HOI TIN TONG CO LTD v. CHOY KWOK KEUNG

HCA 1755/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1755 OF 2013

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DECISION

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Introduction

1. This is an application of the respondent for leave to appeal against a costs order made absolute on 19 January 2016 (“the 2^nd Decision”) whereby the respondent was ordered to pay the plaintiff’s costs of its successful appeal against a master’s decision (“the Order”).

2. The background facts have been set out in full in my decision dated 29 October 2015 (“the 1^st Decision”) and I shall not repeat them here. In gist, upon the plaintiff’s appeal, this court by the 1^st Decision set aside the master’s order and allowed the plaintiff’s application for non-party discovery despite the respondent’s reliance of the newspaper rule.  This court further made a costs order nisi that the respondent should pay the plaintiff’s costs of the appeal, to be taxed if not agreed. For the hearing before the master, this court made no order as to costs on a nisi basis.

3. In the 2^nd Decision, this court disposed of three applications. One of them was the respondent’s application to vary the costs order nisi in the 1^st Decision. It was partially successful in that this court made an order that the plaintiff do pay 90% of the costs of its application including the hearing before the master in lieu of no order as to costs. As regards the plaintiff’s appeal before this court, this court maintained that costs should follow the event and refused to vary this part of the costs order nisi. Hence, the Order was made and against this, the respondent intends to appeal.

4. I should add that the Court of Appeal (Yuen JA and Kwan JA) on 30 March 2016 dismissed the renewed application of the respondent for leave to appeal against the substantive part of the 1^st Decision with costs to the plaintiff. Yuen JA (with whom Kwan JA agreed) agreed with this court that the newspaper rule is not engaged in view of the special circumstances of this case.

Applicable principles

5. Leave to appeal under section 14AA(4) of the High Court Ordinance, Cap.4 (“the HCO”) shall not be granted unless this court is persuaded that the intended appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.

6. The intended appeal is an appeal on costs only. It is trite that the appellate courts are reluctant to allow appeals on costs only and in order to succeed, it has to be shown that the judge had failed to exercise the court’s discretion or exercised on a false principle, or did not exercise it judicially or the exercise of discretion was demonstrably flawed: Tang Chung Wah Alan v Chen Yung Ngai Kenneth, unreported, HCMP113/2013, 7.5.2014 per DHCJ Le Pichon at §6.

This application

7. Mr Li, for the respondent for the first time, pointed out that this court, having concluded that the respondent was not so unreasonable in its opposition of the plaintiff’s application before the master in the 1^st Decision, should not penalize the respondent in costs in respect of the appeal hearing in the 2^nd Decision absent any grave misconduct on the part of the respondent and/or exceptional circumstances. He highlighted that it was the plaintiff and not the respondent who brought the appeal. The respondent merely defended albeit unsuccessfully the decision of the master, which was in its favour. At the appeal hearing, the respondent simply reiterated its entitlement to protection under the newspaper rule, which had been upheld by the master and the respondent did not commit any grave misconduct.

8. I believe I explained why I made the Order sufficiently in §§38-39 of the 2^nd Decision. I do not accept that the plaintiff’s appeal was only incident to the plaintiff’s application. In my view, the costs before the master and the costs of the appeal hearing call for separate considerations. For the former, this court referred to section 43(2) of the HCO[1] as the starting point and accepted that as the normal rule, the non-party should be entitled to its costs despite an order of specific discovery being made against it. This court made the observation that the respondent did not oppose the plaintiff’s application before the master unreasonably only in this court’s consideration as to whether the respondent should be disentitled to its costs in light of the said provision.

9. In regard to the latter, my starting point is the general rule that costs should follow the event. I understand that the plaintiff raised the same argument concerning the inapplicability of the newspaper rule before the master. Whether or not the video clip (or its screenshots) was provided to the master for her viewing is irrelevant.

10. I can understand that it was tempting for the respondent to cling to the favourable decision of the master but it was essentially a judgment call. The respondent should reassess its position and in particular reconsider the applicability of the newspaper rule in light of the arguments of the plaintiff albeit rejected by the master once the plaintiff filed its notice of appeal.  Mr Li confirmed to me that there was no offer on the part of the respondent whatsoever to concede the plaintiff’s appeal at any stage.

11. In the premises, I am not convinced that there is a reasonable chance that the appellate court would interfere with the discretion I exercised in the making of the Order.  I do not accept that the respondent’s intended costs only appeal has a reasonable prospect of success.

Conclusion and Order

12. For reasons given above, I conclude that the respondent is unable to meet the threshold of its application. I refuse to grant the respondent leave to appeal and dismiss its application accordingly.

13. There is no reason why costs should not follow the event. I order that the respondent should forthwith pay the plaintiff’s costs of this application, summarily assessed at HK$32,000.

14. Lastly, I thank counsel on both sides for their helpful submissions.

[1] See also Order 62 rule 3(12) of the Rules of the High Court, Cap.4A