GREEN SUMMIT HOLDING PTE. LTD. v. XUDI TRADING CO., LTD AND OTHERS

HCA 1264/2021

[2023] HKCFI 229

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1264 OF 2021

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DECISION  ON  COSTS

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1.  By a consent summons filed on 11^th November 2022 (“the Consent Summons”), the Plaintiff and the 6^th to 13^th Defendants agreed that each of the 6^th to 13^th Defendants would disclose various documents referred to in their respective Defences filed in this action (“the Documents”), that the hearing originally fixed for the Plaintiff’s summons seeking specific discovery of such documents (“the Discovery Summons”) would be vacated, and that the issue of costs between the parties would be determined by way of paper disposal. I now determine the issue of costs.

2.  The Plaintiff seeks costs of $86,880 as costs of and occasioned by the Discovery Summons and costs of $1,040 as costs of and occasioned by the Consent Summons, both payable forthwith.

3.  The background is as follows.

3.1  The Plaintiff’s solicitors (“CFN”) requested the Documents pursuant to RHC O.24 r.10 in a letter of 18^th October 2022 sent to the solicitors for the 6^th to 13^th Defendants (“DM”), requesting their provision by 26^th October 2022 and warning that if the Documents were not provided by then, the Plaintiff would take out an appropriate application without further notice.

3.2  No response was received from DM or the 6^th to 13^th Defendants by 26^th October 2022.

3.3  On 31^st October 2022, the Plaintiff issued the Discovery Summons, seeking discovery of the Documents under O.24 rr.10 and 11.

3.4  By a letter dated 2^nd November 2022, DM complained that it was unreasonable to expect the 6^th to 13^th Defendants to have complied with the request by 26^th October. The letter continued “We also PUT ON RECORD that we have been / were dealing with your request but 7 days is not acceptable and insufficient time to deal with your request…”

3.5  By a letter dated 3^rd November 2022, CFN proposed disposing of the Discovery Summons by way of a consent summons, with costs of $54,540 (together with costs of $1,040).

3.6  By a letter dated 4^th November 2022, DM complained that the Discovery Summons was premature when it was processing the request for discovery. It counter proposed a consent summons (in other words, it was agreeable to the provision of the Documents) with no order as to costs.

3.7  In the end, the Consent Summons was filed on 11^th November, leaving the issue of costs to be determined by the court.

4.  The 6^th to 13^th Defendants say that they should not pay costs as:

4.1  the present case can be distinguished from Perrine Chamonix Limited v Star League Limited, unreported, HCA 1139/2017, 13^th September 2017 (relied on by the Plaintiff), as the Plaintiff would not necessarily have been successful had the Discovery Summons proceeded to argument. It is said that the Plaintiff would not have been able to show that discovery was necessary for disposing fairly of the cause or matter or for saving costs;

4.2  it was impossible for the 6^th to 13^th Defendants to comply with the request for specific discovery within the short time stipulated by the Plaintiff, given the number of documents sought and the number of defendants involved.

5.  I do not agree.

5.1  The court is not bound to determine the issue of costs by considering the evidence and arguments directed to the merits of the case had the matter proceeded to substantive argument: see Perrine Chamonix Limited at [24].

5.2  Instead, it seems to me that the relevant circumstances to take into account in the present case are that:

5.2.1  the Plaintiff obtained what it had originally sought by the Discovery Summons and was therefore the successful party;

5.2.2  it cannot be said that the Discovery Summons was issued prematurely when:

(a)  CFN made it clear in its letter of 18^th October 2022 that the Plaintiff might proceed to apply for discovery without further notice in the absence of provision of the documents by 26^th October 2022;

(b)  DM and/or the 6^th to 13^th Defendants failed to respond to CFN’s letter of 18^th October 2022, even if only by means of a holding letter seeking further time, by the given deadline of 26^th October 2022;

(c)  the deadline of 26^th October 2022 could not be said to be unreasonable given that O.24 r.10(2) provides that a party on whom a notice is served under O.24 r.10(1) must, within 4 days after service of the notice, serve a notice stating a time and place within 7 days (after service) at which the documents (or such of them as he does not object to produce) may be inspected, and stating which documents he objects to produce and on what grounds.

5.3  Whether or not it was possible for the 6^th to 13^th Defendants to comply with the request within the stipulated 7 days is beside the point when they did not ask for additional time before the Discovery Summons was issued as foreshadowed in the letter of 18^th October 2022.

6.  The 6^th to 13^th Defendants also say that the amount of costs claimed is excessive having regard to (a) the simplicity of the application, (b) the fact that it was taken out prematurely, and (c) the fact that by 2^nd November 2022 it was clear that the Discovery Summons was largely uncontested save as to costs.

7.  As to (b), I do not agree that the Discovery Summons was taken out prematurely, as explained above. As to (c), DM’s letter of 2^nd November 2022 indicated that they were “dealing with” the request, but it was not clear what the stance of the 6^th to 13^th Defendants would be. It was only DM’s letter of 4^th November 2022 that appeared to indicate that the 6^th to 13^th Defendants would consent to provide the Documents. There then followed some correspondence between the solicitors arguing over costs. In any event, the bulk of the costs would have been incurred in preparing the Discovery Summons of 31^st October 2022 and supporting evidence.

8.  I do agree that having regard to the simplicity of the application, two fee earners should not have been necessary, and there was some duplication of work between solicitors and counsel. Taking a broad brush approach, I assess the Plaintiff’s costs of and occasioned by the Discovery Summons at $45,000 and by the Consent Summons at 1,040. The 6^th to 13^th Defendants are to pay the costs forthwith.