PONY HK WORLD LTD v. VAND PETRO-CHEMICALS (BVI) CO LTD AND ANOTHER

FACV No 4 of 2013

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO 4 OF 2013

(ON APPEAL FROM CACV NO 270 OF 2011)

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DECISION ON COSTS

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Decision of the Court:

1. On 13 December 2013, we allowed the appellants’ appeal and made an order nisi that the respondent pays the costs of the appellants in this court and the courts below.

2. The respondent asks that the court order nisi be varied such that the appellants pay the costs of the respondent of the trial and of the appeal before the Court of Appeal and that there be no order as to the costs of the appeal to this court.

3. First, the respondent contends that the appellants succeeded on a point which had not been taken below.  This is a surprising submission.  In Lord Phillips’s judgment, with which all members of the court agreed, Lord Phillips said the principle underlying the point on which the appellants succeeded before this court “had always featured in (their) arguments below.”

4. Secondly, it is said, issues argued unsuccessfully below had significantly increased costs, especially at trial.  As this court said in CIR v HIT Finance [2008] HKEC 1078 at para 7 (per Bokhary PJ), the discretion in the court to deprive a successful party of the whole or part of his costs because he had caused a significant increase in the length or costs of the proceedings by raising issues on which he did not succeed “exists for the purpose of avoiding the rigour of too inflexible an application of the rule that costs generally follow the event.  It is to be approached with due circumspection so as not to undermine the utility of that general rule.”  The only issue in this case is whether the plaintiff respondent had validly exercised the option and on that the appellants have won.  This is not a case for departure from the general rule.  Too ready a departure from the general rule encourages unnecessary arguments which will itself increase costs.

5. The 3^rd point relied on is that the appellants’ appeal to the Court of Appeal was entirely misconceived. This is just another way of saying that the appeal failed.  Had the point of the appellants’ case be correctly appreciated, they would not have had to appeal to this court.  This is not a reason to depart from the general rule that costs should follow the event.

6. For these reasons, the costs order nisi is made absolute.  Costs in respect of the submissions on costs should also follow the event.