PERFECT BEST ASSET MANAGEMENT INC v. ADL EXPRESS LTD AND ANOTHER

HCA 937/2016

[2021] HKCFI 3021

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 937 OF 2016

________________________

________________________

____________________

D E C I S I O N  O N  C O S T S

____________________

1.  This Court handed down Judgement in this case on 13 August 2021, holding that the Plaintiff [P] had succeeded in establishing the first Defendants [D1] liability, and entered Judgement for P, but also held that P had failed to establish that it had suffered any loss or damage, and in consequence awarded P nominal damages in the sum of $1000. The parties by written submissions have now addressed the question of costs which question the Court now determines.

2.  Counsel for both parties have in their succinct written submissions sought to assist the Court by providing a thorough analysis of the relevant case law, and I have carefully reflected upon the same in conjunction with the arguments advanced by Counsel.  Thus assisted the resolution of the costs issue appears to me to be a straightforward one.

3.  As both Counsel have acknowledged costs should follow the event, and where nominal damages only have been awarded the starting point is reflected in Hong Kong Civil Procedure Order 62/2/6:-[citing Anglo-Cyprian Trade Agencies Ltd v. Paphos Wine Industries Ltd [1951] 1 AER 873]

“Where Plaintiffs in an action for breach of contract recover only nominal damages and do not establish anything which is of the least value to them, they are not to be regarded as successful Plaintiffs, and the court will normally treat the Defendants as having succeeded and award the Defendants the costs of the action, whether or not the Defendants have at any stage made a payment into court of nominal damages……”

4.  Furthermore I have considered that in conducting its case D1 was not guilty of any improper conduct, nor in my view acted in any way unreasonably or to defeat or delay Justice, and indeed entered into correspondence with the Plaintiff to try to settle this case.  In fact in its WP letter to P of 20 March 2017 D1 highlighted the very matter upon which P ultimately lost, being its difficulty in proving its damages, and invited the P to withdraw its case.  The P nevertheless chose to proceed.

5.  In my view D1 is clearly the successful party in this litigation. Costs should ordinarily follow the event, and where nominal damages only have been awarded the court, as noted, will normally award the Defendant the costs of the action.

6.  Is there anything to displace this position?  Counsel for the P has urged an “Elgindata or issues based approach”, his principal submission being that “The factual and contractual defences were always hopeless, especially the T/R defence….”. With respect I do not accept that characterization.  Although after closing submissions the Court had no doubt that D1s various defences had failed, this conclusion was only reached after having first considered the evidence and the reasoned submissions of Counsel. D1 was entitled to defend itself against Ps claims and as noted there was no unreasonable conduct in its attempts to do so. To the contrary at an early stage of the hearing the Court expressed its concerns about the viability of the Ps case on damages, which then resulted in a late and misguided attempt by the P to place further and new evidence before the court.

7.  Having carefully considered all the submissions advanced by Ps Counsel I see no reason to depart from the normal course to be adopted when nominal damages have been awarded, and to award D1 the costs of and occasioned by this action. In doing so I accept Mr Alders submissions that D1s WP letter of 26 August 2019 provides no basis for an award of indemnity costs.