NUME LTD v. YUEN HOI MAN

HCA 192/2021

[2026] HKCFI 5592

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 192 OF 2021

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BETWEEN

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DECISION

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INTRODUCTION

1.  By a summons dated 19 March 2026 (“the Summons”), the plaintiff (“P”) seeks to vary the costs order nisi made by this court in the judgment handed down on 9 March 2026 in this case (“the Judgment”).

2.  In the Judgment, I dismissed P’s defamation claim brought against the defendant (“D”) in its entirety and found D liable only for two of the pleaded false statements under the malicious falsehood claim. I awarded P a nominal sum of HK$10,000 as damages. I found the “real winner” of the case was D and awarded costs on the basis that (i) P pays 90% of D’s costs of the action; and (ii) D pays 10% of P’s costs, in each case to be taxed if not agreed, with certificate for 2 counsel (“the Costs Order Nisi”).

3.  P seeks to vary the Costs Order Nisi to the extent that P pays 60% of D’s costs and D pays 40% of P’s costs or at such percentage payable by either party as the court thinks fit: (see §1 of the Summons).

4.  D objects to P’s application.

5.  I decided that the Summons should be dealt with by way of paper disposal and directed the parties to lodge written submissions for that purpose.

6.  On 20 April 2026, P lodged its written submissions (“P’s Submissions”). On 11 May 2026, D lodged his written submissions (“D’s Submissions”). P lodged its reply submissions on 25 May 2026 (“P’s Reply Submissions”).

DISCUSSION

Relevant Legal Principles

7.  P and D’s counsel in their respective submissions have cited what they consider as the applicable principles in this area of law. They can be summarised as follows.

8.  Chief Justice Ma in Mimi Kar Kee Wong Hung v Raymond Kin Sang Hung (unrep., FACV 10 & 11/2014, 7 July 2015) at§7 succinctly stated that the discretion as to costs “is to be exercised in a principled way with a view to reality and justice.”

9.  Deputy High Court Judge Grace Chow has summarised those well-established principles in Vasily Trubnikov v Evgeny Volosov and Others [2025] HKCFI 3051 at §6 as follows:-

“(1) Costs are in the discretion of the court;

(2) They should generally follow the event;

(3) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or part of his costs;

(4) Where the successful party raises or makes allegations improperly or unnecessarily, the court may not only deprive him of his costs but may order him to pay the whole or part of the unsuccessful party’s costs;

(5) A party seeking to displace the general rule that costs follow the event bears the burden of showing that the circumstances justify the exceptional course of such displacement;

(6) The court has a discretion to exercise whether to deprive a party of all or part of his costs in respect of those issues which he has failed…;

(7) This discretion exists for the purpose of avoiding the rigour of too inflexible an application of the rule that costs generally follow the event. However, it is to be approached with due circumspection so as not to undermine the utility of that general rule. Too ready a departure from the general rule encourages unnecessary arguments which will itself increase costs;

(8) Where the party who has been successful overall has failed on one or more issues, particularly where such issues have occupied a significant amount of hearing time or led to the incurring of significant expense, the court may in its discretion order a reduction in the award of the costs to him. An issue for this purpose must be something so distinct and separate in itself that the decision of it constitutes an “event”;

(9) Whilst the court may order a successful party to pay the costs of the issues or allegations which were made improperly or unnecessarily and such issues have caused a significant increase in the length or costs of the proceedings, those issues have to be discrete and isolated; and

(10) It is not the case that the lack of success in any specific argument of itself attracts a costs sanction. It is only if it is possible to isolate an issue in the case in that it can properly be said it is unnecessarily pursued as having no bearing on the real question in the suit that it would be proper to deprive the successful party of all costs of that issue, otherwise a more general assessment should be made. So unless discrete points can safely be isolated and can be shown to have led to a wastage of time and costs, the practice of the court is not to engage in any ‘filleting’ of cases according to the success or failure of the disparate issues which, when taken cumulatively, constitutes the dispute to be judged.” (emphasis added)

10.  In Thanakharn Kasikorn Thai Chamkat (Mahachon) v Akai Holdings Ltd (in liquidation) (unrep., FACV 16/2009, 21 January 2011) at §6, Lord Neuberger NPJ observed that the word “unnecessarily” in O.62 r.7(1) “should not be construed as applying to anything done which was not, with wisdom of hindsight, strictly necessary. Where a party has two alternative ways of putting his case, it is normally not unreasonable to run them both…”. The effect of this guidance is that there is a hurdle for the party seeking to deprive the successful party of his costs, more than mere hindsight misjudgement is required.

