SUCCESS LANE DEVELOPMENT LTD v. FERGURSON HONG KONG LTD t/a NEW WORLD MILLENNIUM HONG KONG HOTEL

DCCJ 2191/2023

[2025] HKDC 46

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2191 OF 2023

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DECISION

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APPLICATION

1.  This is an application of the plaintiff (“P”) for leave to appeal from two decisions made by this Court.

PROCEDURAL HISTORY

2.  The underlying dispute and the procedural history in this action have been summarized in §§2 to 8 and §§20 to 29 of the judgment of the Court of Appeal dated 30 August 2024[1] (“First CA Judgment”) as well as §§19 to 31 of the recent judgment of the Court of Appeal dated 15 October 2024[2] (“Second CA Judgment”) (collectively, “Two CA Judgments”), which I respectfully adopt and will not repeat here.

3.  In order to understand the arguments in this application, it is necessary to set out a brief chronology of the seven decisions made by this Court (“Chronology”) as follows:-

(1)  In the Decision dated 25 September 2023[3] (“Injunction Decision”), P’s summons for interlocutory injunction (“Injunction Summons”) was dismissed with a costs order nisi that P do pay the costs of the defendant (“D”) on an indemnity basis.

(2)  In the Decision dated 1 March 2024[4] (“Leave Decision”), P’s two summonses respectively apply for leave to appeal against the substantive decision of the Injunction Decision (“Leave Summons”) and for adducing new evidence (“Evidence Summons”) were dismissed with a costs order nisi that P do pay D’s costs of the two summonses[5] on party and party basis, to be summarily assessed, payable forthwith after the assessment.

(3)  In the Decision dated 1 March 2024[6] (“Injunction VOC Decision”), D’s summons (“D’s VOC Summons”) for variation of the costs order nisi of the Injunction Decision was granted in part[7] with a costs order nisi that P do pay D’s costs on party and party basis, to be summarily assessed, payable forthwith after the assessment.

(4)  In the Decision dated 26 July 2024[8] (“Leave-Injunction VOC Decision”), P’s summons for leave to appeal against the substantive decision of the Injunction VOC Decision was dismissed with a costs order that P do pay D’s costs, summarily assessed at HK$26,000, payable forthwith.

(5)  In the Decision dated 26 July 2024[9] (“Leave-Summary Assessment Decision”), P’s summons for leave to appeal against the three summary assessments of costs (payable by P as referred to in §§3(1)-(3) above) dated 2 April 2024 (“Three Costs Assessments”) was dismissed with a costs order that P do pay D’s costs, summarily assessed at HK$18,000, payable forthwith.

(6)  In the Decision dated 26 July 2024[10] (“First Costs Variation Decision”), P’s summons for variation of the costs order nisi made in §37 of the Injunction VOC Decision was dismissed with a costs order that P do pay D’s costs, summarily assessed at HK$21,000, payable forthwith.

(7)  In the Decision dated 26 July 2024[11] (“Second Costs Variation Decision”), P’s summons for variation of the costs order nisi made in §89 of the Leave Decision was dismissed with a costs order that P do pay D’s costs, summarily assessed at HK$21,000, payable forthwith.

4.  Subsequent to this Court’s dismissal of all of P’s applications for leave to appeal as set out in §§3(2), (4), (5) above, P renewed all those applications for leave to appeal, which were subsequently dismissed by the Court of Appeal respectively in the First CA Judgment[12] (in that P’s application for leave to appeal from the Injunction Decision was dismissed) and the Second CA Judgment[13] (in that P’s applications for leave to appeal from the substantive decision of the Injunction VOC Decision and the Three Costs Assessments were dismissed).

PRESENT SUMMONS

5.  By the Summons taken out by P on 9 August 2024 (“Present Summons”), P now seeks leave to appeal from the First Costs Variation Decision and the Second Costs Variation Decision (collectively, “Two Costs Variation Decisions”).

