史超 v. 均富有限公司 AND ANOTHER

DCCJ 5015/2017

[2024] HKDC 1909

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5015 OF 2017

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BETWEEN

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DECISION

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BACKGROUND

1.  On 31 May 2024, this Court handed down its the judgment for this action (the “Judgment”). I shall in this Decision adopt the same abbreviations and definitions used in the Judgment.

2.  The backgrounds of the case and the reasons for my final judgment have been set out in the Judgment. Suffice it to highlight for this Decision is that I have in §311(2) of the Judgment held the 2^nd defendant liable for the plaintiff’s claim relating to the Light Well (the “Light Well Claim”) in the total sum of HK$72,300. As for the costs between the plaintiff and the 2^nd defendant, I have in §312(3) made an order nisi that the 2^nd defendant do pay 10% of the costs of the plaintiff, to be taxed if not agreed, with certificate for counsel. The reasons for making such costs order nisi are provided in §312.

THIS APPLICATION

3.  By a Summons filed on 12 June 2024 (the “Summons”), the 2^nd defendant applies for the said costs order nisi to be varied to the extent as provided below:-

(1) The 2^nd defendant do pay 10% of the costs of the plaintiff for the Light Well Claim up to and inclusive of 29 August 2023, to be taxed if not agreed.

(2) The plaintiff do pay the 2^nd defendant’s costs for the Light Well Claim from 30 August 2023 onwards including this application on an indemnity basis, to be taxed if not agreed, with certificate for counsel.

(3) The plaintiff do pay the 2^nd defendant enhanced interest on the disbursements (such disbursements to be taxed if not agreed) incurred since 30 August 2023 and paid at the rate of 10.875% (i.e., 2% above judgment rate) per annum from the respective dates of payment of the said disbursements.

4.  Apart from the above, the 2^nd defendant also seeks the following orders:-

(1) The plaintiff shall not be allowed to have any interest for the award in the sum of HK$72,300 made in his favour.

(2) The sanctioned payment made by the 2^nd defendant on 1 August 2023 in the sum of HK$200,000 (the “Sanctioned Payment”) inclusive of interest accrued, if any, be released to the 2^nd defendant via its solicitors.

5.  The Summons is supported by an affirmation from Mr Luk King Kwong (“Mr Luk”)[1], principal of Messrs Raymond Luk & Co (“RLC”), solicitors for the 2^nd defendant. In Mr Luk’s affirmation, it was revealed that the Sanctioned Payment was made, and the Notice of Sanctioned Payment was served to the plaintiff’s then solicitors, Messrs Kingston Tong & Co (“KTC”), on 1 August 2023. The Sanctioned Payment was not accepted by the plaintiff, hence the need for the trial.

6.  On 2 July 2024, directions were given to the parties for filing of affirmations in opposition and reply, and the lodging of written submissions. These directions were made subject to an answer from KTC as to whether the Summons would be contested by the plaintiff.

7.  By a letter dated 12 July 2024, RLC reported that KTC gave no reply to the said requisition. It had also come to my attention that KTC had on 16 July 2024 applied for leave to cease to act for the plaintiff, which was scheduled to be heard on 21 August 2024. I had therefore on 25 July 2024 sought answers from KTC, apart from the above requisition, as to whether the plaintiff was informed about the 2^nd defendant’s application, and whether the Summons and Mr Luk’s affirmation had been delivered to him.

8.  By a letter dated 31 July 2024, after referring to the Summons and the directions that I had given on 2 July 2024, KTC replied that they had repeatedly tried contacting the plaintiff but were unable to do so. KTC was thus unable to confirm whether the Summons would be contested by the plaintiff.

9.  In light of KTC’s reply, I gave further directions to RLC on 6 August 2024 that the Summons and Mr Luk’s affirmation should be served to the plaintiff at his last known address on or before 16 August 2024. My previous directions were revised, extending the deadlines for the plaintiff to file and serve his affirmation in opposition and written submissions to 30 August 2024 and 27 September 2024 respectively. I have also fixed a hearing for the Summons for 11 November 2024.

10.  RLC served the Summons, Mr Luk’s affirmation, and my directions dated 6 August 2024, to the plaintiff on 8 August 2024, by way of speedpost and airmail.

11.  Pausing here, the said documents were served to the plaintiff’s address at 161 West Ranch Place SW, Calgary, Alberta, T3H, 5C1, Canada. This is his last known address per the plaintiff’s own evidence that he has immigrated to Canada since May 2022[2].

