AMERY CONSTRUCTION WATER PROOFING CO LTD v. YUE HING LAND INVESTMENT CO LTD

DCCJ16179/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.16179 OF 2001

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REASONS FOR RULING

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1. In my judgment I found that the plaintiff's action was premature and I said that this fact could be reflected in the order for costs.

2. I gave judgment for $186,367.49. This was done on the basis of the final account dated 19 March 2003. Now I am shown a Calderbank letter dated 16 November 2001 whereby the defendant said that on the latest figures supplied by the quantity surveyor it appeared that it owed the plaintiff $186,367.49. An offer of $154,367.49 was made, in full settlement; i.e. the amount the quantity surveyor had given, minus legal costs. This the plaintiff did not accept.

3. There is a further Calderbank letter dated 16 March 2003, shortly before the trial whereby the defendant again offered $186,367.49 in full and final settlement, on the basis that each party would bear its own costs, including any costs orders made to date in favour of either party. Again, the plaintiff did not accept this, not surprisingly since it had successfully resisted an application for security for costs, and been awarded the costs in respect of that.

4. This is an unfortunate case where if the parties had been sensible they could have sorted it all out at an early stage, and saved themselves a lot of costs.

5. The plaintiff's claim was premature. It should not have sued when it did. I do not see that the claim ceased to be premature once the figure of $186,367.49 was put forward.

6. The plaintiff's claim was never really in dispute. But as a result of its having raised the action prematurely, the defendant had to counterclaim and in effect it has established the greater part of the counterclaim. The plaintiff could have accepted the offer at an early stage. Granted it would in effect have had to pay some legal costs, but that would have been more sensible, as it turned out, especially given that ultimately I did not believe the plaintiff's witness at trial.

7. At the same time, it is difficult to see why the basis for the figure of $186,367.49 was not put forward when that figure became available in November 2001. If that had been done, there might have been some better basis for negotiation and the parties would not have taken the entrenched positions which they did, and all for the sake of a rather small amount.

8. It seems to me that the proper way to deal with this matter is to order that the plaintiff will bear its own costs in respect of the claim and to award the defendant 75% of the costs of the counterclaim. I do not think there is any need to order costs on the indemnity or common fund basis.

9. So far as interest is concerned, I do not think the plaintiff can have any, because its action was premature. However I think that much of the delay in this matter can be laid at the defendant's door. There is really no reason why its quantity surveyor was allowed to leave production of the final account for so long. If the defendant had pursued this matter, the whole mess could have been sorted out much earlier. I will therefore make no award of interest on the counterclaim either.

10. So the ultimate result is that the plaintiff will bear its own costs of the claim and will pay the defendant 75% of the defendant's costs of the counterclaim to be taxed if not agreed.

11. When I adjourned the defendant's application for leave to appeal until the hearing of the costs application, I said that I was minded to grant leave. It is now granted. The stay then ordered is now lifted.