LAW CHUNG TAI v. SUN PROFIT LOGISTICS (HK) LTD AND ANOTHER

DCPI 174/2021

[2024] HKDC 1157

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 174 OF 2021

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BETWEEN

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DECISION

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Introduction

1.  A 2-day trial was scheduled to take place on 29 May 2024 (“Trial”).

2.  Shortly before the Trial, the Plaintiff and the 2^nd Defendant agreed to vacate the Trial upon the Plaintiff’s acceptance of a sum from the 2^nd Defendant in full and final settlement, and adjourn the costs issue for argument.

3.  This is the decision on costs.

Background

4.  On 21 January 2021, the Plaintiff commenced these proceedings against the 1^st Defendant.

5.  The Plaintiff claimed that on 12 September 2018, whilst in the course of his employment with the 1^st Defendant, he suffered personal injuries in an accident, which was caused by the negligence, breach of common duty of care, breach of statutory duties and/or breach of contract of employment on the part of the 1^st Defendant and/or its employees, servants, representatives, contractors and/or agents for which the 1^st Defendant was vicariously liable. The Plaintiff claimed total damages of around HK$2 million, minus HK$900,000 being employees’ compensation received in an Employees’ Compensation Case of this Court (“DCEC”).

6.  On 19 March 2021, the Plaintiff amended the Writ of Summons by joining the 2^nd Defendant.

7.  The 2^nd Defendant was the insurer of the 1^st Defendant for the period from 10 June 2018 to 9 June 2019. According to the 2^nd Defendant, it had not been aware of the alleged accident before receiving the Application in the DCEC from the Plaintiff on or around 28 March 2019, and so it subsequently repudiated the insurance policy with the 1^st Defendant. The Plaintiff did not plead any cause of action against the 2^nd Defendant.

Chronology

8.  On 5 January 2022, pursuant to Order 22 rule 8(2) of the Rules of the District Court (Cap.336H, sub.leg.) (“RDC”), the 2^nd Defendant served a notice on the Plaintiff, indicating that a sanctioned payment of HK$100,000 (inclusive of interest and on top of the employees’ compensation in the sum of HK$900,000) had been paid into court in settlement of the whole claim of the Plaintiff (“Sanctioned Payment”).

9.  On 29 March 2023, the Plaintiff’s solicitors wrote a letter expressly marked “without prejudice save as to costs” and “sanctioned offer under Order 22, RDC” to the 2^nd Defendant. I shall refer to this letter and the offer therein simply as “the Offer”.

10.  It is worthwhile setting out the Offer in full here:-

“We refer to the captioned case.

Solely for the purpose of resolving this matter amicably, we are instructed to make a sanctioned offer to your client under Order 22, rule [sic] 4 & 5 of the Rules of the District Court (“RDC”) in sum of HK$145,000 (inclusive of interest) plus costs to be taxed if not agreed [original emphasis] in full and final settlement of the whole of the captioned case.

Kindly note that the above offer is a sanctioned offer and intends to have the costs consequence provided for in Order 22, RDC. It is available for acceptance for a period of 28 days from the date of this letter. Should your client choose to not accept this sanctioned offer and at the trial the sanctioned offer is not beaten, the Court is likely to make the following costs orders:-

(1) Your client may have to bear our client’s costs after the latest date when the sanctioned offer could have been accepted;

(2) Your client may have to bear such costs on an indemnity basis with interest running on such costs at a penalty rate up to 10% over the Judgment rate; and

(3) Disallow all or part of any interest otherwise payable on the whole or part of any sum of money awarded to your client for some or all of the period after the latest date this sanctioned offer could have been accepted.

Should this letter fail to take effect as a sanctioned offer, it shall, in any event, have the same effect as a “Calderbank offer”.

We reserve the right to produce a copy of this letter to the Court to argue on costs where appropriate.

All our client’s rights are expressly reserved.” [emphasis added]

11.  On 6 September 2023, at the Checklist Review hearing, Master T K Lam ordered, inter alia, the Trial shall take place on 29 May 2024, and that parties shall submit written opening submissions and list of authorities no later than 7 days prior to the commencement of the Trial.