LEGAL PRINCIPLE

6.  The legal principles governing appeals in relation to costs are summarized in §13(6) of the Second CA Judgment which I respectfully repeat as follows:-

“(6) Costs are matters for the broad discretion of the court making the award, and the Court of Appeal would be very circumspect in intervening in such decisions with a high discretionary content. It will only interfere when it is satisfied that the decision of the judge is either wrong in principle or plainly wrong. See Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815, at §34; Chan Shun Kei v Hong Kong Construction (HK) Ltd (CACV 192/2014, 7 March 2016), at §22……”

P’s SKELETON SUBMISSIONS

7.  P has lodged two skeleton submissions respectively dated 8 October 2024 (“First Submission”) and 5 November 2024 (“Second Submission”) in support of the Present Summons. The two skeleton submissions are unfocused and disorganized. They disclose no valid grounds of appeal but contain rambling criticisms of the various decisions in this action, many of which are plainly irrelevant to the present application.

8.  In gist, P focuses on two major complaints: the decisions made by this Court in this action are flawed and this Court has bias against P and its director. I should start with P’s attempts to challenge the rulings of several decisions made by this Court.

9.  It is immediate apparent from the Chronology that P is now seeking leave to appeal from the Two Costs Variation Decisions, in that P’s two summonses for variation of the costs order nisi respectively granted in the Leave Decision and the Injunction VOC Decision were dismissed.

10.  It is noteworthy that P’s summonses for leave to appeal from the underlying Injunction Decision, the Injunction VOC Decision and the Three Costs Assessments (collectively “Three Decisions”) have all been dismissed in the Two CA Judgments[14], which are binding on P. Hence, P’s attempts to challenge the substantive decisions of the Three Decisions in the present application are doomed to fail.

11.  Viewed in this light, a substantial part of P’s submissions, including §§2-3, 5-8 of the First Submission and §§1, 3 of the Second Submission, in so far as they seek to challenge the substantive decisions of the Three Decisions, are bound to fail. For completeness sake, P’s arguments seeking to challenge the Three Decisions will be briefly dealt with as follows.

12.  Being bound by the First CA Judgment, P is left with no room to repeat its arguments seeking to adduce new evidence to challenge the rulings of the Three Decisions. Therefore, its allegations relating to a black rainstorm incident, the use of car parking space and P’s unilateral letter dated 15 September 2023 (“Letter”), which have already been considered and rejected in the Leave Decision and the Injunction VOC Decision, cannot pose a valid ground of appeal from the Two Costs Variation Decisions.

13.  Further, P’s criticisms of false claim and factual errors in §§3, 5-7 of the First Submission and §3 of the Second Submission are baseless. P is unable to justify such criticisms, still less of proving how such criticisms constitute valid grounds of appeal.

14.  Indeed, nowhere in the Leave Decision has claimed that P wrote the Letter to the Court without providing a copy to D as P now alleges. An account of the fact that P had chosen to write an unilateral letter to the Court, instead of making a formal application, for the purpose of adducing new evidence in §48-49 of the Leave Decision should not be distorted by P as the Court having falsely claimed that P had not provided a copy of the said letter to D. Such complaint is unjustified and misleading.

15.  Likewise, P’s another allegation in §7 of the First Submission that the Court of Appeal had disapproved the test adopted by this Court in assessing the merits of P’s Injunction Summons (“Wrong Test Argument”) is also untrue. Such allegation is in direct contradiction to §27 of the First CA Judgment, which I respectfully repeat as follows: -

“Instead, the plaintiff submits that the judge was wrong to require a high degree of assurance to be shown because the interlocutory injunctions would not give the plaintiff the whole of the relief which it claims. In our view the plaintiff’s approach is misconceived. …… Here, the judge considered that granting the injunctions sought would permanently deprive the defendant, before trial, of its lien and its statutory right to sell the Chattels under the Hotel Proprietors Ordinance (Cap 158), and was therefore reluctant to do so unless the plaintiff showed stronger merits than simply serious issues to be tried. The judge’s reasoning cannot in our view be faulted.” (emphasis added).

