BONNIE BLAIR LTD v. WITMORE LTD AND ANOTHER

DCCJ 1871/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1871 OF 2011

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REASONS FOR RULING

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INTRODUCTION

1. On 12 June 2015, I refused the defendants’ application for leave to appeal out of time against the orders as contained in the Judgment[1] and their application for leave to appeal against the Costs Order[2].  I also granted costs of the application (with certificate of counsel) to the plaintiff.  I said that reasons were to be given in due course.  This, I now do.

BACKGROUND

2. The facts and the procedural history of the case can be seen in the Judgment[3] and the Ruling on Costs[4] and I will not repeat those.  Very briefly stated, the plaintiff was the tenant of two warehouse premises of which the defendants were the respective landlords.  The plaintiff held over the two premises and failed to deliver vacant possession after the original leases had expired in August 2010.  The plaintiff’s case was that they had an oral agreement with the defendants to renew the tenancies and they took out proceedings for the alleged breach by the defendants of the oral agreement and the plaintiff’s right to quiet enjoyment.  The defendants, on the other hand, denied that there was such an oral agreement and they counterclaimed for the alleged trespass and wrongful obstruction by the plaintiff. 

3. As noted in the Judgment, however, by the time the trial commenced in January 2015 many of the disputes between the parties had become largely academic in that the plaintiff had vacated the two premises since 25 August 2012 and they had also paid the defendants a total of $1,656,000 as interim payment, together with all the management fees and government rents of the premises for the period in dispute. 

4. The trial took an unexpected turn on the third day, when counsel for the plaintiff, Mr Hung, informed that his client conceded liability on the counterclaim, that judgment should be entered in the defendants’ favour in respect of the plaintiff’s claim and that the only outstanding question was quantum[5]. Having heard counsel submissions on quantum, this court reserved its judgment and directed that written submissions be filed on two specific points, namely (i) the implication of the incidence of tax on mesne profit; and (ii) the amount which the plaintiff said that they had overpaid each of the defendants by way of interim payment.  In due course, written submissions were received from counsel.  However, Mr Yeung, counsel for the defendants, more than once strayed beyond the scope of the court’s direction, sought to introduce new evidence and made submission on exemplary damages which had not been raised in his oral submission.  As a result, Mr Hung was galvanised into replying by further written submissions. 

5. By the Judgment handed down on 6 February 2015, this court dismissed the plaintiff’s claim against the defendants and gave judgment for the defendants for the counterclaim.  However, this court found that the defendants had been overpaid by the plaintiff and ordered the 1^st defendant to refund $19,000 and the 2^nd defendant to refund $57,400.  This court also made a costs order nisi that there be no order as to costs. 

6. The defendants applied for variation of the costs order nisi.  The application was heard on 10 March 2015.  On 20 March 2015, this court dismissed the defendants’ application and the costs order nisi was made absolute.

7. By a summons dated 2 April 2015, the defendants sought leave to appeal against the Judgment and the Costs Order.  Their position is that the application for leave to appeal against the substantive orders is within time.  However, if need be, they would also ask for an extension of time. 

THE GROUNDS OF APPEAL

8. The defendants’ grounds of appeal boil down to the following complaints:-

(i) this court errs in ordering refund by the defendants by failing to take into account (i) the rapid rise of the market rent of the two premises; (ii) the general principles in tort and equity that wrong-doers should not be allowed to benefit from his misfeasance and the landlord’s entitlement to mesne profit does not depend on his ability to rent out the premises; (iii) that the plaintiff had never pleaded for any refund of interim payment (Ground 1);

(ii) this court errs in refusing to award exemplary damages to the defendants when it was included as one of the remedies prayed for in the counterclaim (Ground 2);

(iii) the judgment is erroneous, incomplete and irregular in that it fails to include all the 12 remedies which the defendants had prayed for in the counterclaim (Ground 3);  and

(iv) in refusing costs, this court has failed to take into account the following: the plaintiff’s conduct (wrongful occupation and obstruction) during the course of the incident in dispute (Ground 4); their failure to file a hearsay notice concerning what was alleged to have been said by one Ms Tam (Ground 5); the plaintiff’s untruthful assertion of an oral agreement to renew and the belated concession on liability (Ground 6); that the plaintiff’s concession on liability means that they also conceded costs (Ground 7); that the defendants should be treated as being successful in their counterclaim (Ground 8); the risks created by the conduct of the plaintiff during the course of the incident in dispute (Ground 9A); the settled legal principles on costs (Ground 9B); the principle in equity when the defendants acted on the concession made by the plaintiff on the claim and the counterclaim (Ground 10). 

