YIU HON LAM v. CHAN YU CHUN

CACV 383/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 383 OF 2007

(ON APPEAL FROM DCCJ NO. 5351 OF 2005)

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REASONS FOR DECISION

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Hon Tang VP:

1.  Although the plaintiff’s claim for damages for defamation was dismissed, District Judge Simon Leung ordered the defendant to pay half of the plaintiff’s costs.

2.  The defendant’s appeal was allowed to the extent that the plaintiff was ordered to pay the defendant 80% of her costs below.

3.  We made an order nisi that the plaintiff pays the defendant costs of the appeal.

4.  This is the plaintiff’s application to vary the order nisi.

5.  Several reasons have been advanced in support of the application. 

6.  First, the plaintiff had made a Calderbank offer to the defendant to settle the appeal on terms that there be no order to costs in respect of the trial and the appeal.

7.  We were told that there was no response from the defendant to the plaintiff in respect of this Calderbank offer.  I do not believe a party who has made an inadequate payment into court can complain if the other party did not respond to the payment into court.  Nor should a Calderbank offer be regarded as the opening salvo in a negotiation.  The plaintiff cannot complain if it had offered too little.  In this case, the Calderbank offer fell substantially short of what the defendant had obtained from this court.

8.  We were also told that there were subsequent without prejudice negotiations but that the content of such negotiation could not be disclosed to us.  So much for that.

9.  The second reason is that the defendant had not wholly succeeded because the defendant only obtained 80% of the costs of the trial instead of 100% she had asked for in the appeal. 

10.  In Waddington Ltd v. Chan Chun Hoo Thomas and Ors, unreported, FACV 15/2007, dated 14 November 2008, Bokhary PJ and Chan PJ said in their joint judgment (with the concurrence of the other members) on costs:

“9. … There can be circumstances in which it would be appropriate to make an order as to costs that deprives the substantial winner of some of his costs for the reason that his arguments on one or more points have not prevailed.  But in the present circumstances Waddington’s victory was so substantial in practical terms that there is no reason why the costs in this Court should not follow the event. …”

11.  Here, the defendant was the real winner and her victory was substantial.  In such circumstances, I do not believe she should be deprived any part of the costs of the appeal. 

12.  Mr Tibbo submitted that although she was the real winner, she had not won everything she wanted because she only got 80% of the costs below.  But as Waddington Ltd shows that is not necessarily a reason for depriving her of some of the costs.  Mr Tibbo also submitted that it was the defendant’s fault that she was unrepresented at the costs hearing below so she was unable to assist the learned judge.  I do not believe that is a good reason to deprive her of any of the costs of the appeal. 

13.  Lastly Mr Tibbo referred to the fact that before the trial the plaintiff had offered to settle on terms that the defendant should pay him his costs then estimated at $230,000.  I fail to see how it could assist the plaintiff.  Then it is said that the defendant had failed to properly respond to the plaintiff’s settlement overtures.  I believe it is undesirable to penalise the successful party on costs for not responding to wholly inadequate offers.  It is better that costs should follow the event.  Parties who want to be protected on costs should make adequate offers.  When a plaintiff brings a claim it is salutary that he should know the general rule is that if he fails, he will have to pay the costs.  Time and costs should not be spent investigating the ebb and flo of any negotiation which the parties might have engaged in.

14.  I would make the costs order nisi absolute.  The plaintiff must pay the costs of this application, such costs to be taxed if not agreed.  The application is so devoid of merits that I have given serious consideration to ordering that costs should be paid on an indemnity basis.  In the end I have decided not to do so.

Hon Cheung JA:

15.  I agree.

Hon Lam J:

16.  I agree.