16.  Further, the fact that the Court of Appeal just focused on some of the issues, which were already sufficient to dispose of P’s summonses, rendering it unnecessary to deal with the other matters, should not be misinterpreted by P as those other matters had met with the disapproval of the Court of Appeal. P’s argument is in ignorance of §22 of the First CA Judgment as follows:-

“For the purposes of this judgment it is unnecessary to discuss each and every ground and argument raised, because the following points, which the plaintiff has shown no prospects of overcoming, amply justify the decision of the judge.”

17.  P simply neglects the ruling of the First CA Judgment that “the [P’s] intended appeal has no reasonable prospects of success.” and “is wholly without merit”, and that P was ordered to pay D’s costs of the application on “indemnity basis”.

18.  Thus analyzed, P’s attempts to challenge the decisions made by this Court, including the Three Decisions, are bound to fail. P’s allegations of flawed decisions, factual errors and false claims are wholly unjustified. They could not form any valid grounds of appeal.

19.  I now turn to consider the allegation of bias. Much has been said in §§1-4 of the First Submission and §§2, 4-5 of the Second Submission about this Court having malicious intentions in not resolving P’s seven summonses (plus D’s Summons) in one single decision, but instead, in seven decisions, resulting in inflation of costs payable by P as well as portraying P as an unreasonable party.

20.  Such complaints are unsubstantiated. They ignore the fact that it was P who took out the seven summonses separately and those summonses could not be practically dealt with in one single decision. Not only because they were issued independently and separately for different types of applications and at different times but also the written submissions put forward by P separately for each of those summonses were unfocused, disorganized and filled with many confusing arguments, irrelevant matters, new allegations as well as unwarranted complaints. Some of them were even attached with new documents without leave. It is necessary and more proper to deal with all those contentions and arguments in separate decisions.

21.  At any rate, the rule dictates that the costs of each summons will have to be assessed individually no matter if the summonses are resolved in one single decision or in separate decisions. Hence, P’s contention of inflation of costs caused by separate decisions is misconceived.

22.  As to P’s complaints of this Court having ruled against P with a costs order against it in each of those seven decisions, exhibiting bias against it and its director, such complaints are groundless as it was P who failed in those applications, which inevitably attracted adverse costs orders. P’s own failure in those applications cannot support the complaints of judicial bias or malicious intention.

23.  The reality is well reflected in the First CA Judgment, in that the Court of Appeal affirmed this Court’s rulings on the Injunction Decision and further, raised concern about P’s unwarranted litigation conduct at §64 as follows:-

“It is a matter of concern that not only had the plaintiff resoundingly failed in various interlocutory steps referred to above, but it had further, almost as a matter of course, made applications to the judges below and then to this court for leave to appeal that are wholly unmeritorious, and in some cases, pointless. Such baseless and indiscriminate applications are an unwarranted drain on the courts’ limited resources whose fair distribution is one of the underlying objectives of our rules. Firm and robust case management is needed, and unwarranted and baseless interlocutory steps will be treated as such.”

24.  In §8 of the First Submission, P complains this Court to have personal bias against P’s director for having “falsely accused P, stating that P’s director was well-versed in law”. Such complaint is unfounded. It has been dealt with in §38 of the Injunction Decision and §41 of the Leave Decision. In gist, the reference to P’s director’s ability in conducting the proceedings was confined to the analysis of P’s omission in giving notice to D, thus, failure in discharging its duty of full and frank disclosure.

25.  Reference should also be made to the factual finding of the Court of Appeal in this aspect in §26 of the First CA Judgment as follows:-

”But an undeniable fact is that the plaintiff’s legal documents show that they had been prepared with some legal knowledge and familiarity with civil litigation.”

26.  Besides, P’s director was also found to have failed to discharge the duty of full and frank disclosure in the First CA Judgment. Thus considered, P’s complaint is unmeritorious.

27.  In §§8-9 of the First Submission and §4 of the Second Submission, P refers to some matters which have been dealt with in the Leave-Injunction VOC Decision and the Leave-Summary Assessment Decision to lay a complaint. However, those matters are not only beyond the scope of the Present Summons but also were finally disposed of in the Second CA Judgment[15]. They cannot form the basis for a valid ground of appeal.