12.  On 20 September 2023, the Plaintiff filed his 2^nd witness statement.

13.  On 14 May 2024, the 2^nd Defendant’s solicitors sent an open letter to the Plaintiff’s solicitors (“May 14 Open Letter”), referring to the Offer and stating that the 2^nd Defendant agreed to accept the “sanctioned offer” in full and final settlement of the Plaintiff’s claim, while noting that the 2^nd Defendant agreed to pay costs on party and party basis up to 14 May 2024. Attached to the said letter were (a) a notice of acceptance of the “sanctioned offer” pursuant to Order 22 rule 12 RDC, and (b) a draft consent summons for vacating the Trial.

14.  On 16 May 2024, the Plaintiff’s solicitors replied to the 2^nd Defendant’s solicitors with an open letter (“May 16 Open Letter”), pointing out the deadline for acceptance of the “sanctioned offer” was 26 April 2023, and the same could not be accepted without leave of the court because there had never been any offer to re-open the “sanctioned offer” or any agreement as to costs. The Plaintiff’s solicitors further asked the 2^nd Defendant to take out a summons for leave to accept the “sanctioned offer” since the 1^st Defendant had been absent from the proceedings, and indicated that meanwhile the Trial shall stand.

15.  On 20 May 2024, the 2^nd Defendant took out a summons (“Summons”), seeking, inter alia, leave to accept the “sanctioned offer” out of time, an order that the 2^nd Defendant do pay the Plaintiff costs up to and including 16 May 2024 on party and party basis, and an order that the Trial be vacated.

16.  On 23 May 2024 morning, the Plaintiff and the 2^nd Defendant filed a consent summons (“Consent Summons”) for an order by consent that:-

(1) Leave be granted to the 2^nd Defendant to accept the “sanctioned offer” out of time;

(2) The 2^nd Defendant do pay the Plaintiff a sum of HK$145,000 (inclusive of interest) in full and final settlement of the Plaintiff’s claim in these proceedings (“the Settlement Sum”);

(3) The Settlement Sum shall be satisfied in the following manner:-

(a) The Sanctioned Payment paid by the 2^nd Defendant shall be released to the Plaintiff through the Director of Legal Aid forthwith;

(b) The remaining sum of HK$45,000 being the balance of the Settlement Sum shall be paid by the 2^nd Defendant to the Plaintiff through the Director of Legal Aid, within 28 days from the date thereof;

(4) The Trial be vacated;

(5) The Summons be adjourned to 29 May 2024 for argument on the costs issue;

(6) Costs of this application be in the cause; and

(7) The Plaintiff’s own costs be taxed in accordance with Legal Aid Regulations.

17.  On 23 May 2024 afternoon, the Summons was heard by HHJ G Chow. At the hearing, the learned judge expressed her reservation as to whether the Offer truly constituted a valid sanctioned offer under Order 22 RDC.

18.  As a result, on 29 May 2024, the Summons and the Consent Summons were adjourned before me at 9:30 am, ie half an hour before the commencement of the Trial. The 1^st Defendant did not appear. I ordered the 2^nd Defendant to pay the Plaintiff the Settlement Sum in the agreed manner in full and final settlement of the Plaintiff’s claim, and vacated the Trial. I also heard arguments on costs.

Parties’ stances

19.  The Plaintiff’s position was that the Offer was a valid sanctioned offer. Due to its failure to accept the same by the deadline of 26 April 2023, the 2^nd Defendant shall pay the Plaintiff’s costs to be taxed on an indemnity basis from 26 April 2023. Even if the Offer were not a valid sanctioned offer, the Offer and other factors such as the 2^nd Defendant’s litigation conduct would support an indemnity costs order.

20.  The 2^nd Defendant’s position was that the Plaintiff shall have costs of this action up to 16 May 2024 on party and party basis.

Was the Offer a valid sanctioned offer?

