May Fung Co Ltd v. Wing Lung Industrial Ltd and Others

HCA 1607/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.  1607 OF 2007

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BETWEEN

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Before: Hon Lam J in Chambers

Date of Application by way of letters: 19, 21 and 28 October 2009

Date of Ruling: 30 October 2009

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R U L I N G

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1.After I handed down my Judgment on Costs on 9 October 2009, the order was finalized and perfected on 15 October 2009. On 19 October 2009, solicitors for the Defendants saw fit to write a letter to this court asking for costs on three items related to argument on costs in favour of the Defendants which they said the court had omitted to deal with. Solicitors for the Plaintiff objected by a letter of 21 October 2009. They said this court is now functus officio. A reply was given by solicitors for the Defendants on 28 October 2009.

2.Whilst it is correct that the Defendants did not ask for costs of the argument as to scale of costs to be dealt with separately at any stage prior to the court’s judgment on costs, the court would have jurisdiction to deal with it if the omission to seek such costs is accidental and as such the same can properly be said to be falling within the scope of the slip rule, see Man Ping Nam v Man Fong Hang (No 2) (2007) 10 HKCFAR 140 paras.17 to 21.

3.However, Order 20 Rule 11 requires a summons to be taken out if the Defendants wish to evoke the slip rule. This has not been done. There is no suggestion in the correspondence that the failure to make the application was a slip on the part of those representing the Defendants.

4.In any event, this court is not minded to award costs to the Defendants in respect of the three items identified in the letters from the Defendants’ solicitors as follows,

(a)  The costs for written submissions and authorities for argument on scale of costs;

(b)  The part of costs for oral submissions and arguments and preparation in advance for argument on scale of costs on 5 October 2009;

(c)  The costs of obtaining and perusing the handed down Judgment on Costs.

5.I do not accept the submission that settlement was not anticipated by the Defendants. Even though the hearing on 5 October 2009 was originally scheduled as a PTR, directions from this court on 24 September 2009 and the making of sanctioned offer by the Defendants clearly paved the way for the possibility of settlement being achieved on 5 October. With such possibility in mind, parties should take the necessary steps to ensure all outstanding matters are adequately dealt with either by way of agreements or by specific applications being made to the court on 5 October.

6.Costs item (b) identified in the letters from the solicitors for Defendants clearly shows that preparation works were done on arguments as to scale of costs before the hearing on 5 October.

7.After the achievement of settlement (other than on scale of costs), Counsel for the Defendants did not ask for the matter to be adjourned in order to prepare for arguments on scale of costs. In other words, as far as the Defendants were concerned they were ready willing and able to finalize matters by immediate oral argument canvassed at the hearing of 5 October.

8.If the Defendants had intended to seek a separate order for costs in respect of the argument on scale of costs, that intention should have been made known at the time of argument. Further, there should be a reservation for this part of costs to the general order for costs in favour of the Plaintiff in the settlement agreement submitted to the court for approval on 5 October.

9.The argument on scale of costs took the Plaintiff by surprise. But again there was no application by Plaintiff to adjourn the matter.

10.In other words, both parties were contented with finalizing the matter by having oral arguments on 5 October 2009. No doubt that was done with a view to save the additional costs of coming back to court for another hearing. As such, the costs of the arguments would be absorbed by the costs of the PTR which is part of the costs of the action. This is in line with the underlying objectives under Order 1A.

11.Whilst the court did request for relevant authorities to be submitted by the parties when the oral submissions have been concluded on 5 October 2009, in the exchange between the court and counsel for the Plaintiff it was made clear that the court did not give liberty for further written submissions to be filed.

12.In the circumstances, even though the Defendants lodged written submissions on 6 October 2009 this court is not minded to give them costs for such works even assuming that the discretion on costs is to be exercised afresh. The written submissions were lodged without leave. There was no reason why the points canvassed in the written submissions could not have been made at the oral hearing on 5 October. Given that the Defendants’ legal team has done the preparation for argument on scale of costs, the relevant authorities should also have been submitted on 5 October in the course of hearing.

13.More importantly, given the agreement on the order for costs in favour of the Plaintiff (subject to the question of scale of costs) without any qualification, it would not be right to entertain an application for a separate order for costs on the argument as to scale of costs which in effect seeks to rewrite the settlement agreement between the parties.

14.I must say I regard this application by the letter of 19 October from the solicitors for the Defendants to be an opportunistic one. It is an attempt to re-open matter that should have been canvassed on 5 October and as such against the spirit of the underlying objectives in Order 1A. It is also against the terms and the spirit of the settlement agreement between the parties.

15.The application by the Defendants by letter dated 19 October 2009 is dismissed. For the avoidance of doubt, the costs of the parties on this application should form part of the costs of the action. In other words, the Plaintiff is entitled to such costs, to be taxed on the District Court scale if not agreed.

Messrs Keith Lam Lau & Chan, for the Plaintiff

Messrs S H Chan & Co., for the 1^st to 3^rd Defendants