MOHAMMAD KHURSHID QAZI v. KARBHARI JAL NADIRSHAW t/a JAL N. KARBHARI & CO, SOLICITORS & NOTARIES

DCCJ 3838/2019

[2020] HKDC 1165

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3838 OF 2019

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DECISION ON COSTS

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1.  In my judgment handed down on 19 October 2020, I dismissed all of the plaintiff’s claims in this action save awarding to him a sum of HK$13,610 (“the Judgment”). There, I reserved the question of costs to be decided on paper after the parties have had time to consider the Judgment. This I now do.

2.  This decision should be read in conjunction with the Judgment in which the background, the relevant procedural history, the plaintiff’s claims and my reasons for judgment and such have been fully set out.  I will continue to use here the same abbreviations used in the Judgment.

3.  As directed, the defendant lodged his submissions thereon on 4 November 2020, therein seeking the costs order that the plaintiff pays the defendant’s costs of this action, to be taxed on an indemnity basis, with certificate for 2 counsel, and be assessed on High Court scale up to and including the hearing on 26 June 2019 (for transfer to the District Court) and thereafter on District Court scale.

4.  The plaintiff did not lodge any written submissions to make representation as to what form of costs order he would contend as appropriate, nor did he lodge any reply written submissions contesting against the defendant’s proposed costs order.

5.  The principles regarding the award of indemnity costs are well settled and I do not think I need to rehearse them here.

6.  The defendant submits that the present case falls within the following circumstances justifying an award of indemnity costs:-

(a)  Where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior purpose (Choy Yee Chun v Bond Star Development Ltd [1997] HKLRD 1327, 1334E-F);

(b)  If the claim pursued was a bogus claim intended to exert pressure on the defendant to pay as much as possible (Choy Yee Chun supra, 1337A-E); and

(c)  In an action that was devoid of merit: it was doomed to fail from the outset and did fail on precisely the basis that the defendant had drawn to the plaintiff’s attention well in advance of its commencement; it is an action which should never have been instituted.  It was instituted so as to harass the defendant (Hung Mau Decoration Company Limited v Kowloon Tsai Home Owners Association HCA 3609/2001, unrep, 15 April 2003, Deputy High Court Judge Wright).

7.  The above submissions are made in the context of the plaintiff’s claims based on the 2^nd Agreement and not in relation to the claims based on the plaintiff’s entitlements under the Employment Ordinance.  Under the former group of claims, the plaintiff claimed a total amount of HK$2,068,599, which claims I have all dismissed.  Under the latter entitlements, I awarded the said sum of HK$13,610.

8.  The defendant stresses that he had made an open offer to the plaintiff in the Labour Tribunal hearing held on 27 November 2009 in the sum of HK$300,000, which were much more than the sum now awarded, which the plaintiff ought to have accepted.

9.  The defendant further stresses that he has also made a sanction payment into court under O 22 r 8 in the sum of HK$208,068 on 5 June 2017.  However, the defendant presently is not seeking to impose the consequences under O 22 r 23 against the plaintiff.  The point made is that the defendant had made very reasonable offers to settle and has taken the prescribed procedural step to bring pressure to the plaintiff to re-consider.

10.  In its long letter dated 28 June 2016 to the plaintiff’s former solicitors enclosing the relevant pages of the transcript of the proceedings before the Labour Tribunal, the Firm highlighted the fact that the plaintiff has clearly and unambiguously admitted on oath that the 2^nd Agreement was a sham and therefore the pursuance of this action to enforce it was scandalous, frivolous, vexatious and a clear abuse.  The defendant there also offered, as a gesture of goodwill, to agree to discontinuance of this action with no order as to costs.  The defendant further warned that he would seek costs on an indemnity basis should the plaintiff persisted.

11.  Following from such admissions, the Labour Tribunal Officer in the hearing has also clearly pointed out to the plaintiff that the court might very well not enforce an agreement which was sham.  So, the plaintiff had been fully warned that his claims based on the 2^nd Agreement might very well fail based on those admissions.

12.  In the Judgment, I held to the effect, though without using those exact words, that the plaintiff’s admissions before the Labour Tribunal were clear and unambiguous and I rejected the plaintiff’s attempt to explain them away as “completely disingenuous, false and incredible”.  The fact that the 2^nd Agreement was admitted by the plaintiff to be a sham was one of the main grounds I dismissed the plaintiff’s claims to enforce it.

13.  The other main ground, it will be recalled, is that the plaintiff’s own claims for unpaid salary under the 2^nd Agreement were directly contradicted by various documentary evidence, not just by those proffered by the defendant’s, but mainly by those proffered by the plaintiff himself, and many were admittedly signed by him.

14.  The inescapable conclusion is that the plaintiff’s claims based on the 2^nd Agreement were doomed to failure from the outset and he had been warned of it and the potential costs consequences as aforesaid.  I accept the defendant’s submission that such claims should never have been instituted.

15.  Having read all the papers and heard the trial, I also accept the defendant’s submissions that the plaintiff nevertheless commenced and continued to prosecute this action to exert pressure on the defendant to pay as much as possible and to harass and embarrass him.  I would tend to think more the latter than the former, and if I may borrow DHCJ Wright’s expression in Hung Mau Decoration Company Limited’s case (at paragraph 17) to describe it: “It has a distinct air of having been instituted so as to harass the defendant”.

16.  In the premises, I conclude that it is appropriate to order taxation of the costs of this action on an indemnity basis.

17.  Since the plaintiff claimed an amount of over HK$2 million which in 2009 (until December 2018) was within the jurisdiction of the Court of First Instance, the costs of this action up to its transfer to this court should be taxed in High Court scale.

18.  The defendant also asks for a certificate of 2 counsel.  The justification put forth is that various allegations made by the plaintiff were serious and had implications on the defendant’s professional name, reputation and integrity.  While I accept that this is so and am grateful for the able assistance of Mr Ramanathan, I do not think the above reason alone, in this case where the issues are not of such complexity, would justify a certificate for 2 counsel.  I therefore would decline that request.  In my view, a senior junior would have been competent enough to adequately handle that aspect of the plaintiff’s claims, and a taxation of counsel fees at the level of a senior junior seems to me well justified.

19.  In the premises, I make a costs order in terms of paragraph 3 above, save with certificate for one counsel only; and the costs of the defendant’s written submissions on costs would be included as part of his costs of this action.