YIP KWOK SUN v. POLY STYLE LTD

DCMP 2891/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 2891 OF 2011

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DECISION ON COSTS

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1.  This is an application by the plaintiff to vary the costs order nisi made by me.

BACKGROUND

2.  At the end of the Decision dated 24 June 2015 (“the Decision”) in relation to the summons taken out by the plaintiff dated 17 November 2014 (“2014 Summons”), I made an order nisi that the plaintiff should pay the costs of the application to the defendant in any event and the plaintiff’s own costs to be taxed in accordance with the Legal Aid Regulations.  I further ordered that such costs to be taxed if not agreed with certificate for counsel.  The order was made on a nisi basis which would become absolute after 14 days in the absence of any application to vary the same by the parties.

3.  By a summons dated 6 July 2015 (“the Costs Summons”), the plaintiff sought to have the order nisi substituted with the following:-

“(1) Costs of the Summons taken out by the plaintiff on 17 November 2014 (“the 2014 Summons”) and the hearing of the same on 26 May 2015 be to the plaintiff in any event, such costs to be taxed if not agreed, with certificate for counsel, and the plaintiff’s own costs to be taxed in accordance with the Legal Aid Regulations;

(2)& Costs occasioned by the 2014 Summons to the defendant, namely costs of the defendant to file and serve further expert evidence, if so advised, in response to the supplemental expert report by the plaintiff’s 2^nd expert, be to the defendant in any event.”

(“Proposed Order”)

4.  The parties agreed that this costs issue can be dealt with by way of paper submissions and an oral hearing was deemed not to be necessary.  Hence, the original scheduled oral hearing was dispensed with.

DISCUSSION

Categories of costs

5.  I agree with the defendant’s counsel, Mr Isaac Chan, that in fact there are 3 categories of costs involved in the Proposed Order put forward by the plaintiff.  They are:-

(i) The costs of the 2014 Summons (excluding the costs of the hearing). [Instead of what had been stated in the 2014 Summons when the plaintiff offered “the costs of and occasion by this application be to the defendant in any event”, this has now been changed to “costs to the plaintiff”];

(ii) The costs of the hearing. [The plaintiff now seeks the costs of the hearing instead of agreeing to pay for it as stated in the 2014 Summons]; and

(iii) The costs occasioned by the 2014 Summons. [The plaintiff agrees that this part of the costs should be to the defendant but seeks to limit the scope to the defendant’s costs of preparing and filing a consequential expert report only].

The plaintiff’s arguments

6.  After citing extensively the history of this case, which had already been referred to in the Decision, the plaintiff argues that as the proposed expert evidence was “reasonably required to resolve the issues before the court” (see §§19, 20, 22-24, 28-29 of my Decision), as such the 2014 Summons was not issued without any basis or merits.

7.  The plaintiff first attacked the conduct of the defendant, principally on its stance that it had, on one hand consented to be the plaintiff’s 2014 Summons to obtain a supplemental expert report while on the other hand only agreed to allow Mr Ching to be appointed as the expert.  Further, the plaintiff argues that the 2014 Summons is essentially the same as the consent order reached by the parties, save and except the appointment of the expert was someone else other than Mr Ching.  Moreover, the plaintiff claims that the hearing of the 2014 Summons and delay in the proceedings were necessitated by the defendant’s unreasonable refusal of consent to the 2014 Summons.  The plaintiff alleges that the defendant’s objection was futile and without merits.  The plaintiff also alleges that the defendant has not filed a single word of affidavit evidence in opposition to the 2014 Summons.

Applicable legal principles on costs

8.  I would agree and respectfully adopt the following legal principles on costs which are helpfully summarised by the defendant’s counsel in his written submissions.

9.  It is well established principle that when a party comes to the court for indulgence, he or she will at least have to bear the costs in relation to the application (if not also the costs of the hearing).

10.  It is now also well established that in the post-CJR era, in relation to interlocutory applications, costs to follow the event is no longer the “usual order” but just an option. (see Melvin Waxman v Li Fei Yu, HCA 1972/2012, Hon To J, 11 September 2013, unreported; §62/3/3B, Hong Kong Civil Procedure 2015).

11.  It is provided in O 62 r 5 of the RDC that:-

“(1) The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account-

(aa) the underlying objectives set out in Order 1A, rule 1;

……

(e) the conduct of all the parties;

……

(2) For the purpose of paragraph (1)(e), the conduct of the parties includes-

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) …

(d) conduct before, as well as during, the proceedings.”

