WANG HO YIN PATRICK v. FU CHUN LUNG AND ANOTHER

DCCJ4814/2014

[2018] HKDC 301

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4814 OF 2014

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DECISION ON COSTS

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INTRODUCTION

1.  This is a decision on costs after the plaintiff has abruptly withdrawn his summons dated 31 July 2017 (“the Summons”) in the middle of the hearing before me on 9 February 2018.

2.  Upon the withdrawal of the Summons, I ordered costs of the application be to the 1^st defendant (“D1”) with certificate for counsel.  D1’s counsel then made an application that the costs ordered against the plaintiff (“P”) be made on an indemnity basis.  In order to save the costs and time of having another hearing to deal with this issue, I made a number of directions for the parties to lodge and serve written submissions.

3.  D1’s counsel has duly lodged his submission on 15 February while P’s solicitor lodged his on 22 February.  D1’s counsel made his reply to P’s submission on 1 March 2018.    

BACKGROUND

4.  D1 is the registered owner of a piece of land which was particularly described in the First Schedule to a Consent Order signed by all 3 parties on 5 August 2016 (“Consent Order”).

5.  P is the registered owner of another piece of land adjoining D1’s land which was more particularly described in the Second Schedule to the Consent Order.

6.  A section of the property which was more particularly delineated in the plan annexed to the Consent Order (“the Portion”) became the subject matter of a dispute between P and D1 in DCCJ 4814/2014. P alleged to have the right to use and occupy the Portion which is situated within D1’s land while D1 counterclaimed against P for damages for trespass and wrongful interference of the Portion by P.

7.  By way of settlement, the parties filed the Consent Order with the Court on 5 August 2016 whereby the Court ordered the following:

“(1) All further proceedings in this action be stayed, the parties having agreed the terms set out in the Schedule (“the Schedule”) annexed hereto except for the purpose of carrying out the said terms in the Schedule for which purpose there shall be liberty to apply; and

(2) There be no order as to costs to this application.”

8.   The Schedule of the Consent Order contains the following terms:

“(1) The Plaintiff shall have the exclusive right of use and occupation (永久使用權) of the Portion which is more particularly delineated with red colour in the annexed Plan hereto;

(2) The 2^nd Defendant shall demolish the hoarding panels erected and remove all articles placed by him at his own costs within 7 days from the date of the Order to be made;

(3) The 1^st Defendant shall execute a Deed of Easement in respect of the Portion in favour of the Plaintiff and his assigns within 28 days after the issue of Certificate of Completion (滿意紙); and

(4) There be no order as to costs inclusive of all reserved costs.”

9.   There was no dispute between the parties that D2 has satisfied requirement (1) and (2) of the Consent Order as stated above.  In respect of requirement (3), D1 did execute a Deed of Easement in respect of the Portion on 8 July 2017 as requested and within the time stipulated under the Consent Order. 

10.   P, besides being the registered owner of P’s land, is a practising solicitor with the P’s solicitor firm in this case.  He clearly was not happy with the terms of the Deed of Easement signed by D1.  And in the Summons, he wished to re-litigate on that issue and asked the Court to determine “whether D1 shall re-execute the Deed”.

11.   No citation was provided by P in the margin of the Summons as to what rules under the Rules of the District Court (“RDC”) or any provisions of law which the Summons was supposed to be based on.  It has merely cited “Consent Order dated 5 August 2016 and inherent jurisdiction of District Court” as the authority on which the Summons was based on.

1.   Without wishing to repeat the arguments relied on D1’s counsel and P in their written submissions, it is quite clear to me that P’s application has been totally misconceived and without any proper legal or factual foundation.  As such, in my view, it should not have been issued in the first place, let alone of bringing it all the way to a hearing.

13.   At the hearing before me on 9 February 2018, P’s counsel Ms Angela Gwilt, despite her gallant efforts in arguing what I would describe as a completely hopeless application on behalf of P, had to concede half way through her arguments that there was no real substance in the application at all.  She had wisely advised her lay client / solicitor to withdraw the Summons after a short adjournment was sought and instructions taken in the middle of the hearing.

