SUN HOI TAT v. PROFECTUS INVESTMENT GROUP LTD

HCA 1366/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1366 OF 2013

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DECISION ON BASIS OF TAXATION

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1.  In a judgment handed down in August 2016, the plaintiff’s claim was dismissed with costs to the defendant.  The outcome resulted, in short, from the rejection of the plaintiff’s claim that he has been in adverse possession of the suit property for such time period that the defendant’s title thereto was extinguished.

2.  The parties disagree regarding the basis of taxation.  The defendant contends that the above costs should be taxed on more generous basis (either indemnity or common fund) whereas the plaintiff argues that they should be taxed on the usual party-and-party basis.

3.  The only ground put forth by the defendant for seeking a departure from the norm is that the plaintiff and his witness were persons with extremely low moral standard, and he has commenced a “try on” or bogus claim.

4.  The evidential basis relied upon in support of the above ground is the court’s rejection of the testimony given by the plaintiff’s witnesses.

5.  The footnotes in Hong Kong Civil Procedure 2016 Vol 1 (para 62/App/12) set out the relevant general principles:

“The Court of Appeal in Choy Yee Chun (The Representative of the estate of Chan Pui Yiu) v. Bond Star Development Ltd (1997) H.K.L.R.D. 1327, CA reviewed the cases and summarized the law as follows. A taxation of the successful party’s costs on an indemnity basis could properly be ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner.”

6.  The Choy Yee Chun decision is heavily relied upon by the defendant in this application.  However, there are important differences between that decision and this action.  In Choy Yee Chun (a case where adverse possession was the defence):

(a)   before the legal proceedings, the paying party (the defendant therein) demanded money in exchange for handing over the property concerned;

(b)   in the course of the legal proceedings, the paying party was found to own a much smarter residential unit near the property concerned, and his alleged continued occupation of the property concerned was rejected;

(c)   the courts (both first instance and on appeal) concluded that the paying party put forth a bogus claim, which was contradicted by obvious evidence (such as the paying party’s own earlier assertions) and abused the process by dragging on to put financial pressure on the receiving party.

7.  No such (or similar) features can be found in this action.  This action does not differ much from other hostile litigations involving credibility; in order to determine the outcome of those litigations, the courts would have to (and did) deciding on which factual version should be accepted (and the related question of which version should be rejected).  See also Overseas Trust Bank Ltd v Coopers & Lybrand (a firm) and Others [1991] 1 HKLR 177 (referred to in the Choy Yee Chun decision).

8.  Such being the case, there is insufficient reason to justify awarding the higher scale(s) of costs sought by the defendant. Accordingly, the costs should be taxed on the usual party-and-party basis.