LOH SAI, THE ADMINISTRATRIX OF THE ESTATE OF WANG GEORGE ALSO KNOWN AS GEORGE WANG, DECEASED v. HIGH CHOICE ENTERPRISES LTD AND ANOTHER

HCMP 1775/2015
[2018] HKCFI 98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1775 OF 2015

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(by original action)

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(by counterclaim)

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DECISION ON COSTS

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The hearing

1.  This hearing is pursuant to the Order of Master Au-Yeung dated 4 September 2017 whereby it was ordered:

a. Chan Lai Lai (2^nd Defendant by original action, Plaintiff by Counterclaim) was granted leave to amend and to file and serve the Re-Re-Amended Defence and Counterclaim;

b. Loh Sai (the Plaintiff by original action, 2^nd Defendant by Counterclaim) and High Choice Enterprises Ltd (“High Choice”) (1^st Defendant by original action and 1^st Defendant by Counterclaim) were given leave to make consequential amendments and serve their Re-Amended Reply and Defence to Counterclaim, and the Re-Re-Amended Defence to Counterclaim and Counterclaim (by Counterclaim);

c.  Chan Lai Lai was given leave to make consequential amending to her pleadings and file and serve the Re-Amended Defence to the Counterclaim of the 1^st Defendant by Counterclaim;

d. High Choice was ordered to file and serve an affirmation in relation to certain documents by way of discovery under Order 24, r. 3(2);

e. Chan Lai Lai was at liberty to inspect the documents under paragraph d above;

f. Chan Lai Lai was given retrospective leave to serve her supplemental witness statement.[1]

2.  The questions for this hearing are the costs between Chan Lai Lai , Loh Sai, and High Choice on Chan Lai Lai’s application for amendments to her pleadings and the consequential amendments made thereto (“the costs for the amendments”) and the costs for specific discovery taken out by Chan Lai Lai against Madam Loh Sai and High Choice (“the costs for discovery”).

3.  As I understand it, the above matters were dealt with by Master Au‑Yeung in a 3-minute hearing.  The parties had taken more than one hour to dispose of the matters.  They had consented to those directions, which were endorsed by Master Au‑Yeung.  Master Au‑Yeung had not made the order on costs as he could not afford the time to dispose of the issues on costs.  He adjourned these issues, at the request of the parties, before me for adjudication. The hearing was scheduled for three hours.  The parties are legally represented.[2]

4.  Loh Sai has made submissions to this Court in relation to costs.  She submits that Chan Lai Lai should bear the costs of and occasioned by and wasted to be paid forthwith.  As to discovery, she asked for costs for the preparation of the hearing before Master Au Yeung, as the order to make the affidavit is against High Choice only.

5.  Since the issues on the question of costs have no bearing on the facts of the matter, I shall not set out the factual background of it.

The costs for the amendments

6.  On the costs for the amendments, Chan Lai Lai accepts the following legal principles:

“In respect of the Amendment of Pleadings, the usual penalty imposed as a term for giving leave to amend is that the party seeking the amendment should pay in any event all the costs incurred and thrown away by the amendment and the costs of any consequent amendment. However, the court has discretion to grant otherwise. (See Hong Kong Civil Procedure 2018, 20/8/51; Lessy S.A.R.L v Pacific Star Development Ltd. and Another [1996] 2 HKLR 1)”

7.  She submits that for the following reasons, the costs should be costs in the cause:

a. She amends her pleadings by abandoning her claims under the principle of proprietary estoppel and/or common intention constructive trust in respect of the property in dispute.  Her solicitors had written to the solicitors for Loh Sai and High Choice for documents and information on the property.  Loh Sai told her that discovery should be made after close of the pleadings and High Choice told her that the company was the beneficial owner of the property.

b. She therefore took out the application for amendments of her pleadings without those information and documents as requested.

c. She abandoned the claims after she had the documents through discovery.

8.  High Choice argues that if she was minded to obtain the documents before the pleadings, she could have taken out an application for discovery before pleadings under Order 24, rule 7A RHC.  I agree.  She can proceed after the writ of summons and make an application to the court, supported by affidavit evidence under the same Order.  Her argument fails.

