GAIN GLOBAL CORPORATION LTD v. FONGS (a firm)

CACV 153/2024, [2025] HKCA 586

On Appeal From [2024] HKCFI 894

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 153 OF 2024

(ON APPEAL FROM HCA NO. 2964 OF 2017)

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J U D G M E N T

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Hon Cheung JA (giving the Judgment of the Court) :

I.  The appeal

1.  This is an appeal against the judgment of Wilson Chan J who dismissed the plaintiff’s claim against the defendant for damages for professional negligence. The Judge further ordered costs against the plaintiff to be taxed on an indemnity basis.

II.  Background

2.  We will adopt the summary of the background of the case by the Judge that was based on facts that were not disputed or not disputable. We will supplement the summary by other matters that are gleaned from the trial documents.

3.  The plaintiff is a Hong Kong company and a money lender licensed under the Money Lenders Ordinance (Cap. 163). Its business includes mortgage lending.

4.  The defendant was a firm of solicitors in Hong Kong. It ceased practice in 2025. Ms Winnie Lo (‘Winnie’) was a consultant with the defendant in 2016. The defendant had worked with the plaintiff prior to March 2016.

5.  Mr Kuan Ian Leong Patrick (‘Kuan’) was the registered owner of the property at Flat B, 23^rd Floor, Block 5, and carparking space No. 98 on level CP3, Pacific View, No. 38 Tai Tam Road, Hong Kong (the ‘Property’).

6.  In March 2016, the plaintiff was introduced by Global Hill Asia Finance Company Limited (‘Global Hill’) to a person claiming to be Kuan who wished to obtain a mortgage loan on the Property (the ‘Borrower’). Global Hill was a company set up by three persons who were the subordinates of a director of the plaintiff. One of these subordinates was Ms May Lo (‘May’). These subordinates were responsible for sourcing clients and processing loan applications. The plaintiff would reward them when they successfully introduced new clients to the plaintiff. The reward would be paid to Global Hill.

7.  On 11 March 2016, May called Winnie requesting a quote for the preparation of a mortgage to secure a $10 million loan. A set of certified true copies of the title deeds of the Property was delivered to the defendant’s office on 12 March 2016.

8.  On 14 March 2016, Winnie received an email from May in which the defendant was retained or instructed to investigate the title of the Property (睇契), and to prepare a rental assignment as well as a mortgage in favour of the plaintiff (‘Instructions Email’). May informed Winnie that the loan was for $10 million at an interest rate of 14% p.a. and was to be drawn down on the following day on 15 March 2016. May also provided Winnie with a copy of the Borrower’s Hong Kong Identity Card (‘HKID’), water bills, rates demand, a land search, a stamped tenancy agreement dated 24 October 2015 (‘the Tenancy Agreement’), a draft facility letter and a telephone bill.

9.  Winnie informed May that the title deeds were not originals and that the Borrower was suspicious. Winnie advised May that the Borrower should provide a statutory declaration stating that he was the registered owner of the Property and the original title deeds had been misplaced and could not be found. The plaintiff should obtain a Certificate of Registered Particulars (‘the Certificate’) issued by the Immigration Department in respect of the Borrower for the purpose of verifying the Borrower’s identity, and that the average processing time for such a certificate would be about 25 business days.

10.  In a later telephone conversation on 14 March 2016, May informed Winnie that the loan transaction was urgent, there was no need to obtain the Certificate, and the plaintiff had no doubt as to the identity of the Borrower. May confirmed that the plaintiff wished to complete the transaction on the following day.

11.  In the morning of 15 March 2016, Winnie called May again to confirm that the plaintiff was satisfied with the identity of the Borrower and would still wish to proceed with the loan transaction. May confirmed that the plaintiff would proceed with the transaction despite the loss of the original title deeds and the absence of the Certificate.

12.  Winnie in her witness statement specifically dealt with the misdescription of the address of the Property in the stamp certificate attached to the Tenancy Agreement (the term was to commence on 1 November 2015) provided to her by May. She said it was a typographical error and such errors on tenancy agreements and stamp certificates were quite common and they were not considered to be an issue for the purpose of investigating the Borrower’s title to the Property. She had further inquired with May on the absence of the carpark in the Tenancy Agreement and May told her that the flat was let out without the carpark in around November 2015.

