KAM HING TRADING (HONG KONG) LTD v. THE PEOPLE'S INSURANCE CO OF CHINA (HONG KONG) LTD AND ANOTHER

HCA 1062/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1062 OF 2008

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BETWEEN

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DECISION ON COSTS

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1.  This is an application by the 2^nd Defendant to vary a costs order nisi for costs to be in the cause which I have made on 27 July 2009. This decision should be read together with my Reasons for Decision on that date (“the Reasons”).

2.  The substantive application was for expert directions. It was applied for at a checklist hearing heard post-Civil Justice Reform. The Plaintiff had initially conceded the application but withdrew the consent. As a result a summons for expert directions (“the Summons”) was taken out by D2. Accordingly, the rules under CJR applied to that Summons.

3.  Under Order 62, rule 3(2A) of the Rules of the High Court, “costs to follow the event” is merely one option for the Court in an interlocutory application.

4.  Under Order 62, rule 5(1), in exercising its discretion as to costs, the Court shall take into account, amongst others:

“ (e)  the conduct of all parties;

(f)  whether a party has succeeded on part of his case, even if he has not been wholly successful; …”

5.  Under rule 5(2),

“ For the purposes of paragraph 1(e), the conduct of the parties includes –

(a)  whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b)  the manner in which a party has pursued or defended his case or a particular allegation or issue; …”

6.  Insofar as conduct of the parties was concerned,neither party acted unreasonably or misconducted itself. D2 discerned the need to adduce expert evidence and pursued it. The Plaintiff initially conceded but withdrew the consent. It did not, however, oppose the expert directions unreasonably. In the end, D2 obtained the expert directions but I ruled against it on the issue of single joint expert.

7.  In my view, even if the Plaintiff has not withdrawn its concession to the expert directions, it would have little bearing on the course and results of this application. I would not have made an order by consent on the terms of the expert directions set out in the Summons but would have raised similar queries as I had. I would have expressed the same doubt as to how much value the expert evidence could add to the case and required the parties to agree on of the issues for the expert to answer. I would also have queried whether or not a single joint expert should be appointed, a point which the summons did not deal with and which D2 unsuccessfully contested. I respectfully disagree with D2’s submission that it “has now proved they are right all along and the Plaintiff was wrong”.

8.  In its submission on costs, D2 thought that I had required it to frame the expert directions inside the Summons by reference to questions in Section D of the timetabling questionnaire when the filing of timetabling questionnaire was not required in this case. With respect, that was a misreading of my Reasons. I was aware that there was no timetabling questionnaire. However, the questions set out in Section E of the timetabling questionnaire are always questions that a party must consider whenever expert directions are sought, whether by way of a case management summons or a summons specifically taken out for that purpose. One of the them (E4) is: “Please state the precise issues and subjects within such issues to be addressed by the liability expert(s).” It cannot be the intention of the Court nor is it right that a different approach to expert directions (which is within the Court’s case management powers) should be taken for a summons as opposed to a case management summons. Accordingly, my requirement for a list of issues for the expert to answer is within the legal framework of CJR.

9.  With regard to the supporting affirmation filed by D2, I accept that it was filed pursuant to Master Lung’s direction although his order did not contain a term to that effect. I did find the affirmation useful although I have commented that submission and the framed issues (which ought in future to be included in the Summons) could be kept out of it. To avoid any doubt, I clarify that the costs of preparing (or considering) the full affirmation should be allowed on taxation.

10.  Practitioners are on a learning curve under CJR. There has been no previous decision on how to approach expert directions under CJR and so I have attempted to set out my own views in the Decision. Neither party should be blamed for taking the course it had. Ordering costs to be in the cause leaves the matter to a time when the trial judge has the full opportunity to consider whether or not the expert evidence is of value. This in fact followed the costs order in Wong Hoi Fung v. American International Assurance Co. (Bermuda) Ltd. [2002] 4 HKC 225.

11.  By way of comment, I find that the costs of over $250,000 (apart from costs spent on counsel stated in section E of the costs statement) claimed by D2 in its costs statement to be grossly excessive and disproportionate to the issue involved. I will leave that, however, to taxation.

12.  In conclusion, I dismiss the application for variation of the costs order absolute.

Conclusion

13.  The application to vary the order nisi on costs is dismissed. The order will remain one of costs in the cause including costs of preparation or consideration of D2’s full affirmation. There will be certificate for counsel.