WONG YUK LIN v. CHAN TIM YIU RAYMOND, THE PERSONAL REPRESENTATIVE OF THE ESTATEOF CHAN KWOK CHOY (ALSO KNOWN AS CHAN KWOK CHOY SCOTT), DECEASED

DCCJ 1146/2021

[2023] HKDC 1737

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1146 OF 2021

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DECISION ON COSTS

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1.  By a Judgment dated 30 October 2023 (“my Judgment”),[1] I dismissed the plaintiff’s claims in their entirety, both with respect to her alleged adverse possession of the Property and her allegation of trespass by the defendant. As Mr J Lam had indicated that the defendant would like to be heard on the question of costs, I gave directions for written submissions from both parties.

2.  The defendant seeks an order that the plaintiff pay the defendant’s costs of the action, with certificate for counsel, to be taxed if not agreed, on an indemnity basis.

3.  Alternatively, the defendant seeks an order that the plaintiff pay the defendant’s costs of the action, with certificate for counsel, to be taxed if not agreed, on: (1) a party and party basis up to and including 23 September 2021; and (2) an indemnity basis from and including 24 September 2022.

4.  In the further alternative, the defendant seeks an order that the plaintiff pay the defendant’s costs of the action, with certificate for counsel, to be taxed if not agreed, on: (1) a party and party basis up to and including 19 July 2022; and (2) an indemnity basis from and including 20 July 2022.

5.  The basis for the defendant seeking costs of the whole action on an indemnity basis is that the plaintiff has advanced a dishonest case (rather than, for example, a case based on mis-recollection of events).

6.  The defendant’s first alternative case is based on the date that he first disclosed photographic evidence, in particular the 2005 and 2016 photographs. Although the defendant referred to this date being 23 September 2021, that was in fact the date of the plaintiff’s list of documents. The defendant’s list of documents was dated 5 November 2021, and I take the defendant’s alternative case to be with respect to the date of 5 November 2021 rather than 23 September 2021.

7.  The defendant’s second alternative case is premised upon the date that the plaintiff rejected a “without prejudice save as to costs” offer made by the defendant.

13.1  By a “without prejudice save as to costs” letter dated 14 July 2022, the defendant’s solicitors wrote to the plaintiff’s solicitors, proposing that the action be discontinued, with both parties bearing their own costs in relation to the action, including costs reserved (the “Defendant’s 1^st Offer”).

13.2  By a “without prejudice save as to costs” letter dated 19 July 2022, the plaintiff’s solicitors replied to the defendant’s solicitors, rejecting the defendant’s offer, demanding the transfer of the Property and offering to waive the plaintiff’s right to claim mesne profits, with both parties bearing their own costs in relation to the action.

8.  For completeness, I have also been informed that at the Case Settlement Conference, the plaintiff offered to settle on the basis that the defendant pay her HK$3,000,000. On the other hand, the defendant offered to top up the Defendant’s 1^st Offer with the sum of HK$50,000 as compensation for the amount that the plaintiff had alleged to have spent on the Property. The plaintiff made no counter-offer.

9.  The plaintiff has no issue with the defendant’s request for a certificate for one counsel, but contends that costs should be paid by the plaintiff on a party and party basis.

A.  LEGAL PRINCIPLES

10.  When the claims of a plaintiff are dismissed because the key witness of the plaintiff was found to have lied, and to have made up exaggerated claims, obviously in an attempt to mislead the court, special and unusual features exist to justify a more onerous order of costs, to mark the court’s disapproval of the party’s lies, and its conduct of the litigation. See Yu Jiang & Ors v Cheng Wai Lin Rosalind & Ors, HCA 2562/2005, 27 August 2014, §14.

11.  Dishonest conduct is frowned on by the courts. In the ordinary way, one would expect the judge to penalise a dishonest and fraudulent plaintiff in costs. It is entirely appropriate in a case of this kind to order the plaintiff to pay the costs of any part of the process which was caused by his fraud or dishonesty and moreover to do so by making orders for costs on an indemnity basis. See Lai Sin Yan Elsie v Tata Communications (Hong Kon) Ltd [2020] 4 HKLRD 363, §6.

