SHUN FAI DECORATION HANDICRAFT CO. LTD v. F & F INVESTMENT LTD

HCA 1588/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1588 OF 2006

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R U L I N G

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Introduction

1.  On 9 April I handed down a Judgment in favour of the Plaintiff for $1,201,022 being the balance of what the Defendant owed to it for works done at two residential properties owned by the Defendant.  I  made an order nisi awarding the Plaintiff its costs to be taxed on an indemnity basis.  The Defendant objects to such a taxation and submits that the Plaintiff’s costs should be taxed on the usual party and party basis.

Discussion

2.  I made the order nisi because I considered that the Defendant, through its controlling shareholders Mr and Mrs Ng, who were the persons whose homes were the two properties that the Plaintiff had refurbished, had behaved very badly indeed by first of all refusing to pay the balance of what was owing and then conducted this litigation in such a way that it prolonged its course, raised very many issues which fell away by the time that the matter had come on for trial and continued to fall away during the course of the trial itself.  As a result the Plaintiff had to prepare and pay for a trial with a great deal being strongly contested, including a substantial counterclaim, only to succeed in an overwhelming way at the end of it.  I take the view that this highly unreasonable approach by the Defendant towards its obligations to the Plaintiff and in its conduct of the litigation itself gives rise to a sense of indignation from the court.  This has been a case well within the principles reviewed by the Court of Appeal in Choy Yee Chun v Bond Star Development [1997] HKLRD 1327.

3.  For its part of the Plaintiff has been willing to be reasonable so as to avoid an expensive trial by accepting about 75% of its claim.  I have seen a letter to this effect before the delivery of counsel’s briefs.  This was refused and resulted in the Defendant making a payment into court of $280,000 which was comfortably beaten by my Judgment which awarded the Plaintiff the whole of its claim.

4.  Another factor is that because of the Defendant’s conduct overall the Plaintiff has had to contest an expensive trial, for a relatively small claim which, would mean that a party and party taxation would undoubtedly greatly reduce the net effect of the Judgment which would result in an injustice being done to it caused by the Plaintiff’s unreasonable conduct.

Result

5.  Accordingly, the basis of taxation should be on an indemnity basis.  The Plaintiff will also have its costs of the written submissions on this issue but on this occasion taxed on a party and party basis.