on all the costs reserved in these proceedings. 27.Finally, on costs of the submissions on costs of this action including the hearing on 10 May 2006. I think the 1st defendant, having succeeded in its submissions, is entitled to have the costs against the plaintiffs. As between the 3rd plaintiff and Mr Ho, having regard as how the matter is disposed of, I think it is fair not to make any order as to costs. And I so order.
Mr Nigel Aiken, SC and Mr Kenneth Chow instructed by Messrs Lau & Chan, for the 1st, 2nd & 3rd Plaintiffs Mr Alan Hoo, SC and Mr Alfred Chan, instructed by Messrs Livasiri & Co., for the 1st Defendant Mr Pat Bobby Ying Ho, A former partner in the firm of Ho & Chan, the 3rd Defendant |
Further hearings and rulings under HCA 20094/1998