FUNG WING YING v. CHENG MAN TAK trading as HOP FAT HONG

DCCJ 3091/2022

[2026] HKDC 1737

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3091 OF 2022

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DECISION

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I.  Introduction

1.  On 17 April 2026, this Court handed down the judgment[1] (“Judgment”) after a 5-day trial, finding that the Defendant is liable to pay the Plaintiff damages in the total sum of HK$59,808.86 for misfuelling the Plaintiff’s car on 1 October 2021.

2.  This Court also made a costs order nisi that the Defendant do pay the Plaintiff 50% of her costs of the action, including all reserved costs, with Certificate for Counsel, to be taxed on the District Court scale if not agreed (“Costs Order Nisi”).

3.  After the Judgment, both parties applied for variation of the Costs Order Nisi.

4.  By summons filed on 30 April 2026 (“D’s Summons”), the Defendant seeks to vary the Costs Order Nisi as follows:-

(1)  The Plaintiff do have 50% of her costs of this action (including all reserved costs) on the Small Claims Tribunal scale, such costs to be taxed if not agreed; and all fees and disbursements relating to the instruction, engagement and attendance of the Plaintiff’s expert Mr Hui Wing Ka Benny (“Mr Hui”) be disallowed in any event.

(2)  As first alternative, the Plaintiff do have 50% of her costs of this action (including all reserved costs) up to and including 19 October 2022 on the District Court scale, such costs to be taxed if not agreed, but subject to (a) the vacation of the Certificate for Counsel; (b) no recovery of costs incurred by the Plaintiff after that date; and (c) disallowance of all fees and disbursements relating to the instruction, engagement and attendance of Mr Hui.

(3)  As second alternative, the Plaintiff do have a reduced percentage of her costs of this action (including all reserved costs) on the District Court scale as this Honourable Court thinks fit, in any event not exceeding 30%, such costs to be taxed if not agreed, subject to (a) the vacation of the Certificate for Counsel; and (b) disallowance of all fees and disbursements relating to the instruction, engagement and attendance of Mr Hui.

5.  By summons filed on 4 May 2026 (“P’s Summons”), the Plaintiff seeks to vary the Costs Order Nisi such that the Defendant shall pay the Plaintiff 75% of her costs of the action including all reserved costs, with Certificate for Counsel, to be taxed on the District Court scale if not agreed.

6.  On 23 June 2026, this Court directed that both P’s Summons and D’s Summons be disposed of together on papers.

7.  For convenience, I adopt the same definitions and abbreviations used in the Judgment.

II. The Judgment

8.  In the Judgment, I ruled in favour of the Plaintiff on Issue 1. Based on the Plaintiff’s oral evidence and the Two Notes including the factual background surrounding the signing of the Two Notes, I ruled that the Plaintiff had orally requested the refuel of diesel but Mr Zhang was at fault by wrongly refuelling the Car with petrol, and hence the Defendant is liable to the Plaintiff. The Defendant acted in breach of an express term of the Contract for Refuel Service when Mr Zhang refuelled the Car with petrol instead of diesel. Further, by supplying and refuelling the wrong fuel, the Defendant acted in breach of the condition of supplying the correct fuel of merchantable quality and for the purpose, namely the diesel-driven Car, as implied by sections 16(2) and 16(3) of the Sale of Goods Ordinance (Cap 26), and the condition of carrying out the supply of refuel service with reasonable care and skill as implied by section 5 of the Supply of Service (Implied Terms) Ordinance (Cap 457). However, for the further or alternative case of negligence, the Plaintiff did not plead the nature and extent of the duty of care owed by the Defendant, the breach of which by Mr Zhang giving rise to a cause of action in negligence, and therefore I dismissed the Plaintiff’s claim in negligence or breach of duty of care. See paragraphs 85 to 90 of the Judgment.

9.  On Issue 2, I found that only the fuel tank and the primary fuel pump (as opposed to the entire fuel pipeline system from the fuel tank to the injectors as suggested by the Plaintiff including her expert Mr Hui) were contaminated by reason of the Incident: paragraph 115 of the Judgment. Next, by preferring the evidence of the Defendant’s expert Mr Lee to that of the Plaintiff’s Mr Kwan and expert Mr Hui, I found in favour of the Defendant that only the primary fuel pump, fuel filter and O-ring required replacement, with the remainder of the fuel system capable of being flushed/cleaned: paragraphs 126 to 130 of the Judgment. Turning to the reasonable labour costs and number of working days for repairs, again I preferred the assessment of Mr Lee to that of Mr Hui: paragraphs 141 to 142 of the Judgment. Lastly, I ruled that the replacement of the primary fuel pump, fuel filter and O-rings constituted inevitable betterment or improvement and therefore depreciation did not apply: paragraph 147 of the Judgment.

