SUZANNE RUTH HENDERSON v. SCOTT HENDERSON

HCMP 1780/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1780 OF 2013

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1.  On 27 November 2013 I ordered that paragraph 1 of the ex parte order made by L Chan J on 22 July 2013 as amended by him on 5 August 2013 and as varied by Deputy High Court Judge Hartmann on 4 October 2013 be continued until further order.  I made the order for the reasons given in my judgment of that date.

2.  There are two summonses before me, one is the plaintiff’s summons to vary the costs order nisi and the defendant’s summons to also vary the costs order nisi.

3.  As I had not heard any arguments at the time of my judgment, I made an order nisi that the costs of the plaintiff’s summons and the defendant’s summons be costs to the plaintiff, such costs to be taxed if not agreed with a certificate for two counsel.

4.  As I have said, both the plaintiff and the defendant have sought to vary the costs order nisi.  The plaintiff applies by summons dated 11 December 2013 for an order that the order nisi be made absolute except that the costs of and occasioned by the hearing on 4 October 2013 before Deputy High Court Judge Hartmann be to the plaintiff to be taxed on an indemnity basis.

5.  The defendant applies by summons dated 10 December 2013 for the costs order nisi to be varied so that half or such proportion as the court deems fit of the plaintiff’s costs be in the cause with certificate for one counsel only and alternatively, costs be reserved.

6.  I have now had the benefit of full argument on the question of costs.  I have taken into account the submissions of counsel and the authorities cited. 

7.  I am satisfied that as held by the Court of Appeal in King Fung Vacuum Ltd v Toto Toys Ltd [2006] 2 HKLRD 785 that unless there are very special circumstances in an application for an interlocutory injunction, the appropriate costs order should be either costs in the cause or the successful party’s costs in the cause.  Rogers VP dealt this at paragraph 27 of the judgment.  Le Pichon JA agreed with the judgment of the Vice President. 

8.  Mr Ng submits that costs should follow the event and the plaintiff having been successful in the applications, the costs order should be made absolute.  I disagree. In my view, the appropriate costs order should be either costs in the cause or the successful party’s costs in the cause as held by the Court of Appeal in that case.

9.  Both parties have relied on what they say is the conduct of the other party on the question of costs.  I have taken all this into account.

10.  In my view, the appropriate order to be made is that the costs of the inter partes summons and the defendant’s summons which were heard by me should be the plaintiff’s costs in the cause, subject to a reduction to be made.  Mr Leung makes the point, correctly in my view, that at the inter partes stage the plaintiff relied on two bases to found the court’s jurisdiction.  As I held that the alternative basis of enforcement under the common law was unsustainable as there was no good arguable case shown, it seems to me that some deduction should be made in respect of the plaintiff’s costs. Mr Leung suggests 50% but, in my view, taking matters in the round and the time spent on the alternative basis, it seems to be that a proper reduction should be 30%, so that the plaintiff should be entitled to 70% of the plaintiff’s costs in the cause in respect of the inter partes hearing before me.

11.  As regards the costs of the ex parte hearing before L Chan J and the hearing before Suffiad J on 9 August 2013, it seems to me that those costs should also be the plaintiff’s costs in the cause.

12.  Dealing with the question of the costs reserved by Deputy High Court Judge Hartmann, I see no reason why the costs should be treated any differently than the order that I have made, namely the plaintiff’s cost in the cause.  I see no merit in any submission made to me that the defendant should pay those costs on an indemnity basis. 

13.  There is no merit in relying on the Calderbank letter.  It is clear that after the Civil Justice Reform, Order 22 provides a self‑contained statutory procedure for settlement which is complete in its own right and as set out at marginal note 22/1/A of the Hong Kong Civil Procedure 2014, in essence this means that the need to resort to a Calderbank letter has been largely obviated.  And by Order 62, rule 5(1)(d), it is specifically provided that any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings is to be taken into account, but the court may not take the offer into account if at the time it is made the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22.  Quite clearly, the Calderbank letter relied on was not a sanctioned offer made under Order 22. 

14.  That is the order I make as to costs.  To sum up, I vary the costs order nisi made on 27 November 2013.  I substitute it with an order that the costs of the plaintiff’s summons and the defendant’s summons be the plaintiff’s costs in the cause, subject to a reduction of 30%, such costs to be taxed if not agreed.

15.  I am satisfied that it was reasonable to engage two counsel for the second day of the hearing before me in view of the allegations that had been made against misleading impressions given in counsel’s submissions to the court.  So I will certify the hearing for the second day before me with a certificate for two counsel.

16.  The costs of the ex parte hearing before L Chan J on 22 July 2013 and the hearing before Suffiad J on 9 August 2013 should also be the plaintiff’s costs in the cause.  The reduction of 30% of the plaintiff’s costs is only to apply as from 9 August 2013.

 [Submissions on the costs for today’s hearing]

17.  As to the costs for today, it seems to me that the appropriate order should be the defendant’s costs in the cause.