13.  The defendant proceeded to prepare the mortgage (‘Mortgage’), the rental assignment (‘Rental Assignment’) and a Statutory Declaration by the Borrower.

14.  On 15 March 2016, the Borrower attended the office of another firm of solicitors and signed the Statutory Declaration where the Borrower declared, inter alia, that he was the registered owner of the Property, and that the original title deeds had been misplaced and lost and could no longer be found.

15.  On the same day, the Borrower signed the Mortgage and the Rental Assignment at the defendant’s office. He also acknowledged that he did not require legal advice.

16.  The defendant’s total fees for its professional services were $19,470. Meanwhile, Global Hill received a commission of $100,000.

17.  The plaintiff claimed that a sum of $9,873,630 was advanced to the Borrower. The plaintiff claimed, in mid-May 2016, a cheque issued by the Borrower representing the payment of the second installment payment of interest was dishonoured, and the Borrower could not be found.

18.  On 31 May 2016, the defendant received a letter from Y L Yeung & Co, Solicitors, stating that they acted for Kuan, and that Kuan did not sign or execute the Mortgage or other documents including any application to the plaintiff. The matter was subsequently reported to the police.

19.  On 22 July 2016, Kuan commenced HCA 1910/2016 against the plaintiff, seeking, inter alia, a declaration that the Mortgage and the Rental Assignment were null and void, and for an order requiring the plaintiff to vacate or remove the registration of the Mortgage and the Rental Assignment from the Land Registry. The proceedings were initially contested by the plaintiff, who filed a counterclaim against Kuan. The plaintiff and Kuan eventually reached a settlement. On 15 December 2017, Master M Wong granted a consent order ordering, inter alia, that the registration of the Mortgage and the Rental Assignment be vacated from the Land Registry, and the plaintiff was to pay Kuan a sum of $40,000 in full and final settlement of Kuan’s claim.

20.  On 18 September 2018, the Commissioner of Police informed the plaintiff that two persons had been charged with money laundering offences in DCCC 517/2018 in connection with the Borrower’s mortgage loan transaction. On 4 March 2019, the plaintiff commenced DCCJ 1075/2019 against these two persons, claiming restitution of the sums they had received at the plaintiff’s expense. On 17 June 2019, these two persons were acquitted in DCCC 517/2018 by H H Judge Casewell. On 19 September 2019, the plaintiff discontinued DCCJ 1075/2019 against them.

21.  The plaintiff later commenced the present action against the defendant.

III.  The parties’ respective case below

1)  The plaintiff’s case

22.  The plaintiff claimed that the defendant owed to the plaintiff, in contract and tort, a duty of care to act with reasonable care and skill that was to be expected from a reasonably competent solicitor. It averred that the discharge of the duty required the defendant to: (1) satisfy itself that the Borrower had good title to or sufficient interest in the Property; (2) verify the identity of the Borrower; (3) exercise greater vigilance in checking all other available documents which might tend to indicate the Borrower’s good title to the Property or otherwise; and (4) ensure that the plaintiff could obtain a good title under the Mortgage. It claimed Winnie was negligent by (1) failing to advise the plaintiff the need to obtain the Certificate and advise the plaintiff the risk of not obtaining it and (2) failing to exercise reasonable care in checking the Tenancy Agreement.

23.  The plaintiff claimed damages against the defendant for a total sum of $10,101,763.33 and interest, comprising : (1) $9,873,630 being the actual sum released to the Borrower; (2) $40,000 being the legal costs paid to the real owner of the Property in HCA 1910/2016; (3) $73,500 being the legal costs of the plaintiff’s own legal team in HCA 1910/2016; and (4) $231,300 being the legal costs of the plaintiff’s own legal team in respect of the criminal investigation and subsequent prosecution in DCCC 517/2018 and the civil action in DCCJ 1075/2019; less (5) $116,666.67 being the repayment of the first installment of interest on the principal of the loan.

2)  The defendant’s case

24.  The defendant denied owing such duties to the plaintiff. It contended that it never undertook the responsibilities of verifying the Borrower’s actual identity, and at no time did the defendant undertake to guarantee against any risk of identity fraud. It contended that there was no breach of duty by the defendant, and the losses suffered by the plaintiff were not caused by the defendant. In any event, the plaintiff was guilty of contributory negligence and failed to mitigate its losses.

