THE INCORPORATED OWNERS OF YEE FUNG GARDEN v. BASIC TECH LTD AND ANOTHER

CACV 40/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL No. 40 OF 2003

(ON APPEAL FROM HCA No.6622 OF 1998)

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DECISION ON COSTS

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Hon. Yeung JA:

1.  I agree with the decision of Yuen JA and would make an order in terms of paras. 12 and 13 hereof.

Hon Yuen JA:

2.  In our judgment handed down on 20 April 2005, we allowed the      Defendants’ appeal in part from the order of Deputy Judge B. Fung in      which he ordered a mandatory injunction to be issued against the      Defendants in respect of 6 items of work.  We set aside the mandatory      injunctions in respect of 2 items - the gas pipe and the toilets, but in      respect of the latter, we replaced the order for a mandatory injunction      with a declaration that that item of work was in breach of the DMC.       The rest of the appeal was dismissed.

3.  To reflect the limited extent of the Defendants’ success, we gave an order nisi that the Defendants were to bear the Plaintiff’s costs.  

4.  The Defendants have applied to vary the costs order nisi. 

5.  Mr Edward Chan SC, leading counsel for the Defendants, have submitted that each of the 6 items of works for which a mandatory injunction was ordered by the judge was a separate cause of action, and since they had to come to this court to overturn the mandatory injunctions in respect of the gas pipe and the toilets - which he said were items essential to the running of the restaurant - the costs order should reflect that success.  He relied on the well-known principles of Re Elgindata No. 2 [1992] 1 WLR 1207.

6.  Mr Ronny Wong SC, leading counsel for the Plaintiff on this application, has opposed any variation.  He submitted that the judge had made only one order for a mandatory injunction (albeit in respect of 6 items).  He said there was no evidence that the gas pipe and toilets were essential to the running of the restaurant, and also quoted parts of the judgment citing submissions made by the Defendants’ counsel at trial that all the works were essential to the running of the restaurant. 

7.  In my view, it does not matter greatly for present purposes whether the judge gave a single mandatory injunction covering 6 items, or a separate mandatory injunction for each of the 6 items.  The Re-Amended Statement of Claim sought a single mandatory injunction covering a number of items, and no doubt that was the basis of the judge’s order as approved and perfected. 

8.  It is however clear from the approach of the judge below and on appeal that each item had to be examined separately as a discrete cause of action.  In fact, it could be said that even for each item of work, there was more than one cause of action, depending on the number of breach(es) of DMC alleged.  Therefore, I think Mr Chan SC must be right in his submission that there was a separate cause of action for each of the 6 items of work.  

9.  Further, I do not think it matters greatly whether counsel at the trial had submitted how important each item of work was to the running of the restaurant.  That type of submission is expected in the course of forensic arguments. 

10.  In any event, the issue at the proceedings whether at trial or on appeal was not whether the Defendants should be able to run a restaurant on the premises.  The issues were whether, in respect of each of the items of work, there was a breach of the DMC and if so, whether a mandatory injunction should be given.  It was in the consideration of this latter issue that the effect on the Defendants’ business was only one of the factors to be taken into account. 

11.  This was therefore a case where there was a separate cause of action for each of the items of work.  At the trial at first instance however, much of the ground covered would have been common to all the causes of action.  Accordingly, I think the judge’s order in respect of the costs of the trial should stand. 

12.  In respect of the appeal, the Defendants have failed in respect of most of the items appealed from.  Nevertheless they have had to come to this court to overturn the mandatory injunctions in respect of 2 of the items of work (although the injunction in respect of the toilets has been replaced by a declaration against them).  Having taken the above matters into account, in the exercise of discretion, I think it would be fair to order that the Defendants bear 80% of the Plaintiff’s costs of the appeal to reflect the Defendants’ partial success.  

13.  As indicated during the hearing, the costs of the application to vary the costs order nisi are part of the costs of the appeal.

Hon Yam J:

14.  I agree with the judgment of Yuen JA.