DRAGON COURT LTD v. THE INCORPORATED OWNERS OF NOS. 33 & 35 BISNEY ROAD

HCA 197/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 197 OF 2015

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DECISION ON BASIS OF COSTS TAXATION

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Introduction

1.  This action was settled on the second day of trial when the parties executed a draft consent order dated 21 August 2017.

2.  This action was commenced in January 2015.  The re-amended statement of claim, and the witness statements (together with the exhibits thereto) show that the plaintiff is the owner of the remaining portion of Section 5, Inland Lot No 623 (“the plaintiff’s property”).  Located next to the plaintiff’s property is the remaining portion of Section 4, Inland Lot No 623 (“the defendant’s property”).  The defendant is the incorporated owners tasked to manage the common area of the defendant’s property.  The plaintiff’s property and the defendant’s property are collectively called “the subject properties”.

3.  The subject properties are located in Bisney Road, Pokfulam.  Situated between the subject properties is a planter (“the said planter”).  A fence was built in the middle of the said planter.  For ease of comprehension, the portion of the said planter nearer to the plaintiff’s property will be called “the plaintiff’s portion” while the portion of the said planter nearer to the defendant’s property will be called “the defendant’s portion”.

4.  According to the re-amended statement of claim, this action was prompted by a claim made by the defendant to the effect the defendant has obtained possessory title to the defendant’s portion by reason of adverse possession.

5.  The primary relief sought by the plaintiff was a declaration in effect the defendant has not acquired possessory title to any part of the said planter.

6.  This action was set down for a 6-day trial.  On the first trial day, the parties indicated they had agreed in principle to settle this action.  Complications arose out of the language of the draft consent order, as well as out of the precise mechanism by which the plaintiff was to obtain final relief.  The trial was adjourned to enable those matters to be considered and taken care of.

7.  A draft consent order was executed by the parties, and subsequently made an order of the court, on the second trial day.

8.  The matter which remains outstanding is the basis of taxation of the costs of this action: the plaintiff contends it should be on indemnity basis whereas the defendant contends it should be party-and-party.

The Parties’ Case

9.  In gist, the plaintiff argues that indemnity costs are justified by the defendant’s improper conduct:

(a)   the defendant offered to settle only after the plaintiff’s opening submissions have been served on it in August 2017;

(b)   the draft consent summons (drafted by the defendant) was defective in that it did not also dispose of the counterclaim;

(c)   the defence and counterclaim raised an issue which necessitated expert survey evidence to be prepared;

(d)   the defendant raised various matters during the settlement discussion (which took place during the scheduled trial) (the trial later became unnecessary because of settlement);

(e)   the witness statements of the defendant could not support the pleaded defence.

10.  The defendant refutes the above:

(1)   it has not acted in a scandalous or vexatious manner;

(2)   the defence witnesses addressed matters which occurred in the 1960s in their witness statements as best as they could.  There is no bad faith in doing so;

(3)   further, the defence witnesses were entitled to, and did, rely on contemporaneous documents in support of the defendant’s pleaded case;

(4)   it was rather the plaintiff who has been acting oppressively; such as not cooperating during the mediation meeting, and refusing to answer further and better particulars.

11.  I do not consider any of the above matters to warrant ordering a more generous basis of taxation.  While the Civil Justice Reform regime requires litigants to bear in mind, and to assist in, things like greater efficiency and proportionality in civil litigation, there is no requirement for them to not contest everything proposed by the other side, or indeed necessarily to share the other side’s point of view.

12.  The matters relied on by the parties herein (para 9 and 10 above) are matters often seen in hostile litigations.  While there were disagreements over (relatively) more minor matters, overall the defendant has been acting (a) within the range of ordinary litigation behaviour, and (b) in good faith, both as regards the matters pleaded, and as regards the settlement discussions which ultimately succeeded in avoiding a full trial.

Conclusion

13.  By reason of the matters aforesaid, I agree with the defendant the costs awarded to the plaintiff should be taxed on party-and-party basis.

Other Matters

14.  The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the decision on basis of costs taxation and its comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.

Costs Order

15.  There is no apparent reason to depart from the usual rule that costs should follow the event.  There will accordingly be a costs order that the costs of the arguments on the basis of taxation be paid by the plaintiff to the defendant to be taxed if not agreed.