CHAN SHUN KEI t/a CHAN SHUN KEI CONSTRUCTION WORKS v. HONG KONG CONSTRUCTION (HONG KONG) LTD (formerly known as HONG KONG CONSTRUCTION (HOLDINGS) LTD)

HCCT 2/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 2 OF 2011

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D E C I S I O N

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1.  Where a judgment or order is pronounced at the conclusion of the hearing, but the reasons are given in writing at a later date, or the judgment or order is recorded in writing and handed down at a later date, the order as to costs in the written decision is by its nature an order nisi under O 42 r 5B RHC. Unless an application is made to vary that order, it becomes absolute 14 days after the pronouncement of the decision (O 42 r 5B (6)).

2.  An application to vary a costs order nisi made under O 42 r 5B (6) should be made by summons (32/6/9A Hong Kong Civil Procedure).

3.  In this case, my order and reasons were pronounced orally at the conclusion of the hearing on 3 July 2014.  The order was to dismiss the plaintiff’s application for leave to appeal, with costs (hereinafter called “Order”).  After the Order was pronounced orally in court, the defendant indicated that it sought costs on an indemnity basis by virtue of a sanctioned offer.  I indicated that a separate application for variation can be made.

4.  The plaintiff’s solicitors drew up the Order, which was sealed.  The defendant’s solicitors complained that the sealed Order provides simply for the costs of the application “be to the defendant”.  They now apply to the court by summons issued on 17 July 2014 to amend the sealed Order to read that “there be an order nisi that the costs of the application be to the defendant”.

5.  Although the Order is sealed, it does not alter the fact that it was an order nisi in nature as and when it was pronounced.  No variation of its nature is sought.

6.  Whether or not the Order is amended, if the basis on which the defendant seeks payment of costs on an indemnity basis is that it had made a sanctioned offer which has the consequences provided for in Order 22 r 23 (as counsel so informed the court at the conclusion of the hearing on 3 July 2014), then the defendant could have made the application for such costs, even if the Order is sealed.

7.  The parties acknowledge that the court had clearly informed the parties at the conclusion of the hearing on 3 July 2014 that the costs order can be varied on proper application being made.  There is no doubt that the costs order was an order nisi.

8.  In my view, the defendant could have applied for variation of the Order, even without amendment of the Order - provided that it does so within the 14 days period specified in O 42 r 5B (6) for the Order to become absolute, or otherwise it seeks an extension from the court so to do.  Surprisingly, and notwithstanding the stance indicated by the defendant from 3 July 2014 until now, that it seeks costs on an indemnity basis, no application for variation was ever made, whether under O 42 r 5B, or O 22 r 23.  Instead, it chose to engage in correspondence on the necessity to amend the Order or to appeal against the Order.  I would add that any amendment of the costs Order dates back to 3 July 2014, and does not affect the commencement of the time for the order nisi to become absolute, from the pronouncement of the decision.

9.  On 22 July 2014, I already directed, pursuant to correspondence from the parties’ solicitors, as follows :

“An application for an order for costs as a consequence of a sanctioned offer having been made should be made pursuant to O 22 r 23, if appropriate. The costs order made on 3 July 2014 was made without hearing the parties on costs. The court made it clear to the parties at the end of the hearing that any application with regard to the costs order can and should be made for variation, on grounds being shown. It is inappropriate and unnecessary to seek leave to amend or appeal against the order made and drawn up. Parties are directed to propose directions as to the further disposal of the pending matters, and in the absence of agreement, the defendant’s summons of 17 July 2014 can be dealt with by the court as appropriate, on 21 August 2014 as scheduled.”

10.  In fact, on 18 July 2014, the very next day after the defendant issued its summons for leave to amend and leave to appeal against the Order, the plaintiff indicated that it was prepared to consent to an order for amendment, as sought by the defendant.

11.  In my view, it is clear that the defendant’s solicitors have engaged in unnecessary correspondence from and after 18 July 2014, if not before.

12.  I will grant leave to amend the Order to provide, for avoidance of any doubt, that the costs order made on 3 July 2014 is an order nisi.  However, the order for costs that I make is that each party should bear its own costs of and occasioned by the application to amend, save that the defendant should pay all costs incurred from 18 July 2014, including the costs of today’s hearing.  I see no reason why the plaintiff should pay costs of an unnecessary course of action.

13.  The plaintiff’s own costs are to be taxed in accordance with the Legal Aid Regulations.