9.  Order 62, rule 3(2) RHC provides that normally, the court should order costs in favour of the winning party, viz. costs following the event except there are other circumstances that the court should make other order.

10.  The costs for Chan Lai Lai’s application for amendment and the costs for the hearing of her application, including all costs reserved relating thereto and the costs occasioned by her application are awarded to Loh Sai and High Choice.  Such costs are to be taxed if not agreed in any event.  This covers the costs under paragraph 1. a. b. and c.

The costs for discovery

11.  As to the costs for discovery, Chan Lai Lai complains that her solicitors had written to High Choice’s solicitors for the documents and information.  They did not reply to her request.  She was under a court order to take out all interlocutory applications within a period of time. She had to take out the application.  She accepts that at the end, Master Au‑Yeung had revised her schedule of documents annexed to her summons.  She argues that although the scope was narrowed down, she had obtained an Order from Master Au‑Yeung for discovery.  She agrees that the costs should be “No order as to costs”.

12.  High Choice argues that the costs should be awarded to it because she had annexed her schedule of documents, which were found by Master Au-Yeung to be unreasonably too wide.  Master Au‑Yeung had ordered a different schedule of documents for discovery.  On the original schedule of documents, her application should have failed.  Besides, the documents in the original schedule were High Choice’s documents, which she should have knowledge of.  Besides, her request for the documents was unreasonable because she only gave three days for High Choice to locate all the documents.  She should ask the estate of the Deceased for some of the documents.

13.  Bearing in mind of the factors above, I note that the terms were agreed by the parties and endorsed by Master Au‑Yeung.  He had made the order of discovery instead of dismissing Chan Lai Lai’s application for discovery.  This demonstrates that the parties should cooperate with each other in the preparation for the trial.  See Order 1A, rule 3 RHC.  If High Choice had considered Chan Lai Lai’s requests and responded to them, they might be able to work out the schedule of documents without recourse to court.

14.  I consider that the whole exercise before Master Au‑Yeung was for case management and the preparation for the trial.  Chan Lai Lai had failed to satisfy Master Au Yeung that her schedule of documents are appropriate and it was ultimately revised by Master Au‑Yeung.  However, High Choice was unable to persuade Master Au‑Yeung to dismiss her application for discovery.  That is to say, High Choice should have disclosed those documents as set out in the revised schedule.  This is the primary duty of High Choice to disclose the relevant documents for a fair trial under Order 24, rule 1(1) RHC. High Choice has failed to discharge this duty.

15.  This exercise, after all, is for the benefit of the parties and the trial judge.  As such, the costs of this application, including all costs reserved relating thereto should be in the cause.  So I order.

16.  So far as Loh Sai is concerned, having heard the argument, I find that Chan Lai Lai agrees that Loh had incurred costs for the preparation of the hearing before Master Au Yeung.  Subsequently, Chan Lai Lai had abandoned her request for discovery against Madam Loh.  Loh Sai is therefore entitled to the costs up to the hearing before Master Au Yeung.  The costs are agreed at $8,030.  So I order.

The costs for today’s hearing and the Order

17.  As to the costs for today’s hearing, Chan Lai Lai has to bear the costs for the amendment to her pleadings and for discovery in favour of Loh Sai, which are assessed at $20,000.  High Choice should have the costs for the amendment application, which are at $10,000.  The assessed costs are to be paid by Chan Lai Lai within 21 days from the date hereof.  For the argument on costs, I do not consider counsel’s service should be required.  I disallow counsel certificates for this hearing.

18.  I shall make an order on costs in terms as follows:

i. The costs of and occasioned by Chan Lai Lai’s application for amendment of her pleadings be to Loh Sai and High Choice, to be taxed if not agreed in any event;

ii. The costs of Chan Lai Lai’s application for discovery, including the costs for inspection of the documents be costs in the cause, to be taxed if not agreed in any event.  As to costs for Loh Sai for discovery, it is in terms as per paragraphs 15 and 16 above.

iii. The costs for this hearing be as per paragraph 17 above.