LAI YUET SAU v. NGAN WAI FONG

DCCJ 6673 / 2001

 IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6673 OF 2001

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BETWEEN

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DECISON

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1.  On 9 April 2008 I handed down judgment dismissing the Plaintiff’s claim against the Defendant after a 6 days’ trial.  I also allowed the Defendant’s counterclaim.  I made an order nisi that the costs of the action be to the Defendant, to be taxed if not agreed, with certificate for counsel.

2.  This is the application by the Defendant seeking to vary that costs order nisi, to make it costs on an indemnity basis.

3.  As agreed between counsel, the principles governing making a costs order on an indemnity basis are those set out by the Court of Appeal in Choy Yee Chun v Bond Star Development Ltd [1997] HKLRD 1237.  As observed by Yeung J (as he then was) at page 1339 T:

“An order of costs on a full indemnity basis is an unusual order and shall only be made in very rare and exceptional circumstances.”

4.  Further, as said by Stock J (as he then was) at page 1336 A to B:

“Of course there will in most litigation be evidence which a court rejects, and it is far from rare that a court will find that evidence has been deliberately untruthful.  Such a finding will not necessarily in itself warrant an order for costs upon either of the bases alternative to party and party taxation.  But there will be cases - and it is true that they will be the exception and not a rule - where the conduct of a party in a case is of a more venal kind, where the conduct of the litigation has in some sense been wicked, and in such a situation the exceptional power can quite properly be applied.”

5.  Mr Tze, counsel for the Defendant, submits that given that the Court in its earlier judgment has rejected almost entirely the Plaintiff’s witnesses’ evidence, it is a case where indemnity costs is justified.  Mr Tze says that, as the Plaintiff’s evidence having been rejected by this Court, the Court can draw the inference or can come to the conclusion that the entire claim is scandalous and vexatious, and was initiated maliciously, which amounts to an abuse of process of the court.

6.  I do not accept Mr Tze’s submissions.  I rejected the Plaintiff’s evidence on the balance of probabilities, as I found her and her other witness’ evidence generally unreliable, being inconsistent and contradictory to common sense and to certain documentary evidence.  That conclusion is no different from many of the cases tried by the court in rejecting on the balance of probabilities of certain witnesses’ evidence.  I however have not made any findings in my earlier judgment, nor do I now feel that there is evidence before me, to justify what Mr Tze has submitted that this claim must have been brought with an ulterior motive, or is vexatious and scandalous.  

7.  As I set out above in relation to the general principles, the fact that a party pursues a claim that is later found by the Court to be unmeritorious, does not per se warrant a costs order of an exceptional and unusual nature, that is, a costs order on an indemnity basis.

8.  Mr Tze attaches to his written skeleton submission certain documents, which are the amended charge and brief facts of another criminal case concerning a defendant named Mr Wong.   Mr Tze submits that the said Mr Wong in that case was convicted for the use of false documents in a civil matter heard before a Master.  Mr Tze further submits that the said Mr Wong’s case is comparable to the present case. 

9.  I reject Mr Tze’s submissions.  Not only do I find it inappropriate for Mr Tze to present these documents by simply attaching them to the skeleton submission, I also do not find that that case, taking it to the highest, is of any relevance to the present case.  In that case, as Mr Tze submits, the Master who had heard the civil matter had made a finding that the document used by Mr Wong in the civil matter was a false document, made for the purpose of the hearing.   There is no such finding in the present case.   I therefore do not see how that case, with the scanty and patchy information presented before me today, could be of any relevance to the present application.

10.  For the above reasons, I refuse the application by the Defendant to vary the costs order nisi granted on 9 April 2008, which is to be made absolute today.

11.  I further order that costs of this application be to the Plaintiff to be taxed if not agreed, with certificate for counsel.