HECNY SHIPPING LTD AND OTHERS v. HUANG CHUN JEN JERRY AND ANOTHER

HCA1126/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1126 OF 2007

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RULING ON COSTS

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1.  By Summons dated 14 December 2010 (“the Summons”), the 1^st and 2^nd plaintiffs sought leave to amend the Writ of Summons by adding the 3^rd plaintiff and the 2^nd defendant as parties to the proceedings (“the Joinder Application”) and to amend the Re-Amended Statement of Claim (“the Amendment Application”).

2.  The Summons was heard before Master Woolley on 13 May 2011.  Master Woolley dismissed the Summons and ordered the costs thereof to be paid by the plaintiffs to the defendants in any event.

3.  The plaintiffs appealed against Master Woolley’s decision and the appeal was heard before me on 3 August 2000.  On 3 November 2011, I handed down my decision allowing the plaintiffs’ appeal and invited the parties to lodge written submissions on costs.

4.  The plaintiffs submit that the proper order as to costs should be as follows :

(a) The defendants do pay to the plaintiffs the costs of the appeal, with certificate for two counsel.

(b) The costs order made by Master Woolley be varied to:

(i) the defendants do pay to the plaintiffs the costs of the Joinder Application (including the costs of the hearing before Master Woolley and all costs reserved) with a certificate for counsel; and

(ii) the plaintiffs do pay the 1^st defendant’s costs of and occasioned by the amendments to the Writ of Summons and the Re-Amended Statement of Claim and the consequential amendments to the 1^st defendant's pleadings in any event to be taxed if not agreed.

5.  The plaintiffs submit that the above proposed order is intended to reflect the following :

(a) the defendants’ unsuccessful opposition to the plaintiffs’ application to join the 2^nd defendant;

(b) the usual order that the plaintiffs should bear the costs of the 1^st defendant’s consequential amendments; and

(c) the plaintiff's should not bear the costs for the preparation of the 2^nd defendant’s defence.

In this regard, the plaintiffs invited me to note that a similar order, in similar circumstances, was made in Cheung Yin Heung v Hang Lung Real Estate Agency Ltd & Anor [2010] 3 HKLRD 67 §135.  However, I note that the order in that case was only a costs order nisi.

6.  The plaintiffs also submit that the intended parties took part and were represented in the arguments, both before me and and in the court below.  This does not appear to be disputed by the defendants.

7.  The plaintiffs further submit that there are special or unusual features justifying that costs be taxed on a common fund basis :

(a) the arguments advanced at the hearing represented a marked departure from the defendants’ original position as disclosed in the affidavit made by the defendants’ solicitors.  In particular, whilst the fides of the application was raised as a ground of opposition in that affidavit, no merit-based argument was foreshadowed in the entirety of that affidavit; and

(b) the merit-based arguments, which appeared to have been the product of the industry of counsel, were in any event viewed by the Court as being unmeritorious, especially when some of them were targeted at allegations which already featured in previous versions of the Statement of Claim.

8.  The defendants submit that the proper order as to costs should be as follows :

(a) the plaintiffs do pay the defendants the costs of and occasioned by the Joinder Application and the Amendment Application and the consequential amendments to the 1^st defendant's pleadings in any event, such costs to be taxed if not agreed; and

(b) the costs of the hearing of the Joinder Application and of the Amendment Application (including the costs of the hearing before Master Woolley, the appeal hearing and all costs reserved) be the plaintiffs’ costs in the cause of the proceedings with certificate for two counsel.

9.  In relation to the order proposed under paragraph 8(a) above, the defendants submit that where a party seeks the court’s indulgence to amend pleadings and to add parties to the proceedings, it changes the case that the defendant must answer, and the usual cost order is for the applicant to pay the costs thrown away by the amendments.

10.  As regards the order proposed under paragraph 8(b) above, a defendants submit, relying on Kwok Chin Wing v GFT Holdings Ltd, HCA2332 of 2004, unreported, Burrell J., 19 April 2007, that even if a party fails in his opposition to a joinder/amendment application, he will not necessarily be ordered to bear costs.  In that case, the learned judge allowed the plaintiff's applications to amend the Statement of Claim and to join an additional defendant despite opposition from the original defendant.  Despite the original defendant’s unsuccessful opposition, the learned judge did not order the original defendant to bear the costs of the hearing but ordered that such costs be in the cause.  It is, however, not stated in the judgment why the learned judge so ordered.

11.  The defendants also drew my attention to Kan Ming Construction Investments Ltd v Kwok Moon Chi, HCA2060 of 2005, unreported, Deputy High Court Judge Longley, 21 December 2006; Terkild Johan Terkildsen & Anor v Barber Asia Ltd & Ors, HCA1963 of 2003, unreported, Saunders J., 27 March 2007; and Liang Jun Xian v Tsui Hin Chi, HCA2288 of 2007, unreported, Suffiad J., 26 January 2011, which were cases in which the parties who had unsuccessfully opposed applications to amend were not ordered to pay the costs of the hearings of the opposition either in full or partially.  The decision in each of those cases turned on the particular facts of the case.

12.  Having considered the parties’ respective written submissions (and the authorities cited) and weighing all the matters which have been put before me, I am of the view that the proper order for costs is as follows :

(a) the plaintiffs do pay the defendants the costs of and occasioned by the Joinder Application and the Amendment Application and the consequential amendments to the 1^st defendant’s pleadings in any event, such costs to be taxed if not agreed; and

(b) the defendants do pay the plaintiffs the costs of the hearings of the Joinder Application and of the Amendment Application (including the costs of the hearing before Master Woolley, the appeal hearing before me and all costs reserved) with certificate for counsel for the hearing before Master Woolley and certificate for two counsel for the appeal hearing before me.

13.  I am not satisfied that there are sufficiently special or unusual features in this case to justify that the costs awarded to the plaintiffs should be taxed on a common fund basis.