SUPERDRIVE INVESTMENT LTD v. AU-YEUNG TSAN PONG DAVIE AND ANOTHER

DCCJ3173/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3173 OF 2004

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D E C I S I O N

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1.  This case has now been settled, but there is a dispute between the parties about the costs incurred after the Defendants’ Calderbank letter dated 27 April 2007.

2.  The central issue in the present application is whether the Plaintiff is entitled to an automatic order for taxation of costs under O. 62 r. 10(2) of the Rules of the District Court, Cap. 336.

3.  In this action, the Plaintiff complains that the water seepage problem in his flat was caused by the negligence, nuisance or breach of the deed of mutual covenant on the part of the Defendants and as a result, the Plaintiff claims for injunctive relief and damages against the Defendants.

4.  The case has been fixed for trial on 21 May 2007.  However on 11 May 2007, the parties submitted a consent summons to the court for approval.  As the consent summons only dealt with the interlocutory judgment in respect of the claim for damages and not the claim for injunction, Master Wong did not approve the consent summons and asked for further clarification from the parties.  On the same day, i.e. 11 May 2007, the Plaintiff accepted the money paid by the Defendants into court in the sum of $210,000 in satisfaction of the Plaintiff’s causes of action in respect of the claim for damages.  The Plaintiff therefore contends that it is entitled to an automatic order for taxation under O. 62 r. 10(2), and consequentially, the court is not required to consider the Calderbank letter sent by the Defendants on 27 April 2007.

5.  In fact, the parties have not been able to agree on the terms of the injunction before this hearing, and so I only grant a consent order for the injunction today. 

6.  In my judgment, the payment into court made by the Defendants is only in respect of the Plaintiff’s claim for damages only.  By accepting the payment into court, only the claim for damages has been settled.  Since the claim for injunctive relief was still outstanding by that time and the Plaintiff has not abandoned the claim in this regard, not all the claims involved in the case have been settled and so the Plaintiff is not entitled to an automatic order for taxation.  It has been clearly held by the Court of Appeal in Associated Engineers Limited v Lo Chee Pui [2003] 2 HKLRD 76 that O. 22 only applies in respect to a claim for damages and debt only.  So unless the Plaintiff abandons or withdraws the claim for injunctive relief, the Plaintiff would not be entitled to an automatic order for taxation.

7.  The court is therefore entitled to consider the costs of the action afresh.  The Plaintiff made an offer in a Calderbank letter dated 27 April 2007, offering to submit to injunction and to pay Plaintiff damages in the sum of $210,000.  However, the Plaintiff was not satisfied with the offer, and on 2 May 2007, the Plaintiff’s solicitors wrote back to the Defendants’ solicitors proposing a counter-offer.  In the end, what the Plaintiff obtains today is basically what the Defendants have offered in the Calderbank letter, and the Defendants therefore argue that the Plaintiff is only entitled to the costs of the action up to the date of the Calderbank letter and thereafter the Plaintiff should pay for their costs.

8.  As the Plaintiff should have accepted the Calderbank offer earlier, I agree that the Plaintiff is only entitled to the costs of the action up to the date of the Calderbank letter.  The Plaintiff was then entitled to a few days to consider the offer, and after that, the Plaintiff should pay for the costs incurred by the Defendants after 2 May 2007, i.e. the date on which the Plaintiff rejected the Defendants’ Calderbank offer.  This would be subject to the agreement made between the parties that there be no order as to costs in respect of the applications by way of the summons and the consent summons filed by the Plaintiff on 9 and 11 May 2007 respectively and of the hearing before Master K W Wong on 14 May 2007.