LAW CHI CHING v. APPLE DAILY LTD AND OTHERS

HCA 2155/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2155 OF 2009

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DECISION ON COSTS

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INTRODUCTION

1. In a judgment handed down on 21 August 2015 (“the August judgment”), monetary judgment was entered in the plaintiff’s favour.  Costs of the action were tentatively dealt with at para 79 of the August judgment as follows:

“There is no apparent reason to depart from the usual rule that costs should follow the event. There will accordingly be a costs order nisi pursuant to Ord 42 r 5B(6) that the costs of this action (including any costs earlier reserved) should be paid by the defendants to the plaintiff to be taxed if not agreed.”

2. Both parties now seek to vary the above order nisi. On the plaintiff’s part, she seeks the costs to be taxed and paid on indemnity basis.  On the defendants’ part, they seek to vary the order nisi such that:

(a) they need only pay 80% of the costs from 22 October 2009 (date of writ) to 21 November 2011;

(b) there be no order as to the costs from 22 November 2011 (date of sanctioned payment) to 26 April 2013 (date of amended statement of claim);

(c) the costs after 26 April 2013 be paid to the plaintiff;

(d) all of the above costs to be taxed and paid on District Court scale.

For convenience, the variations summarized in sub-para (a) to (c) above are called “the split costs variation”, whereas that mentioned in sub-para (d) above is called “the DC scale variation”.

THE PLAINTIFF’S VARIATION APPLICATION

3. The first principal matter relied upon is the plaintiff’s Calderbank letter dated 28 November 2011 wherein the plaintiff offered to settle this action (among other things) for $391,160.  The monetary judgment entered in her favour was about $740,000 in total.  Based on this, the plaintiff in effect argues that the defendants have acted unreasonably in refusing to accept her settlement offer.

4. The other matter relied upon is that, although the plaintiff has acted reasonably in her conduct of this action, the same cannot be said of the way in which the defence has been conducted.  The alleged unreasonable conducts were:

(1) the defendants acted unreasonably when the plaintiff sought further and better discovery of documents from them, demonstrating an obstructive attitude which only caused delay and oppressiveness;

(2) an application to strike out part of the plaintiff’s claim was never pursued at trial;

(3) the defendants took out an unwarranted application for specific discovery of documents;

(4) the defendants once attempted to require the court attendance of the joint medical expert; this attempt turned out to be unjustified.

The above are said to show the litigation was conducted by the defendants in a hostile, oppressive, aggressive and uncooperative manner.

5. Based on the above two matters, the plaintiff argues that she should be awarded indemnity costs, relying on RHC Ord 62 r 5 (especially r 5(1)(d)).

6. The problem with the plaintiff’s first matter (the Calderbank offer) is that she did not simply ask for a lump sum; instead, she also sought from the defendants:

(a) a written apology (in terms to be agreed) to be published for 3 days in a newspaper and a magazine;

(b) an undertaking from the defendants (similar to a permanent injunction) against the repetition of the libel;

(c) High Court costs from the date of the libel.

7. The above other settlement terms were not part of the order made by the August judgment.  It is unknown whether, had the defendants agreed to the payment of the proposed lump sum, the plaintiff would have abandoned those other terms, and settled this action just by accepting such lump sum.

8. For this reason, it is too speculative to consider this matter to be a valid reason for awarding indemnity costs.

9. As regards the other matter relied upon by the plaintiff (the defendants’ alleged unreasonable conduct), I note the defendants’ following response:

(a) the plaintiff’s further and better discovery application was dismissed;

(b) the defendants’ specific discovery application was not pursued because the documents have been disclosed by the plaintiff;

(c) the request for the joint medical expert’s attendance was not pursued and little time was spent on it.

10. Taking the matters summarized in para 9 above into account (and despite no satisfactory explanation having been given for para 4(2) above), the defendants’ conduct in this action was insufficient to ground a complaint that undue hostility, obstructiveness or aggression has been shown by the defence.

