RESOURCES LEADER LTD v. HO NGO YING

HCA 2667/2018

[2022] HKCFI 2078

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2667 OF 2018

__________________

__________________

_______________

D E C I S I O N

_______________

Introduction

1.  Before me this morning is the defendant’s application to vary the costs order nisi which I made on 11 April 2022: see my decision at [2022] HKCFI 1066 at para 28.  I shall adopt below the defined terms used in that decision.

2.  As stated in her summons filed on 25 April 2022, the defendant now asks for costs of the substantive argument of the two summonses, which were dealt with on paper.  She accepts that the costs of and occasioned by the amendments, the withdrawal of her admissions in the pleading and the adducing of Mr Cheung’s letter as additional expert evidence should be borne by her.  

3.  I refuse the application for the following reasons.

Legal principles

4.  Costs of interlocutory proceedings are dealt with in Order 62, rule 3(2A) of the Rules of the High Court.  It reads:

“If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any interlocutory proceedings, it may, subject to this Order, order the costs to follow the event or make such other order as it sees fit.”

5.  Accordingly, the general rule that costs should follow the event does not apply to interlocutory proceedings.  The court has a much wider discretion to award costs as it sees fit.  Nonetheless, such discretion should be exercised judicially.  That said, the general rule of costs following the event remains an obvious option in many cases.

6.  The court in exercising its discretion should take into account the factors enumerated in Order 62, rule 5. 

7.  In cases where indulgence is sought by a party from the court, as in the present case where the defendant sought leave to amend her pleading and to adduce supplemental expert evidence, the general practice is to make a distinction between two sets of costs. 

8.  The first set of costs comprise the costs of and occasioned by the indulgence being granted.  Normally, that set of costs would be awarded in favour of the other party in any event.  The second set of costs comprise the costs of the contested substantive hearing.  Normally, this second set of costs would be made against the other party if he unreasonably opposes the application. 

9.  The rationale is that where there is an amendment which really ought to be consented to and which it is obvious that the court is going to grant, it would be unreasonable for the other side to resist the application, thus inflating the costs of the litigation unnecessarily.

10.  The court’s task is to see whether the other party was acting reasonably and sensibly.  The other side should consider the application and the risk of losing his argument.  He was not expected to inflate costs unnecessarily.  If he did not act reasonably and sensibly and opposed an application which should not have been opposed, then he would end up paying the costs of the argument.

11.  For a discussion of the above general principles, see Daimler AG v Leiduck (re: expert evidence) (No. 3) [2018] 1 HKLRD 1188, [2018] HKCFI 383 at paras 5 to 14.

Discussion

12.  In my view, the present case is not a case where the plaintiff had acted unreasonably in resisting the application even though the plaintiff ultimately failed in its opposition.

13.  First, what is striking in this case is that the defendant’s applications were very late applications with no explanation offered for the delay.  According to the chronology of events, the applications could have been taken out as early as in mid-2020.  In the end, they were only taken out in February 2022.  There was no indication at the PTR hearing that these applications might be made by the defendant prior to the trial.  The fact that there had been no explanation for the delay remains true to the present day.

14.  Secondly, what is equally alarming is that when the defendant took out the applications, it was done in a very piecemeal and unsatisfactory manner.  The first summons was taken out in early February, with the second summons to follow about two weeks later.  When the first summons was taken out, it was not supported by the necessary affidavit evidence.  The affidavit evidence was only filed when the second summons was taken out.  In fact, since the taking out of the two summonses, certain parts of the applications were withdrawn in the written submissions lodged with the court for the substantive disposal of the summonses. 

15.  One would expect that given that the applications were taken out so late in the day, the defendant would have put together a proper application rather than doing it in such an unsatisfactory manner.

16.  At the receiving end of such an application, I consider that the plaintiff was quite entitled to take time to consider the merits of the applications.  The plaintiff was quite entitled to see whether there was an explanation offered by the defendant for the lateness.  The opposition mounted by the plaintiff was therefore not unreasonable in the circumstances. 

17.  In the end, I allowed leave to be granted to the defendant after conducting a balancing exercise.  The pre-trial timetable had to be compressed to allow parties to take all the necessary steps so that the trial date could be kept.  But I made clear in my decision that the disruption to the pre-trial preparation was itself a prejudice suffered by the plaintiff: see paras 21 and 30.

18.  In the circumstances, it was not unreasonable for the plaintiff to assert its rights and to resist the late applications mounted by the defendant.

19.  At today’s hearing, in the defendant’s written submissions for the present application, the defendant makes a number of criticisms against the plaintiff.  She complains that the plaintiff never set out its grounds of opposition until it lodged its skeleton submissions in early April.  The defendant also says that the plaintiff had been keeping the defendant in the dark as far as these summonses are concerned.  The defendant also accuses the plaintiff of not acting in a cooperative and proactive manner in the disposal of the summonses.  This was because at the beginning, the plaintiff was not prepared to consent to paper disposal of the summonses.  It is further submitted on behalf of the defendant that, by contrast, the defendant had been acting proactively, aiming to have the two summonses expeditiously disposed of before the trial.

20.  All these criticisms made by the defendant are ill-founded.  To me, the defendant seems to be proceeding on the assumption that just because she took out an application, the plaintiff had to bend over backwards to accommodate her request.  Now that in the defendant’s eyes, the plaintiff did not do so, therefore the defendant accuses the plaintiff of being uncooperative in the disposal of the summonses.

21.  I find it extremely difficult to come round to the viewpoint of the defendant.  The objective fact is that there were disruptions to the pre-trial preparation because of the very late applications taken out by the defendant.  The defendant has so far been pointedly silent on why she took out these applications so late.  It must be said that all the last-minute scrambling was due to the defendant’s belated applications.  Therefore, I find the defendant’s criticisms of the plaintiff to be wholly unmeritorious.

Conclusion

22.  I conclude that the plaintiff’s resistance to the applications were not unreasonable.  And, hence, they should be awarded both sets of costs in these applications. 

23.  For the above reasons, I dismiss the defendant’s summons to vary my costs order nisi.  The order be made absolute.

[Submissions re costs]

24.  The plaintiff do have costs of the defendant’s variation summons, to be taxed if not agreed, with certificate for counsel.