IV.  The Judge’s decision

25.  May was the only person from the plaintiff who had communication with Winnie. She did not give evidence. The Judge described the evidence of the other three witnesses for the plaintiff as having limited relevance or largely irrelevant as they did not have first-hand knowledge of the communication between May and Winnie or involvement with the Borrower’s loan. Winnie gave evidence for the defendant. The Judge accepted the evidence she gave was truthful.

26.  The Judge made the following findings :

1)  He identified the duties owed by the defendant to the plaintiff where there is a retainer : the extent of a solicitor’s duties depends upon the terms and limits of the retainer and any duty of care to be implied must be related to what he is instructed to do. There is no such thing as a ‘general retainer’.

2)  The duty of a solicitor to his client under contract and tort is to exercise that reasonable degree of skill and care to be expected of a competent and reasonably experienced solicitor.

3)  The defendant never assumed any absolute or unqualified obligations to ensure or warrant that the plaintiff could obtain a good title under the Mortgage. No words to that effect were included in the Instructions Email. The defendant’s duty to ‘investigate title’ as instructed was merely a duty to exercise reasonable care and skill. There was no undertaking by the defendant to insure against any identity fraud. The defendant was not under any duty to verify the identity of the Borrower or to satisfy itself that the Borrower was himself the registered owner of the Property. There was no express term in the Instructions Email requiring the defendant to verify the Borrower’s identity or satisfy itself that the Borrower (as opposed to the registered owner of the Property) had good title to or sufficient interest in the Property. The defendant was amply justified in taking the view that it was entirely up to the plaintiff to investigate and verify the Borrower’s actual identity. The plaintiff was satisfied with the identity of the Borrower when the loan agreement between the plaintiff and the Borrower was signed.

4)  There was also no express term in the Instructions Email requiring the defendant to check ‘all other available documents which might indicate the Borrower’s good title to the Property’, such as documents other than the title deeds or what had been supplied by May.

5)  The plaintiff has never pleaded that any duties are to be implied into the retainer.

27.  The Judge then considered whether the defendant had breached any of the duties owed to the plaintiff. He rejected the plaintiff’s claim that the defendant had failed to advise the plaintiff on the need to obtain the Certificate. He specifically found the facts in [11]‑[12] above. He found that it was the plaintiff’s calculated commercial decision not to wait for the Certificate so as not to risk losing the Borrower given the reasonable urgency of the transaction.

28.  As to the plaintiff’s claim that the defendant had failed to properly check the Tenancy Agreement and the stamp certificate, the Judge held :

‘ 82. As submitted by the defendant, the short answer is that tenancy agreements and stamp certificates are not title documents. The plaintiff did not instruct the defendant to check them or their authenticity in the Instructions Email. Contrary to the plaintiff’s Opening §25, it is Winnie’s uncontroverted evidence that there would in general be no need for a solicitor to ask to see an original tenancy agreement in order to prepare a rental assignment, since only details such as the landlord’s name, the address and the name of the tenant would have to be put down in the rental assignment. The plaintiff’s complaints in this regard must likewise be rejected.’

V.  The plaintiff’s appeal

29.  Although many grounds of appeal were pleaded in the Supplemental Notice of Appeal, the plaintiff only relied on two matters at the hearing of the appeal. The first was in respect of the Rental Assignment and the second was on the issue of indemnity costs. Mr Tong SC (together with Mr Yau and Mr Wong) for the plaintiff argued that the plaintiff instructed the defendant to prepare two legal documents, namely, the Mortgage and the Rental Assignment. The Judge primarily focused on the Mortgage and the issue of identity of the owner of the Property in question and brushed aside the question of the Rental Assignment in one paragraph. Had Winnie examined the legal documents that were supplied to her relating to the preparation of the Rental Assignment with the minimum duty of care, she would have discovered the Tenancy Agreement provided by the Borrower was bogus and the whole fraud would have been discovered, and the plaintiff would not have suffered the loss it did. The copy legal documents supplied to Winnie revealed the following : on 14 June 2011, the Property was assigned to one Kuan, Ian Leong Patrick (‘the Owner’) subject to an existing lease (‘the Lease’); the Property assigned to Kuan consists of a flat and a carpark and the Lease was of the flat as well as the carpark; having purportedly studied the title deeds, Winnie knew or must have known that the Property consisted of both a flat and a carpark; the Tenancy Agreement provided to Winnie was stated to be to one Tsui Kam Pui for a term of two years from 1 November 2015 to 31 October 2017 without mention of the carpark; there was a stamp certificate which confirmed the Tenancy Agreement but stated the wrong address in that it referred to ‘Flat D’ when the Property was Flat B; and in the Amended Defence, the defendant’s first case was Winnie ‘did not notice any irregularities’; but in her witness statement, she brushed it aside as ‘a typographical error’. She did not refute the plaintiff’s evidence that imputing the stamp certificate number into a Government website produced the response ‘related stamp certificate record not found’.

