DIXIE ENGINEERING COMPANY LTD v. LONG ENGINEERING LTD

HCMP 109/2025

[2025] HKCFI 1809

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 109 OF 2025

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D E C I S I O N

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1.  On 24 December 2024 the Defendant submitted to the Plaintiff an invoice for HK$4,555,326.76 for building works carried by the Defendant pursuant to a contract for which it has already been paid HK$227,347,320.82. The invoice was issued following issue of a sub-contractor’s interim certificate no. 53 dated 17 December 2024. This was not paid and on 13 January 2025 the Defendant issued a statutory demand. On 20 January 2025 the Plaintiff issued an originating summons and interlocutory summons seeking an order that the Defendant be enjoined from presenting a winding up petition. The following day, the Defendant’s solicitors wrote to the Plaintiff’s solicitors voluntarily withdrawing the statutory demand. It appears to have been accepted by the Defendant having read the Plaintiff’s evidence that the account for the entire building work indicated that the Plaintiff had a set-off which exceeded the value of the work for which the December invoice had been submitted.

2.  The Plaintiff says that it should have the costs of the proceedings for the reasons to be found, in [14] of Re Lucky Ford Industrial Limited [2013] 3 HKLRD 550, a case with similar relevant facts:

“In my view having regard to O1A r1 the correct approach to determining costs in cases which do not involve the court granting substantive relief is for the Court first to consider the terms of settlement and assess whether the petitioner has obtained substantially what he sought in his petition. If he did it will not be necessary or appropriate for the Court to consider evidence and arguments directed to the merits of the case and whether or not the petitioner would have been successful if the petition had gone to trial. The petitioner will be treated as having been successful and entitled to his costs.”

3.  On the face of the matter, this is clearly a case in which costs should follow the event.  The Defendant disputes this on the basis that rather than issue the originating summons the Plaintiff should have written asking why the invoice had not been paid.  If it had provided the information contained in the Plaintiff’s affirmation in support of the application, it would have withdrawn the statutory demand.  It says that until it received the affirmation it was not clear from the documents that it had received that there was arguably a set-off.  There are two flaws with the Defendant’s case.  First, it illustrates the reason for the approach described in Lucky Ford: otherwise, the court is drawn into determining what might or might not have happened if the parties had behaved differently after a trawl through the evidence concerning the substantive dispute; commonly a disproportionately complicated task.  In the present case the documentary evidence is over 300 pages in length.  Secondly, there is no evidence of the Defendant writing to the Plaintiff asking why it had not been paid prior to issue of the originating summons.

4.  It maybe that the parties should have been able to sort any confusion that existed over what was due without recourse to legal methods. They did not.  The Plaintiff obtained by issue of the originating summons what it sought to achieve.  It should have its costs of the proceedings with a certificate for counsel.  Such costs to be taxed if not agreed.