GOTLAND ENTERPRISES LTD v. KWOK CHI YAU AND OTHERS

HCMP 4550/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 4550 OF 2003

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(By original writ and order to carry on)

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DECISION ON COSTS
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1.  Two rounds of written submissions have been filed by the parties in addition to what has been said today. 

2.  There is broad agreement between CML[1] and D1 on the appropriate costs order which should be made following the judgment dated 25 November 2014 (“Judgment”), namely, D1, D2 and D5 should bear the costs of CML in this action.  Such costs are to be borne equally between D1 and D2 on one part and D5 on the other part.  In addition, D1 and D5 should bear CML’s costs of their counterclaims.  All costs are to be taxed if not agreed.

3.  On the other hand, D5 argues that (a) there should be no order as to costs in favour of CML and (b) D1 should bear 80% of D5’s costs with a certificate for 3 counsel, to be taxed if not agreed. 

4.  Basically, there are 2 grounds advanced in support of D5’s position. 

5.  Firstly, it is said that costs had been wasted by CML by reason of the late abandonment of its Basic Law arguments.  I am not persuaded by Mr Li SC, appearing for D1 and D2, that the entirety of the costs in question had been covered in a costs order made against D1 to D3 as a result of an adjournment of the trial on 3 September 2013[2].  Indeed, it has been clarified in the arguments ventilated this morning that it cannot be the case.  Equally, I am not convinced that the costs incurred on the Basic Law arguments are, in the context of this case, of sufficient significance to merit separate treatment. 

6.  Secondly, D5 relies upon the conduct of D1 in these proceedings as justification for the extraordinary costs order which he seeks.  Again, there are basically 2 complaints.

7.  Mr Lo, appearing with Mr Yan for D5, relies upon the absurdity in the fact that D1 was running opposite cases at the trial (see paras 34 to 37 of the Judgment).  I agree with Mr Lo that this position permeates into Mr Li’s costs submissions.  However, it has not been demonstrated how that matter had resulted in wasted or a significant increase in costs.  In fairness, it must be said that given the system of litigation we have, it would be surprising for D1 not to try to capitalise on the fact that he had, via CML, acquired the Land (see para 35 of the Judgment). 

8.  As regards the other complaints concerning D1’s changing stance and the rejection of his evidence by the court (see paras 19 and 20 of D5’s Submissions on Costs), I would have taken those matters into account and made an adjustment as to the proportion by which D1 and D2 should bear the costs of CML but for the rejection by D5 of a without prejudice save as to costs offer made by D1 to him dated 13 July 2011. 

9.  In the premises, I see no reason to accept D5’s costs proposal, and I make an order in terms of para 2 above.

10.  The costs of this morning’s hearing must be borne by D5 in favour of CML, D1 and D2.

Mr Tommy Lo and Mr Yan Kwok Wing, instructed by Wong & Associates for the 5^th defendant