CHARM MASTER ENTERPRISES LTD v. GRAND T G GOLD HOLDINGS LTD AND ANOTHER

HCA 397/2011

[2022] HKCFI 2137

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 397 OF 2011

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BETWEEN

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D E C I S I O N

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Introduction

1.  The Plaintiff seeks to vary the costs orders that I made in paragraphs 45-46 of my Decision dated 13 May 2022 (“Decision”). D2 opposes the application and asks that the orders nisi on costs do stand.

2.  The legal principles are not in dispute. When disposing of an interlocutory application, the Court has power to make a summary assessment of costs instead of asking the parties to wait for taxation. This aims at discouraging unwarranted interlocutory applications or unmeritorious oppositions to such applications and saves time and costs of taxation. In deciding on the costs order, the Court is entitled to consider the conduct of the parties, including the manner in which a party pursued or defended his case or a particular issue. See Order 62, rules 5(1)(e) and 5(2); Hong Kong Civil Procedure 2022, Volume 1, §62/0/2.

Costs of the Plaintiff’s summons

3.  The Plaintiff sought in its summons, amongst others, for an order for leave to cross-examine Robin Lee at the trial and that D2 shall secure the attendance of Robin Lee at the trial. This Court effectively rejected the Plaintiff’s submissions for the reasons given in paragraphs 17 and 18 of the Decision and accepted the objections of D2. However, the Plaintiff got what it wanted in substance by the Court’s exercise of its case management powers.

4.  This was not a situation of D2 unreasonably objecting to the Plaintiff’s summons. It was just that the parties did not take the proper case management approach. On what was effectively a case management matter, dealt with at a CMC, I did not see the need to order summary assessment of costs against D2 to discipline it against unmeritorious objection. This was particularly so when, in view of the other costs orders that I made, a taxation was unavoidable. I decline to vary the costs order nisi.

D2’s amended summons for amendment to its amended defence and counterclaim

5.  I have ordered that the “costs of and occasioned by the amendments” be to the Plaintiff but costs of the hearing on 19 April 2022 be in the cause.

6.  The parties have agreed that the costs of D2’s amended summons, including the hearing on 19 April 2022, be in the cause and that the costs of and occasioned by the amendments be to the Plaintiff, to be taxed if not agreed (“the Amendment Costs”). I agree to the variation in this respect.

D2’s summons for leave to adduce the 2^nd supplemental witness statement of Leung

7.  The Decision did not expressly spell out the order for costs of this summons. The Plaintiff submits that this Court should order that the costs of this summons and costs of and occasioned by the 2^nd supplemental witness statement of Leung be to the Plaintiff, to be taxed if not agreed.

8.  D2 suggests that there should be no order as to costs on the grounds that the Court did not accept the Plaintiff’s objections and emphasized that the revisions to the prayer for relief (constituting D2’s Final Draft) had nothing to do with the witness statement. The latter was a matter of evidence, which was quite separate from the Court’s concerns that relief appeared to be sought against Listco initially.

9.  I am unable to agree with D2. As I have stated in paragraph 44 of the Decision, the arguments on amendments in this case were unusual. The Court accepted part of the Plaintiff and part of D2’s arguments. D2 has to submit yet another draft (Final Draft) during the arguments. That was why the costs of the hearing was in the cause. However, the undeniable fact was that the Court granted the indulgence to amend after the pleadings have long closed and the amendments related to the Separate Agreement.

10.  The parties have agreed the Amendment Costs (which was in accordance with this Court’s intention).

11.  In Hong Kong Civil Procedure 2022, Volume 1, §62/1/3(13), “costs of and occasioned by the adjournment” refers to items of costs which are directly attributable by the adjournment.

12.  By the same token, all costs of and occasioned by amendments to D2’s pleading would cover all costs directly attributable to or which would not need to be incurred but for the amendments. These costs practically will include:

(1) Costs of considering the summons for amendment and all versions of the DRADCC (including the Final Draft);

(2) Costs of the hearing on amendments;

(3) Costs of amending the reply to answer those amendments;

(4) Costs of considering D2’s supplemental witness statement for the purpose of deciding whether to contest the amendment summons and whether to draft a supplemental witness statement in reply;

(5) Costs of drafting any supplemental witness statement of the Plaintiff arising out of the amendments; and

(6) Any other costs occasioned by the amendments, such as making copies, filing and serving in relation to the above.

13.  As some of those costs cannot usually be ascertained at the time the costs order is made, therefore costs of and incidental to amendment to pleadings are usually taxed instead of summarily assessed.

14.  In the present case, the supplemental witness statement of Leung plainly arose out of D2’s amendments to pleadings. The Plaintiff has made clear right from the start that its objection to the supplemental witness statement was the same as for the amendment, ie in respect of those parts that referred to the Separate Agreement (§3 of the Decision).

15.  Accordingly, costs of D2’s summons to adduce the supplemental witness statement of Leung formed part of the “costs of and occasioned by the amendments” to D2’s pleading. Those costs were covered by paragraph 46(6) of the Decision, although it would have been better if I had spelt this out expressly in the Decision. The Plaintiff’s application for variation in respect of this summons in fact reflects this Court’s intention and I grant the variation.

Conclusion

16.  With regard to the Plaintiff’s summons for variation of costs, I therefore order as follows:

(1) In respect of the Plaintiff’s summons dated 23 June 2021, the order that costs be borne by D2 shall be made absolute without variation.

(2) In respect of D2’s amended summons dated 8 September 2021 for leave to amend its pleading, the cost order be varied such that the costs of the amended summons, including the hearing on 19 April 2022, be in the cause, but the costs of and occasioned by the amendments be to the Plaintiff, to be taxed if not agreed.

(3) In respect of D2’s summons dated 25 June 2021 for leave to file and serve the 2^nd supplemental witness statement of Leung, the costs of and occasioned by adducing that supplemental witness statement be to the Plaintiff, to be taxed if not agreed.

17.  As the Plaintiff is largely successful, I make an order that D2 do pay the Plaintiff 50% of the overall costs of the summons for variation.

18.  Looking at the Plaintiff’s costs statement for the variation, as a matter of principle, cost of a USB (presumably containing soft copies of the written submissions) is not recoverable because it is re-usable and the judge’s clerk usually returns the USB to the relevant solicitor after the hearing. Likewise, costs for gathering information and drafting of a costs statement are not recoverable: Practice Direction 14.3, §13. This is to ensure that a broad brush approach is taken in summary assessment and the receiving party’s solicitor would not incur unnecessary costs in seeking costs.

19.  In the premises, I order that D2 do pay the Plaintiff $25,000 in respect of the costs of the summons for variation.

20.  I thank counsel for their assistance.