Chow Kee James t/a Tapbo Civil Engineering Co v. Transway Construction & Engineering Ltd t/a Wo Kee Construction & Engineering Co
Read the full judgment text of HCCT 11/2006 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 23 May 2007 before Deputy High Court Judge Gill.
Costs — Construction and Arbitration Proceedings — Subcontract dispute involving public works — Wo Kee counterclaimed for outstanding contract payment and expenses; Tapbo defended with set-off claims and later conceded some amounts — Court initially made costs order giving Tapbo three quarters of costs on basis majority issues resolved in its favour — Upon submissions citing Re Elgindata (No. 2) and Hong Kong Court of Appeal decision Thomas Vincent v South China Morning Post Publishers Limited, court reconsidered costs approach — Held costs should reflect discrete claims and apportioned success rather than simple costs follow event rule — Wo Kee not found to have acted improperly; Tapbo’s late concessions considered in apportioning costs — Costs order varied to award Wo Kee one quarter of costs and Tapbo one quarter, netted off — Wo Kee awarded costs of this hearing. The decision emphasizes fairness and precision in costs orders where multiple claims with mixed outcomes exist, discouraging litigants from prolonged disputes over all claims. Outcome: Costs order nisi varied accordingly.
Legal issues: Approach to costs in case of partial success on multiple claims
Outcome: Costs order varied to apportion costs between parties reflecting partial successes; Wo Kee awarded one quarter of its costs and Tapbo one quarter, to be netted off; Wo Kee awarded costs of this hearing.
Cited by 2 cases · Cites 1 case
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HCCT 11/2006 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTRUCTION AND ARBITRATION PROCEEDINGS NO. 11 OF 2006 (Transferred from DCCJ No. 3565 of 2005 and HCA No. 1203 of 2005) _________________ BETWEEN
_________________ Before: Deputy High Court Judge Gill in Chambers Date of Hearing: 16 May 2007 Date of Ruling: 23 May 2007 ________________________ RULING ON COSTS ________________________ 1.On 19 December 2006 I handed down judgment in which the defendant Wo Kee received an award being a net amount found due under its counterclaim. But in an order nisi I gave costs to the plaintiff Tapbo as to three quarters of the assessed amount, on the preliminary basis that the majority of the disputed issues were resolved in its favour. 2.Wo Kee brought the matter back for argument, and now with the benefit of that from counsel on both sides, I am bound now to consider the costs issue afresh. 3.The parties were parties to a subcontract involving public works. Tapbo had contracted with the Water Supplies Department to lay a line of water pipes, and then passed the majority of the work on to Wo Kee. 4.The parties fell out. Tapbo was called upon to pay workers of Wo Kee who had not been paid and sued to recover that. This was an amount of $282,250.70. There was no denial that this was due. But of much greater moment was the counterclaim brought by Wo Kee. It completed the work, at least substantially, and sued to recover the contract price outstanding. Tapbo declined to pay because it had incurred counter charges which together with the amount it was suing for were, it alleged, for a significantly larger sum. 5.At the outset Wo Kee counterclaimed not just for the balance due but also additional expenses incurred; this all came to $3,766,153.93. Tapbo’s defence as pleaded was that it had been compelled to provide substantial services and materials and to meet liquidated damages, because of Wo Kee’s default. These amounts not only absorbed the balance due under the subcontract but meant that it had overpaid and was due reimbursement of $685,895.06. 6.Then at trial, by amended reply, Tapbo conceded that it did owe Wo Kee a net amount, being albeit a much smaller amount than that counterclaimed for, of $39,583.25. 7.In the event I awarded Wo Kee net the sum of $346,853.84. The Competing Arguments 8.Mr Coleman SC, joining the fray for the first time, argued for Wo Kee that this was not a case where the fundamental principle of costs to the successful party should be departed from. Wo Kee, he submitted, had had to come to court to recover what it could. Whilst it failed to prove and recover all its claims, it nevertheless achieved much more by a net award than Tapbo’s originally pleaded case and then its amended case which it advanced at trial. 