HONG KONG BROADBAND NETWORK LTD v. HONG KONG CABLE TELEVISION LTD

HCA 9172/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 9172 OF 2000

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DECISION
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1. The defendant (“HKCTV”) applied to strike out the claim of the plaintiff (“HKBN”). HKBN responded with a similar application to strike out the counterclaim. On 12 May 2015, I handed down my decision dismissing both the claim and the counterclaim on the ground of delay and abuse of process (“the Decision”). I made nisi costs order. HKCTV now applies to vary it.

THE APPLICATION

2. I gave the parties 14 days to apply to vary the nisi costs order.  Within time, by summons filed on 26 May 2015, HKCTV applies for leave to appeal instead.  According to the written submission on its behalf[1], one of the contentions of HKCTV is that costs should be ordered otherwise than as per the nisi order, even on the basis of what were set out in the Decision.  In the circumstances, I asked the parties to consider, and the parties did consent to, proceeding with this application as one for the variation of the nisi costs order.

3. I did so for a reason.  The court gives the parties the chance to formally argue costs, if any of them is not satisfied with the tentative order. Especially when in any event, any challenge will be one in respect of costs only, the formal argument and the decision of the first instance on costs will have duel bearing.  First, the decision will have a bearing on whether and, if yes, how the appealing party may want to take the matter further.  Second, if the matter is taken further, the appellate court will know the reasons for the court’s exercise of discretion on costs after full argument.  I do not think it is wise to bypass the formal argument on costs on the basis of the Decision.  To avoid doubt, the right to appeal against the Decision is not taken to have been abandoned.

4. I would not repeat the discussion in respect of the parties’ respective responsibilities in the Decision (at §§41-76).  As to costs, I said (at §79):

“Both parties are to blame for shelving the action. In the circumstances, it is only fair that the parties should bear their own costs of the action and the application to strike out (including any costs reserved but without prejudice to the costs orders previously made in this action).”

5. HKCTV is seeking to vary the nisi costs order to become that the costs of the action (including any costs reserved but without prejudice to the costs orders previously made in this action) be to HKCTV, and the costs of the counterclaim (if any) be to HKBN; and that the costs of the summonses for striking out taken by the parties respectively be all paid by HKBN to HKCTV.  Costs shall be taxed, if not agreed.

DISCUSSION

6. The starting point is costs follow the event.  O.62, r.3 provides:

“(2) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings (other than interlocutory proceedings), the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.

(3) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any interlocutory proceedings, it may, subject to this Order, order the costs to follow the event or make such other order as it sees fit.”

Costs of the claim and counterclaim

7. Mr Beresford for HKCTV submits that an order for costs to follow the event in the present case should be an order that the costs of the action be to HKCTV and the costs of the counterclaim be to HKBN.  The finding that both parties are to blame[2] would not justify the nisi costs order, which will have the consequence of imposing a more substantial costs burden on one party.  The nisi costs order is said to be imbalanced and unfair in the circumstances of the case.

8. Mr Lee for HKBN, when asked, would not say that the order proposed by Mr Beresford is wrong in principle, in view of the outcome of the hearing.  But he submits that this is HKBN’s burden to show that the nisi costs order is wrong before the order should be varied.

9. This is not an appeal but the hearing of the parties’ formal arguments before deciding whether the nisi costs order ought to be made absolute.

10. I shall not repeat the chronology of the steps taken by the parties respectively in respect of the claim and the counterclaim set out in the Decision (at §§2-34).  Upon revisiting those steps and the documents filed by the parties at the request of Mr Beresford, I agree that I should not rule out the potential imbalance of justice if the parties are not to recover their respective costs of defending the claim and the counterclaim following the event of their respective striking out applications.  The broad brush order that the parties bear their own costs, as made, should give way to this countervailing consideration in the circumstances.

Costs of the summonses

11. By the nisi order, the parties are also to bear their own costs of the summonses for striking out.  HKBN asks to vary it so that HKCTV shall pay the costs of both summonses.

12. HKBN is prima facie entitled to the costs of and incidental to its summons to strike out the counterclaim, which was successful.  Now HKCTV asks not only to deprive HKBN of such costs, but HKBN should also pay HKCTV’s costs occasioned by such application.  The only basis for that is that it was improper or unnecessary for HKBN to take out its summons on 19 December 2012 for striking out the counterclaim, notwithstanding its ultimate success.

13. HKCTV took out its summons to strike out the claim on 29 March 2012.  It first proposed by affirmation filed on 26 October 2012 that in the event that the claim was struck out, it would be agreeable to the dismissal of the counterclaim but with no order as to costs (presumably of the counterclaim).  The question is whether it was unreasonable for HKBN to refuse to dispose of the counterclaim in terms as proposed by HKCTV.

14. HKBN’s stance was that in the event that the claim was found to be liable to be struck out, the counterclaim should also be struck out with costs for HKCTV was also to blame for the inaction.  HKCTV did not concede that.  The decision of this court reflects that HKBN’s argument was accepted.  Even the consequential costs order now proposed by HKCTV reflects that.

15. In the circumstances, I do not agree that HKBN should be made to bear HKCTV’s costs of and incidental to HKBN’s summons to strike out the counterclaim.

Conclusion

16. In line with the above discussion, I would vary the nisi costs order so that:

(1) subject to (2) below, HKBN shall pay HKCTV’s costs of and occasioned by this action as well as its summons for striking out filed on 29 March 2012;

(2) HKCTV shall pay HKBN’s costs of and occasioned by the counterclaim as well as its summons for striking out filed on 19 December 2012;

(3) costs include costs reserved but without prejudice to the costs orders previously made in the action; and

(4) all costs shall be taxed, if not agreed.

COSTS OF THIS APPLICATION

17. Except for the costs of HKBN’s summons to strike out the counterclaim, HKCTV succeeds in the present application.  To reflect that, which did not occupy much of the parties’ argument, I would order that HKCTV shall have 80% of its costs of and incidental to the present application, to be taxed, if not agreed.

ORDER

18. Upon the parties by consent having proceeded with the hearing of HKCTV’s summons as one for variation of the nisi costs order, I vary the nisi costs order in terms of paragraph 16 above.  As to the costs of this application, I make a nisi order in terms of paragraph 17 above; and the parties have 14 days to apply to vary such nisi order or the same will become absolute.

19. I thank counsel for their assistance.