KITAHARA HONG KONG CO., LTD v. CHENG KAM WAH GRACE (also known as CHENG GRACE OR 鄭詠騰)

DCCJ 1088/2019 & 139/2022 (Consolidated)

[2026] HKDC 1714

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NOS 1088 OF 2019 & 139 OF 2022

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(Consolidatedby the Order of Master Ebony Ling dated 21 June 2023)

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DECISION

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Introduction

1.  On 20 January 2026, this Court handed down its decision[1] (“Appeal Decision”), allowing the Defendant’s appeal (“Appeal”) against that part of the order of the learned master in respect of security for costs made on 1 September 2025 (“Order”) by increasing the amount of security awarded to the Defendant from HK$250,000 to HK$400,000.  I also made a costs order nisi that the costs of and occasioned by the Appeal pursuant to the Notice of Appeal filed on 15 September 2025 (“Notice of Appeal”) and the Defendant’s summons filed on 19 February 2025 (from which the Appeal arose) be paid by the Plaintiff to the Defendant, with Certificate for Counsel, to be taxed if not agreed, and the Defendant’s own costs be taxed in accordance with the Legal Aid Regulations (“Costs Order Nisi”).

2.  On 12 February 2026, the Plaintiff took out a summons (“Amendment Summons”) pursuant to Order 20 rule 11 of the Rules of the District Court (Cap 336H, sub leg) (“RDC”), seeking an order that the Appeal Decision be amended or corrected or revised by deleting reference to the costs order nisi made by Master Bianca Yu dated 1 September 2025 that, costs of and occasioned by the Defendant’s Discovery Summons be borne by the Defendant, from the Order of Master Bianca Yu that is set aside in paragraph 19(1) of the Appeal Decision.

3.  Still on 12 February 2026, the Plaintiff took out another summons (“Leave to Appeal Summons”) for leave to appeal to the Court of Appeal against the Appeal Decision and an extension of time for application for such leave to appeal.

4.  Pursuant to the directions made on 28 May 2026, the Amendment Summons and the Leave to Appeal Summons are disposed of together and on papers.

Background

5.  Before considering the merit of the present application, it is necessary to set out the relevant background.

6.  On 3 February 2026, the Plaintiff took out a summons to vary the Cost Order Nisi.  Suffice it to say that on 14 September 2026, this Court handed down a decision[2] to vary the Costs Order Nisi to a certain extent (“Costs Order Nisi Variation Decision”).

7.  As stated above, on 12 February 2026, the Plaintiff took out the Amendment Summons and the Leave to Appeal Summons. 

8.  According to the 8^th Affirmation of Wai Yip Hin filed on 12 February 2026 in support of the Leave to Appeal Summons, the intended appeal raised a single point, namely whether this Court erroneously and/or without basis set aside the costs order nisi made by the learned master that costs of and occasioned by the Defendant’s Discovery Summons be borne by the Defendant.  It was further stated that the Plaintiff had drawn this Court’s attention to the error by way of the Amendment Summons and its solicitors’ letter dated 12 February 2026, so the Leave to Appeal Summons was issued out of an abundance of caution.

9.  It is therefore clear that from the Plaintiff’s perspective, the summons for variation of Costs Order Nisi, the Amendment Summons and the Leave to Appeal Summons taken out all concerned the costs order nisi of the learned master that costs of and occasioned by the Defendant’s Discovery Summons be borne by the Defendant.  The Plaintiff’s stance was that whilst the Appeal was concerned with the Defendant’s application for security for costs only, this Court erroneously set aside the learned master’s costs order nisi in relation to the Defendant’s Discovery Summons.

Discussion

10.  As stated in paragraph 9 of the Costs Order Nisi Variation Decision, this Court was fully aware, both at the Appeal and in the Appeal Decision, that the Appeal was in relation to the Defendant’s application for security for costs only:-

(1)  In paragraph 1(3) of the Appeal Decision, this Court realised that the Defendant had wrongly described, in her Notice of Appeal, the order in respect of the security for costs application, and that was why this Court quoted the sentence “there be a costs order nisi that costs of and occasioned by the Defendant’s Discovery Summons be borne by the Defendant” with the word “[sic]” after “the Defendant’s Discovery Summons”.

