Yu Man Fung Alice v. Chiau Sing Chi Stephen and Another

HCA 1584/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1584 OF 2012

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D E C I S I O N   O N   C O S T S

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Introduction

1.In a decision handed down on 25 March 2013 (“the said decision”) the following costs order nisi was made:

“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 the striking out application be paid to D1 and the leave to re-amend application be paid to both defendants” (para 50 thereof).

2.This is the plaintiff’s application (by way of summons taken out on 5 April 2013) to vary the said order, namely, there be no order as to costs:

(1)   as between the 1^st defendant (“D1”) and the plaintiff, as regards D1’s striking out/Ord 14A application;

(2)   as regards the plaintiff’s application for leave to re-amend her statement of claim.

3.This application is opposed by both D1 and the 2^nd defendant (“D2”).

Background

4.The relevant background can be stated shortly.

5.The plaintiff commenced this action in September 2012 claiming against D1 fee due to the plaintiff for her services as D1’s investment adviser.  There was also a constructive trust claim concerning both defendants.

6.Both defendants applied (among other things) to strike out the respective part of the amended statement of claim which concerned them.  D2’s application was dismissed on 7 February 2013 (this is now the subject of a pending appeal).  In relation to D1’s application, I struck out the amended statement of claim (giving leave for her to re-amend it) in the said decision.

7.D1’s stance at the beginning of the hearing on 19 March 2013 (which led to the said decision) (“the said hearing”)was to:

(1)   abandon the application to strike out (on the ground that a re-amended statement of claim has been filed shortly before the said hearing); but

(2)   seek costs of the application from the plaintiff.

8.Following a discussion between the court and D1 during the said hearing, D1 changed his stance and pursued his application to strike out.

9.D2, on the other hand, maintained its stance throughout that even the proposed re-amended statement of claim was liable to be strike out (but expressed it by way of seeking an adjournment to await the outcome of its appeal against the earlier dismissal of its striking out application).

The application to vary costs

10.In relation to D1, the plaintiff’s case in this application is in gist that:

(1)   D1’s ultimate stance (to seek to strike out her claim) resulted from a mere adoption of the court’s analysis of what the plaintiff’s claim involved (made known to the parties during the said hearing by an exchange between the court and the parties);

(2)   thus, the outcome of D1’s application owed absolutely nothing to D1;

(3)   consequently, D1 ought not be awarded the costs of the applications.

11.In relation to D2, the gist of the plaintiff’s case in this application is:

(1)   the arguments put forth at the said hearing were the same as those put forth in D2’s application (which was dismissed on 7 February 2013);

(2)   like D1, D2’s role was no different from that summarized in para 10(1) and (2) above;

(3)   D2 ought not be awarded the costs of the applications either.

12.Both defendants naturally disagree with the above, and support the costs order nisi.

13.By reason of the matters set out below, I agree with the defendants (and disagree with the plaintiff).

14.The reasons for the court’s exchange with the parties (especially between the plaintiff and D1) at the said hearing have been set out in the said decision (para 37 to 45 thereof).  Such an exchange was one of the useful functions of a hearing; any matters of concern to the court arising from a perusal of the materials placed before it could be made known to the parties so as to afford them an opportunity to be heard.

15.Upon having been made aware of those matters of concern, the parties were at liberty to respond in a number of ways.  For example:

(1)   the parties may already be in a position to decide how to respond to those matters (such as expressing their agreement or disagreement, and the reason(s) in support thereof).  In such a case, the parties would respond accordingly;

(2)   alternatively, the parties may consider that they would need more time (and/or further materials) before they can properly respond to those matters.  In such a case, the parties may seek an adjournment to consider them (or to collate further materials).

Whatever the parties may decide to do, it can be inferred that, those were their considered decision(s). This is more so when experienced legal representatives appeared for the parties.

16.What transpired during the said hearing was that, following the exchange between the court and D1 during the said hearing:

(1)   D1 sought, and was granted, a short adjournment to consider the matter.  Upon the resumption of the said hearing, D1 decided to pursue his application to strike out;

(2)   the plaintiff did not seek any adjournment, and proceeded to put forth her submissions in support of her amended pleading (and proposed re-amendment).

By doing so, D1 and the plaintiff have indicated clearly what their respective case was.  Neither party ought to have any uncertainty as to the other side’s stance (and the parties have not expressed any uncertainty).

17.Conversely, after his exchange with the court during the said hearing, D1 could well have chosen to maintain his stance to abandon the application to strike out.

18.In such circumstances, I do not consider it fair to describe the outcome as:

“[owing] absolutely nothing to [D1]” (para 13, plaintiff’s written submissions).

19.Less still can it validly be said that D2 cannot properly be regarded as a successful party.  Whether D2’s arguments have found favour with the court on another occasion is irrelevant.

Conclusion

20.The plaintiff’s application to vary the costs order nisi is dismissed.

Other matters

21.The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with in the above headings.  This is so only because of the need to balance between the length of the decision on costs and its comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.

Costs order nisi

22.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 the defendants.

23.I consider summary assessment of costs to be appropriate.  The above costs shall thus be so assessed.  For this purpose:

(1)   the defendants be at liberty to lodge with court and serve a statement of costs within 7 days from today;

(2)   the plaintiff be at liberty to lodge with court and serve a statement of objections within 7 days thereafter.

24.To avoid doubt, any stay by virtue of para 51 of the said decision is uplifted by the pronouncement of this decision on costs.

(Andrew Chung) Judge of the Court of First Instance High Court

Mr Neville Sarony SC leading Ms Angel W Lau, instructed by Lam & Co, for the plaintiff

Mr Robert Whitehead SC, instructed by Herbert Smith Freehills, for the 1^st defendant

Mr Wilson Leung, instructed by F Zimmern & Co, for the 2^nd defendant