LAM CHI SHING JOSEPH AND ANOTHER v. FALCON INSURANCE CO (HONG KONG) LTD

cacv 137/2005

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 137 of 2005

(on appeal from DCMP NO. 2191 OF 2004)

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J U D G M E N T

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Hon Rogers Acting CJHC:

1.  This is an example of litigation which, I regret to say, has become totally out of hand.  The parties are now locked in acrimonious disputes which have really nothing to do with the case and whoever is being benefited, it is certainly not the lay clients.

2.  As a result of a comparatively minor accident in which the damages which were awarded came to $50,660, plus interest, the costs which have already been paid have been a total of $141,485 which included the interest on the basic amount of costs which was $118,956.61.  We are told that in these proceedings, the nature of which I will come to in a moment, the Plaintiffs have spent something like $80,000 prior to this matter even reaching court.  The matter has been in the court below.  It went back to the judge below on the application for leave to appeal to this court in respect of the order of costs alone.  The matter has now been engaged in this court, I regret to say, for nearly two hours. 

3.  Very simply, this was a case in which insurers were involved.  They were not involved to begin with but they became involved later.  After the costs were taxed, the Plaintiffs sought the costs from the insurers.  That was not forthcoming, so they issued these proceedings which are the DCMP proceedings to obtain payment under the allocator.  The DCMP proceedings were issued in June 2004. 

4.  The Defendants, the insurance company, paid the taxed costs and interest and the payment was effected on 3 September 2005.  As matters stood, therefore, the Plaintiffs would have been entitled to their costs up to the date of the payment and there was no need for the proceedings thereafter.  If the insurance company refused to pay those costs, in the normal way the Plaintiffs would have to go to court to recover the costs and so the costs would thereby be increased. 

5.  We have been shown the correspondence - and I do not propose to go through it - but there was argument about the costs of enforcing the original judgment for costs against the personal Defendant and as to whether there should be pre-taxation costs of enforcement, post-taxation costs of enforcement, and so on and so forth. 

6.  As matters transpired, the parties could not see sense and the matter came before the judge.  The judge was then faced with dealing with two matters.  First of all, judgment was being asked for in respect of the payment of costs of $141,485 which had already been paid in September.  The judge said, quite rightly, that that was a waste of time.  The money had already been paid; there was no question of having a judgment for that payment when it had already been paid and, in my view, I can only describe it as being nonsense to seek a judgment of that type.  One might frame it in some other way – a declaration that the money had been properly paid or something of that nature - but really there was no need for it.  The only need was perhaps for an order for costs of the DCMP proceedings if the Defendant refused to pay.  But the Plaintiffs sought other costs and as the judge said on page 5 of his judgment that:

“The judgment under DCPI 61 of 2001 does not cover the costs incurred in the enforcement actions which were only commenced after the final judgment had been entered against the Defendants.  This part of the claim against the Defendant is ungrounded.  I therefore dismiss the Plaintiffs’ summons.”

7.  So what the judge, in effect, did was to say, “Well, part of the summons, was unnecessary or inappropriate and part of the summons was not right, and I am not going to give part of the relief which the Plaintiffs are seeking.”

8.  There has been no appeal against that order.  It might have been right; it might have been wrong.  But the Plaintiffs have accepted it.  They have not appealed against it.  All the Plaintiffs appeal against is the following two paragraphs where the judge says:

“The Plaintiffs’ action is not an abuse of process of this court.  I therefore dismiss the Defendant’s summons.  I make an order that each party is to bear its own costs in respect to the two summonses.”

9.  I cannot think of any more sensible order in a case like this which the judge could make.  The parties had come to court; the Plaintiffs had been warranted in seeking their costs up to 3 September but partially unsuccessful.  The proceedings were being escalated beyond all comprehension; costs were being run up totally unnecessarily and it would have been a futile exercise, in my view, to tax part of the costs for one party and part of the costs for the other party and incur all the additional costs that are involved in taxation.  It is against that order in respect of costs which the Plaintiffs now appeal.  In my view, there was only one mistake which the judge made and that was to give the Plaintiffs leave to appeal on a matter of costs of this nature.  I do not think that he should have done so, but so be it.  He has done it and the matter has come to this court. 

10.  I therefore have no hesitation in saying that this appeal should be dismissed.  There was a respondent’s notice.  The first prayer in the respondent’s notice was that the proceedings, from the outset, were an abuse of the process and the Plaintiffs were not entitled to any substantive relief.  That, as Mr Kerr has acknowledged, goes too far and, indeed, in his skeleton argument, it is acknowledged it went too far.  Nevertheless, that was the respondent’s notice that was filed.  It has not taken up much time with this court.  In my view, the Defendants are not entitled to this relief and there is no need for any relief on the respondent’s notice at all.  The respondent’s notice should therefore not be dismissed but no order need be made, but the outcome of this case is that the appeal should be dismissed and the Defendants should have the costs of this appeal save in so far as they have been increased by the service of the respondent’s notice. 

Hon Le Pichon JA:

11.  I agree.