28.  §10 of the First Submission and §6 of the Second Submission challenge this Court’s order given in the Injunction VOC Decision (and affirmed in the First Costs Variation Decision) that P was to pay D the costs of the D’s VOC Summons, instead of “no order as to costs”, by questioning “why P, having succeeded in varying part of the costs orders, is still required to pay full costs to D”. That said, P has not formulated any serious argument in support of such challenge. Nor has it substantiated how the decisions was wrong.

29.  I should not burden this Decision by repeating the detailed reasons set out in §§13-33 of the First Costs Variation Decision. For present purpose, it may be convenient just to highlight a few points for illustration. In essence, it was D, not P, which had taken out the D’s VOC Summons for variation of the costs order nisi of the Injunction Decision. Accordingly, P’s allegation that it had “succeeded in varying part of the costs orders” is not true.

30.  As to D’s VOC Summons, D succeeded in its “Forthwith Request” but failed in its “Extension Request”[16]. Notwithstanding that, P should still pay D the costs of D’s VOC Summons. Not only because P failed in its opposition to the Forthwith Request[17] and D’s unsuccessful Extension Request did not actually bring any significant impact on costs[18] but also because P had raised a number of unmeritorious arguments and irrelevant matters, which incurred unnecessary costs far exceeding the costs caused by the unsuccessful Extension Request[19].

31.  Viewed thus, P’s another complaint about this Court’s bias against it for having focused on the length instead of merits of its submissions is baseless and is in direct contradiction to the detailed analysis of the merits of its arguments set out in §§15 to 33 of the First Costs Variation Decision.

32.  It is also wrong for P to allege that this Court has “wrongly claimed that D’s request for extension was made solely for the convenience.”. P’s allegation runs counter to §17 of the First Costs Variation Decision, which is repeated as follows:-

“a rough classification of D’s requests in the Injunction VOC Application into the Extension Request and the Forthwith Request for convenience purpose does not necessarily mean that the nature and complexity of the two classes of requests were the same. It is wrong to regard the two classes of requests as well as the costs incurred therein could be set-off against each other.” (emphasis added).

33.  Hence, it is wrong for P to misinterpret this Court’s rough classification of D’s requests in the D’s VOC Summons into the Extension Request and the Forthwith Request solely for analysis purpose into the incorrect statement as it now seeks to contend.

34.  P also argues that given all arguments regarding costs variation had already been made in the Leave-Injunction VOC Decision, D should not be awarded costs for the First Costs Variation Decision. Such argument is premised on the wrong footing that the arguments in the two applications were exactly the same. They were not. Faced with the two different applications initiated by P, which had added various new arguments and matters in each summons, D was entitled to the costs in dealing with the two different applications, bearing in mind that the overlapping costs would be dealt with during the costs-assessment process.

35.  P’s complaint in §11 of the First Submission that the order for summary assessment (instead of taxation) of the costs of the Leave Summons and the Evidence Summons granted in the Leave Decision (and affirmed in the Second Costs Variation Decision) is flawed is unmeritorious. P simply failed to formulate any serious arguments to challenge the reasons of the Second Costs Variation Decision[20] other than repeating its complaint about the Letter, which has already been dealt with above and should not be repeated here.

36.  P’s attempts to supplement its arguments in §7 of the Second Submission by repeating its arguments regarding the use of the car parking space and the Letter, the Wrong Test Argument, which have been dealt with above, cannot advance P’s position any further.

37.  In further consideration of the legal principles governing summary assessment of costs of interlocutory applications as elaborated at §§13(6), 14-15, 27-30 of the Second CA Judgment, there is indeed no room for P, being the losing party of the Injunction Decision, the Leave Decision and the Second Costs Variation Decision, to mount any meaningful challenge to the order for summary assessment of the costs for its unsuccessful interlocutory applications.

