VINOD LACHMAN MAHTANI v. MARK LOVELL SIDE

HCA 1410/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1410 OF 2013

_________________________

BETWEEN

_________________________

_____________

D E C I S I O N

_____________

1.  The parties have no dispute that leave should be given to the defendant to withdraw the third party notice.  The question for argument today is the costs.  The defendant says that there should be no order as to costs for the third party and the costs of this withdrawal be in the cause for the plaintiff.

2.  The defendant relies upon the case of Re Peaktop Technologies (USA) Hong Kong Ltd HCMP2456/2006 [2007] 4 HKLRD 207 that the court has the unfettered discretion in respect of costs on the defendant’s application for withdrawal of the third party notice and in exceptional circumstances, the court may order costs in favour of the defendant.  This is not disputed by the parties.  The issue is whether the defendant can show the exceptional circumstances to justify its proposals on costs.

3.  The reasons in support of the defendant’s proposal, in relation to the third party, are that the plaintiff in this matter had instituted an action against the defendant, who then started another proceeding against the third party as the defendant.  The defendant in this matter wanted the other proceedings to be heard together with this matter. The defendant also wanted discovery against the third party in this matter. Therefore the defendant took out the third party notice.  However, since the court had made an order for this matter to be heard together with the other proceedings and the evidence would be interchangeable between the two proceedings, the defendant now considers that it is not necessary to have the third party proceedings in this action.

4.  Since the defendant is not the losing party vis-à-vis the third party, the defendant should not pay the third party’s costs.

5.  The defendant further says that even if the court is minded to award costs to the third party, the court should not award costs for the preparation of the affidavits as the court had indicated that affidavits would not be necessary for the setting aside application.

6.  As between the plaintiff and the defendant, the defendant says that the plaintiff was the agent of the third party. The defendant is not a losing party to the plaintiff and the plaintiff has been adopting a neutral stance.

7.  Having heard the submissions from the third party and the plaintiff, it appears clear that the sequence of events are these:

a. The plaintiff in this action instituted the proceedings against the defendant for the cheque honoured but the defendant having refused to settle with the third party;

b. The defendant took out the proceedings against the third party in another separate action; and

c. The defendant took out an application for third party proceedings in this action.

8.  I do not find the defendant having any exceptional circumstances, which justify no costs to the third party and the plaintiff despite its application for withdrawal of the third party notice here.

9.  The defendant can simply wait for the court’s decision on the issue of consolidation of this action with the other action taken out by the defendant against the third party.  If the court refuses the application, then the defendant may consider the third party notice to be taken out.

10.  The costs for withdrawal by a party should normally be given to the other parties affected by the application, which is the norm here.

11.  The defendant should bear the costs of the third party and the plaintiff for its withdrawal of the third party notice.

12.  As to the costs for the affidavits in support of the third party’s application to set aside the third party notice, the defendant agreed that it had served the affidavit in reply to the third party’s affidavit in support of the application.  The costs of the affidavits should be included in the costs to be awarded to the third party.

13.  I shall make an order in terms as follows:

a. By consent, leave be given to the defendant to withdraw its third party notice;

b. The third party’s summons for setting aside of the defendant’s third party notice be set aside, with costs to the third party to be paid by the defendant;

c. The costs of and occasioned by the defendant’s third party notice, including the costs wasted, be to the third party and to the plaintiff, to be assessed on a date to be fixed, unless the parties agreed;

d. The costs assessment shall be made by the third party and the plaintiff serving and filing their schedules of costs on the defendant within 14 days from the date hereof;

e. The defendant shall within 14 days thereafter file and serve its objections;

f. The hearing of the assessment shall be fixed before the Registrar, with 15 minutes reserved.  The Registrar may dispose of the matter on paper;

g. The costs of today’s hearing (1 hour and 30 minutes) shall be paid by the defendant to the third party and the plaintiff.