21.  The first issue is whether the Offer constituted a valid sanctioned offer within the meaning of Order 22 RDC.

22.  Prompted by the learned judge’s observation, the 2^nd Defendant took the view, for the first time in its Skeleton Argument lodged on 27 May 2024, that the Offer was not a valid sanctioned offer as provided under Order 22 rules 4 and 5 RDC.

23.  At the hearing, Mr Eddie Ng, Counsel for the Plaintiff, accepted that the Offer was not a valid sanctioned offer.

24.  With respect, I agree with the learned judge that the Offer did not constitute a valid sanctioned offer within the meaning of Order 22 RDC.

25.  Order 22 rule 4 RDC provides that an offer by a plaintiff to settle the whole or part of a claim or an issue arising from the claim does not have the consequences specified in that Order unless it is made by way of a sanctioned offer.

26.  Order 22 rule 5(7) RDC provides that a sanctioned offer made not less than 28 days before the commencement of the trial must provide that after the expiry of 28 days from the date the sanctioned offer is made, the offeree may only accept it if – (a) the parties agree on the liability for costs; or (b) the Court grants leave to accept it.

27.  In my judgment, the Offer did not comply with Order 22 rule 5(7) RDC and was therefore not a valid sanctioned offer. Mr Leon Ho, Counsel for the 2^nd Defendant, submitted that in the absence of a valid sanctioned offer, Order 22 RDC is inapplicable, and the costs issue here should be governed by Order 62 RDC. I agree. In the circumstances, the Plaintiff fails to invoke this court’s jurisdiction under Order 22 RDC to order costs on indemnity basis.

Should the Offer be taken into account as a Calderbank offer?

28.  The next issue is whether the Offer, not being a validly constituted sanctioned offer, should be taken into consideration for the question of costs.

29.  The Plaintiff submitted that even if the Offer were not a valid sanctioned offer, it was nonetheless a Calderbank offer which should be taken into consideration under Order 62 RDC, citing the Court of Appeal’s decision of CEP Ltd v Wuxi Jiacheng Solar Energy Technology Ltd Co [2016] 1 HKLRD 960.

30.  The 2^nd Defendant submitted that the Plaintiff clearly could have protected his position as to costs by means of a sanctioned offer, and since the Offer did not contain any sanctioned offer, it should be excluded from consideration of costs, citing Order 62 rule 5(1)(d) RDC which provides that the court may take into account any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings, but the court may not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22 RDC. The 2^nd Defendant further cited Hong Kong Civil Procedure 2024, Volume 1, rubric 62/5/8 to support the submission that the exclusionary rule under Order 62 rule 5(1)(d) RDC applies to Calderbank offers, and distinguished CEP (supra) on the ground that the Order 22 regime did not apply to appeal proceedings and therefore Calderbank offers might be taken into account by the Court of Appeal (paragraph 64 thereof).

31.  I agree with the 2^nd Defendant that in CEP (supra), the Court of Appeal’s rulings on the inapplicability of sanctioned offer principles and the relevance of “without prejudice save as to costs” offers on costs are in relation to appeal proceedings only. In that judgment, despite the dissatisfaction expressed by Lam VP (as he then was) and concurred by McWalters JA, the Court of Appeal confirmed that the exclusionary rule which applies to Calderbank offers is mandatory but not permissive – see paragraphs 1 and 71 thereof. In my judgment, the Plaintiff could have easily protected his position as to costs had he followed all the requirements of a sanctioned offer laid down in Order 22 rule 5 RDC. Since the Offer fell short of a valid sanctioned offer and was simply a Calderbank offer, I am bound by Order 62 rule 5(1)(d) RDC and CEP (supra) to disregard the Offer in the consideration of costs.

32.  That said, I must not forget that there is another dimension in this case – both the Plaintiff and the 2^nd Defendant had been under the common, albeit mistaken, belief of the Offer being a valid sanctioned offer until the observation of the learned judge at the hearing on 23 May 2024. Indeed, the 2^nd Defendant went so far as filing and serving the notice of acceptance of “sanctioned offer” on 14 May 2024, and taking out the Summons on 20 May 2024 and the Consent Summons on 23 May 2024 for leave to accept the “sanctioned offer” out of time. The Settlement Sum eventually accepted by the 2^nd Defendant was that offered by the Plaintiff in the Offer. Should parties’ such common, mistaken belief and pertaining conduct be taken into account despite Order 62 rule 5(1)(d) RDC?

