PAUL Y. - ITC CONSTRUCTION LTD. v. KIN SHING CO. LTD.

HCA2220/98

H E A D N O T E

Practice and Procedure. Appeal from the Master on the question of costs only. This should not be allowed unless it can be shown that the order made by the Master was unreasonable or erred in law i.e., if he either failed to take into account proper matters or took into account matters that should not have been taken into account.

HCA 2220/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2220 OF 1998

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J U D G M E N T

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1. This is an appeal on the question of costs alone in respect of the orders made by Master Poon on 31st July 1998. There were two applications before Master Poon on 31st July 1998. One was by summons taken out by the Defendant dated 21st May 1998 seeking an order for further and better particulars of the Plaintiff's Reply Nos. 2 & 3 as referred to in the Defendant's Request for Further and Better Particulars of the Plaintiff's Reply by Letter dated 29th April 1998 to the Defendant's Request for Further and Better Particulars of the Statement of Claim. The second matter was that the Plaintiff should serve on the Defendant's solicitors the answers to the Defendant's Second Interrogatories served on the Plaintiff's solicitors on 1st May 1998, which are set out in the Second Interrogatories filed on 13th May 1998. The other summons was one taken out by the Plaintiff dated 28th May 1998 for an order that the interrogatories without order filed by the Defendant on 13th May 1998 be withdrawn or alternatively, that the answers required be provided by letter.

2. After hearing the applications, Master Poon ordered that the Plaintiff do within 14 days from the date hereof serve on the Defendant the further and better particulars to the extent of the Plaintiff's Reply Nos. 3(1) as referred to in the Defendant's Request for Further and Better Particulars of the Plaintiff's Reply by letter dated 29th April 1998 to the Defendant's Request for Further and Better Particulars of the Statement of Claim, limited to the following:

"Please state what, if any, or at all, were the standard as alleged."

3. He also ordered that the Plaintiff should within 14 days from the date thereof serve on the Defendant's solicitors the answers to the Defendant's Second Interrogatories served on the Plaintiff's solicitors on 1st May 1998, which are set out in the Second Interrogatories filed herein on 13th May 1998. This was the order he made on the Defendant's summons and the order for costs he made on that summon was that costs of and incidental to the provision of the answers pursuant to para 2 of the order, namely, that part relating to the interrogatories, be to the Plaintiff in any event, otherwise, costs of the application be costs in the cause. The order he made in respect of the Plaintiff's summons was that there be no order given on the Plaintiff's application but that the costs of the Plaintiff's application be to the Plaintiff in any event.

4. The question of the interrogatories first arose by letter dated 1st May 1998 from the Defendant's solicitors to the Plaintiff's solicitors. By that letter, they sought interrogatories from the Plaintiff on four matters. By letter dated 7th May 1998, the solicitors for the Plaintiff answered that letter setting out answers to the interrogatories. Those answers were not provided by affidavit as is required by O.26, r.2(2). The Defendant then sent a letter on 12th May to the Plaintiff's solicitors enclosing formal interrogatories and asking for answers on oath.

5. Looking at the formal interrogatories that were served with that letter and comparing it with the interrogatories served in the letter dated 1st May 1998, there is no material difference between the two sets save that O.26, r.1 is not mentioned in the earlier letter but is mentioned in the formal interrogatories served with the letter dated 12th May 1998.

6. The Plaintiff's solicitors took great exception to having been served with the letter of 12th May 1998 enclosing the formal interrogatories. They wrote on 13th May stating that their client was not prepared to provide the Defendant with answers to the second set of interrogatories by affidavit unless the Defendant would agree to pay either the Plaintiff's wasted costs in providing the answers that had been provided in correspondence or the costs of having to repeat the exercise on oath. That made it plain that the Plaintiff was unwilling to respond to the formal interrogatories by giving answers on oath. It was, therefore, necessary to issue a summons which the Defendant did on 21st May 1998.

7. By virtue of O.26 r.3(2), a party on whom interrogatories without order are served may, within 14 days of the service of the interrogatories, apply to the court for the interrogatories to be varied or withdrawn. The Plaintiff, by a summons dated 28th May 1998, did precisely that because it sought an order that the interrogatories filed on 13th May 1998 be withdrawn or alternatively, that the answers required be provided by letter, and they also asked for an extension of time for the making of that application.

8. The matter was heard by Master Poon on 31st July 1998. He made an order that the Plaintiff should serve answers to the interrogatories. He did not make an order that the Plaintiff be permitted to do so by letter and, by virtue of O.26 r.3(2), unless the court directs otherwise, the answers shall be on affidavit. He did not allow the Plaintiff's application that the interrogatories be withdrawn, or that the answers required be provided by letter. In the circumstances, it is clear that he must have come to the conclusion that the Defendant was entitled to serve the interrogatories filed on 13th May 1998 and that the Plaintiff should answer the same.

