LEUNG SZE NOK v. TSUEN WAN PROPERTIES LTD t/a RIVIERA ICE CHALET

DCPI 1470/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO. 1470 OF 2007

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D E C I S I O N

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1.  The plaintiff applied by summons for leave to appeal against my order on costs of 5 November 2010 awarding costs of that hearing to the defendant on the plaintiff’s application by letter of 27 July 2010. The dispute raised in the plaintiff’s letter of 27 July 2010 was on the issue of the plaintiff’s sanction offer served on the defendant’s solicitor on 7 December 2009 under Order 22 of the Rules of District Court.

2.  The plaintiff had enclosed in the letter of 27 July a reply by the defendant of 26 July 2010 to the plaintiff’s earlier letter to the defendant, in which the defendant agreed to the plaintiff’s proposal for the plaintiff’s costs to be taxed on a common fund basis, but refusing to agree to the plaintiff’s proposal of accrual of interests on the agreed sum of $160,000 from the date of the writ and for an enhanced rate of interest due to the plaintiff’s sanction offer of 7 December 2009.

3.  It was against this background that the parties came before me on 5 November 2010. The crux of the dispute and argument on 5 November was whether the interest should be enhanced and accrued from the date of writ or date of the plaintiff’s sanction offer.

4.  Since the defendant had agreed to the plaintiff’s request for costs to be taxed on common fund basis, at the end of that hearing on 5 November I ruled that the plaintiff’s sanction offer in these proceedings, where liability was in dispute and where the plaintiff is under disability as a minor, Order 22 rule 4 applies because a sanction offer only takes effect when the court’s approval has been given. 

5.  The plaintiff’s ground of appeal for the present hearing was that I have failed to take into account the practice of costs to follow the event, and it was my ruling on that application that the plaintiff, for enhanced interest and interest payable from date of writ to the date of sanction offer, had failed when the agreement on quantum, which was inclusive of interest, was reached on the first day of trial.

6.  On the plaintiff’s second ground of appeal, that I had failed to exercise my discretion judiciously and failed to explain the reasons for my discretion, it can be clearly answered by the plaintiff’s first ground of appeal.  Costs usually follow the event.  Since the plaintiff had failed in her application for interest to accrue from the date of the sanction offer or date of writ, it is reasonable and logical for costs to be awarded against the applicant.

7.  Further, I am well aware of the matters I should take into account in the exercise of my discretion on costs on 5 November 2010.  I had followed Order 62 rule 5, which set out the special matters to be taken into account in exercising discretion, in particular Order 62 rule 5(1)(e), and 62 rule 2, the conduct of the parties in the post-judgment period, in particular, that had led to the hearing on 5 November 2010.

8.  Parties could have reached an agreement over the matters amicably on the issues of interest and costs, since the defendant had already on 26 July 2010 agreed to taxation on common fund basis.  For the aforesaid reasons, I find the plaintiff’s application devoid of merit.

9.  Taking into consideration the Court of Appeal’s dicta in Choy Yee Chun, representative of Chan Pui Yiu’s estate v Bond Star Development Limited (date of judgment 23 September 1997) and Order 62 rule 2 in the Hong Kong Civil Practice, page 1093, 62/2/11, the approach of the appellate court is:

“The Court of Appeal will not interfere with the exercise of a judge’s discretion in the award of costs, unless it was shown that he failed to exercise the discretion, or exercised it upon a false principle, or did not exercise it judiciously, or the exercise of discretion was demonstrably flawed”.

10.  I am not convinced the Court of Appeal would replace the discretion I exercised in making the order for costs on 5 November this year by its own discretion.  I cannot see any merits in the Plaintiff’s grounds of appeal proposed orally at the hearing.  I, therefore, refuse the plaintiff’s application, with costs to be taxed if not agreed.