YAU NGAI v. ITALINA (HOLDINGS) LTD

LDPE 936/2024

[2025] HKLdT 77

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO LDPE 936 OF 2024

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DECISION

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1.  By judgment dated 2.10.2025 (“Judgment”), I allowed the Respondent’s (“R”) application dated 14.2.2025 (“Application”) to set aside the default judgment entered on 7.8.2024 and ordered on a nisi basis that the Applicant (“A”) shall pay R’s costs.

Two Summonses

2.  There are now two summonses (“Two Summonses”) before the Tribunal:

(1)  A’s Summons dated 15.10.2025, to vary the costs order nisi such that R shall bear all of the costs of the Application.

(2)  R’s Summons dated 16.10.2025, to vary the costs order nisi to the extent that (a) costs of the Application incurred up to 14.2.2025, being the date of R’s Application to set aside the default judgment and the affirmation in support, be to A and costs incurred on or after 15.2.2025 be to R; and (b) that the costs be summarily assessed.

3.  The parties lodged and served submissions for the Two Summonses to be determined on paper. I have considered the Skeleton Submission For the Applicant dated 31.10.2025 of Mr Sik Chee Ching (“A’s Skeleton”) and Skeleton Submission of Respondent dated 14.11.2025 of Mr Felix HY Tang. There is no dispute but that the costs be summarily assessed. The issue is whether costs incurred on or after 15.2.2025 shall be to R or A.

Applicant’s variation of costs order nisi

4.  A submits that:

(1)  Since the Judgment was a regular one, the starting point is that R should pay A’s costs of the Application.

(2)  A acted appropriately in resisting the Application, notwithstanding the Tribunal finding that R had an arguable defence. R had pursued the Application on the basis that the Judgment was irregular, which basis was rejected by the Tribunal.

(3)  Additionally, a substantial part of the hearing was spent on arguing whether the Judgment was an irregular judgment, and whether A was in breach of his duty to give full and frank disclosure. Both issues were determined in favour of A. That should be reflected in the appropriate costs order.

5.  In the circumstances, A invites the Tribunal to award costs in favour of A, alternatively to order that costs be in the cause of the action.

Respondent’s variation of costs order nisi

6.  Whereas, R’s position is that costs incurred on or after 15.2.2025 shall be to R because:

(1)  Once R’s defence has been disclosed in the Application and the affirmation in support, the starting point is that costs subsequently incurred shall follow the event.

(2)  Neither A’s primary submission on the regularity of default judgment, nor A’s alternative submission on the issue-based approach would justify any departure from the starting point.

Applicant resisted the Application

7.  A’s argument is first, that in a default judgment application, since the applicant is seeking an indulgence from the Tribunal, he should bear costs of the application: Ko Sin Yau v Chan Chuen [2007] 1 HKLRD 324, at §21.

8.  Secondly, A recognises that the Tribunal may refuse to order costs in favour of a respondent to a setting aside application if the respondent continues to resist in circumstances where it should not: Harbour Hero Enterprises Ltd v Chau Nung Tai [2019] 3 HKLRD 174 at §27, applied in Lu Shaoping v Wu Lianmo [2020] HKCFI 944 at §7. The authorities provide that in the case of a regular judgment, the respondent will bear costs of the setting aside application when the underlying defence was revealed.

9.  Thirdly, however those authorities were concerned with the case where the defendant seeking to set aside a default judgment had conceded the regularity of the judgment. Thus, Welson International Ltd v Jebson Investments Ltd, HCA 2620/2008, 29.6.010, applied in Lu Shaoping by Deputy High Court Judge William Wong SC (as he then was) at  §7, made clear that irregularity was not a real issue before the Court: see Welson §§9-12.

10.  In this case R did not confine its Application to saying that it had a meritorious defence. Instead, it went further to allege that the Judgment was irregular for two reasons: (1) because there was invalid service, and (2) because A was in breach of its alleged duty of full and frank disclosure.

11.  In the circumstances, A submits that he had no choice but to resist the Application – if he did not do so, the Judgment would have been set aside as an irregular one with costs to R – even though that was legally unsound.