10.  On Issue 3, this Court found that it was not unreasonable for the Plaintiff to refuse the Defendant’s offer to have Auto Tech repair the Car. Nonetheless, the Defendant should have accepted the revised repair proposal in Mr Lee’s Revised BMW Quotation as endorsed by the Defendant on 29 October 2021. In other words, the repair works should be completed on 4 November 2021, and damages beyond 4 November 2021 such as vehicle rental costs, taxi fares and costs of additional petrol (if any) as well as the Plaintiff’s engagement of Anderson for inspection and quotation and BMW’s repair costs of HK$102,720.55 were not costs reasonably incurred, and the same shall not be responsible by the Defendant: paragraphs 180 and 184 of the Judgment.

11.  On Issue 4, I rejected the Plaintiff’s claim for BMW’s repair costs and Anderson’s survey fee: paragraphs 186 to 187 of the Judgment. However, this Court accepted that the Plaintiff had to drive the Car for her pet grooming business, and as a result of the Incident she had to rent a private car: paragraphs 195 and 197 of the Judgment. This Court also allowed taxi fares and car rental fare (up to 4 November 2021): paragraphs 196 and 198 of the Judgment. I rejected the Plaintiff’s claim for additional petrol: paragraph 199 of the Judgment.

12.  Lastly, on Issue 5, by reason of the assessed damages of HK$59,808.86 exceeding the sum of HK$48,200 paid into Court by the Defendant, I rejected the defence of tender: paragraphs 202 to 205 of the Judgment.

III. Legal Principles

13.  There is a discretion in the court to deprive a successful party of the whole or part of his costs because he had caused significant increase in the length or costs of the proceedings by raising issues on which he did not succeed. Whether or not it should be done depends on all the circumstances. It is to be approached with due circumspection so as not to undermine the utility of the general rule that costs should follow the event. Order 62 rule 5 RDC provides that the Court in exercising its discretion as to costs shall consider the underlying objectives in Order 1A rule 1, the conduct of all parties and whether a party has succeeded on part of his case even if he has not been wholly successful. The burden rests with the losing party to demonstrate the circumstances which justify the exceptional course of displacing the general rule. See Re Ho Yuk Wah David (bankrupt) [2019] HKCFI 942, per Recorder Eugene Fung SC (as he then was), at paragraph 3, cited in Bright View Properties Limited v New King Properties Limited & Another [2020] HKDC 1240, per HHJ Andrew Li, at paragraph 14.

14.  According to Order 62 rule 5(2) RDC, the conduct of the parties includes:

(1)  whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(2)  the manner in which a party has pursued or defended his case or a particular allegation or issue;

(3)  whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(4)  conduct before, as well as during, the proceedings.

15.  In deciding whether costs should be awarded on District Court scale or Small Claims Tribunal scale, the court has to consider whether, at the commencement of the action, it was reasonable to say that the plaintiff would recover more than the ceiling at the latter scale, ie HK$75,000: Cheung Yu Tin v Ho Hon Ka [2006] 2 HKLRD 674 (CA), at paragraph 31, per Woo VP, and at paragraph 47, per Cheung JA.

16.  Similarly, in the post-CJR era, a plaintiff in a High Court action who wishes to establish that he enjoyed reasonable prospects of recovering a sum of money in excess of the District Court jurisdiction must do so by reference to the evidence available to him at the time he commenced the proceedings; of course, there may be other considerations, such as the complexity of the factual and legal issues involved, which would justify proceedings being brough in the High Court: Wong Chim Hing v Discovery Bay Transit Services Ltd [2016] 1 HKC 491, at paragraphs 21 and 23, per Bharwaney J.

17.  The Plaintiff cites Lau Chi Keung v Wong Wai Kei & Another DCPI 1846/2008, unreported, 22 June 2010, per DDJ Edward Shum, where the plaintiff’s recovery exceeded the defendant’s sanctioned payment so Order 22 rule 23(4) did not strictly apply, but the Court nevertheless acknowledged that money was not the sole governing criterion and special circumstances justified a departure from the usual rule that a successful claimant recovers all costs, and eventually the defendants were ordered to pay the plaintiff’s costs only up to the date of the sanctioned payment with each party bearing its own costs thereafter: paragraphs 31 and 32 thereof.

