STANDARD METAL MFY (HK) (a firm) v. ACE ACCESSORIES LTD

S.T.A. No. 893/89

HEADNOTES

Costs - 4 days before the trial the Defendant paid into court a sum in excess of the amount awarded to the Plaintiff - whether Order 22 Rule 3 which allows a Plaintiff 14 days with which to accept such payment, renders the payment ineffective : (Bowen v. Mills and Knight Ltd. (1973) 1 Lloyd's Rep. 580).

Held ;

(a)    A Defendant who, before trial, pays money into court which exceeds the sum awarded to the Plaintiff is a 'successful party' and prima facie entitled to the costs as from the date of payment.

(b)     Order 22 Rule 3 does not fetter the Court's discretion as to costs although a late payment in is a matter which may influence rather than govern the court's overriding discretion.

(c)     Bowen v. Mills and Knight Ltd. (supra) not followed. Failure to make payment into court within 14 days before trial is not to be treated as ineffective for the purpose of depriving the court from exercising its overall discretion as to costs and to make such order which it considers to be fair and just.

(d)     The onus is on the Plaintiff to show in what way he was prejudiced by a payment not made within 14 days before trial and the circumstances that existed in which justice demanded that the Defendant be deprived of the costs to which the Defendant would otherwise be entitled to as a 'successful party' or what alternative order for costs should be made in the light of such prejudice that may have been occasioned to the Plaintiff by the Defendant's payment at the date it was made.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT SHA TIN

CIVIL JURISDICTION

ACTION NO. 893 OF 1989

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RULING ON COSTS

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1. The Plaintiff, in this action, claimed a sum of $96,000 alleged to be owing by the Defendant for goods sold and delivered. A defence was filed on the 10th April 1989. In it the Defendant maintained a right to set off certain sums as damages occasioned by the Plaintiff's breach with the result that liability is admitted only to the extent of $10,492.95.

2. Four days before the hearing date, the Defendant paid into Court a sum of $20,000 in satisfaction of the Plaintiff's claim.

3. It is common ground that the Plaintiff did not accept the sum paid into Court. The trial was concluded on the 22nd September 1989 and I allowed the deduction claimed by the Defendant in full and gave judgment for the Plaintiff in the sum of $10,492.95.

4. For the Defendant it was submitted that the usual order for costs should follow, namely, that the Plaintiff should have the costs up to the date of payment in, but thereafter the Defendant should have the costs which it had been forced to incur by the Plaintiff's insistence in maintaining a claim which failed.

5. Objection was taken by the Plaintiff to such an order because, it was said that under Order 22, Rule 3 payment into court ought to have been made at least 14 days before the date of hearing as otherwise the Plaintiff would not have his prescribed period of 14 days within which to accept such payment in. Accordingly, it was argued, that the payment in was not effective with the result that the Plaintiff is entitled to all costs up to the conclusion of the trial. In support of this proposition, I was referred to a passage in the White Book (1989) paragraph 22/3/2 at page 384 to which reference is also made to the case of Bowen v. Mills and Knight Ltd. (1973) 1 Lloyd's Rep. 580 where the payment in was made thirteen days before the hearing.

6. In reply, Counsel for the Defendant contended that: (a) payment into Court may be made 'at any time' and satisfaction of the cause of action (Order 22, Rule 1) and that there is no time limit for payment in; (b) Order 22, Rule 3 only sets out the time limit for the Plaintiff to accept the payment in and that it must be done promptly; and (c) costs is, in any event, in the complete discretion of the Court.

7. I would not construe Order 22 Rule 3 as being intended to fetter the Court's discretion as to costs although I would regard it as a matter which may influence rather than govern the Court's overriding discretion.

8. I consider it my duty to look to the facts connected with or leading up to the 'lis' between the parties and then to make such order in regard to costs which I think is right and fair on fixed principles according to reason and justice without regard to benevolence or sympathy for one party or the other.

9. In Findlay v. Railway Executive (1950) 2 All E.R. 969, (CA) the Court of Appeal held that a defendant who has paid money into Court which exceeds the sum awarded to the Plaintiff is a 'successful party' within the meaning of the principle laid down by Cave LC in Donald Campbell and Co. v. Pollak (1927) A.C. 732 at 808-812, and is entitled to be paid his costs as from the date of payment.

10. I see no reason to take a different view in this case. The Defendant was 'the successful party'. On principle, I do not consider it right to penalise the Defendant by making it pay the costs of the trial in the circumstances of this case.

11. I would not regard a failure to make payment into Court within 14 days before the trial to be ineffective to the extent of depriving the Court from exercising its overall discretion as to costs and to make such order which it considers to be fair and just.

12. In a situation such as this the onus is on the Plaintiff to show in what way he was prejudiced by a payment not made within 14 days before trial and the circumstances that existed in which justice demanded that the Defendant be deprived of the costs to which the Defendant would be otherwise entitled as a 'successful party' or what alternative order for costs should be made in the light of such prejudice that may have been occasioned to the Plaintiff by the Defendant's payment at the date it was made.

13. As no reason was advanced by the Plaintiff save that the payment in was made 4 days before the hearing, I do not feel justified in assuming, without any material before me, that 4 days was not enough for the Plaintiff to decide whether to accept the payment or that there were factors present in which it would be wrong to grant the Defendant the costs which it was made to incur by the Plaintiff's failure to accept payment. Accordingly, I grant costs to the Defendant from the date of payment in.