12.  Thus, there was a basis for A to continue to resist the Application, given the grounds that R chose to rely on. In the circumstances, A’s continued resistance of the Application, notwithstanding the defence disclosed on affidavit should not count against A.

The starting point

13.  R submits that whilst it was said in Ko Sin Yun that generally the plaintiff be entitled to costs of the setting aside application if the default judgment is regular, it has been clarified in subsequent cases that once the basis of the defendant’s defence has been disclosed, the costs for resisting the setting aside application ought to follow the event: Welson  at §§16, 17, 25; Harbour Hero at §27. The rationale is that the contrary approach “would encourage setting aside applications to be contested irrespective of whether there is substance in the opposition”: Welson at §23.

14.  In 楊佩玲 v Super Best Investment Ltd [2023] HKCFI 2998 at §6, K Yeung J clarified that the said principle “does not involve any consideration of reasonableness”. It was held that “if the court upon the materials disclosed to the plaintiff subsequently rules that merits to the requisite threshold has been shown, regardless of the question of reasonableness, it is appropriate for the costs occasioned by the further resistance of the application be borne by the plaintiff. If unreasonableness can further be shown, it may form the basis for enhanced assessment.”

15.  Therefore, as a matter of law, even if the resistance of the setting aside application is reasonable, it does not constitute a reason for departing from the above rule. It is not necessary for R to show unreasonableness on the part of A.

16.  Mr Tang submits that in this case, R’s defence that A had repudiated the tenancy agreement by installing the lock, which the Tribunal found to be a meritorious, had been disclosed in the Application with the affirmation in support filed and served on 14.2.2025. Once such meritorious defence had been disclosed, A should have realised the existence of the meritorious defence and conceded the Application, rather than continue to resist it. In the circumstances, the costs occasioned by the resistance of the Application, being costs incurred on or after 15.2.2025, should be paid by A to R.

Challenge to regularity of default judgment

17.  A acknowledges the principle. However, A seeks to qualify the principle saying that it is only applicable to cases where the regularity of default judgment is not challenged.

18.  R submits that A’s contention is without basis. In Welson the defendant in the setting aside application challenged both the issue of regularity of default judgment (which was conceded on appeal) and that of meritorious defence: Welson at §10. More time may have been spent on the issue of meritorious defence but A is wrong to suggest that the principle is only applicable to cases where the regularity of default judgment is not challenged.

19.  I accept that there is no basis for A to confine the general principle as stated in Welson and Harbour Hero to cases where the regularity of the default judgment is conceded or not challenged. R claims that similar to Welson, more time had been spent on the issue of meritorious defence in the present case. According to R more than 95% of the contents of A’s affirmation in opposition deals with the issue of meritorious defence.

20.  A went further to contend that given R’s challenge to the regularity of default judgment, he had no choice but to resist the setting aside Application, otherwise the Judgment would have been set aside as an irregular one with costs to R, which would be legally unsound.

21.  Mr Tang replies that such contention is also wrong:

(1)  First, A’s affirmation in opposition did not resist the Application only on the issue of the regularity of default judgment, but also the issue of meritorious defence. R estimates that more than 95% of A’s 99-paragraph affirmation in opposition, concerns the issue of meritorious defence. In the circumstances, A’s contention is factually wrong.

(2)  Secondly, A’s assertion that but for A’s resistance, the Judgment would be set aside as an irregular one with costs to R was also legally wrong. If A had not resisted the Application, the parties could have set aside the default judgment by way of consent summons and there was no need to specify the basis upon which the Judgment was set aside: see Lu Shaoping at §3. Even if there were disputes as to costs, they could simply have sought directions from the Tribunal. Any potential dispute as to costs could not have justified A’s stance of resisting the Application on each and every ground.

22.  Mr Sik’s primary position is that ultimately, this is R’s application asking to set aside a regular default judgment. It sought to set aside the Judgment on the basis that it was irregular, but that basis was refused. A acted reasonably in resisting the Application as put forward by R. In the circumstances, there is no justification to depart from the “usual rule” that R should bear the costs of the Application.

