CHAN HON, the administrator of the estate of POON LAI MING, deceased v. BAYER HEALTHCARE LTD AND OTHERS

HCPI 32/2016

[2020] HKCFI 255

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 32 OF 2016

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D E C I S I O N

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1.  Master Roy Yu on 8 November 2018 dismissed the 2^nd and 3^rd defendants’ summons dated 3 January 2018 for the following orders:

(1)  the orders of Master Roy Yu dated 16 December 2016 and 20 March 2017 (“1^st Extension Order”, “2^nd Extension Order”, collectively “the Extension Orders”) extending the validity of the Writ for the purpose of service be discharged;

(2)  the order of Master Leong dated 29 December 2016 giving leave, amongst others, to issue and serve the concurrent Writ on the 2^nd and 3^rd defendants out of the jurisdiction (“the Service Out Order”) be discharged; and

(3)  that service of the concurrent Writ on the 2^nd and 3^rd defendants be set aside.

The Extension Orders and the Service Out Order had been obtained on ex parte basis.

2.  On 11 October 2019, I dismissed the appeal of the 2^nd and 3^rd defendants against the order of the learned Master made on 8 November 2018.  I held that:

(1)  the Service Out Order be set aside by reason of the plaintiff’s material non-disclosure of the Caution printed on the outer box of the Pill (§35);

(2)  the 2^nd and 3^rd defendants had submitted to the jurisdiction of the court at the Checklist Review hearing on 26 September 2017 and had waived any irregularities that might have occurred before then (§60); and

(3)  if I had found that the 2^nd and 3^rd defendants had not submitted to the jurisdiction of the court, that the 2^nd Extension Order be set aside as there was no good reason to grant the second extension (§71).

3.  I also made a costs order nisi that the 2^nd and 3^rd defendants pay the costs of the plaintiff to be taxed, if not agreed, with certificate for 2 counsel.  I also directed that the plaintiff’s own costs be taxed pursuant to the Legal Aid Regulations.  

4.  I now have before me 2 applications made by the 2^nd and 3^rd defendants for leave to appeal against my order of 11 October 2019 and to vary my costs order nisi.  I dispensed with an oral hearing and directed the parties to serve written submissions which I have received.

Leave to Appeal

5.  Pursuant to s.14AA(4) of the High Court Ordinance, Cap. 4,  leave to appeal shall not be granted unless the court hearing the application for leave is satisfied that the appeal has “a reasonable prospect of success”.  This involves the notion that the prospects of succeeding must be “reasonable” and, therefore, more than “fanciful”, without having to be probable”[1].

6.  I have carefully considered the submissions of the parties.

7.  As this seems to be the first time that the court has considered the exercise of the court’s management functions to be a factor that is relevant to the issue of whether or not there was a submission to the jurisdiction of the court, it is appropriate that the Court of Appeal reviews the correctness of my decision.

8.  In my view, the grounds of appeal that have been advanced are reasonably arguable. I grant leave to appeal on the grounds set out in the draft Notice of Appeal that was annexed to the summons of the 2^nd and 3^rd defendants for leave to appeal dated 25 October 2019.

Variation of Costs Order Nisi

9.  Order 62 r.3(2A) of the Rules of the High Court provides:

“If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any interlocutory proceedings, it may, subject to this Order, order the costs to follow the event or make such order as it sees fit.”

10.  In Recommendation 122, the Working Party on Civil Justice Reform recommended that:

“The principle that the costs should normally ‘follow the event’ should continue to apply to the costs of the action as a whole. However, in relation to interlocutory applications, that principle should be an option (which would often in practice be adopted) but should not be the prescribed ‘usual order.’ Costs orders aimed at deterring unreasonable interlocutory conduct after commencement of the proceedings should be given at least equal prominence in practice, with the court being directed to have regard to the underlying objectives mentioned in relation to Recommendation 2. These powers should not apply to pre-action conduct.”

11.  Order 62 r.5 provides that:

“(1)  The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account –

(aa) the underlying objectives set out in Order 1A, rule 1;

…

(e)  the conduct of all the parties;

(f)  whether a party has succeeded on part of his case, even if he has not been wholly successful;

…

(2)  For the purpose of paragraph (1)(e), the conduct of the parties includes –

(a)  whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b)  the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c)  …

(d)  conduct before, as well as during, the proceedings.”

12.  Post-CJR, the courts, in the exercise of their discretion on costs, have often taken an issue-based approach in interlocutory proceedings.  However, although the principle that costs follow the event is no longer the usual order in interlocutory proceedings, it remains an option that the court can apply in the exercise of its discretion on costs.

13.  Although it was submitted on behalf of the 2^nd and 3^rd defendants that the issue on submission to jurisdiction was merely raised as a side-point in §§6-7 of the affirmation in opposition to the 2^nd and 3^rd defendants’ summons for setting aside, and that the other 108 paragraphs in that document, as well as a further affirmation, were all dedicated to dealing with the 2 issues that the plaintiff was ultimately unsuccessful in, it was clear that a substantial part of the arguments in the appeal before me centred around the factual matrix leading up to the Checklist Review, and the transcript of the Checklist Review hearing, which I had called for.  Indeed, a substantial part of my judgment dealt with the issue of submission to the jurisdiction of the court.

14.  I have carefully considered the submissions of the parties.  I am not persuaded that I ought to vary the exercise of my discretion on costs by adopting an issue-based approach.

Conclusion

15.  For the reasons set out above, I grant leave to appeal and I refuse the application to vary my costs order nisi.  I confirm my order that the 2^nd and 3^rd defendants pay the costs of the plaintiff to be taxed, if not agreed, with certificate for 2 counsel, and that the plaintiff’s own costs be taxed pursuant to the Legal Aid Regulations.

16.  I make a costs order nisi that the costs of the application for leave to appeal be costs in the cause of the appeal, and that the 2^nd and 3^rd defendants pay the costs of the application to vary the costs order nisi to the plaintiff to be taxed, if not agreed.  I also direct that the plaintiff’s own costs be taxed pursuant to the Legal Aid Regulations.