WONG TO YICK WOOD LOCK OINTMENT LTD v. SINGAPORE MEDICINE CO. AND OTHERS

CACV 225/2021

[2023] HKCA 1354

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 225 OF 2021

(ON APPEAL FROM HCA NO 600 OF 2014 AND HCA NO 595 OF 2014)

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(Consolidated pursuant to the Order of Registrar Lung dated 8 July 2016)

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J U D G M E N T

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The Court:

1.1.  On 9 June 2023, this court handed down a Judgment (“the CA Judgment”)¹ allowing the defendants’ appeal on Ground A² for the reasons stated, setting aside the judgment of the trial judge given on 8 April 2021³ (“the CFI Judgment”) and ordering a retrial before another judge, with an early date to be given. 

1.2.  We made an order nisi that the defendants’ costs of the appeal (with certificate for two counsel) and the parties’ costs below be in the cause of the retrial.  The defendants’ costs of the appeal meant that if the defendants succeed at retrial, the plaintiff would have to pay their costs of the appeal.  We expressed our tentative thinking as follows:

“ ... generally, a successful appellant should be awarded the costs of the appeal to be paid by the unsuccessful respondent, and this is so even though the appeal is allowed for reasons which cannot be attributed to the fault of either party, on the ground that the unsuccessful respondent could have remained neutral, or even conceded the appeal. In the present appeal, however, it should be noted that one of the matters included (albeit peripherally) in the Ground A appeal was inadequacy of reasons. In view of that, it was prudent for the plaintiff to come to this court to contend that the court should not determine this issue, and that the defendants’ arguments on it should be left to the substantive appeal (if a retrial is not ordered) or the retrial”.

2.  On 23 June 2023, the defendants filed a summons for the following orders:  

-  under Order 42 r.5B(6) RHC,

(1)  the costs of the appeal be to the defendants (with certificate for two counsel, being one solicitors advocate and one barrister), to be taxed forthwith if not agreed;

(2)  the parties’ costs below be reserved to the new trial judge;

-  under Order 29 r.1 and the court’s inherent jurisdiction,

(3)  the return, destruction and deletion of the defendants’ affirmations (“Disclosure Affirmations”) and exhibits thereto, filed pursuant to the CFI Judgment;

(4)  the removal of the Disclosure Affirmations from the court file;

(5)  the plaintiff and its agents be restrained from making use of information from the Disclosure Affirmations; and

-  in respect of the summons,

(6)  costs.

3.  The plaintiff opposed all the above items.

4.  Affirmation evidence was filed by the parties’ respective solicitors, which we have read, together with their respective counsel’s written submissions. 

Discussion

(1)  Costs of the appeal

5.1.  In contending that they should have the costs of the appeal, the defendants submitted first that in October 2021, they had suggested to the plaintiff that Ground A should be dealt with as a stand-alone ground, but the plaintiff rejected this suggestion.

5.2.  In our view, that in itself is not material for (as we have explained in the CA Judgment) one of the matters the defendants included (albeit peripherally) in the Ground A appeal was inadequacy of reasons, so the plaintiff was justified in attending the hearing of the appeal to safeguard its interests should the defendants advance full argument on that point. 

5.3.  The defendants explained that they included this issue having considered Chan San v Hans Li⁴ where the Court of Appeal⁵ said that a crucial question was whether the judge had exercised his independent judgment and whether adequate reasons were given by the judge for coming to his decision (§37). 

5.4.  Be that as it may, our order nisi that the costs of the appeal be in the cause of the retrial does not mean that the defendants were wrong in including the inadequacy of reasons issue as part of Ground A. But the point remains that the plaintiff needed to attend the appeal hearing because of its inclusion.

6.  Second, the defendants submitted that the plaintiff had used the time pending the hearing of the leave application and appeal to enforce the CFI Judgment.  This submission may be rejected summarily as the defendants did not apply for a stay of execution.      

7.1.  Third, the defendants referred to Without Prejudice settlement offers they made to the plaintiff in August 2022 and April 2023 (which they have exhibited without waiving privilege for the purposes of the retrial and any subsequent appeal).  The plaintiff has however submitted that it was right to reject the offers, as they would have rendered some parts of the CFI Judgment nugatory.

7.2.  It is not appropriate for this court (which has not examined the merits of the case) to consider this submission.  The impact of WP offers is a matter for the retrial judge after he gives judgment.

8.  Accordingly, we see no reason to vary our costs order nisi regarding the costs of the concluded appeal.  The costs order nisi should therefore be made absolute.

(2)  Costs below   

9.1.  As for the costs below, the defendants submitted that they should be reserved to the retrial judge, rather than be in the costs of the cause of the retrial.  They submit that would preserve the flexibility of the retrial judge “in order to best reflect the justice of both trials”.

9.2.  We are not persuaded by that submission.  Of course the retrial judge is free at the retrial to consider the evidence adduced or submissions made at the original trial, but he should give his judgment independently of the CFI Judgment.  Our order regarding the costs below reflects the nature of Ground A and is irrespective of each party’s success or failure on individual issues.  It does not in any way restrict the flexibility of the retrial judge when he decides the costs of the retrial.  

10.  We see no reason to vary our costs order nisi regarding the costs below, which should therefore be made absolute.

(3) - (5) The Disclosure Affirmations

11.1.  As noted above, the defendants did not apply for a stay of execution of the CFI Judgment.  Having said that, as the CFI Judgment has been set aside, it is only right that the parties should be restored to their original positions prior to that judgment.

11.2.  We have considered the undertakings offered by the plaintiff in answer to the summons, i.e.

(1)  the Disclosure Affirmations be sealed and kept with the court, without prejudice to the plaintiff’s right to apply to be granted access to any part thereof for use in the re-trial, any disputes arising from its application for such use to be dealt with by the retrial judge; and

(2)  no disclosure of the contents to any third parties other than for the purpose of the conduct of the present case.

11.3.  We do not consider that these undertakings would restore the parties to their positions prior to the CFI Judgment.  Accordingly, we would grant an order in terms of §§3 to 5 of the summons. 

(6) Costs

12.  Finally, as the summons arose from the CA Judgment, the costs of the summons should be treated as part of the costs of the appeal.