FONG YUEN TUNG NICOLE v. PONG YUEN KONG

HCA 939/2022

[2024] HKCFI 1673

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 939 OF 2022

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D E C I S I O N

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Introduction

1.  On 12 April 2024, I gave judgment in favour of the Plaintiff immediately after the assessment of damages hearing, ordering the Defendant to pay damages to the Plaintiff in the sum of HK$115,500 with interest.  I also made an order nisi that the Defendant do pay the Plaintiff’s costs of the action including the costs of the assessment of damages (and all costs reserved)  on party and party basis, with certificate for counsel, to be taxed if not agreed (“Costs Order Nisi”).  The written reasons were handed down on 19 April 2014 ([2024] HKCFI 1061). 

2.  By a summons dated 26 April 2024, the Plaintiff applied to vary the Costs Order Nisi to the effect that the Defendant do pay the Plaintiff’s costs on party and party basis until 28 August 2023 and on indemnity basis thereafter. 

Procedural Matters

3.  On 26 April 2024, I directed that the Plaintiff’s variation application be disposed of on paper, and I gave directions for the parties to file evidence and to lodge written submissions. 

4.  In compliance with my directions, the Plaintiff filed and served the affirmation in support on 7 May 2024.  The Defendant has not filed any affirmation in opposition within the 14 days stipulated or at all.  It was then up to the Plaintiff to lodge her written submissions by 28 May 2024, and the Plaintiff did so on 31 May 2024.  The Defendant has not lodged any written submissions. 

5.  On 31 May 2024, the Plaintiff took out another summons seeking retrospective leave to file / lodge her affirmation in support and her written submissions out of time. 

6.  I directed that the Plaintiff’s leave application be also disposed of on paper, and I gave leave to the Defendant to lodge written submissions should he wish to oppose the application.  The Defendant has not lodged any submissions. 

7.  It should be noted that actually the Plaintiff’s affirmation in support was filed on time, so no retrospective leave needs to be given.  The written submissions were late by three days, which is not serious. In any event, the Defendant has not raised any objection. 

8.  I will therefore make an order that notwithstanding paragraph 3 of my order dated 26 April 2024, retrospective leave be given to the Plaintiff to lodge and serve her written submissions on 31 May 2024.  I make no order as to costs on the Plaintiff’s summons dated 31 May 2024. 

9.  Having read the affirmations of service, I am satisfied that the Plaintiff has served the papers on the Defendant and that the Defendant has had the opportunity to oppose the variation application.  I will proceed to dispose of the variation application in the absence of evidence and written submissions in opposition from the Defendant. 

Analysis

10.  The Plaintiff made her variation application on the strength of a sanctioned offer previously made by her. 

11.  The solicitors for the Plaintiff issued a written sanctioned offer on 31 July 2023, where it was offered that the Plaintiff would accept a sum of HK$17,500 (inclusive of interest)  in full and final settlement of her claim, and that the Defendant do pay the Plaintiff’s costs to be taxed on the High Court scale if not agreed.  It was stated that the offer related to the whole of the Plaintiff’s claim.  Thus, the mandatory requirements relating to the form and content of a sanctioned offer under Order 22 rule 5 of the Rules of the High Court have been complied with. 

12.  In the said written sanctioned offer, the possible consequences of not accepting the offer were set out.  The Defendant was also reminded that if he wished to accept the offer, he should accept it within 28 days, otherwise he could accept it only if the parties agreed on the liability for costs or with leave.  

13.  To comply with Order 22 rule 6, the Plaintiff’s solicitors did send the sanctioned offer to the Defendant at the Defendant’s premises (ie Flat D on 3^rd Floor, Kingsfield Garden)  and at Flat D, 2^nd Floor, Cannon Garden, No 68 King’s Road, Hong Kong (another usual and last known address of the Defendant)  by registered post on 31 July 2023.  The post to the Kingsfield Garden address was returned, but the post to the Cannon Garden address was not, and the Post Office’s track and trace records show that this registered post was delivered on 1 August 2023.  I accept that there has been valid service of the sanctioned offer on the Defendant. 

14.  The Defendant has not accepted the sanctioned offer.  Order 22 rule 24 is applicable as the Defendant was held liable for more than the proposals contained in the sanctioned offer.  In my judgment, I ordered the Defendant to pay damages in the sum of HK$115,500 with interest, whereas the Plaintiff’s sanctioned offer was for the Defendant to pay her HK$17,500 inclusive of interest. 

15.  Therefore, pursuant to Order 22 rule 24(3), I may order that the Plaintiff is entitled to her costs on the indemnity basis after the latest date on which the Defendant could have accepted the offer without requiring the leave of the Court.  In considering whether to do so, under rule 24(5), I shall take into account all the circumstances of the case including the terms of the sanctioned offer, the stage in the proceedings at which the sanctioned offer was made, the information available to the parties at the time when the sanctioned offer was made, and the conduct of the parties with regard to giving or refusing to give information for the purposes of enabling the offer to be made or evaluated. 

16.  It is well established that the onus is on the Defendant to show that in view of all the circumstances of the case it is unjust to make an order under Order 22 rule 24(3): Chan Wai Chung v China Travel Service (Hong Kong)  Limited & Ors [2023] HKCFI 1442 at §31. 

17.  The Defendant has not filed any evidence or submissions to suggest that it would be unjust for me to make an order under rule 24(3), and in any event I do not think it would be unjust for me to do so, considering the following matters:-

(1)  Compared to the Plaintiff’s claim for damages, the offer to accept HK17,500 (inclusive of interest)  was a genuine offer to settle.  It was not a mere “tactical step” to secure the benefit of Order 22: see Kai Min Fashion (HK)  Ltd v Fond Express Logistics Ltd [2013] 1 HKC 563 at §§12-14. 

(2)  The sanctioned offer was made well ahead of the assessment of damages hearing which was fixed to be heard on 12 April 2024. 

(3)  On 20 April 2023 (ie more than three months prior to the sanctioned offer), the Plaintiff filed her witness statement for the assessment of damages hearing.  In her statement, the Plaintiff clearly set out the basis of her claim for damages in the sum of HK$115,500.  The Defendant had the necessary information to evaluate the sanctioned offer. 

18.  As stipulated in Order 22 rule 12(1), a sanctioned offer is made when it is served on the offeree.  According to Practice Direction 19.2, service by way of registered post is deemed to have been effected on the fourth working day after posting, subject to proof to the contrary.  As noted above, the Plaintiff has adduced evidence to prove that the service was actually effected on 1 August 2023 and she does not have to rely on the deeming provision.  The latest date on which the Defendant could have accepted the sanctioned offer without leave is therefore 28 August 2023, and indemnity costs should be awarded from 29 August 2023 onwards. 

Disposition

19.  I order that the Costs Order Nisi be varied as follows – the Defendant do pay the Plaintiff’s costs of the action including the costs of the assessment of damages (and all costs reserved)  on party and party basis until 28 August 2023 and on indemnity basis thereafter, with certificate for counsel, to be taxed if not agreed. 

20.  As to the costs of the variation application itself, I make an order nisi that the costs of and occasioned by the summons dated 26 April 2024 be to the Plaintiff on party and party basis, to be taxed if not agreed.