Chinachem Charitable Foundation Ltd v. Chan Chun Chuen and Another

HCAP 8/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 8 OF 2007

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BETWEEN

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Coram : Before Master Levy in Chambers

Order Date (Date of Paper Disposal) : 17 August 2011

Date of Handing Down Determination : 17 August 2011

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DETERMINATION

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A. Summons for variation

1.By a reserved judgment handed down on 30 June 2011 (“June Judgment), I dismissed the 1^st Defendant’s application for discovery of documents in connection with his preliminary objections to the Plaintiff’s bill by contending that the costs claimed in the bill is allegedly champertous and that they are in breach of the indemnity principle.  I further made a costs order nisi in favour of the Plaintiff.

2.The 1^st Defendant by summons of 13 July 2011, applies to vary the said nisi costs order by asking for a 50% reduction of the Plaintiff’s costs   (or for such percentage reduction the Court thinks fit).

3.I directed this summons to be dealt with on paper without a hearing.  Parties’ written submissions were lodged.

B. Principle on costs

4.The following principles on costs are largely undisputed:

(1)  Costs are in the discretion of the court, and it can take into account of special matters set out in Order 62 rule 5, Rules of the High Court (which factors relevant to the present case are, according to the 1^st Defendant’s submission, the underlying objectives of the Civil Justice Reform, the conduct of the parties and whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue.[1]”)

(2)  Costs shall follow the event unless there are circumstances suggesting that some other order should be made (Order 62 rule 3 (2)).

(3)  The court may deprive a successful party of part of his costs if that party raises issues or makes allegations on which he fails and such issues have caused a significant increase in the length or costs of the proceedings (In re Elgindata Ltd (No.2) [1992] 1 LWR 1207, applied in La Chemise Lacoste SA v Crocodile Garments Ltd. [2000] 4 HKC 317)[2].

5.Bearing these principles in mind, I will now consider the 1^st Defendant’s ground for variation.

C. Is a departure from the usual rule under Order 62 rule 3(2) warranted?

C.1 The 1^st Defendant’s reason for departure

6.In the normal circumstance, the Plaintiff, as the successful party, should be entitled to the costs of the 1^st Defendant’s unsuccessful discovery application.  The 1^st Defendant however submits that there should be a 50% reduction on the costs to be awarded to the Plaintiff because the Plaintiff, in relation to the contention regarding the breach of the indemnity principle, only confirmed the correct amount of costs claimed in the bill after its law costs draftsman filed a clarification affirmation as directed by me.

C.2  Discussion

7.According to the principle in In re Elgindata Ltd., it would appear that the court may deprive a successful party’s costs if  (i) that party has raised issues on which he fails; (ii) such issues have caused a significant increase in the length or costs of the proceedings.

8.I would therefore consider if the clarification affirmation has met these two criteria.

9.The answer is clearly no.  The clarification affirmation was filed after the oral hearing was concluded.  The discussion regarding the accuracy of the amount of the Plaintiff’s bill during the hearing has hardly prolonged the hearing. Neither is there any increase in the costs as the 1^st Defendant has made no response to the affirmation.  I do not think the two criteria in In re Elgindata Ltd for depriving a successful party’s costs have been met.

10.Further, I have in fact found that the evidence the Plaintiff has filed in opposition to the 1^st Defendant’s discovery summons in fact shows that the amount of costs the Plaintiff has paid to its solicitors exceeded the amount of costs it claimed in the bill (June Judgment §52) in spite of the mistakes that were admittedly present in its bill.

11.For these reasons, I am unable to find any justifiable ground for making a reduction as the 1^st Defendant suggests.  However, I think, as a matter of fairness, the Plaintiff should not be allowed to recover the costs of the clarification affirmation as it was solely occasioned by its own mistake.  Hence, if assessment of costs were needed, I direct all costs of and in connection with the preparation and filing of the clarification affirmation should be excluded from the Plaintiff’s Statement of Costs.

D. Order

12.The 1^st Defendant’s summons for variation of costs is dismissed. The costs order nisi shall become absolute in favour of the Plaintiff save and except that any costs of and occasioned by the filing of the affirmation of  Yu Shiu Ming, Nelson on 1 June 2011 is disallowed.

13.I make a costs order nisi that the 1^st Defendant do pay the Plaintiff’s costs of this summons.  Upon the costs becoming absolute (14 days from the date of this determination), the costs should be summarily assessed in lieu of taxation if they cannot be agreed.  The same direction in paragraph 80 of the June Judgment shall apply.

Messrs Reed Smith Richards Butler for the 1^st Defendant

Messrs Wilkinson & Grist for the Plaintiff