WIN PROFIT CORPORATION LTD v. WORLD ORIENT INVESTMENT LTD

HCA 1487/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1487 OF 2009

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J U D G M E N T

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1.  This is the hearing of the summons dated 20 August 2012 taken out by the defendant for :-

a) extension of time for the defendant to apply for varying the costs order nisi dated 18 April 2012 (“the said costs order nisi”)

b) the said costs order nisi whereby it was adjudged that “the plaintiff shall pay the defendant costs of the proceedings (including all costs reserved), the same to be taxed if not agreed, with certificate for two counsels” be varied to “the plaintiff shall pay the defendant costs of the proceedings (including all costs reserved), the same to be taxed if not agreed on party and party basis up to 31 December 2010 and thereafter on indemnity basis, to be taxed if not agreed, with certificate for two counsels, with enhanced interest on the indemnity costs at the rate of 2% or such rate as determined by the court, above judgment rate until actual payment”.

c) cost of the application be paid by the plaintiff to the defendant to be taxed if not agreed, on indemnity basis.

2.  In this case, the plaintiff had failed in their claim for damages arising out of an aborted sale and had been ordered by this court in the said costs order nisi, to pay the defendant costs of the proceedings (including all costs reserved), the same to be taxed if not agreed.

3.  In support of the present application, defendant filed the affirmation of Ching King Tat, solicitor for the defendant, dated 20 August 2012.

4.  It is the explanation of the defendant that as one of the directors gave birth to a child, the whole family including the other director of defendant were busily engaged, thereby resulting in the delay of over 3.5 months in making the present application.

5.  Defendant relied on Order 22 rule 23 of the Rules of High Court (“RHC”).

Order 22 rr23 of RHC provides that:-

“Costs consequences where plaintiff fails to do better than sanctioned offer or sanctioned payment (O.22, r.23)

23. – (1) This rule applies where a plaintiff–

(a) fails to obtain a judgment better than the sanctioned payment; or

(b) fails to obtain a judgment that is more advantageous than a defendant’s sanctioned offer.

(2) The Court may by order disallow all or part of any interest otherwise payable under section 48 of the Ordinance on the whole or part of any sum of money awarded to the plaintiff for some or all of the period after the latest date on which the payment or offer could have been accepted without requiring the leave of the Court.

(3) The Court may order the plaintiff to pay any costs incurred by the defendant after latest date on which the payment or offer could have been accepted without requiring the leave of the Court.

(4) The Court may also order that the defendant is entitled to –

(a) his costs on the indemnity basis after the latest date on which the plaintiff could have accepted the payment or offer without requiring the leave of the Court; and

(b) interest on the costs referred to in paragraph (3) or subparagraph (a) at a rate not exceeding 10% above judgment rate.

(5) Where this rule applies, the Court shall make the orders referred to in paragraphs (2), (3) and (4) unless it considers it unjust to do so.

(6) In considering whether it would be unjust to make the orders referred to in paragraphs (2), (3) and (4), the Court shall take into account all the circumstances of the case including- ”

6.  Mr Ching says by a sanctioned offer dated 3 December 2010, defendant offered to settle on term that the plaintiff should discontinue his claim against the defendant and pay 50% of the defendant’s costs with certificate for 2 counsels.  Defendant says the same was not accepted.  In fact, Mr Ching says plaintiff had failed to respond to the sanctioned offer.

7.  Mr Ching says therefore now that the plaintiff was ordered to pay 100% of the defendant’s costs with certificate for two counsels, the costs consequence of Order 22 rule 23 should apply.

8.  He submitted that the plaintiff had failed to obtain a judgment that is more advantageous than defendant’s sanctioned offer.

9.  Mr Ching in his affirmation says further that in connection with the present application, they have written to solicitors for the plaintiff on 15 August 2012 but was told by letter dated 16 August 2012 that the plaintiff’s solicitors had no further instructions to act for the defendant.  The plaintiff’s solicitor however had not made any application to cease acting for the plaintiff and therefore they remained as solicitors on record for the plaintiff.

10.  In court, Mr Fu, solicitor for the plaintiff confirmed that he had no instructions from the plaintiff in connection with the present application.

11.  Mr Ching submitted that despite there was over 3 months’ delay, no prejudice was caused to the plaintiff.

12.  He said the lateness could be cured by the order of the court extending the time for making of the application, citing Ma Wan Farming Ltd v Chief Executive in Council & Another (No.2) [1998] 2 HLRD 314 and Tsang Mei Luen v Yip Wai Biu DCPI2272/2008.

13.  Whilst it is true that this court does have power to extend the time for defendant to apply for varying the said costs order nisi, this court in considering whether to grant the time extension need to take into account of, inter alia, the length of delay and whether there are good reasons for the delay.

14.  In my view, the explanation given by Mr Ching for the defendant is not acceptable as being good reason for the delay of 3.5 months.

15.  On what is before me, the first time that the plaintiff was told that the defendant intended to vary the said costs order nisi was 15 August 2012, that is nearly 4 months after the said costs order nisi when they wrote to the plaintiff.

16.  In the absence of any good reason for the delay and in view of the substantial delay, I am not minded to grant the application for time extension for defendant to make application to vary the said costs order nisi.  The application is refused.

17.  Having refused the time extension application, I would add that in fact I agree with Mr Ching that in the present case, the plaintiff has failed to obtain a judgment that is more advantageous than the defendant’s sanctioned offer.

18.  I also agree that in this case there is nothing before the court that makes it unjust to make order under O22 rr23(2), (3) and (4).

19.  It follows therefore that had I granted the time extension, I would be willing to make order in terms of paragraph 2 of the summons.

20.  As for costs of the summons, as I can see no reason why costs should not follow the event, I order that the defendant shall pay the plaintiff cost of the summons, the same to be taxed if not agreed.