THE APPLICABLE LEGAL PRINCIPLES

9. The test for the granting of leave to appeal is well-known and not in dispute.  It is for the applicant to show that the appeal has a reasonable prospect of success or that there is some other reason in the interests of justice that the appeal should be heard: see s 63A(2) of the District Court Ordinance, Cap 336.  A “reasonable prospect of success” means that there is an arguable case such that the chance of success is more than “fanciful” but without having to be “probable”: see Wing Tat Haberdashery Company Limited v Elegance Development & Industrial Co Limited [2011] 5 HKC 474, 476B-C; and also Ma Bik Yung v Ko Chuen [2009] 3 HKC 359, 360H-I, 361A-C.

10. As regards the proposed appeal against the Costs Order, it is an appeal against the exercise of the court’s discretion.  It is well-established that it is only where the decision involves a mistake of law or a disregard of principle; or is made under a misapprehension as to the facts; or takes into account irrelevant matters; or exceeds the generous ambit within which reasonable disagreement is possible and is in fact plainly wrong, that an appeal court is entitled to interfere.  See Hong Kong Civil Procedure 2015, at §59/0/54. 

11. An application for leave to appeal against an adverse judgment or order must be made within 28 days from the date of the judgment or order.  However, this court has the power to enlarge the time for the appeal or for applying for leave to appeal, notwithstanding that the time for so doing has expired: see Order 58, r 2(4) & (9), Rules of the District Court, Cap 336H.  The principles for granting extension of time are well-established: see, eg, Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd & Anor [2001] 1 HKC 125.  I bear in mind that whilst the discretion to extend time to appeal has to be exercised judicially and consideration of the four matters in Norwich & Peterborough Building Society v Steed [1991] 1 WLR 449[6] would usually be sufficient in most cases, it remains a broad discretion which must be exercised by reference to the special facts of the case.  On the established principles, in case the delay is not insubstantial and is not excusable, the party seeking an extension of time to appeal must show a real prospect of success on the merits of the intended appeal: The Real Estate Developers Association of Hong Kong v Building Authority (HCMP 1746/2014).[7]

CONSIDERATION

(i) Appeal against the substantive orders in the judgment

Whether the application for leave to appeal is out of time

12. Mr Yeung relied on Angela Ho & Association (A Firm) v Kwong Ka Ying trading as Phyllis K Y Kwong & Associates (CACV 32/2015)[8] to support his contention that the time for seeking leave to appeal did not start to run in the present case until after the Costs Order had been made absolute.  He submitted that as there was only a costs order nisi on 6 February 2015 when the Judgment was handed down, time only started to run when this court gave its Ruling on Costs on 20 March 2015. 

13. With due respect, the case of Phyllis KY Kwong provides no assistance to the defendants. That case concerns a very different type of “order nisi” which was not about costs and not provided for by the rules of the Court.  The aforesaid “order nisi” was a misnomer as it was not really an order at all.  The position, as the Court of Appeal explains, was very similar to one in which the trial judge had adjourned the proceedings for further argument as to the terms of the order before finally disposing of the proceedings.  It is in that sense that there had not been a final disposition of the matter by the so-called “order nisi”. 

14. In the present case, however, the orders as contained at paragraphs 62 to 64 of the Judgment are substantive orders which disposed of the proceedings between the parties. When this court subsequently heard the parties on the application for variation of the costs order nisi, it would not revisit the substantive decision it had made: Vaacov Ozer v Kwan Siu Man (No 2) [1998] 2 HKLRD 1001. 

15. Once the Judgment was handed down, there was no legal barrier for the defendants to file an application for leave to appeal against the substantive orders within time.  If that had been done, the application for leave to appeal against the Costs Order could have been the subject matter of a separate application.  Alternatively, the latter could have been added to the application for leave against the substantive orders by way of amendment.  The defendant had done neither of those.

16. Based on the above, I rule that the application for leave against the substantive orders is out of time by 26 days. 

Whether the delay is excusable

17. In the affirmation of Kwok Ching Yee[9], a director of the defendants, she said the following regarding the late filing of the application for leave to appeal against the substantive orders:-

“8. I have been advised by Counsel and verily believe that the Defendants’ application for leave to appeal is not out of time because the “final disposition of the proceedings herein occurred on 20^th March 2015 when the learned Judge made the ruling on costs following the order nisi dated 6^th February 2015.

