Chong Cheng Lin Courtney v. Cathay Pacific Airways Ltd

HCA 898/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 898 OF 2007

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Before:  Hon Chung J in Chambers

Date of Hearing:  19 January 2010

Date of Handing Down Decision on Basis of Taxation:  27 January 2010

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DECISION ON BASIS OF TAXATION

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1.In a judgment handed down on 22 December 2009, a costs order nisi was made in the plaintiff’s favour.

2.On 5 January 2010, the plaintiff took out this application to vary the said order such that the costs awarded are to be taxed and paid on an indemnity basis, alternatively, common fund basis.  The application is opposed by the defendant (“Cathay”).

3.The basis of this application can be summarized as follows:-

(a) Cathay has knowingly pursued an unmeritorious defence.  The lines of defence either shifted with time, or were contradicted by its own documents;

(b)    Cathay has argued all conceivable points; thus unnecessarily prolonging and complicating the proceedings;

(c) the financial benefit which Cathay may gain from a favourable outcome in this action is disproportional to the costs which were needed to defend it;

(d)    last (but not necessarily least) is that Cathay is a large public corporation.  The implication seems to be that the financial resources available to Cathay for this piece of litigation far exceed those of the plaintiff.

4.There are numerous judicial discussions regarding when indemnity or common fund costs should be awarded.

5.The plaintiff relies on observations made in decisions such as Town Planning Board v. Society for Protection of the Harbour Ltd. (No. 2) (2004) 7 HKCFAR 114.  She submits that the court has a “broad discretion” in this aspect which is “unfettered and uncircumscribed” in an “appropriate” case (para. 17 thereof).  But even she accepts that there must be “some special and unusual features” (para. 15 thereof).  Also, “appropriateness” requires consideration to be given to “any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation” (para. 18 thereof).

6.On the other hand, Cathay asks the court to note that the above observations in Town Planning Board were made in entirely different factual circumstances, namely, public interest litigation.  Further, it relies on judicial observations that indemnity or common fund costs are exceptional (Choy Yee Chun v. Bond Star Development Ltd. [1997] HKLRD 1327); where the conduct of a litigant is relevant, it has to be in some sense wicked (at pp. 1335 to 1336 thereof).

7.In brief, I do not find sufficient reason to award indemnity or common fund costs against Cathay.

8.In relation to para. 3(a) above, I am not satisfied that Cathay knowingly pursued unmeritorious defence.  The assessment of credibility and reliability is an exercise commonly found in civil (and criminal) litigation and there is nothing special in this action.  Disputes relating to legal issues are likewise a regular feature in litigation.

9.In relation to para. 3(b) above, the trial lasted for about 4 days.  This action was commenced in 2006 (in the District Court) and was tried in 2009.  There is no basis to conclude that Cathay has delayed the trial; neither has the trial itself been prolonged.  In fact, in view of the factual and legal issues involved, it can be said the trial has been conducted efficiently.

10.In relation to para. 3(c) and (d) above, because of the conclusions reached in relation to para. 3(a) and (b) above, these matters are insufficient to ground this application.

11.Insofar as it may be necessary to do so (especially with regard to para. 3(c) and (d) above), I agree with Cathay that the plaintiff’s failure to respond to the proposed mediation (suggested both by the court and Cathay) is a factor which militates against this application.  In saying so, I have borne in mind mediation was suggested before the new provisions of the Rules of the High Court (which implement the Civil Justice Reform) come into effect.  On the other hand, the trial itself took place well after they became effective.

12.This application is accordingly dismissed.

13.There is no apparent reason to depart from the usual rule that costs should follow the event.  There will accordingly be a costs order nisi pursuant to Ord 42 r 5B(6) that the costs of this application be paid by the plaintiff to Cathay.  I consider summary assessment of costs to be suitable.  For that purpose:-

(1) Cathay is at liberty to lodge with court and serve a statement of costs within 21 days from the date of decision (which period has taken into account the 14 days prescribed by Ord 42 r 5B(6));

(2) the plaintiff be at liberty to lodge with court and serve a statement of objections within 7 days thereafter, unless an application to vary the costs order in this paragraph is made within the period prescribed by Ord 42 r 5B(6).

Mr Martin Lee, SC leading Ms Frances Lok, instructed by Messrs Lo Wong & Tsui, for the Plaintiff

Mr Ashley Burns, SC, instructed by Messrs JSM, for the Defendant