XCHRX AKTIESEL SKABET DANSK SKIBSFINANSIERING v. WHEELOCK MARDEN & CO. LTD. AND OTHERS

MP 2625/88 &
A1670/89

Headnote

Costs - interlocutory proceedings - usual order "in any even"

1988, No. MP 2625
1989, No. A1670

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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IN THE MATTER of the Companies Ordinance (1975 and 1984)
and
IN THE MATTER of Wheelock Maritime International Limited (in liquidation)

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J U D G M E N T

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1. On 3rd June, following a hearing which lasted 4 days, I handed down judgment in which I ordered that all the interrogatories which the Plaintiff had served on the 1st and 12th Defendants should be withdrawn. I further ordered that, with 2 small exceptions, interrogatories served on the other individual Defendants should also be withdrawn. I made orders nisi that all the Defendants should have their costs.

2. When I made the orders as to costs, I did not, as I should have done, apply my mind to the question of whether the costs should be "in any event" or be taxed and paid forthwith. That oversight was particularly remiss in view of the judgment which I handed down in these proceedings on 15th February 1994, in which I sought to clarify the confusion which had apparently arisen over what form of words warrant an immediate taxation. In that judgment I held that the absence of the words "in any event" provides for an immediate recovery of costs. Accordingly, the orders nisi which I made appear to justify an immediate taxation. The Plaintiff now seeks the addition of the words "in any event".

3. For the Plaintiff, Mr. Smith submitted that in interlocutory proceedings the usual rule is that costs should be in any event. He said that earlier in these proceedings the Court of Appeal, of which I was a member, when dealing with the question of costs following an appeal in relation to further and better particulars, expressed the view that costs should be in any event in most interlocutory matters. I find that expression hardly surprising because, although there is no distinct authority on the topic, I am quite satisfied that the approach of the courts is generally to award costs in any event to a successful party in interlocutory proceedings. I reflected that in my judgment to which I have just referred, when I said :

"The customary order to be made in interlocutory proceedings is that the costs should go to one party or the other "in any event". It is not at all unusual for the successful party to ask to have his costs immediately. If that application finds favour, as often as not the object is achieved by the simple deletion of 'in any event', ... ."

4. I reject, therefore, the submission of the Defendants that there is no general proposition that costs in interlocutory proceedings are normally "in any event". If a successful party in interlocutory proceedings seeks an immediate taxation, the question that arises is whether there is a factor or combination of factors sufficient to justify departure from the usual order.

5. For the Plaintiff, Mr. Smith said there is no such reason. He pointed out that interrogatories no longer need leave from the court before they may be served so that they do not fall into some special category of interlocutory application. He said that I had rejected the common primary objection of all the Defendants namely, that the purpose for the interrogatories was illegitimate. Indeed, some interrogatories I had allowed.

6. Mr. Scott for the 1st Defendant, whose submission was adopted by Mr. Lam for the other Defendants, reminded me that there have already been two orders for an immediate taxation in the proceedings. While interesting, I do not think that point to be particularly helpful. Plainly, each application for an immediate payment of costs must be dealt with on its own merits and particular facts. They are unlikely to be duplicated in other interlocutory applications. Mr. Scott's principal argument, however, was that the only reason for withholding costs from a successful party in interlocutory proceedings is the difficulty of, or disruption likely to be caused by, an immediate taxation. Otherwise, he said, a successful party who is already entitled to interest on the costs awarded to him from the date of such an award should not be kept from the money owing to him for possibly a prolonged period of time, a period which might be two years or more in the present case. Mr. Scott submitted that, provided the taxation is one which will be simple, discrete and severable, it is better for it to take place as soon as possible so that it can be cleared out of the way and make the final taxation after trial less difficult and cumbersome. He said that, in the present case, the taxation would be discrete. It could be hived off to costs clerks with a minimum participation by the solicitor involved in the proceedings and minimum disruption of preparation for trial.

7. I do not understand how the fact that a successful party is entitled to interest, running from the date of the award of costs in his favour, is a factor which might influence the court in exercising its discretion as to whether to award costs immediately or not. It seems to me that, if anything, it militates against an immediate taxation because it protects or helps to protect the position of the successful party. If interest did not run from the date of the award, that might be a more compelling reason for the court to make an order for immediate taxation.

8. I accept, however, that the facility with which a taxation can be prepared and conducted, and the consequent reduction of the burden on the parties and taxing Master after trial, is a factor which the court can take into account when considering whether to make an order for immediate taxation. I agree, however, with Mr. Smith that it is simply a factor to be considered and not a factor which is in itself decisive. And I also accept that if an immediate taxation would cause difficulty and disruption, that may deter the court from making such an order.

9. Mr. Smith also argued with some force that the course which proceedings may take is always unpredictable. He said taxation may never be necessary. Therefore the parties should not be put to the possibly unnecessary task of preparing for and undertaking taxation. I am unable to attach any weight to this point. If it had any merit, it would make an order for immediate taxation well nigh impossible to obtain.

10. The Plaintiff was, of course, almost wholly unsuccessful. That is not, however, a factor which I find particularly influential because, as often as not in interlocutory proceedings, a party is wholly unsuccessful but nonetheless only suffers costs "in any event". The Plaintiff was absolved from an illegitimate use of interrogatories. I do not find it to the point, as submitted by Mr. Lam, that in relation to the individual Defendants the Plaintiff could have withdrawn the interrogatories and served without an order of the court a more satisfactory set of interrogatories.

11. In all the circumstances, I am persuaded that this is a case where there is no warrant for departing from the usual order. Accordingly, the costs which I have already awarded to the Defendants are to be in any event.

12. The costs of this application are to be to the Plaintiff in any event.