11.  Further, in Cathay Pacific Airways Ltd v Kwan Siu Wa Becky & Ors (unrep., FACV 5/2012, 26 July 2013) at §4, Ma CJ reiterated that “the Court will not generally go into a minute examination of whether each issue and each sub-issue and argument within each issue has been argued successfully or not by the parties. Usually, an overall view of the justice of the case will serve as the best guide to determine the question of costs.”

12.  The Court of Appeal in FBC Construction Co Ltd v Lee Ben [2014] 2 HKLRD 1054 at §§237–238 held that a wholly successful party should be given his costs unless there was evidence that he (i) brought about the litigation, (ii) occasioned unnecessary litigation or expenses, or (iii) had done some wrongful act. The credibility of witnesses and the conduct of the parties in presenting their cases are also relevant considerations.

13.  The English Court of Appeal in Re Elgindata Ltd (No 2) [1992] 1 WLR 1207 at 1214A-C similarly held that the mere fact that a party did not succeed on every issue does not, by itself, justify departure from the general rule that costs follow the event.

14.  Notwithstanding the general rule that costs follow the event:-

(a) A successful party may be deprived of whole or part of his costs, not only where he has acted unreasonably or improperly in raising an issue, but also where the “failed allegation of the successful party has caused a significant increase in the length or costs of the proceedings”: see Yoe Han Yauw v Yoe Han Hian [2022] HKCA 498 at §21 (per Au JA).

(b) A successful party may even be required to pay the costs of the unsuccessful party on a particular issue, for example:-

(i) where the successful party raised issues or made allegations improperly or unreasonably: (廈門新景地集團有限公司v Eton Properties [2020] HKCA 876 at §§14.4, 19), or

(ii) where a party puts forward allegations knowing that the evidence in support was woefully inadequate (even if there was no finding of dishonesty on the part of the successful party): (Monat Investment Limited v All Person(s) in Occupation of Part of the Remaining Portion of Lot No 591 & Anor [2020] HKCFI 2447, §3).

P’s Submissions

15.  Mr Abraham Chan SC, leading Ms Sheena Wong, has succinctly summed up P’s primary submissions as follows.

16.  A 60:40 apportionment of costs would result in the most proper, fair and reasonable outcome on the facts of this case.

17.  In particular, P submits that a 60:40 (or similar) adjusted apportionment would:-

(a) assign more appropriate weight to P’s success in the malicious falsehood claim, as well as the significance of the findings made therein – including of D’s malice and recklessness in publishing extremely severe allegations against P and its medical doctors; and

(b) avoid putting disproportionate weight on the fact that D succeeded in his justification defence – notwithstanding that D had failed and/or unreasonably pursued other defences based on fair comment and qualified privilege, which unnecessarily incurred a substantial amount of time and costs.

18.  P submits that in light of (i) the number and nature of sub-issues involved, (ii) the significant overlap between the evidence and background to the two causes of action, as well as (iii) the manner in which D conducted his case, the court should not, on fuller consideration, regard D as “the real winner of this case” (cf. Judgment §281) and that it would not be fair and proportionate in all the circumstance for D to be able to recover the vast majority (90%) of his costs from P (cf. Judgment §282).

D’s Submissions

19.  Mr Chris Ng, appearing with Mr Wilson Yuen, on the other hand submits on behalf of D that the court, having presided over the entire trial and having been in the best position to assess the relative significance of the issues, was plainly correct to find that D was “the real winner of this case” (Judgment §281) and to estimate that about 90% of the time was spent on the defamation claim and the unsuccessful parts of the malicious falsehood claim (Judgment §§282–283).