33.  Mr Ng and Mr Ho admitted that they could not find any authority of similar facts. Mr Ng submitted that such matters were part of the conduct of the parties which shall be taken into account pursuant to Order 62 rule 5(1)(e) RDC. On the other hand, Mr Ho submitted that such common, mistaken belief and pertaining conduct shall not be taken into account, otherwise the mandatory exclusionary rule in Order 62 rule 5(1)(d) RDC would be circumvented.

34.  I agree with Mr Ho. As stated by Lam VP in CEP (supra), it has to be accepted that the exclusionary rule in Order 62 rule 5(1)(d) is mandatory rather than permissive, and the Rules Committees of the Rules of the High Court and the Rules of the District Court should consider whether Order 62 rule 5(1)(d) should be amended by deleting the exclusionary rule from it. In other words, the exclusionary rule cannot be disapplied or got round simply by interpretation of the relevant rules by the court. In my view, taking the Plaintiff and the 2^nd Defendant’s common, mistaken belief and their pertaining conduct into account under Order 62 rule 5(1)(e) RDC indubitably involves the consideration of the Offer as a Calderbank offer, which is tantamount to trumping the exclusionary rule in Order 62 rule 5(1)(d) RDC which is clearly impermissible.

35.  In this case, however, the ruling above may not have any practical significance, as Mr Ho accepted that I can still consider the May 14 Open Letter and the May 16 Open Letter. Putting aside the Offer, these two open letters should be interpreted as follows:-

(1) On 14 May 2024, the 2^nd Defendant agreed to pay the Plaintiff a sum of HK$145,000 (inclusive of interest) in full and final settlement of the Plaintiff’s claim, and to pay the Plaintiff’s costs up to 14 May 2024 on party and party basis.

(2) On 16 May 2024, the Plaintiff expressed that he needed 14 days to consider the 2^nd Defendant’s position and report the same to the Legal Aid Department.

Indemnity costs or party and party costs?

36.  In Law Yin Pok Bosco, a minor by Lam Po Yee, his mother and next friend v Dr Chan Yee Shing also known as Dr Chan Yee Shing Alvin [2022] HKCFI 345, Deputy High Court Judge Winnie Tsui (as she then was) summarised the principles governing indemnity costs orders at paragraph 8:-

“8. The principles governing indemnity costs orders are not in dispute. I shall apply the general principles which I sought to summarise in Wong Yung Tai v Top Eagle Security Management Ltd [2019] HKDC 408 at paras 39 to 43. They are:

(1) Generally speaking, the court has a broad discretion to determine how costs shall be paid and whether indemnity costs should be ordered: see, in general, Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004) 7 HKCFAR 114 at para 12.

(2) In order to obtain an order for costs on an indemnity basis, it is for the party seeking it to show that the case has some “special or unusual feature”: Town Planning Board at para 15.

(3) It is now well recognised that indemnity costs are no longer confined to cases where the paying party’s conduct lacks moral probity or deserves moral condemnation for which the court wishes to express disapproval. Conduct which falls short of that can be so unreasonable as to justify an order for indemnity costs. But such conduct would need to be unreasonable to a high degree. Unreasonable in this context does not mean merely wrong or misguided in hindsight: Kiam v MGN (No 2) [2002] 1 WLR 2810 at para 12; cited recently in Hong Kong in Heung Wing Yan v Hangway Housing Management Ltd HCPI 347/2012, 14 February 2017 at para 19.

(4) The pursuit of a weak claim will not usually, on its own, justify an order for indemnity costs. On the other hand, to maintain a claim that one knows, or ought to know, is doomed to fail on the facts and on the law, is conduct that is so unreasonable as to justify an order for indemnity costs: Wates Construction Ltd v HGP Greentree Allchurch Evans Ltd 105 CLR 47 at 55; Heung Wing Yan at para 19.

