WISON (SHANGHAI) CHEMICAL ENGINEERING CO LTD v. SIMMONS & SIMMONS (a firm)

HCMP 629/2007
HCMP 664/2007
(Consolidated)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NOS 629 OF 2007

AND 664 OF 2007

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R U L I N G

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1.  This is a summons to amend an order that I made on 13 July 2007.  The order I made was that “the security for costs summons be adjourned sine die with liberty to restore upon the Defendant’s application for summary judgment on the counterclaim, pursuant to Order 14 of the Rules of the High Court”.  The proposed amendment is simply that “the security for costs summons be adjourned sine die with liberty to restore”. 

2.  The Plaintiff took out an Originating Summons against the Defendant, their former solicitors, for taxation of solicitor and own client’s costs outside the one-year period as stipulated in the Legal Practioner Ordinance.  Before the determination of whether leave should be given for the matter going to taxation, an issue arose that the Plaintiff was actually denying liability to pay those costs to be taxed at all, because the agreement was for a fixed sum, and the costs to be taxed fell outside the fee cap.

3.  When the matter came before me, I thought as a matter of the logical sequence, liability should be decided before quantum. Hence, the parties decided that the Originating Summons should proceed on the basis as if a writ were issued, and a statement of claim was to be filed. 

4.  On the side, the Defendant has taken out a security for costs application on the basis that the Plaintiff is ordinarily resident outside Hong Kong.  An earlier indication was given by the Defendant that it would be seeking summary judgment on the counterclaim to resolve the liability, while conceding that some of the bills should go for taxation.  Hence, I made the case management decision that I should hear the summary judgment first, to be followed by the security of costs on the same day, in order that I would have heard arguments on the merits. 

5.  It transpired that in the Statement of Claim later filed by the Plaintiff, the Plaintiff alleged fraud against the Defendant.  Hence, the Defendant took out the present application to vary the old paragraph 5 of the order, the main ground being that it was not within the intention of the parties that when the court made the order, the Plaintiff was to plead fraud which would, in a way, preclude the application under Order 14, and the pre-condition for restoring the security for costs application would never occur.

6.  Mr Lee, for the Plaintiff, submitted that the summons for amendment was misconceived and premature, as Mr Goh, for the Defendant, now asks for an order, not that the Defendant be allowed to restore the security for costs application and to abandon any Order 14 application, but as a wait-and-see in that the Defendant be at liberty to restore the application if it abandons any Order 14 application.

7.  Be that as it may, the application can be seen as coming under liberty to apply.  Circumstances have changed and I think the order needs to be clarified as sought.

8.  There remains the matter of costs.  Mr Lee said that, first, the Defendant had not written to the Plaintiff before taking out the summons; secondly, although the Defendant had written into the court on 23 August 2007 and copied to them, the issue framed in that letter was that they were precluded from making an Order 14 application.  Now the order sought by the Defendant is that they do have liberty to restore the security for costs application upon abandoning an application for summary judgment.  Mr Lee was asked what if the Defendant had written to them not in the way of the letter of 23 August 2007, but simply to say that circumstances have changed and the order be clarified, and in the meantime, giving them the option of deciding whether to proceed with Order 14.  Mr Lee said his response would have been the Defendant should make up their mind first and the clarification was academic.

9.  In considering whether costs should be awarded or whether there should be no order as to costs, I have to look at the matter broadly, in the sense that, clearly, the old paragraph 5 of the order did not foresee any allegation of fraud.  I do take into account that there were numerous affidavits filed and correspondence exchanged in this matter and fraud was not intimated.  Where the circumstances have changed, I have to look at whether the change of circumstances was foreseeable, and whether one could have, with caution or vigilance, added a clause in the original order to cater for the situation.  But I say it is not.

10.  Looking at the development of the matter, I think the clarification today is needed and it is not triggered by something for which the Defendant should have to bear the blame.  Hence, I simply take it as a clarification upon changed circumstances which the Defendant could not have foreseen, and I shall no order as to costs as to today’s hearing.