9. I am also advised by Counsel and verily believe that the Defendants’ counting of time for taking out application for leave to appeal is consistent with the Hong Kong Court of Appeal’s Judgment in Angela Ho & Associates (A Firm) v Kwong Ka Ying trading as Phyllis K Y Kwong & Associates CACV 32/2015 [2015] HKEC 486 which indicated the counting of time is to commence on the “final disposition of the proceedings.

10. However, if this Court is to take the view that the time is counted from the first decision, namely on 6^th February 2015, I do humbly apply for an extension of time because the costs issue which is a significant question in the whole proceedings would affect the Defendants’ decision whether or not to appeal against the Judgement on the quantum of damages.  The Court of Appeal’s decision in CACV 32/2015 set out that the matter is neither well-settled nor clear, and the Court of Appeal concluded that extension of time for appealing should be granted.”

18. As regards what Kwok said, I have the following observations:-

(a) what Kwok has failed to mention in her affirmation is the fact that this court had on two previous occasions warned the defendants’ solicitors to follow the proper procedure for appeal, the first occasion on 9 March 2015 and the second other on 30 March 2015:-

(i) The first occasion was in response to the solicitors’ letter dated 6 March 2015 which was the last day of the 28 days time limit.  In that letter, the solicitors indicated that they had instruction to apply for leave to appeal, set out some preliminary grounds of appeal against the Judgment and continued to say that “We shall be deeply grateful if leave against the judgment can be granted by the learned Judge.  Counsel for the defendants will submit perfected grounds of appeal in due course and take out a formal application where appropriate”[10].

(ii) The second occasion was in response of the solicitors’ letter dated 26 March 2015 in which they said they had instruction to appeal against both the Judgment and the decision on costs and for that purpose they applied for transcripts of the proceedings[11]. The solicitors received the transcripts on 21 April 2015.  The draft grounds of appeal, however, were filed on 2 April 2015.  Therefore, it was not the case that the defendants’ required the transcripts in order to settle their grounds of appeal. 

(b) Kwok is not explaining in her affirmation why the defendants had not filed the application for leave to appeal against the substantive order within time.  She was simply arguing, as she said her counsel had so advised her, that the application was not out of time; 

(c) Kwok is being ambiguous as to when the aforesaid legal advice was given and whether it was in fact based on Phyllis K Y Kwong’s case.  It is noted that Kwok only said that the legal advice she received was “consistent with” that case.  The words in quote seemed to have been carefully chosen.  If the advice was in fact based on Phyllis K Y Kwong’s case, then the advice could not have been given before 25 March 2015 which was the date the judgement of the Court of Appeal. However, by then the 28 days time limit had already expired.  On the other hand, if the advice was given earlier and was thus not based on Phyllis K Y Kwong’s case, then one knows not on what basis her legal adviser formed the view that time did not start to run “from the date of the Judgment” as clearly stipulated in the Rules[12]. I note also that Kwok is being ambiguous as to whether the defendants had not filed the application relating to the substantive orders earlier because of counsel advice. In any event, even assuming that the defendants were acting on legal advice, a party is generally bound by the way a matter is conducted by his or her counsel: see Chong Ching Yuen v HKSAR (2004) 7 HKCFAR 126; and Lily Chiang v Secretary for Justice (2010) 13 HKCFAR 208.  Even if the defendants were acting on legal advice, that in my view would not afford them a valid excuse for the delay in the present case, especially when the solicitors had twice been warned by this court to follow the proper procedure;

(d) Kwok seems to have contradicted herself by saying in the earlier part of her affirmation that the defendants’ stance was “to give top priority to the justice in the case”[13] and then by saying that “the costs issue was a significant question in the whole proceedings” which “would affect the defendants’ decision whether or not to appeal”.  Mr Yeung frankly admitted during the hearing of the leave application that “commercial consideration” was part of the reason why the application for leave to appeal against the Judgment had not been filed earlier.  If costs was the main reason why the defendants appeal, then it may explain better why the application against the substantive orders had not been made until after the result of the application for variation was known; and

(e) on 2 March 2015, after consultation of counsel diaries, the defendants were informed that the application for variation would be heard on 10 March 2015. The defendants therefore must have known that the hearing on costs would be more than 28 days after the Judgment.

19. Based on the above, I am inclined to the view that the defendants had taken a conscious decision not to file the application for leave to appeal against the substantive orders until after the result of the application for variation of the costs order nisi was known.  Whether or not I am right on this, in any event the defendants have failed to persuade me that there are acceptable excuses for the delay.  I find that the delay is inexcusable.