(5) There is an infinite variety of situations in which the court may consider appropriate to make an indemnity costs order. But ultimately what the receiving party must demonstrate is something in the conduct of the action or other circumstances of the case that “takes it out of the norm” which warrants such an order: Heung Wing Yan at para 20.” [emphasis added]

37.  In support of his argument for costs on an indemnity basis, the Plaintiff relied heavily on the Offer, the 2^nd Defendant’s non-acceptance of the Offer until 14 May 2024 and the lack of counter-offer or invitation to negotiate settlement from the 2^nd Defendant. Nonetheless, as I held above, the Offer as well as the parties’ common, mistaken belief that the Offer was a valid sanctioned offer and their pertaining conduct are excluded from the consideration of the question of costs.

38.  In my view, this case does not have such special or unusual feature warranting costs be awarded on an indemnity basis. It is not uncommon that parties reach settlement weeks or days before the commencement of trial. I agree with the 2^nd Defendant that the mere fact that a claim was settled shortly before trial when settlement proposals could have been put forward earlier does not take the case out of the norm.

39.  As a matter of fact, on 5 January 2022, the 2^nd Defendant made the Sanctioned Payment of HK$100,000 which had never been withdrawn or rejected, and the Plaintiff could accept the same with or without leave of the court depending on the timing of acceptance and the parties’ stances on the liability for costs. In other words, the 2^nd Defendant’s willingness to settle the claim without trial had always existed. I do not consider that the May 14 Open Letter, having the practical effect of slightly raising the settlement sum from HK$100,000 to HK$145,000, was something so late, unexpected or unreasonable that warrants indemnity costs.

40.  I also bear in mind that since the Plaintiff’s claim was settled without trial or judgment on merit, I cannot form a view on the reasonableness or unreasonableness of the 2^nd Defendant’s maintenance of the defence until 14 May 2024, or whether the Plaintiff’s 2^nd witness statement should or should not have had any bearing on the 2^nd Defendant’s own assessment of the merit of the defence.

41.  Even if my ruling on the exclusion of the parties’ common, mistaken belief in respect of the Offer and their pertaining conduct were wrong, still I would not have ruled this case as warranting indemnity costs:-

(1) First, the Plaintiff has pleaded no cause of action against the 2^nd Defendant. Pursuant to sections 43 and 44 of the Employees’ Compensation Ordinance (Cap.282), and the Court of Appeal’s decision of Pang Wai Chung v Tai Ping Insurance Co Ltd [1999] 2 HKLRD 354 (at 361F-G, 362E, 366C-F, 369C, 373I-375A), an insurer’s liability to pay the employee is a concurrent liability which would accrue upon the quantification of the employee’s claim against the employer. In the present case, if the Trial had been proceeded with, there would be a judgment quantifying the Plaintiff’s claim against the 1^st Defendant, and only upon that quantification the 2^nd Defendant’s liability to the Plaintiff would accrue. In other words, the Plaintiff would not have obtained a monetary judgment against the 2^nd Defendant after the Trial, not to mention a monetary judgment that would beat the Offer. Hence, it is not quite right to say that the 2^nd Defendant was late in accepting the Offer.

(2) Secondly, the difference between the Sanctioned Payment and the Offer was only HK$45,000. The Plaintiff has never complained that the Sanctioned Payment was an unrealistic settlement offer. It was not so unreasonable for the 2^nd Defendant to accept a slightly increased settlement sum shortly before the Trial to avoid litigation risks.

