XCHRX DYNAMIC WAY INTERNATIONAL LTD. AND ANOTHER v. HO KUI CHEE AND OTHERS

HCA16149/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 16149 OF 1999

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DECISION

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Background

1. The plaintiffs by a summons filed on 26 November 1999 applied for an interlocutory injunction against all the defendants herein. The summons is returnable on 24 March 2000 By a letter dated 4 March 2000 which was faxed to the solicitors for the 4th defendant, the plaintiff's solicitors indicated that the plaintiffs would withdraw their application for interlocutory injunction against the 4th defendant and suggested that the costs be in the cause. The 4th defendant's solicitors replied on 6 March 2000 demanding that the plaintiffs pay the 4th defendant's costs of and occasioned by the summons.

2. The parties maintained their positions on costs at the hearing of the summons. After hearing submissions from counsel, I granted leave to the plaintiffs to withdraw the summons against the 4th defendant. I ordered that the plaintiffs pay the 4th defendant costs of the summons and the costs wasted by the withdrawal up to and including 4 March 2000 in any event to be taxed. I also ordered that the costs of the hearing be to the 4th defendant against the plaintiffs in any event. At the request of the plaintiffs, I now reduce my oral reasons into writing.

Reasons for the cost order

3. In determining the costs consequential upon the withdrawal or discontinuation of an action, a major consideration is that the other party has been brought into the litigation and made to incur costs and expenses which has become useless or academic as a result of the withdrawal or discontinuation.

4. In considering how the discretion of the court should be exercised in respect of costs upon a withdrawal of an interlocutory application, the question is whether the consideration mentioned above holds good or is applicable, having regard to the circumstances of the case before the court.

5. In my view, the same consideration does apply to the application of the plaintiffs to withdraw the summons against the 4th defendant. The plaintiffs having taken out the summons against all the defendants, the 4th defendant was obliged and had to defend the application. The work undertaken is now rendered academic as a result of the plaintiffs' decision not to proceed with the application against it. There is no reason why the 4th defendant should not be able to recover the costs in relation of the efforts taken and which now become wasted. There is also no good reason to make the 4th defendant's entitlement to the wasted costs dependent on the outcome of the trial.

6. Counsel for the plaintiffs had referred to the 2 affirmations made by a Mr Franklin Ma of the 4th defendant. It was observed that the content of Mr Ma's first affirmation is nearly identical to that of his witness statement. That being the case, it was submitted that the costs of the preparation of the affirmation had not been completely wasted. I agree with counsel on this point. The fact that the contents of the 2 documents bear such close similarity is a clear indication that the witness statement was built upon the work undertaken for the preparation of the first affirmation, such as the conferences held and attendance upon Mr Ma for obtaining information for the affirmation. To say the least, the preparation and drafting of the affirmation would have greatly facilitated the preparation of the witness statement.

7. Counsel for the plaintiff also pointed out that the second affirmation of Mr Ma was affirmed and filed after the plaintiffs' letter of 4 March 2000, that it was not necessary for Mr Ma to affirm and file this affirmation. I agree. Given the letter from the plaintiffs' solicitors dated 4 March, there is no need nor reason for Mr Ma, insofar as the position of the 4th defendant is concerned, to proceed with the making of this affirmation. This is particularly so having regard to the contents of the letter from the 4th defendant's solicitors dated 6 March. The plaintiffs should not be made to bear these costs incurred after the letter of 4 March reached the 4th defendant's solicitors.

8. The 4th defendant asked that costs should be ordered to be paid forthwith. Generally speaking, the costs of an interlocutory application should be in any event. The mere fact that the application is for an interlocutory injunction does not afford an exception : see The Supreme Court Practice 1999 para. 29/1A/30.

9. For the reasons above, the appropriate costs order is for the plaintiffs to pay the 4th defendant the costs of the summons filed on 26 November 1999 and the costs wasted by the withdrawal of the summons up to and including 4 March 2000, in any event to be taxed, if not agreed. The plaintiffs should also pay the 4th defendants the costs of the hearing on 24 March 2000 in any event to be taxed. And I order accordingly.