9.In support of its contention that Wo Kee should recover all its costs he referred to the landmark English Court of Appeal case in re Elgindata Limited (No. 2) [1992] 1 WLR 1207. In that case successful petitioners, part of whose case was disallowed, were awarded by the trial judge some of their costs but were ordered to pay a greater share of their opponent’s. Nourse LJ said of this:
10.Mr Coleman submitted that there was no suggestion that Wo Kee had behaved improperly; that it was the successful party, albeit as to a part only of what it claimed. Conversely, Tapbo had until the date of trial claimed it was owed money, yet in the end failed to establish that; further, it lost its pleaded claim because of set-off. Thus Wo Kee was the victor, whilst Tapbo was the vanquished. 11.Mr Yee for Tapbo, submitted that the appropriate award was the one that I made nisi. He referred me to a case of the Hong Kong Court of Appeal, Thomas Vincent v South China Morning Post Publishers Limited [2004] 3 HKLRD 471. In that case the Plaintiff had made three discrete claims against his former employer under various heads. After trial he had succeeded as to two claims and failed as to the third. The trial judge awarded him all his costs. 12.The appellate court allowed the defendant’s appeal in respect of one of the claims leaving the plaintiff the victor in respect of one claim only. 13.Dealing with the costs of the action and appeal, the court ordered that the defendant should pay one third of the plaintiff’s costs of the action, that the plaintiff pay the defendant two thirds of the costs of the appeal and the defendant pay the plaintiff one third of the costs of appeal, liability to be set-off. 14.As it happened, Mr Coleman represented the plaintiff. 15.Yuen JA, giving the lead judgment, said at p.474:
She then made reference to recent English cases and in particular Phonographic Performance Limited v AIE Rediffusion Music Limited [1999] 1 WLR 1507. She quoted an excerpt from the judgment of Lord Woolf MR as follows:
Yuen JA then said:
Then she went back to the case before the court, and said this:
16.Mr Yee submitted that the order nisi giving Tapbo three quarters of its costs and making no other order justly reflected the extent to which Tapbo had succeeded in reducing the amount due under the counterclaim from more than $3.7 million to, in round terms, $346,000. 17.He submitted the case was a classic example of discrete claims for different sums made by both parties, and produced a table to show that Tapbo had won 91.5% of the amounts at stake, leaving Wo Kee a paltry 8.5%. 18.Mr Coleman’s reposte was that these were not discrete claims separately grounded as contemplated in the sort of circumstances referred to by Lord Woolf. My Determination 19.I agree with Mr Coleman that there is no suggestion that in the conduct of its case Wo Kee behaved improperly or unreasonably. 20.Thus in the exercise of my discretion it is a matter of whether to apply the third principle spelt out in Elgindata or whether, in the circumstances, to treat the various claims as discrete and apportion costs accordingly. 21.Looking at the matter as a whole it seems to me that the appropriate course is the latter one. At trial the focus was on the different issues; this was particularly apparent as the parties moved towards settlement of many of these during the trial, and presented me with tables to show how this was achieved. 22.Mr Coleman sought to emphasize that Wo Kee succeeded in getting an award at judgment many times that which Tapbo had acceded to; further, that concession was delayed until trial. But the reality is that the majority of the issues remaining to be resolved were won by Tapbo. 23.However a feature of this case overlooked by me when I made my preliminary order on costs were the extent of the concessions made by Tapbo which were not put forward until after preparation for trial. Mr Yee’s calculation that Tapbo had won, in money terms, 91.5% of the disputed amount (what I refer to in my judgment as the lion’s share) is somewhat skewed because it does not take into account the lateness of the concessions. It seems to me that Wo Kee should be entitled to the costs in respect of those matters it won whilst Tapbo should similarly be rewarded for its successes. 24.Doing the best I can on the matter of time taken I vary the costs order nisi by awarding to Wo Kee one quarter of its costs and to Tapbo one quarter of its costs, to be netted off. Costs of This Hearing 25.These are nisi. Wo Kee came to court to argue a variation of the nisi costs order and was successful, albeit not wholly so. Nevertheless it shall have its costs. In this respect, Wo Kee having also applied to vary the judgment sum on the grounds that I had erred in the arithmetic which in the event was not pursued, the costs of dealing with that matter are to be disregarded.
Mr K Yee, instructed by Messrs Foo, Leung & Yeung, for the Plaintiff Mr R Coleman SC, leading Mr C Y Liu, instructed by Messrs C L Chow & Macksion Chan, for the Defendant |
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