JIANG ZHONG v. UP CHEER LTD AND OTHERS

CACV 11/2017 & CACV 12/2017

[2018] HKCA 365

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 11 OF 2017

(ON APPEAL FROM DCEC NO. 1267 OF 2010)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 12 OF 2017

(ON APPEAL FROM DCPI NO. 2047 OF 2011)

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(HEARD TOGETHER)

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DECISION ON COSTS

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Hon Cheung JA (giving the Decision of the Court) :

1.  On 26 January 2018, this Court allowed the Board’s appeal.

2.  As to the costs of the appeal, this Court held that :

‘ 8. Although the appeal is allowed, Jiang is the real successful party. The Board is only partially successful in its appeal. It fails in the jurisdictional issue which in fact took up the substantive part of the appeal. The costs relating to these two issues should be apportioned. I would make a costs order nisi that the Board is to pay 80% of the costs of the appeal to Jiang.’

3.  The Board now asks for the costs of the applications for leave to appeal before Judge Elaine Liu of the Court below and before Poon JA of this Court. Judge Elaine Liu dismissed the Board’s applications for leave to appeal in both actions with costs to Jiang.  Poon JA granted leave to the Board in both actions but reserved the costs of the applications.

4.  Where a party succeeds in obtaining leave to appeal, the usual practice is to order the costs of the leave application to be in the cause of the appeal : Newocean Petroleum Co Ltd v OW Bunker China Ltd [2016] HKCA 745 at paragraph 6.

5.  The gist of the Board’s case is that since the Board’s appeal is allowed, it should be entitled to the full costs in the leave application and that the Court’s view that ‘Jiang is the real successful party’ was made in the context of determining the costs of the appeal and it cannot be extended or applied beyond that context.  Having acknowledged that the Board was partially successful in its appeal, it is inconceivable that the Court regarded the Board as the losing party of the appeal.

6.  We disagree with the Board’s approach.  The starting and end point on costs is that costs are to be awarded at the discretion of the Court.  The discretion is to be exercised in a principled way with a view to reality and justice (Mimi Kar Kee Wong Hung v Raymond Kin Sang Hung [2015] HKEC 1326).  The comment of Snowden J of the UK Competition Appeal Tribunal in British Telecommunications PLC v Office of Communications [2018] CAT 1; Case No. 1260-1261/3/3/16 is instructive :

‘ ...34. One of the main purpose of adopting an approach which has regard to the outcome on particular issues, is to encourage parties to be selective in the points that they take in litigation. Even in high stakes litigation, parties should be discouraged from proceeding on the basis that if they are successful overall, they will be able to recover their costs on all issues, including those on which they fail. Put shortly, the policy objective is to discourage a “kitchen sink” approach to litigation.’

7.  In this case the Board has failed on a substantial issue and was ordered to pay 80% of the costs of the appeal.  It would be totally against reality and justice if, notwithstanding this Court’s order that the Board is required to pay 80% of the costs of the appeal to Jiang, it would be entitled to recover its full costs in the interlocutory applications for leave to appeal which eventually led to the appeal in which Jiang emerged as the ‘real successful party’.  Accordingly the orders we will make are :

1)   80% of the costs of the two applications for leave to appeal before Judge Elaine Liu be paid by the Board to Jiang, with a certificate for counsel, to be taxed if not agreed;

2)   80% of the costs of the two applications for leave to appeal before Poon JA be paid by the Board to Jiang, to be taxed if not agreed;

3)   Costs of this application for costs be to Jiang, with a certificate for two counsel, to be taxed if not agreed; and

4)   Jiang’s own costs to be taxed in accordance with the Legal Aid Regulations.