FINE WINE CELLAR LTD v. KOO YING YING AND ANOTHER

DCCJ 3769/2019

[2025] HKDC 1113

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3769 OF 2019

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D E C I S I O N

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1.  On 30 July 2024, I handed down the judgment (the “Judgment”) in respect of the present action ([2024] HKDC 1193).

2.  By the Judgment:-

(1)  I ordered the 1^st Defendant to pay the following sums to the Plaintiff: (1) AUD259,600; (2) AUD16,450; and (3) HK$200,000 (see Judgment, para 108).

(2)  I made a costs order nisi that the costs of these proceedings be paid by the 1^st Defendant to the Plaintiff (to be taxed if not agreed) (see Judgment, para 112).

(3)  I expressly directed that any application to vary such costs order nisi be made within 14 days (see Judgment, para 112).

3.  On 7 April 2025, the Plaintiff belatedly took out a summons (the “Summons”) seeking to vary my costs order nisi. In short, relying on a sanctioned offer made on 13 May 2020, the Plaintiff sought indemnity costs and interest on costs against the 1^st Defendant pursuant to the provisions under order 22, rule 24.

4.  The Plaintiff took out the Summons more than 8 months after the Judgment was handed down.

5.  Mr Benson Wong (for the 1^st Defendant) suggested that this court has been functus officio. He emphasized that (i) my Judgment and/or order was sealed and/or perfected; and (ii) there was no application to extend the time for applying to vary the costs order nisi.

6.  As pointed out by the learned authors of Hong Kong Civil Procedure (2024) at para 42/5B/1 (referring to Ma Wan Farming Ltd v Chief Executive in Council [1998] 2 HKLRD 314 and Tang Man Kit v Hip Hing Timber Company Limited (CACV 137/2002, 8 June 2006)):-

“The time for making an application to vary a costs order nisi may be extended…The court has power to extend time even after a costs order nisi has become absolute, but by reason of the combined effect of O.42, r.5(6) and O.2, r.4, reliefs under O.2, r.5 needs to be obtained before the effect of the order absolute can be overturned.”

7.  In Balram Chainrai v Kushnir Family Trust (Holdings) Ltd [2021] HKCFI 976 at para 20, Lisa Wong J held that even though the judgment that contains the costs order nisi has been sealed, this does not extinguish a party’s right to apply for variation under Order 42, rule 5B(6) and the court retains the jurisdiction to grant time extension under order 3, rule 5. As explained by Her Ladyship:-

“As observed by Liu JA in Ma Wan Farming Ltd at 317B-C, a party is implicitly authorised by Order 42, rule 5B(6) to apply to have an order nisi as to costs varied within 14 days after the written judgment containing such an order is handed down. And Ma Wan Farming Ltd and Tang Man Kit are binding authorities that the 14-day period mandated by rule 5B(6) can be extended under, inter alia, Order 3, rule 5. Let us consider the case where a judgment incorporating an order nisi as to costs is sealed before the expiry of the 14-day period for the making of an application to vary the order, which is certainly possible. In such a situation, would the early perfection of the order nisi extinguish a party’s built-in right under Order 42, rule 5B(6) to apply to vary the order nisi? The answer is clearly negative. And given that the time for an application to vary a costs order nisi can (in an appropriate case) be extended, I fail to see how the timing of the perfection of such an order can take away the court’s jurisdiction, where proper, to extend time under Order 3, rule 5 and to vary the order under Order 42, rule 5B(6)”

8.  In the premises, I am satisfied that this court has the jurisdiction and powers to grant time extension for applying to vary the costs order nisi under the Judgment.

9.  However, the Plaintiff did not seek time extension for pursuing the application under its Summons.

10.  In any event, I am not of the view that this is an appropriate case where time extension should be granted:-

(1)  First of all, the starting point is that under paragraph 112 of the Judgment, I expressly directed that any application to vary the costs order nisi be made within 14 days. The Plaintiff should not have flouted the court’s direction.

(2)  Second, the Plaintiff’s explanation for the delay is unacceptable. In short, the Plaintiff said that it focused its energy and resources on (i) the 1^st Defendant’s application for leave to appeal (which has been withdrawn); and (ii) enforcement. Bearing in mind the application under the Summons was straightforward, I am not of the view that the matters relied on by the Plaintiff constituted reasonable excuses for the delay.

(3)  Third, I am of the view that the delay was serious and lengthy. In my view, the 1^st Defendant was entitled to treat the proceedings under the present action as concluded. The Plaintiff cannot revive the proceedings at its whim and pay no regard to the timetable imposed by the court.

11.  For all the above reasons, I am of the view that the delay in taking out the Summons was inordinate and inexcusable.

12.  Thus, had the Plaintiff sought time extension for pursuing the application under the Summons (which was not done), I would have dismissed such an application.

13.  For completeness, I also reject the Plaintiff’s contention that once a plaintiff does better than his sanctioned offer, it is mandatory for the court to exercise the statutory powers under order 22, rule 24:-

(1)  This contention flies in the face of order 22, rule 24(4), which provides that the court shall consider whether it would be unjust in the circumstances to order indemnity costs, interest on costs and enhanced interest against the unsuccessful defendant pursuant to order 22, rule 24(2) and (3).

(2)  In any event, order 42, rule 5B(6) provides that unless an application has been made to vary the costs order nisi, the same shall become absolute 14 days after the judgment or decision is pronounced. As such, the successful plaintiff must take out a proper application to vary the costs order nisi. If he fails to do so within 14 days, he must seek time extension and justify his application for time extension with sound reasons.

14.  In the premises, I dismiss the Plaintiff’s Summons.

15.  Costs should follow the event.

16.  I order the Plaintiff to pay the 1^st Defendant’s costs in respect of the Summons to be taxed if not agreed (with certificate for counsel).