IV. Parties’ Stances

18.  Insofar as P’s Summons is concerned, the Plaintiff advances 3 grounds to argue for a percentage of costs award of more than 50%, namely:-

(1)  The Defendant had unreasonably refused to admit liability and insisted on the Plaintiff to strict proof thereof. The Plaintiff submits that the present case was factually straightforward and without much controversy, as it was beyond dispute that the Defendant’s staff had injected the wrong type of fuel into the Plaintiff’s vehicle. The Plaintiff contends that the Defendant should have admitted liability leaving damages to be assessed, and in fact she had invited the Defendant to admit liability at the very early stage of proceedings by the Plaintiff’s solicitors’ letter dated 6 November 2023.

(2)  The error by the Defendant’s expert Mr Lee in his first expert report, namely that the mixed fuel was found at the fuel tank only as opposed to also the injectors, misled the Plaintiff to believe that mixed fuel had reached the point of injectors in the fuel line and wasted the Court’s time, and was inevitably prejudicial to the Plaintiff.

(3)  It was reasonable to spend more time on the issue of quantum at the trial. In particular, the Plaintiff takes the view that she did not exaggerate her claim but the 50% disallowance on costs is overly excessive.

19.  Insofar as D’s Summons is concerned, the Defendant contends that:-

(1)  Prior to the commencement of the present action, the Defendant had made open offers of HK$31,128.70 (with cheque) and HK$48,200 for full and final settlement of the Plaintiff’s claim, which were rejected by the Plaintiff who counter-demanded HK$170,000 all inclusive.

(2)  It was not reasonable for the Plaintiff to commence this action in the District Court as it was reasonably clear on the evidence at that time, as confirmed by the award in the Judgment, that she would not recover more than the ceiling of the jurisdiction of the Small Claims Tribunal, ie HK$75,000. The maintenance of the action down to and through trial, with the persistence in pursuing the unreasonable repair methodology and reliance on Mr Hui’s evidence, was wholly unjustified while eventually she was awarded HK$59,808.86 only.

(3)  On 19 October 2022, pursuant to Order 22 rule 8(2) RDC, the Defendant paid the sum of HK$48,200 into court by way of sanctioned payment in settlement of the whole of the Plaintiff’s claim. The sanctioned payment was never accepted by the Plaintiff. Instead, on 9 November 2022, the Plaintiff made her own sanctioned offer to accept HK$170,000 (inclusive of interest) plus costs to be taxed if not agreed, in full and final settlement of her claim.

(4)  The Plaintiff’s engagement of Counsel was necessitated by the Plaintiff’s own pursuit of an inflated claim exceeding HK$200,000 which led to procedural and evidential complexity subsequently developed in the action.

V.  Analysis

(A)  Commencement and Prosecution of the Action

20.  To start with, the Defendant’s open offers before the commencement of the action were less than the damages assessed by this Court, ie HK$59,808.86. The Plaintiff had to initiate this action to recover such damages. The sanctioned payment in the sum of HK$48,200 made by the Defendant did not beat the damages assessed either, and the Plaintiff had to proceed with the case to trial for the damages awarded. Therefore, it is not just to disallow the Plaintiff of all her costs after the date of the sanctioned payment. Hence, I reject the first alternative put forward in D’s Summons.

(B)  Percentage of Costs Recoverable by Plaintiff

21.  Next, I consider the first and third points of the Plaintiff’s argument together. I agree with the Plaintiff that the factual background in respect of liability was simple. Nonetheless, the Defendant, save and except some admissions, simply put the Plaintiff to strict proof on liability. From evidence in the very early stage of these proceedings including the Two Notes signed by Mr Zhang and Mr Leung respectively and the surrounding circumstances, the Defendant should have admitted liability and contested the issue of damages only. That said, the Plaintiff succeeded in her contract claim but not the tort claim on Issue 1. Moreover, damages representing only 29.61% of the amount claimed was awarded to the Plaintiff on Issue 4, and in making the assessment this Court basically found against the Plaintiff on the reasonable costs of repairs to the Car on Issue 2 and made the ruling that the Plaintiff had failed to act reasonably to mitigate her loss on Issue 3. Of course, this Court found against the Defendant on Issue 5. However, the time and costs spent on Issues 2 and 3 both before and during the trial far exceeded those spent on Issues 1, 4 and 5, notably for Issue 2 the parties called both factual and expert witnesses who were subject to extensive cross-examination. While this Court has to take an overall view of the matter to arrive at a suitable costs order, the fact that the Plaintiff enjoyed only limited success on the issues (and sub-issues) relating to the quantum of damages on which far more time and costs were spent compared with those on the issue of liability must be taken into account.

