TO PUI KUI, THE ADMINISTRATRIX OF THE ESTATE OF NG PO SUM, DECEASED v. NG KWOK PIU AND OTHERS

CACV 281/2012 &
CACV 1/2013 (Heard together)

[2023] HKCA 1108

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS 281 OF 2012 AND 1 OF 2013

(ON APPEAL FROM HCA 523 OF 2008)

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D E C I S I O N

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Hon Barma JA (giving the Decision of the Court):

1.  These were applications by the 2^nd defendant for variation or amendment of the costs order made by this Court in CACV 281/2012 and CACV 1/2013 on 2 March 2016, in respect of the costs of the trial in the court below (HCA 523/2008)  (“the March 2016 Costs Order”).

2.  The 2^nd defendant filed two Summonses (one in each of the appeals)  on 16 and 20 December 2022 respectively (“the Summonses”).  Each of the Summonses sought the same relief, namely that the March 2016 Costs Order should be amended or varied in terms of the draft amended order annexed to the Summonses.  The March 2016 Costs Order ordered that 75% of the 1^st, 4^th, 5^th, 7^th and 9^th defendants’ costs of the trial should be paid by the plaintiff and the 2^nd, 3^rd, 6^th and 8^th defendants.  The applications were made under the “slip rule” embodied in RHC Order 20 rule 11 and the inherent jurisdiction of the court.

3.  Having considered the documents before us, we were of the view that the application could be dealt with on paper without an oral hearing.

Background

4.  The background to the parties’ dispute was set out in the judgment given by this court (Lam VP and Kwan JA (as they then were)  and Barma JA)  in respect of the substantive appeals dated 21 August 2014 (“the Appeal Judgment”). For present purposes, it suffices to provide the following brief summary.

5.  The proceedings concerned disputes between members of a family relating to the distribution of their respective shareholdings in the family company (the 9^th defendant).  The plaintiff in the proceeding was the mother of the 1^st to 8^th defendants, who are siblings.  The plaintiff was also the administratrix of the estate of her late husband, the father of the 1^st to 8^th defendants.

6.  Rivalry between the siblings and the mother had split the family into two camps, namely the plaintiff, the 2^nd, 3^rd, 6^th and 8^th defendants (“Mother’s Camp”)  on the one hand, and the 1^st, 4^th, 5^th, 7^th and 9^th defendants (“Philip’s Camp”)  on the other. 

7.  The two main issues at the trial in HCA 523/2008, centred on allegations by the Mother’s Camp that (i)  an “official” resolution of the board of the 9^th defendant, which concerned an allotment of shares in the 9^th defendant, was forged (“the Allotment Issue”); and (ii)  certain instruments of transfers of shares in the 9^th defendant bearing the signature of the late father were forged (“the Share Transfer Issue”).  The trial judge (DHCJ Seagroatt)  found in favour of the Mother’s Camp on the Share Transfer Issue but found in favour of Philip’s Camp on the Allotment Issue.

8.  On appeals by Philip’s Camp against the finding on the Share Transfer Issue (CACV 281/2012), and by the plaintiff against the finding on the Allotment Issue (CACV 1/2013), this court allowed the appeal by Philip’s Camp and dismissed the appeal by the plaintiff, for the reasons explained in the Appeal Judgment.

9.  At [88] of the Appeal Judgment, this court made the following costs order:

“We also make a costs order nisi that the Plaintiff shall pay the costs of the 1^st, 4^th, 5^th, 7^th and 9^th Defendants in these appeals (except the further round of post-hearing submissions for which we would not order any costs)  and such costs are to be taxed with certificate for 2 counsel. As regards the costs of the other defendants, they basically supported the position of the Plaintiff in these appeals. Their participation in the appeal did not substantially increase the costs of the proceedings. We would make no order as to costs as between them and the other parties.”

10.  Thus under the costs order made in the Appeal Judgment, the plaintiff was the only party liable to Philip’s Camp for the costs of both appeals.  The Unsuccessful Defendants were not held liable for Philip’s Camp’s costs of the appeals.  As is also clear from [88] of the Appeal Judgment, the only costs dealt with in the Appeal Judgment were the costs of the appeals, and nothing was said about the costs of the trial below.

11.  Subsequent to the handing down of the Appeal Judgment, Philip’s Camp issued a summons on 3 September 2014 asking for their costs of the trial below to be paid by the plaintiff personally, whereas by a summons dated 4 September 2014, the plaintiff sought an order that she be indemnified by the estate of the late father in respect of all costs awarded against or incurred by her. 

