CHINA TRAVEL LOGISTICS AND TRADING HONG KONG LTD v. CHINA TRAVEL HIP KEE GODOWN HONG KONG LTD

HCA 693/2021

[2022] HKCFI 3380

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 693 OF 2021

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BETWEEN

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D E C I S I O N

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A. INTRODUCTION

1.  By summons of 2nd September 2022 (“the Summons”), the Defendant applies to vary the costs order nisi in my decision of 19th August 2022 (“the Decision”), such that the costs of and occasioned by the Plaintiff’s Summons[1] and the Defendant’s Summons be paid by the Plaintiff to the Defendant, with certificate for three counsel, to be taxed if not agreed.

2.  In other words, the Defendant asks that the costs order be varied so that (1) it is awarded the costs of the Defendant’s Summons (rather than having to pay them), and (2) there be certificate for three counsel in respect of both the Plaintiff’s Summons and the Defendant’s Summons.

B. COSTS OF THE DEFENDANT’S SUMMONS

3.  The Defendant says that it should be awarded the costs of the Defendant’s Summons as (1) it has substantially obtained the relief sought thereunder, (2) there are underlying merits in the Defendant’s Summons, (3) the costs order ought to follow that of the Plaintiff’s Summons.

4.  The Defendant’s Summons sought to exclude the Advertising Space from the scope of the Interim Order. The Defendant has in fact achieved this outcome, as it has successfully resisted the Plaintiff’s Summons.

5.  There was no need to determine the Defendant’s Summons separately[2] as the Interim Order was entirely discharged. Thus whilst the Defendant did not pursue the summons and it was accordingly dismissed, this was not because of any finding that it lacked merit. The Defendant’s case that an interlocutory injunction should not be granted in respect of the Advertising Space was essentially accepted, given my view that that the Plaintiff could be adequately compensated in damages for any loss of rental suffered, and that the balance of convenience was not in favour of a grant, since (inter alia) the Plaintiff had not paid any rent or mesne profits for the period of occupation after the Interim Order.[3]

6.  The Plaintiff says that the Defendant’s Summons had become academic by the time of the substantive hearing of the Plaintiff’s Summons and that this was attributable to the Defendant’s own delay in issuing the summons in the first place and in filing reply evidence. The Defendant says that the delay was primarily attributable to the Plaintiff’s delay in filing evidence. It seems to me, in the circumstances of this case, that the delay of either party should not affect the question of costs. With the benefit of hindsight, it may be said that both parties could have acted more expeditiously. However, whilst the dispute between the parties relating to the Advertising Space arose in July 2021, matters developed further for a few months before they reached a stage such as to prompt the Defendant to issue the Defendant’s Summons. Time was then taken by both parties to file their evidence, by which time the hearing of the Plaintiff’s Summons became imminent, and the parties sensibly jointly applied for the Defendant’s Summons to be heard together with the Plaintiff’s Summons.

7.  In these circumstances, I agree that the incidence of costs on the Defendant’s Summons should follow that of the Plaintiff’s Summons.

C. CERTIFICATE FOR COUNSEL

8.  The Defendant says that it should be entitled to certificate for three counsel, as (1) the Plaintiff also retained three counsel, (2) the stakes involved were high, the Godowns’ monthly market rental being around $5.5 to 6m, (3) the Defendant had limited time to prepare its case before summons day, (4) some of the legal principles involved in the dispute were not straightforward.

9.  As the Court of Appeal observed in Competition Commission v W Hing Construction Co Ltd (No.2) [2022] 3 HKLRD 84 at [78]:

“Awarding costs for three counsel is “exceptional”. It is not justified even if there is “a good deal of work” and “the issues were not simple”.”

10.  In the present case, I do not agree that the Defendant has shown that this is an exceptional case justifying certificate for three counsel.

10.1 The fact that the Plaintiff retained three counsel is not necessarily an indication of such exceptionality: HKSAR v Pang Hung Fai (2015) 18 HKCFAR 1 at [12]. In fact, as the Plaintiff points out, the Plaintiff’s leading counsel did not appear on the first day of the hearing.

10.2 The fact that the amount at stake was relatively high is not exceptional.

10.3 The fact that the Defendant only had three days in advance of the summons day hearing before Lisa Wong J on 7th May 2021 is not exceptional.[4] It not infrequently happens that applications for injunctions come before the court on summons day on two clear days’ notice.

10.4 The Defendant says that the court recognised that some of the legal principles involved in the dispute were not straightforward, citing Decision [28]. However, the issues referred to in that paragraph were not definitely determined: as was observed in the same paragraph, it is not appropriate to resolve difficult points of law on an application for an interlocutory injunction, particularly where they may turn on disputed questions of fact.

11.  I will however certify the matter as being fit for two counsel.

D. DISPOSITION

12.  I therefore vary the costs order nisi such that the costs of and occasioned by the Plaintiff’s Summons and the Defendant’s Summons be paid by the Plaintiff to the Defendant, with certificate for two counsel, to be taxed if not agreed.

13.  I further make a costs order nisi that the costs of and occasioned by the Summons be paid by the Plaintiff to the Defendant, to be taxed if not agreed.