American Lloyd Travel Service Ltd v. International Air Transport Association

HCA 660/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 660 OF 2007

_______________

BETWEEN

_______________

Before: Deputy High Court Judge Carlson in Chambers

Dates of Written Submissions: 11 May and 18 May 2007

Date of Ruling on Costs (Handed Down): 25 May 2007

________________________

R U L I N G  O N  C O S T S

_________________________

1.On 26 April last, I dismissed the Plaintiff’s application for an interlocutory injunction and made an order nisi that the costs should be costs in the cause.  The Defendant has applied to me to vary the order so as to give it the costs in any event or alternatively to say that these should be the Defendant’s costs in the cause.  The Plaintiff submits that I should confirm the order nisi.

2.Both parties have provided me with the fullest possible written submissions supported by many decided cases that bear on the issue of costs in interlocutory injunctions.  I am very grateful to both of them for their help.

3.Without the assistance of argument on both sides, I made an order nisi of costs in the cause to reflect the fact that there had been a breach of its procedure by the Defendant in the way that it dealt with the bringing into effect of the same day voiding provisions.  I considered this significant because it provided the justification for the Plaintiff coming to court to get its injunction.  In the event it failed notwithstanding its having made out a good case on the procedural breaches because I held that as a matter of discretion, the injunction should be refused because of the, in my judgment, likelihood of failure at trial to obtain such an order and therefore that it would not be right to grant the order at this interlocutory stage having regard to all the circumstances of the case which I have canvassed in the judgment.

4.The Defendant submits that this is really a case where such an application should never have been made and therefore this should amply justify an outright order in the Defendant’s favour in any event or at worst an order of Defendant’s costs in the cause.

5.It strikes me that this is a harsh appraisal of the circumstances here.  After all the Defendant, although very accommodating to the Plaintiff after the resolution was passed by delaying implementation for many months, has rather invited the application by falling foul of its own procedures.  Once the negotiations over further time broke down, the court was being invited to focus on strictly legal considerations.

6.The principle on the award of costs in these circumstances is briefly summarised at 29/1/44 of the current practice page 531.  Whilst the court retains a broad discretion to reflect the particular circumstances of the case the more usual order where a Plaintiff succeeds is Plaintiff’s costs in the cause and when a Defendant succeeds, Defendant’s costs in the cause.  The rubric also makes clear that the courts have more recently shown “a greater willingness to depart” from this practice and there are cases in which it has made outright orders against an unsuccessful applicant for an injunction.

7.Ultimately, I have decided in this matter, where the Plaintiff has got over the first hurdle with some ease but failed on an overall appreciation of the merits, that I ought to leave matters as they are.  The Defendant has rather invited this application by its failure to adhere to its own procedures and has lost on that issue.  The party that ultimately succeeds at trial will get these costs as well.  I confirm the order nisi save as to the ex parte hearing which was on notice.  The written argument has caused me to focus my attention to that hearing in a way that I had not done when I made the order nisi.  As I have already said this matter should never have been brought ex parte.  In fact very short notice was given to the Defendant’s solicitors and one of their partners had to attend at which hearing I adjourned the matter for an inter partes hearing.  It seems to me that the costs which I reserved on that occasion and which I directed should also be costs in the cause should in fact be to the Defendant in any event.  This reflects the justice of that hearing.  The Plaintiff should never have proceeded in that way.  I disapproved of that course at the time and it is only right that the Plaintiff should suffer the consequences of that in costs.

8.The order therefore will be costs in the cause for the inter partes hearing and Defendant’s costs in any event on the ex parte (on notice) hearing.

John Yan SC and Colin Shipp, instructed by Messrs Paul W Tse, for the Plaintiff

Clifford Smith, SC, instructed by Messrs Tanner De Witt, for the Defendant