3D-GOLD JEWELLERY HOLDINGS LTD v. PRICEWATERHOUSECOOPERS (a firm)

HCA 1192/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1192 OF 2011

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DECISION ON COSTS
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1.  This is a paper application by the Plaintiffs to vary the costs order nisi made by me on 22 May 2014 in respect of an application by the Defendant, PricewaterhouseCoopers (“PwC”), to set aside the service of the writ in this action (“the Writ”).

2.  The background of the Defendant’s application has been fully set out in my written decision dated 22 May 2014 (“the Decision”), and I do not want to repeat the same here.  After hearing submissions from the parties, I held that the purported service of the Writ on 12 July 2013 on the Defendant was irregular, but nevertheless I exercised the discretion under O 2 r 1 of the RHC to cure the irregularity and refused to set aside the service of the Writ.

3.  In the Decision, I made an order nisi that save that the costs of the hearing before me be paid by the Defendant, the costs of the summons be paid by the Plaintiffs.

4.  The Plaintiffs apply to vary such order nisi. According to them, the Plaintiffs were successful in resisting the Defendant’s application.  As costs ought follow the event, the Plaintiffs should be awarded all their costs of the application.  Whilst the court held that the service of the Writ on 12 July 2013 was irregular, O 2 r 1 means that the irregularity did not render the service a nullity.  There was therefore no need for the Plaintiffs to apply for any indulgence.  The Defendant could have accepted that it had been served and not raised the issue of irregular service.  Instead, the Defendant chose to make an application to set aside the irregular service which was unsuccessful.

5.  In support of their contention, the Plaintiffs rely on authorities including HSBC v Ong Tong Shing [2008] 3 HKLRD 444, Boocock v Hilton International Co [1993] 1 WLR 1065 and Golden Ocean Assurance Ltd v Christopher Julian Martin [1990] 2 Lloyd’s Rep 215.

6.  In Boocock and Ong Tong Shing, the plaintiff was awarded all of its costs of the defendant’s application to set aside the service, though the costs order in the latter case was only a nisi one in the reported judgment.

7.  There had not been a lot of discussions in these cases about the issue of costs, and so I do not attach a lot of weight to these authorities.

8.  The Defendant submits that there was no fault on its part in taking out the setting aside application.  However, the Plaintiffs’ solicitors had informed the Defendant’s solicitors as early as 16 July 2013 that the Plaintiffs would, if necessary, rely on O 2 r 1 in asking the court to rectify the irregularity in the service of the Writ.  The Plaintiffs’ solicitors even referred the Defendant’s solicitors to the case of Ong Tong Shing and the legal principles contained therein.

9.  Facing such circumstances, the Defendant had a choice.  It could either accept the service without challenging it. In any event, as mentioned in the Decision, Mr Hartford was the appropriate officer for the purpose of handling the proceedings on behalf of the Defendant and he knew about the purported service of the Writ on 12 July 2013.  There was therefore no prejudice caused to the Defendant.  The second option was to make an application to the court to set aside the service of the Writ.  In so doing, I agree with the Plaintiffs that the Defendant had to take the consequences if it failed in the application, knowing well in advance the basis upon which the Plaintiffs were seeking the court to cure the irregularity.

10.  As the Defendant had chosen the second option, I agree to vary the costs order nisi and order that the costs of the whole setting aside application be paid by the Defendant.   It is not appropriate for the court to spend any more time on paper application in this case and so I do not order a summary assessment of the costs.