CLARE HOLLINGWORTH v. THOMAS EDWARD JUSON

HCA249/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 249 OF 2006

-----------------------

-----------------------

-----------------------------------

DECISION ON COSTS

------------------------------------

1.  On 12 July 2006, I handed down the Decision on the plaintiff’s application for a summary order for account. I granted the application. I also made an order nisi that the defendant pays the plaintiff the costs of the application to be taxed if not agreed.

2.  The defendant applied by letter dated 18 July 2006 to vary the costs order nisi. Pursuant to directions communicated to the parties by letter dated 25 July 2006, the defendant and the plaintiff lodged their respective submissions on the application to vary on 8 and 22 August 2006.  This was followed by a second round of submissions, which was caused by the defendant’s further submissions lodged on 29 August 2006. 

3.  Before this decision was handed down, the defendant filed a Notice to Act in Person on 8 September 2006.

The defendant’s grounds for variation

4.  In applying to vary the costs order nisi, the defendant asks that there be no order as to the costs of the plaintiff’s application.  In the first submission, the thrust of the defendant’s argument was that the plaintiff should not be allowed her costs because she had failed to comply with Practice Direction 5.4 in the following regards:

(1)     The plaintiff’s skeleton argument and authorities were served late.

(2)     The hearing bundle was served and lodged late and without first consulting the defendant as to its contents. This had caused the court to adjourn the hearing to consider the additional evidence of the defendant, thereby increasing the costs unnecessarily. 

(3)     The plaintiff had failed to prepare a chronology.

5.  In the second submissions, the defendant made the following additional points:

(1)     The plaintiff’s solicitors failed to inform the court at the hearing of the application that they had corresponded with the Director of Legal Aid in connection with the defendant’s legal aid application and had unduly influenced the Director of Legal Aid into making an abrupt decision to refuse his legal aid application.  Both the Director of Legal Aid and the plaintiff’s solicitors refused to disclose their correspondence to the defendant.  In light of this factual matrix and the plaintiff’s conduct, the plaintiff should be deprived of her costs.

(2)     The litigation was brought not by the plaintiff but by Mr Patrick Garrett out of his personal malice towards the defendant. He had also wrongfully interfered with the defendant’s legal aid application.

(3)     Despite Deputy Judge Gill’s remark in his Decision dated 3 May 2006, the plaintiff had refused mediation.  Before issuing the proceedings, the plaintiff did not attempt to seek clarifications of the defendant’s statements and explanations contained in his solicitors’ letter dated 3 February 2006.   

Non-compliance with Practice Direction

6.  Under Practice Direction 5.4, for contested interlocutory applications listed for 30 minutes or more, there should be before the court an agreed chronology of relevant events (paras.2.3 and 3.1).  Further, the applying party should serve and lodge with the court the hearing bundles, chronology of events and skeleton arguments and lists of authorities at least 72 hours before the hearing (para.11).  The responding party should serve and lodge his skeleton argument and list of authorities at least 48 hours before the hearing (para.12). 

7.  Para.20 of the Practice Direction states as follows: 

“Consequences of non-compliance

20.       Those not observing or complying with these directions may be called upon to explain such failure and, in the absence of a satisfactory explanation, may be penalized in costs irrespective of whether or not they are the parties who succeed on the application. Parties are warned that to ensure observance of and compliance with these directions, a party who has breached any of such directions may, despite his success in the application or appeal, still be deprived of all or part of his costs of the application or appeal as a penalty. Further, such costs penalty may be imposed irrespective of whether or not the breach has resulted in any adjournment of the hearing or any other forms of wastage of time or costs.”

8.  There is no dispute that the plaintiff did not serve and lodge the hearing bundles, skeleton argument and lists of authorities within the time prescribed by the Practice Direction.  However, as a result of the defendant’s legal aid application, there was a statutory stay of proceedings until it was lifted on 3 July 2006.  Section 15(4) of the Legal Aid Ordinance, cap. 91 provides that during the period of statutory stay, the “time fixed by or under any law or otherwise for the doing of any act or the taking of any step in the proceedings shall not run”.  I agree with the plaintiff’s submissions that strictly speaking, the time prescribed in Practice Direction 5.4 would not apply.

9.  For the plaintiff, it is further said that there is a good reason for the non-compliance with the Practice Direction.  As noted above, the defendant had made an application for legal aid. The Director of Legal Aid gave notice of the application of legal aid by memorandum dated 30 May 2006.  Consequently, there was a statutory stay of the proceedings for 42 days, which would have lasted until 12 July 2006.  The defendant’s solicitors wrote in early June to seek the court’s indication on whether the hearing on 3 July 2006 would be vacated.  By letter dated 14 June 2006, the parties were informed that the position would be reviewed in the last week of June. 

