ZHANGJIAGANG BOYA TRADING CO., LTD v. ASD (HK) LTD (trading as CHEUNG WING GARMENTS CO)

HCA 2440/2016

[2021] HKCFI 1052

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2440 OF 2016

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DECISION ON COSTS

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1.  By my Judgment (the “Judgment”) handed down on 11 November 2020, I allowed (1) P’s claim to the extent of US$91,361.09, and (2) D’s Counterclaim to the extent of US$80,370 plus HK$73,569.70. I made an interest order nisi (the “Interest Order Nisi”). I also made a costs order nisi that that there be no order as to costs (the “Costs Order Nisi”).

2.  By submissions of 2 December 2020, Mr McLeish seeks variation of both the Interest Order Nisi and the Costs Order Nisi on the basis of a sanctioned payment in the sum of HK$286,769.34 made by D on 18 May 2016 (the “1^st Sanctioned Payment”[1]).  The latest date for P to accept the same without leave was 15 June 2016 (the “Latest Date”).

3.  By submissions of 15 December 2020, Ms Chong objects to the application, on the sole basis of D’s alleged failure to disclose details relating to its Counterclaim in time, so that it is unjust in the circumstances to make an order under Order 22, rules 23(2) and (3).

4.  Mr McLeish filed his reply on 24 December 2020.

5.  I have considered Qvist Henrik v Clatronic Far East Ltd & Anor [2020] 1 HKLRD 703 that Mr McLeish has cited to me.

6.  I have considered the factors set out at Order 22 rule 23(6) which this Court shall take into account.  I consider the following facts and considerations to be important:

(a)  In relation to the terms of the payment, P has failed to do better than the 1^st Sanctioned Payment by a very large margin.  The net award after interest is less than 10% of the 1^st Sanctioned Payment;

(b)  The 1^st Sanctioned Payment was made at a stage after D has filed its Defence and Counterclaim, and after P had received the affirmatory evidence filed by and on behalf of D in opposition of P’s application for summary judgment;

(c)  There is no elaboration by P as to what information P thought it needed but did not have in order to assess the 1^st Sanctioned Payment; and

(d)  There is no evidence that P had taken any reasonable efforts in seeking any information which it thought it needed, or that D had refused to provide any.

7.  In the circumstances, I do not find it unjust to make the orders under the relevant rules.

8.  In so far as the Interest Order Nisi is concerned, I make an order in terms of §3 of Mr McLeish’s submissions, to the effect that the interest otherwise payable by D to P under section 48 of the High Court Ordinance up to the date of the Judgment, after taking account of the judgment sums awarded to D for its counterclaim, be disallowed from the Latest Date to the date of the Judgment.

9.  In so far as the Costs Order Nisi is concerned, I order that:

(a)  P shall pay D’s costs of P’s claim and of D’s counterclaim incurred from the Latest Date (including any and all costs previously awarded to P after that date) on the indemnity basis; and

(b)  P shall pay D interest on the aforementioned costs at the rate of 2% above judgment rate.

10.  D shall have the costs of this application to vary, to be taxed if not agreed.

11.  I echo Mr McLeish’s submissions[2] that the costs and court time involved in arriving at a judgment in the present case have plainly been disproportionately large.  With that in mind, I decline Mr McLeish’s request that the costs of this action be summarily assessed by this court “so as to avoid the possibility of a disproportionately costly taxation”.  It is for the parties to exercise good sense to avoid that.  I do not find it appropriate or proportionate for this Court to engage in an assessment exercise in relation to the costs of a trial of long history, when the statement of costs concerned are likely to be long and complicated.