Superene Ltd and Another v. Metro Fair Ltd

DCCJ 3025/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3025 OF 2008

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DECISION

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INTRODUCTION

1.This is the application of the 1^st plaintiff to vary the costs order nisi made at the end of my judgment on 3 May 2013 that there be no order as to the costs of the trial.  The order was made on the basis that the 1^st plaintiff was unsuccessful in its claim against the defendant and the defendant was also unsuccessful in its counterclaim against the 1^st plaintiff and that their respective claims related substantially to the same factual and legal issues.  The details of the case are stated in my judgment which I will not repeat.

2.I have the benefit of written submissions from both sides which are supplemented by oral submissions of Mr Wong for the 1^st plaintiff and Mr Koo for the defendant.

Relevant legal principles

3.It is trite that costs are in the discretion of the court and that the general rule is that costs should follow the event.  I appreciate that under the new rules after the Civil Justice Reform the courts may be more ready to make separate orders which reflect the outcome of the different issues.  I also bear in mind the provisions of Order 62 Rule 5 of the Rules of the District Court, in particular Rule 5(1)(e) & (2).  I am alive to the principles stated in Re Elgindata Ltd (No 2) [1993] 1 All ER 232, in particular, that the aforesaid general rule does not cease to apply simply because the successful party raised issues or made allegations that failed, but that he could be deprived of his costs in whole or in part where he had caused a significant increase in the length of the proceedings and also that where the successful party raised issues or made allegations improperly or unreasonably the court can not only deprive him of his costs but can also order him to pay the whole or part of the unsuccessful party’s costs.

The Present case

4.I am unable to accept the 1^stplaintiff’s argument that the respective claims of the parties did not share common factual and legal issues. As pleaded in the 1^stplaintiff’s statement of claim, its case was that the portion of the external wall in question (“the P External Wall”) was its property.  At the trial, the 1^stplaintiff sought to advance an alternative case that the P External Wall was “Building Common Area”.  The defendant defended and counterclaimed by alleging that the P External Wall had already been assigned to the defendant years before the 1^stplaintiff came into the picture and therefore it could not be the 1^stplaintiff’s property or “Building Common Area”.  As such, I cannot see how it can be said that there were no common factual and legal issues on the ground that the parties “claimed to have derived title by different routes and based on different conveyancing instruments”. 

5.In relation to the 1^st plaintiff’s unsuccessful claim, I see no reason why the defendant should not be entitled to its costs.  Although I rejected the evidence of the defendant’s witnesses and the arguments advanced on its behalf, it is not to say that the issues raised by the defendant were improper or unreasonable.  I take into account that the action began in 2008 and a lot of preparation work must have been done prior to the trial by each side.  Although the points raised by the 1^stplaintiff in its pleaded case were legal rather than evidential in nature, I do not agree that the legal issues raised by the 1^stplaintiff were easy or straightforward and did not require much preparation.  Sometimes, legal research and formulation of counter-legal arguments can be as time consuming.  I note also that the 1^stplaintiff only abandoned many of the legal issues only at the eleventh hour.

6.In relation to the defendant’s unsuccessful counterclaim, I also see no reasons why the 1^stplaintiff should not be entitled to its costs. 

7.In theory, it is possible to have separate costs order for different issues or different claims.  However, it is obviously difficult and time consuming to separate the costs for each and every individual issue or for different claims of the parties.  Bearing in mind the underlying objectives of the Civil Justice Reform as pronounced in Order 1A, Rule 1, it is in my view expeditious, proportional, procedurally economic and fair that there be no order as to costs. 

Order

8.I dismiss the 1^stplaintiff’s application and make the order nisi absolute. 

9.As to the costs of today’s application, I order that the costs should be paid by the 1^st plaintiff to the defendant, to be taxed if not agreed.

Mr David P H Wong of Wong, Hui & Co, for the 1^st plaintiff

Mr Ernest C M Koo instructed by Jack Fong & Co, for the defendant