KAN SAU LAN, the Administratrix of the Estate of TSANG MA MING, deceased v. XU HONG

HCA 1958/2021

[2025] HKCFI 1767

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1958 OF 2021

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DECISION ON COSTS

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Introduction

1.  By a decision dated 17 March 2025 ([2025] HKCFI 1161) (the “Decision”)^[1]:-

(1)  I partially allowed the Plaintiff’s application for a preservation order and/or proprietary injunction against the Defendant, and ordered the Defendant to pay the net rental income generated from the Disputed Lands after 14 August 2017 into an escrow account: see paras 14 to 43.

(2)  I fully allowed the Plaintiff’s application for specific discovery in respect of the documents relating to the rental affairs of the Disputed Lands: see paras 44 to 60.

2.  Under paragraph 62 of my Decision, I made a costs order nisi that 85% of the costs of the summons dated 14 August 2024 be the Plaintiff’s costs in the cause (with certificate for two counsel).

3.  This is the Plaintiff’s application by summons dated 31 March 2025 seeking to vary my costs order nisi. The Plaintiff seeks a costs order along the following lines:-

(1)  the costs of the application for specific discovery be paid by the Defendant to the Plaintiff forthwith (with certificate for two counsel) (the “Discovery Application”); and

(2)  the costs of the application for the preservation order and/or proprietary injunction (the “Preservation Order Application”) be the Plaintiff’s costs in the cause.

Two Sets of Costs Order

4.  Having considered the submissions lodged by the parties, I am of the view that the costs in respect of the Discovery Application and the costs in respect of the Preservation Order Application should be dealt with separately, and there should be two sets of costs order.

5.  I take this view for the following reasons:-

(1)  The nature of the two Applications were different.

(2)  Whilst the Plaintiff was fully successful in the Discovery Application, the Plaintiff was only partially successful in the Preservation Order Application.

6.  With a view to facilitating taxation in the future, I should apportion the costs between the two Applications. I hold that:-

(1)  70% of the costs incurred by the parties in relation to the Plaintiff’s summons dated 14 August 2024 was attributed to the Preservation Order Application; and

(2)  30% of the costs incurred by the parties in relation to the Plaintiff’s summons dated 14 August 2024 was attributed to the Discovery Application.

The Discovery Application

7.  There is no question that the Plaintiff is the successful party in the Discovery Application.

8.  As a starting point, the successful party is prima facie entitled to costs under the general rule of costs follow the event.  The evidential burden is on the unsuccessful party to show that some other or lesser order is appropriate: see Waxman v Li Fei Yu [2013] 6 HKC 424 at para 20 (per To J).

9.  In my view, the Defendant should not have opposed the Discovery Application.

10.  Bearing in mind the spirit of the Civil Justice Reform, I am of the view that it is appropriate to make an immediate costs order in favour of the Plaintiff.  I am unable to discern any good reason why the Defendant, being the unsuccessful party, should not pay the costs of the Plaintiff forthwith. I am not of the view that the alleged financial circumstances of the Defendant and her misunderstanding of the position constituted good reasons for departing from the starting point that costs should follow the event.

11.  In the premises, the Defendant should pay the Plaintiff’s costs in respect of the Discovery Application forthwith. In order to save time and costs, I am prepared to conduct gross sum assessment. I direct:-

(1)  the Plaintiff to lodge her statement of costs within 7 days; and

(2)  the Defendant to lodge her statement in opposition within 7 days thereafter.

The Injunction Application

12.  The question of whether the Defendant is a beneficial owner of the Disputed Lands is a hotly contested issue that can only be determined at trial.  If the Defendant succeeds at trial, the implication is that the court should not have allowed the Preservation Order Application.

13.  In the premises, the costs of the Preservation Order Application should be the Plaintiff’s costs in the cause (with certificate for two counsel).

14.  However, it is important to stress that the Plaintiff was not wholly successful.  Whilst the Plaintiff sought all the rental income arising from the Disputed Lands throughout the years after 2004, my order only covered the rental income after 14 August 2017.

15.  Bearing in mind the limited success achieved by the Plaintiff, I am of the view that it would be fair to order that 60% of the costs of the Preservation Order Application be the Plaintiff’s costs in the cause.

Conclusion and Disposition

16.  For all the above reasons, I vary the costs order nisi under paragraph 62 of the Decision and make a costs order absolute that:-

(1)  The Defendant do pay the Plaintiff’s costs in respect of the Discovery Application forthwith, to be summarily assessed by this Court on papers as per the directions set out in paragraph 11 above.

(2)  60% of the costs of the Preservation Order Application be the Plaintiff’s costs in the cause (with certificate for two counsel).

17.  Bearing in mind the overall success achieved by the parties and the stance that they took, I make a costs order nisi that 40% of the costs in respect of the summons dated 31 March 2025 be to the Plaintiff in any event (with certificate for counsel).

18.  I thank Mr Jason Ko and Mr Coleman Li for their helpful assistance.