XCHRX SHAHDAN LTD. v. SIU WING KEUNG t/a CRYSTAL SHOES

1994, No. A4861

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. On 18 May 1995, I handed down a judgment in relation to proceedings in which the plaintiff claimed arrears of rent and other relief. The defendant had given notice to defend. The plaintiff had applied to the Master for judgment under Order 14, and this was granted on 6 March 1995. The defendant appealed to me.

2. The result of that appeal was recorded in my judgment of 18 May 1995 -

"I find that the matter of the alleged collateral contract, even if proved, does not provide an arguable defence, but I believe that the defendant is entitled to require that the deposit he paid by way of security be brought into account against his liability to pay rent, damages or any other liability arising from a breach of the lease; or, at least, that this is arguable. It follows that the judgment entered against the defendant cannot stand. It is set aside, and the defendant is given unconditional leave to defend.

On the face of it, there seems no reason why the usual order should not be made in respect of costs. Accordingly, I make an order nisi that costs be costs in the cause."

3. The defendant now comes before me, asking that I vary my order nisi in respect of the costs. Mr Sakhrani argues that, although my order would have been the usual one if I had granted unconditional leave to defend in the first instance, it is not so when the decision is made on appeal from a Master. He says that the costs before the Master should be in the cause, but the costs of the appeal should go to the successful party; that is, the defendant.

4. There is no doubt that, on an appeal from judge in chambers to the Court of Appeal on an Order 14 matter, the practice is for that court, all things being equal, to order that costs of the appeal follow the event. Is here a different practice when the appeal is from a Master to a judge in Chambers?

5. As Mr Wong points out, the nature of the appeal to me is different to that of an appeal to the Court of Appeal. The appeal before me was by way of an actual rehearing of the application. The "White Book" says "the Judge treats the matter as though it came before him for the first time". He may, for example, and commonly does, allow further evidence to be adduced. He is in no way bound by an exercise of the Master's discretion. The arguments and authorities relied upon may be completely different.

6. Counsel have not been able to find a case directly on the point, and nor have I, but both the "White Book" and Sweet and Maxwell's High Court Litigation Manual indicate quite clearly, although no direct authority is cited, that the practice in regard to costs in the case of an appeal from a Master is the same as that on any other appeal.

7. Hitherto, my own practice has been the same. I see that in last half-dozen or so Order 14 cases in which I have considered appeals from Masters' decisions, I have ordered that the costs follow the event. There were no appeals from those decisions, so the practitioners for the parties against whom the orders for costs were directed seemed to have accepted that they were not out of step with current practice. I do not know why I departed from this approach in this case, but I accept that I was wrong.

8. Accordingly, I now order that the costs before the Master be in the cause, but the costs of the appeal before me be to the defendant in any event. The costs of this hearing must also be to the defendant in any event. I grant a certificate for counsel.