ARTHUR ANTONIO DA SILVA AND ANOTHER v. GABRIEL RICHARDO DIAS-AZEDO AND ANOTHER

HCA 2158/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2158 OF 2009

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BETWEEN

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RULING ON COSTS

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1.  In this matter, the Plaintiff Judgment Creditors have failed to show that the 2nd Defendant Garnishee is indebted to the 1st Defendant Judgment Debtor. In such circumstances, I had dismissed the garnishee proceedings and made an order nisi that the judgment creditors should pay the garnishee all of its costs of the garnishee proceedings.

2.  The judgment creditors now seek a variation of that order so that each party bears its own costs.  I have taken submissions in writing in respect of this issue.

3.  In support of the provisional costs order in its favour the garnishee relies on the general principle that usually costs should follow the event.  This is explained at para. 62/3/3 of Hong Kong Civil Procedure 2010 which is to this effect:

“In the case of a wholly successful defendant the judge must award him costs unless there is evidence:

(1) That the defendant brought about the litigation; or

(2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense; or

(3) has done some wrongful act in the course of the transaction of which the plaintiff complains.”

4.  It is right that at the outset the picture that had emerged on the garnishee's accounts was that it owed the judgment debtor some $5.5 million which, no doubt, encouraged the judgment creditors to initiate this proceeding.  Once the matter had come to court on a contested basis there was clear evidence that these accounts were provisional and that once a more final account was available this would show that nothing was going to be owed to the judgment debtor by the garnishee.

5.  I allowed the garnishee time to prepare a final account.  In the interim it also obtained a default judgment against the judgment debtor based on his conduct towards it during his tenure as one of its partners.  Although when the matter was brought back to me on a final hearing the accounts produced by the garnishee were not “final”, I was satisfied with its explanation as to why this was so and more importantly satisfied that there was never going to be a situation where any debt would be owed to the judgment debtor by the garnishee.

6.  Not for the first time I record my sympathy for the judgment creditors, but no matter how these garnishee proceedings are viewed in their minutiae which, understandably, they have been on the judgment creditors' behalf in the written argument, I fail to see how the garnishee can be faulted in its conduct of this matter.

7.  There is force in the point that has been made on the garnishee's behalf that the judgment creditors' solicitors delayed before serving the garnishee with the order nisi so that it had very little time to respond to the application to show cause which prompted me to adjourn the application.  Following that the conduct of the garnishee and its solicitors has been entirely reasonable and at the final hearing when the arguments were put to the test, I was satisfied that no debt was ever going to be owing to the judgment debtor.  In such circumstances, the successful garnishee ought to have its costs as I ordered when making the costs order nisi. It must also have its costs of this application to vary that order.