SPORTOYS SALES INC v. STALLION (ASIA) LIMITED

DCCJ 1075/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1075 OF 2010

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BETWEEN

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DECISION ON APPLICATION TO VARY COSTS ORDERS NISI

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1.  By Summons dated 3 November 2010, the plaintiff applied for summary judgment against the defendant for 4 distinct relief pleaded in its Amended Statement of Claim (defined as the Account Claim, the 1^st Sum, the 2^nd Sum, and the 3^rd Sum in the Judgment handed down on 20 January 2011).

2.  I entered judgment on the 1^st Sum, granted unconditional to defend on the Account Claim and the 2^nd Sum, and dismissed the application in relation to the 3^rd Sum.  I also dismissed an oral application by the plaintiff to amend the Summons in respect of the 3^rd Sum.

3.  At paragraph 65 of the Judgment, I made the following costs orders nisi:

“(1) costs of and occasioned by the plaintiff’s application for summary judgment in respect of the 1^st Sum be to the plaintiff to be taxed if not agreed;

(2) costs of and occasioned by the plaintiff’s application for the Account Claim and the 2^nd Sum be costs in the cause, to be taxed if not agreed;

(3) costs of and occasioned by the plaintiff’s application for the 3^rd Sum and the plaintiff’s oral application to amend the Summons be to the defendant to be taxed if not agreed;

(4) there be certificate for counsel.”

4.  It was recognized that the cost orders nisi, although reflecting the orders usually made in the circumstances, were nevertheless cumbersome.  At paragraph 66 of the Judgment, I anticipated that the parties might well wish for a simpler costs order, and intimated I would certainly entertain any such suggestion.

5.  The Plaintiff took up the invitation, and applied to vary the costs orders nisi.  Directions were then made for the parties to file their written submissions and at the conclusion of which to jointly confirm to the Court that no oral hearing was necessary (subject to the Court viewing otherwise).  The parties have confirmed by a joint letter dated 15 March 2011 that no oral hearing is necessary and I do not see any compelling factors to depart from that agreement.

6.  The plaintiff’s position on the present application is as follows.  The plaintiff estimates, on a broad-brush basis, that the time and costs expended in the 1^st Sum and the 3^rd Sum each comprise of about 15%, with the remaining 70% attributable to the Account Claim and the 2^nd Sum.

7.  Flowing from the foregoing rough estimation, the plaintiff’s primary position is that the entire costs of and occasioned by the present summary judgment application should be in the cause, since the costs in relation to the 1^st Sum and the 3^rd Sum would balance out each other.  In the alternative, the plaintiff submits that the plaintiff and the defendant should each pay to the other 15% of the costs of and occasioned by the summary judgment application.

8.  On the other hand, the defendant submits that the costs in relation to the 1^st Sum should be reserved and the costs in relation to the 3^rd Sum should be paid forthwith because the plaintiff is a foreign corporation.  It is said that it is not beyond peradventure that the costs in relation to the 1^st Sum may be refused in their entirety should the defendant prevail in the other 3 claims, since the plaintiff should have brought the 1^st Sum (in the sum of US$920.70) in the Small Claims Tribunal.

9.  In the alternative, the defendant says that the apportionment estimated by the plaintiff is incorrect, in that the time and costs incurred in the 1^st Sum, the 2^nd Claim (and the Account Claim), and the 3^rd Sum ought roughly to be respectively 10%, 45% and 45%.  From the foregoing estimate, the alternative orders proposed are as follows:

(1) 10% of the costs of and occasioned by the summary judgment application (being attributable to the 1^st Sum)     be reserved;

(2) 45% of the costs of and occasioned by the summary judgment application (being attributable to the Account Claim and the 2^nd Sum) be costs in the cause, to be taxed if not agreed;

(3) 45% of the costs of and occasioned by the summary judgment application (being attributable to the 3^rd Sum)    be paid to the defendant forthwith.

10.  In reply, the plaintiff points out that the defendant did not capitulate on the 1^st Sum until the hearing of the summary judgment application and that the judgment sum has so far remained unsatisfied.  It further says that insofar as the defendant suggests that any costs should be taxed and paid to the defendant forthwith, the plaintiff would likewise ask for an order that any costs in its favour should be taxed and paid to the plaintiff forthwith.

11.  In my view, I am minded to prefer the defendant’s rough apportionment of costs, namely 10%, 45% and 45% between, respectively, the 1^st Sum, the 2^nd Sum (and the Account Claim) and the 3^rd Sum.  That rough apportionment is reflected by the respective “coverage” dedicated to each claim in my Judgment.

12.  On the other hand, I agree with the plaintiff that the defendant did not capitulate on the 1^st Sum until (at the earliest) its counsel filed his skeleton argument (see paragraph 7 of the Judgment), and as such, costs would have already been incurred by the plaintiff.

13.  It therefore seems to me that by setting off the costs in relation to the 1^st Sum and those in relation to the 3^rd Sum, there should be an order that the plaintiff should pay to the defendant 35% of the costs of and occasioned by the summary judgment application forthwith, not so much because the plaintiff, as the defendant emphasizes, is a foreign corporation but because this is the prevailing approach in the post Civil Justice Reform era.

14.  Neither party, despite having alluded to the possibility of obatining a forthwith costs order in its submissions, has requested for summary assessment of costs and no Statement of Costs has been lodged.

15.  Bearing all the above in mind and in the exercise of my discretion, the costs orders nisi are therefore varied and made absolute as follows:

(1) 45% of the costs of and occasioned by the summary judgment application be costs in the cause, to be taxed if not agreed;

(2) 35% of the costs of and occasioned by the summary judgment application be paid by the plaintiff to the defendant forthwith, to be taxed if not agreed;

(3) there be certificate for counsel.

16.  I also make an order nisi that the plaintiff do pay to the defendant the costs of the present application to vary the costs order nisi to be taxed if not agreed.  The plaintiff’s primary argument (to have the entire costs be in the cause) has failed and its alternative argument (in effect to have 70% of the costs to be in the cause) has substantially failed.  On the other hand, the defendant has de facto succeeded in seeking to “defend” the costs orders nisi, subject only to the inclusion of an apportionment of costs with which I agreed.

17.  Absent any application to vary, the above costs order nisi (for the present application to vary) will become absolute within 14 days hereof.