12.  False claims undermine the proper administration of justice. They undermine the system in a number of serious ways. They impose various burdens upon those involved in the litigation, and also have an effect on the court. Our system of adversarial justice depends upon openness, upon transparency and above all upon honesty. The system is seriously damaged by lying claimants. See Lai Sin Yan Elsie v Tata Communications (Hong Kong) Ltd, §7, citing South Wales Fire and Rescue Service v Smith [2011] EWHC 1749 (Admin), §§3-4.

13.  Although the discretion to award indemnity costs is unfettered and uncircumscribed, there must be some special or unusual feature in the case to justify an order for indemnity costs. Whilst pursuit of a weak claim will not usually on its own justify an order for indemnity costs, the pursuit of a hopeless claim (or a claim which the party pursuing it should have realised was hopeless) may well lead to such an order. See Lai Sin Yan Elsie v Tata Communications (Hong Kong) Ltd, §10, citing Heung Wing Yan v Hangway Housing Management Ltd, HCPI 347/2012, 14 February 2017, §19.

B.  DISCUSSION

14.  My view is that the plaintiff ought to pay the defendant’s costs of the action on an indemnity basis.

15.  The plaintiff’s claim for adverse possession was based mainly on her testimonial evidence, which I disbelieved. See, for example, §§71-79 of my Judgment. I agree with Mr J Lam that there is no possibility that the plaintiff could have misremembered her alleged conduct at the Property which she claims started in February 2007. The difference between when the Plaintiff commenced entering and using the Property is between 2007 (the plaintiff’s case) and 2017 (my finding at §116 of my Judgment). The plaintiff could not have misremembered that. The difference is not a matter of days or weeks or months, but of some 10 years.

16.  In my view, the plaintiff deliberately lied and made up exaggerated claims in an attempt to mislead the court into finding in her favour in these proceedings. This merits an award of costs on an indemnity basis. See §10 above.

17.  The fact that I did not make any finding that the plaintiff had altered the Stairwell Lighting Fee Payment Records in order to conceal her ownership of the Ying Yeung Street Property (see §112 of my Judgment) does not assist the plaintiff. Insofar as Mr V Lam seeks to suggest that a finding of forgery is necessary in order for indemnity costs to be awarded, I do not consider that is a correct reading of Yu Jiang & Ors v Cheng Wai Lin Rosalind & Ors.

18.  Further, I do not consider that it assists for Mr V Lam to try to distinguish Yu Jiang & Ors v Cheng Wai Lin Rosalind & Ors on the basis that in the present case, the court had not expressly warned the parties at the PTR about the possibility or likelihood of indemnity costs being awarded against the losing party. That was merely an additional factor relied on by M Chan J in Yu Jiang & Ors v Cheng Wai Lin Rosalind & Ors which fortified her view that indemnity costs should be awarded. It is certainly not incumbent upon judges to warn litigants about indemnity costs before making such an order.

19.  The defendant gave discovery of various photographs, including the 2005 and 2016 photographs, on 5 November 2021, which in my view help show that the plaintiff’s case is untrue. See §§63 to 70 of my Judgment. Yet the plaintiff persisted in continuing with what I consider to be her entirely false case concerning when she commenced entering and using the Property. Insofar as necessary, I also find that such behaviour merits an award of indemnity costs against the plaintiff.

20.  Still further, insofar as necessary, I also find that the Defendant’s 1^st Offer was better than what the defendant has ultimately obtained at trial, and that this again merits an award of indemnity costs against the plaintiff.

C.  CONCLUSION

21.  For all the above reasons, I order that the plaintiff pay the defendant’s costs of the action, with certificate for counsel, to be taxed if not agreed, on an indemnity basis.