MCLARENS HONG KONG LTD v. POON CHI FAI, COREY AND OTHERS

HCA 514/2019

[2019] HKCFI 1944

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 514 OF 2019

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DECISION ON COSTS

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1.  In paragraph 61 of my Decision dated 14 June 2019, I made a costs order nisi that:

(1)   the costs of the Summons be costs in the cause; and

(2)   80% of the costs of the hearing on 3 June 2019 be paid by the plaintiff, on a party to party basis, to be taxed if not agreed.

2.  On 28 June 2019, the plaintiff took out a summons (“the plaintiff’s Summons”) to vary the above costs order nisi in the following terms:

“ a. Save for the costs of the hearing on 3 June 2019, the costs of the Plaintiff’s Summons dated 26 March 2019 to be jointly and severally paid by the Defendants to the Plaintiff in any event,to be taxed on a party to party basis if not agreed; and

b.   The Defendants are entitled to have 80% of the costs of the hearingon 3 June 2019 (excluding counsel’s fees) to be paid by the Plaintiff in any event, to be taxed on a party to party basis if not agreed.”

3.  On the same date, the 10^th defendant also took out a summons (“the 10^th defendant’s Summons”) to vary the costs order nisi in the following terms:

“ (a) the Defendants are entitled to have 80% of the costs of the hearingsof the Plaintiff’s summons for interlocutory relief dated 26 March(the ‘Application’), such hearings having taken place on 29 March 2019 and 3 June 2019; and

(b)   that the said costs to be payable by the Plaintiff to the Defendants forthwith, on a party to party basis, to be taxed if not agreed.”

4.  The parties have since filed skeleton submissions.  I note that the 1^st to 9^th defendants, whilst did not take out an independent summons, basically support the 10^th defendant’s Summons and oppose the plaintiff’s Summons.

Costs of the plaintiff’s Summons dated 26 March 2019

5.  In paragraph 62 of my Decision, I stated that:

“ I make the above costs order because whilst the defendants are successful in resisting the application for springboard injunctions,they have also offered the Modified Undertakings to the Court which is as good as an interim injunction. Further, most of the affirmation evidence filed could be deployed for the trial in this action.”

6.  The plaintiff’s main submission that it should be entitled to the costs of the Summons dated 26 March 2019 is that it was the successful party of the said Summons and it had to come to court in order to extract undertakings from the defendants which are as good as an interim injunction.

7.  The plaintiff also submitted that the undertakings were only offered after the Summons dated 26 March 2019 was issued and costs were legitimately incurred.  In particular, the Modified Undertakings were only offered after the mid-morning break on 3 June 2019.

8.  First, I agree with the plaintiff that it has to come to court in order to obtain the undertakings which are as good as an interim injunction and that it is the successful party in so far as the reliefs which are covered bythe undertakings.  Had the scope of the plaintiff’s Summons dated 26 March2019 been restricted to the terms of the undertakings which it accepted, thisCourt would have no hesitation and difficulties in awarding the costs that the plaintiff now seeks, namely, the entire costs of the Summons dated 26 March 2019.

9.  However, that is not what the plaintiff sought in its Summons dated 26 March 2019.  It also sought the springboard injunctions against all defendants and a restraint order against the 1^st defendant which it failed to obtain.  The plaintiff cited the case of KJ v KMLM[2014] HKFLR 227 and submitted that since CJR, the court is more ready to take an issue-based approach.  I agree.

10.  The plaintiff also referred to the following passage from the judgment of Deputy High Court Judge Marlene Ng (as she then was) in Lam Po Yee and Law Yiu Wai Ray v Dr Chan Yee Shing HCPI 62/2011, unreported, 30 April 2018:

“ 96. Costs: summary. In summary, the starting point is that costs should follow event, and a party seeking departure from that bearsthe burden of showing a departure is justified or, to put it in another way, it would be unjust to follow the normal rule. The court has adiscretion to deprive a successful party of costs incurred on failed issues if the issues in question caused a significant increase in the length/costs of the proceedings. But the court must take into account the realities of the case and the extent to which a party has succeeded, and it would be inappropriate to simply look at the number of issues won and lost. The court can only order a successful party to pay the costs of the unsuccessful party if the former raised some issues or made allegations improperly or unnecessarily. How the discretion is to be exercised in each case depends very much on the particular circumstances of the case.”

11.  I have no problem with the above legal propositions.  However, the reality of the present case is that the plaintiff applied for more than one injunctive relief.  It succeeded in some in the form of the undertakings but it failed to obtain some injunctive relief as prayed for in its Summons dated 26 March 2019.  The defendants could also claim that they were the successful parties in respect of the terms of the Summons dated 26 March 2019 which are not covered by the undertakings.

12.  I do not agree that had the undertakings been offered earlier,the plaintiff would not have pressed for the full terms and effects of its Summons dated 26 March 2019.  Indeed, at the substantive hearing on 3 June 2019, the plaintiff pressed strongly for the springboard injunctions against the defendants.

13.  I had considered whether no order as to costs would be appropriate in the circumstances of this case.  However, I took into account the conduct of the 1^st to 9^th defendants and the fact that most of the filed evidence could be deployed at the trial of this action.

14.  Having considered all the circumstances of this case, I do not consider that the plaintiff is the absolute successful party of its Summons dated 26 March 2019.  Though, it is correct that I should have dealt with the reserved costs order on 29 March 2019 as part of the costs of the plaintiff’s Summons dated 26 March 2019.  

Costs of the hearing on 3 June 2019

15.  First, the defendants ask for 80% of the costs of the hearing of the plaintiff’s Summons dated 26 March 2019 to include the costs of the hearing which took place before Deputy High Court Judge Keith Yeung SC (as he then was).  I do not agree.  The plaintiff did not press for the springboard injunctions at that hearing.  I am of the view that the costs of the hearing on 29 March 2019 should be part of the costs of the Summons dated 26 March 2019.

16.  Secondly, I like to clarify that the costs of the hearing on 3 June 2019 should include the costs of counsel’s fee.  Counsel were briefed to argue the entire Summons dated 26 March 2019 and not just part of the Summons.  I agree with the 10^th defendant’s submission that the springboardinjunctive relief would have a significant effect on all the defendants and itis entirely reasonable for the defendants to instruct counsel to argue against the springboard injunctive relief.

17.  Thirdly, as the application for springboard injunctive relief is aself-standing and discrete application and this Court has dismissed the same,I agree that the costs of and occasioned by the said application should be taxed forthwith.

Disposition

18.  According, I vary my costs order nisi as follows:

(1)   Subject to (2) below, the costs of the Summons dated 26 March 2019 including the costs of the hearing on 29 March 2019 be costs in the cause; and

(2)   80% of the costs of the hearing on 3 June 2019 (including counsel’s fees) be paid by the plaintiff to the defendants forthwith, to be taxed on a party to party basis, if not agreed.

19.  Finally, as neither party are completely successful in their applications to vary the costs order nisi, I make no order as to costs in respect of both the plaintiff’s Summons and the 10^thdefendant’s Summons.