The Court’s Findings

20.  In my view, the crux of the matter is who was the substantial or the real winner of the entire action brought by P and whether the Costs Order Nisi fairly reflected the result of the case after trial.

21.  In this regard, I entirely agree with the following matters listed out by Mr Ng in D’s Submissions which help to determine who was the “substantial or real winner” of the action.

22.  First, the defamation claim was dismissed in its entirety. There is no dispute that this was P’s primary cause of action where most of the time and efforts had been spent both prior to and during the trial. The malicious falsehood was pleaded and dealt with as an alternative and independent cause of action. It occupied a relatively short duration of time during the trial and space in the pleadings, preparation, evidence and arguments in the entire proceedings.

23.  For the defamation claim itself, P invoked the full range of the defamation remedies. They included substantial compensatory damages, general damages, injunctive relief, apology, exemplary damages and costs. At the end of the day, the court found P had failed in the defamation claim, thus the remedies claimed under that cause of action went under with it.

24.  Second, it cannot be denied that a great deal of time and efforts had been focused on the central sting of the Offending Words both during the pre-trial stage of the proceedings and at the trial. At the end of the day, the court found that the Offending Words, namely that P was a “beauty parlour” within the meaning of Cap. 599F and had violated the Restriction by operating during the Specified Period, was substantially true: (Judgment §§172, 179, 190).

25.  Third, the parties agreed in the Joint Statement of Undisputed Facts (“JSUF”) that the Offending Words bore the pleaded meanings mentioned in §121 of the Judgment. D further accepted and pleaded meaning (3), that P dishonestly sought to mislead the public into believing that it was a “clinic” as opposed to be “beauty parlour” (Judgment §122). These agreed and accepted meanings were the central sting of the defamation claim where a great deal if not the majority of time had been spent by the parties in dealing with them during the trial. This is both in terms of evidence and legal arguments. At the end, D succeeded in justifying them in substance.

26.  Fourth, the only meanings which P did not prevail (meanings (5), (6) and (7)) were found by the court to fail as matters of meaning, ie an ordinary, reasonable and fair-minded reader would not interpret the Offending Words to bear those meanings. There were failures of P to prove that the Offending Words were defamatory and bear the pleaded meanings (5), (6) and (7) in its main defamation claim, not failures of D’s justification defence.

27.  Fifth, of the 11 meanings advanced by P, D admitted only 3 ((1), (2) and (4)) as matter of pleading economy, and successfully defended all of the remaining 8 disputed meanings. Even on the malicious falsehood claim, P succeeded only on 2 of those 11 meanings, and only on a technical and nominal basis. The HK$10,000 nominal sum awarded by the court reflected that.

28.  Sixth, it cannot be disputed that the majority of time during the trial had been devoted to the resolution of the factual disputes between the parties, in particular whether P was operating a “beauty parlour” at its premises within the meaning of Cap. 599F and had violated the Restriction by operating during the Specified Period. This involved lengthy cross-examination of the key witnesses by counsel on both sides. Rather unconventionally, P saw fit to engage 2 eminent leading counsel and 2 junior counsel to represent it at the trial, including one of the most senior and leading criminal senior counsel (Mr Cheng Huan SC) to undertake the tasks of conducting the examination-in-chief and re-examination of its own witnesses and the cross-examination of D and his only other witness. As one would expect, the cross-examination of D and Ms Leung were very thorough, meticulous and left no stones unturned. As a result, they took up a significant portion of time during the trial.

29.  Despite of that, after carefully analysed the evidence, the court found P’s witnesses, in particular its main witness Dr Wang, were not honest or credible witnesses. On the other hand, the court found D as an “honest and reliable witness” (Judgment §84) and further found that “D’s primary intention of holding the Press Conference (and the release of the Press Release) was out of a genuine public-interest concern rather than to promote himself or to benefit his own political career” (Judgment §80).

30.  Thus, seeing the case from the above perspectives, I consider it is fully justified to say that D was the real or substantial winner of the case.

