SIT SAU MING v. LEUNG MAY CHUN, ALISON ALIANCE formerly known as SHAM MAY CHUNG

DCCJ4453/2008

[2019] HKDC 932

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4453 OF 2008

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DECISION

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1.  To recap, the defendant took out a summons after this action had been set down for trial to apply for: (i) leave to amend her Amended Defence; (ii) leave to file and serve her supplemental witness statement; and (iii) an order under Order 18, rule 12 of the Rules of the District Court, Cap 336H (“RDC”) for the plaintiff to provide further and better particulars on the Amended Statement of Claim.

2.  The applications were disposed of after a hearing and two written decisions.  In the end, I made a costs order nisi that “the defendant do pay the plaintiff one-third of the costs of the summons in any event with the remaining costs to be in the cause with certificate for counsel.”

3.  This is plaintiff’s application to vary the costs order nisi.  By my directions, the application is to be dealt with on paper.  Both parties have put in their written submissions.  No issue is taken by the defendant on the mode of the application.

4.  This is my decision on the application.

5.  In para 36 of my decision dated 15 May 2019, I said: “Two of the three applications of the defendant have been resolved more or less by agreement of the parties without much argument, I have now dismissed the remaining application for particulars. In the premises, I make an order nisi that the defendant do pay the plaintiff one-third of the costs of the summons in any event with the remaining costs to be in the cause with certificate for counsel.”

6.  The respective stance of the parties on the present application are as follows:-

(a)  The plaintiff is seeking “all costs of and occasioned by the Summons including the hearing on 25^th March 2019 with certificate for counsel” and, insofar as (iii) is concerned, the plaintiff is asking for indemnity costs.

(b)  The defendant is content with the costs order nisi as it is “well within the reasonable ambit that the Court could make”.

7.  The broad questions that require determination are:-

(a)  Should the plaintiff be awarded indemnity costs in relation to (iii)?

(b)  Should the plaintiff be awarded costs against the defendant in relation to (i) and (ii)?

8.  It is common ground that the following general principles apply:-

(a)  Costs of and incidental to proceedings are in the discretion of the court.  The court has full power to determine by whom and to what extent the costs are to be paid.  See s 53(1) of the District Court Ordinance, Cap 336.

(b)  In the exercise of its discretion as to costs, the court shall take into account the special matters enumerated in Order 62, rule 5 of the RDC, including the conduct of the parties which both counsel have alluded to in argument. 

(c)  If the court sees fit to make any order as to the costs of or incidental to any interlocutory proceedings, it may order the costs to follow the event or make such order as it sees fit.  The pre-CJR principle that costs should normally follow the event should no longer be the “usual order” but an option.  In particular, costs orders aimed at deterring unreasonable interlocutory conduct should be given at least equal prominence in practice.  See Hong Kong Civil Procedure 2019, para 62/3/3B.

(d)  The discretion to order indemnity costs is not to be fettered or circumscribed beyond the requirement that such an order must be “appropriate”.  It is not confined to cases where the proceedings were brought with an ulterior motive or for an improper purpose or where there is some deception or underhand conduct on the part of the losing party.  There must, however, be some “special or unusual feature” in the case to justify such an award.  See Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004) 7 HKCFAR 114 at paras 15-17.

9.  According to Mr Chain for the plaintiff, (iii) “is plainly an abuse of process, it requires P to go through the 151-page transcripts in order to properly respond, this is on any view of the matter time consuming.  D should have gone through the materials first before even making the requests, and had she done so she should know the application is frivolous and vexatious.”  He submitted that “[t]he requests for further and better particulars, and its continuation after the hearing on 25^th March 2019 is frivolous and vexations, and an abuse of the Court’s process.”

10.  On behalf of the defendant, Mr Hung complained about “the lack of co-operation on the part of P”.  He said that “[o]n 18^th March 2019 D wrote and requested for particulars of the ASOC.  There was no reply at all from P.  Nor any attempt from P to narrow down or focus on the dispute or to clarify mistakes (made by P).  P could have replied ‘we relied on the evidence of GT in the earlier trial’ (P did not say so even in the Synopsis filed just before the hearing); P could have even identified the relevant parts of the transcripts (as she did after the hearing).” 

11.  In reply, Mr Chain retorted that “D issued both the letter and the Summons on 18^th March 2019 – the former asked P to reply ‘within the next 7 days’ (ie by 25^th March 2019) and the latter was (also) returnable on 25^th March 2019.”

12.  It was for the defendant, as the applicant, to satisfy the court that an order was necessary, and the defendant should have considered the evidence filed including the transcripts of the first trial before launching the application: see paras 11 & 14 of my decision dated 15 May 2019.  In any event, the defendant’s complaint cannot be sustained as the plaintiff had not been given a reasonable opportunity before the summons to “co-operate” and the defendant persisted in the application after the plaintiff had particularised her objections.

