Bothlink Ltd v. King Glare Ltd and Another

HCA 1978/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1978 OF 2013

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JUDGMENT ON COSTS
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A. INTRODUCTION

1.In a judgment handed down on 21 January 2015, I gave judgment for the Plaintiff (“Bothlink”) against the 1^st defendant (“King Glare”) and the 2^nd defendant (“Convey”), and made an order nisi that King Glare and Convey should pay Bothlink’s costs, to be taxed if not agreed, with certificate for two counsel.

2.King Glare has applied to vary the order so that:

(1) it only pays one-tenth of Bothlink’s costs, and

(2) Bothlink pays nine-tenths of its (King Glare’s) costs.

3.In this decision, will adopt the abbreviations used in my earlier judgment.

B.   AUTHORITIES CITED BY KING GLARE

4.King Glare relies on Wong Kam Tong v Tin Shing Court, Yuen Long (IO) (No 2) [2012] 2 HKLRD 1128 and Swiss Singapore Overseas Enterprises PTE Ltd v China Citic Bank Corporation Limited, Xiamen Branch, unreported, CACV 197/13, 29 August 2014 for the propositions that the general rule that costs should follow the event, whilst significant, is only a starting point from which the court can readily depart; that it is no longer necessary for a party to have acted unreasonably or improperly to be deprived of his costs; and that the court may order a reduction in the costs awarded to a successful party who fails on one or more issues.

5.King Glare also cited Order 62 rule 5(1)(e), pursuant to which the court may take into account the conduct of all the parties.  For the purpose of rule 5(1)(e), “the conduct of the parties” includes:

“(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defend his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

6.King Clare further relies on May Fung Co Ltd v Wing Lung Industrial Ltd [2009] 5 HKLRD 590, where Lam J (as he then was) observed at [8] that:

“… When a claim falls within the jurisdiction of the District Court, a plaintiff who chooses to commence the action in the Court of First Instance is expected to explain why such a course is adopted when the question of costs is considered.”

7.Bothlink does not dispute these principles.

C.    KING GLARE’S ARGUMENTS

8.The grounds advanced by King Glare for seeking a variation of the costs order as set out in paragraph 2(1) above are that:

(1) both the amount originally claimed and the damages eventually awarded were within the jurisdiction of the District Court, so that unnecessary costs were spent trying the matter in the High Court;

(2) it was unreasonable to make a claim against King Glare in respect of the Temporary Structures and the New Structures;

(3) Bothlink’s conduct unnecessarily prolonged the trial.

9.As to the reasons for seeking a variation of the costs order as set out in paragraph 2(2) above, King Glare said, in its reply submissions, that these had been set out in its initial written submissions.  However, those initial submissions do not in fact explain why it is said that Bothlink, despite having succeeded against King Glare at the trial, should be paying 90% of King Glare’s costs.

10.Finally, in its written submissions, King Glare opposed the grant of a certificate for two counsel, although this was not the subject of its application in its summons of 4 February 2015.

C1. DISTRICT COURT JURISDICTION

11.Bothlink commenced its action against King Glare in the District Court.  The action was transferred to the Court of First Instance on 7th October 2013.  By the time of the transfer, partial judgment had already been entered against King Glare for $756,000, being arrears of fees due under the Licence.  What remained was Bothlink’s claim for mesne profits at the rate of $108,000 per month from 1st June 2009 until delivery up of vacant possession of the Wall.  Thus contrary to King Glare’s assertion, the total amount claimed was in excess of the jurisdiction of the District Court.  The observations of Lam J in May Fung Co Ltd relied on by King Glare are not applicable here.

12.Whilst it is true that the amount ultimately awarded to Bothlink against King Glare was within the jurisdiction of the District Court, it could not be said that this was a foregone conclusion at the time of the transfer, or indeed up to the time of the trial.  King Glare’s pleaded position was that it had sub-licensed its right to use the Wall to Convey, and that it was Convey which had erected the offending structures.  However, this in itself would not have absolved King Glare from responsibility for the structures (in fact, King Glare was found liable in respect of the Old Structures erected by Convey).  It was the fact that King Glare had terminated the Sub-Licences in April 2009, and that the Licence itself was terminated in May 2009, prior to Convey’s erection of the New Structures, that absolved King Glare from responsibility for the New Structures.  That was not a point relied on by King Glare in its pleadings.[1]

C2. CLAIM AGAINST KING GLARE REGARDING TEMPORARY AND NEW STRUCTURES

13.King Glare says that Bothlink did not adduce positive evidence as to how it (King Glare) was involved in the Temporary or New Structures.  However, even if it was Convey which physically erected these structures, King Glare might nevertheless have been responsible for them if they had been erected with King Glare’s permission or cooperation.  As mentioned above, King Glare’s pleaded position, even if established at trial, would not have sufficed to absolve it from responsibility for structures erected by Convey.  Accordingly, it cannot be said that it was unreasonable for Bothlink to have maintained a claim against King Glare in respect of the Temporary and New Structures.

C3. CONDUCT OF THE TRIAL

14.King Glare says that Bothlink unnecessarily prolonged the trial, relying on (1) Bothlink’s late re-re-re-amendment to its Statement of Claim, and (2) new photographs produced by Bothlink on the first day of trial which led to the filing of supplemental witness statements by Bothlink and Convey.  It is said that 1½ days were spent on these matters at the trial.

15.In fact the re-re-re-amendment was made on 28 October 2014 and not at the trial which took place in December 2014.  As for Bothlink’s photographs, any delay caused was minimal in the context of the 6-day trial – for example, the argument over the filing of Bothlink’s supplemental statement was resolved within 20 minutes.

C4. NO VARIATION OF COSTS ORDER NISI AS SOUGHT

16.King Glare has therefore not made out any basis for variation of the costs order nisi such that it should only pay 10% of Bothlink’s costs.

17.A fortiori, the matters relied on by King Glare do not justify an order that Bothlink should be paying 90% of King Glare’s costs.

D. CERTIFICATE FOR TWO COUNSEL

18.King Glare’s summons of 4 February 2015 did not make any application in respect of the certificate for two counsel granted in my earlier judgment.  The matter was only raised in King Glare’s written submissions of 17 February 2015.

19.An order nisi can be reconsidered by the court, upon appropriate application within time, in terms of the variation proposed, but only in terms of that proposed variation; the application does not throw open the entire issue of costs to general and unrestricted debate: see UDL Holdings Ltd v Leung Yuet Keung, unreported, HCA 4409/02, 19 January 2009, per Stone J at [51].

20.It is therefore not open to King Glare to take issue with the certificate.

E. DISPOSITION

21.I therefore dismiss King Glare’s application for variation of the costs order nisi, and order that King Glare pay the costs of the application to Bothlink, to be taxed if not agreed.

Written submissions by Mr Dennis Law and Mr Lawrence Cheung, instructed by W L Yuen & Co, for the plaintiff

Written submissions by Mr Billy Poon, instructed by Kam & Fan, for the 1^st defendant