WEST COAST INTERNATIONAL TRADING LTD t/a DANDELION FINE ARTS v. CHELESA ART CO LTD

HCA 1636/2010

[2018] HKCFI 1367

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1636 OF 2010

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DECISION ON COSTS

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Introduction

1.  This is the defendant’s application in effect for the variation of para 7 of the order dated 30 January 2018 (“the Jan 2018 order”).  The relevant parts of the Jan 2018 order read:

“6. Subject to Paragraph 7 below, costs of the Case Management Conference today be in the cause; and

7. Costs of the Plaintiff’s Summons [dated 25 January 2018] (including half an hour of today’s hearing) be to the Plaintiff in any event”.

2.  The defendant argues that the costs of the plaintiff’s above summons (“the expert reports summons”) should be reserved, alternatively, be in the cause of this action.  The plaintiff opposes this application.

3.  The parties do not dispute that the court has jurisdiction to vary the Jan 2018 order.  It is therefore unnecessary to consider whether there is jurisdiction to do so (in this connection, I would have decided that there is jurisdiction to vary had this aspect been disputed).

Background

4.  In a nutshell, this action concerns the plaintiff’s claim that the defendant has caused it loss by converting to the defendant’s use several of the paintings belonging to the plaintiff.

5.  By virtue of the state of the latest version of the parties’ pleadings, it was necessary to give directions for the preparation of expert reports (for use at the trial of this action) relating to:

(a)   the value of the paintings converted (or, in the case of the so-called “disputed painting”, allegedly converted) to the defendant’s use;

(b)   the authenticity of the disputed painting.

6.  Two earlier orders are relevant to this decision:

(1)   para 4, order dated 27 June 2016 (“the 2016 expert reports order”);

(2)   para 6, order dated 6 October 2017 (“the 2017 expert reports order”).

In both orders, the direction given was in effect that the parties were to provide reply reports in tabular form (the 2017 expert reports order was made by consent).  There is a dispute as to the meaning (and therefore the coverage) of the two orders; but, as will become clear below, the dispute is irrelevant for present purpose.

This application

7.  The defendant’s principal argument on the merits of this application is in short that:

(a)   the expert reports summons was intended to compel the defendant to use the version of reply (in tabular form) used by the plaintiff.  The plaintiff has no right to do so because the defendant can decide whether to file a reply (and if so, to use its own version);

(b)   the plaintiff itself has failed to comply with the deadline prescribed by the 2016 expert reports order.

8.  In response to para 7(a) above, the plaintiff points out that:

(1)   at least up to the time of the 2017 expert reports order, the defendant implicitly indicated that it would file a reply (in tabular form);

(2)   further, in a letter dated 16 January 2018, the defendant in fact proposed a tabular form, which the plaintiff considered unacceptable for being too simplistic;

(3)   it was only at the hearing on 30 January 2018 that the defendant disclosed it would not respond in any way to the plaintiff’s reply (in tabular form);

(4)   the relief sought by the expert reports summons was not that the defendant must provide answers to the plaintiff’s version of reply, but also any other orders or directions which the court might deem fit.  It was in effect a summons intended to assist case management.

In response to para 7(b) above, the plaintiff contends that the time extension sought was brought about by the defendant’s above change of stance.

9.  In the above circumstances, the plaintiff contends that it was appropriate for it to have taken out the expert reports summons, and for it to be awarded the costs of that summons.

10.  It is unfortunate that the point has not been highlighted upon (or, at the very least, clearly presented) at the hearing of 30 January 2018 (which resulted in the Jan 2018 order), but by the time of the hearing of this application, the defendant informed the court that, in compliance with para 6, 2017 order, its reply has in fact been filed and served on 19 January 2018 already.  This point is important (because it would effectively render the expert reports summons otiose), but, as stated above, it was not put at the forefront (for example, it was not mentioned in the defendant’s skeleton submissions for the 30 January 2018 hearing).

11.  Such being the case, on 30 January 2018, there was in truth nothing of substance for the court to deal with pursuant to para 6, 2017 order (except to consider whether to grant a time extension to the plaintiff to comply with that order).

12.  Normally this would have resulted in the dismissal of the expert reports summons and for the costs concerned to be awarded to the respondent (the defendant herein).  However, almost all of the time for arguing on the expert reports summons was spent mainly because the defendant did not place emphasis upon the matter mentioned in para 10 above; the hearing would have been much shorter if the defendant had done so.

13.  By reason of the above matters, both parties were at fault for failing to economize on the hearing of the case management conference on 30 January 2018.  Accordingly, para 7, the Jan 2018 order should be varied so that each party is to bear its own costs of the expert reports summons.

Conclusion

14.  The defendant’s application to vary para 7, the Jan 2018 order is allowed to the extent indicated in para 13 above.

Other matters

15.  The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the decision on costs and its easier comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.

Costs order

16.  The parties agree that costs should follow the event.  The defendant is effectively the successful party (although only to a limited extent).  There will accordingly be a costs order that half of the costs of this application (to vary the Jan 2018 order) are to be paid by plaintiff to the defendant.

17.  I consider summary assessment of costs to be appropriate.  The above costs shall thus be so assessed.  For this purpose:

(a)   the defendant be at liberty to lodge with court and serve a statement of costs within 7 days from today;

(b)   the plaintiff be at liberty to lodge with court and serve a statement of objections within 7 days thereafter.