TO KAI YIN t/a STEPHEN KY TO DESIGN & CONTRACTING v. CHAN PUI KWONG t/a DR CHAN PUI KWONG

DCCJ 629/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 629 OF 2012

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D E C I S I O N

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1.  This is the hearing of the summons dated 10 February 2014 issued by the defendant for variation of the costs order nisi made by this court on 28 January 2014 (“the Costs Order Nisi”).

2.  By my judgment handed down on 28 January 2014, I dismissed the plaintiff’s claim in its entirety, as well as making the said Costs Order Nisi.

3.  The basis of the defendant’s application on variation of the Costs Order Nisi is that the plaintiff has failed to obtain a judgment better than the sanctioned payment effected by the defendant on 3 May 2012, so that the costs consequence under Order 22, rule 23(3) and (4) of the Rules of the District Court is triggered.

4.  The sanctioned payment was made on 3 May 2012.  Under the Rules of the District Court, the latest day on which the plaintiff could have accepted the sanctioned payment without requiring leave of the court was 31 May 2012. 

5.  Order 22, rule 23(5) provides that the court shall make the orders on costs referred to in Order 22, rule 23(2), (3) and (4) unless the court considers it unjust to do so. 

6.  Having considered the submissions by Mr Liu Chin‑yu, counsel for the plaintiff, I am not satisfied that it would be unjust to make the orders sought under paragraph 1(a) and (b) of the summons.

7.  The defendant made the sanctioned payment shortly after the plaintiff had commenced the action.  The sanctioned payment was made before the close of pleadings.  

8.  It seems that the plaintiff is suggesting that the Costs Order Nisi should not be varied simply because there is no misconduct on the plaintiff’s part.  Such argument is clearly misconceived. 

9.  The provisions of Order 22, rule 23 are designed to provide an incentive to encourage defendants to make, and plaintiffs to accept, settlement offers at appropriate levels.  Such an incentive would be deprived of effect unless the non‑acceptance of an offer which subsequently proves to have been a sufficient offer ordinarily will advantage the defendant in the respect set out in the rules.

10.  For the reasons stated above, I make an order in terms of paragraph 1(a) and (b) of the summons. The plaintiff do pay to the defendant the costs of this action incurred prior to 31 May 2012 (including all costs reserved (if any) prior to 31 May 2012) on a party and party basis, with certificate for counsel, to be taxed if not agreed. The plaintiff do pay to the defendant the costs of this action from 1 June 2012 onwards (including all costs reserved (if any) after 1 June 2012) on an indemnity basis, with certificate for counsel , to be taxed if not agreed.

(Discussion re interest on costs)

11.  Regarding paragraph 1(c) of the summons, I am inclined to adopt the “simplified approach” used by Johnson Lam J (as Lam VP then was) in Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273, at paragraphs 18 and 19. 

12.  Accordingly, I order that the plaintiff do pay to the defendant enhanced interest on the costs incurred by the defendant from 1 June 2012 onwards at 4.5% per annum for the period from 1 June 2012 to 28 January 2014.

(Discussion re costs of the summons)

13.  Regarding costs, I see no reason why costs should not follow the event.  I order that the costs of the application be paid by the plaintiff to the defendant, summarily assessed at $35,835. 

14.  Such costs to be paid within 14 days from the date hereof.