STEVENSON, WONG & CO (A FIRM) v. GOLDSENSE TECHNOLOGY LTD

HCA 2050/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2050 OF 2005

____________

____________

__________________

RULING  ON  COSTS

__________________

1.  In a reserved judgement delivered on 29 November 2006, I rejected, in part, an application to set aside a default judgement and held that Goldsense had no defence to Stevenson Wong’s claims for legal costs in the sum of $607,919.88.  The default judgement stood, for that sum, but was set aside for the balance, a sum of $558,122.01, being interest claimed at the rate of 2% per month.

2.  The basis of the opposition to the payment of interest was a legal question as to whether the provisions of s 56 Law Practitioners Ordinance constituted a bar to the claim.  I ordered that that legal argument should be heard pursuant to O 14 R 1(1) on Friday 12 January 2007.

3.  On Wednesday 10 January 2007, the plaintiffs wrote to the defendant solicitors, noting that the judgement that had been entered had still not been paid, commenting that that demonstrated the defendant’s financial position, and consequently informing them that, for purely commercial reasons, the claim for interest would not be pursued, and was withdrawn.

4.  The parties appeared before me on 14 January 2007, and the claim was withdrawn, being dismissed at the request of the defendant.  The question of costs, which was not agreed, was then argued.

5.  There can be no doubt that the plaintiffs are entitled to costs on the argument to set aside the judgement, for they succeeded in holding the judgement, at least in part.  The question is whether defendant is entitled to costs respected that portion of the judgement it succeeded in having set aside, which portion was subsequently dismissed, following the plaintiffs withdrawing the claim.

6.  My preliminary view was that the defendants should not be entitled to any costs simply because they had not paid the judgement due.  I enquired in the course of the hearing whether the defendant would be able to pay the judgement.  I was told that the defendant “would endeavour to raise a loan from its shareholders” to pay the judgement.  Realistically payment is unlikely, and the commercial decision taken by the plaintiff was sensible.

7.  Under the High Court Ordinance, s 52A, the court has the full power to determine by whom and to what extent the costs to be paid.  It is a matter of discretion, but that is a judicial discretion which must be exercised on fixed principles, that is according to rules of reason and justice, not according to private opinion.

8.  There is little merit on the side of the defendant.  They have succeeded on an economic basis only, and whether they were right or wrong in law in their argument is not a matter that has been tested.  That said, it cannot be denied that the defendant has been successful in reducing the amount claimed.  Other than the fact of non-payment of the outstanding judgement, there is no proper basis upon which I can refuse a successful defendant its costs.

9.  The defendant must pay the plaintiff the usual costs upon the judgement, together with the costs of and incidental to the summons heard by me on 16 November 2006.  The defendant may set off against that sum the costs of the hearing on 14 January 2007.  All costs are to be assessed on a party and party basis.