J.H. TRACHSLER (HK) LTD. v. LIU YAN ROCKY

HCA4998/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4998 OF 1997

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R U L I N G

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1. On 30 June 2000 this court gave judgment for the plaintiff against the 2nd defendant and dismissed the plaintiff's claim against the 1st defendant. At the same time, an order was made by the court in accordance with Order 42 rule 5(B)(6) that unless either party made an application within 14 days to be heard on the question of costs, the following order was to take effect, namely that the 2nd defendant do pay the plaintiff's costs of the claim, to be taxed if not agreed, and that the plaintiff do pay the 1st defendant any costs exclusively referable to the defence of the 1st defendant, to be taxed if not agreed.

2. Well over two years later, on 22 October 2002, the plaintiff took out the first of the two summons now before the court requesting an extension of time to apply for variation of the costs order nisi made on 30 June 2000, and setting out the order that the plaintiff sought.

3. The plaintiff's second summons, dated 14 December 2002, to amend the first summons related to the order sought by the plaintiff if the court was prepared to grant an extension of time.

4. A preliminary issue to be decided by the court common to both summons is therefore whether the court should grant an extension of time to apply for variation of the costs order nisi made on 30 June 2000.

5. Having heard the arguments of Mr Clarke for the plaintiff and Mr Chan for the 1st defendant, I am satisfied that the plaintiff has not demonstrated sufficient grounds to justify such an extension. I must stress that my decision is not based on the merits of an application to vary the order nisi had it been made in the timely fashion, but simply on the basis of the delay by the plaintiff in bringing the application before the court.

6. The decision of the Court of Appeal in Ma Wan Farming Limited v Chief Executive in Council [1998] 2 HKLRD 314 is authority for the proposition that the court does have a discretion to extend the time period under Order 42 rule 5 for applying to be heard on the question of costs following an order nisi, even after the 14 day period has expired. I would observe, however, that in that case the delay appears to have been only for six days and the order had not yet been drawn up. In this case, the delay is almost two and a half years.

7. I am satisfied that the plaintiffs were in possession of the information which would have enabled them to apply for a Sanderson Order from the time of the delivery of judgment on 30 June 2000. Mr Clarke fairly has conceded as much. There is therefore in my view no real excuse why the plaintiff should have not sought such an order then, within the 14 day period.

8. In so far as the information that the 1st defendant had financed the 2nd defendant's litigation and advised the 2nd defendant to avoid its liabilities, the plaintiff was in possession of that information by 3 July 2000 when Mr Grieb interviewed Miss Iris Leung; in other words, three days after judgment. The plaintiff did not know that Miss Leung would claim privilege in respect of that conversation until after Miss Leung's letter of 22 August 2000, well after the expiry of the 14 days provided by the order nisi. Indeed, it is apparent from the affirmation of Mr Grieb on 12 July 2000 that he did not then regard his conversation with Miss Leung as privileged.

9. Even if there had been a belief on the part of the plaintiff that such conversation might be privileged back in July 2000, it was obvious by October 2001, following the examinations of Miss Iris Leung and Mr Wong Yee-ming, that their evidence could not be the subject of privilege. Nonetheless, the applications were not made until a year later.

10. The only real justification for not making an application was essentially a hope, based on the fact that the 1st defendant had not presented a bill for taxation, that the 1st defendant would not pursue his application for costs. There had however been a letter from the defendant's solicitors on 10 August 2001, seeking to agree the 1st defendant's costs in a particular sum, which should or might have alerted the plaintiff to the definite possibility that the 1st defendant would pursue his costs.

11. I do not criticise the tactical decision of the plaintiff to do nothing in the hope that the 1st defendant would not pursue his claim. However, that decision was subject to the risk, which has materialised, that the 1st defendant would pursue his claim for costs.

12. In my view, the fact that the 1st defendant did not appear to be pursuing his rights, or at least did not appear to be pursuing them vigorously, cannot provide a reason why the plaintiff should now be granted leave to re-open the question of costs almost two and a half years later. For these reasons, I dismiss the plaintiff's summonses.