30.  The plaintiff argued that given Winnie’s concern as to the identity of the true owner of the Property, had she exercised the bare minimum of care and examined the legal documents given to her, she should have checked the genuineness of the stamp certificate or at least raised the issue with the plaintiff as to the genuineness of the tenancy agreement, and had she done so, the fraud would have been revealed and the plaintiff’s loss avoided. The plaintiff did not seek to argue the defendant bore an absolute duty to safeguard the plaintiff’s interest as this was not necessary; rather, the plaintiff argued that Winnie, as a professional instructed to do what in her profession was common to do, ought to exercise reasonable care in her work, particularly where she had been put on inquiry if in so doing she came across certain unusual or unlikely features. In this regard, the identity of the owner of the Property was of vital importance to the plaintiff, a lender, who was to the knowledge of the defendant, relying on the value of the Property (including the carpark) and the income thereof to secure the indebtedness and the defendant had a paramount duty to be satisfied whether the Borrower was the owner of the Property particularly when she was put on alert by the discrepancies in relation to the proposed tenancy agreement and the fact that only copy title deeds were produced.

31.  The plaintiff argued that the law expects a professional to exercise a reasonable standard of care to combat fraud and to protect the interests of her client and innocent third parties. A professional therefore must exercise due care if put on inquiry, see Barclays Bank Plc v. Quincecare Ltd [1992] 4 All ER 363, at 376E-H; Mercantile Building Society v. JW Mitchell Dodds & Co [1993] Lexis Citation 1906, 3^rd last paragraph at page 6, 3^rd to 5^th paragraphs at page 7; and Hondon Development Ltd. v Powerise Investments Ltd. [2005] 3 HKLRD 605, CA. at page 613C‑E, 614C‑F.

32.  The plaintiff argued that although it was alleged in the evidence that the plaintiff’s representative had instructed the defendant to ‘proceed with the preparation of the mortgage and the statutory declaration’ even in the absence of the originals of the title deeds, the Judge preferred to decide the case on the basis that it was not within the defendant’s scope of duty to check the identity of the owner (Judgment, [75]‑[80]). The instruction to proceed only related to the preparation of the Mortgage and Statutory Declaration in relation to the Property. But it did not exonerate or exempt the defendant’s duty to exercise due care to ensure the purpose of its engagement, namely, to prepare legal documents to secure the plaintiff’s loan, is fulfilled. Had Winnie told the plaintiff the stamp certificate was bogus or there were material discrepancies in relation to the proposed tenancy both as to the address and as to the lack of reference to the carpark, it would be inconceivable that the plaintiff would still insist on proceeding with the transaction without further inquiries. In any event, the point was neither pleaded nor pressed by the defendant and the Judge made no findings in this respect.

33.  The plaintiff submitted that the Judge’s decision in ordering the plaintiff to bear the defendant’s costs on indemnity basis should be set aside. Under Order 22 of the Rules of the High Court, after the offeree rejects the offer and he cannot obtain an outcome better than at trial, he would almost automatically be visited by an order as to costs awarded against him on an indemnity basis. They relate to cases of statutory offer or sanctioned payment which are subject to strict statutory requirement : Order 22, rules 4 and 5. The offeror must give the offeree an offer with sufficient details so that he has a reasonable opportunity to make up his mind within the period specified in the offer. The Calderbank offer in this case did not measure up to such level of information sufficiency in that there was no breakdown as to the alleged costs involved. Treatment of this offer should not, without more, correspond to treatment of a sanctioned offer.

VI.  Our view

1)  Put on inquiry?

