TERKILD JOHAN TERKILDSEN AND ANOTHER v. BARBER ASIA LTD

HCA 1963/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1963 OF 2003

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RULING ON COSTS

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1.  In these proceedings the 7^th defendant, Mr Dunford, sought to strike out all causes of action brought against him.  The plaintiffs countered that application with an application to amend the statement of claim.

2.  The effect the judgement delivered by me on 8 March 2007, was to find in favour of Mr Dunford, but to allow an amendment to the statement of claim, which permitted the plaintiffs to retain Mr Dunford as a defendant in one of the eight different causes of action, the subject of the claim.

3.  I made an order nisi that the costs on both the application to strike out, and the application to amend be costs in the cause.  Mr Dunford now seeks to vary that order, asking that the plaintiffs be ordered to pay his costs both on the application to strike out and the application to amend.

4.  It will often be the case that an application by a defendant to strike out proceedings for failing to disclose a reasonable cause of action will be countered by an application by the plaintiff to amend.  On an application to amend, where the application is resisted, the usual costs order is to order:

(a)	costs of and occasioned by the amendment to the other side in any event; but
(b)	costs of the hearing before the tribunal to the party who was successful in the argument to amend: see Lessy SARL v Pacific Star Development Ltd [1996]2 HKLR 1.  The rationale behind the distinction is to deter the other party from resisting an amendment regardless of the merits.  If the amendment is resisted, but the resistance fails, costs of the hearing will be ordered against the resister.

5.  Mr Ling says, and I accept, that Mr Dunford in effect won the application to strike out, for Mr Dunford’s remaining in the action was entirely dependent upon the success of the application to amend.  But notwithstanding Mr Ling’s efforts to avoid the reality of the situation, the plaintiffs succeeded in their application to amend.  The plaintiffs did not lose the application to amend, Mr Dunford resisted it, and failed in that resistance.  That the plaintiffs only succeeded in respect of one of several causes of action is sought to be pursued against Mr Dunford matters not. 

6.  In reaching the decision that I have in respect of costs I have had regard to the submission that it would be unfair Mr Dunford to make the costs on the summons to amend, defendant’s costs in the cause, because, Mr Ling says, if Mr Dunford lost at the end of the day he would have to pay the costs of the amendment.  While that is right, it is not unfair that a losing defendant, at the end of the day, should bear the substantial burden of the costs.

7.  Weighing the matters that have been put before me and the ultimate result I am satisfied that the proper order for costs is that:

(i)	the plaintiffs must pay the 7th defendant’s costs of the 7th  defendant’s application to strike out by summons dated 23  October 2006;
(ii)	the plaintiffs must pay the 7th defendant’s costs of and occasioned by the amendment arising from the application by the plaintiffs to amend the statement of claim made by summons dated 19 July 2006;
(iii)	costs on the hearings of plaintiffs application to amend the statement of claim, on 8 November 2006, and 15-19 January 2007, be to the 7th defendant, in the cause, to be taxed on a party and party basis.

8.  Mr Dunford has substantially succeeded in his application to vary the costs order.  Costs on the summons to vary the order for costs must be paid by the plaintiffs on a party and party basis.