MAN TIM WAN v. CHUNG TAI HOI

DCCJ 5012 of 2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL JURISDICTION

ACTION NO. 5012 OF 2007

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BETWEEN

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J U D G M E N T

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A. APPLICATION

1.  This is the Plaintiff’s application for varying the costs order nisi dated 19^th April 2010 to the effect that the Defendant do pay cost on indemnity basis as per his summons dated 18^th May 2010.

2.  The Defendant opines that there is no good reason to order the Defendant to pay costs on indemnity basis. The Defendant simply exercised her right to defend, though it was rejected after trial.

B. APPLICABLE LEGAL PRINCIPLES

3.  As to under what circumstances a court may order cost on indemnity basis, the Court of Appeal in Choy Yee Chun v Bond Star Development Ltd [1997] HKLRD 1327 reviewed the cases and summarised the law as follows:

“A taxation of the successful party’s costs on an indemnity basis could properly be ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner.  Any proceedings instituted or prosecuted in such circumstances as to constitute an affront to the court could properly be subject of a direction for the taxation of the successful party’s cost on the indemnity basis… The discretion was not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be “appropriate”.  The principle for an award of an order of costs on an indemnity basis applied equally to those who not only instituted proceedings but who defended them.”

C. DISCUSSION

4.  In the present case, the Plaintiff sought to recover possession of the Property from the Defendant. The Defendant admitted to be the tenant of the Property but she contended inter alia that her late husband told her and the Plaintiff once made a promise that the whole family could reside there as long as they wish. In essence, The Defendant relied on a hearsay promise.

5.  Generally speaking, the court will not award costs on indemnity basis merely because the defence case was rejected. However, in the present case, the evidence reveals that such a defence is scandalous or vexatious or for an ulterior motive.

6.  Firstly, had the allegation existed long ago, which was so important to the Defendant, there was no reason why it was not raised when the Defendant filed the defence or the notice of opposition in the Lands Tribunal. Further, by a simple comparison with the Plaintiff’s averment and the Defendant’s reliance of a hearsay promise, the case is scandalous. Secondly, it was raised with ulterior motive. Such a belated assertion of hearsay promise was obviously a dishonest design to concoct such an allegation either with the motive to strike a luck or to delay the possession order as long as possible. Thirdly, it was an affront to the Court in that the Defendant was controlled by her sons DW1 and DW2 in this litigation. They “spoon feed” the untruthful version on the Defendant. That’s why she was unable to confirm something that was not the truth despite attempts. DW1 was found to be an incredible and arrogant witness while DW2 was found to be a dishonest witness.

7.  In Nina Kung CACV 460 of 2002 and CAVC 67 of 2003, the Court of Appeal laid down further principles on costs on indemnity basis. Although the Will in question was held to be genuine by the Court of Final Appeal, the said principles are still applicable: see ChinaChem Charitable Foundation v Chan Chun Chuen HCAP 8/2007 dated 16^th April 2010 as per Lam J cited Yuen JA in Nina Kung CACV 460 of 2002 and CAVC 67 of 2003 :

“In my view the court must look at the facts of each individual case and if the evidence shows that the person seeking to propound the will has, in order to advance his own interests, knowingly participated in a dishonest design to put forward as a genuine will a document which was not, that may be a special and unusual feature such as to warrant an order for costs on the indemnity basis.”

8.  As I found that the hearsay promise was created after thought, it was created, not at but after the Defendant filed the defence (notice of opposition) in the Lands Tribunal. The Defendant, though acted under the thumb of her sons, knowingly participated in a dishonest design to put forward a genuine hearsay promise, which was not.

9.  Had the Plaintiff asked for a costs order against DW1 and/or DW2, law, I would have considered it seriously. The new order, after the implementation of the Civil Justice Reform, namely Order 62, r.6A provides that:-

“(1)  Where the Court is considering whether to exercise its power under section 53 or 53A of the [District Court] Ordinance to make a costs order in favour of or against a person who is not a party to the relevant proceedings –(a) that person must be joined as a party to the proceedings for the purposes of costs only; and (b) that person must be given a reasonable opportunity to attend a hearing at which the Court shall consider the matter further.”

10.  Nonetheless, Counsel for the Plaintiff said that he is not seeking for such an order.

11.  Having said that, no criticism is put on Counsel for the Defendant as he is bound by the instructions. Like Counsel for the Plaintiff, he was pragmatic and helpful throughout the proceedings.

12.  As a result, I am of the view that the suitable order should be one of indemnity basis. In short, I vary my costs order as follows:-

“The Defendant do pay the costs of the action  to the Plaintiff with certificate for counsel, on an indemnity basis, to be taxed if not agreed.

Cost of and occasioned by the Plaintiff’s summons dated 18^th May 2010 be to the Plaintiff with certificate for counsel to be taxed if not agreed.

Defendant’s own costs be taxed in accordance with Legal Aid Regulations.”