ERIC CUMINE ASSOCIATES (A FIRM) v. THE WHARF (HOLDINGS) LTD AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. There is now before me the rest of the application in this action made by the Defendants that the costs of the proceedings in which I gave judgment on 16th December 1987 should be taxed and paid by the unsuccessful Plaintiffs. The Defendants asked for these costs to be taxed on a common fund basis and not as between party and party and I gave a ruling on this point yesterday (without calling on Counsel for the Plaintiffs) in favour of the Plaintiffs. I will now deal with the remainder of the application. The normal rule is that costs follow the event; but the Court has a general discretion as to costs and may, if good reason is shown, deprive a successful defendant of the whole or part of his costs. In the present case, Counsel for the Plaintiffs submits that there are good reasons why the Defendants should be deprived of all or part of their costs.

2. Briefly, the Plaintiffs complain that there have been failures on the part of the Defendants to comply with the rules, particularly in relation to discovery; that the Defendants raised unnecessary issues and a number of bad points; and failed adequately or properly to plead the case which they developed at the trial and upon which they eventually succeeded. As to discovery, there are a number of points taken by the Plaintiffs; but there is one which has particularly featured in the submissions made on their behalf. This concerns a copy of a Decision of the Building Appeals Tribunal of 24th November 1972.

3. Before I turn to express a view upon the alleged failures in discovery, I would make two general observations about the case. First, it is an action for damages for professional negligence which, as the Plaintiffs' case proceeded, from the date of the issue of the writ to the date of the conclusion of the trial, involved very careful and searching examination of the whole history of the development in relation to which the Defendants had been retained. That inevitably meant that there would be a mass of documentation, which would involve the most meticulous examination by all the parties, all their lawyers and by the Court. It seems to me inevitable that, in this sort of case, errors of judgment are going to be made by the lawyers in relation to matters of discovery and otherwise.

4. Secondly, the pleadings in this action, when consolidated into a paginated bundle, ran to 404 pages. When I remind myself that the guiding principle of our system of pleading is that pleadings should state in summary form and should state only the material facts relied on and not the evidence by which they are to be proved, I stand aghast at the sight of this bundle. Again, it seems to me that when pleadings get into a state like this, it is inevitable that some issues will be buried in the mass of words and others will emerge with comparative clarity only at a much later stage in the action than is desirable.

5. One of the issues (there were only two) concerned the status of what was referred to in argument as "circular 58". I will not again rehearse the history of the matter, which is set out in my judgment of 16th December 1987. I will simply remark that, in relation to circular 58, doubts were entertained both in the Government and in the architectural profession, about the constraints or possible constraints which circular 58 imposed on a developer's ability to achieve the maximum plot ratio available to him under the Building (Planning) Regulations. When an architect is called on to advise his clients in relation to plot ratio matters, his understanding at the material time must be relevant when considering the question of his carelessness or otherwise in the advice which he tenders to his client. If he is aware of material which might or should influence his advice and if that awareness is recorded in writing, it seems to me obvious that discovery must be made of that writing in an action in which the performance of his duty is in issue.

6. In the present case the decision of the Building Appeals Tribunal is not in itself of very great significance. The degree of awareness of the Defendants about it is, however, of distinct significance. It appeared quite late in the day that Mr. Roberts, of the Defendants, had in his possession at quite an early stage (one cannot be sure exactly when) a copy of this decision of the Building Appeals Tribunal and (as I remark in my judgment) must have heard of it soon enough. The attempts of the Plaintiffs to obtain discovery in relation to that copy is something I must now consider.

7. Very shortly, what happened was this. The Plaintiffs pressed the Defendants to disclose copies of 4 Building Appeals Tribunal decisions, including this one. As to this one, the Defendants admitted that they had a copy.

8. What was significant was that the copy had endorsed on it, in Mr. Roberts's writing, "Katherine - file under job number 1508," with which it turned out Mr. Roberts had been concerned as the architect.

9. At the crucial moment, when the Plaintiffs had an opportunity to press for discovery in relation to this, they let the moment slip; because, although they made an application for specific discovery in relation, among other things, to this decision, they did not press for that discovery when the application came on before Mr. Justice Mortimer.

