MAMMY PANCAKE CO LTD v. CARLA DAY LTD AND OTHERS

CAMP 108/2025

[2026] HKCA 1654

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 108 OF 2025

(ON AN INTENDED APPEAL FROM HCA NO 1044 OF 2021)

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D E C I S I O N

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A. INTRODUCTION

1.  By summons of 12th June 2026 (“the Summons”), the Plaintiff applies to vary the costs order nisi (“the Costs Order Nisi”) in our earlier decision of 1st June 2026 (“the Decision”), by which we had ordered that (1) the costs order made by the Judge[1] in the Leave Judgment was to stand, and (2) 10% of the costs of the renewed application for leave to appeal (“the Leave Application”) were to be the 1st and 2nd Defendants’ costs in the cause of the appeal.

2.  The Plaintiff seeks to vary this by adding a further order that the 1st and 2nd Defendants should pay 90% of their costs of the Leave Application. It says that it was the substantial winner on the Leave Application, as the court rejected Grounds 1 to 5 advanced by the 1st and 2nd Defendants, and as Ground 6 (relating to exemplary damages) was reformulated by the court. It further says that most of its efforts in opposing the Leave Application were directed towards Grounds 1 to 5, that these were improperly or unnecessarily pursued, and that the court can adopt an issue-based approach as the intended grounds of appeal were distinct. Finally, it says that litigants should not be allowed to escape the costs consequences of raising unmeritorious grounds and the burden which such arguments place on opponents and the court.

3.  The 1st and 2nd Defendants oppose the application, saying that their limited success has already been taken into account in the Costs Order Nisi; that the 90% sought by the Plaintiff is “random”; and that the costs of addressing the court’s requisition in relation to exemplary damages (an issue on which the 1st and 2nd Defendants succeeded) would have roughly been the same as the costs of addressing Grounds 1 to 5 which were simply rerun before us (on these, the Plaintiff succeeded).

4.  The starting point, in general, is that costs follow the event. In the Leave Application, the 1st and 2nd Defendants were successful in obtaining leave to appeal in relation to the reformulated Ground 6.

5.  The court may however reduce a successful party’s costs where it fails on distinct issues that occupy significant time or cause substantial costs to be incurred, but will not normally “fillet” a case by reference to particular arguments: an “issue” or “event” must be sufficiently discrete to justify a costs reduction. In practice, such reductions are often implemented through percentage adjustments to the costs recoverable by the party who is successful overall. See Competition Commission v ATAL Building Services Engineering Ltd [2026] HKCA 214 at [6] to [7] (Zervos JA).

6.  We accept the Plaintiff’s submission that Grounds 1 to 5 were discrete grounds, that they were improperly and unnecessarily pursued, that Ground 6 as initially framed would not have had any prospect of success, and that it is the 1st and 2nd Defendants, rather than the Plaintiff, who should have to bear the costs consequences of these matters, notwithstanding that the 1st and 2nd Defendants have successfully obtained leave to appeal (on a limited ground).

7.  Whilst the Costs Order Nisi sought to take into account the 1st and 2nd Defendants’ limited success, on further reflection, we consider that it would be fairer to award a portion of the costs of the Leave Application to the Plaintiff (excluding those incurred after the court’s requisition of 20th April 2026), given the aforesaid matters. At the same time, the costs order ought to give due recognition to the fact that the 1st and 2nd Defendants had to go to court to obtain leave to appeal, and were successful in doing so (albeit on a limited basis).

8.  We therefore vary the Costs Order Nisi to add that the 1st and 2nd Defendants are to pay 50% of the Plaintiff’s costs of the Leave Application (excluding those incurred after the court’s requisition); this sum (of 50% of the Plaintiff’s costs) is summarily assessed at $50,000.

9.  We further order, on a nisi basis, that the costs of and occasioned by the Summons are to be paid by the 1st and 2nd Defendants to the Plaintiff, summarily assessed at $25,000.