34.  In respect of the merits of the case, it is apparent that the plaintiff is no longer pursuing the issues concerning the certified title deeds that, in fact, was the focus of its case below. The argument now advanced by the plaintiff in this appeal is that Winnie was put on inquiry in respect of the stamp certificate and the Tenancy Agreement. It is important to understand what the term ‘put on inquiry’ means. Lord Sumption NPJ in PT Asuransi Tugu Pratama Indonesia TBK v Citibank NA (2023) 26 HKCFAR explained :

‘ 17. The phrase “on inquiry” is traditional, but it is apt to mislead unless one appreciates what it involves in a commercial context. It is not the same as constructive notice. There is no general obligation spontaneously to inquire into an agent’s authority and no rule that fixes the third party with notice of what might be discovered upon such an inquiry. The starting point is what is actually known to the third party without inquiry (or would actually be known to him if he appreciated the meaning of the information in his hands). The question is whether the information which he actually has calls for inquiry. If, even without inquiry, the transaction is not apparently improper, then there is no justification for requiring the third party to make inquiries. But if there are features of the transaction apparent to a bank that indicate wrongdoing unless there is some special explanation, then an explanation must be sought before it can be assumed that all is well. In other words, if a bank actually knows of facts which to their face indicate a want of actual authority, it is not entitled to proceed regardless without inquiry.’

35.  A tenancy agreement is required to be stamped at the Stamp Office of the Inland Revenue Department. The plaintiff’s case is that the stamping of the Tenancy Agreement took the form of a stamp certificate. In this case, the stamp certificate provided a link to the website of the office that issued the stamp certificate. The plaintiff’s lawyers, following the advice on the stamp certificate that ‘You may check the authenticity of this Certificate at [the linked website]’, had made an inquiry online. The instant online reply was ‘Related stamp certificate record not found.’

36.  The plaintiff submitted that had Winnie clicked on this link, she would have discovered that the document was a false document. In [15] of the Amended Statement of Claim, the plaintiff pleaded that it suffered loss and damage as a result of the breaches of the duties on the part of Winnie. Under the ‘Particulars of the Breaches’, the plaintiff pleaded, inter alia, the following in regard to the Tenancy Agreement :

‘ (d) Failing to properly check other supporting documents provided by the Borrower which served to indicate his ownership of or relationship with the Property, such as the stamped certificate of the tenancy agreement which he alleged to have entered into with the tenant of the Property;

(e) Failing to investigate the Property’s occupancy to see if it was consistent with the information provided by the Borrower (and had Miss Lo done that, she would have realised that the tenancy agreement the Borrower provided was a bogus document);’

37.  It is of note that the plaintiff did not plead that Winnie was put on inquiry by reason of the falsity of the stamp certificate and Tenancy Agreement so that the defendant was under a duty to be satisfied whether the Borrower was the owner of the Property. It was also not pleaded that the fraud could have been discovered by Winnie by doing what the plaintiff’s own solicitors had done in respect of the stamp certificate. It was not even put to Winnie in cross‑examination about any online inquiry on the authenticity of the stamp certificate. We accept the submission of Mr Fung SC (together with Mr Leung) for the defendant that the plaintiff’s case that Winnie was put on inquiry is a new point that the plaintiff is not entitled to take in this appeal. This will cause evidential prejudice to the defendant. Had these points been properly pleaded, the defendant would have conducted its case differently, both in preparing witness evidence and in cross‑examining the plaintiff’s witnesses. The present case comes within the state of evidence bar discussed by Bokhary PJ in Flywin Co. Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 369.

38.  In any event, we are of the view that the arguments do not assist the plaintiff. Winnie’s evidence that the stamp certificate and Tenancy Agreement are not title documents was not challenged. We have already referred to her evidence in regard to the misdescription in the stamp certificate and the omission of the carpark in the Tenancy Agreement. She said misdescriptions are quite common and May’s instruction to her was that the November letting was without the carpark. The plaintiff had not adduced any evidence, in terms of the practice of the solicitors, that Winnie’s view on title documents was wrong and that notwithstanding what she was told, the duty of a reasonable solicitor in such a situation would still require her to carry out an inquiry on the stamp certificate in the manner as urged upon us by the plaintiff and the failure to do so would constitute a breach. In our view, Winnie’s evidence provides a complete answer to the plaintiff’s arguments. The reliance by the plaintiff on the extract of Winnie’s evidence at the hearing of the appeal does not carry the matter further. We reject the plaintiff’s contention that notwithstanding the two documents are not title documents, in order to ensure that the plaintiff would get the benefit of the rent that was to be assigned to it, Winnie should carry out the inquiry. This is a superficially attractive argument without regard to the specific context of this case.

