YOE HAN YAUW v. YOE HAN HIAN AND OTHERS

HCA1332/2018

[2022] HKCFI 2684

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1332 OF 2018

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DECISION ON COSTS

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1.  On 5 May 2022, I handed down a decision in this matter in relation to an appeal against a Master’s decision wherein the Defendants had sought leave to file and serve supplemental witness statements of the 1^st and 2^nd Defendants (“the 5 May Decision”).

2.  The matter has a relatively lengthy procedural history, which is apparent in the 5 May Decision. This decision on costs should be read together with the 5 May Decision. I shall not repeat the background here.

3.  In the 5 May Decision, I had made an order nisi that the Plaintiff shall have the costs of the appeal up to and including 2 March 2022, and there shall be no order as to costs in relation to the costs incurred in the appeal following 3 March 2022. The reasons for this order nisi were set out in inter alia the body of the decision, with certain matters I considered to be of particular relevance highlighted in the sub-paragraphs of paragraph 27 therein. Again, I shall not repeat the reasoning here.

4.  The Plaintiff seeks to have the costs order varied such that instead of there being no order as to costs following 3 March 2022, he instead seeks an order that he should have the costs incurred in the appeal following 3 March 2022.

5.  Two primary reasons were cited in support of the Plaintiff’s application:

(1)  It was alleged that the Defendants had been unreasonable in their conduct of the appeal, and that insufficient weight had been accorded to such conduct in considering the costs position.

(2)  Reliance was placed upon the Plaintiff’s offers to settle.

I shall consider these in turn.

6.  It is trite that costs are within the ambit of the Court’s exercise of discretion (S.52A(1), High Court Ordinance (Cap 4); O.62, r.2(4), Rules of the High Court (Cap 4A)). Much turns on the particular circumstances of the case. The general rule that costs follow the event is simply an option, and having regard to the specific circumstances of the case, the Court may make such order as it sees fit (Hong Kong Civil Procedure 2022, §62/3/3B; O.62, rr.3(2A)  & 5, Rules of the High Court (Cap 4A)).

7.  As to the first allegation that the Defendants’ conduct had been unreasonable:

(1)  The crux of the Plaintiff’s complaint is that the Defendants, after having provided their supplemental statements, had not adhered to the Court’s direction that submissions should be filed to address relevance and admissibility of the same. Insofar as the Defendants’ failure to adhere to the Court’s original directions, this had already been expressly taken into account when making the order nisi.

(2)  The Plaintiff seeks to argue that his own conduct in the aftermath was not inherently wrong or unreasonable. However, as I had alluded to in paragraph 27(3)  of the 5 May Decision, both sides bear responsibility for the conduct of the application following 3 March 2022. The evidence sought to be admitted by the Defendants was not overly convoluted or irrelevant. Upon consideration of both sides’ conduct, I took the view that (on the materials then available to the Court)  there had not been serious endeavours on either side to agree what should have been a relatively straightforward matter.

(3)  Further points are made by the Plaintiff about prior unreasonable conduct but insofar as the costs after 3 March 2022 are concerned, the prior conduct is of limited relevance.

(4)  It was for those reasons (as appear more fully in the 5 May Decision)  that neither side was awarded their costs following 3 March 2022. I am not persuaded that the order should be varied on the ground of the Defendants’ unreasonable conduct as was apparent at the time, as this has already been reflected in the order nisi.

(5)  I do note that the above reasoning was undertaken without the benefit of the without prejudice save as to costs correspondence, which was only disclosed after the order nisi had been made (and rightly so). I shall address this below.

8.  As to the second point made about offers to settle, reference is made by the Plaintiff to three Calderbank letters exchanged between the parties on 16 and 17 March 2022:

(1)  The first letter from the Plaintiff dated 16 March 2022 was sent prior to the provision of the supplemental statements by the Defendants. It proposed that the Plaintiff would accede to the new evidence, but on the conditions that (a)  all costs incurred by the Plaintiff up to 16 March 2022 would be summarily assessed and paid by the Defendants on an indemnity basis (in the total sum of HK$127,350)  and (b)  the Defendants would bear all costs of the Plaintiff in preparing the Plaintiff’s supplemental statement in reply (if any). The $127,350 figure comprised the balance of the costs in the Defendants’ original statement of costs (which formed the basis of the Court’s assessment of the costs of the hearing on 3 March 2022)  together with costs of considering the supplemental statements. It was further proposed that if the Defendants accepted the terms in principle but not the figure, then the hearing on 24 March 2022 could proceed but only for the purpose of a summary assessment of the amount.

(2)  The Plaintiff followed up the above with a second letter dated 17 March 2022 (faxed at 2:36pm), making a few brief general points about their objection to the supplemental statements, but then essentially reiterating the above proposal “solely for the purpose of saving costs and the Court’s precious time…” and giving a deadline of replying on the same day by 5:00pm.

(3)  In the Defendants’ solicitor’s reply dated 17 March 2022, the Plaintiff’s proposal was rejected, essentially on the basis that since the Defendants had already had costs ordered against them for the 3 March 2022 hearing, if the Defendants were to succeed in having their supplemental statements admitted, then there was no basis for further penalizing them. It was also stated that the Plaintiff had already had sight of the supplemental statements, and any continued opposition would not be warranted. It was further stated that there was no basis for the Defendants to cover the costs of the Plaintiff’s supplemental evidence in reply. The Defendants counter-proposed that leave should be given for the filing of their supplemental statements, the Plaintiff should have leave to file his supplemental statement, and that costs be paid by the Defendants to the Plaintiff agreed at $39,000.

(4)  No further correspondence was exchanged thereafter. The matter was then determined on the papers owing to the fifth wave of Covid arising.

9.  Having considered the parties’ Calderbank letters, I do not consider these to be a basis for varying the order nisi in the manner sought by the Plaintiff. Whilst both sides were apparently ad idem that the supplemental statements should be admitted, the Plaintiff’s insistence on its costs position was not reasonable. To begin with, it was highly unlikely that the Court would have ordered they be awarded such a high sum of costs on an indemnity basis. But perhaps what is more telling is the lack of response to the respectable offer in the Defendants’ letter dated 17 March 2022 that the Defendants would pay the Plaintiff costs in the sum of HK$39,000 (which would have placed them in a better position than they are in now).

10.  Considering matters in the round, I do not consider there is sufficient basis to vary the costs order nisi, which will thus be made absolute.