Applicant’s primary case determination

23.  R sought to set aside the judgment both on the basis that it was irregular and that R had a meritorious defence. A resisted the Application on both bases. A did not merely contend that the Judgment was regular. I accept that the fact that R sought to set aside on the basis the Judgment was irregular is not a sufficient basis to depart from the principle that once the meritorious defence is disclosed to A, cost should follow the event.

24.  On A’s primary case, I find that the meritorious defence was disclosed to A on 14.2.2025 by the affirmation in support of the Application. In my view A continued to resist where he should not have done so. If costs of setting aside were not agreed any remaining costs issue could have been determined. On that basis regardless of reasonableness, it is appropriate here that costs of that further resistance be borne by A.

Issue-based approach

25.  Alternatively, A submits that the Tribunal will also adjust the appropriate costs order depending on whether the successful party in the application had failed on certain discrete points. A relies on the issue-based approach authorities. If R is not to pay all of A’s costs, the alternative order sought by A is costs in the cause. A refers to matters that took up much of the submissions and hearing time, but does not actually apportion the  costs based on time or costs incurred on separate issues.

26.  O.62, r.5(1)(e) of the Rules of the High Court, Cap. 4A (“RHC”) provides that the conduct of the parties would be relevant in determining the question of costs. O.62 r.5(2) provides that:

“For the purpose of paragraph (1)(e), the conduct of the parties includes—

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

27.  In KJ v KMLM HCMC 4/2010 (21.5.2014), the Court explained the relevant principles at §§17 to 18:

“17. Third, the starting point does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or costs of the proceedings he may be deprived of the whole or part of his costs. Since CJR, the court is more ready to take an issue-based approach. It is no longer necessary for a party to have acted unreasonably or improperly to be deprived of his costs of a particular issue on which he has failed …. Nor is it necessary to show that the successful party has deliberately wasted time and costs… For the purpose of this guideline, a significant increase in the length or costs of the proceedings means one that can be estimated as a more than trifling proportion of the total costs. The costs need not be assessed with precision. It suffices if the court can give an estimate of the proportion of these costs… . A party may be deprived of part of his costs on the failed issues even if such costs overlap with those of the succeeded issues…

18. Fourth, where the successful party raises issues or makes allegations improperly or unnecessarily (or unreasonably, in the United Kingdom), the court may not only deprive him of his costs but may order him to pay the whole or part of the unsuccessful party’s costs: Order 62, rule 7(1). By implication, a successful party who neither improperly nor unreasonably raises issues or makes allegations on which he fails ought not to be ordered to pay any part of the unsuccessful party’s costs.”

28.  A submits that in this case, although R was ultimately successful in its Application, it failed on two distinct issues. First, it failed to establish that the Judgment was an irregular one. Second, it failed to establish that A was in breach of any duty to give full and frank disclosure.

29.  These matters took up much of the submission and the hearing time, which the A identifies as follows:

(1)  The question of regularity was dealt with by the Tribunal at §§65-86, and 90-98 of the decision. The Tribunal dismissed the arguments concerning service.

(2)  The question of material non-disclosure was dealt with by the Tribunal at §§87 to 89, 172-187 of the decision. Again, this matter formed a substantial part of R’s arguments. It also involved making allegations against A on the propriety of his litigation conduct, which were ultimately rejected.

30.  In the circumstances, A contends that R should in principle bear the costs for pursuing and ultimately losing on those points, which did take up substantial time on the part of the Tribunal and A. I agree the written and oral submissions on those two issues took time. While A submits tht R should bear the costs of those two issues, the order A seeks is either that R pays the whole of A’s costs or that costs be in the cause.

Is A’s alternative case wrong in principle?

31.  R replies that A’s alternative submission that the Tribunal should adopt an issue-based approach and order costs be in the cause should also be rejected.

32.  First, in Commissioner of Inland Revenue v HIT Finance Ltd (No 2) [2014] 4 HKLRD 412 at §§6-7, the Court of Final Appeal explained that the issue-based approach must be approached with due circumspection and rejected such approach on the facts:

“6. … Not every point taken by the Commissioner proved to be a winning one. But there is nothing exceptional about a case being won on only some of the winner’s points.

