GILBERT HENRY COLLINS v. ALAN LAM, YAM & PE (A FIRM)

DCCJ 1555/2019

[2021] HKDC 157

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1555 OF 2019

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BETWEEN

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DECISION

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INTRODUCTION

1.  On 17 December 2020 I handed down a judgment in this action at [2020] HKDC 1016 (“the December 2020 Judgment”) which concerned various applications made by the plaintiff against the defendant.   In this decision, I shall continue to adopt the abbreviations in the December 2020 Judgment unless otherwise indicated herein.

2.  The December 2020 Judgment included orders nisi as to, inter alia, costs of the O 14A Summons and the Admission Summons: see paragraphs 72 to 74 of the December 2020 Judgment.

3.  On 31 December 2020, the defendant filed a summons (“Costs Variation Summons”) seeking inter alia an order varying my costs orders nisi, such that:-

(1) The costs of the remainder of the O 14A Summons[1] be to the defendant with certificate for counsel, such costs to be summarily assessed (paragraph 1 of the Costs Variation Summons); and

(2) There be no order as to costs and interest of the Admission Summons (paragraph 2 of the Costs Variation Summons).

4.  The defendant had also sought, in the Costs Variation Summons, an order that the application be determined by me on paper without a hearing, and direction for such a determination.  Having considered written submissions from the parties on such issue, I directed that the hearing of the summons be vacated and that the defendant file and serve written submissions (with supporting authorities), including as to the costs of the application.

5.  In its written submissions, the defendant indicated that it would only seek to vary my costs order nisi concerning the remainder of the O 14A Summons, and that it would not pursue (as sought in paragraph 2 of the Costs Variation Summons) a variation of my order as to the costs and interest of the Admission Summons.

THE PARTIES’ SUBMISSIONS

6.  The defendant submitted, with reference to Melvin Waxman v Li Fei Yu [2013] 6 HKC 424 paragraphs 3, 11, 14, 19, 20 and 26, that the defendant was entitled to the orders sought as:-

(1) It had discharged the evidential burden of showing that it was entitled to costs by defeating the Collateral Application;

(2) The plaintiff had not adduced sufficient evidence or argument that some other or lesser order was appropriate; and

(3) The Collateral Application was clearly lacking in merits or there was at least a real risk that it lacked such merit.

7.  The defendant, apparently in relation to the last of the arguments above, also submitted as follows:-

(1) The stated question of law or construction which the plaintiff had sought to determine under RDC O 14A did not meet the relevant criteria under that rule (with reference to paragraphs 28 to 31 and 39 of the December 2020 Judgment);

(2) It was unreasonable for the plaintiff to issue the Collateral Application since the determination of the question under the application would not finally determine the defendant’s defence – hence the defendant should not have been burdened with the Collateral Application or its costs (with reference to paragraph 40 of the December 2020 Judgment and paragraph 14 of Waxman, supra); and

(3) As I had ordered nisi that the plaintiff have his costs of the LPP Application (as per paragraph 72 of the December 2020 Judgment), I should likewise grant the order sought by the defendant in order to ensure fairness and do justice between the parties.

8.  The plaintiff submitted in response as follows:-

(1) With reference to the entirety of paragraph 14 of Waxman, supra, it was said that:-

(a) it was impossible to list all the circumstances which are relevant to what type of costs order should be made (which the plaintiff said was crucial to understanding the ratio of the authority); and

(b) there are other possible options depending on the court’s perception of where justice lies;

(2) The present situation did not come close to the other examples in paragraph 14 of Waxman, supra, ie there was no “lack of merit or a real risk of such lack of merit”, and instead that I had considered in great detail all the circumstances and the combined effect of the 2 sets of Summonses (namely the O 14 Summons and the O 14A Summons) in concluding that the matter should be decided at trial and hence the appropriate costs order should await such;

