GOLDENWICK LTD v. STANDARD CHARTERED BANK (HONG KONG) LTD

HCA2634/2004
& HCA2645/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2634 OF 2004

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AND

ACTION NO. 2645 OF 2004

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BETWEEN

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(Consolidated pursuant to the Order of
Master de Souza dated 26 January 2005)

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REASONS  FOR  DECISION  ON  COSTS

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Introduction

1. This Reasons for Decision on Costs should be read together with the judgment that I handed down on 20 March 2008 (“the Judgment”).

2. In the Judgment, I entered judgment in favour of SCB and made an order nisi that it shall have the costs of the two actions, including all the costs reserved, to be taxed if not agreed.  Goldenwick sought to vary the costs order nisi so that SCB would get - of the costs only and need to pay ¼ of the costs to Goldenwick.

3. On 2 June 2008, I varied the costs order nisi to the effect that SCB shall have 85% of the costs of the two actions including all the costs reserved, to be taxed if not agreed.  These are my reasons.

The causes of action raised by SCB

4. To recap, the primary cause of action raised by SCB was that Goldenwick had failed to prove good title to the Property.  In this regard, SCB relied on Requisition 7 (relating to the Missing Documents) and Requisition 12 (relating to the Undivided Share Issue and the Common Parts/Right of Way Issue).  In the end, I ruled against SCB on Requisition 7 but found in its favour on Requisition 12 on both Issues.

5. SCB advanced an alternative cause of action based on misrepresentations.  I rejected it because SCB failed to prove inducement for entering into the Agreement and the complaint that it entered into the Provisional Agreement because of the alleged misrepresentations was purely academic and should not be entertained.

Depriving SCB the costs relating to the cause of action based on misrepresentations.

6. The applicable principles on costs are well established.  They are :

(1)     Costs are in the discretion of the court.

(2)     They should follow the event, except where it appears to the court that in the circumstances of the case some other order should be made.

(3)     The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprive of the whole or part of his costs.

(4)     Where the successful party raises or makes allegations “improperly or unnecessarily” the court may nor only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party’s costs.

See In re Elgindata Ltd (No.2) [1992] 1 WLR 1207, per Nourse LJ at p.1214A-C.

7. In my view, SCB had not acted improperly or unnecessarily in raising the cause of action based on misrepresentations.  So contrary to the submission of Mr Li, counsel for Goldenwick, principle (4) does not apply.  SCB should not be ordered to pay Goldenwick the related costs.

8. However, principle (3) does apply.  I noted that the cause of action based on misrepresentations did not significantly increase the length of the trial.  For the evidence pertaining to misrepresentations overlapped with those on the Common Parts/Right of Way Issue.  The evidence of those factual matters would have to be adduced any way.  But I agreed with Mr Li’s submission that that cause of action had significantly increased the costs because considerable time had to be spent on preparation and writing the submissions on it.  It is right for me to exercise my discretion to deprive SCB of the related costs.  Taking the matter in the round, I agreed with the estimate of Mr Chow, SC, counsel for SCB, that a 15% deduction is in order.

9. Mr Li also asked me to reduce the costs relating to Requisition 7.  I disagreed because I did not consider it had significantly increased the length of the trial or the costs.

10. For the above reasons, I varied the costs order nisi as indicated above.