7. There is a discretion in the court to deprive a successful party of the whole or part of his costs because he had caused a significant increase in the length or costs of the proceedings by raising issues on which he did not succeed. That can be done even if it was not unreasonable to have raised those issues. Whether or not it should be done depends on all the circumstances. This discretion exists for the purpose of avoiding the rigour of too inflexible an application of the rule that costs generally follow the event. It is to be approached with due circumspection so as not to undermine the utility of that general rule. In the circumstances of the present case, after weighing the rival arguments on costs, we do not consider it appropriate to deprive the Commissioner of any of her costs. …”

33.  R also relies upon Waddington Ltd v Chan Chun Hoo Thomas (unreported, FACV15/2007, 14 November 2008) at §6, where the Court of Final Appeal rejected the issue-based approach:

“In coming to this Court, Mr Chan did so on two points of law and with the objective of bringing the proceedings commenced by Waddington to an end. To succeed in that objective, it was necessary for him to prove right on both points. He proved right on one i.e. the no reflective loss point, but not on the other i.e. the no multiple derivative action point. So he failed in his objective. It is true that Mr Chan proved right in one of his points and that it is an important point of law. There can be circumstances in which it would be appropriate to make an order as to costs that deprives the substantial winner of some of his costs for the reason that his arguments on one or more points have not prevailed. But in the present circumstances Waddington’s victory was so substantial in practical terms that there is no reason why the costs in this Court should not follow the event. They should be awarded to Waddington.”

34.  Notwithstanding that the defendant’s challenge to the regularity of default judgment failed, the Court in Welson did not take into account the defendant’s unsuccessful challenge on the regularity of default judgment when ordering all the costs incurred after the affirmation in support of the setting aside application be to the defendant.

35.  R submits that there is no room for the issue-based approach to be adopted in the present case:

(1)  The requirement of “significant increase in the length or costs of the proceedings” (in KJ at §17) was absent. According to R more than 95% of the contents of R’s affirmation in support, A’s affirmation in opposition and R’s affirmation in reply concerns the issue of meritorious defence. The issue of regularity of default judgment is a purely legal point regarding the interpretation of section 827 of the Companies Ordinance, Cap.32 and does not require any factual evidence. Once A had chosen to resist the Application, the substantive hearing on 2.7.2025 could not have been avoided.

(2)  To succeed in the Application, R only need succeed on either the issue of regularity of default judgment or of meritorious defence. Whereas A had to succeed on both issues. As A lost on the meritorious defence issue, A failed in his objective.

(3)  The only “event” in the Application was the issue as to whether the default judgment was set aside. This is to be contrasted with the situation where the default judgment is only partially set aside (e.g. where only the order of possession is set aside but not the rent).

(4)  Further, adopting an issue-based approach too readily in setting aside applications would be contrary to the rationale behind the approach of Welson and Harbour Hero, which is to discourage “setting aside applications to be contested irrespective of whether there is substance in the opposition”.

Issue-based approach discussion

36.  Mr Sik submits that even if the Tribunal takes the view that costs should be adjusted by virtue of the fact that A resisted the Application, in view of R’s defence, it should not go as far as to order that A pay R’s costs. Instead, given that each party succeeded on some of the issues, costs should be in the cause. That would also reflect the fact that although R was successful, it did not succeed on the basis on which it advanced the Application in the first place.

37.  While A advocates an issue-based approach, A has not apportioned time and costs between particular issues and proposed an order with regard to such assessed apportionment. A did refer to paragraphs of the Judgment. R focused on the content of affirmations, and that the bulk of the evidence was material to the merits argument. It is not simply a matter of considering the factual evidence or length of affidavits. I also have regard to the time and costs of preparing legal argument. The costs of the legal submissions, written and oral, on the irregularity and non-disclosure issues are also material.

