LI SHIU TO v. LI SHIU TSANG AND OTHERS

HCA 416/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 416 OF 2003

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DECISION ON COSTS

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1. This is an application by the plaintiff to vary the costs order nisi made by me on 14 August 2012. Both parties agree that any application to vary the costs order nisi should be conducted on paper without a hearing.

2. In the hearing on 19 June 2012, I granted leave to the plaintiff to amend the Re-Amended Statement of Claim.  On 14 August 2012, I handed down the reasons for the said decision and made an order nisi that the costs of and occasioned by the amendments and the costs of the plaintiff’s amendment summons be paid by the plaintiff to the 1^st and the 3^rd defendants and the plaintiff’s own costs to be taxed in accordance with Legal Aid Regulations.

3. The plaintiff now seeks to vary the costs order nisi to the extent that the costs of the hearings of the amendment summons before Master Ho on 22 May 2012 and myself on 19 June 2012 should be paid by the 1^st and the 3^rd defendants with certificate for counsel. Relying on Lessy SARL v Pacific Star Development Ltd [1996] 2 HKLR 1, Ms Wong SC, counsel for the plaintiff, submits that the court should treat the costs of the substantive hearings separately from the costs of the amendment summons.  Since the 1^st and the 3^rd defendants have failed in its opposition to the plaintiff’s amendment summons, the 1^st and the 3^rd defendants should pay for the costs of the substantive hearings.

4. According to the dicta of Yam J in Lessy SARL:

“The rationale behind differentiating these two sets of costs is not to encourage the other side who has decided to resist an application to amend to have a try-on. Otherwise the resisting party would be under an impression that, win or lose, they will get their costs any way. The resisting party should be deterred to adopt such an attitude. In deciding to resist the amendment, they should know that in the event they have lost the argument, they would be ordered to pay the cost of the argument and that is the costs of the hearing whilst the first set of costs, (i.e. the costs of and occasioned by the amendment), would be to them in any event.” (at p 2E-F)

5. Despite such dicta, Yam J acknowledged that the set of costs relating to the substantive hearing is a matter within the discretion of the court having regard to all the relevant considerations (see: pp2J-3B).

6. The rationale for the separate treatment of costs as stated by Yam J in Lessy SARL is certainly a factor in favour of ordering the 1^st and the 3^rd defendants to pay for the costs of the substantive hearings.  However, one cannot ignore the following factors in the present case:

(i)  there was substantial delay in the making of the amendment application and the plaintiff only offered the reasons for the delay after the 1^st and the 3^rd defendants filed their submissions on 18 May 2012 criticising the inadequacies in the plaintiff’s application;

(ii)  the plaintiff made certain concessions about the value of the properties and the role of the 2^nd defendant only after the skeleton arguments of the 1^st and the 3^rd defendants were lodged;

(iii)  the plaintiff had made a quite incorrect representation to Master Ho in the striking out application that the case was by then ready for trial; and

(iv)  the delay of the amendment application is causing some inconvenience to the 1^st and the 3^rd defendants in the preparation of their respective defence case.

7. I must also emphasize that after the implementation of the CRJ, there is a heightened concern to guard against late applications.  The plaintiff’s application is certainly one of those late applications which should not be encouraged by the courts.

8. Further, I agree with Ms Sit, counsel for the 1^st and the 3^rd defendants, that the court should not take into account events subsequent to the court’s decision in determining the issue of costs.

9. Balancing all these factors, I am of the view that the fairest order is that there should be no order as to costs of the substantive hearings.  The same should also apply to the costs of the application to vary the costs order nisi dated 14 August 2012.  I therefore vary the costs order nisi as follows:

(i)  save that there be no order as to the costs of the hearings on 22 May 2012 and 19 June 2012 and the costs of the application to vary the costs order nisi dated 14 August 2012, the costs of and occasioned by the amendments and the costs of the plaintiff’s amendment summons dated 3 May 2012 be paid by the plaintiff to the 1^st and the 3^rd defendants; and

(ii)  the plaintiff’s own costs to be taxed in accordance with Legal Aid Regulations.