THE DEFENDANTS’ VARIATION APPLICATION

(a) The split costs variation

11. This part of the defendants’ application has been summarized in para 2(a) to (c) above.

12. Para 2(c) above is uncontentious.  For the reasons given below, neither para 2(a) nor (b) above is justified.

13. Much play has been made concerning the way in which the plaintiff’s claim for her psychiatric ailment evolved.  It is contended that her original statement of claim did not specify she has suffered such an ailment; it was only on 26 April 2013 that she finally did so when the statement of claim was amended to include such head of claim.

14. In the meantime, a sanctioned payment ($200,001) has been made (22 November 2011).

15. Finally, the bulk of the damages awarded by the August judgment consisted of the plaintiff’s psychiatric injury: para 15, decision on interest dated 24 September 2015.

16. Based on the above, it is argued that the plaintiff ought not be awarded the full costs of this action prior to 26 April 2013.

17. I disagree.  First, the defendants resisted this action to the end.  More importantly, the sanctioned payment has not been increased after 26 April 2013.  The defendants frankly admit that it has not been increased because they opined that the plaintiff’s psychiatric ailment had not been caused by the libel (see para 72 to 76, the August judgment).

18. Such being the case, it is reasonable to infer that, even if the plaintiff had properly pleaded the heads of claim from the beginning, the same stance would still have been adopted by the defence.

19. The defendants’ written submissions also mention other matters:

(1) the quantum of the other heads of claim (such as loss of wages or medical expenses) have been reduced by the court;

(2) prolonged inaction and unnecessary correspondence on the plaintiff’s part.

20. It is common for the damages assessed by the court to be less than that sought by a successful claimant.  Save in exceptional cases, this by itself is not a good reason for reducing the costs to be awarded.

21. The reasonableness of, and necessity for, correspondence is a matter for taxation (which the taxing master is more than competent to assess).  The defendants have not explained why prolonged inaction by a successful litigant should constitute a good reason for reducing the costs to be awarded to him/her (such as additional and/or unnecessary costs have thus been caused; but even if it was so alleged, such disputes can normally be dealt with at taxation).

(b) The DC scale variation

22. This part of the defendants’ application rests simply on the ground that the damages awarded fall short of the damages which the District Court can award: s 32(1), District Court Ordinance (Cap 336).

23. As the defendants fairly accept, the test for determining this issue is whether it would have been clear to a reasonable person in the successful litigant’s position that no judge would award damages beyond the jurisdiction of the District Court.

24. Here the submissions set out in para 13 to 16 above have in effect been repeated by the defence.  In this connection, I merely observe that this ground has no substance here either (see para 17 to 18 above).

25. At trial the plaintiff has placed heavy reliance on the award made in Chu Siu Kuk Yuen v Apple Daily Ltd and Others [2002] 1 HKLRD 1.  While it is true the facts of this action show the Chu Siu Kuk Yuen decision to be distinguishable, it is not beyond reasonable for the plaintiff to rely on it.

26. The defendants also point to the plaintiff’s Calderbank offer ($391,160) as a matter in support.  The suggestion here appears to be that somehow that should be considered to be the appropriate amount of damages (or at least the plaintiff should somehow be bound by such an amount).  First, the defendants cannot go behind the actual award made by the August judgment (which they seem to be trying to do).  Secondly, as has been mentioned in para 6 above, the plaintiff’s offer was not purely monetary, but a package consisting of other terms as well.

27. As with the plaintiff’s variation application (see para 6 to 8 above), for purpose of this part of the defendants’ variation application, it would be inappropriate to consider only one part of such a Calderbank offer, without considering the other parts.  Finally, because the offer has not been accepted, it would be too speculative to postulate how it could have affected the course of this litigation were it accepted.

CONCLUSION

28. In view of para 6 to 10 above, the plaintiff’s application is dismissed; in view of para 12 to 27 above, the defendants’ application is also dismissed.

COSTS ORDER

29. The parties accept in effect that my discretion is at large if they are only partially successful in the variation applications.

30. The applications can conveniently be divided into 3 parts:

(a) the plaintiff’s application for indemnity costs;

(b) the split costs variation;

(c) the DC scale variation.

31. The plaintiff has not succeeded in relation to para 30(a) above, but has succeeded in resisting para 30(b) and (c) above.

32. Taking into account practicality (when the costs come to be taxed), it may be more costs-effective to simply award to the plaintiff two-thirds of the total costs of the variation applications, to be taxed if not agreed.