38.  A’s primary case that R pay all of A’s costs was advanced on the basis that R did not concede that the Judgment was regular and that it was reasonable for the A to contest the Application. If R were ordered to pay the whole of A’s costs by purported application of an issue-based approach it would mean not only that its conduct was such that the successful party was deprived of the entirety of its costs, but also, that it should pay the entirety of the unsuccessful parties costs. That would clearly be wrong in principle in the present circumstances.  

39.  Applying KJ v KMLM, I am not able to find that R caused a significant increase in the length or costs of the proceedings such that it should be deprived of the whole or part of its costs. A did not assist as to the estimate of the proportion of the costs that R should be deprived of, save that A applies for all of his costs, which necessarily includes depriving the R of the entirety of its costs.  An issue-based approach to costs is to be approached with due circumspection so as not to undermine the utility of the general rule that costs follow the event. Having considered both party’s arguments, I do not think it appropriate to deprive R of any of its costs by adopting an issue-based approach: KJ v KMLM §17.

40.  The fact that R contested the regularity of the judgment is not sufficient basis to depart from the general rule. In additional to the service issue, R also failed on the material non-disclosure issue. I have considered whether that may tip the balance to depart from the usual approach and order. However, there were not significantly increased costs to deal with that argument. Even taking both bases to challenge the regularity of and set aside the Judgment cumulatively, I am not persuaded that the R should be deprived part of the costs, much less ordered to pay any part of A’s costs by reason of contending that the Judgment was irregular. The arguments failed. However, in practical terms R achieved its objective of setting aside the Judgment. There is nothing exceptional about a case being won on only some of the winner’s points: CIR v HIT at §6.

41.  Further, where a party raises issues or makes allegations improperly or unnecessarily, it may not only be deprived of cost but may be ordered to pay the whole or part of the costs of the unsuccessful party. R was the successful party. I find that R neither improperly or unnecessarily, nor unreasonably under RHC, raised issues or made allegations on which it failed such that it should be ordered to pay costs of the unsuccessful party. Therefore, R shall not to be ordered to pay any of A’s costs: KJ v KMLM §18.

42.  The discretion is to be approached with circumspection so as not to undermine the general rule that costs follow the event. I was not persuaded that the R should be deprived part of the costs, much less ordered to pay any part of A’s costs by reason of contending that the Judgment was irregular. I address an order for costs in the cause below.

Costs in the cause

43.  R considers A’s proposal that costs be in the cause difficult to understand.

44.  In Wing Fai Construction Co Ltd v Yip Kwong Robert (No 2) (2012) 15 HKCFAR 454 at §§5-8, the Court of Final Appeal explained why the Court is encouraged to order immediate payment of costs in interlocutory proceedings:

“5. As to the approach mandated by the CJR, Lam J stated: Under the Civil Justice Reform, the court is encouraged to order immediate payment of costs of interlocutory proceedings and if possible by way of summary assessment of costs. The objective is to discourage unnecessary and disproportionate interlocutory applications. It is recognised that the lack of immediacy of orders to pays costs “in the cause” or “in any event” weakens costs as a sanction against unwarranted applications or resistance, see paras.529–536 of the Final Report of the Chief Justice’s Working Party on Civil Justice Reform.

6. And as his Lordship pointed out, O.62 r.5(1)(aa) requires the court in exercising its discretion as to costs, to take appropriate account of the underlying objectives set out in O.1A r.1.

7. Whether or not the immediate payment of costs should be ordered is quintessentially a matter within the court’s discretion. The former practice was generally to order interlocutory costs to be “in the cause”, to be settled up at the end of the proceedings where orders which may have been made in favour of the respective parties might be set-off against one another and when the overall result of the proceedings can be taken into account. However, it is now generally recognized that such an approach may lead to procedural laxity and a damaging proliferation of interlocutory or satellite litigation. The first four of the underlying objectives are relevant to redressing such tendency … ”.

45.  Specifically in relation to an application for setting aside default judgment, the proposal that costs be in the cause was rejected in Lu Shaoping at §22, where DHCJ William Wong SC held:

“I do not consider that this is an appropriate case to order costs to be in the cause of the action as the parties have spent substantive legal resources to argue on whether the Regular Default Judgment should be set aside. It is a self-contained application and there are no special circumstances and good reasons as to why costs should not be determined according to the general principles.”