(3) Thirdly, Tsoi Yin Wan v LHG Catering Limited [2022] HKDC 433 cited by the Plaintiff is distinguishable from the facts here. In that case, the plaintiff made a sanctioned offer, and on the last day before expiry, the defendant rejected the sanctioned offer and made a counter-offer. The plaintiff subsequently rejected the counter-offer. About 2 months later, after the case had been re-fixed to the running list to be warned for trial, the defendant sought to accept the sanctioned offer out of time. HHJ Andrew Li took the view (at paragraphs 15 to 17) that by making the counter-offer (which would have completely wiped out the damages to be obtained by the plaintiff if he had to bear his own costs), the sanctioned offer was no longer on the table, and if the defendant had accepted the sanctioned offer in the original timeframe, the plaintiff would not have to incur unnecessary costs for the preparation of trial. In view of these factors, the learned judge came to the view that the plaintiff shall be entitled to any costs incurred due to the defendant’s unjustified, unreasonable and unexplained delay in accepting the sanctioned offer (paragraph 19). In his judgment, the learned judge also referred (at paragraph 18) to Petrotrade Inc v Texaco Ltd [2002] 1 WLR 947 and Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273, and stated that the modern position under the Civil Justice Reform is that an order for indemnity costs under the equivalent provisions of the CPR is not penal and carries no stigma or implied disapproval of the defendant’s conduct, and such an order is aimed to provide a means of achieving a fairer result for a plaintiff.

(4) In the present case, however, the Offer was not a validly constituted sanctioned offer, and in any event there was no initial rejection and subsequent acceptance of the Offer by the 2^nd Defendant. Moreover, there had always been the Sanctioned Payment for the Plaintiff’s acceptance. Further, HHJ Andrew Li made the statement that the order for indemnity costs is not penal and carries no stigma or implied disapproval of the defendant’s conduct in the context of sanctioned offer under Order 22 RDC, but not indemnity costs in general.

(5) Fourthly, Golden Eagle International (supra) cited by the Plaintiff is also distinguishable from the facts here. In that case, which was a contract dispute, the defendant declined the plaintiff’s proposal to mediate. Instead, the defendant made an offer to settle but the same was rejected. Subsequently, the plaintiff made a sanctioned offer, which was not accepted by the defendant. The parties eventually reached an agreement over the judgment sum which exceeded the sanctioned offer. Pursuant to the Order 22 regime, Lam J (as he then was) ordered, inter alia, the defendant to pay those costs of the plaintiff incurred after the last day of acceptance of the sanctioned offer on an indemnity basis. Lam J (at paragraph 13) referred to the judgment of Chadwick LJ in McPhilemy v Times Newspapers (No 2) [2002] 1 WLR 934 which stated that the purpose for which the power to order the payment of costs on an indemnity basis is conferred is to enable the court, in a case to which r.36.21 applies, to address the element of perceived unfairness which arises from the fact that an award of costs on the standard basis will, almost invariably, lead to the successful claimant recovering less than the costs which he has to pay to his solicitor. In Golden Eagle International (supra), the learned judge was referring to the purpose of awarding indemnity costs under the English counterpart of our Order 22 regime, but not indemnity costs in general.

(6) I also bear in mind Mr Ng’s argument that according to Order 62 rule 5(1)(aa) RDC, the underlying objectives in Order 1A rule 1 RDC, (such as to ensure that a case is dealt with as expeditiously as is reasonably practicable, to ensure fairness between the parties, and to facilitate the settlement of disputes) must be taken into account. Having considered all the circumstances, even if I were allowed to consider the parties’ common, mistaken belief regarding the Offer and their pertaining conduct, there is nothing to suggest that the 2^nd Defendant’s non-acceptance of the Offer until 14 May 2024 was unreasonable to a high degree.

42.  To conclude, this is not a case which warrants indemnity costs. The 2^nd Defendant shall bear the Plaintiff’s costs on party and party basis.

Should the 2^nd Defendant pay the Plaintiff’s costs after 14 May 2024?

43.  In the May 14 Open Letter, the 2^nd Defendant agreed to pay the Plaintiff’s costs on party and party basis up to 14 May 2024 only. In the Summons, the 2^nd Defendant changed the date from 14 May 2024 to 16 May 2024. Understandably, the Plaintiff disagreed and sought costs of the whole action including the costs of the Trial, which was only vacated at this hearing before me.

