LAM KONG SANG v. MOK SUNG KIT

DCCJ 3121/2016

[2018] HKDC 878

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3121 OF 2016

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DECISION

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1.  I have before me this afternoon a summons taken out by the plaintiff to vary the costs order nisi granted in my judgment handed down on 8 May 2018.

2.  At the hearing, the issues have been narrowed down to four points:-

(1)  The rate of enhanced interest on the judgment sum.  The plaintiff asks for judgment rate plus 5% whereas the defendant asks for judgment rate or, alternatively, not higher than 2% above judgment rate.

(2)  Should the enhanced interest rate accrue on the judgment sum up to payment, as sought by the plaintiff, or the date of judgment, as argued by the defendant?

(3)  The plaintiff seeks interest on costs at half of the above enhanced rate.  The defendant says no interest should be awarded on costs at all, or alternatively, interest should run at half the enhanced rate applicable to the judgment sum.

(4)  The date until which such interest should accrue.  The rival contentions are the same as under question (2). 

3.  Having heard submissions from counsel, I make the following orders:-

(1)  The defendant do pay the plaintiff enhanced interest on the judgment sum (excluding interest) at 4% above judgment rate from 5 July 2017 until the date of judgment.

There is no exact science in determining what percentage of enhanced rate is a suitable one.  Here, I take into account the fact that the plaintiff’s original sanctioned offer is a very generous one when compared to the loss he has in fact suffered, and that he was genuine and sincere in seeking a settlement, as is clearly demonstrated by his two subsequent offers. The defendant’s final counter-offer of $180,000 with no order as to costs was fairly wide of the mark as it would be evident, judging from parties’ correspondence and common sense, that the offered sum might not even cover the plaintiff’s legal costs incurred up to that point.

I do not agree with the plaintiff, however, that the enhanced interest rate should continue to run after the judgment date.  In this regard, I follow the Court of First Instance decision in Lo Yuk Sui v Fubon (Hong Kong) Ltd [2017] 2 HKLRD 477 at paras 57 to 58.

(2)  The defendant do pay the plaintiff interest on costs at half the enhanced rate applicable to the judgment sum set out in (1) above from 5 July 2017 to the date of judgment.

The defendant has failed to show why it would be unjust to impose interest on costs.  His position is hard to understand, particularly given that he accepts at the same time that the judgment sum should carry enhanced interest up to judgment.

The halving of the rate is to reflect that not all items of legal works were done as of 5 July 2017.  The affidavit evidence filed on behalf of the plaintiff reveals that costs were incurred in September 2017 and January 2018 both on counsel’s fees.  As submitted by the plaintiff, solicitors’ costs would be incurred from time to time during this period.  This would be in line with the approaches adopted by Lam J in Golden Eagle International (Group) Ltd v GR Investment Holding Ltd [2010] 3 HKLRD 273 at para 18 and Bharwaney J in Fung Chun Man v Hospital Authority [2012] 2 HKLRD 490 at paras 3 to 6.

(3)  I also make an order in terms of para 1 of the plaintiff’s summons.

( Submissions on costs )

4.  The plaintiff has largely succeeded on his summons.  As remarked above, there is no exact science in the selection of the right percentage figure, if there is one. The plaintiff should therefore be awarded costs.  Adopting the approach of Lam J in Golden Eagle at para 50, the basis of taxation for the summons itself should also be on an indemnity basis.

Order on costs

5.  The plaintiff do have costs of the summons on an indemnity basis, to be taxed if not agreed, with certificate for counsel.

6.  The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.