ZIMMER SWEDEN AB v. KPN HONG KONG LTD AND ANOTHER

HCA 2264/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2264 OF 2013

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REASONS FOR DECISION
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1.  There were two applications for stay of execution of:

(a) the costs order dated 30 April 2015;

(b) the costs order dated 12 June 2015.

Both were taken out by the plaintiff (“these applications”). 

2.  The former costs order was related to the plaintiff’s summary judgment application, and the decision on whether its claim involves “fraud” so that the application should fall outside the summary judgment procedure (which was decided in the defendants’ favour).  The latter costs order was related to the plaintiff’s application for leave to appeal (which was also decided in the defendants’ favour).  The costs have already been assessed summarily (“the assessed costs”).

3.  These applications were dismissed.  Below are the reasons for the dismissal.

4.  It has been decided in the decisions respectively handed down on 30 April 2015 and 12 June 2015 that:

(1) the plaintiff’s claim was one based on “fraud”;

(2) there was no merit in the plaintiff’s application for leave to appeal;

(3) the costs of those applications should follow the event.

The plaintiff’s arguments put forth during these applications have not changed my view about the above matters.

5.  I also agree with the defendants that, having decided in their favour on the merits on both occasions which led to the costs orders, it would require exceptional circumstance(s) to justify these applications to be decided in the plaintiff’s favour (merits of the intended appeal being a factor for granting a stay of execution).

6.  The exceptional circumstance relied upon by the plaintiff is the amount earlier paid into court as security for the defendants’ costs (“the said security”).  The plaintiff argued that the assessed costs should be paid out of the said security.

7.  The problem with that argument is that the said security was fixed without taking into account the two applications which led to these applications.  If the assessed costs were paid out of the said security, the amount intended by the earlier court order to provide security for costs to the defendants would in effect be depleted to the extent of the amount paid out.  There is no valid reason to justify such a course to be taken.

8.  The plaintiff’s further argument that there is a risk that any sum paid to the defendants might not be recoverable afterwards is sufficiently met by the defendants’ earlier proposal that the assessed costs be paid into court instead.

9.  In short, by reason of the above matters, no valid justification has been put forth to support these applications.