46.  Mr Tang submits that here, similar to Lu Shaoping, the Application was a self-contained application, and parties have spent substantive legal resources to argue whether the default judgment should be set aside. A also fails to specify any special circumstances that justify the proposal that costs be in the cause. In light of the post-CJR objective of discouraging proliferation of interlocutory and satellite litigation, it is wrong in principle to propose that costs of the Application be in the cause.

47.  Where both parties succeeded on substantial issues and it is not possible to estimate a relative percentage of costs incurred or apportion costs between issues, it may be appropriate to order that there be no order as to costs, so each party bears their own costs. A says that the Tribunal should not order that A pay R’s costs, but considers the answer is to order costs in the cause, rather than ordering that there be no order as to costs. In my view, the fact that each party may have succeeded on some issues does not make the proper, or an appropriate order here, costs in the cause.

48.  I hold that it would be wrong in principle to order that costs be in the cause. The setting aside Application is undoubtedly a self-contained application. The action may proceed without further regard to the Application. Since the CJR the court is encouraged to order immediate payment of costs of interlocutory proceedings and, if possible, by way of summary assessment of costs. The objective is to discourage unnecessary applications. It is recognised that the lack of immediacy of an order to pay “costs in the cause” weakens the sanction against unwarranted resistance.

49.  The geniuses of A’s idea may have been Ko Sin Yau §20. That 14/12/2006 decision was before the 2/4/2009 CJR implementation, when the former practice was generally to order interlocutory costs to be in the cause. However, it is now generally recognised that such an approach may lead to laxity. The first 4 underlying objectives of O.1A, r.1, RHC redress such tendency by emphasising the objectives of (a) increasing cost-effectiveness of any practice and procedure; (b) ensuring that a case is dealt with as expeditiously as is reasonably practicable; (c) promoting a sense of reasonable proportion and procedural economy in the conduct of proceedings; and (d) ensuring fairness between the parties.

50.  In my view on these facts granting costs in the cause would be contrary to those underlying objective. It would weaken the sanction against unmeritorious resistance. Immediate determination of the incidence of costs and summary assessment furthers those objectives.

51.  As in Lu Shaoping I do not consider it appropriate to order costs in the cause on this Application to set aside default judgment. There are no special circumstances or good reason why the costs should not be determined according to the general principles. I maintain my view that an issue-based approach should not lead to an order that costs be in the cause.

Costs determination

Costs of the Application to set aside default judgment

52.  R submits that costs of the Application incurred up to 14.2.2025, namely the date of R’s Application and the affirmation in support be to A and costs incurred on or after 15.2.2025 be to the R.

53.  For the reasons set out above I reject A’s application for the entirety of the costs of the Application. An issue-based approach to costs should be approached with circumspection. There is no need to depart from the usual order here. Further, I do not find it appropriate to order that costs be in the cause.

54.  I shall vary the costs order nisi. I order that the costs of the Application incurred up to 14.2.2025, namely the date of R’s Application and the affirmation in support, be to A and costs incurred on or after 15.2.2025 be to R, both on the District Court scale, with certificate for counsel, to be summarily assessed and paid forthwith.

Costs of the Two Summons

55.  R also asks for costs of the Two Summonses. R has succeeded in that I have made an order in terms of paragraph 1 of the R’s Summons dated 16 October 2025. A’s Summons dated 15 October 2025 shall be dismissed. There is no reason to depart from the starting point that costs follow the event. A shall pay R the costs of each of the Two Summons, on the District Court scale, with certificate for counsel, summarily assessed  to be paid forthwith.

Summary assessment

56.  Both sides filed two sets of Statement of Costs, (a) one for the setting aside Application and (b) another for the Two Summonses. A’s Statement of Costs for the setting aside Application concerns all the costs incurred by A. Whilst R’s Statement of Costs is limited to those incurred by R on or after 15.2.2025.