31.  Last but not the least, I wish to add that the 90% figure was never meant to be an exact scientific figure but what I would like to consider as a fair and reasonable estimate, based on the court’s assessment of the time and efforts spent by the parties in dealing with the different issues in the case. Having read all the papers presented at the trial (including the trial bundles and the written submissions lodged by the parties) and having presided over the 7-day trial (and later on reviewing the evidence and writing the Judgment), I think I was in a fairly good position to make that assessment. Overall, I do not consider my assessment of the costs under the Costs Order Nisi was an unreasonable one in the circumstances.

Rejection of P’s Submissions

32.  With greatest respect to P’s latest leading counsel Mr Abraham Chan SC, whom I note was not one of the 2 leading counsel who had represented P at the trial but has recently been engaged by P to deal with the present variation of costs issue, I do not agree with the submissions made by him on behalf of P.

33.  I would like to deal with P’s Submissions under the different headings as set out by Mr Ng in D’s Submissions.

(i) Nominal damages cannot redirect the bulk of costs

34.  P seeks to elevate the nominal costs awarded by the court as a ground for a 30-percentage-point swing in costs. I agree with Mr Ng for D that this is contrary to the established principles.

35.  The settled position is that a judgment for only nominal damages is treated as a defeat for the claimant, and for costs purposes the claimant is the losing party: Elpe International (Far East) Limited v Hewlett Packard Hong Kong Limited (unrep., CACV 58/1993, 30 July 1993) at p11; Perfect Best Asset Management Inc v ADL Express Ltd [2021] HKCFI 3021 (§§3-5).

36.  Bokhary JA (as he then was) in Elpe International (Far East) Limited at p11 cited Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 and Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 All ER 685 and said:-

“So the courts do not proceed on the basis that a party who recovers anything, even if only nominal damages, is prima facie entitled to costs provided he is not confronted by a payment into court of as much or more than what he has recovered. Rather, the courts, looking at the realities, ask themselves the question, “who really won?”

37.  As Jacob J observed in Hyde Park Residence Ltd v Yelland [1999] RPC 655 at 670 (25):-

“It seems to me that the whole question of nominal damages is at the end of this century far too legalistic. A plaintiff who recovers only nominal damages has in reality lost and in reality the defendant has established a complete defence.”

38.  That statement has been adopted and applied in more recent authorities. In Marathon Asset Management LLP v Seddon [2017] EWHC 479 (Comm), [2017] 2 Costs LR 255, Leggatt J (as he then was), expressly referring to the Hyde Park passage, held (at §3): “In a commercial case such as this a judgment for only nominal damages is a defeat.” The learned judge accordingly approached the question of costs on the footing that the defendants were the successful parties (at §4) notwithstanding the claimant’s success on liability.

39.  The same principle was affirmed and applied by the UK Supreme Court recently in George v Cannell [2024] UKSC 19, [2024] 4 All ER 431 (a malicious falsehood action). Lord Leggatt JSC, giving the majority judgment, held that where an action succeeds but no financial loss has been sustained, “only nominal damages may be awarded” and nominal damages are “a token sum of money, usually £1 or £2 or at most £5” (§89). His Lordship accordingly directed that judgment be entered for the claimant in the nominal damages of £5 only, notwithstanding her technical success on liability (§120). Where the presumption of financial loss under s.3(1) Defamation Act 1952 (which is equivalent to s.24(1) of the Defamation Ordinance, Cap, 21) is engaged but no actual financial loss is caused by the relevant publications, the presumption is “purely notional and attracts only token damages” (§113). The significance for costs is plain: where the claim is one for financial loss and none is proved, the plaintiff cannot be said to have achieved any substantive success.

40.  Applying the above principles to the present case, I agree with D that:-

(a) P’s primary claim in defamation (together with its originally pleaded remedies at up to 25% to 30% of HK$84 million in general damages (which was subsequently amended to HK$3 million), plus injunctive relief, apology and exemplary damages) failed completely (Judgment §§254-264, 267-277);

(b) On the malicious falsehood claim, P succeeded on only 2 of 11 pleaded statements, and the court expressly found that P had not proved any pecuniary loss flowing from the False Statements (Judgment §§245-246); and

(c) The HK$10,000 awarded was expressly stated as nominal, reflecting “the very limited content of the False Statements” and “the likely minimal effect to P”: (Judgment §247).

