CHUN WO BUILDING CONSTRUCTION LTD v. METTA RESOURCES LTD

HCCT 29/2013

[2019] HKCFI 1146

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 29 OF 2013

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D E C I S I O N

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1.  This is Metta’s[1] application by Summons filed on 30 October 2018 (“Summons”) for an order that the interest on the costs awarded to Chun Wo should run from 15 February 2017 until the date of payment.

Relevant facts

2.  The trial of this action resulted in a monetary Judgment in excess of HK$97 million (exclusive of interest) in favour of Chun Wo dated 19 August 2016.  Pursuant to the agreement of the parties, the issues of interest and costs were addressed after the handing down of the Judgment (see para 390 thereof).

3.  By a Decision dated 15 February 2017, Chun Wo was awarded 70% of its costs of this action to be taxed if not agreed, and no costs order was made in respect of Metta’s Counterclaim against it.  On 23 February 2017, the Judgment, which included the costs provision, was sealed. It was dated 19 August 2016.

4.  After a taxation hearing which took place from 22 to 24 August 2018, an Interim Certificate was issued for part of Chun Wo’s costs.  The interim payment was subsequently made by Metta.  However, the interest on the payment was calculated from 15 February 2017.  Chun Wo disagreed and maintains that interest should accrue from the date of the sealed Judgment, ie, 19 August 2016.  The sum at stake amounts to HK$173,461.87. 

Parties’ contentions

5.  Metta contends that O. 62, r. 3 provides the starting position :

“… no party shall be entitled to recover any costs of or incidental to any proceedings from any other party to the proceedings except under an order of the Court.”

6.  Once an order for costs has been made by the Court, interest on costs runs from the date of the costs order (Caltex Oil Hong Kong v Director of Buildings and Lands [1994] HKDCLR 31 at 43 line 40, following Hunt v R.M. Douglas (Roofing) Ltd [1990] 1 AC 398 (see also Hong Kong Civil Procedure 2019, vol 1, [62/24/4])).

7.  Accordingly, Metta argues that as of the 19 August 2016, neither party was entitled to any costs.  As it transpired, no agreement on the appropriate costs order was reached by the parties, and that issue was determined by the Court on 15 February 2017.  It was only at this date that Metta was identified as the paying party and the basis of payment was determined.  Pursuant to authorities, interest should only run from the date of the costs order, 15 February 2017.

8.  On its part, Chun Wo says that the matter is not open to argument.  O. 42, r. 3(1) provides that a judgment or order takes effect from the day of its date.  O. 42, r. 3(2) provides that a judgment or order shall be dated as of the day on which it is pronounced, given or made, unless the Court orders it to be dated as of some other date.

9.  Chun Wo relies on the date of the sealed Judgment (19 August 2016) and says that there is no jurisdictional basis for Metta to challenge it, the draft of which was vetted by its solicitors before it was approved by the Court. 

Analysis

10.  I do not believe that there is any question over the date of the sealed Judgment.  It was “Dated and entered on the 19^th day of August 2016”.  Metta seeks to rely on the preamble of the Judgment, which stated as follows :

“This Action having been tried before the Honourable Mr. Justice Anthony Chan without a jury, at the High Court, Hong Kong, and the said Honourable Mr. Justice Anthony Chan having on the 19th day of August 2016 and on the 15th day of February 2017 ordered that judgment as hereinafter provided be entered …”

11.  I am unable to agree that the preamble serves to delay the taking effect of the costs order to the 15 February 2017. 

12.  I have considerable doubt whether, despite the decision having been made after the handing down of the Judgment, anyone was minded at any time prior to 23 February 2018 (the date when the Judgment was sealed) that the costs order should take effect only when it was determined after arguments.  Hence, the agreement of the draft Judgement by Metta[2]. 

13.  The fact of the matter is that, if not for the agreement of the parties, this Court would likely have made a costs order nisi in the Judgment dated 19 August 2016 if the issue was not addressed by the parties as part of their final submissions.  I have no reason to believe that in agreeing to have the costs issue dealt with later, Metta had in mind that it would gain an advantage in any exposure on interest.  It is to be noted that Metta never contended that Chun Wo should not be entitled to any costs despite succeeding in this action.  I am unable to see any unfairness to Metta in these matters.

14.  Finally, on Metta’s submission that the Court had made no adjudication pursuant to O. 42, r. 3(2) that the costs order should be dated as of some other date instead of the date of its pronouncement, the issue was never raised and the draft Judgment was uncontroversial and approved by the Court in due course.  

15.  With respect, I see neither technical reason nor reason of fairness to deprive Chun Wo of the interest in question.

Conclusions

16.  For these reasons, I dismiss the Summons.  The parties had agreed that costs should follow the event.  I order that the costs of and occasioned by this application be to Chun Wo, to be taxed if not agreed.