XCHRX CHINA RESOURCES ELECTRIC ALAPPLIANCE (ZHUHAI) CO., LTD. AND ANOTHER v. DECOSONIC HONG KONG LTD.

HCCL 39/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL LIST NO. 39 OF 2001

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DECISION ON COSTS

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Introduction

1. This is the decision on the plaintiffs' application for the costs of the ex parte application before Seagroatt J on 4 August 2001 (no provision for costs having been made at that hearing). The defendant opposed the application at the hearing on 10 August 2001 on the ground that the court has no jurisdiction to order such costs, except perhaps under RHC Ord. 20 r. 11. The matters giving rise to this application arose in the following manner.

2. The plaintiffs applied ex parte on 4 August 2001 before Seagroatt J for a worldwide Mareva injunction order. The order was granted on the same day and Seagroatt J appended his signature onto the draft (with amendments to the draft). This is the only copy of that order in the court records. As will be set out below, the plaintiffs should have, but had not, drawn up that order after 4 August 2001 (until 23 August 2001).

3. The ex parte order was discharged on 8 August 2001 at another ex parte hearing (on notice to (and in the presence of) the plaintiffs) upon the defendant's undertaking to make a payment into court. The parties however could not agree on the costs for the ex parte hearing and, although the inter partes hearing on 10 August 2001 could have been vacated, they decided to have that matter ventilated at the last mentioned hearing.

The Costs Order for the ex parte Hearing

4. By reason of the issues raised by the parties' arguments, it becomes necessary to consider RHC Ord. 20 r. 11 and/or the "slip" rule which is applicable after a judgment or order has been "perfected". It is therefore also relevant to consider the provisions of Ord. 42 r. 5 regarding "perfecting", that is, the drawing up and entry of, judgments and orders.

5. Ord. 42 r. 5(2) and (5) requires the party seeking to enter a judgment to draw it up. When this has been approved by the court, it should be finalised and submitted to the Registry for sealing: see Hong Kong Civil Procedure 2001, para. 42/5/1. According to Ord. 42 r. 5(1), when the approved draft is presented at the Registry for entry, it shall be entered in the book kept by the Registrar for the purpose and the Registrar shall file the judgment.

6. The hearing on 10 August 2001 proceeded on the basis that the ex parte order has been "perfected" in the manner provided for in Ord. 42 r. 5. By reason that none of the matters in Ord. 42 r. 5(1), (2) or (5) have been undertaken, I am of the view that the ex parte order has not been drawn up or entered. On 23 August 2001, the plaintiffs filed the said copy order signed by the ex parte judge with the Registry. Since that still does not fully comply with Ord. 42 r. 5, it is doubtful if the ex parte order has been drawn up yet. I am prepared to treat the ex parte order as having been "perfected" on 23 August 2001 for present purposes.

7. The significance of the drawing up and entry of an order is that:-

"Recall of orders- An order pronounced in Court or Chambers can be withdrawn, on an application or on the Court's motion, if it has not been drawn up, and entered (Re Harrison's Settlement [1955] Ch 260; Pittalis v. Sherefetti [1986] QB 868 ... applying Millinstead v. Grosvenor House (Park Lane) Ltd. [should be Millensted v. Grosvenor House (Park Lane) Ltd.] [1937] 1 KB 717, CA) ... "

(The Supreme Court Practice 1999, Vol. 2, para. 17A-12).

"... the Court has no power under any application in the action to alter or vary a judgment after it has been entered, or an order after it is drawn up, except so far as is necessary to correct errors in expressing the intention of the Court ... "

(Hong Kong Civil Procedure 2001, para. 20/11/6).

"(6) Before entry of judgment or the drawing up of an order, the Court can reconsider the matter ... "

(Hong Kong Civil Procedure 2001, para. 20/11/8).

8. The Hong Kong Court of Appeal also has the opportunity of considering the point in Lilik Andayani v. Chan Oi Ling, CACV 104 of 2000.

9. Because the ex parte order has not been drawn up at the hearing on 10 August 2001, there was ample power on that day for the court to alter or vary it. Defence counsel referred to Hong Kong Civil Procedure 2001, para. 20/11/3 at the hearing on 10 August 2001:-

"Mode of application - Where the order is made in Court, by motion in the Court which made the order ... Notice to the other parties is given formally, and, upon the Registrar being informed, the case will be placed in the Daily Cause List on a day convenient to the Judge and the parties and marked 'To be mentioned.' Where CA made the order, application is made to it ... Where the order is made in chambers, the application may be made by summons. In any case notice must be given to the other side. Notwithstanding the wording of this rule, in certain cases application is ex parte to a master. Wherever practicable, application under the slip rule should be made to the Judge or Master who made the order ... " (emphasis supplied).

Even though she did so in the belief that the ex parte order was already drawn up, (although there is no direct authority on this point) the same practice may be applicable to a case where the judgment or order has not yet been "perfected".