DISCUSSION

14.   Order 62 rule 28(3) of the RDC provides:

“The Court in awarding costs to which this rule applies may in any case in which it thinks fit to do so order or direct that the costs shall be taxed on the common fund basis or on the indemnity basis.” (emphasis added)

15.   It is trite law that the Court has a wide discretion to determine any costs awards against a particular party.  I agree that the following situations, as summed up by D1’s counsel Mr Harpradbdeep Singh, warrant the awarding of costs on an indemnity basis:

i. In cases where a plaintiff’s pursuing of a totally unmeritorious application: Tang Wai Cho v Tang Wai Leung [2011] 1 HKLRD 1, at p 8, §§23 and pp 30-31;

ii. Where the proceedings were initiated maliciously or for an ulterior motive or in an oppressive manner which “could well leave a court with a sense of indignation”: Choy Yee Chun v Bond Star Development [1997] HKLRD 1327, at p 1337F-J;

iii. Where the outcome of the case was not better than the settlement offer: Lung Po Kwan & Anor v Tang Kam Sheung & Anor (unrep, CACV 164/2010) at p 3, §11; and

iv. Whether there is any improper or unreasonable behavior of the party (eg acts calculated to incur unnecessary costs or intentional omissions of acts that would have saved costs), in this connection, the court would bear in mind the underlying objectives of Order 1A of the RDC: Adorn Workshop Limited v Steicke David Paul (unrep, DCCJ 4350/2009) at p 6, §18.

(i)  Ground 1: totally unmeritorious application

16.   I accept Mr Singh’s submission that P’s application was totally unmeritorious and goes way beyond mere procedure defects as now claimed by P.

17.   First, being a practising solicitor, P was fully aware that the parties had entered into a Tomlin Order in order to settle the dispute.  Nevertheless, P attempted to re-open and re-litigate these proceedings by taking out the Summons in order to vary the terms agreed in the Schedule attached to the Consent Order.

18.   Second, it is apparent that the Summons had been issued without any proper legal foundation as is evidenced by P’s counsel acts of abandoning the majority of the proposed arguments contained in her skeleton submissions prior to the hearing.

19.   Third, P has failed to demonstrate under which rules of the RDC or the alleged inherent jurisdiction of the court that gave it the power to deal with the present application.

20.   Fourth, even assuming that the court has jurisdiction to deal with the present application, the reliefs sought by P in the Summons was incapable of being performed by or ordered by the court, as such, it rendered the whole application defective.

21.   Hence, on Ground 1 alone, I agree with D1’s counsel that it is justifiable for this court to award costs against P on an indemnity basis.

22.   However, for the sake of completeness, I would also consider Grounds 2 to 4 as listed out by D1’s counsel in his submissions.

(ii) Ground 2: P’s summons was taken out maliciously and/or with ulterior motive and/or in an oppressive manner

23.   D1’s submits that P showed a lack of good faith during the negotiation process when D1 had attempted to resolve this dispute out of court.  It has been further alleged by D1 that P had attempted to sabotage the parties’ negotiations with the ulterior motive of hoping to re-litigate the matter so as to gain personal benefits from it, P being the handling solicitor as well as the lay client in this case.

24.   While I agree that there was “some” evidence to suggest that P, in his capacity as the handling solicitor, might not have been very sincere or genuine in his attempts to negotiate for the settlement, I cannot say that the correspondence between the parties has sufficiently able to show that there was an ulterior motive on the part of P.  However, I find, P, by issuing the Summons even before proper negotiations with D1 had taken place, had conducted the matter in an oppressive manner.  For example, before the parties even concluded their first round of negotiations on some matters which could only be described as “a trivial” in late June 2017, P in his email dated 26 June 2017 to D1’s former solicitors, stated that “our client’s sincerity for amicable solutions between the parties has already been exhausted … we hereby reserve out client’s rights to apply for the direction of the court and commence civil proceedings for contempt of court, if any” (emphasis added).

25.   I do not see how P’s client (who was P himself) “sincerity for settlement” could have been exhausted when the negotiations had hardly begun. I also do not find there was any legal basis for him to even suggest that he could commence civil contempt proceedings in court.

26.   In my judgment, P, being a practising solicitor, had unfortunately used his position to conduct the negotiations in a rather high-handed and oppressive manner with the sole aim of trying to re-litigate the issue against D1.

27.   The subsequent correspondence between the parties further demonstrated to me that P had never interested in resolving this matter in an amicable manner: see for example letters from D1’s former solicitors dated 13 July 2017 and D1’s current solicitors dated 28 July 2017 which had given a number of proposals to P to settle the matter without going to court.  However, P simply had ignored such sensible solutions to the matter.  Instead, without any warning, notice or attempt to negotiate on D1’s latest offer as contained in his solicitors’ letter dated 28 July 2017, P unilaterally took out the Summons even before the date D1’s offer become expire.