12.  Coming back to the service, it is reported by RLC that the documents sent by speedpost were returned with the remarks “Refused”. The documents sent by airmail have not been returned[3]. I agree with RLC that the return of the documents sent by speedpost could be a deliberate act of the plaintiff in not accepting the service; the speedpost could have been returned with remarks of “Moved” or “No such person” if the plaintiff no longer resided at the last known address. Moreover, it is believable that the plaintiff is trying to avoid all contacts, as supported by KTC’s inability to reach him.

13.  I am satisfied that the plaintiff should have knowledge of the present application, my directions to him, and the date and time of the substantive hearing.

14.  At the hearing, the 2^nd defendant was represented by counsel Timothy Lam (“Mr Lam”). The plaintiff was unrepresented and absent. Neither an affirmation in opposition nor any written submissions was filed by the plaintiff. I agree with Mr Lam that all information points to the plaintiff having no intention to participate in these proceedings any further, and the hearing was thus proceeded with in his absence.

DISCUSSIONS

15.  To begin with, the orders sought by the 2^nd defendant under the Summons and reproduced in §§3 and 4(1) above are all within the ambit of orders that could be granted under O. 22, r. 23(2) to (4) of the Rules of the District Court, Cap 336H[4]. The default rule is that the Court shall make these orders, unless it considers it unjust to do so[5]. In considering whether it would be unjust to make the orders, the Court is required to take into consideration all circumstances of the case, including those set out in O. 22, r. 23(6). And for the circumstances to be considered relevant, either they have to show the reasonableness for the plaintiff to reject the Sanctioned Payment, or that the costs are incurred or increased after the rejection due to any unreasonable conduct of the 2^nd defendant[6]. The burden is on the plaintiff to show why it would be unjust to apply the default rule[7].

16.  The plaintiff has failed to adduce any evidence to show that the application of the default rule would be unjust. On the contrary, I agree with Mr Lam that, based on the available information, application of the default rule is just. The Sanctioned Payment was made more than 1 month before the first Pre-trial Review[8], and more than 3 months before the trial commenced[9]. By then, all evidence had been filed and served, and the issues between the parties were crystallised. The plaintiff and his legal adviser had all the necessary information, and sufficient time, to consider the merits of the parties’ cases, and to evaluate the acceptability of the Sanctioned Payment, before the trial commenced.

17.  I shall pause here and repeat what I have said in the Judgment: the plaintiff’s claims for renovation costs, and hence his overall claim, were substantially reduced due to the sale of the Premises on 28 January 2022 without any renovation, which was revealed by the 2^nd defendant only at trial. This led to the plaintiff having to abandon most of his claims under this head. The plaintiff has only himself to blame for attempting to hide such crucial fact from the Court, and likely also from his own legal adviser, when the latter was advising on the acceptability of the Sanctioned Payment.

18.  Turning now to the enhanced interest, the Courts in previous cases had taken into account a claimant’s unreasonable refusal to accept sanctioned payment, and the egregious and dishonest manner in which the claimant had conducted the proceedings, in imposing the maximum rate, or close to the maximum rate, to mark the disapproval of the claimant’s improper conduct[10]. In view of my criticisms of the plaintiff’s case, particularly his conduct of exaggerating his claims, and how he had withheld crucial evidence regarding his sale of the Premises without renovation, all the boxes are checked for the imposition of a very high rate of enhanced interest. I agree with Mr Lam that the imposition of a 2% enhanced rate is just and modest.

19.  As one could see in §3(3) above, the 2^nd defendant seeks in the Summons enhanced interest on the disbursements rather than on costs as prescribed by O. 22, r. 23(3) and (4). When asked, Mr Lam acknowledged the difference between costs and disbursements, and clarified that the 2^nd defendant had erroneously used the latter term in §1(c) of the Summons when the former term was intended, and is actually used in the preceding sub-paragraph. He undertook to this Court that the Summons would be amended and served on the plaintiff to rectify the problem within 28 days from the date of the hearing. He asked this Court to exercise its discretion to make an order that the enhanced interest should be imposed on the costs, rather than on the disbursements alone. Upon Mr Lam’s said undertaking, and in the absence of any good reason to deny the 2^nd defendant from its entitlement under the said rules, I agree to order enhanced interest on the costs.

20.  Finally, the Summons asks for release of the Sanctioned Payment, inclusive of interest accrued (if any), to the 2^nd defendant via RLC. Mr Lam clarified that this is made pursuant to O. 22A, r. 1, which was not specifically referred to in the margin note of the Summons. I agree with Mr Lam that notwithstanding the omission, this Court does have jurisdiction to make an order under O. 22A, r. 1[11]. Moreover, I see no reason not to release the Sanctioned Payment back to the 2^nd Defendant.

CONCLUSION

21.  For the reasons above, I would make an order in terms of the Summons, save that the words “disbursements” shall be replaced by the words “costs” in §1(c) of the same.

22.  I thank Mr Lam for his assistance.