WARREN GARY LICHTENSTEIN v. ANNABELLE SARAH BOND AND ANOTHER

HCA 1545/2021

[2023] HKCFI 1914

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1545 OF 2021

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DECISION ON COSTS

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1.  I refer to the Judgment herein dated 13 June 2023, which contains the salient facts and findings. I adopt the terminology there used.

2.  By the said Judgment, I dismissed P’s appeal against the order of Master Gary CC Lam dated 14 September 2022, and accordingly upheld the Master’s finding that as between P and D1 the Amended Statement of Claim be struck out and the action dismissed pursuant to the principles in Henderson v Henderson.

3.  At §38 of the Judgment, I pronounced an order nisi that P do pay D1’s costs of the appeal on an indemnity basis to be summarily assessed on paper, if not agreed.

4.  P made a paper application to vary the costs order nisi such that the P pay D1’s costs of the appeal on a party and party basis, rather than on an indemnity basis.

5.  The principles on the award of indemnity costs are set out in various Hong Kong cases including: Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004)  7 HKCFAR 114 at §§6-20; applied in eg Power Securities Co Ltd v Sin Kwok Lam And Others [2020] HKCFI 344 per Coleman J at §§4-16.

6.  I have made reference to these principles, but do not here repeat them, save to note that there should be “special or unusual features” which justify the court in exercising its discretion to award indemnity costs.  I also accept P’s submission that indemnity costs should generally be justified by features which take the case outside of the norm.

7.  In the present case, the action against D1 was found to be an abuse of process under the doctrine in Henderson v Henderson, and was as a result struck out by the Master with indemnity costs.  P appealed on the same point, and I reached the same substantive conclusion.   

8.  I take the view that the finding of abuse of process under Henderson v. Henderson amounts to a “special or unusual feature” which renders an award of indemnity costs fair and just, taking into account also all the circumstances of this case: compare Power Securities (supra) at §§7, 9, 13 & 16.

9.  I have considered, but am not persuaded by, P’s submissions in this regard.

10.  First, P prayed in aid the family law context of the current proceedings, which was contrasted with the commercial backdrop of certain of the case law cited on indemnity costs.

11.  However, I do not think this adds anything significant to the analysis.  There is no difference between the principles applied to the award of indemnity costs in the family law context as opposed to other legal contexts; nor is abuse of process any less objectionable in family law cases.

12.  Second, P argued that the reason for the action was that D1 was evasive over the years in relation to the 13.7m Sum, and further that the proceedings were motivated by P’s love and concern for ILB and brought in her best interests.

13.  Assuming these assertions to be correct, I again do not see that they anything significant for the purposes of deciding whether to award indemnity costs.  They do not detract from the conclusion that the proceedings were abusive in the sense of mounting a collateral attack on a previous court judgment, and twice vexing D1 with the same or a similar complaint.  In addition, the pertinent reasoning was apparent from the Master’s Decision, yet P chose to put the parties to further costs by appealing unsuccessfully on the same point.  

14.  For the above brief reasons, P’s application to vary the costs order nisi is dismissed.

15.  There will be an order that P do pay D1’s costs of the said application to vary, on an indemnity basis, to be summarily assessed on paper if not agreed.  I consider that indemnity costs is again appropriate, given that the entire proceedings against D1 have been held to be an abuse of process, and further given that I do not think the variation application had a realistic prospect of success.

16.  For the assessment of the costs order absolute in respect of P’s appeal and the costs order referred to at paragraph 15 herein, the parties are referred to the procedure set out at paragraph 40 of the Judgment.