10.  Then on 30 June 2006, which was the Friday before the hearing, the Director of Legal Aid filed the memorandum of refusal of legal aid.  The plaintiff’s solicitors were notified of the refusal at 5:30pm on 29 June 2006. They immediately instructed counsel and made copies of the hearing bundle, the index of which was already prepared on 28 June 2006.  The hearing bundle and skeleton submissions were served on the defendant before lunchtime on 30 June 2006.  On the same day, the plaintiff issued the summons to lift the stay.

11.  I accept that in these circumstances, there is a good reason for the plaintiff’s non-compliance with the Practice Direction.  It is understandable for the plaintiff to think that the summons would probably be adjourned if by the time of the hearing, the defendant’s legal aid application were still being processed and there was a statutory stay in place.  It is therefore reasonable for the plaintiff to withhold the preparation of the hearing bundle and skeleton submissions for the time being.  They had also proceeded expeditiously to prepare for the hearing once they were informed of the outcome of the legal aid application. 

12.  It is suggested that the defendant was prejudiced by the non-compliance.  I am unable to agree.  Despite the non-compliance, the defendant’s legal advisers had the Friday afternoon and the weekend to consider and prepare the defendant’s case.  Although Mr Bedford who appeared for the defendant indicated that he did not have access to library or research facilities during the weekend, he had compiled a detailed submission and had not sought an adjournment.  As to the contents of the hearing bundle, the defendant’s affidavits that were not included were affidavits filed in relation to other summonses. The defendant did not file any evidence on the plaintiff’s application for account, despite having been given leave to do so.  As a result of Mr Bedford’s indication that the defendant’s affidavits would need to be looked at, I adjourned at about 12:30 pm so that I could read the affidavits during lunchtime and saved counsel’s time in reading out the affidavits in court.  In the end, Mr Bedford did not in his submissions refer to the contents of any of the defendant’s affidavits.  It is therefore incorrect to say that because the hearing bundle was prepared without first consulting the defendant, costs had been unnecessarily increased.

13.        In short, even if the time limits prescribed by Practice Direction 5.4 did apply, the plaintiff had given a satisfactory explanation for the non-compliance and the non-compliance had not occasioned prejudice to the defendant.

The defendant’s legal aid application

14.  The fact that the plaintiff’s solicitors had communicated with the Director of Legal Aid in connection with the defendant’s legal aid application is entirely irrelevant to the issue of costs.  In this regard, Messrs Robertsons appeared to be under a misconception that the costs order nisi in the Decision of 12 July 2006 relates to both the application for account and the application to lift the statutory stay.  As pointed out in the court’s letter dated 1 September 2006, at the hearing on 3 July 2006, Mr Stock and Mr Bedford had already made submissions on the costs of the application to lift the stay and an order had been made granting costs to the plaintiff.  The present application to vary the costs order nisi therefore only concerns the costs of the plaintiff’s application for account.

15.  Further, the defendant had appealed to the Registrar against the refusal of legal aid.  If the defendant felt that the refusal of his legal aid application was due to any wrongful interference of the plaintiff’s solicitors, the proper forum to raise the complaint was at the appeal against the refusal.  The defendant was legally represented before and after the refusal of legal aid.  At the hearing, he appeared by counsel to resist the plaintiff’s application for account and failed.  The refusal of his legal aid application has no bearing on the outcome of the plaintiff’s application. It cannot afford the defendant with a reason to avoid the costs consequences of his failed opposition.

The involvement of Mr Patrick Garrett

16.  Similarly, the suggestion that these proceedings were instituted by Mr Patrick Garrett out of his personal animosity towards the defendant is not a reason exonerating the defendant from paying the costs of the application.  As observed in Mr Stock’s submissions on costs, it is clear from the affidavits of Ms Wright and Mr Flude that they as well as other family members of the plaintiff are supportive of Mr Garrett and these proceedings against the defendant.  In any event, in granting the plaintiff’s application, the court had accepted that the application was properly made, and the defendant is under a duty both in law and on the facts to render an account.

Mediation

17.  Although Deputy Judge Gill had remarked that this might be a case for mediation, it did not oblige the parties to attempt mediation. Still less would the disagreement to mediate afford a reason for depriving the plaintiff of costs that she would otherwise be entitled to.  Additionally, the evidence shows that for a considerable time before these proceedings were commenced, the defendant had been asked to explain and give an account of the withdrawals from the plaintiff’s account.  It cannot be said that the defendant had not been given a reasonable opportunity to explain and clarify himself.

Conclusion

18.  Costs is a matter of court’s discretion.  None of the matters put forward by the defendant to support the application to vary the costs order nisi justifies a departure from the normal rule of costs to follow event.  Additionally, the plaintiff’s solicitors had by letter dated 23 May 2006 invited the defendant to consent to give an account and also warned him of the costs consequences should he resist the application and fail.  In the circumstances, the defendant has no cause to complain if he had the benefit of legal advice, chose to oppose the application and failed.  He has to abide by the costs consequences.

19.  For the above reasons, the defendant’s application to vary the costs order nisi is refused.  The costs order made in the Decision of 12 July 2006 is made absolute forthwith.