(2)  In paragraph 7 of the Appeal Decision, this Court expressly stated that the Plaintiff’s and the Defendant’s respective applications for specific discovery did not concern the Appeal.

(3)  That this Court has not misunderstood the Defendant’s intention of appealing against the costs order nisi of the security for costs application only, despite the error in the Notice of Appeal, was apparent from the order of the learned master with the following costs orders:-

(a)  Costs order nisi that costs of and occasioned by the Plaintiff’s application for specific discovery be to the Plaintiff (paragraph 36(1) of the learned master’s decision dated 1 September 2025);

(b)  Costs order nisi that costs of and occasioned by the Defendant’s application for specific discovery be reserved (paragraph 36(2) thereof); and

(c)  Costs order nisi that costs of and occasioned by the Defendant’s application for security for costs be borne by the Defendant (paragraph 36(3) thereof).

(4)  It is clear that the learned master did not make any costs order nisi that “costs of and occasioned by the Defendant’s Discovery Summons be borne by the Defendant”, but only that “costs of and occasioned by the Defendant’s application for security for costs be borne by the Defendant”.

11.  On 1 April 2026, this Court referred to all 3 summonses and expressed to parties that its intention, as manifested in the Appeal Decision, was to set aside the Order in respect of the costs order nisi for the Defendant’s application for security for costs only but not the costs order nisi for the Defendant’s Discovery Summons.  This Court made no error in the Appeal Decision.

12.  In paragraphs 11 to 15 of the Costs Order Nisi Variation Decision, this Court accepted that the reference to “the Defendant’s Discovery Summons” in the description of the Order in the Notice of Appeal was a clerical error for “the Defendant’s application for security for costs”, while this Court, the Plaintiff and the Defendant were not mistaken at the Appeal that the subject matter was the costs order nisi of the Defendant’s application for security for costs only.  This Court therefore rejected the Plaintiff’s argument that the Appeal Decision set aside the learned master’s costs order nisi for the Defendant’s Discovery Summons only but did not set aside the learned master’s costs order nisi in respect of the Defendant’s application for security for costs. 

13.  I repeat the same reasoning here.

14.  The manifest intention of this Court at the Appeal and in paragraph 19(1) of the Appeal Decision was clearly that the learned master’s costs order nisi for the Defendant’s application for security for costs only, but not the costs order nisi for the Defendant’s Discovery Summons, was set aside.  As a result, this Court, at paragraph 16 of the Costs Order Nisi Variation Decision, granted leave to the Defendant to amend the Notice of Appeal by replacing the words “the Defendant’s Discovery Summons” by the words “the Defendant’s application for security for costs” in the description of the Order.

15.  In this connection, I reject paragraph 10 of the Plaintiff’s written submissions that this Court’s letter dated 1 April 2026 is “dispositive of the factual question: any disturbance of the Defendant’s Discovery Summons costs order was not intended”.  This Court was fully aware of the clerical error in the Notice of Appeal (notably with the remark “[sic]” in the description of the Order) and the learned master’s costs order nisi in respect of the Defendant’s Discovery Summons was never disturbed in the Appeal Decision as a matter of fact.

16.  In the premises, I dismiss the Amendment Summons.

17.  Turning to the Leave to Appeal Summons, the Plaintiff sought leave to take out the leave to appeal application out of time for a delay of 9 days due to Counsel’s oversight of the time limit, which was 14 days instead of 28 days.

18.  While the length of and explanation for delays are certainly relevant as to whether out-of-time leave should be granted, it cannot be disputed that the merits of the leave to appeal application and the degree of prejudice to the other party should be considered: Lee Chick Choi v Best Spirits Co Ltd HCMP 371/2015, unreported, 21 May 2015, per Kwan JA (as she then was), at paragraph 19.

19.  The Plaintiff’s Draft Grounds of Appeal contains one ground only, namely that the Appeal Decision erroneously and/or without basis set aside the costs order nisi made by the learned master that the costs of and occasioned by the Defendant’s Discovery Summons be borne by the Defendant.

