LDB SALES CO LTD v. GERMAIN ELECTRONIC LTD AND OTHERS

HCA5439/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 5439 OF 2001

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DECISION

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1. On 30 September 2005 following a 6 day hearing I handed down a written decision dismissing the defendants' application under Order 24 rule 16(1).  The defendants had sought to strike out the plaintiff's claim because of their alleged failure to make proper discovery of documents relating to two transactions.  I made a costs order nisi in the plaintiff's favour.

2. In short I had decided that :

(1) the breach was not a breach of a peremptory order;

(2) the defendants had not proved any contumelious conduct by the plaintiff;

(3) the defendants had not proved that the plaintiff's shortcomings in discovery matters was deliberate; and

(4) the defendants had not demonstrated that there was a substantial risk that a fair trial was no longer possible.

3. The plaintiff now asks for the nisi order on costs to be made absolute.  The defendants submit that the costs should be in their favour or, alternatively, costs should be in the cause.

4. I have heard brief oral submissions.  As time for oral submission was insufficient, both counsel agreed to complete their submissions in writing.  I have now read and considered both their oral and written submissions.

5. Because of my findings, outlined above, the defendants had failed to prove what was necessary for the court to accede to their application to strike out the plaintiff once and for all.  If successful, their application would have brought the entire action to an end. 

6. There is no merit in the defendants' application for costs in their favour they having failed entirely on their application.  Neither do I agree that costs should be in the cause.  This has been a discrete interlocutory issue.  The issues in this application are significantly different from what are likely to be the issues on liability in "the cause".

7. I am satisfied therefore that the costs order should be in the plaintiff's favour.  The only issue which remains is whether that order should be reduced to reflect the criticisms made of the plaintiff, in my decision, with regard to discovery.

8. In my discretion I think some reduction is appropriate.  I now make the following final order.  The defendants shall pay 80% of the plaintiff's costs of the Order 24 strike out application forthwith.  The defendants shall pay 60% of the plaintiff's costs of and arising out of the application to vary the nisi order forthwith.  There shall be no order as to costs in relation to the consent order dated 14 November 2005.  All costs to be taxed if not agreed.