12.  By this court’s judgment dated 29 January 2015, the plaintiff’s summons was dismissed and Philip’s Camp’s summons was adjourned for argument.  In dismissing the plaintiff’s summons and adjourning the summons of Philip’s Camp, this court commented at [23] of the 29 January 2015 judgment:

“We would confirm our order for costs at para 88 of our judgment of 21 August 2014. We decline to order any indemnity for the plaintiff’s costs out of the estate. As for the costs below, for the above reasons, there shall be a short hearing as directed under the preceding paragraph. Pending such hearing, if parties could agree on the appropriate order for costs below in light of what had been said in this judgment, they can lodge a consent summons for this court’s endorsement.” (emphasis added)

13.  The judgment of 29 January 2015 directed the parties to make submissions on the issues set out at [21(b)  to (e)] of that judgment, in connection with the costs of the trial.  Having considered the parties’ submissions on those issues, this court handed down a further judgment on 24 September 2015 on the “outstanding issue in respect of costs below as identified at paras 21 to 23 of our judgment on 29 January 2015” (see [1(b)] of our judgment dated 24 September 2015).  At [10] to [13] of the judgment dated 24 September 2015, this court considered and determined the relevance of the issues (b)  to (e)  as regards the costs below, and further adjourned the matter for a short hearing with a view to “set the appropriate discount in terms of costs of the action below to be awarded to the successful defendants” (see [14] of the judgment dated 24 September 2015).

14.  The question of the appropriate discount to the costs to be awarded to the successful defendants (i.e. Philip’s Camp)  was dealt with at a hearing on 2 March 2016.  At the end of the hearing, the court made the March 2016 Costs Order in the following terms:

“We are mindful that we did not preside at the trial. However, doing the best we can with the assistance of counsel, we conclude that on account of those matters, we should deprive the successful defendants of 25% of the costs of the action below. We therefore order the plaintiff and the unsuccessful defendants to pay 75% of the costs of the successful defendants in the action, such costs are to be taxed if not agreed with certificate for 3 counsel.” (emphasis added)

The March 2016 Costs Order was recorded in these terms both in the transcript of the oral judgment given by Lam VP at the end of the hearing, and also in a written judgment dated the same date as the hearing.

15.  The March 2016 Costs Order was sealed on 18 March 2016, following which Philip’s Camp commenced taxation proceedings. Court documents pertaining to the taxation proceedings were duly served on the 2^nd defendant, and she did not at that stage raise any issues regarding her liability for costs of the trial.  Instead, she engaged solicitors to contest the quantum of costs sought by Philip’s Group, filing a List of Objections and taking part in the taxation proceedings.

The present application to vary the March 2016 Costs Order

16.  The 2^nd defendant now applies, more than six years after the March 2016 Costs Order was made, to vary that order to the effect that only the plaintiff, and not the Unsuccessful Defendants, should bear the costs of Philip’s Camp in the proceedings in the court below.  Her application is opposed by Philip’s Camp, while the plaintiff and the 3^rd, 6^th and 8^th defendants take a neutral stance.

17.  Written submissions were lodged by Mr Eugene Kwan for the 2^nd defendant on 3 March 2023, followed by those of Mr Adrian Lai (with him Mr Nyon Tsang)  for Philip’s Camp on 17 March 2023, and reply submissions by Mr Kwan on 22 March 2023.

18.  As noted in [2] above, the 2^nd defendant relies on RHC Order 20 rule 11 and the inherent jurisdiction of the court.  Mr Kwan’s submissions in support of the application were as follows:

(1)  as this court had by its judgment dated 29 January 2015 confirmed the August 2014 Costs Order, by which it directed that there be no order as to costs as between the Unsuccessful Defendants and the other parties, this showed that the court’s intention was not to make any adverse costs order against the Unsuccessful Defendants;

(2)  the inclusion of the Unsuccessful Defendants in the March 2016 Costs Order was an accidental slip as no party had applied for an adverse costs order against them, and the court had not previously indicated that it would so order;

(3)  the only issue which was before the court in the 2 March 2016 hearing was whether Philip’s Camp should be awarded all, or a reduced percentage, of the costs below;

(4)  the fact that there had been delay in making the present application would not affect the court’s exercise of discretion whether or not to allow the amendments to the March 2016 Costs Order that were sought.

19.  In response, Mr Lai for Philip’s Camp submitted that the slip rule is not engaged for the reasons suggested by Mr Kwan, as it was clear from the plain reading of the August 2014 Costs Order that that order dealt only with the costs of the appeal, and not the costs of the trial.  This, he said, was evident, as the court had thereafter directed further hearings in order to determine and dispose of the costs below.  Finally, he submitted that even if the ‘slip-rule’ was engaged, while no time limit applies to applications, where there is delay, the court should take account of prejudice to the other party, and that here, because of the serious delay, the court should decline to exercise its discretion to amend or vary the March 2016 Costs Order.

Legal principles

20.  The principles applicable to the slip rule in RHC Order 20 rule 11 have been conveniently summarised by G Lam J (as he then was)  in Lo Yuen Chong v IWS Environmental Technologies Limited [2021] HKCA 89 at [17] to [19] as follows:

“17.  Order 20 rule 11 (often called the ‘slip rule’)  provides:

‘Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on summons without an appeal.’

18.  The jurisdiction of the court to correct mistakes under the slip rule or its inherent jurisdiction has been described by Godfrey JA in Skink Ltd (in liquidation)  v Comtowell Ltd [1998] 1 HKLRD 542 at 543G as follows:

‘The court has an inherent power to vary its own orders so as to carry out its own meaning and to make that meaning plain; and an express power (under R.H.C. (Cap. 4 Sub. Leg.)  O.20 r.11)  to correct any error in any order resulting from an accidental slip or omission. But these powers extend only to the correction of errors in expressing the court’s intention. The court has no power to correct mistakes of its own; even where it is satisfied that it has indeed made such a mistake.’