41.  In the aforestated premises and looking at the matter holistically, I agree with Mr Ng’s submission that “the real event of the litigation was a comprehensive defeat of P’s claims, mitigated only by a technical finding on two subsidiary statements.” I agree with D that based on the above findings of the court, it could not justify a 30-percentage-point swing in the costs “from the substantially successfully defendant to the substantially unsuccessful plaintiff.”

(ii) Pleaded Statement (10): D’s awareness of the Clarification Statement does not establish subjective recklessness

42.  For the reasons stated in §29 of D’s Submissions, I agree with Mr Ng that reading P’s Clarification Statement before the Press Conference only goes to support finding of liability in the malicious falsehood, it does not carry the weight P now attempts to load onto it.

43.  I further agree with Mr Ng that reading a clarification statement does not, as a matter of law, automatically convert into subjective recklessness at the moment of publication: see Horrocks v Lowe [1975] AC 135 at 149H-150c, per Lord Diplock.

(iii) Pleaded Statement (11): the falsity was technical while D’s belief was honest

44.  With respect, I think P has overstated the very limited success of Pleaded Statement (11) in P’s Submissions. In my view, it in no way will justify D in paying 40% of P’s costs in the context of the whole case.

45.  As Mr Ng has pointed out in D’s Submissions, the finding on Pleaded Statement (11) was based on a limited and technical falsity, it cannot bear the weight of a 30-percntage-point costs reversal, particularly when D was found to be an “honest and reliable witness” (Judgment §84) with a “genuine public-interest concern” motivating his conduct (Judgment §80): (see §§30-31 of D’s Submissions).

46.  I also find P’s reliance on D’s reference at the Press Conference to the “Purported Legal Opinion” (at §17(3) of P’s Submissions) has been overstated for the reasons provided by Mr Ng in D’s Submissions: (see §§33-34 of D’s Submissions).

(iv) The “Protection of a legal right” contention has been misplaced

47.  In P’s Submissions, Mr Chan SC invokes the proposition that, where part of the object of an action is to establish or protect a legal right, a plaintiff who recovers only nominal damages may still be regarded as the successful party, relying on Tsun Fat Finance Co Ltd v Commissioner of Police (HCA 7017/2000, 4 October 2002) and To Wai Sing v To Hung Tai & Ors (HCMP 533/2011, 18 February 2014). P also relies on Mariner International Hotels Ltd v Atlas Ltd (No 2) (2007) 10 HKCFAR 246 at §18 for the burden-of-proof principle. In my view, P’s reliance on these authorities is misconceived for several inter-related reasons as stated by Mr Ng in D’s Submissions.

48.  First, Tsun Fat Finance and To Wai Sing line ultimately derives from Devlin J’s dictum in Anglo-Cyprian (cited at Tsun Fat Finance §8), namely that a plaintiff who recovers nominal damages “may properly be regarded as a successful plaintiff” only “where part of the object of the action is to establish a legal right, wholly irrespective of whether any substantive remedy is obtained”, and that “it is necessary to examine the facts of each particular case”. Anglo-Cyprian itself, in its actual ratio, treated the defendant there as the successful party (per Bokhary JA in Elpe International at p11, citing Anglo-Cyprian and applying the “who really won” test).

49.  Secondly, the case-specific factor that decided Tsun Fat Finance itself was the absence of any offer of costs by the defendant before trial. The decision was further anchored to the conversion-specific rule in Hiort v London & North Western Railway (1879) 4 Ex D 188 (Tsun Fat Finance §11). I agree with Mr Ng that neither factor exists here: this is not a conversion case, no comparable concession of costs is in play, and the malicious falsehood action is in its essential nature a financial-loss-driven claim, not a right-protection claim.

