Kam Leung Sui Kwan, Personal Representative of the Estate of Kam Kwan Sing ,The Deceased v. Kam Kwan Lai and Others

CACV 266/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 266 OF 2012

(ON APPEAL FROM HCCW NO. 154 OF 2010)

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BETWEEN

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Hon Lam VP (giving the Judgment on Costs of the Court):

1.We handed down our main judgment in this appeal on 6 March 2014. In that judgment, we made a costs order nisi that the appellant petitioner shall pay the costs of the respondents both in respect of the costs of the appeal and the respondents’ notice.

2.The petitioner sought a variation of that costs order nisi.  We have received and considered the written submissions from the parties on the application to vary.

3.The petitioner accepted that she has to bear the costs of her appeal.  However, she contended that notwithstanding the conditional nature of the respondents’ notice, there had been (at least in substance) a cross-appeal and given that the respondents did not succeed on many grounds raised in the respondents’ supplemental notice, the petitioner should have the costs of the respondents’ supplemental notice.  Alternatively, the petitioner submitted that the respondents should be deprived of the costs of the respondents’ supplemental notice, viz no order as to costs in respect of the that notice “to reflect the fact that the petitioner should be compensated for the costs she was forced to incur in dealing with the 11 failed issues raised by the respondents in their cross-appeal”.

4.The petitioner also asked for certificate for 3 counsel.

5.The respondents did not accept there was any cross-appeal.  They submitted that there is no reason to vary the costs order nisi.  In a nutshell, they submitted that the costs incurred in respect of the issues which the court held against the respondents on the pleading point and the point on the existence of quasi-partnership were limited as the respondents did not spend much time on those issues both in terms of time spent at the hearing and in terms of the length of the skeleton submissions on those issues.  There is thus not enough justification for departing from the general rule of costs following the event.  The respondents asked for certificate for 2 counsel.

6.As far as one is concerned with “the event” for the purpose of the general rule as to costs, the respondents can be described as successful on both the petitioner’s appeal and the so-called cross-appeal (in terms of this court overturning the finding of Harris J on unfair prejudicial conduct). 

7.We have explained in the main judgment that the cross-appeal in the respondents’ notice was premised on the eventuality of this court reversing the judge’s decision on jurisdiction (which did not happen) and strictly speaking it was not necessary to deal with the same in view of our conclusion on jurisdiction.  At the same time, it must be recognized that substantial costs had been incurred in respect of the cross-appeal.  At the hearing of the appeal, neither the court nor the parties could have known in advance whether the petitioner’s appeal would succeed and submissions on the cross-appeal were heard.  We agree with the petitioner that it is a cross-appeal as opposed to a mere advancement of additional grounds to support the judgment of Harris J.  In the judgment below, Harris J concluded that there was unfair prejudicial conduct on the part of the respondents.  Thus, without any cross-appeal, the petitioner would have been entitled to judgment if she succeeded on the jurisdiction point.  By the cross-appeal, the respondents sought to challenge the judge’s conclusion on unfair prejudicial conduct.  It is not the supporting of the judge’s conclusion on jurisdiction on some additional reasons.  As submitted by Mr Jat SC, the respondents sought to improve their position. 

8.We have actually dealt with some but not all of the points raised in the cross-appeal and the respondents had succeeded on some of those points and failed on others.  For the reasons given in the main judgment, we did not reach any final conclusion on various other points raised.  Thus it is not entirely correct to describe the respondents as failing on 11 issues.  From a practical point of view, the respondents did achieve the overturning of Harris J’s conclusion on unfair prejudicial conduct.  At the same time, this court left the ultimate determination of the issue of unfair prejudice open for the reasons we gave in the main judgment. 

9.In such circumstances, though technically there was no need for this court to make any order on the cross-appeal, we agree with the petitioner that we should examine the issue of costs on the respondents’ notice on the basis that there was a cross-appeal.

10.As we said, in terms of “event”, the respondents could be regarded as successful in the cross-appeal in respect of the overturning of Harris J’s conclusion on unfair prejudice.  However, the respondents are not wholly successful in that this court did not rule that there was no unfair prejudicial conduct.  We have left that open.

11.Even so, we do not think the petitioner can be described as the successful party in the cross-appeal.  On the whole, the respondents should still be regarded as the successful party.  There is no question of the petitioner being given the costs of the cross-appeal.

12.It would be disproportionate for us to re-visit at length in this judgment on costs as to the success and failure of the respondents by reference to the issues canvassed at the appeal in relation to the respondents’ supplemental notice.  They have been adequately set out in our main judgment and the skeleton submissions considered by us.  Having regard to the submissions of the parties, we are of the view that it is appropriate in the present appeal to depart from the general rule of “costs follow event”. Though the time spent at the hearing on the unsuccessful issues may not be very lengthy, it is fair to say that many authorities were cited by both sides and substantial time must have been spent on the preparation for those issues.  In coming to this conclusion, we have borne in mind the reminders by the Court of Final Appeal in Pony HK World Ltd v Vand Petro-Chemicals FACV 4 of 2013, 18 March 2014, para 4 and Commissioner of Inland Revenue v HIT Finance Ltd FACV 8 and 16 of 2007, 26 June 2008, para 7 that the discretion to depart from the general rule should be approached with due circumspection so as not to undermine the utility of the general rule.   

13.Since we did not make any order in respect of the cross-appeal, and given the way in which the matter had been proceeded before us, we do not think there should be another set of taxation in respect of the costs of the cross-appeal.  Instead, we would only order one set of costs for the whole appeal process.  However, taking into account what we said above and having regard to the issues which the respondents failed before us (in the sense that we have ruled against their submissions), we would order that they be deprived of 15% of their costs in the whole appeal. 

14.We therefore order the petitioner to pay 85% of the costs of the respondents in this appeal, including the costs of the respondents’ supplemental notice.  There would be certificate for two counsel.  Such costs are to be taxed if not agreed.

15.As for the costs of the application for variation, we adopt a position other than those advanced by the parties.  Though the petitioner did achieve a variation from our costs order nisi, she cannot be described as substantially successful in view of the extent to which we deprive the respondents of their costs.  We shall make no order as to costs for the application to vary.

Mr Jat Sew Tong SC, Ms Linda Chan SC & Mr Justin Ho, instructed by Tony Kan & Co., for the Appellant / Petitioner

Mr John Bleach SC & Mr Victor Joffe, instructed by Minter Ellison, for the 1^st & 2^nd Respondents / 1^st & 2^nd Respondents

Stevenson, Wong & Co., for the 5^th Respondent – attendance excused