10. The order sought in this application is merely that costs of the ex parte application be reserved. Because the defendant's ground of objection is only procedural and it has never objected to reserving the ex parte costs, it is most likely the defendant would not resist such an application if it were made before Seagroatt J. Even if the defendant does oppose such application, I do not see what argument can validly be made such as would persuade the learned Judge not to reserve those costs. I therefore consider it appropriate to depart from the usual practice (assuming such practice applies to a situation like the present) and order that the costs of the ex parte hearing be reserved.

The Parties' Arguments at the Hearing

11. Having come to the above conclusion, it is unnecessary to consider the parties' arguments which, as stated above, were advanced on the basis the ex parte order has been "perfected". I shall do so briefly for completeness.

12. The plaintiffs argued that the court has the power to, and should in the present case, make an order regarding the costs of the ex parte hearing because:-

(a) that ex parte order merely followed strictly the standard form of order in Practice Direction 11.2 (the standard form of order does not contain a term about costs);

(b) the inter partes hearing which was directed by the court at the ex parte hearing is in essence a continuation of the ex parte hearing. The plaintiffs relied on the passage in Hong Kong Civil Procedure 2001, para. 32/6/16 (p. 509) which reads:

"By its nature, an ex parte order is essentially a provisional order made by the Judge on the basis of evidence and submissions emanating from one side only and there is therefore no basis for making a definitive order and accordingly when the Judge reviews his provisional order ... he is not hearing an appeal from himself ... ";

(c) although the standard form of order does not expressly provide for costs, it must have been the implied intention of the Practice Direction 11.2 that costs should be reserved. This is because it should not be assumed that the draftsman of the practice direction has overlooked such matter.

13. The defendant's arguments can be summarized as follows:-

(a) the standard form order in Practice Direction 11.2 should be read together with Practice Direction 11.1 the relevant part of which reads:-

"... Applicants for ex parte relief should prepare and lodge with the papers relating to the application a draft minute of the order sought ...

... The order should, as a general rule, contain provision ... for the costs to be reserved ... " (para. 14 and 15(c) of Practice Direction 11.1);

(b) an ex parte hearing is a hearing in its own right.

14. I agree with the defendant's point (a) above which is a good answer to the plaintiffs' points (a) and (c) above and conclude that the plaintiffs have omitted to ask for costs to be dealt with at the ex parte hearing.

15. Para. (1) of the UK Practice Direction dated 28 July, 1994 ([1994] 1 WLR 1233) (which introduced the use of standard form of orders) states that:-

"The granting of a Mareva injunction or Anton Piller order is a matter for the discretion of the judge hearing the application. However, it is desirable that a consistent approach should in general be adopted in relation to the form and carrying out of such orders, since they represent serious restrictions on the rights of those persons subjected to them ... ".

Hence, the introduction of the standard form of order was primarily to ensure consistency. Further, the terms of the standard form of order must have been considered to be those which best safeguard the interests of both parties in the majority of cases. Needless to say, the "consistency" in question is that relating to the terms of the order themselves and not whether an express provision for costs should be included or left out.

16. Further, even if there were no Practice Direction 11.1 (especially para. 15(c) thereof), the arguments about following standard form order(s) show that legal practitioners should not blindly adopt them. Whether the standard form orders appear in Practice Directions, textbooks on precedent forms or elsewhere, due consideration should be given to the circumstances of the particular case at hand and the standard forms (or precedent forms) should be suitably amended or revised accordingly.

17. I agree with the defendant's point (b) above and disagree with the plaintiffs' point (b) above. An ex parte order may be a provisional order but that does not mean that somehow the inter partes hearing is a continuation of the ex parte hearing. If that were so, the inter partes hearing ought to be fixed before the judge who granted the ex parte order. I have not heard of such a practice and do not consider it to be correct.

18. I also consider that, for the reasons set out in para. 10 above, even if this were a case where Ord. 20 r. 11 and/or the "slip" rule was applicable on 10 August 2001, I would still have acceded to the plaintiffs' request to make an order that costs of the ex parte hearing be reserved.

Costs of the Hearing on 10 August 2001

19. As regards the costs of the hearing on 10 August 2001, I consider that the objection raised by the defendant to be so devoid of practical consequence that whatever the outcome of the hearing on 10 August 2001 may be, no costs should be awarded in its favour. The defendant's objection (even if valid) is purely technical. On the other hand, the plaintiffs has been adamant in pursuing an application before me when the matter could (at least from a practical point of view) have been more efficiently dealt with by an application brought before Seagroatt J. There is no practical advantage in persisting such course. Accordingly, I do not consider the plaintiffs should be awarded any costs for the said hearing. There will therefore be no order as the costs of the hearing of 10 August 2001. Legal practitioners are well advised to remember that part of their service to their respective lay clients is to provide proper legal advice, and to conduct litigation in a time- and costs-saving manner.