LIKE SOON COMPANY LIMITED v. TSAI KUI KAN AND OTHERS

HEADNOTE

Appeal from Master - Meaning of the words "costs (to) follow the event" in interlocutory proceeding - Is "the event" the event decided in the interlocutory proceedings or the final event - Held that the proper meaning of the words is "the final outcome" and that the words must be given that meaning unless something in the judgment requires otherwise.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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JUDGMENT

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1. I am dealing here with appeals against two orders made by Master O'Donnell. The first appeal is against his decision on the 11th of November 1985 to dismiss the application by the plaintiff, Like Soon Company Limited (Like Soon), for an appointment to tax a bill of cost against the defendants pursuant to the order of the Honourable Mr. Justice Mayo dated the 4th of February 1981. The second appeal is against an order also made on the 11th of November 1985, dismissing the application by Like Soon for an appointment to tax the bill of costs against the defendants pursuant to the order of the Court of Appeal dated 26th of July 1982, ordering that the costs of the application be to the defendants.

2. The nature of these appeals can only be understood if I trace the history of action 581 of 1979 and action 4080 of 1979. On the 10th of January 1979, Francisca Ha, the 5th defendant, issued writ no. 581 of 1979 against Mr. Tsai Kui Kan (Mr. Tsai), the 1st defendant, Neptune Realty Company Limited (Neptune), the 2nd defendant and Lucinda Garden Limited (Lucinda), the 3rd defendant. He claimed specific performance of an alleged agreement for the sale of certain property and other relief. This writ was registered as a lis pendens against the properties the subject of the action on the 15th of February 1979. On 30th of March 1979, Francisca Ha applied for summary judgment under 0.14. The order made on this summons was that there should be unconditional leave to defend with the usual consequential orders. This order was filed on the 3rd of May 1979.

3. On the 18th of September of 1979, Like Soon issued their writ no. 4080 of 1979, nameing five defendants. Francisa Ha was a defendant as were the 3 defendants in writ 581. The other defendant was Tani Investment Ltd. (Tani).

4. On the 19th of December 1979, Neptune and Lucinda took out a summons seeking to dismiss action 581 and/or to have the lis ponders vacated.

5. On the 21st of December 1979, Mr. Tsai took out a summons, seeking a similar relief. Mr. Registrar Blackwell dealt with these summonses by making an order, dated the 5th of May 1980, dismissing action no. 581 with costs and ordering the vacation of the lis pendens.

6. Francisca Ha took out a summons to stay the vacation of the lis pendens pending appeal and an order was made in terms of that summons on the 9th of May 1980. He filed a notice of appeal on 12th May.

7. Mr. Tsai, Neptune and Lucinda took out a summons in November of 1980 to strike out Like Soon's statement of claim in action 4080.

8. On 21st of January 1981, Like Soon applied by summons to be added as plaintiff in 581 and Francisca Ha also took out a summons applying to add Like Soon an plaintiff in 581.

9. On the 2nd, 3rd and 4th of February 1981, Mayo J. heard all of these applications. In 581 he made an order that Francisca Ha's appeal against the striking out be dismissed and that the applications of Francisca Ha and Like Soon to join Like Soon an plaintiff in action 581 be dismissed.

10. In 4080 he ordered that the applications by Mr. Tsai, Neptune, Lucinda and Tani to strike out 4080 and vacate the lis pendens be also dismissed.

11. The orders made by Mayo J. were taken to the Court of Appeal, of which I was a member. Inaction 581 there wan an appeal by Francisca Ha from the dismissal of his action and the vacation of his lis pendens and there wan a respondent's notices from Mr. Tsai contending that the orders should be affirmed on the additional ground that the Judge had erred in law in coming to the conclusion that Francisca Ha had an arguable cane upon which to proceed to trial.

12. There was an appeal by Mr. Tsai in action 4080 against the Judge's refusal of his application to dismiss Like Soon's action and to vacate that lis pendens.

13. The Court of Appeal confirmed the dismissal of action 581 and the order vacating the lis pendens and dismissed the several appeals against the refusal to, strike out action 4080. In action 4080 Like Soon was, therefore, successful and in action 581 Francisca Ha failed. The Court of Appeal ordered that there "be an order nisi as to costs that costs follow the event". Counsel asked me to put from my mind, and I agreed so to do, any memory I had as to what was intended by the Court of Appeal when making its order an to costs and to deal with the matter strictly upon the basis that I give the words their proper meaning in the context of the order.

14. On 13th October 1983 Master Wilson discussed action 4080 for want of prosecution.

15. In the first of the decisions of Master O'Donnell, from which appeal is made, the Master refused to tax the costs which Like Soon claimed had been awarded to it by Mayo J. when he refused to accede to the applications to strike out action 4080. The Master ruled :

"Justice Mayo's decision that 'all costs to follow the event' interpreted in relation to the outcome of the litigation rather than the interlocutory application. Accordingly, plaintiff is not entitled to cost on this application. Costs of this application of taxation to the Defendants present. Plaintiffs allowed costs on Items 1 - 5 of this Bill of Costs as these were costs to be borne by the Defendants in any event on the first Defendant's amendments to his Defence and Counterclaim."