9. However, he ordered that the costs of and incidental to the provision of the answers pursuant to para 2 of the order be to the Plaintiff in any event. That related to the order requiring the Plaintiff to serve on the Defendant's solicitors the answers to the Defendant's Second Interrogatories served on the Plaintiff's solicitors as set out in the document filed on 13th May 1998. It seems to me that he must have taken into account, in arriving at that order for costs in respect of the provision of the answers, the fact that answers had already been provided previously by letter. The answers that were eventually filed in the document headed 'The Answers' filed on 18th August 1998 were identical to the answers given previously by letter. It seems to me that Master Poon in making the order for costs of and incidental to the provision of the answers to be to the Plaintiff in any event must have been influenced by the fact that answers had been given by letter dated 7th May 1998. However, both Mr. Chan, for the Defendant, and Ms. Mak, for the Plaintiff, have submitted that the costs incurred by the Plaintiff in providing the answers by the letter dated 7th May 1998 was not an issue before the Master and was a matter for taxation at the conclusion of this action. In my view, Master Poon should not have been influenced by the costs incurred by the Plaintiff in providing the answers by letter and it must have been a matter, in my view, that he took into account in making the order for costs that he did.

10. As this is an appeal as to costs only from the discretion of the Master, such application should not be allowed unless it can be shown that the order made by the Master was unreasonable or erred in law i.e., if he either failed to take into account proper matters or took into account matters that should not have been taken into account. (Hoddle v. CCF Construction Ltd. [1992] 2 All ER 550. See also Lessey SARL v. Pacific Star Development Ltd. & Anor. [1996] 2 HKC 326 and China Venturetechno International Co. Ltd. v. New Century Chain Development (T/A Century Chain Property Agency) [1996] 2 HKC 68) The Court of Appeal in Civil Appeal No. 20 of 1996 in China Venturetechno International Co. Ltd. v. New Century Chain Development Co. Ltd. trading as Century Chain Property Agency in their judgment dated 3rd July 1996 considered that this was the correct test.

11. The Plaintiff wished to seek an order that the interrogatories be withdrawn or that the answers required be provided by letter. It failed on that because the Master ordered that the Plaintiff should serve answers to the interrogatories. As the Master took into account matters that he should not have taken into account, it is my view that he exercised his discretion wrongly. Furthermore, as the Defendant had succeeded in the application that the Plaintiff should serve answers to the interrogatories and the Plaintiff failed in seeking to have the interrogatories withdrawn or alternatively, that the answers required be provided by letter, the order for costs that was made was also, in my view, unreasonable.

12. The Master also ordered that the Plaintiff should provide some particulars to the Defendant but, apart from the provision of the answers pursuant to para 2 of the order being to the Plaintiff in any event, he ordered that the costs of the application be costs in the cause. This, of course, included the costs of the application for particulars as well as the costs of the application that the Plaintiff do serve answers to the interrogatories.

13. Costs should normally follow the event unless it appears to the court that in the circumstances of the case, some other order should be made as to the whole or any part of the costs. As far as the costs in respect for the interrogatories are concerned, I see no reason why costs should not follow the event.

14. As the Master has not exercised his discretion correctly, in my view, in respect of the order for costs, it seems to me that I can look at the matter afresh on the question of costs. The Defendant did not succeed in all its request for particulars that it sought but it has succeeded in getting an order from the Master that the Plaintiff's Reply No. 3(1) was lacking in particulars. To obtain that order it was, of course, necessary for the Defendant to issue the summons. Right up to the stage of the hearing before the Master, the Plaintiff was also objecting, in principle, that the Plaintiff need not supply any further particulars to particulars as the particulars that had previously been provided was not a pleading. Although this point may not have been pursued before Master Poon, it was certainly pursued in correspondence and it was necessary for the Defendant to issue the summons for further and better particulars. To that extent, the Defendant has succeeded and I see no reason why the Defendant should not get its costs for that application.

15. The appeal is allowed and the order for costs made by Master Poon on 31st July in respect of the Defendant's summons is to be set aside and substituted by an order that the costs be to the Defendant in any event. Para 3 of the order of Master Poon is set aside and substituted by one that the costs be to the Defendant in any event. Master Poon made no order on the Plaintiff's summons because he had already ordered that the Plaintiff should serve answers to the interrogatories. However, in my judgment, the costs of that application should be to the Defendant in any event and I so order. Costs of the appeal be to the Defendant.