22.  Turning to the Plaintiff’s second point, viz the error in Lee’s first expert report, I accepted that the error was a clerical one because there was no objective evidence such as sample extracted from the injectors or documents from BMW showing that the fuel at the injectors were checked, given that the said common view of the experts that diffusion of the mixed fuel from the fuel tank was impossible without restarting the Car: paragraph 109(3) of the Judgment. While Mr Lee acknowledged under cross-examination that he had discovered the error some time before the trial but failed to point out the same in advance (apparently not in compliance with the Code of Conduct for Expert Witness), I notice that there was no evidence during or before the trial that the Plaintiff had relied on the error in Mr Lee’s first expert report. Notably, Mr Hui and Mr Lee reached a common view on 2 matters only, namely that (a) the engine of the Car had not been restarted after the refuel of petrol at the Station, and (b) on the basis that the engine had not been restarted, the primary fuel pump (ie the high pressure pump) had to be replaced: paragraph 99 of the Judgment. In other words, Mr Hui was not mistaken that the Mr Lee held the view (but in fact he did not) that mixed fuel had reached the point of the objectors. In the premises, I reject the Plaintiff’s contention that she had relied on and been misled and prejudiced by Mr Lee’s clerical error. In any event, the Plaintiff’s concession in his solicitor’s supporting affirmation herein that ultimately the error may not have a bearing on the outcome of the trial suggests that the Plaintiff was not prejudiced by the error.

23.  Bearing in mind the principles encapsulated in Bright View Properties Limited, and looking at the matter in the round, this Court maintains the view that it is just to order the Defendant to pay the Plaintiff 50% of her costs of the action, including all reserved costs. I am unable to agree with P’s Summons.

(C)  Scale of Costs

24.  Moving on to the scale of costs, in paragraph 179 of the Judgment, I held that it was clear from the WhatsApp messages between the Plaintiff and Mr Leung that the Plaintiff was willing to adopt Mr Lee’s Revised BMW Quotation, namely to clean the fuel tank and replace the primary fuel pump, fuel filter and O-rings only, subject to the Defendant’s confirmation (a) to be responsible for all losses arising from the failure of the revised repair proposal; and (b) that BMW shall grant the repair warranty. By the Plaintiff’s WhatsApp message dated 29 October 2021 at 6:56 pm, consensus was apparently reached between the Plaintiff and Mr Leung (for the Defendant). Such an agreement was a reasonable one for the parties to enter into given that (a) Mr Lee’s Revised BMW Quotation was accepted by Mr Kwan of BMW which the Plaintiff regarded as authoritative; (b) the Defendant would pay all costs of repair as well as all losses arising from Mr Lee’s Revised BMW Quotation should the same fail and cause more or other problems to the Car; and (c) the Plaintiff apparently accepted Mr Leung’s representation regarding repair warranty for part replacements by her WhatsApp on 29 October 2021 at 6:56 pm. I therefore went on to find that the Defendant should have accepted the revised repair proposal in Mr Lee’s Revised BMW Quotation as endorsed by the Defendant on 29 October 2021 and, taking into account that 29 October 2021 was a Friday and it would take 4 working days for the repairs works, damages such as vehicle rental costs, taxi fares and costs of additional petrol (if any) shall not be recoverable beyond 4 November 2021: paragraphs 180, 184 and 185 of the Judgment.

25.  In other words, the evidence available to the Plaintiff at the commencement of the present action on 10 August 2022 was that she should have accepted Mr Lee’s Revised BMW Quotation on 29 October 2021 which met her own requirements of endorsement by BMW and coverage of repair warranty. Of course, at that time, Mr Lee’s Revised BMW Quotation contained a depreciation of 25% and therefore the total amount was only HK$28,168.70, while this Court eventually ruled that the depreciation should not apply and the total amount should be HK$33,353.30. This Court is prepared to take the latter amount for reference for the present purpose.

26.  This Court also ruled that it was reasonable for the Plaintiff to claim the full amount of HK$6,012.40 for taxi fares: paragraph 196 of the Judgment.