13.  Having said that however, I do not think the defendant’s failure is so serious as to amount to an abuse as Mr Chain would have it or constitute “special or unusual feature” justifying an order for indemnity costs.  As To J explained in KJ v KMLM [2014] HKFLR 227 at para 22:-

“If unreasonable conduct is relied on, the losing party’s conduct would need to be unreasonable to a high degree. In this context, ‘unreasonableness’ does not mean merely wrong or misguided in hindsight: see Kiam v MGN Ltd (No 2) [2002] WLR 2810 at 2813H, §12. Advancing a case which is difficult, unlikely to succeed or which in fact fails, or without any foundation in law or fact, or devoid of merits, is not necessarily in itself a sufficient reason for an award of indemnity costs: see Overseas Trust Bank Ltd v Coopers & Lybrand (a firm) [1991] 1 HKLR 177 at 177F-G; Shaina Investment Corporation v Standard Bank London Ltd [2001] All ER (D) 36 (Nov) at §§15 & 24; Golden Sand Marble Ltd v Hsin Chong Construction Co Ltd [2005] 1 HKLRD 598 at 610; Kao, Lee & Yip (a firm) v Midland Realty International Limited, unreported, HCA 2153/2007, 31 March 2010 at §§14 & 18. The court’s finding that the claim or the ground of defence is plainly and obviously incredible on the fact, or that the evidence has been deliberately untruthful will not necessarily in itself warrant an order for indemnity costs. The conduct of the losing party must be of a more venal kind and the conduct of the litigation has in some sense been wicked: see Choy Yee Chun v Bond Star Development Ltd [1997] 1 HKLRD 1327 at 1336B-C; and Kao, Lee & Yip, supra at §18.”

14.  In my view, both parties should be conversant with the evidence of the first trial in preparation of the retrial.  It is not as if the plaintiff did not have to go through the transcripts but for the defendant’s application.  Insofar as the plaintiff had spent time dealing with the defendant’s application (eg combing through the transcripts to identify the relevant parts), that was part and partial of the adversarial proceeding and normal in a litigious litigation.  Now that the court has ruled in her favour, the plaintiff’s efforts would be compensated by a favourable costs order on the usual party and party basis.  There is nothing special or unusual to justify indemnity costs.

15.  Turning to (i), Mr Chain referred me to the general rule that an applicant should pay the costs of and occasioned by his amendment and submitted that: “the correct test is whether the objections are ‘reasonable’, and if they are (depending on time and substance etc), even if the objection fails, the applicant should still be required to pay all the costs (including the hearing).  After all, the applicant is seeking an indulgence…”.

16.  As I have noted in my decision dated 29 March 2019, the plaintiff initially took 4 objections against the defendant’s proposed amendments.  The defendant and the plaintiff each dropped one amendment/objection at the hearing.  The plaintiff further withdrew another objection after learning the defendant’s counter-proposal, and I disallowed the remaining amendment after argument.  There is thus no clear winner in terms of the objections.

17.  Whilst Mr Chain is correct in saying that the defendant had sought the court’s indulgence in amending her pleading, the plaintiff also grabbed the opportunity to introduce her own amendments to her pleading which were not consequential to the defendant’s amendments: see para 3 of my decision dated 15 May 2019.  In my view, a fair order in those circumstances would be costs in the cause.  In other words, the party in whose favour an order for costs is made at the conclusion of this action shall be entitled to his costs relating to (i).

18.  Minimal time was spent on (ii) at the hearing.  Eventually, the plaintiff consented to the application after sight of the defendant’s comprehensive draft that had taken the plaintiff’s amendments into account.  As things progressed, the plaintiff also put in her own supplemental witness statement by consent.  In my view, a fair order in those circumstances would be costs in the cause. 

19.  Looking at the application in the round, I can perhaps see why the plaintiff feels dissatisfied with the costs order nisi.  As observed by Mr Chain, the costs spent on (i) and (ii) was not much.  The defendant elected to proceed with (iii) after the oral hearing and notwithstanding the plaintiff’s elaboration and the resultant argument constituted the bulk of the costs of the summons.  I am persuaded that an award of one-third of the costs of the summons to the plaintiff would not adequately compensate her in terms of her costs on (iii). 

20.  I therefore set aside the costs order nisi and make the following order instead:-

(a)  The costs of the application for particulars be to the plaintiff in any event; and

(b)  subject to the above, the remaining costs of and occasioned by the summons (including the costs of the hearing on 25 March 2019) be in the cause with certificate for counsel.

21.  The costs of this application to vary the costs order nisi be in the cause.