XCHRX SUZIKA ELECTRONICS CO. LTD. v. EUROPEAN TRASNPORT SYSTEM (HAMACHER) LTD.

1994, No. CL 37

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. On 14 September 1995, the defendant issued a summons asking for an order that a preliminary issue of time-bar be tried before all other questions. At that stage, the plaintiff's reply alleged simply that the plaintiff's claim was not statute-barred. On 11 October 1995, the plaintiff issued a summons seeking leave to amend its reply largely to allege facts that would support its plea that its claim was not barred. On 27 November 1995, I heard the plaintiff's application, and adjourned the defendant's application until the outcome of the plaintiff's application was known.

2. I handed down a judgment on the plaintiff's application on 29 November 1995. I allowed the plaintiff's application to amend. I made an order nisi as to the costs of the application. This was - ". . . the plaintiff has succeeded in the face of opposition. In these circumstances, I believe the just order is that the defendant should have its costs in any event, as if the matter had been unopposed, but the plaintiff is to have its costs, in any event, occasioned by that opposition."

3. The defendant has now issued a summons in which it asks that my costs order be varied to be that the costs of and occasioned by the plaintiff's summons of 11 October 1995 up and including 25 November 1995 be to the defendant.

Mr Faulkner argues that, when the summons seeking leave to amend was issued, one of the allegations sought to be included in the reply, that relating to a plea of estoppel, was fatally flawed. It did not allege any reliance on what was said. At the hearing on 27 November 1995, Mr Scott obtained my leave to amend the summons to make allegations of reliance. So, Mr Faulkner says, my order for costs should reflect the fact that the plaintiff's application to amend its reply succeeded on the estoppel point only because the defect was cured during the hearing. Mr Faulkner suggests that four major points were argued, and the plaintiff would have failed on one of them if it had not amended its summons at the hearing. On this point, he says there is no reason why the defendant should pay the costs of opposition; in fact, the defendant should have its costs on this point, including preparing for the hearing and dealing with the late amendment to the summons. To ease the way for the Taxing Master, Mr Faulkner suggests that, as to the costs of the opposition, 75% should go to the plaintiff and 25% to the defendant.

4. In response to this, Mr Scott says that the defendant's opposition to the amendments was wholesale, and it failed, so the plaintiff should have the costs of the opposition.

5. I think there is something in what Mr Faulkner says, but not as much as he would have me accept. As I see the position, the defendant should have conceded the plaintiff's amendments to the reply on all points save the estoppel before the hearing. At the hearing, it should have conceded the estoppel amendment when Mr Scott intimated that the plaintiff would plead a reliance. Very little time would have been involved in this. Doing the best I can with what is not a mathematical problem, I order that the plaintiff should recover 90% of its costs for the hearing and preparation for it, and the defendant should recover 10% of its costs in that respect.

6. On another aspect which the plaintiff introduced by amending its reply, raising a point about the Hague Visby rules, Mr Faulkner says that, as I pointed out in my judgment, the plaintiff is likely to have difficulties, and that I should order that the plaintiff should have its costs here as plaintiff's costs in the cause. Mr Scott argues that this contention would apply to any of the amendments. The fact is, he says, that the defendant opposed the amendments, and it should not have done. I agree. I do not accept that the order should be varied for this reason.

7. The summons now before me also seeks an order that the defendant be at liberty to withdraw its summons of 16 September 1995, and that the costs of and occasioned by that summons be to the defendant. Mr Faulkner argues that this summons has been rendered redundant by the plaintiff's amendments to its reply, and that the defendant should have its costs, or, at least, the costs should be in the cause. Mr Scott says that I should not award costs against the plaintiff unless I decide that, but for the amendments, the defendant would have succeeded in having the preliminary issue tried first, and this is unlikely. The defendant, he says, should have withdrawn this summons within a reasonable time of receiving notice of the plaintiff's application to amend; he suggests 11 November 1995 - 2 weeks after receiving the plaintiff's summons to amend. There should be no order as to costs before this date, or they should be in the cause, and the plaintiff should have the costs after this date. But, Mr Faulkner points out, the plaintiff's amendments to the estoppel point were only produced at the hearing on 27 November 1995.

8. I cannot, of course, decide, on what I have, if the defendant would have been successful in its application if the plaintiff had not amended its reply. The fact is, however, that once the defendant had received notice of the plaintiff's intention to seek amendments to its reply, even assuming that, at that stage, the point regarding estoppel was defective, and had considered them, it should have realised that it could not proceed with its application. It should have then withdrawn its summons. Up to that stage, which I think should be taken, fairly arbitrarily, as 15 November 1995, I believe the just order is that the costs be in the cause. After 15 November 1995, the plaintiff should have the costs in any event. I order accordingly.

9. As for the costs of this application, the defendant has had a measure of success, as has the plaintiff. I think it would be fair to order that the costs of this application be in the cause. I make an order nisi accordingly.