50.  Thirdly, To Wai Sing is, a fortiori, unhelpful to P. There, the plaintiff was awarded substantive vacant possession of the land in question (§98), reflecting a substantive proprietary right; nominal damages of HK$100 for trespass were ancillary (§99), and costs followed the substantive vacant-possession victory (§100). In the present case, P, by contrast, was refused every substantive remedy sought: injunctive relief, apology, exemplary damages, and the substantial monetary damages claimed. The malicious falsehood claim, viewed realistically, was a financial-loss-driven claim that achieved no proven financial loss (Judgment §§245-246).

51.  Fourthly, P’s primary case in this litigation was the defamation claim, which was dismissed in its entirety. The malicious falsehood claim was parasitic on the same factual matrix and shared the same evidence, witnesses and disclosure as the defamation claim. P sought, principally, substantial general damages of HK$3 million on the malicious falsehood claim (Judgment §§259, 264), plus exemplary damages, injunctive relief and apology. On the George v Cannell line of authority at §§89, 113 and 120, where no actual financial loss is proved, the action achieved no substantive financial success. The residual nominal HK$10,000 award is precisely “a mere peg on which to hang costs” within the Anglo-Cyprian / Tsun Fat Finance taxonomy.

52.  Fifthly, P’s reliance on Mariner §18 does not assist P either. As Bokhary PJ stated at §18, “a party seeking to displace the general rule that costs should follow the event naturally bears the burden of showing that the circumstances justify the exceptional course of such displacement”. The Costs Order Nisi already gives effect to that general rule: D was found to be “the real winner” (Judgment §281). It is P, the applicant in the Summons, who bears the burden of demonstrating exceptional circumstances justifying displacement. D submits that P has not discharged that burden. I agree with that submission.

53.  Lastly, I wish to add that there is nothing stated in P’s Reply Submissions has changed my views on the above.

P’s Criticisms of D’s Conduct

54.  P further contends that D should be deprived of costs because: (a) his defence of fair comment failed on a pleading point; (b) his defence of qualified privilege was devoid of merit; and (c) D belatedly attempted to advance a Chase Level Two meaning during trial.

55.  For reasons stated in by Mr Ng in D’s Submissions (see §§42-52 of D’s Submissions), I do not accept any of the above, whether taken on its own or looked at them together, would justify a departure from my assessment under the Costs Order Nisi.

(i) Fair comment was a proper alternative defence

56.  As D has pointed out, §194 of the Judgment expressly acknowledged: “The alternative defence that can be sought by D is fair comment.” D therefore pursued a defence that the court recognised as available in principle. The defence of fair comment failed only on a pleading point (Judgment §§197–204). That was not a failure on the substantive merits of the defence of fair comment; nor was there any finding by the court that D acted improperly or unreasonably in advancing the defence of fair comment.

57.  It has been stated that an unsuccessful pleading point, decided on the basis of authority (Judgment §199, citing Lam Yi Lai v Ip Kwok Chung (CACV 194/2009, 12 March 2010), is an insufficient basis to deprive a successful party of costs: Re Elgindata (No 2) at 1214; Active Base Ltd v Roderick John Sutton & Others (unrep., HCCW 470/2005, 17 October 2008) at §10.

(ii) Qualified privilege was properly raised and did not drive costs

58.  The defence of qualified privilege was dismissed on a narrow factual basis: that D’s Press Conference was held in premises associated with the Democratic Party in Jordan, concerning P’s clinics in Causeway Bay and Tsim Sha Tsui (outside D’s Sham Shui Po district where D was an elected district councillor at the material time). The court dismissed the defence of qualified statutory privilege (Judgment §§215–221).

59.  As Mr Ng has submitted, the court made no finding that D raised the defence of qualified privilege improperly or unreasonably, or that the defence of qualified privilege caused any disproportionate or unnecessary expenditure of time and costs of the trial. A defendant is entitled to advance arguable defences; criticism after the event that a defence “should not have been raised”is precisely the kind of ex post facto criticism that the Court of Appeal warned against in 廈門新景地集團有限公司.