57.  I have ordered that A is only entitled to his costs incurred up to 14.2.2025. The Tribunal must assess those costs. R points out that:

(1)  The costs incurred by A up to 14.2.2025 must be confined to the costs liability owed to A’s former solicitors Messrs Cheung Wong & Associates, as the Notice of Change of Solicitors shows that A’s current solicitors Messrs Tony Kan & Co only replaced A’s former solicitors on 27.5.2025.

(2)  A’s Statement of Costs failed to comply with PD 14.3, §7 format requirements by failing to provide a breakdown or particulars for the costs of HK$755,793 paid to A’s former solicitors. This deficiency means that the costs incurred by A up to 14.2.2025 cannot be ascertained from A’s Statement of Costs. A should be responsible for this defect: see PD 14.3 at §15.

(3)  R suggests that the costs incurred by A up to 14.2.2025 would likely consist of (a) A’s costs of applying for default judgment, and (b) A’s costs of perusing R’s affirmation in support, which only consists of 15 pages. Significantly, (a) A’s costs of applying for default judgment have already been summarily assessed to be HK$3,200: see default judgment at §4. R has no objection to the Tribunal giving an estimate of (b), A’s costs of perusing R’s affirmation in support, which is to be added to (a) A’s costs of applying for default judgment in the sum of HK$3,200 as assessed.

(4)  R proposes alternatively, following 楊佩玲 at §§12-13, rather than having separate costs assessments before and after 14.2.2025, the Tribunal may also adopt a broad brush basis and set-off approach. This is particularly so when A failed to provide any breakdown in the Statement of Costs. If the Tribunal is minded to adopt this approach, R submits that the discount to be applied to R’s costs incurred on or after 15.2.2025 should be no more than 10%.

Summary assessment determination

58.  The Tribunal is not in a position to assess the actual costs incurred by the A prior to 15.2.2025 because A’s Statement of Costs fails to comply with the format prescribed by PD 14.3 at §7, providing no breakdown, nor particulars for the costs of HK$755,793 paid to A’s former solicitors. This is a matter of substance, not simply form or style.

59.  In the circumstances, I shall adopt a broad brush basis and set-off approach. I shall deduct a percentage of R’s costs to reflect the costs incurred by A prior to 15.2.2025. R asserts that should be no more than 10%.

60.  In my view A would not only have to read the Application and affirmation in support, which R contends is short. A must be allowed more than simply the time of perusal. Also allowed is time and the costs of considering and assessing the Application, to determine whether or not to resist.

61.  R’s costs incurred from 15.2.2025 payable by A shall be reduced by 15% for that reason. A’s costs of applying for default judgment have already been summarily assessed at $3,200. I shall not disturb that costs order. In addition R shall pay that sum of summarily assessed costs.

R’s costs of the Application

62.  I must also assess Rs’ costs of the Application from 15.2.2025. I have considered the Statement of Costs dated 14 November 2025 in respect of the setting aside Application, seeking the total sum of $505,963.

63.  The hourly rates of the fee earner and litigation clerk claimed are in accordance with those allowed on the District Court scale on a party and party basis. I shall not allow the full time claimed. Attendance on client and, particularly on counsel, is excessive. Preparation of documents and perusal of documents cumulatively is excessive.

64.  Counsel fee is reasonable and necessary, given there was substantial legal argument.

65.  I summarily assess the total costs at HK$417,183.

66.  The costs payable to R shall be reduced by 15% to account for A’s costs incurred prior to 15.2.2025, which I have summarily assessed in the total sum of $417,183. A shall pay R 85% of those costs forthwith.

67.  Further, A’s costs of applying for default judgment have been summarily assessed at $3,200: see the costs order, paragraph 4 of the Judgment dated 2024. R shall pay A or set off that sum.

Costs of the Two Summons

68.  R’s Statement of Costs dated 14 November 2025 in respect of A’s Summons dated 15 October 2025 and R’s Summons dated 16 October 2025 claims total costs of $86,829.

69.  Again, the hourly rates claimed are in accordance with that allowed on a District Court party and party taxation. I disallow part of the time, in particular time of solicitor attending on counsel.

70.  I summarily assess R’s costs of the Two Summons in the total sum of HK$71,000. A shall pay R that sum forthwith.