GENIUS EXPRESS LTD AND ANOTHER v. MANI LTD

HCMP 2714/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2714 of 2014

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DECISION

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1. In these proceedings, the plaintiffs (“landlords”) seek re‑determination of the applicable market rent payable by the defendant (“tenant”) under Tenancy Agreements I and II.

2. The market rent had previously been determined, in accordance with the provisions of the Tenancy Agreements by the parties’ single joint expert, Paul Varty.  The landlords did not accept that valuation and on 13 July 2015, I gave leave to them to file an expert report by Pamela W I Lam on the valuation issue.  Ms Lam subsequently stated that she was not willing to testify in court, and the landlords proposed to introduce two reports, one in respect of each property, by Mr Andy Law.

3. The tenant’s solicitors pointed out to the landlords’ solicitors that Mr Law, in his reports, had failed to either refer to, or comment on, or respond to Mr Varty’s reports.  The tenant’s solicitors invited the landlords’ solicitors to ask Mr Law to revise his reports to include appropriate responses. 

4. On instructions, the landlords’ solicitors declined the request and issued a summons on 13 May 2016, for leave to file Mr Law’s reports as they were.

5. By a summons dated 1 June 2016, the tenant’s solicitors sought directions for Mr Law’s reports to include specific comment on Mr Varty’s reports, or, by way of alternative, a joint report by Mr Varty and Mr Law setting out specifically the extent of their agreement or disagreement, with reasons.

6. By letter dated 22 June 2016, the landlords agreed to the alternative order.  It has been agreed that on the alternative order being made, there will be an order for costs in the cause on the tenant’s summons.  I make that order accordingly.

7. The landlords’ solicitors propose that their summons should be withdrawn, with costs in the cause.  The tenant’s solicitors say that the landlords should pay the defendant the costs of and incidental to the proposed withdrawal.

8. In support of the tenant’s position, Mr Tsang cites the decision in Best Joint Investments Ltd v Kagani Ltd (unreported, HCA 2608/2006, Chung J, 3 June 2008).  There, Chung J applied the principles in Order 21, rule 5 of the Rules of the High Court (“RHC”), in relation to the entitlement to costs on a discontinuance, to an application for leave to withdraw a summons.  With respect to the judge, I do not think that those principles necessarily apply to an interlocutory step in proceedings, particularly one which is capable of being judged on its own merits.

9. In the present case there was simply no proper basis at all on which the landlords’ could properly refuse to require Mr Law to make appropriate comments on Mr Varty’s report.  If those comments were not obtained prior to the trial, and Mr Law was cross‑examined to reveal his position on Mr Varty’s report, that would be the first time the tenant’s counsel would learn of that position.  Without proper instructions on that position, counsel would be in no position to properly test Mr Law’s responses.

10. At the centre of the modern requirement in litigation that each party shall disclose their case, is the proposition that once all cards are on the table, each party can properly assess their position, and where appropriate resolve the matter by agreement.  To refuse to obtain Mr Law’s comments on Mr Varty’s report defeats the underlying objectives prescribed by Order 1A, rule 1 of the RHC.  It would decrease the effectiveness of the expert witness procedure, it would fail to ensure the case was dealt with expeditiously, it would deny fairness between the parties, and it would not facilitate the settlement of the dispute.

11. On that basis alone the landlords’ should be required to pay the costs of and incidental to the summons 13 May 2016, which is to be withdrawn by leave. 

12. I shall make a summary assessment of the costs.  Defendant’s solicitors are to lodge a schedule of costs by 5 pm on Thursday 14 July 2016.  Plaintiffs’ solicitors are to reply to that schedule by 5 pm on Monday 18 July 2016.