MONTRIO LTD AND ANOTHER v. TSE PING SHUN DAVID

CACV 291/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 291 OF 2011

(ON APPEAL FROM HCA NO. 757 OF 2009)

________________________

________________________

________________________

DECISION ON COSTS

________________________

Hon Kwan JA (giving the decision of the Court):

1.  On 28 December 2012, we handed down judgment dismissing the defendant’s appeal and allowing the plaintiffs’ cross-appeal on the quantum of damages. We made an order nisi that the defendant is to pay the plaintiffs’ costs of the appeal and the costs incurred by the plaintiffs in respect of the Respondents’ Notice. On 7 January 2013, the plaintiffs issued a summons to vary the order nisi to the extent that the costs of the appeal and the costs incurred in respect of the Respondents’ Notice are to be taxed on an indemnity basis.

2.  Mr C Y Li, SC submitted there are special features in this case to justify indemnity costs in that the appeal should not have been brought.  The plaintiffs had made an open offer to the defendant by letter dated 12 October 2009, which the defendant ought reasonably to have accepted.  The trial judge had taken this open offer into account and varied his order nisi to provide that costs incurred after the open offer should be taxed on an indemnity basis.  Mr Li submitted that if the defendant had accepted the open offer as he should have done, there would not have been a trial and there would be no appeal.

3.  Mr Li referred us to MGA Entertainment Inc v Toys & Trends (Hong Kong) Ltd & Ors, CACV 104/2011, 8 August 2012 (Tang VP, Cheung and Lunn JJA), in which the Court of Appeal by a majority took into account the sanctioned offer made in the court below and awarded costs of the appeal to the successful defendants on an indemnity basis as “this follows from the sanctioned offer, which if it had been accepted there would have been no appeal” (at para 73).

4.  It seems to us the same reasoning should apply in the present case.  We therefore allow the plaintiffs’ application and vary the order nisi to the extent that the costs of the appeal and the costs incurred in respect of the Respondents’ Notice are to be taxed on an indemnity basis.