28.   I find that P had never interested in resolving the matter in an amicable manner, despite D1 had, both through his previous and current solicitors, suggested several sensible ways out to the dispute.

29.   In my view, the effect of P in unilaterally taking out the Summons had (i) rendered D1’s offer on 28 July 2017 useless; and (ii) was an affront to professional courtesy since D1’s current solicitors were still in the process of receiving the papers from D1’s previous solicitors.  Further, despite D1 had issued a final letter to P remind the latter of its duty to save judicial resources, P had simply failed to answer D1’s 5 letters / emails written by his current solicitors from 13 September 2017 onwards.  The total lack of response on the part of P on the agreed directions resulted in an unnecessary 15 minutes hearing before Registrar Ho on 28 September 2017 where the learned registrar commented that P “did not have to come to court to obtain those directions” and to that extend the registrar considered that P was “in the wrong”[1].

30.   Having listened to the audio recordings of the dislogue exchanged between the advocates at the hearing before Registrar Ho on 28 September 2017, I do not agree with P’s submissions that D1 had fabricated evidence about the fact that Registrar Ho had actually commented that he was “in the wrong”. However, as the learned registrar had rightly observed, P’s status as somebody who was acting personally as well as being the legal representative of the party was not a matter of his concern.    

31.   Judging from the correspondence between P and D1 (which could be found in the hearing bundle), there had been no less than 8 attempts by D1’s solicitors to call upon P to join them in dialogue for the resolution of this matter in order to avoid a hearing before the court.  However, not a single one of those letters containing different proposals from D1 was ever entertained by P. Instead, P had chosen to unilaterally issue the Summons and insisted to argue the contents of the Summons in court.

32.   In my judgment, the oppressive manner leading to the unnecessary directions hearing before the registrar on 28 September 2017; and the insistence of P to have the Summons heard before me on 9 February 2018 (which ultimately resulted in his counsel’s dramatic withdrawal of the Summons halfway through the arguments at the hearing); only show that P had acted in an oppressive manner which was totally against the letters and spirit of the CJR.  On this separate account alone, and quite apart from matters discussed under Ground 1 above, I would also allow the costs of the Summons to be paid by P on an indemnity basis.

(iii) Ground 3:  Outcome no better than any of D1’s Prior Offers

33.   Again, I agree with Mr Singh’s submission under this ground that as a result of the withdrawal of the Summons on that date of the hearing, P was no better off than any of D1’s offers made at various stages of the negotiations which consisted of a number of concessions made by D1 with a view to amicably settle the matter. 

34.   Under such circumstances, in my judgment, the hearing before me was totally unnecessary and the costs incurred by D1 was totally wasted.  I do not see why P should not be paying for them on an indemnity basis under this ground also.

(iv) Ground 4: P’s unreasonable behaviour

35.   I agree with D1’s counsel that this application had to come as far as the hearing (only to find that P’s counsel would abandon it half way through) was as a result of P’s (both in his capacity as the handling solicitor and lay client in the case) refusal to curtail the dispute by consent and constant attempts to refer to matters which occurred prior to the entering of the Tomlin Order.  This had led to the unnecessary incurring of costs and wasting of time on the part of D1.  In my view, this could have been totally avoided had P acted reasonable and with a sense of proportionality and judgement.

36.   In the premises, I find P’s unreasonable conduct after the signing of the Consent Order has resulted in D1’s incurring of otherwise completely avoidable costs.  As such, I do not see why this should not be ordered on an indemnity basis.

CONCLUSION

37.   In conclusion, based on the aforesaid, I order that all costs of and occasioned in relation to the Summons be paid by P to D1, on an indemnity basis, with certificate for counsel.

SUMMARY ASSESSMENT ON COSTS

38.   At the end of the hearing on 9 February 2018, I directed D1’s solicitors to lodge a statement of costs and P’s solicitors to lodge a statement of objection for my summary assessment on the costs wasted as a result of the withdrawal of the Summons.

39.   Having considered D1’s 2 statements of costs for: (i) interlocutory application; and (ii) summary assessment; and P’s statement of objection, also mindful of the fact that such costs are to be paid on an indemnity basis, I hereby summarily assess D1’s costs incurred as a result of this totally misconceived and unnecessary application at HK$375,000, such costs to be paid by P to D1 forthwith.