MILLION WAY LTD v. TO SHING WO AND OTHERS

HCA 436/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 436 OF 2007

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D E C I S I O N

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1.  The plaintiff has lost a claim for the rectification of a formal agreement as made between the parties, but it has in effect succeeded on what it wanted, that is to have the agreement to continue to have effect so that it can apply to the District Officer under section 15 of the New Territories Ordinance for consent to the sale of the property in question by the 1st defendant to the plaintiff.

2.  The plaintiff’s success was the result of an amendment to its pleadings made at the start of the trial.  The 1st, 2nd and 3rd defendants say that prior to the amendment, the plaintiff had no case.  That might be correct, however, the amendment only raised an argument of law fairly and squarely between the parties.  It did not result in the need for any further evidence or discovery or any interrogatory direction to be complied with.  In fact, all the facts were already there.  So I do not see the justification of requiring the plaintiff to pay any costs to the defendant from the start of the action up to the commencement of the trial.  I therefore dismiss the first prayer in the summons of the 1st, 2nd and 3rd defendants for varying the costs order nisi.

3.  Regarding the plaintiff’s application that instead of just getting 70% of the costs of the action, it should have the whole of such costs, I also do not think that that is right.  The reason being that for the lost cause of rectification, a substantial part of time was spent in the preparation for it before the trial.  Quite some time was also spent on the taking of evidence on it and in the preparation of the submissions.  That can be gleaned from the length of my discussion on this issue in the judgment.

4.  I think I can rely on paragraph 3 of the principle in Re Elgindata to say that it is fair that the plaintiff should only get 70% of the costs of the action.  I therefore dismiss the plaintiff’s summons for variation of the costs order nisi as well.

5.  Regarding the variation sought in paragraph 2 of the summons of the 1st, 2nd and 3rd defendants, the 2nd and 3rd defendants have no doubt succeeded in defending the claim of misrepresentation.  However, they succeeded because I disbelieved them in their evidence.  I held that what was allegedly represented by them was in fact true.  So even if they should have made the representation as alleged, it was a truthful one.  It was on that basis that I held in their favour on this issue.  

6.  In fact, in my analysis of the facts, I came very close to finding that they had indeed made the representation as alleged, although I did not make the finding as it was unnecessary to do so. 

7.  Since I held in their favour on this issue by disbelieving them, I think it was right that I should have made no order as to costs on this issue as between the plaintiff and the 2nd and 3rd defendants.  I therefore dismiss this paragraph of the summons as well.

8.  Since both sides have lost their applications for variation of the costs order nisi, I make no order as to costs for their applications.