KWOK HIN CHEUNG AND ANOTHER v. KWOK HIN TAK AND OTHERS

HCMP 3156/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3156 OF 2004

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D E C I S I O N

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1.  This is a summons issued by the plaintiffs on 8 November 2006 under Order 21 rule 3 of the Rules of the High Court for leave to discontinue proceedings.

2.  There is no dispute that leave should be granted, and I will grant leave.  The only question relates to the costs of the proceedings to be discontinued and the costs of the application.

3.  The general rule is that the defendant is entitled to costs where the action is discontinued.  The rule may be departed from in an appropriate case, for instance where the discontinuance is due to the matter having become academic rather than any acknowledgement of the plaintiff of likely defeat (Hong Kong Civil Procedure 2006, vol. 1, para. 21/5/11).

4.  In the summons, the plaintiffs did not spell out what order they seek regarding the costs of the proceedings if leave to discontinue should be granted.  They merely seek an order in respect of the summons to discontinue, that the costs of the application be in the cause of the proceedings.

5.  In the submissions of Mr Vincent Poon, counsel for the plaintiffs, he proposed these costs orders:

(1)         before 30 March 2006, costs in the proceedings should be costs in the cause of HCMP No. 448 of 2006; and

(2)         after 30 March 2006, costs in the proceedings, including the costs of the application for leave to discontinue and the hearing today, should be awarded against the defendants;

6.  30 March 2006 was the date on which the defendants filed an acknowledgement of service to contest the proceedings, being the same date these defendants issued a summons to strike out the originating summons in HCMP No. 448 of 2006 on, inter alia, the ground of duplicate proceedings and abuse of process, which I dismissed on 8 November 2006.

7.  For the defendants, Miss Lorinda Lau submitted that the plaintiffs should bear all the costs of the proceedings and there is no reason to depart from the general rule.

8.  I do not propose to repeat the background matters.  I refer to the decision I gave on 8 November 2006 in HCMP No. 448 of 2006, in particular paragraphs 17 to 37.  To these relevant events set out in my previous decision, I would add the following.

9.  On 6 December 2004, when the plaintiffs issued the originating summons in these proceedings, they filed the 1^st affirmation of the 2^nd plaintiff, Lo Kin Tung.  This affirmation was apparently never served on the defendants, see the letter of the plaintiffs’ solicitors to the defendants’ solicitors dated 16 June 2006.

10.  On 18 April 2006, being the same date the 1^st respondent Kwok Hin Tak (the same individual sued as the 1^st defendant in the present proceedings) filed a supporting affirmation for his strike out application in HCMP No. 448 of 2006, he filed a largely identical affirmation in HCMP No. 3156 of 2004, purportedly in answer to the 1^st affirmation of Lo Kin Tung, when this affirmation was never served on the defendants.

11.  On 2 May 2006, being the same date the 1^st plaintiff Kwok Hin Cheung (the same individual who is the 1^st applicant in HCMP No. 448 of 2006) filed his affirmation in reply to the respondent’s affirmation in the strike out application, he filed a similar affirmation in HCMP No. 3156 of 2004, in reply to the affirmation of the 1^st defendant filed on 18 April 2006.

12.  I have considered the correspondence exchanged between solicitors subsequent to 2 May 2006.  This is my ruling on costs.

13.  For costs of the proceedings before 30 March 2006, there is no reason to depart from the general rule and make these costs in the cause of HCMP No. 448 of 2006.  I order the plaintiffs to pay the defendants’ costs of the proceedings up to 30 March 2006, to be taxed if not agreed.

14.  For the costs of the proceedings after 30 March 2006, there is a case to depart from the general rule, although I do not go so far as to order the defendants to pay the costs of the plaintiffs.  I have come to this view for the following reasons.

15.  It is clear from the letter of the plaintiffs’ solicitors to the defendants’ solicitors dated 9 February 2006 when they asked the defendants’ solicitors not to take any further action in HCMP No. 3156 of 2004 and to return to them the sealed copy of the originating summons served on 8 February 2006 that the plaintiffs had by then not intended to proceed with HCMP No. 3156 of 2004.

16.  Notwithstanding the defendants’ solicitors wrote back on 10 February 2006 stating that they had “taken steps” to apply to set aside the service of the originating summons as irregular and would oppose any application of the plaintiffs to renew the originating summons, they did not at any time issue an application to set aside service.

17.  Apparently the defendants had a change of mind on 30 March 2006 about challenging the irregularity of service.  Not only did they file an acknowledgement of service but in the affirmation filed in support of the strike out application on 18 April 2006, it was stated that the respondents could “always waive the irregularity” of service of the originating summons in HCMP No. 3156 of 2004.

18.  Any step taken by the defendants in HCMP No. 3156 of 2004 after 30 March 2006, such as the filing of a largely identical affirmation on 18 April 2006, was just to provide ammunition for their strike out application on the basis that the plaintiffs were pursuing multiple proceedings seeking identical reliefs and hence an abuse of process.  To do so, the defendants even went to the length of answering an affirmation in HCMP No. 3156 of 2004 which was never served on them in the first place.

19.  The costs incurred by the defendants in HCMP No. 3156 of 2004 after 30 March 2006 are wholly unjustified, and should not be borne by the plaintiffs.

20.  Insofar as the plaintiffs had incurred additional costs in HCMP No. 3156 of 2004 after 30 March 2006, such as by filing an affirmation on 2 May 2006 in reply to the defendants’ affirmation filed on 18 April 2006, I do not think it is right to ask the defendants to bear the plaintiffs’ costs.

21.  The plaintiffs had made clear their intention by then that they intended to proceed only with HCMP No. 448 of 2006.  I appreciate they had an argument with the defendants’ solicitors if HCMP No. 3156 of 2004 should be stayed or discontinued and how the issue of costs in these proceedings was to be resolved, but there is no reason why the plaintiffs should take further steps in these proceedings and incur further costs as they had indicated clearly that only HCMP No. 448 of 2006 would be proceeded with.

22.  For the costs in the proceedings after 30 March 2006, it is appropriate that each side should bear its own costs.  So the order I make is that there should be no order as to the costs of the proceedings after 30 March 2006.

23.  I come to costs of the present application.  I am aware of an open letter of the plaintiffs’ solicitors to the defendants’ solicitors dated 27 October 2006 with a draft consent summons, which the plaintiffs required the defendants to sign by 31 October 2006 and the defendants have declined to do so.  The offer relates to proposals to deal with HCMP No. 448 of 2006 and HCMP No. 3156 of 2004 as a package.  After the application in HCMP No. 448 of 2006 was disposed of on 8 November 2006, the plaintiffs have not made any separate offer in respect of HCMP No. 3156 of 2004.  The plaintiffs need to come to court to seek leave to discontinue, and they have not been wholly successful in their argument on the costs of the proceedings.  So I will award this part of the costs to the defendants.  The order I make is that the costs of the application for leave to discontinue and of the hearing today are to the defendants.

24.  I decline to impose a condition that HCMP No. 448 of 2006 is to be stayed until the plaintiffs pay up the costs ordered against them in HCMP No. 3156 of 2004.  There is no reason why proceedings in HCMP No. 448 of 2006 should be delayed until the taxation process has been completed and payment made in respect of HCMP No. 3156 of 2004.  What would merely happen is that until costs in HCMP No. 3156 of 2004 have been fully paid, these proceedings will continue to survive.