39.  The authorities referred to in the plaintiff’s written submission are not specifically discussed in its oral submission. They must be considered in their specific context and we agree with the defendant that they do not establish a general principle that the defendant in discharging its duty must ensure that the Borrower was the true owner of the Property in this case.

40.  The plaintiff submitted that a professional is expected to exercise standard of care to combat fraud. Again, this must be considered in the context of ‘put on inquiry’ where there are unusual features in the particular circumstances of the case. In Quincecare Ltd, Steyn J at page 376 referred to the countervailing policy considerations in assessing the obligation of a bank such as to guard against the facilitation of a fraud. He held :

‘ In my judgment the sensible compromise, which strikes a fair balance between competing considerations, is simply to say that a banker must refrain from executing an order if and for as long as the banker is ‘put on inquiry’ in the sense that he has reasonable grounds (although not necessarily proof) for believing that the order is an attempt to misappropriate the funds of the company (see proposition (3) in Lipkin Gorman v Karpnale Ltd (1986) [1992] 4 All ER 331 at 349, [1987] 1 WLR 987 at 1006). And, the external standard of the likely perception of an ordinary prudent banker is the governing one.’

41.  As pointed out by the Judge with reference to Mummery LJ’s decision in Midland Bank plc v Cox McQueen [1999] PNLR 593 at 604 F‑G, professional services provided by solicitors would not normally involve the guaranteeing of a result by them, such as verifying the identity of the signer, let alone providing the bank with what would amount to an insurance policy against the risk of fraud.

42.  The Judge’s review of the authorities is not challenged by the plaintiff in this appeal. The express finding by the Judge is that the plaintiff gave express instruction to the defendant to proceed with the Mortgage notwithstanding the advice given by Winnie on the issue of identity of the Borrower. The ground now relied upon by the plaintiff does not advance its case further.

2)  Indemnity costs

43.  As stated by the Judge in his Decision on Costs dated 16 July 2024, the defendant’s application for indemnity costs was based on its Calderbank offer expressed to be on a ‘without prejudice save as to costs’ basis to the plaintiff (the ‘Offer’) set out in the letter from the defendant’s solicitors to the plaintiff’s solicitors dated 17 May 2021 (the ‘Letter’). The defendant considered that it had a strong case but in order to save time, effort and resources it proposed a full and final settlement of the plaintiff’s claim with costs to the defendant in the sum of $1,050,000 (representing 50% of the total legal costs which the defendant had incurred up to that point in defending this action). The defendant’s solicitors stated in the Letter that, should the plaintiff decline the Offer and pursue its claim to trial, the defendant would disclose the Letter to the Court when making costs submissions that it was entitled to have its costs assessed on an indemnity basis. The plaintiff rejected the Offer by way of a letter from the plaintiff’s solicitors to the defendant’s solicitors dated 21 May 2021 with no counter‑offer or explanation.

44.  The Judge recognized the discretionary nature of a costs order and had considered the relevance of a sanctioned offer :

‘「5(2)」 any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings, but the court may not take the offer into account if, at the time when it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under RHC Order 22 (the “Exclusionary Rule”): Order 62, rule 5(1)(d);’

45.  He held that the sanctioned offer approach did not apply in this case :

‘ [9] .... In circumstances where the defendant had a strong defence to liability and would not have expected to have any legal liability for the plaintiff’s costs, a sanctioned offer or payment under RHC Order 22 did not make sense due to the automatic costs consequences that would follow. Therefore, the defendant could not have made the Offer by way of a sanctioned offer or payment under RHC Order 22, and the court should take the Offer into account as a Calderbank offer when considering the costs issue pursuant to RHC Order 62, rule 5(1)(d).’

46.  The Judge held that the defendant’s costs (subject to taxation) incurred up to the time of the Decision on Costs was approximately $4,710,000. The defendant’s Calderbank offer was for the plaintiff to pay $1,050,000. Hence, the plaintiff did not do ‘better’ after trial. He had also considered the other arguments of the plaintiff against an indemnity costs order and rejected them. In our view, the Judge was correct in his decision and cannot be faulted.

VII.  Conclusion

47.  The appeal is accordingly dismissed with costs to the defendant. We will make an order nisi that the defendant’s costs are summarily assessed at $750,000 inclusive of the fees for two counsel.