The learned Master appears to have been referred during argument to the notes of the judge, upon which the order was based, and not to the order itself. It is true that the notes read "All costs to follow the event". However, the formal order of the Court reads :

The formal order was the order of the Court and it seems to me to be clear beyond argument that the learned Master should have rested his decision not upon the notes of the judge but, upon the order itself. The appellant is entitled to succeed on this appeal and I order the matter be returned to the Master for taxation upon the basis of the order of the Court.

16. In the second matter Master O'Donnell was asked by Like Soon to tax the costs which it claimed were awarded to it by the Court of Appeal when it dismissed the appeal against Mayo J. 's order refusing to strike out Action 4080. The order the Court of Appeal as to costs had been "an order nisi as to costs that costs follow the event". The Master ruled :

"CA's order that costs "follow the event" held to mean the outcome of the litigation rather than the interlocutory appeal. Although not entitled to costs in terms of this order, costs of this taxation to the defendant's present. Plaintiff document returned."

The Court of Appeal had dealt, as I have indicated above, with appeals in Action 4080 and Action 581.

17. Mr. Tang, who appears for the appellant quite rightly submits that the words "the event" in the order of the Court of Appeal must have been meant to refer to each of the two matters decided by the Court of Appeal. He submits that this Court should be satisfied that the words "the event" mean either "this event" or "the event decided by this Court". He argues that his client, Like Soon which was successful in its event, i.e. the appeals against the refusal to strike out action 4080, is entitled to its costs of that event. He submits that there is nothing unusual about such an order as plaintiffs are commonly awarded their costs when a defendant is unsuccessful in an application to strike out. He submits that if the Court had meant the costs to follow the final event it could have said "costs to be costs is the cause". Equally, of course, it might be argued that the Court could have said "costs to the plaintiff in any event". It is certainly true that a more explicit order could have been made. This does not however really assist me in arriving at a conclusion as to the meaning of the words actually used.

18. Mr. Tang submitted that the words used are a common shorthand way of saying, where more than one interlocutory application has been dealt with, that the costs will follow the instant event in each application rather than the final event. It seems to me, however, that, unless it can be established that there is " a common shorthand way" such as is contended for, it is equally arguable that the words could be taken to mean the final event in each application.

19. Mr. Rogers, who appears for this respondent, submitted that one must look to 0. 62 r. 3(3) reads as follows :

"If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings, the Court shall, subject to this order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some or other order should be made to the whole or any part of the costs."

Mr. Rogers argued that the words "the event" in that rule mean the outcome of the whole proceedings. (See Field v. The Great Northern Railway Co. (1878) 26 W.R. 817). He referred to Howell v. Derring (1915) 1KB 54 per Buckley L.J., at 62, (quoted in Words and Phrases Legally Defined at 189) which states "what is the meaning of the word "event" in 0.65, r. 1.   An "event" within the meaning of the rule is an outcome of the presentation to the tribunal of some claim made by the plaintiff against the defendant which results in a finding that the plaintiff is not entitled to relief against the defendant."

20. Mr. Rogers relying on this decision, submitted that in 0.62 r. 3 "the event" meant the event which determined the action and that the same meaning should be given to the words when used by the Court of Appeal.

21. We are, of course, in the present case not concerned with what the words mean in 0.62, r 3 but with what the Court of Appeal meant when it used them in the case before it. Mr. Rogers submits that the only meaning that can properly be given to the words "the events" is the final event in the action. He submits that if any other meaning were intended the Court would have said it. It might, for instance, have said "this event" or "the event before us" or ordered "costs to the plaintiff in any event". He says, as to action 581, that the event was the earlier determination of the action by Master Blackwell. This event had, it is true, already occurred but, its correctness having been confirmed by the dismissal of the appeal, it determined the matter of costs. He submits, as to action 4080, that the Court was also referring to the final determination of the action.

22. The words "the event" are, in my view, capable of hearing either the meaning contended for by Mr. Rogers or that contended for by Mr. Tang.  I am, however, satisfied, having considered the arguments of counsel, that, when the words are used in a judgment with reference to costs the meaning properly to be attributed thereto is "the final outcome" and that they should bear this meaning unless something in the judgment requires otherwise.

23. Is there anything in the judgment which requires that the proper meaning of the words should not be given thereto? Mr. Tang suggests that the meaning he contends for is required by the judgment because the Court was employing a form of shorthand commonly used to indicate that costs should follow the determination of each issue when a brief but compendious order is made having application to the costs of multiple issues. I am not persuaded of the existence of any recognized form of shorthand order of the type for which he argues.

24. Mr. Rogers submitted that the Court of Appeal had said in its judgment that it did not discount the possibility that Likesoon's action was a sham and that such being the case, it was unlikely that the court would order Likesoon to have its costs in any event. I do not consider that too much weight can be given to this submission but do note that the observation of the Court is entirely in accordance with a ruling that costs should follow the final outcome.

25. There is, I am satisfied, nothing in the judgment which indicates that the words should hear any meaning other than their proper one.

26. I am satisfied that the learned Master was right in holding that the words meant the outcome of the litigation and I discuss the appeal.

27. I make orders nisi to be final within 14 days :