SMART EDGE LTD (RECEIVERS AND MANAGERS APPOINTED) v. HG PROPERTY INVESTMENT HK LTD

HCMP 2146/2022

[2024] HKCFI 2879

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2146 OF 2022

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D E C I S I O N

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1.  On 4^th October 2023, I handed down a decision (“the Decision”), granting the application of the Plaintiff Smart Edge[1] to vary the Costs Order Nisi made in my judgment of 27^th April 2023 (“the Judgment”), so that the costs of and occasioned by the Originating Summons (and the Amended Originating Summons) were to be paid by HG to Smart Edge on an indemnity basis, to be taxed if not agreed (“the Costs Order”).

2.  By summons of 5^th July 2024 (“the Summons”), Smart Edge applied for an amendment of the Costs Order, to include a certificate for two counsel, under RHC O.20 r.11 and the court’s inherent jurisdiction.

3.  Smart Edge says that it accidentally omitted to ask for a certificate for two counsel at the time when it sought to vary the Costs Order Nisi. It says that it was implicit in the Costs Order, and the manifest intention of the court in varying the Costs Order Nisi to provide for indemnity costs, that Smart Edge would be entitled to the costs of its two counsel.

4.  HG says that the court is functus officio insofar as a grant of certificate for two counsel is concerned, and in any event, the slip rule cannot be relied on to insert a provision which is missing because it was not originally asked for.

5.  In an application brought under the slip rule, the sealing of an order is not a bar to the making of an amendment. The court is not functus officio in this regard. See Man Ping Nam v Man Fong Hang (No.2) (2007) 10 HKCFAR 140 at [20] (Bokhary PJ).

6.  The question to be considered, then, is whether the amendment sought can be said to reflect the manifest intention of the court.[2] See Man Ping Nam at [10]:

“Even if an Order as drawn up is ambiguous, it is well settled that the court (at all levels) has an inherent or implied discretionary power to clarify the original order if the court’s intention appearing from the body of the judgment is manifest. As Lord Penzance stated in Lawrie v Lees (1881) 7 App Cas 19 at 34-35:

“I cannot doubt that under the original powers of the Court, quite independent of any order that is made under the Judicature Act, every Court has the power to vary its own orders which are drawn up mechanically in the registry or in the office of the Court – to vary them in such a way as to carry out its own meaning, and where language has been used which is doubtful, to make it plain. I think that power is inherent in every Court.”

See also the cases cited in Hong Kong Civil Procedure 2007 at 20/11/1.”

7.  See also Wong Hung Kar Kee Mimi v Severn Villa Ltd [2014] 1 HKLRD 1088 at [19], [20] (Au-Yeung J):

“19. However, the error or omission must be an error in expressing the manifest intention of the court. In Li Tze Cho v Ching Hua Co (No 3) [1961] HKLR 201, 205, Reece J held:

But the error or omission must be an error in expressing the manifest intention of the Court; the Court cannot correct a mistake of its own in law or otherwise, even though apparent on the face of it. If the order or judgment of the Court correctly expresses the intention of the Court, it cannot be corrected under this rule or the inherent jurisdiction even if the decision of the Court is procured by fraud or misconception.

20. A party cannot use the slip rule to insert, into the original order, a provision which was not there, not because of any slip in expressing the court's intention but because it was not originally asked for: Bank of China v Xinyuan Trading Co (unrep., CACV 276/1998, [2000] HKLRD (Yrbk) 77) (21 June 2000), Godfrey V-P.”

8.  The slip rule cannot enable a court to have second or additional thoughts. Once the order has been drawn up, any mistakes must be corrected by an appellate court. See Bristol-Myers Squibb v Baker Norton (No.2) [2001] RPC 45 at [25] (Aldous LJ).

9.  Therefore, the court cannot at this stage exercise its discretion for the first time as to whether certificate for two counsel should be granted. Cf. Wong Hung Kar Kee Mimi at [32].

10.  HG was ordered to pay indemnity costs because its conduct in opposing the Amended Originating Summons, and refusing to withdraw the Instruments from registration, was an abuse of the land registration system and an attempt to obtain an injunction by the back door, so as to thwart Smart Edge in its dealings with the Property: see Decision at [12]. The grounds for ordering indemnity costs did not have any bearing on whether it was justified for Smart Edge to have instructed two counsel, so that it cannot be said that the manifest intention in ordering indemnity costs was that certificate for two counsel should be given.

11.  Smart Edge submits that consideration should be given to the complexity of the legal issues involved. HG says that this is not a matter that arises for consideration under the slip rule.

12.  As the authorities show, it is not for me to exercise my discretion for the first time now to decide whether, had the matter been raised by Smart Edge, I would have granted certificate for two counsel, whether on the ground that the matter was complex, or that HG was represented by two counsel, or other such grounds.

13.  It is true that in Wong Hung Kar Kee Mimi, Au-Yeung J reviewed the late DHCJ Carlson’s rulings to see whether the matters before DHCJ Carlson were complex in nature. However, the consideration was not whether the matters were complex per se, so as to enable Au-Yeung J to exercise a fresh discretion as to whether certificate for two counsel should be granted, but whether anything on the face of the rulings disclosed a manifest intention that DHCJ Carlson would have granted a certificate. It was on that basis that Au-Yeung J found that for a particular category of costs orders, DHCJ Carlson’s ruling reflected his view that it was fair for the parties to be represented by two counsel given the complexity of the matter.

14.  In the present case, it was Smart Edge’s position that the law was settled, and in fact at the hearing of the Amended Originating Summons, HG accepted this (and instead sought to advance a reformulated argument). See Decision at [4]; Judgment at [32], [35]. These parts of the Decision and Judgment do not suggest a manifest intention of the court that certificate for two counsel would have been granted on the grounds of complexity.

15.  I have reviewed the Decision and Judgment to see whether there is any other basis on which it could be said that they disclose that the manifest intention of the court was that certificate for two counsel was to be granted, but there is none (and indeed Smart Edge has not suggested any, other than the fact that costs against HG were ordered on an indemnity basis, which I have addressed above). In the circumstances, it is not possible to amend the Costs Order pursuant to the slip rule, no matter what might have otherwise been decided had the issue of counsel’s certificate been raised and argued earlier.

16.  It follows that the Summons must be dismissed. I make a costs order nisi that Smart Edge is to pay the costs and occasioned by the Summons to HG, to be summarily assessed on the papers. HG has already lodged and served its statement of costs. Smart Edge is to lodge and serve a list of objections, in bullet point form limited to two pages, within five days; HG has leave to lodge and serve a reply, in bullet point form limited to two pages, within three days thereafter.