RTX PRODUCTS HONG KONG LTD v. LI YIU FAI

HCA 1777/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1777 OF 2009

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D E C I S I O N

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1. There is before this court a Summons dated 1 August 2014 (“Summons”) issued by the defendant to vary a costs order nisi made after the trial of this action on 6 September 2011. 

2. This application is hopelessly unmeritorious. This action concerned a breach of copyright claim of the defendant’s ex-employer (the plaintiff).  By a judgment dated 6 September 2011, the plaintiff’s claim was upheld after trial and an injunction was granted against the defendant to prevent further infringement of its copyright.  In addition, an order nisi (“ON”) was made for the costs of the action to be borne by the defendant. 

3. Pursuant to O 42, r 5B(6), the ON became absolute on 20 September 2011 (14 days after it was made) since there was no application made to vary it.  However, the judgment in this case (“Judgment”) was not sealed until the 18 October 2011. Although the ON had become absolute at the time when the Judgment was sealed, it was still referred to in the Judgment as an order nisi.  

4. Meanwhile, on 23 September 2011, a Notice of Appeal (“Notice”) was filed by the defendant in respect of the Judgment.  There was no indication in the Notice that the defendant sought to argue that he ought not be liable for the costs of the action despite being the losing party.  At the hearing of this application, the defendant confirmed that no such argument was advanced at the appeal.  The appeal was dismissed on 8 July 2013 with costs to the plaintiff. 

5. In these circumstances, it is extraordinary for the defendant to come to the court almost 3 years later to seek to vary the ON.  The only explanation for the delay which can be discerned from the supporting affirmation filed by the defendant on 1 August 2014 is that he had recently received pro bono legal advice concerning a sanctioned offer (“SO”) made by his solicitors prior to the trial on 11 and 23 September 2009 (the two letters in question appear to be identical). 

6. On behalf of the plaintiff, Ms Tang has advanced 3 arguments. 

7. Firstly, it is submitted that this court has become functus officio such that it has no further jurisdiction over this case upon the perfection of the Judgment on 18 October 2011 : see Andayani v Chan Oi Ling, CA, [2000] 4 HKC 233.  I agree.  Further, I do not believe that the fact that the Judgment referred to the costs order as an order nisi makes any difference.  Such order had become absolute pursuant to O 42, r 5B(6) at the time when the Judgment was perfected. 

8. It should be noted that the rule is expressed in imperative terms : “… that [order nisi] shall become absolute 14 days after the decision is pronounced” [emphasis added] .

9. The situation may be different if a judgment is perfected before the order nisi becomes absolute.  It may be said that in such a case it is inherent in the judgment that the costs order has yet to become absolute and the door remains open to an affected party to make an application to have it varied, including an application for an extension of time to make the variation application. However, once the order has become absolute, I am inclined to the view that any disagreement will then have to be pursued on appeal.  This is of course not the situation before this court. 

10. Secondly, Ms Tang submits that even if this court retains jurisdiction over the ON, no extension of time should be granted to allow the defendant to apply now to vary the same.  I also agree. 

11. To allow an application to vary the ON after a lapse of almost 3 years is, prima facie, a serious erosion of the principle that there should be finality to litigation.  This is all the more so when the defendant had unsuccessfully appealed against the Judgment.  The potential injustice to the plaintiff is obvious.  

12. I do not believe that the delay in question has been properly explained.  In particular, there is no explanation as to why it had taken the defendant so long to obtain advice in respect of the SO.  The defendant is not an unsophisticated person.  He was employed by the plaintiff as a Senior Product Engineer and he can read English.

13. Ms Tang’s third argument goes hand in hand with her second.  It is submitted that there is no merit in the SO because after it was made the defendant then withdrew the admission of liability (“Admission”) which he had made by way of a Form 16C filed on 4 September 2009. The order granting leave to withdraw the Admission was dated 11 November 2009.  I also agree with Ms Tang.

14. Whilst the SO indicated the defendant’s willingness to, inter alia, submit to the injunction sought by the plaintiff, it is clear from the terms of the SO that it was made on the basis of the Admission.  After the withdrawal of the Admission, a Defence was then filed on behalf of the defendant on 17 November 2009 by his solicitors which disputed the plaintiff’s entitlement to any of the relief claimed by it.

15. I do not accept the serious allegation made by the defendant that the withdrawal of the Admission was made by his solicitors without his instructions.  The allegation is inherently improbable and unsupported by any credible evidence.

16. In the premises, I see no justification for a variation of the ON and no reason at all to allow an extension of time to enable the defendant to apply to do so (assuming that the court retains jurisdiction over the matter). 

17. By reason of the aforesaid, the Summons is dismissed and I make an order nisi that the costs of and occasioned by the Summons be paid by the defendant.