CHOY NGA WAI NANCY v. GENTLE SMART LTD AND ANOTHER

DCCJ 4895/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4895 OF 2007

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BETWEEN

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(Oral Hearing be dispensed with)

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DECISION

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Introduction

1.   On 27 April 2009 I handed down my judgment for assessment of damages whereby the 1^st Defendant was ordered to pay the Plaintiff damages in lieu of specific performance assessed at HK$260,000.00 and to return deposits to the Plaintiff in the sum of HK$278,000.00 with interest (“Judgment”). In my Judgment, I also granted a costs order nisi in favour of the Plaintiff whereby the 1^st Defendant was ordered to pay half of the Plaintiff’s costs of assessment, to be taxed if not agreed.

2.   This is the Plaintiff’s application to vary the costs order nisi. By her summons dated 8 May 2009 (“Costs Summons”), the Plaintiff applied for an order that the 1^st Defendant do pay the Plaintiff’s costs of assessment, to be taxed if not agreed.

3.   The 1^st Defendant was absent in the assessment but the 2^nd Defendant had taken part in the hearing under leave granted by HHJ Lok on 15 October 2008. With the consent of the Plaintiff and the 2^nd Defendant, I directed on 22^nd May 2009 that the Costs Summons be disposed of by written submissions without a hearing.

4.   Written Submissions were filed on behalf of the Plaintiff on 26 May 2009 and the written submissions were filed by the 2^nd Defendant on 3 June 2009. Further clarification submissions were made by the Plaintiff on 22 June 2009.

The Judgment

5.   In my Judgment, I held that, whilst the Plaintiff failed to make out her primary case that damages in lieu of specific performance should be assessed at a date other than the date of the postponed completion, or her alternative case that such damages should be assessed by reference to her alleged consequential losses, the Plaintiff nevertheless ought to be awarded damages being a reasonable payment of the benefits gained by the 1^st Defendant as a result of its breach of the contract for sale and purchase of the Property. After taking into account all circumstances, in particular of the conduct of the assessment for and on behalf of the Plaintiff, I disallowed half of the Plaintiff’s costs of assessment and made the costs order nisi that the 1^st Defendant do pay half of the Plaintiff’s costs of the assessment.

6.   I refer to the Judgment which set out in greater detail my reasons for judgment, which I shall not repeat here.

The Costs Summons

7.   Mr. Victor Cheung, counsel for the Plaintiff, made basically 3 points in his written submissions. First, he submitted that the Plaintiff has acted promptly and in no way misconduct herself for any delay in prosecuting the action.

8.   This argument indeed is not open to the Plaintiff on an application for variation of the costs order nisi for I have already found in the Judgment that the Plaintiff had failed to act reasonably in pursuing the remedy of specific performance.

9.   Mr. Cheung next argued that the Plaintiff was already penalized for delay by the Court disallowing her claim for interest on deposits between 1 May 2008 and 6 October 2008. In the Judgment, in paragraphs 7 – 10, the undesirable features of the way the Plaintiff sought to mount her case were set out. Further, the valuation report filed did not contain any expert evidence on the valuation of the Property as at the date of the default judgment, which would be prima facie the date on which the damages should be assessed if Johnson v Agnew is followed. It was such a state of affairs which necessitated the filing of additional witness statement on part of the Plaintiff and the adjournment of the assessment for a further day of hearing. The disallowing of interest on deposits was directed at the Plaintiff’s conduct before the hearing; the disallowing of a portion of costs of the Plaintiff was directed at the Plaintiff’s conduct at the hearing – a distinction which in my view is obvious and apparent in the Judgment and I simply cannot understand why Mr. Cheung would have failed to heed.

10.   Mr. Cheung then submitted that the 2^nd Defendant indeed lied in court because his claim that since the 1^st Defendant’s default he had returned the initial deposit to the solicitors acting for the 1^st Defendant in the conveyancing transaction was untrue. Correspondence between the Plaintiff’s solicitors and the solicitors acting for the 1^st Defendant since the handing down of the Judgment was exhibited and alluded to. In reply, the 2^nd Defendant attached a copy of the paid-in slip which was produced during the 2^nd Defendant’s evidence. Eventually solicitors acting for the 1^st Defendant in the conveyancing transaction confirmed the receipt from the 2^nd Defendant for the initial deposit and the Plaintiff by further clarification submissions dated 22 June 2009 withdrew this argument. But in any event, such an approach is, like the Plaintiff’s first argument, entirely improper. Costs orders nisi are made on the basis of the reasons and findings in support of the substantive decision; any argument which goes to the correctness of such reasons or findings is for the appellate court and not for variation of costs order nisi.

11.   As noted by Mr. Cheung in his written submissions, “it is a general principle that:-

“(1)Costs are in the absolute discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid (s.53, District Court Ordinance, Cap. 336 & O.62, r.2(4) RDC);

“(2)Costs should follow the event except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs (O.62, r.3(2) RDC).”

12.   I fail to see why the costs order nisi should be varied. The Plaintiff’s Costs Summons be dismissed, which meant that the costs order nisi set out in paragraph 48 of the Judgement is made absolute. I also direct that the 2^nd Defendant’s costs occasioned by the Plaintiff’s Costs Summons be borne by the Plaintiff, to be taxed if not agreed.