FANTASTIC STATE LTD v. TIEN’S ORGANIC FARM AND OTHERS

CACV 77/2019

[2019] HKCA 1042

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 77 OF 2019

(ON APPEAL FROM HCA 99/2018)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  We made a costs order nisi in our judgment of 24 June 2019. On 4 July 2019, the Plaintiff issued a summons seeking to vary that order, seeking an order in the following terms instead:

“ ‘the Defendants shall pay the Plaintiff’s costs of the appeal and the costs of the injunction proceedings at the court below forthwith, such costs be summarily assessed, with certificate for two counsel. The Plaintiff shall file and serve its Statement(s) of Costs in relation to its costs of the appeal and the costs of the injunction proceedings at the court below within 28 days after this Order for costs has become absolute, the Defendants shall file and serve their Statement(s) in Opposition in relation thereto within 28 days thereafter.’

or alternatively,

‘the Defendants shall pay the Plaintiff’s costs of the appeal and the costs of the injunction proceedings at the court below forthwith, to be taxed if not agreed, with certificate for two counsel’… ”

2.  Directions for lodging submissions on the summons were given by the Registrar of Civil Appeals on 9 July 2019.  Those directions clearly stated that the Court may determine the summons after reading the submissions without any oral hearing.

3.  The Plaintiff lodged and served submissions accordingly.  The Defendants did not lodge any submissions.

4.  In the circumstances, the Defendants are deemed as not having any submissions in relation to the summons.

5.  After reading the submissions of the Plaintiff and the summons, we consider that the summons can be determined without any oral hearing. 

6.  We agree with Mr Lam (counsel for the Plaintiff) that the relevant principles are set out in Midland Business Management Ltd v Lo Man Kui (No 2) [2011] 2 HKLRD 667, endorsed by the Court of Final Appeal in Wing Fai Construction Co Ltd v Yip Kwong Robert (No 2) (2012) 15 HKCFAR 454. 

7.  Apply those principles, we are of the view that this is an appropriate case for immediate taxation or assessment of the costs of the interlocutory injunction proceedings. 

8.  The costs in respect of the interlocutory injunction application are self-contained and as explained in our judgment of 24 June 2019 there is a misuse of the ex parte procedure in the application for interlocutory injunction by the Defendants.  We also held that as the evidence stood (and as things stand as far as we know), there is no serious issue to be tried.  The Defendants would have to substantially improve their case (if they could and if they so wish) before a valid defence based on easement can be made out.

9.  Whilst the immediate payment of costs might have an adverse impact on the cash flow of the Defendants, they have not deemed fit to put such argument or evidence before us to enable us to assess the seriousness of the impact.  From what we were told at the hearing on 14 June 2019, they might choose not to litigate further.  If that were so, there is no possibility of the Defendants claiming to offset the costs in the injunction proceedings with the costs that they may get in successfully defending the action or making good their counterclaim.  The abandonment of the defence would also mean that it is unlikely that the court will revisit the merit of the Defendants’ claim for easement in light of fuller information and evidence to be adduced at the trial.  Thus, it would not be unjust to order immediate payment of costs of the injunction proceedings.

10.  We accept that it is appropriate to engage 2 counsel in the present appeal.

11.  As regards whether there should be taxation or gross sum assessment, we would defer our determination in this respect until we have sight of the quantum involved.  For that purpose, we direct the Plaintiff to lodge and serve their statement of costs (in a format for gross sum assessment) within 14 days.  The Defendants shall lodge and serve their objections to the quantum in such statement of costs 14 days thereafter.  We shall then decide if a taxation should be ordered.