Extraordinary application

12.  Whether to admit expert evidence is a matter within the court’s discretion.  Expert evidence is an area that the court would robustly monitor, especially in the post-CJR era.  As Hon Bharwaney J explained in Fung Chun Man v Hospital Authority, unreported, HCPI 1113/2006, 24 June 2011:-

“16 However, even if a prima facie case is made out for the admission of expert evidence, in every case, the court must also have regard to other relevant circumstances, such as the potential disruption to the trial, the prejudice to the other parties, and the explanation offered by the applicant in cases where a later application is made for expert evidence to be adduced. These matters have to be considered and weighted in the light of and against the underlying objectives of the CJR: to ensure cost effectiveness and economy, expedition, proportionality, and fairness between the parties. Ultimately, the court strives to do justice between the parties and, in cases where the court permits the parties to call expert evidence, the court strives to ensure a level playing field with faire access to proper experts for all parties.” [emphasis added]

13.  Similar principles have been cited by the plaintiff’s counsel Mr Valentine Yim in his written submission.  In particular, the plaintiff has quoted extensively from Hong Kong Civil Procedure 2015 in support of his argument, viz §62/0/2 (p 1126); §62/3/3B (pp 1136 – 1137).

14.  The plaintiff further submits that the approach of To, J in Melvin Waxman v Li Fei Yu, HCA 1972/2012, 11 September 2013, unrep, has been followed in, among others:-

(a) TSC v LYK, FCMC 2359/2013, 22 Jan 2014, unrep, DDJ Grace Chan, §§40-41;

(b) Hind International Investment Ltd v K & L Gates (a firm of solicitors), HCA 1325/2011, 12 August 2014, unrep, DHCJ B Chu (as Madam Justice B Chu then was), §§7-9.

15.  Further, in TSC v LYK, DDJ Grace Chan said (at §42):-

“42. Further, in the exercise of its wider discretion of costs under Order 62 rule 3(2A), the court is empowered under Order 62 rule 5 to take into account special matters set out therein. This rule is of general application and applies to costs in interlocutory proceedings as well as to other proceedings. Of relevance in this application, in my view, is rule 5(1)(e) and (f), which read as follows:

“5(1) The court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account-

…

(e) the conduct of all the parties;

(f) whether a party has succeeded on part of his case, even if he has not been wholly successfully;

…

(2) For the purpose of paragraph (1)(e), the conduct of the parties includes-

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.” [emphasis added]

16.  In Hind International Investment Ltd v K & L Gates (a firm of solicitors), after agreeing with To J’s statement in Melvin Waxman that the principle of “costs to follow the event” is no longer the prescribed usual order but is instead an option, DHCJ B Chu (as Madam Justice b Chu then was) added (at §8):-

“8. … Further Order 62 rule 5 has now set out special matters for the court to take into account in exercising its discretion of costs, which is of general application and also applies to costs in interlocutory proceedings.”

FINDINGS

17.  I am afraid that I do not find the plaintiff’s arguments on costs convincing at all for the following reasons.

18.  First and foremost, it was the plaintiff who had come to court to ask for an indulgence in this case under the 2014 Summons.  It was not due to the fault of the defendant in any way that the plaintiff’s own appointed expert had behaved in a fickle manner and kept changing his mind in whether he would provide a supplemental report or not.  I agree with Mr Chan’s submission that it is the usual norm that a party who comes to court to ask for an indulgence should expect to bear the costs in relation with the application, if not also the costs of the hearing.  The latter would obviously depend on the conduct of the parties, in particular whether the party objecting to the application has conducted reasonably and whether he/she has caused an unnecessary hearing.

19.  Second, as explained in Fung Chun Man, supra, admission of expert evidence is never a rubber-stamping exercise.  It is most unusual, as in the circumstance of this case, that the court would allow a single party to have different experts in the same area of expertise to comment on an overlapping subject matter, whether it is consented by the parties or otherwise.  I agree with the defendant’s submissions that the plaintiff’s application for calling the 2^nd expert to comment on the 4 aerial photos is in itself an extraordinary application when the 1^st expert had already commented on many of the aerial photos already, with only 2 overlapping photos.  Hence, in my judgment, the defendant was perfectly entitled to object to such unusual application, including attending the hearing for the oral arguments.