(3) More favourable costs orders could have been made to the plaintiff (ie as regards his claim for an account, with reference to paragraphs 49 and 51 of the December 2020 Judgment) and to the defendant (such as those in terms which, the plaintiff said, the defendant was now seeking).  However, the fact that I had not made more favourable orders either way did not mean that I was wrong in exercising my discretion.  It was said that as long as I was “not perversely wrong in the exercise of [my] discretion, [the] costs Order [nisi] must stand”;

(4) The defendant’s submission based on the outcome of the LPP Application was contrary to the Court’s discretion not to order costs to follow the event where suitable circumstances arise – and the circumstances of the LPP Application and the Collateral Application were materially different, since the defendant only conceded the LPP Application at the last minute although it should never have been resisted, and that I had distinguished both in paragraphs 73(2) and (3) of the December 2020 Judgment;

(5) The defendant had wasted a significant amount of the Court’s time at the hearing by resisting the plaintiff’s claims for cost and interest following judgment (ie the Interest and Costs of the Admission Application, as covered in paragraphs 59 to 69 of the December 2020 Judgment).  Yet the defendant had applied to vary my costs order nisi and had “wasted further costs from the date of [its] application to [the date of the plaintiff’s submissions]”.  It was also (and it seems accordingly) suggested that as there was no merit in the defendant’s application, it should be dismissed with costs to be summarily assessed on a higher scale, at least on a common fund if not indemnity basis.

9.  In response, the defendant submitted that the plaintiff, as losing party in the Collateral Application, had failed to satisfy his burden to adduce sufficient evidence or argument that some other or lesser order was appropriate (per paragraph 20 of Waxman, supra) as he had not responded to my findings that the Collateral Application did not meet the criteria for an application under RDC O 14A, and he had said nothing to justify the reasonableness of the Collateral Application and how it would finally determine his defence.

10.  The defendant, apart from reiterating the point relating to treatment of the LPP and Collateral Applications, also pointed out that the Collateral Application was “fiercely pursued by [the plaintiff] in both his pleadings and his skeleton and much of the hearing before [the plaintiff] eventually on his own volition stated that he was no longer asking the Court to determine that the Sept 2015 Email… was a collateral agreement, thus wasting not only [the defendant’s] time in preparing for the Defence, but also the Court’s time.”  The defendant sought to contrast this with the LPP Application that formed the other limb of the O 14A Summons, which it said had been expeditiously dealt with due to the defendant’s concession, and constituted only a minor fraction of the O 14A Summons.

11.  The defendant also apparently submitted that there were no overlapping issues between the Collateral Application and the O 14 Application, hence there was no need for costs to wait until determination of the issues in the latter.

12.  As to the costs of the defendant’s application, it was said that the plaintiff’s suggestion was entirely misconceived as there were no special or unusual features warranting an adverse costs order on a common fund or indemnity basis.

DISCUSSION

13.  Having considered the matter with the benefit of fuller submissions on costs from both parties, on balance I am persuaded that I should exercise my discretion to vary my costs order nisi such that the costs of the remainder of the O 14A Summons (ie the Collateral Application) should be to the defendant, with certificate for counsel and with such costs to be summarily assessed.  This is for the following reasons.

14.  Firstly, I am of the view that I should have further regard, and accord more weight, to the plaintiff’s conduct in relation to the Collateral Application.  In particular, I do not think that the plaintiff pursued the Collateral Application in a reasonable manner, or that it was reasonable for the plaintiff to raise or pursue the Collateral Application (cf RDC O 62 r. 5(1)(e) and 5(2)):-

(1) The Collateral Application was advanced before the Court in an unsatisfactory manner.  Its actual, and apparently more limited basis, was only made clear at the hearing after further and substantial inquiry from me, since it apparently contradicted or was at least inconsistent the contents of the plaintiff’s own affirmation (in which regard see paragraphs 28 to 31 of the December 2020 Judgment).  I consider it appropriate to give more weight to the fact that time and resources were unnecessarily taken up with attempts to discern the nature of the plaintiff’s case in relation to the Collateral Application, including in particular whether to approach it as an argument in support of a collateral agreement.

(2) Furthermore, and given my reasoning in paragraphs 39 to 41 of the December 2020 Judgment, I do not consider that the plaintiff acted reasonably in raising or pursuing the Collateral Application.

