LAW TING PONG SECONDARY SCHOOL v. CHEN WAI WAH

CACV 517/2019

[2021] HKCA 1076

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 517 OF 2019

(ON APPEAL FROM HCLA NO 22 OF 2018)

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JUDGMENT ON

VARIATION OF COSTS

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Hon Chu JA giving the judgment of the Court of Appeal

1.  On 11 June 2021, this Court handed down our judgment[1] allowing the claimant’s appeal. We made an order nisi (at §86(4) of the judgment) that the defendant pays the claimant the costs of the appeal and the leave to appeal application summarily assessed at $70,000.

2.  By letter dated 16 June 2021, the claimant applied through its solicitors to vary the costs order nisi by adding an order that the defendant pays the claimant the costs of the appeal in the Court of First Instance (i.e. HCLA 22 of 2018, “CFI Appeal”), to be taxed if not agreed.

3.  On 18 June 2021, Chu JA gave directions for the parties to lodge written submission on the claimant’s application, and to indicate with reasons whether they require the application to be heard in an oral hearing. 

4.  After the time for him to provide written submission expired on 2 July 2021, the defendant, acting in person, wrote to the Court to oppose the claimant’s application.  He has since filed a notice to act in person.  The claimant by letter dated 15 July 2021 made submission in reply to the defendant’s opposing submission.

5.  The claimant requested for the application to be dealt with on the papers.  The defendant has expressed no view on this.  Having regard to the nature of the application and the parties’ submissions, we are of the view that it is appropriate to determine the application on paper without an oral hearing.

6.  The claimant’s primary position is that costs should follow the event; since it succeeds in overturning the decision in the CFI Appeal, it should be awarded the costs of the proceedings in the CFI Appeal.

7.  The defendant opposes the claimant’s application arguing that the case relied on by this Court was only decided in December 2020, and was not available when he put in the CFI Appeal.  It is said that he did not have the benefit of considering the case when deciding whether to appeal, hence it is unfair that he should shoulder the costs of the CFI Appeal.  Although the defendant did not specify which case he was referring to, it would appear that it is a reference to the Court of Final Appeal’s decision in Eminent Investments (Asia Pacific) Ltd v DIO Corporation (2020) 23 HKCFAR 487 (see [49] of our judgment).

8.  The claimant makes three points in reply.  They are: (1) the point argued by the defendant is irrelevant and cannot displace the usual rule of costs follow the event; (2) the Eminent case does not decide any new principles of law; and (3) the case only relates to the first ground of appeal, and does not affect the second ground of appeal on which the defendant also fails. 

9.  We do not find the defendant’s argument a valid ground to oppose the claimant’s application. 

10.  First, the Eminent case relates to the first ground of appeal which turns on interpretation of the contract between the parties.  As we said in [49] of our judgment, the Court of Final Appeal reiterated the principles of interpretation of contract. It did not decide any new points of law.  It is clear from the passages in the case that we cited at [49] that the Court of Final Appeal had referred to and adopted a line of well-established authorities. 

11.  Second, the defendant also failed on the second ground of appeal about whether the provision in question is unenforceable as a penalty.  

12.  Third, at the time the defendant put in the CFI Appeal, his legal representatives would have considered the law on contractual interpretation, which has not been altered by the Eminent case, as well as the law on penalty, including the principles discussed in Cavendish Square Holdings v Makdessi [2016] AC 1172.  In the circumstances, there is no unfairness.              

13.  For the above reasons, we see no basis to depart from the normal rule of costs follow the event.  We allow the claimant’s application and make an order that the claimant shall have the costs of the CFI Appeal.  To save costs and time, the costs will be summarily assessed following the lodgement of statement of costs and statement of objection as directed below.

14.  Accordingly, we make the following orders:

(1)  The costs order nisi in §86(4) of the judgment is made absolute.

(2)  The defendant shall pay the claimant the costs of HCLA 22 of 2018 to be summarily assessed.

(3)  The claimant shall within 7 days lodge with the court and serve on the defendant a statement of costs for summary assessment.

(4)  The defendant may within 14 days thereafter lodge with the court and serve on the claimant his statement of objection, if any.