19.  To be capable of being corrected in this way, the error or omission must be an error in expressing the manifest intention of the court: Li Tze Cho v Ching Hua Co (H.K.)  Ltd (No. 3) [1961] HKLR 201, 205; MKKWH (also known as MKGWH) v RKSH [2018] HKCA 395, §§63-68; Bank of China v Xinyuan Trading Co Ltd (CACV 276/1998, 21 June 2000), p 3; see also R v Cripps, ex parte Muldoon [1984] QB 68, 80-81. As Ribeiro PJ said in Man Ping Nam & another v Man Fong Hang (No. 2) (2007)  10 HKCFAR 140 at §10, the court has power to clarify the original order ‘if the court’s intention appearing from the body of the judgment is manifest’.”  (emphasis added)

Discussion

21.  In our view, the key question is whether the slip rule or the inherent jurisdiction of the court is engaged at all.  As explained in the authorities cited in Lo Yuen Chong set out in the previous paragraph, in particular the statement of Godfrey JA in Skink v Comtowell, the slip rule permits clerical errors in orders to be corrected where the order does not, as a result of the error, properly reflect the manifest intention of the court appearing from its judgment.  The inherent jurisdiction permits the court to vary an order to carry out its meaning and clarify that meaning.  But in both cases, it is only permissible to correct an error in the expression by the order of the court’s intention.  Where the court’s intention is clear and is accurately recorded, but that intention was wrong or mistaken, it is not open to the court to vary or amend its order.  The proper recourse for an aggrieved party in that situation is to appeal.

22.  So understood, it is clear that there was no error in expressing the manifest intention of the court by the March 2016 Costs Order.  As explained in [14] above, the order accurately reflected the intention of the court appearing from its oral and written reasons.  If that intention, and the consequent order was wrong, that is a matter for appeal, and not for an application under the slip rule or the inherent jurisdiction.

23.  As for Mr Kwan’s contentions, the August 2014 Costs Order and its confirmation by the January 2015 judgment do not assist the 2^nd defendant.  It is plain that that costs order dealt only with the costs of the appeal, and did not bear on the costs below, which had yet to be considered and dealt with.

24.  We also reject Mr Kwan’s submission that because no party had applied for an adverse costs order against the Unsuccessful Defendants, and because the main issue in the March 2016 hearing was the amount of the discount to be applied to Philip’s Camp’s costs, the court had made a slip in making the March 2016 Costs Order in the terms in which it did.  This confuses and elides the possibility that the court had made an error in its decision with the existence of an error in the recording of that decision in the formal order.  The slip rule and inherent jurisdiction are available in the latter, but not the former, situation.  As we have explained, the intention of the court was clearly stated in its judgment and was accurately recorded in the March 2016 Costs Order.  If there was a mistake in the court’s decision, this was a matter for appeal, not for an application to the court under the slip rule or the inherent jurisdiction.

25.  We would also add that it is not clear to us that the court did make the mistake alleged.  The court’s discretion in relation to costs is wide, and it is not limited by the stance taken by the parties.  The position in relation to the trial, where the Unrepresented Defendants, although unrepresented, took part and gave evidence, was different from that on appeal, where they played little active role.  But even if the court was wrong to have made the order that it did, it is clear that it intended to make that order, and that there was no error in recording it.

26.  Thus, we are satisfied that there was no accidental slip or omission in recording the manifest intention of the court in the March 2016 Costs Order, so that neither the slip rule nor the inherent jurisdiction are engaged.  If the 2^nd defendant was aggrieved by the March 2016 Costs Order, her proper course was to seek to appeal against it. She did not do so.  Instead, as we have noted, she took no issue as to her liability for costs, and only contested the quantum of such costs, by filing of a List of Objections in respect of the costs claimed by Philip’s Group in the taxation proceedings.  After some six and a half years, it is not open to the 2^nd defendant to now attempt to circumvent her failure to seek to appeal by recourse to the slip rule and the inherent jurisdiction.

Disposition and costs

27.  For the reasons given above, the 2^nd defendant’s Summonses are accordingly dismissed.

28.  Costs should follow the event.  Having considered the statement of costs lodged by Philip’s Camp on 28 March 2023, while we note that Philip’s Camp have instructed a new firm of solicitors for the purpose of this application, the costs of the solicitors are clearly too high, particularly in respect of the time spent on perusal of documents (20 hours)  and drafting of documents (10 hours), for which no details were given and when counsel was instructed.  Taking a broad brush approach, we summarily assess the costs of Philip’s Camp on a gross sum basis in the amount of HK$200,000, and accordingly order that the 2^nd defendant do pay the sum of HK$200,000 to Philip’s Camp (i.e. the 1^st, 4^th, 5^th, 7^th and 9^th defendants)  in respect of this application.