10. The whole matter is unsatisfactory; but I have not the least doubt that I ought to acquit the Defendants in general, and Mr. Roberts in particular, of the charge of deliberate concealment made against then. I also acquit the solicitors and counsel who acted for and presented the case of the Defendants in so far as such a charge of deliberate concealment was also made against them. I do not for a moment think that happened. I think that the approach of the Defendants' legal advisers to this was wrong; but I think their judgment was clouded by a misapprehension of the significance of the decision. It was not, as I have said, the decision itself, but the degree of awareness of it possessed by Mr. Roberts, which might have led the Plaintiffs to place a particular significance on the copy endorsed by Mr. Roberts which they were deprived from doing until after the hearing had commenced and, eventually, this copy was produced. Even at the end, the position in which the Court was left by the Defendants was unsatisfactory; for one member of their firm deposed that the copy which was eventually produced had been removed from the file and had been itself a photostat copy. It had, the Defendant said, been removed from the file after the institution of the proceedings for the purposes of making a number of copies so that the Defendants' legal advisers, and others working on the case, would have copies. Despite that sworn statement it turned out in the end that the copy being used for the purposes of preparation of the architect's case was (so I understand it) another copy altogether. I cannot, therefore, show much enthusiasm for the approach of the Defendants' advisers to the question of discovery on this point. But not only do I acquit them of any attempt at deliberate concealment; I would express my understanding how difficult it was to get every point right on discovery or otherwise when the action had escalated, in the interlocutory stages, out of all proportion to the real difficulty of the issues. I do not think it right therefore to deprive of the Defendants of any part of their costs in this respect, important though I agree it is that parties should obey the rules and in particular should make proper discovery without being pushed to do so. None of the other points about discovery seem to me to warrant the depriving the Defendants of the whole or part of their costs.

11. The Defendants raised a number of points which they abandoned during the course of the hearing. It seems to me that the Defendants in abandoning these points were saving costs rather than increasing them. They might have gone on taking every point to the end of the trial. Indeed, it seems to me that a decision as to costs which would deter Counsel from abandoning points when he would otherwise think it right to do so would be a most unfortunate decision.

12. Trials go on long enough as it is without putting Counsel at risk that, if they do not take every point good, bad or indifferent, they might later be criticized for having taken it at an earlier stage. A number of the points taken by the Defendants here were, in my judgment, bad points. But again I do not think that the Defendants' conduct of this complex litigation requires me to deprive them of any part of their costs of this ground. Their conduct was not oppressive or unreasonable.

13. A number of points achieved greater importance during the course of the trial than might have been expected before it began and a number of points receded in importance. Some of them were the subject of argument before me as to whether the relevant evidence could be led at all on the ground that the points had not in fact been pleaded. I dealt with those arguments at the time and I see no reason to deal with them again now. Again, they seem to me to afford no good reason for depriving of the Defendants of the whole or any part of their costs.

14. My approach to the matter is the same as that of Mr. Justice Kekewich in Blank v. Footman, Pretty and Company (1988) Ch, D. 678, in which the Defendants had raised seven defences and had succeeded on one only.

15. In those days the practice was to deal with costs, when they were to be apportioned, not by dealing with a particular fraction but by dealing separately with different issues. What the Judge said must be looked at in that light. But I still find the observations of the Judge helpful. He said:

"The difficulty which I feel as a judge and always felt when at the Bar is this: that the defendant is entitled to put his back against the wall and to fight from every available point of advantage. I think it would be extremely hard on defendants if as a rule they were told at the end of the trial "You have beaten the plaintiff, but because you raised some points on which you have not succeeded you should not have all the costs of the action." And it is obvious that it might lead to lengthening trials if Counsel understood that unless they fought out every point, their clients would not be allowed their costs even in a successful case."

16. Those observations are as sage now as they were a hundred years ago.

17. After giving all these matters the best consideration I can, I have come to the conclusion that no sufficient case has been made out to justify me depriving the Defendants of any part of their costs. Accordingly, I will order that the costs of the Defendants should be taxed and paid by the Plaintiffs to the Defendants. The basis of the taxation will be party and party in accordance with my ruling given yesterday.