60.  Nor does P’s reliance on the fact that, on Day 1 of the trial, Mr Ng acknowledged in oral opening submissions that the defence of qualified privilege was D’s least robust defence: (see P’s Submissions §27). I agree with D that a candid acknowledgement, in oral opening submissions, that one of the three alternative defences carries less substantive weight than the others is consistent with proper litigation conduct, not raising the defence improperly. The defence of qualified privilege defence rested on the statutory privilege framework for elected district councillor engaging on matters of public concern; it failed on the narrow geographical and locus point (see Judgment §§215–219, 221), but was not without arguable basis. The court made no finding that the defence was advanced improperly or unreasonably, or that pursuit of it caused any disproportionate expenditure of trial time. The fact that hearing time on this defence was, in any event, limited to a relatively short duration of time during the oral closing submissions confirms that the pursuit of the defence of qualified privilege was not a significant costs driver in the present case.

61.  In terms of hearing time, D’s counsel addressed both the defence of fair comment and the defence of qualified privilege in oral closing submissions on Day 7: used up approximately 1 hour 11 minutes of the entire trial. Thus, neither defence was a significant driver of the length or costs of the proceedings. I agree with D that the trial time devoted to these alternative defences was, in the overall context of a 7-day trial dominated by Cap. 599F and the beauty-parlour justification question, was entirely proportionate.

(iii) The Chase Level Two submission was considered and briefly addressed

62.  D’s submissions that the Offending Words bore a Chase Level Two meaning (reasonable grounds to suspect) rather than Chase Level One (guilt) was duly considered by the court, which rejected it on the basis that both parties had previously agreed in the JSUF that P had committed a criminal offence under Cap. 599F (Judgment §§153–156). D thereafter proceeded on Chase Level One justification, on which he fully succeeded.

63.  The Chase Level Two point occupied a limited portion of the trial. It was raised in D’s opening submissions (D’s Opening §§21–22, 42–45) and further developed in D’s closing submissions (D’s Closing §§17–40), which Mr Ng submits was proper. Its relevance was in framing the issue of the meaning of Offending Words at an early stage, not in increasing the hearing time. P’s own closing submissions devoted only seven paragraphs to this issue (P’s Closing §§42–49). I agree with D that it cannot be characterised as a significant costs driver during the trial.

(iv) D committed no wrongful act; the three-prong FBC Construction test fails

64.  Applying FBC Construction at §§237–238, I agree with Mr Ng’s submission that there is no evidence that D:-

(a) brought about the litigation: on the contrary, P was the plaintiff who chose to sue;

(b) occasioned unnecessary litigation or expenses (to the contrary, the court found that D acted out of a “genuine public-interest concern” (Judgment §80) and was an honest witness (Judgment §84)); or

(c) committed any wrongful act in the course of the litigation.

65.  P also relies on the principle in Chan Shun Kei v Hong Kong Construction (HK) Ltd (CACV 192/2014, 7 March 2016), that a successful party may be required to pay the unsuccessful party’s costs where the evidence in support of an allegation was “woefully inadequate”: (see P’s Submissions §11.2(2), citing Monat Investment §3). I agree with Mr Ng that the principle has no application to the present case. I further agree with Mr Ng that none of D’s defences was advanced on “woefully inadequate” evidence:-

(a) the defence of fair comment was acknowledged by the court at §194 of the Judgment to be available in principle as an alternative defence in this action, and failed only on a pleading point (Judgment §§197–204);

(b) the defence of qualified privilege was rested on a statutory framework concerning the privilege of elected district councillors, and engaged a fact-sensitive enquiry as to the geographical scope and locus of the privileged occasion (Judgment §§215–219, 221). The court dismissed the defence of qualified privilege on the ground of the facts and not on the ground of the absence of evidence; and

(c) the Chase Level Two submission was raised on a foundation of substantive interpretation of the meaning of Offending Words arising from the evidence at the trial, which was duly considered by the court. It was rejected on the narrow basis of the JSUF agreement on Cap. 599F criminality (Judgment §§153–156).

66.  I also agree with D that in each instance the defence was both arguable and supported by evidence and submissions: the standard for “woefully inadequate” evidence under Chan Shun Kei cited in Monat is plainly not engaged. P’s attempt to characterise D’s three alternative defences (justification, fair comment, qualified privilege) as constituting misconduct ignores that, in a defamation action in which P claimed general damages up to HK$84 million (subsequently reduced to HK$3 million: Judgment §§259, 264), it was proportionate and responsible for D to run these available defences in the alternative. Raising alternative defences is not only permissible but often essential in defamation action. D submits that it is no basis to deprive the successful party of costs: Thanakharn Kasikorn at §6 (the word “unnecessarily” imports a substantial hurdle).

