Sam Nickolas David Hing Cheong v. Lowe Edwin Ryan

DCCJ4846/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4846 OF 2009

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BETWEEN

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Before: H H Judge Lok in Chambers (Open to the public)

Date of Hearing: 3 December 2010

Date of Decision: 3 December 2010

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D E C I S I O N

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1.This is an application to vary the costs order nisi made by myself on 22 September 2010. The background of this case has already been set out in the decision handed down on that day and I do not want to repeat the same here.

2.In the hearing below, the learned Master made a summary costs order assessing the Plaintiff’s costs up to that stage in the sum of $12,000.  The Plaintiff now seeks to vary such order and asks for the costs to be taxed.  According to Mr Cheung, counsel for the Plaintiff, the learned Master made the assessment without the benefit of a bill of costs.  Further, as the case will continue with the assessment of damages proceedings, the costs order made by the learned Master for the entire action is no longer applicable. 

3.Obviously, in the hearing before the learned Master, he summarily assessed the costs incurred by the Plaintiff up to that stage.  As I have allowed part of the appeal and there will be further assessment of damages proceedings, I have already revised the costs order to cover only the Plaintiff’s costs up to that particular stage.  If there be further proceedings, the court is then free to make further costs order in respect of such proceedings.

4.So far as the quantum of the costs is concerned, masters generally have more experience in assessing the costs of litigation than judges.  If the Plaintiff wants to appeal against the quantum of the summary assessment, the Plaintiff should bear the burden of showing why he says that the assessment made by the learned Master is wrong.  As there is no such material before the court, I would not disturb the summary assessment made by the learned Master.

5.For the costs of the appeal, since the Plaintiff does not succeed in all the issues, I made the order nisi that the Plaintiff is only entitled to half of the costs of the appeal.  After reviewing the facts of the case and the submissions of counsel, I maintain my view that the Plaintiff should not be entitled to all the costs of the appeal.  The judgment given by the learned Master has been amended in the appeal and the Defendant is now entitled to have a trial as to the inquiry of the exact amount owed to the Plaintiff prior to the repudiation of the agreement and the market value of the property at the time of the repudiation of the agreement.  In such circumstances, the Plaintiff should not be entitled to all the costs.  However, the Plaintiff succeeds in two main issues in the appeal, namely (i) the Defendant does not have any further beneficial interest in the property; and (ii) the damages arising from the breach of the agreement should be assessed based on the market value of the property at the time of the repudiation of the agreement.  Since they are the main issues in the appeal, I vary the order to allow the Plaintiff to recover 75% of the costs of the appeal.

6.Mr Leung, counsel for the Defendant, submits that the order made by the court is the same as the settlement term proposed by the Defendant in the “without prejudice” letter dated 21 April 2010.  However, it is clear from that letter that the Defendant maintained his position that he still enjoyed half of the interest of the property and that, in assessing the Plaintiff’s damages, he could enjoy the benefit of the rising market after the repudiation of the agreement. In such case, the Plaintiff was entitled to reject such offer on the part of the Defendant, and in fact, the Plaintiff succeeded on these two main issues in this appeal.  Hence, I do not think that the contents of the “without prejudice” letter can assist the Defendant’s argument on the issue of costs.

7.There is also an application for leave to appeal against the order made by myself on 22 September 2010.  This case is about a matter of some importance: how should the court assess the damages in the case that one party pulls out from a joint venture property investment in a volatile property market in Hong Kong? 

8.At this stage, I do not propose to deal with the arguments again.  However, as there is no direct authority on this particular issue, the Court of Appeal may disagree as to the approach that was adopted by myself in deciding this particular case.  I also take the view that the Court of Appeal should be invited to clarify the law on this area, in particular, the decision may affect a lot of real property investors in Hong Kong.  I therefore grant leave to appeal against my decision.

Mr Anthony P W Cheung, instructed by Rene Hout & Co., for the Plaintiff

Mr Paul Leung, instructed by Hastings & Co., for the Defendant