38.  In §12 of the First Submission, P contends that as HHJ H Leong has, in recognition of “the usual practice for a summary assessment of cost to provide the paying party an opportunity to submit a summary list of objections before the court exercises its assessment”, granted leave for P to appeal from a costs order granted by the learned Judge[21], this Court should adopt the same approach and accordingly, grant leave for P to appeal from the Two Costs Variation Decisions for the costs of the summonses therein were summarily assessed without providing P a chance to submit its list of objections.

39.  Such arguments are unconvincing and misleading. Each case decides on its own facts. The circumstances under which leave was granted to P by HHJ H Leong are different from the circumstances under which the Decisions set out in §§3 (4)-(7) above were made. In particular, it is not true that P had not been provided with an opportunity to submit a list of objections before this Court summarily assessed the costs of the relevant summonses.

40.  The fact is that, for the purposes of determining the P’s summonses set out in §§3(4)-(7) above[22] by way of paper disposal, this Court has given directions, inter alia, as follows:-

(1)  The Plaintiff’s application for [i.e. variation of the costs order nisi made in paragraph 37 of the Decision [2024] HKDC 25/paragraph 89 of the Decision [2024] HKDC 336] by Summons filed on 15 March 2024 be processed on the papers.

(2)  The Plaintiff do lodge into Court and serve on the Defendant skeleton submissions in support together with costs submissions and costs statement of the present application within 14 days from 22 April 2024.

(3)  The Defendant do lodge into Court and serve on the Plaintiff skeleton submissions in opposition together with costs submissions and costs statement of the present application within 14 days thereafter.

(4)  The Plaintiff do lodge into Court and serve on the Defendant skeleton submissions in reply, if any, within 7 days thereafter.

41.  As a result, the parties were actually directed to make submissions on both substantive issues and the issue of costs. In particular, P had the opportunity not only to study D’s costs statement and costs submissions but also to make submissions in reply. Therefore, P’s complaint is wholly unjustified.

42.  In any event, it has been repeatedly emphasized by the higher courts that summary assessment adopts a broad brush approach and should not be conducted as a mini-taxation. I seek support from §15 of the Second CA Judgment which I respectfully repeat as follows:-

“15. …….There is a large measure of discretion left to the court conducting the summary assessment, using a broad brush rather than carrying out a mini-taxation. The Court of Appeal will not interfere with the quantum of assessment unless there is something that strikes one as clearly outside the wide range of acceptable outcomes. The judge heard the arguments and saw the written evidence filed below and accordingly has a distinct advantage over this court in deciding whether there were costs that were unreasonable or unreasonably occurred…….”

43.  Indeed, submission of list of objections has never been listed as a statutory prerequisite for summary assessment. Instead, the court is left with wide discretionary power to decide whether or not to give direction for lodging of list of objections, and will do so only when the situation warrants.

44.  Given the nature of the summonses determined in §§3(4)-(7) above are relatively straight forward and this Court is in the best position to exercise the discretion on costs because of the familiarity with the conduct of the related applications and the impact of the success and failure on each issue canvassed before this Court, submission of list of objections is not necessary in this particular case, for it will not facilitate the summary assessment any further but rather, unnecessarily wasting the costs and time of the parties.

45.  In fact, the costs being assessed in a limited sum for each of those summonses reflect the realities. Further, P is bound by the Second CA Judgment and is not entitled to challenge the Three Costs Assessments.

46.  After all, P fails to show what it is that it had no opportunity of placing before this Court in its submission in reply, still less of coming up with any solid argument to challenge the quantum of costs, let alone to cross the threshold for appellate intervention in the orders for summary assessment.

DISPOSITION

47.  Having considered all the submissions of both parties, this Court is not convinced that P’s intended grounds of appeal have a reasonable prospect of success. Its arguments are wholly without merits. There is no other reason in the interests of justice why the appeal should be heard. I refuse to grant P leave to appeal and dismiss the Present Summons accordingly.

48.  There is no reason why costs should not follow the event in this application. I order P to pay D’s costs of the Present Summons, including all costs reserved, summarily assessed at HK$20,000, payable forthwith.