20.  Third, this court when exercising the discretion to allow such unusual, if not extraordinary, application had to strike a “fine balance” between the various factors mentioned in Fung Chun Man in order to ensure “cost effectiveness and economy, expedition, proportionality and fairness between the parties”.  I agree with Mr Chan that most of the oral arguments at the hearing was concentrated on whether there could have been an alternative way to obtain the 1^st expert’s opinion, ie to put the relevant aerial photos to the 1^st expert when he comes to court to testify or to allow the plaintiff to call a different expert solely to give evidence on those 4 aerial photos, the latter would create a rather odd if not absurd scenario.  In the end, the court reluctantly struck that balance by tilting towards the latter, but certainly less than ideal, approach.

21.  However, that does not mean the plaintiff had “won” the arguments at the hearing as the plaintiff’s counsel seems to have suggested in his written submissions. 

22.  In my judgment, given the rather unusual background to this case and the extraordinary behaviour of the 1^st expert, not only the court is entitled to, but, in my view, it will be conducive to good case management and pursuant of justice, that full arguments on both sides should be heard in court. I therefore do not consider that the defendant had behaved in an unreasonable manner as alleged by the plaintiff by insisting on the oral hearing for the 2014 Summons.

23.  Further, in the rather unusual circumstances of this case, I do not consider it was fair for the plaintiff to say that the defendant had behaved unreasonably when it insisted that the same expert should give opinion on the 4 additional aerial photos at trial in the first place.  In this regard, I would like to make the observation that the plaintiff did not have leave to submit the supplemental expert report and did not ask for such leave until the last possible moment on 17 September 2014, being the last date of an unless order to require him to seek such direction.  Hence, when the 2014 Summons was taken out on 17 November 2014, it was already out of time under the unless order and the plaintiff was debarred from seeking leave to file any supplemental expert report.  But for the defendant’s consent and subsequently the court’s order pursuant to the consent summons, the plaintiff could not even started the process out of time.

24.  Thus, I find it rather surprising that, given the above circumstances, the plaintiff now turned around against his own proposed terms of the costs order (as stated in the 2014 Summons) and asks for the costs of the hearing. 

25.  Lastly, I reject the plaintiff’s arguments that the defendant’s failure to file any evidence in opposition of the 2014 Summons should be construed against it.  It is trite that an affidavit should contain only evidence and not legal arguments: (see eg the case of Oh Jae-Hoon v Richdale [2003] 4 HKC 318).  In any event, I do not see how a further affidavit filed by the defendant to the plaintiff’s application in this case would have assisted the court or defendant’s legal arguments.  After all, this is what skeleton arguments filed by the parties under the practice directions are there for.  I do not see what difference an affidavit filed by the defendant would have made to either the application or the arguments at the hearing in this case.

CONCLUSION

26.  For the aforesaid reasons, I find that the costs of the 2014 Summons should be to the defendant as originally proposed by the plaintiff in the 2014 Summons.  Given the nature of the application, which in essence was the plaintiff in asking an indulgence from the court (even though it might not had been due to the plaintiff’s own fault), costs of the 2014 Summons should be to the defendant in accordance with the general rule in such situation.  In my view, the costs of the application would be incurred whether the defendant consent to it or not.  Therefore, I do not find the defendant’s opposition to the application has any effect on such costs at all. 

27.  As for the costs of the hearing, as found above, I do not consider the defendant’s attendance (represented by counsel and solicitors) unreasonable, eventhough it had not been successful in opposing the application.  After all, the application involved a fine balancing exercise of the court.  In this case, the plaintiff just managed to persuade the court to tilt the balance in his favour.  However, that in my judgment does not mean that he should be entitled to costs of the hearing. 

28.  As for the costs occasioned by the 2014 Summons, I agree that the nisi order for “costs occasioned by the 2014 Summons be to the defendant in any event” should apply. 

29.  For the aforesaid reasons, I hold the order nisi should be upheld and made absolute.  Hence, the plaintiff’s Costs Summons application is hereby dismissed with costs, with certificate for counsel.

30.  Since the plaintiff is seeking to withdraw his position stated in the 2014 Summons by making the present application, I agree that both the costs of the Costs Summons as well as the reserved costs of the consent summons dated 10 July 2015 should be to the defendant in any event.

31.  I would like to thank counsel on both sides for their helpful written submissions.