CHOW KWAN YEE v. LEUNG MEI YIN MAY AND ANOTHER

CACV 20/2020

[2021] HKCA 832

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 20 OF 2020

(ON APPEAL FROM HCA NO 1260 OF 2017)

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DECISION ON COSTS

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Hon G Lam J (giving the Decision on Costs of the Court):

1.  In our judgment in the appeal handed down on 15 April 2021 ([2021] HKCA 497), we made an order nisi that:

(a) As to costs below:

(i) the 1^st defendant pay the plaintiff 40% of the costs of the proceedings below, and

(ii) the plaintiff do pay the 2^nd defendant 40% of the costs of the proceedings below; and

(b) As to costs of the appeal:

(i) the 1^st defendant do pay the plaintiff 50% of the costs of the appeal, and

(ii) there be no order as to costs as between the 2^nd defendant in the plaintiff as to the costs of the appeal.

2.  The plaintiff and the 2^nd defendant have each applied by summons to vary the order nisi.

(1) The plaintiff’s summons seeks an order to vary (a)(i) and (a)(ii) above (ie concerning only costs below), to an order that (i) the 1^st defendant do pay the plaintiff 50% of the costs below, and (ii) there be no order as to costs as between the plaintiff and the 2^nd defendant.

(2) In contrast, the 2^nd defendant does not seek to disturb the order for costs below, but seeks to vary (b)(ii) above, to an order that the plaintiff do pay the 2^nd defendant 50% of the costs of the appeal.

3.  Dealing with the plaintiff’s summons first, the plaintiff in her submissions contend that the defendants or alternatively the 1^st defendant should bear 50% of the plaintiff’s costs of the appeal and below.  Insofar as this seeks to make the 2^nd defendant liable also for the costs of the appeal, this contention is not part of the plaintiff’s summons and no explanation has been put forward why this should be entertained.  We reject this contention. 

4.  As to the variations sought in her summons, the plaintiff submits that the 1^st defendant’s costs are indistinguishable from the 2^nd defendant’s costs, as they engaged the same legal representatives, ran the same case based on a joint pleading, and their evidence was largely the same.  They should therefore be taken as having incurred one set of costs.  From a holistic point of view, the plaintiff was partially successful against the defendants.

5.  We reject this submission.  The fact that the defendants have jointly incurred costs does not mean that they are to be lumped together for all purposes relating to costs.  It is for a plaintiff to choose which persons to sue, and if she chooses to sue, among others, someone who is ultimately found not liable, prima facie she should be ordered to pay the costs of the successful defendant.  The fact is that the plaintiff has failed in her action vis-a-vis the 2^nd defendant.

6.  The plaintiff’s second point, however, has some force.  It is submitted that although the 2^nd defendant was successful in defending the plaintiff’s action as against him, he had raised, among others, the defence (jointly with the 1^st defendant) that the sum of $2 million was a gift rather than a loan, which was a fact-intensive issue taking up substantial time and costs and which the trial judge roundly rejected.  Where a successful party has failed on an allegation that has caused a significant increase in the length or costs of the proceedings, that may be a reason for depriving him of the whole or part of his costs: see eg Zhuhai International Container Terminals (Jiuzhou) Ltd v Lo Tong Hoi (CACV 181/2011, 31 July 2012), §33.  In the circumstances, we consider it just to reduce by half the award of costs below to the 2^nd defendant.  We vary paragraph 1(a)(ii) above to an order that the plaintiff do pay the 2^nd defendant 20% of the costs of the proceedings below.

7.  Further, we see no justification for varying paragraph 1(a)(i) above from 40% to 50%.  The proportion of 40% was based on the trial judge’s apportionment of time as stated in paragraph 59 of his judgment.  The plaintiff has not advanced any basis for disturbing it.

8.  As for the defendant’s summons, the 2^nd defendant’s argument is that since he was wholly successful in the appeal in relation to the plaintiff’s claim against him and was partially successful in the appeal in relation to his counterclaim (he succeeded on the Bangle but lost on the monetary claims), there should be no order as to costs of the appeal so far as his counterclaim is concerned but he should have the costs of the appeal so far as the plaintiff’s claim is concerned.  We do not accept this contention.  While the 2^nd defendant succeeded in the appeal relating to the plaintiff’s claim, he again raised and lost the argument that the sum of $2 million was gift rather than a loan.  Further, the points he raised in relation to the counterclaim for $200,000 and $32,280 were fact‑sensitive points that no doubt took up substantial time for preparation.  The fact that at the hearing, the 2^nd defendant only concentrated on the points on which he eventually succeeded does not assist him, for counsel were asked by the court to focus on those issues, and it is unlikely that the actual hearing time accounts for a very substantial part of the costs.  Based on a broadbrush approach having regard both to the extent of success in the outcome and on the individual issues raised and the relative complexities and scope of the issues, we are satisfied that the order nisi that there be no order as to costs as between the 2^nd defendant and the plaintiff is the fair order.  The 2^nd defendant’s application for variation is therefore dismissed.

9.  For the above reasons, we vary the order nisi that the plaintiff do pay the 2^nd defendant 40% of the costs of the proceedings below to an order that the plaintiff do pay the 2^nd defendant 20% of the costs of the proceedings below.  The other part of the plaintiff’s summons and the defendant’s summons are dismissed.

10.  Both parties having achieved a measure of success in the positions they have adopted, on a nisi basis we consider that there should be no order as to the costs of the summonses.