LIKE SOON COMPANY LIMITED v. TSAI KUT KAN AND OTHERS

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Headnote

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                An order in interlocutory proceedings that the costs should "follow the event" is normally to be construed as an order giving costs to the party who has been successful in these interlocutory proceedings.

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JUDGMENT

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Cons, V.-P. delivered the judgment of the Court:

1. This is an appeal against the decision of Power J. upholding a decision of Master O'Donnell who refused an application to tax a bill of costs. It is not necessary to go into the details of the long history of the litigation. It is sufficient to say that in July 1982 the Court of Appeal was seized of what in effect were two interlocutory appeals. The Court dealt with them both together, most parties being common. In one appeal there was a respondent's notice in further support of the judgment appealed from.

2. In the end, after we understand some 7 days of hearing, the Court dismissed both appeals and the Respondent's notice in a judgment handed down. The judgment concludes with these words -

"There will therefore be an order nisi as to costs that costs follow the event."

3. No formal order has apparently ever been drawn up. We think that in this instance that was unfortunate, because any doubts as to the true meaning of those words would have been swiftly dispelled, if necessary by an application to the Court itself. We think it unfortunate also that that course was not adopted even at a later stage. The original division could have been easily reconstituted and proceedings before the Master adjourned meanwhile. That would have been a much quicker and less expensive course than pursuing two appeals.

4. In 1984 the successful Respondent in the appeal against the refusal to strike out the statement of claim applied to tax his costs. The Master refused. He took the view that the words "follow the event" meant the "outcome of the litigation rather than the interlocutory appeal". We may observe in passing that the outcome of the litigation had by then already been decided, the action having been dismissed for want of prosecution.

5. The learned judge thought that the Master was right. With every respect to him we do not agree. Unless perhaps there be something compelling in the context, whether of words or facts, we have always understood the expression "costs to follow the event" to mean that the costs expended in obtaining the particular decision that the Court has just made should be recovered by the party in whose favour that decision went. Or if the Court were dealing with more than one matter, or more than two parties, then the costs should be recovered by each successful party. And that is the meaning whether the decision in question be interlocutory or final.

6. Some of the examples given by Mr. Tang who appears for the Appellant, and the words used by the learned editors of the White Book at 14/7/15, indicate that we are not alone in our understanding and nothing we have heard yesterday or today has convinced us that our understanding is incorrect. If a court which is not disposing finally of an action wishes to make its award of costs dependant upon the final outcome of that action, the usual formula is "costs in the cause", or perhaps "plaintiffs, or defendants, costs in the cause" where the circumstances so warrant. The only other occasion when a court looks forwards rather than backwards with regard to costs is when it makes the costs of an abortive trial dependant upon the outcome of a retrial, or when it makes particular costs dependant upon some other tribunal, as for example upon an award in arbitration proceedings. In our experience the usual order in either of these cases is that the costs "abide the result" or "the event" of the subsequent proceedings. The word "follow" does not of itself have the same connotation of waiting for something else to happen, and we see nothing in the context of the Court's order in the present instance which should incline us to give it anything other than the usual meaning.

7. The arguments of Mr. Rogers, who seeks to uphold the decision of the judge below, are indicative, if we may say so, of a wealth of research. He draws our attention to the words of Buckley L.J. in Howell v. Dering⁽¹⁾ when defining an "event" He said -

"'An event' .......... is an outcome of the presentation to the tribunal of some claim made by the plaintiff against the defendant which results in a finding that the plaintiff is or is not entitled to relief against the defendant."

In the same action Kennedy L.J. dealt with an "issue"⁽²⁾He said -

"Still an 'issue', as it seems to me, must be something so distinct and separate in itself that the decision of it constitutes an 'event' within the meaning of the rules. It may be said - and I appreciate the difficulty - that that is only getting out of one difficulty by getting into another. I do not think that the word 'event' has any defined meaning. I think it means result; but it must be such a material result as does not constitute merely a link in a chain."

We would most respectfully agree with those definitions.We find in them no direct assistance for the appeal was not dealing with interlocutory matters. Nevertheless they are useful by way of analogy. The claim in the present instance is the motion to strike out. It can also be looked upon as an issue, for it is distinct and separate in itself. It is not a link in a chain. It is instead an attempt, unsuccessful in the present instance, to sever the chain itself.

8. Mr. Rogers has reminded us of the common expression "costs in any event", where the only matter to which "event" can possibly refer is the final outcome of the litigation. He remarks that it would be odd that "event" should have two different meanings. With respect we do not find that so odd. Words do have different meanings in different contexts, even if the different contexts are themselves within the same general topic. The judge below observed that the order for "costs in the cause" - which he found to have been made, although he did not express it quite in that way - would be consistent with the comment of Silks J.A. that he did not entirely discount the possibility that the action was a sham. Mr. Rogers endorses that as a possible reason why the Court would not wish the Plaintiff to have his costs of the appeal, unless in the end he should prove that his case was not a sham. However vie are not concerned with whether or not the order was reasonable, we are concerned with what it was. We are inclined to agree with the judge below that in any event this was not a matter of great weight. It is a very different situation from the evidence which was "finely balanced" in Stratford v. Lindley⁽³⁾. The Plaintiff may not have been in the end able to prove his case, but it was not so obviously a sham as to be frivolous or vexatious. The Plaintiff was therefore entitled to continue with it, at his own risk of course as to costs, but those would be the costs of the action, not of a separate and unsuccessful attempt to have it struck out.

9. The last matter with which we have to deal is a suggestion by Mr. Rogers that the effect of Order 62 rule 3⁽³⁾, when taken in the context of the particular sub-rules that follow, is to provide that "unless otherwise ordered the costs of any interlocutory application shall be costs in the cause", although he accepts that there is a usual practice to award what we might call "immediate" costs. With respect that seems to us to read the rule without regard to the grammatical connection between the words "any proceeding" and "the event". But even if the suggestion be correct, once it is conceded that the Court can as a matter of discretion make some other order, then it seems to us that it becomes a question whether in any particular circumstance the Court has in fact made some other order. For the reasons we have already given, in our view the Court of Appeal did make some other order in the present instance. We therefore allow the appeal and direct that the costs in question be taxed.

(1)   [1915] 1 K.B. 54 at 63

(2)    Ibid at 69

(3)   [1969] 3 A.E.R. 1122, per Lord Denning at 1124C