MAN EARN LTD v. SING YAU SANG

HCA 5957/1992

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 5957 OF 1992

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AND

HCA 5019/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 5019 OF 1998

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BETWEEN

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(Consolidated with HCA 5019/1998 pursuant to the Order
of the Mr Justice Waung dated 11 August 1998)

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REASONS FOR DECISION

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Introduction

1.  This is the plaintiff’s appeal against the master’s order dated 11 August 2009.  I dismissed the appeal with costs.  Below are the reasons.

Background

2.  The defendant applied for, and obtained, a court order dated 13 September 1999 requiring the plaintiff to provide security for the defendant’s costs.  By December 1999, and after an “unless order” dated 4 November 1999, the plaintiff paid into court a total of $1.5 million as security for the said costs.

3.  As a result of the applications for security for costs and “unless order” above, the defendant obtained the following costs orders from the masters in its favour:-

(a)     the order dated 13 September 1999;

(b)    the order dated 4 November 1999.

4.  About 9 years after the said orders, in November 2008, the said costs were provisionally taxed by the Registrar.  The allocaturs bore various dates in February 2009.

5.  On 12 May 2009, the registrar ordered the taxed costs to be globally reduced by 5%.  I understand the reduction to be related to the defendant’s delay in having the costs taxed.

6.  It is strictly irrelevant to this appeal, but I pause to mention it because delay has been mentioned above; these actions appear to have progressed quite a bit slower than one ordinarily expects.

7.  The amount of taxed costs after reduction stands at about $70,000 inclusive of interest.

8.  The plaintiff applied to the master for the payment-out of part of the said $1.5 million in satisfaction of the said amount of taxed costs.  That application was dismissed on 11 August 2009.  Hence, this appeal.

This Appeal

9.  The plaintiff’s argument in support of this appeal can be summarized as follows.  The sum paid-into court was the security for the costs of this action.  The taxed costs being part of those costs, they should be paid out of that sum.

10.  That argument is invalid.  Para. 1 of the order dated 13 September 1999 reads:-

“… the Plaintiff should within 28 days from the date hereof provide the Defendant with security for the costs that the Defendant has incurred and will continue to incur to prepare his defence for trial … ” (emphasis supplied).

11.  In support of that argument, the plaintiff first contends that any interlocutory application taken out in these actions is to be treated as in preparation for “[the defendant’s] defence for trial” (the plaintiff’s contention goes as far as to include applications which may be unnecessary, unreasonable or even abusive).

12.  I cannot agree.  The phrase used in the 13 September 1999 order must have been intended to refer to the costs for defending the claims in these actions.  Interlocutory applications in this action may be said to be related to the actions, but they cannot properly be regarded as related to “defence” of the actions (unless they involve issues concerning the merits of the action).

13.  Secondly, the plaintiff refers to Part C of the defendant’s skeleton bill prepared in relation to the application for security for costs.  The heading of Part C says:-

“Costs to be incurred from 25th February 1999 inclusive of making application for security for costs up to the trial” (emphasis supplied).

14.  However, despite the heading, a detailed perusal of the individual items falling within that part of the skeleton bill shows that they cannot be items of costs related to that application (during the appeal hearing, the plaintiff has not been able to identify any such item).

15.  On the other hand, I agree with the defendant the circumstances surrounding the orders referred to in para. 3 to 5 above shows that the court did not intend the taxed costs to be paid out of the amount of security.

16.  If the court had intended there should be a “set-off”, the court could have expressly so ordered.  Alternatively, it could have ordered the costs to be paid “in any event”.  This will mean those costs do not become payable or taxable until the final disposal of these actions. 

17.  Instead, the costs orders referred to in para. 3 to 5 above in effect required them to be paid forthwith.

The Master’s Costs Order

18.  After dismissing the plaintiff’s application on 11 August 2009, the master ordered the plaintiff to pay the costs of $13,500 pursuant to RHC Ord. 62 r. 9A(1)(a).

19.  The plaintiff has not put forth arguments to show the said costs order erred in law or was otherwise unreasonable.