CHEN WAH INDUSTRIES LTD. v. EVER RICH CHONG CO. LTD.

1991, No. A7328

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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RULING ON COSTS

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1. The Plaintiff's claim (after taking into account payments made since institution of proceedings) is for $220,061.24. There is no formal admission of this claim on the pleadings. On the first day of trial, Counsel for the Defendant admits the claim. The whole trial was spent on the Counterclaim. Preparation before trial also indicates that the dispute centres on the Counterclaim.

2. The Counterclaim is made up of 3 heads :

(a) The Scandia Claim for US$52,220.20 plus damages for future loss of business;

(b) The Lark International Claim for US$19,483.86; and

(c) The Leslie Fay Claim for US$23,350.60.

3. The Defendant failed to recover anything under the Scandia Claim. They recovered nominal damages of HK$2,500.00 under the Lark International Claim. They recovered in full under the Leslie Fay Claim. Their total recovery is HK$183,850.00 [US$23,350.60 x 7.80 + HK$2,500.00]. Setting off this sum against the Plaintiff's claim of HK$220,061.24 leaves a balance of HK$36,211.24 in favour of the Plaintiff. Both Counsel accepts that the element of interest makes little impact on this computation.

4. I was minded to make no order as to costs in relation to the Counterclaim as I thought the honour was even. Counsel for the Defendant submitted that I overlooked the important point that the gist of the Counterclaim relates to the Defendant's attempt to set-off the Plaintiff's claim. The Plaintiff made no concession whatsoever in relation to such set-off. The Defendant largely succeeded on their set-off defence.

5. Both Counsel drew my attention to N.V. Amsterdamsche Lucifersfabrieken v. H. & H. Trading Agencies, Ltd. [1940] All E.R. 587. In that case the Plaintiff's original claim was L99 10s. 1d. for goods sold and delivered. The Defendant paid L20 odd leaving a balance of L72 3s. 9d. The Defendant made a "clean admission of liability" in respect of this sum. They set up a Counterclaim for like amount in respect of commission due to them. They succeeded to the extent of L55. The Court of Appeal thought that the case was in substance a claim by the Defendants for their commission. Looking at the substance of the matter the Count of Appeal directed that the costs of the Defendant should "be taxed upon the principle that they were successful on the only matter litigated ..."

6. This case is not on all fours with N.V. Amsterdamsche. The Counterclaim in this case is made up of 3 distinct causes of action. It would be unrealistic to regard the Counterclaim here as a mere claim by the Defendant for damages in respect of breaches of contracts. In his Opening, Counsel for the Plaintiff admitted considerable difficulties in relation to the Scandia Claim. Only nominal damages was recovered in respect of the Lark International Claim. Not insignificant time was spent at the trial in relation to both Claims. However I do recognise the force of the Defendant's contention that they succeeded to a considerable extent in setting off the Plaintiff's claim. That is what they set out to do in the Counterclaim.

7. In these circumstances, I am of the view that the fair order to make is as follows :

(a) In view of the Defendant's non admission, the Plaintiff should have the costs of their claim up to the first day of trial. I would observe that such costs should be very moderate on taxation as the weight of the case leans heavily if not predominantly towards the Counterclaim.

(b) The Defendants should have 3/5 of the costs of the Counterclaim.

(c) Costs of the argument on 7.5.1996 be to the Defendant.

(Ronny Wong Q.C.)

Recorder of the High Court