44.  I agree with Mr Ng that it was unrealistic for the 2^nd Defendant to suggest that the costs of the Trial could have been avoided by the Plaintiff’s acceptance of the 2^nd Defendant’s settlement proposal on 14 May 2024. By then, the Trial was only 15 days away. Parties had to comply with Master T K Lam’s direction that opening submissions and list of authorities shall be submitted no later than 7 days prior to the Trial. It is not difficult to imagine that when the 2^nd Defendant made its settlement proposal on 14 May 2024, the Plaintiff’s counsel and solicitors had been assigned to conduct the Trial by the Legal Aid Department and were already preparing for the Trial. I also agree with the Plaintiff that as he has been legally aided, time and costs were required for his legal team to report the 2^nd Defendant’s settlement proposal to the Legal Aid Department for consideration before he could take further steps with the settlement proposal. In short, the costs of the Trial of both counsel and solicitors were unavoidable.

45.  In my judgment, the 2^nd Defendant shall pay the Plaintiff’s costs of this action including the costs of the aborted Trial, but not just up to 14 or 16 May 2024.

Costs of the Summons and the Consent Summons

46.  In the Summons, the 2^nd Defendant asked for an order that there be no order as to costs for the Summons.

47.  In the Consent Summons, the Plaintiff and the 2^nd Defendant sought an order that the costs thereof shall be costs in the cause.

48.  In his Skeleton Argument, the Plaintiff asked for costs of the Summons and the hearings on 23 and 29 May 2024 be paid by the 2^nd Defendant to the Plaintiff on an indemnity basis. As fall-back, should this court take the view that the Offer was not a valid sanctioned offer and hence costs after 26 April 2023 be taxed on party and party basis, then the Plaintiff asked for his costs of the Summons including the costs of the hearing on 29 May 2024 in any event because the Summons should not have been taken out in the first place.

49.  The 2^nd Defendant in its Skeleton Argument asked for costs of the hearing on 29 May 2024.

50.  I agree with the Plaintiff that since the 1^st Defendant was not legally represented and had been absent from the proceedings, a consent order or consent summons entering judgment in the Settlement Sum and vacating the Trial without coming to court was not possible.

51.  In relation to the argument on costs of the action, I take into account the concession made by Mr Ng and Mr Ho at the hearing before me that the Offer was not a valid sanctioned offer, contrary to the parties’ mutual stance maintained up to the hearing before HHJ G Chow on 23 May 2024. Moreover, I have rejected the Plaintiff’s argument that his costs shall be paid on an indemnity basis, and also the 2^nd Defendant’s argument that it shall be responsible for the Plaintiff’s costs up to 14 or 16 May 2024 only. The Plaintiff’s argument on indemnity costs took up most of the time of the hearing.

Conclusion

52.  For the Summons and the Consent Summons, I make an order that:-

(1) 30% of the Plaintiff’s costs of both summonses including costs of the hearings on 23 May 2024 and 29 May 2024 be paid by the 2^nd Defendant, with Certificate for Counsel, to be taxed on party and party basis if not agreed, to reflect the fact that the parties had to come to court for the Plaintiff to enter judgment against the 2^nd Defendant and vacate the Trial; and

(2) 50% of the 2^nd Defendant’s costs of both summonses including costs of the hearings on 23 May 2024 and 29 May 2024 be paid by the Plaintiff on party and party basis, with Certificate for Counsel, to reflect the 2^nd Defendant’s success in arguing costs on party and party basis and its failure in arguing liability on costs up to 14 or 16 May 2024 only. I summarily assess the 2^nd Defendant’s costs at HK$32,500. For the avoidance of doubt, the assessed sum has taken into account that only 50% of the 2^nd Defendant’s costs be paid by the Plaintiff.

53.  Subject to the order in the preceding paragraph, I order that the 2^nd Defendant shall pay the Plaintiff’s costs of this action including the costs of the aborted Trial and all reserved costs, with Certificate for Counsel, to be taxed on party and party basis if not agreed.

54.  The Plaintiff’s own costs shall be taxed in accordance with the Legal Aid Regulations.

55.  I thank Mr Ho and Mr Ng for their assistance.