WIDE WAY DEVELOPMENT LTD v. TUNG HING PRINTING AND DYEING FACTORY

HEAD    NOTE

                Interpleader summons. - On trial of issue case settled without prejudice to argument on costs. It was argued that as there was no determination in the issue framed, there should be no order for costs as the court was not in position to say who is right and who is wrong. Held: bailiff's expenses to be borne by execution creditor. Technically, although there was no determination in the issue framed, however if the result of the compromise shows that neither party succeeds in toto, costs to be apportioned and court can look to terms of settle-ment in deciding apportionment.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO. 9255 OF 1985

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BETWEEN

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RULING ON COSTS

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1. Upon execution by a writ of fi. fa. in K. C. J. 9255 of 1985, the bailiff seized 318 rolls of cloth found in the premises of the judgment debtor. A third party claimed the goods. The bailiff interpleaded. Affidavits were filed. An order was made for an issue to be stated and tried, the agreed issue being: "Whether the claimant, Wide Way Development Company Limited, is the legal or beneficial owner of the goods seized in execution". The claimant was made plaintiff in the issue and the execution creditor, Tung Hing Printing and Dyeing factory, was made defendant. On the second day of the trial, a settlement was arrived at whereby the parties agreed that it be ordered and directed, by consent, that the plaintiff abandons a claim to 90 rolls of cloth, so that in the end result the plaintiff is entitled to the return of 228 rolls out of 318 that were seized. The settlement was without prejudice to the question of costs and bailiff's expenses on which I have heard submissions by counsel for both parties.

2. Watchman fees (bailiff's expenses) relate to an expense incurred in the process of execution initiated by the defendant. I am not disposed to order the plaintiff to pay the bailiff's expenses if the defendant, as execution creditor, sees fit at any stage, not to dispute or contest the plaintiff's claim or part of the claim. That, as far as I am aware, is the general rule applied in practice and I see no reason to depart from it. I take the view that if an execution creditor puts a claimant to proof of title or ownership, but in the course of so doing or pending such proof, the execution creditor agrees, for the purpose of finalising the matter or for any other reason, to submit to the plaintiff's claim for the release of part of the goods which is acceptable to the claimant, I do not think it is right that the claimant be ordered to pay the bailiff's expenses or any portion of it.

3. In regard to costs, the point raised by the defendant is a novel one. It is submitted that as the issue was not determined or resolved, but the case settled, then there should be no order as to costs since the Court is in no position to say who is right and who is wrong. I have not been able to find any case on this point. It is obvious however that the settlement was not on the basis that there should be no order as to costs. It is intended, as confirmed by counsel for the parties, that I should exercise my discretion as to costs. If I accept the defendant's submission as valid, what then are factors that I can take into account in exercising at a judicial discretion? I think the answer is that although, technically, there has been no determination of the issue, the result of the compromise is that the plaintiff succeeds in securing the release of 228 out of 318 rolls of cloth that were seized. This means that neither party has succeeded in toto. In the circumstances, I feel that there should be no general order as to costs, but that costs should be apportioned. The order I make in that upon each party submitting a bill for taxation, the plaintiff is to pay 30% of the defendant's costs (less the bailiff's expenses) allowed on taxation and the defendant to pay 70% of the plaintiff's costs allowed on taxation; certificate for counsel in both cases.

Certified true copy.