YIM TIN FOOK, since deceased (YIM LOK MAN WINNE, appointed by Order dated 10 May 2024 to represent the Estate of YIM TIN FOOK, deceased) AND ANOTHER v. YU CHOR LAI, KONG WAI HUNG and SOU KA LUN trading as WANG CHEUNG INDUSTRIAL CHEMICALS CO AND ANOTHER

CACV 5/2020, [2025] HKCA 772

On Appeal from [2019] HKCFI 2511

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 5 OF 2020

(ON APPEAL FROM HCA NO 2613 OF 2006)

____________________

____________________

________________________________

DECISION ON COSTS

________________________________

Hon G Lam JA (giving the Decision on Costs of the Court):

1.  By our judgment dated 18 July 2025,[1] we dismissed D2’s appeal, DC8’s respondent’s notice and Ps’ cross-appeal, leaving the question of costs to be determined on the basis of written submissions. The parties have lodged written submissions. This is our decision on costs.

2.  The parties’ positions are as follows.  D2 contends that the three questions of law determined were independent issues and separately argued and that costs should be approached based on the outcome of those issues respectively.  On that basis, since D2 succeeded on Questions 1 and 2 and Ps succeeded on Question 3, it is submitted that in principle Ps should pay two-thirds of D2’s costs, while D2 and DC8 should each bear one half of one-third of Ps’ costs.  Taking a broad brush, it is said that, overall, Ps should pay half of D2’s costs. Alternatively, it is submitted that in view of the overall outcome, there should be no order as to costs of the appeal and cross-appeal.  As between D2 and DC8, it is submitted that there should be no order as to costs.

3.  DC8 also submits that an issue-based order is called for, but accepts that overall D2 and DC8 should together pay one-third of Ps’ costs, to be apportioned as between D2 and DC8 in the proportion of 70% and 30% respectively.  It is submitted that DC8’s costs in respect of D2’s appeal should be in the cause of the action between them, and that D2 should pay DC8’s costs relating to D2’s summons filed on 17 March 2023 for leave to adduce new evidence on his appeal, which was subsequently withdrawn.

4.  Ps submit that there should be a single global costs order in respect of both the appeal and cross-appeal, and that they as the ultimate successful party awarded possession of the land in question should be awarded costs, for which D2 and DC8 should be jointly and severally liable.

5.  In our view, although Ps have lost on Questions 1 and 2, they have succeeded on Question 3 and in maintaining the reliefs granted by the judge and should accordingly be regarded as the overall winner. As the Court of Final Appeal said in Cathay Pacific Airways Ltd v Kwan Siu Wa Becky & others (FACV 5/2012, 26 July 2013) at §4: “Usually, an overall view of the justice of the case will serve as the best guide to determine the question of costs.”   Here, the questions of law are not wholly independent and self-standing issues like questions of construction of separate documents, but have arisen from sequential steps of the legal analysis concerning D2’s claim to the land.  The outcome consequential upon the determination of those questions is that D2’s counterclaim against Ps is dismissed and that D2 has to demolish the structures he erected on the land and give vacant possession to Ps.  Following this event, costs should prima facie be awarded to Ps.  We therefore reject D2’s contention that, overall, Ps should be ordered to pay part of D2’s costs. 

6.  Having said that, we consider it fair and just that there should be a reduction in the costs awarded to Ps, to reflect their failure on Questions 1 and 2, which have necessitated substantial separate and discrete argument and which have we believe caused a significant increase in the length and costs of the appeal proceedings: see In re Elgindata Ltd (No. 2) [1992] 1 WLR 1207 at 1214.  The judge did not make any such deduction as regards the costs below, and one of the reasons he gave was that Questions 1 and 2 were difficult points the result on which was somewhat counter-intuitive.[2]  It seems to us that the judge having ruled on those questions, Ps’ cross-appeal stands on a different footing and some deduction ought to be made on account of Ps’ failure on those points which would not have required this court’s determination but for Ps’ decision to raise them again by way of cross-appeal.  Taking into account all the circumstances including the estimates set out in DC8’s submissions on the time taken at the hearing and the number of pages of written submissions and number of authorities employed in relation to the three questions respectively, a fair order in our view is that D2 and DC8 should jointly and severally pay 50% of Ps’ costs overall.  As between D2 and DC8, responsibility for such costs is apportioned in the proportion of 70% and 30%.

7.  Whilst Ps and D2 have both engaged three counsel in this court, no party has asked for a certificate for three counsel.  For the avoidance of doubt, the costs awarded include costs of two counsel – a certificate for that is not necessary in the Court of Appeal: see Chen Hongqing v Asia Cement Corporation [2024] HKCA 463, §6.

8.  DC8 has given no answer to this court’s observation at §35 of our judgment doubting whether it was open to him to deny the validity and effect of his own grant vis-à-vis his successors-in-title and thus whether he ought to have taken part in the appeal and cross-appeal at all. In all the circumstances, we make no order as to costs as between D2 and DC8, including the costs of D2’s summons filed on 17 March 2023 for leave to adduce new evidence on his appeal, which was withdrawn.  DC8’s own costs of the appeal and cross-appeal are to be taxed in accordance with the Legal Aid Regulations.

9.  D2 must also pay Ps the costs of and relating to (i) D2’s summons filed on 17 March 2023 for leave to adduce new evidence; and (ii) D2’s application for stay of execution pending appeal by summons filed on 9 December 2019.

10.  The costs of the submissions on costs are to be treated as part of the costs of the appeal and cross-appeal.

11.  There will be no order as to costs in relation to the parties to the action who have not participated in the appeal and cross-appeal.