TANG QIONG v. ZHANG TING TING

HCA 452/2018

[2026] HKCFI 2499

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 452 OF 2018

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BETWEEN

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DECISION

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1.  By Judgment dated 26 March 2026 ([2026] HKCFI 1843), I gave judgment in favour of the Plaintiff against the Defendant for the sum of RMB 4 million together with accrued interest up to judgment date in the sum of RMB 16,300,645.16 and thereafter at judgment rate until full payment. I made a costs order nisi that the Plaintiff shall have the costs of the action (including all costs reserved, if any), to be taxed if not agreed.

2.  The Plaintiff now applies to vary my costs order nisi on the basis that she has outperformed her Calderbank offer made on 18 November 2022 to the Defendant’s then solicitors on record proposing: (1) a global settlement sum of RMB 14 million inclusive of interest plus costs to be taxed if not agreed; and (2) the Plaintiff, the Defendant and Mr Zheng to sign a joint declaration to the effect that the advancements set out in [2] of the Judgment were loans by the Plaintiff to the Defendant, and not by Mr Zheng to the Defendant. The offer lapsed on 2 December 2022. There was no acceptance of the offer, not any counter-offer, from the Defendant. The Plaintiff asks for costs of the entire action to be taxed on an indemnity basis, or alternatively indemnity costs from 3 December 2022 onwards.

3.  The Plaintiff’s offer was not a sanctioned offer and therefore does not attract the default sanctions under Order 22, rule 24 of the Rules of the High Court including indemnity costs. The offer could not be made as a sanctioned offer because of the Plaintiff’s request for execution of a joint declaration as set out above. That said, a Calderbank offer may still be considered in the Court’s exercise of discretion on costs, as provided for under Order 62, rule 5(1)(d).

4.  There is no dispute that indemnity costs should only be ordered if the case has some “special or unusual feature” in the case. The discretion to award indemnity costs is unfettered, and the guiding consideration is whether such an order is “appropriate” in the circumstances: Town Planning Board v Society for Protection of Harbour (No 2) (2004) 7 HKCFAR 114 at [15]-[17].

5.  Ms Angel Wong for the Plaintiff submitted that an order for indemnity costs is justified for the following reasons:

(1) The Plaintiff’s offer was a reasonable one. The total indebtedness by the Defendant to the Plaintiff (loan principal of RMB 4 million together with interest at 3% per month) measured up to RMB 15,520,000 at the time of the offer. The settlement sum of RMB 14 million was not of an insubstantial discount. The Defendant did not engage in any constructive dialogue on settlement discussion with the Plaintiff, despite indication from Au-Yeung J at a hearing on 1 August 2022 on the desirability of settlement between the parties.

(2) It was also reasonable for the Plaintiff to propose the joint declaration, when the Defendant contended in her Defence that it was Mr Zheng, not the Plaintiff, who advanced the loans to her. Whilst the Plaintiff did not seek such a relief against the Defendant in the Statement of Claim, the Court found in the Judgment that it was the Plaintiff who advanced the loans to the Defendant. The Defendant therefore also failed to beat the offer in this respect.

(3) There were deliberate attempts by the Defendant to delay the proceedings. She filed a Notice to Act in Person only shortly before trial, and she did not comply with the Court’s direction for lodging her opening submissions. She made a last-minute, unjustified application to adjourn the trial, which the Court refused: see [6]-[7] of the Judgment.

(4) The Defendant’s case was wholly unmeritorious. She did not allude to any loan agreement between Mr Zheng and herself when she challenged the Court’s jurisdiction on forum non conveniens grounds in 2019. She produced audio recordings of her conversations with Mr Zheng which did not in fact support her case: see [21] of the Judgment. Her defence was directly contradicted by the IOU Note. The Plaintiff should therefore get indemnity costs for the whole action.

6.  I have taken into consideration the above points raised by Ms Wong. At the same time, I have also not lost sight of the unsatisfactory way in which the Plaintiff’s case evolved in the pleadings: see [15] of the Judgment. Whilst eventually I accepted the Plaintiff’s explanation, this only came about at trial when she gave evidence and answered questions from the Court. The Plaintiff’s conduct before and during the proceedings, including the way in which she advanced her case against the Defendant, is a relevant consideration on the issue of costs, as provided for under Order 62, rule 5(1)(e) and rule 5(2)(d). Although the Defendant’s case was rejected, this is a case where the defence failed on merits. The Plaintiff’s request for execution of a joint declaration was also not a pleaded relief against the Defendant. I do not see how it could be said to be reasonable for the Plaintiff to request its execution in her Calderbank offer.

7.  In my view, there are no special features in this case which warrants an order for indemnity costs against the Defendant. I therefore dismissed the Plaintiff’s costs variation application and make the costs order nisi in the Judgment absolute. I make no order as to costs of this application including the hearing on 22 April 2026.