Read the full judgment text of FACV 16/2009 and FACV 9/2010 on BabelCite. This Court of Final Appeal judgment was delivered on 21 January 2011 before Ma CJ, Bokhary PJ, Chan PJ, Ribeiro PJ, Lord Neuberger of Abbotsbury NPJ.
Civil procedure – costs – Court of Final Appeal – successful respondent's costs of unsuccessful appeal – whether reduction warranted because respondent ran additional knowing receipt argument alongside successful want of authority argument – Order 62 rule 7(1) of the Rules of the High Court – costs of cross-appeal – sub-contract terminated due to delay in progress not applicable – oral contract in loan agreement not applicable – large amount of money at stake – knowing receipt and want of authority arguments involving substantially the same considerations – Court of Appeal deciding appeal in respondent's favour on knowing receipt basis – whether COVID constitutes force majeure not applicable – whether parties entitled to separate experts as of right not applicable – On 8 November 2010, the Court of Final Appeal dismissed the Bank's appeal on liability (FACV 16/2009), dismissed Akai's cross-appeal on quantum (FACV 9/2010), varied the Court of Appeal's order as to the date from which interest on damages ran, and directed that costs be dealt with by written submissions. The parties agreed that the Bank should pay the large proportion of Akai's costs of the Bank's unsuccessful appeal, and that Akai should pay all the Bank's costs of Akai's unsuccessful cross-appeal, such costs to be taxed if not agreed. The narrow dispute was whether Akai should recover 100% or 70% of its costs of the Bank's appeal. The Bank contended that Akai's costs should be reduced because Akai ran an unnecessary additional argument based on knowing receipt alongside its successful want of authority argument. The court held that the prima facie position is that a successful respondent recovers 100% of its costs of an unsuccessful appeal. The court rejected the Bank's contention, holding that where a party advances its case on two different grounds and succeeds on both, it is not unreasonable to run both grounds, particularly where substantial money is at stake. The court construed Order 62 rule 7(1) RHC, which refers to things done "improperly or unnecessarily", as not applying to anything that was not, with the wisdom of hindsight, strictly necessary. The court noted that the two lines of argument involved the same considerations, and that the Court of Appeal had decided the appeal in Akai's favour on the knowing receipt basis, making it particularly hard to criticise Akai for running that argument. The court further held that the fact that Akai also relied on knowing receipt to support its unsuccessful cross-appeal did not justify any reduction in Akai's costs of the Bank's appeal, because any costs attributable purely to the cross-appeal would in any event be borne by Akai. The court left it to the taxation process to determine whether the costs of the knowing receipt argument should be treated as attributable only to the appeal or apportioned between appeal and cross-appeal; on either approach, there was no reason to depart from the prima facie view that the Bank should pay 100% of Akai's costs of the appeal. The Bank was ordered to pay 100% of Akai's costs of the Bank's appeal, Akai was ordered to pay 100% of the Bank's costs of Akai's cross-appeal, and the Bank was ordered to pay the costs of the written argument on costs.
Legal issues: Whether Akai should recover 100% or a reduced proportion of its costs of the Bank's unsuccessful appeal
Outcome: Bank ordered to pay 100% of Akai's costs of the Bank's appeal; Akai ordered to pay 100% of the Bank's costs of Akai's cross-appeal; Bank to pay the costs of the costs argument.
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