20.  As set out in the letter dated 1 April 2026, this Court was fully aware of the subject costs order nisi of the Appeal as manifested in the Appeal Decision.  In any event, this Court has reiterated its manifest intention in the Appeal Decision on two occasions, namely the letter dated 1 April 2026 and the Costs Order Nisi Variation Decision.  The intended appeal has no prospect of success.

21.  Further, as set out in paragraphs 12 and 13 of the Costs Order Nisi Variation Decision which are adopted above, the Plaintiff has always known the subject costs order nisi of the Appeal was that of the Defendant’s application for security for costs only, but not that of the Defendant’s Discovery Summons.  The Plaintiff did not suffer any prejudice as a result of the clerical error.

22.  In the premises, for the same reasons for dismissing the Amendment Summons, this Court also dismisses the Leave to Appeal Summons.

Costs

23.  The Plaintiff fails for both the Amendment Summons and the Leave to Appeal Summons.

24.  However, should the Defendant have been careful in drafting the Notice of Appeal and not making the clerical error, and should the Defendant have applied for leave to amend at the Appeal, the Plaintiff would not have to take out the Amendment Summons and the Leave to Appeal Summons. 

25.  That said, according to Order 1A rule 3 RDC, the parties to any proceedings and their legal representatives shall assist the Court to further the underlying objectives.  The Plaintiff did not spot the clerical error at the Appeal either.  Also, with this Court’s clear indication in the Appeal Decision including the insertion of ‘[sic]’ when referring to the Defendant’s Discovery Summons in the Order, the Plaintiff should have clarified the position with my Clerk before taking out the Amendment Application and the Leave to Appeal Application.  This is especially so in view of the Plaintiff’s understanding that the subject matter of the Appeal including the costs order nisi appealed against was the Defendant’s application for security for costs but not the Defendant’s Discovery Summons.

26.  Moreover, upon the reiteration of this Court’s manifest intention in the Appeal Decision by the letter dated 1 April 2026, the Plaintiff should not have pressed on the merits of the Amendment Summons and the Leave to Appeal Summons in the written submissions, but should have simply sought leave to withdraw both summonses and address the issue of costs of both summonses.  The Plaintiff should therefore bear the Defendant’s costs incurred for the preparation of the supplemental skeleton submissions in respect of the merits of the Amendment Summons and the Leave to Appeal Summons.

27.  Taking into account all the circumstances, the just order to make is that save and except that the Plaintiff do pay 50% of the Defendant’s costs of the preparation of her Supplemental Skeleton Submissions dated 14 July 2026, with Certificate for Counsel, to be taxed if not agreed, there be no order as to costs in respect of both the Amendment Summons and the Leave to Appeal Summons.

28.  This Court has also considered the Defendant’s submission in her solicitors’ letter dated 15 April 2026 that her costs should be taxed forthwith, citing Midland Business Management Ltd & Anor v Lo Man Kui (also known as Howard Lo) [2011] 2 HKC 577.  This Court holds the view that while the Defendant is on legal aid and the 2 summonses in question are severable and self-contained from the rest of the action from a taxation point of view, given that 50% of the Defendant’s costs of the preparation of her written submissions is unlikely to be substantial enough to justify putting the parties to the expense of having a separate taxation for it rather than bringing it in on the final taxation, I refuse to order taxation forthwith.

Disposition

29.  I dismiss both the Amendment Summons and the Leave to Appeal Summons.

30.  For costs, I make an order that:-

(1)  the Plaintiff do pay 50% of the Defendant’s costs of the preparation of her Supplemental Skeleton Submissions dated 14 July 2026, with Certificate for Counsel, to be apportioned equally between the Amendment Summons and the Leave to Appeal Summons, to be taxed if not agreed;

(2)  save and except paragraph (1) hereof, there be no order as to costs in respect of both the Amendment Summons and the Leave to Appeal Summons; and

(3)  the Defendant’s own costs of the Amendment Summons and the Leave to Appeal Summons be taxed in accordance with Legal Aid Regulations.