27.  Insofar as car rental fees is concerned, this Court accepted that it was not unreasonable for the Plaintiff to incur car rental fees of HK$5,300 per 7 days: paragraphs 197 and 198 of the Judgment. Mr Lee stated in his first report dated 8 November 2021 that it would require 3 to 4 working days for the repair, and the same report was provided to the Plaintiff by the letter dated 18 November 2021 from the Defendant’s solicitors. Meanwhile, there was no indication of the number of working days required in Mr Hui’s first report dated 2 December 2021. That said, Mr Hui’s first report stated that the damage to the Car was minor and his evidence in the Joint Expert Report was that the repair would require 4 to 5 working days. Even if some leeway is given to the Plaintiff, she should have realised, at the time of commencement of the action, that the repair should not require more than, say, 21 calendar days, while there was no indication from BMW that replacement parts were not in stock on 29 October 2021 and that the same had to be ordered. Therefore, even if it were reasonable for the Plaintiff to believe that she could claim car rental fees from 9 October 2021 to 29 October 2021 (21 days in total) and 21 additional days, she could only have claimed HK$5,300 per 7 days x 6 weeks = HK$31,800.

28.  In relation to additional petrol costs, even if the Plaintiff could establish the claim in full, she could only adduce receipts amounting to HK$3,606.90 which was far from the amount of HK$23,300 claimed: paragraph 199 of the Judgment.

29.  In total, the Plaintiff should have realised at the time of commencement of the action that it would be reasonable for her to recover about HK$74,772.60 (HK$33,353.30 + HK$6,012.40 + HK$31,800.00 + HK$3,606.90), and such a claim should have fallen within the jurisdiction of the Small Claims Tribunal.  The Defendant warned the Plaintiff on 11 January 2022 that her claim would not exceed the jurisdiction of the Small Claims Tribunal, but the Plaintiff went on to commence this action in the District Court.

30.  This Court eventually assessed the damages at a modest amount of HK$59,808.86. The Defendant’s sanctioned payment of HK$48,200 could not beat the damages awarded, but it was close to such amount, and in any event both amounts were within the jurisdiction of the Small Claims Tribunal. By comparison, the amount of HK$170,000 in the Plaintiff’s sanctioned offer was within the jurisdiction of the District Court and was farther away from the damages awarded.

(D)  Certificate for Counsel?

31.  Further, with the benefit of Counsel’s submissions on costs, I take the view that having regard to the evidence available at the commencement of the action that the amount reasonably recoverable should fall within the jurisdiction of the Small Claims Tribunal, factors such as multiplicity of issues and involvement of expert evidence cannot justify the commencement of the action in the District Court and the award for Counsel’s Certificate, notwithstanding that Mr Timothy Y H Wong acting for the Plaintiff and Mr Rex Yam acting for the Defendant rendered valuable assistance to this Court at trial. I accept the Defendant’s argument that should the Plaintiff have proceeded with Mr Lee’s Revised BMW Quotation which she had apparently accepted on 29 October 2021, the arguments on the reasonable costs of repair (Issue 2) and the mitigation of loss (Issue 3) would have been avoided and the expert evidence in such regard would not have been adduced. The parties could have competently conducted the case including the trial at the Small Claims Tribunal without Counsel or solicitor.

32.  In my judgment, the costs of the present action should be assessed at a scale commensurate with the Small Claims Tribunal scale, and no Certificate for Counsel should be granted.

33.  However, this Court does not find it appropriate to further disallow all fees and disbursements relating to the instruction, engagement and attendance of Mr Hui, as my preference for Mr Lee’s expert evidence to Mr Hui’s evidence (including his assertion and subsequent withdrawal of the diffusion theory) has been reflected in my rulings on Issue 2 and Issue 3, and the outcome on Issue 2 and Issue 3 has been factored in the overall assessment of 50% costs. I reject the second alternative in D’s Summons.

VI.  Disposition

34.  I order that the Costs Order Nisi be varied such that the Defendant do pay the Plaintiff 50% of her costs of the action, including all reserved costs, to be taxed on a scale commensurate with the Small Claims Tribunal scale if not agreed.

35.  In the premises, I dismiss P’s Summons and allow D’s Summons to the extent as ordered.

36.  As the Defendant emerges victorious substantially on his primary case, I order that the Plaintiff do pay the Defendant’s costs of P’s Summons and of D’s Summons, to be taxed on a scale commensurate with that of the Small Claims Tribunal if not agreed.