15.  Secondly, and given the above, I consider that I should give more weight to the fact that the Collateral Application was contrary to the underlying objectives (cf RDC O 62 r 5(1)).  It did not increase the cost-effectiveness of practice and did not ensure that the case was dealt with expeditiously as reasonably practicable, but instead unnecessarily occupied the Court’s resources.

16.  Thirdly, and while there is some overlap between the issues raised in the O 14 Summons and the Collateral Application, on balance I consider, given the aforesaid conduct and merits of the Collateral Application, that it is more appropriate to adopt an approach as to costs that places more weight on the issues raised by the Collateral Application, rather than one which focuses on the possible outcome of the action with regard to the O 14 Application.  I accordingly consider it fair and just to the parties, and in line with the underlying objectives, to award the defendant the costs of resisting the Collateral Application.  A fortiori when I had also awarded the costs of the LPP Application (which the defendant had sensibly conceded) to the plaintiff. I do not agree with the plaintiff’s submissions that I should take a different approach in relation to the Collateral Application, or that the order now sought by the defendant is somehow contrary to my discretion as to costs.

17.  Given the above, I therefore consider that the defendant’s proposed costs order as to the remainder of the O 14A Summons would best serve justice between the parties.  This is regardless of whether the plaintiff has discharged the evidential burden to adduce sufficient evidence or argument that my order nisi was appropriate, in relation to which I do not accept (as was submitted by the plaintiff without supporting authority) that my costs order nisi must stand as long as it was not “perversely wrong”.

18.  I also, given the above, do not see how (as was submitted by the plaintiff) the defendant’s conduct in relation to the Interest and Costs of the Admission Application supports the plaintiff’s argument as to the costs of the remainder of the O 14A Summons.  Nor, for similar reasons, do I see how it could be relevant (as was submitted by the defendant) that the costs of the LPP Application constituted only a minor fraction of the O 14A Summons.

19.  I also dismiss paragraph 2 of the Costs Variation Summons (which related to the Admissions Summons) since the defendant no longer seeks to pursue such.

ORDERS ABSOLUTE

20.  I therefore vary my costs order nisi as set out in paragraph 72(2) of the December 2020 Judgment, such that the defendant will have his costs of paragraphs 1 and 2 of the O 14A Summons (ie the Collateral Application), with certificate for counsel, to be summarily assessed and disposed of on paper.

21.  The costs orders nisi in relation to costs of paragraph 3 of the O 14A Summons (ie the LPP Application), the costs of the O 14 Summons, and the Admission Summons are also absolute (see paragraphs 64, 72(1) and 74 of the December 2020 Judgment).

COSTS OF THE VARIATION APPLICATION

22.  As the defendant has succeeded in relation to paragraph 1 of the Costs Variation Summons, I do not see any reason why costs should not follow the event.  I accordingly order that it should have its costs of and occasioned by such, also to be summarily assessed and disposed of on paper.

23.  However, as the defendant only abandoned paragraph 2 of the Costs Variation Summons in its written submissions dated 20 January 2021, I consider that the plaintiff should have his costs of and occasioned by such up until 20 January 2021, and that there should be no order as to such costs thereafter. Such costs should also be summarily assessed of and disposed of on paper.

DIRECTIONS AS TO SUMMARY ASSESSMENT OF COSTS

24.  To facilitate summary assessment of all of the costs orders at paragraphs 20 to 23 above (as to which the parties should have regard to paragraphs 7 to 15 of Practice Direction 14.3), I order that:-

(1) The parties do lodge and serve their respective statements of costs for summary assessment in respect of costs they are to receive within 7 days hereof;

(2) Parties be at liberty to lodge and serve their respective lists of objections to the other party's statements of costs, limited to 3 pages, within 7 days thereafter;

(3) Summary assessment shall be carried out on paper without a further hearing; and

(4) All such costs as summarily assessed shall be paid within 21 days after summary assessment.

25.  I thank the parties for their assistance.