ETACOL (HONG KONG) LTD AND OTHERS v. SINOMAST LTD AND OTHERS

HCA 3126/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3126 OF 2003

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R U L I N G

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1.  The 1^st Defendant, having lost the action is inviting me to order that the costs of the successful Plaintiffs should be taxed on the District Court scale.  This is not a surprising application having regard to the fact that the principal dispute, as to whether there was a contract between the 1^st Plaintiff and the 1^st Defendant, related to an amount of US$100,000 (HK$780,000) which is well within the District Court’s present jurisdiction.  The additional cause of action for an injunction and damages for harassment has only attracted an award of $45,000, overall leaving the matter within the District Court limits.  This being so the 1^st Defendant submits that the action should have been tried in the District Court.

2.  The Plaintiffs’ case on this starts by pointing out that the writ was issued on 22 August 2003 at a time when the District Court’s jurisdiction was still $600,000.  That did not go up to $1 million until the 1December 2003.  The 1^st Defendant filed its counterclaim seeking judgment for US$100,000 which represented the obverse of the 1^st Plaintiff’s claim for a declaration that it had no contract with the 1^st Defendant and therefore no liability to pay this amount.  It is right to say that the 1^st Defendant has at no time applied to have the case transferred to the District Court.

3.  The correct approach in such matters is for the court to ask itself the question whether at the time that the writ was issued it was obvious to a reasonable person in the Plaintiffs’ position that the claim would be bound to be within the District Court’s jurisdiction?  See for example Wong Chi Ho v Poon Yuk Shui, HCPI 910 of 2002.  In answering that question I should draw attention to the fact that on the correspondence, it was clear that the 1^st Defendant was demanding to be paid US$100,000 by the 1^st Plaintiff and that an action by it for this amount was imminent.  As it was, given the harassment suffered by the 2^nd, 3^rd and 4^th Plaintiffs, the 1^st Plaintiff got in first and brought the action for a declaration in addition to the action for harassment and for an injunction and damages.

4.  Given the fact that when these proceedings started the amount of the contractual claim was in excess of the then District Court level no possible criticism can attach to the Plaintiffs for having come in this court.  The question needs to be considered from this standpoint of whether there came a time after 1December 2003, when the jurisdiction went up to $1 million, that the Plaintiffs should have applied to have had the case transferred to the District Court.

5.  Looking at the matter fairly, I do not believe that any valid criticism can be made of the Plaintiffs for leaving the case in this court.  The monetary dispute was reasonably close to the upper limit of the District Court’s jurisdiction and then one needs to take into account the likely quantum of damages for harassment.  In the event, the award was a modest $45,000 but that of itself is not a complete answer.  As Mr Hung has pointed out there was some prospect of an award well in excess of $100,000 when one has regard to the authorities, which when taken in conjunction with the contractual dispute, would take a case over the District Court’s threshold. 

6.  The test of “…whether it would be obvious to a reasonable plaintiff … that the case was a District Court rather than a High Court case” contemplates a reasonably generous margin for error on the part of a plaintiff or his legal advisors.  No Plaintiff would want to sell himself short by coming in the District Court when there is proper scope for saying that, if successful, he may well achieve more than the $1 million threshold.  It seems to me that this is one of those cases.  Having started in the right court, indeed the only court, given the then $600,000 limit, I do not believe that one can with any justification say that the Plaintiffs should have lowered their expectations to below $1 million when the jurisdiction went up in December 2003 and transferred the case to the lower court.  It was entirely reasonable to have left in this court.

7.  In all the circumstances, it is only right that the successful Plaintiffs should have their costs taxed on the High Court scale which is the order that I propose to make.