“Filleting” of the Case is not the Appropriate Approach

67.  Lastly, P invited the court to adopt an issue-by-issue “filleting” approach in which P presents a table purporting to show that it “succeeded” on multiple sub-issues within the meaning of Offending Words, fair comment, qualified privilege, and malicious falsehood. I agree with D that approach is impermissible in principle and misleading on the facts.

68.  First, the “filleting” approach has been expressly rejected in the settled authorities:-

(a) Vasily Trubnikov at §6(10): the practice of the court “is not [to] engage in any ‘filleting’ of cases according to the success or failure of the disparate issues which, when taken cumulatively, constitute the dispute to be judged.” A party may be deprived of costs of an issue only where that issue is “discrete and isolated” and “has no bearing on the real question in the suit.” Cathay Pacific Airways Ltd v Kwan Siu Wa Becky & Ors at §4, per Ma CJ: “the Court will not generally go into a minute examination of whether each issue and each sub-issue and argument within each issue has been argued successfully or not by the parties. Usually, an overall view of the justice of the case will serve as the best guide to determine the question of costs”.

(b) Active Base at §10: “So unless discrete points can safely be isolated and can be shown to have led to a wastage of time and costs, the practice of the court is not to engage in any ‘filleting’ of cases.”

69.  Secondly, the issues P seeks to isolate are not in fact “discrete and isolated”:-

(a) The defence of justification, upon which D succeeded, was overwhelmingly the dominant issue in the present case. It consumed the great majority of hearing time, including the cross-examination of Dr Wang over multiple days (from the afternoon of Day 1 to the morning of Day 3 of the trial), the expert evidence concerning the 2013 Department of Health Working Group Report, and substantial legal submissions on the construction of Cap. 599F. Both parties’ closing submissions are dominated by this issue: (see P’s Closing §§36-81; D’s Closing §§114-157).

(b) The evidence and factual matrix of D successfully defending P’s defamation claim (centred on Cap. 599F and the defence of justification concerning P falls under the definition of “beauty parlour” under 599F) and P’s partially-successful malicious falsehood claim (centred on the same Press Conference, the same speakers, the same audience, and the same surrounding circumstances) overlap substantially. The Press Conference, D’s conduct and motive, the credibility of witnesses, and the nature and effect of the Offending Words, all are shared. It follows that P’s residual success on two pleaded statements did not require any materially distinct evidential or forensic exercise beyond that already undertaken in defending the dismissed defamation claim. The same witnesses, the same documentary evidence, and the same lines of cross-examination were deployed across both claims. Accordingly, no separate or additional costs burden can properly be attributed to that limited residual success.

(c) Fair comment and qualified privilege are likewise not discrete issues for the purposes of Vasily Trubnikov (§6(9)). The factual foundation of those defences, D’s genuine public-interest motive, the context of the Press Conference, and the substance of what was said, overlaps with the defence of justification and P’s malicious falsehood claim against D. No discrete “fair comment only” or “qualified privilege only” costs can be identified with the precision required.

70.  Thirdly, I agree that P cannot simultaneously rely on the overlap between claims to argue (as it does in P’s Submissions at §23) that the malicious falsehood evidence was subsumed in the trial, while also asserting that a 30-percentage-point costs transfer is warranted for that claim. Hence, I accept Mr Ng’s submissions that the court’s 90/10 estimate is the most reliable indicator of proportional weight, and P’s suggested 60/40 is unsupported by any principled measure of the actual distribution of trial time or substantive success.

CONCLUSION

71.  In conclusion, based on the above analysis, I am not convinced that there are sufficient grounds for the court to exercise its discretion to vary the Costs Order Nisi in this case.

72.  Hence, the Summons is hereby dismissed with costs in favour of D with certificate for two counsel, such costs to be taxed if not agreed.