Merits of the grounds of appeal

As to Ground 1: assessment of mesne profits and orders for refund

20. Contrary to the defendants’ contention that this court had failed to take into account the market rent at the material time and the market volatility, this court had in fact taken those into consideration.  This court noted,

“24. This is not to say that a court in assessing mesne profits cannot take into account any variations in the rental value during the period the tenant was in wrongful occupation. As a matter of principle, in appropriate cases variations in rental value could and should be taken into account. In my view, mesne profits is a function of a host of factors including the length of the trespass, the type of property concerned and the market conditions. Furthermore, the proposition that valuation should be based on “a short term letting” is capable of accommodating any adjustments in rental value in case the tenant held over as a trespasser for a prolonged period of time. What constitutes “a short-term letting” on terms which the landlord would let is, however, not to be defined inflexibility, it is a case specific issue to be decided in each case after taking into account all the relevant circumstances.”[14]

21. Furthermore, as submitted by Mr Hung, this ground also entails an indirect attack on the finding of fact, as this court found that the usual tenure for the two subject premises would be about 2 to 3 years[15]. The defendants have failed to provide any basis to challenge this finding of fact: Ting Kwok Keung v Tam Dick Yuen t/a Tam Dick Yuen Engineering and Others (2002) 5 HKCFAR 336, 350; and Bank of China (Hong Kong) Ltd v Tsang Sheung Bun [2013] 5 HKLRD 62, 70-71. 

22. As regards Mr Yeung’s contention that wrong-doers should not be allowed to benefit from his misfeasance, this court had found that “there is no reason treating the value of the benefit of occupation to the plaintiff as being different to the loss suffered by the defendants”[16]. Also, the compensation was calculated on the basis of the whole of the 24-month period during which the plaintiff was in wrongful occupation[17].

23. As to the contention that the plaintiff had never prayed for any refund of interim payments “which has been conceded to be mesne profits”, the plaintiff’s case had been that the payments were either rentals or interim payments.  There had never been any concession by the plaintiff that the whole of the interim payments were mesne profits.  The pleading point is also misconceived, as the orders for refund were based on Order 29, r 17 of RDC, that is to say by operation of law.

As to Ground 2: exemplary damages

24. It is not, as Mr Yeung submitted, that this court had disallowed the defendant to make submissions on exemplary damages[18]. The fact is that Mr Yeung had missed the chance and failed to make any submissions on exemplary damages in court.  However, he subsequently slipped in his argument for exemplary damages in written submissions without leave.  That was improper. Nevertheless, the court had still dealt with Mr Yeung’s written submissions on exemplary damages at length before rejecting them[19].

25. Besides, as Mr Hung submitted, what cannot be denied is that there was no proper claim or pleading for exemplary damages made by the defendants in the body of the counterclaim.  It is not sufficient for the defendants to plead exemplary damages merely in the prayer: see Hong Kong Civil Procedure 2015, at §18/8/12; nor was there any evidence adduced by the defendant in support of such a claim.  Therefore, there was simply no basis for the defendants to claim any exemplary damages. 

As to Ground 3: judgment being incomplete

26. With respect, Mr Yeung has confused judgment on liability and reliefs.  As Mr Hung submitted, the fact that the defendants obtained judgment on their counterclaim did not mean that they would automatically be entitled to all the remedies they prayed for.  The defendants still had the burden of proof regarding the remedies sought.  However, as aforesaid the defendants had not adduced any evidence to support their claim for remedies other than mesne profit and damages for the aborted work of the contractor, nor had Mr Yeung made any submissions (oral or written) arguing for those other remedies.[20]

27. Secondly, it is trite that the court will not generally decide academic or hypothetical questions.  Also, in exercising its discretion the court will consider whether any useful purpose would be served by granting declaratory judgment: see Hong Kong Civil Procedure 2015, at §15/16/2.  Therefore, it must be obvious to any informed reasonable reader of the Judgment that this court had rejected the defendants’ counterclaim for other remedies in the present case:-

(a) this court noted in the beginning of the Judgment that the defendants had prayed for remedies other than mesne profit and damages for the aborted work of the contractor[21];

(b) as noted in the Judgment, however, when the case came before this court for trial, many of the disputes had become academic[22]. One obvious example was the defendant’s counterclaim for injunction that the plaintiff allow the defendants to enter the subject premises; that the plaintiff be restrained from obstructing the rectification works; and that the plaintiff deliver up vacant possession of the premises[23]. As mentioned before, the plaintiff had vacated the premises since 25 August 2012 which was more than two years before the trial; 

(c) as regards the defendants’ counterclaim for a declaration that the plaintiff shall indemnify the defendants for any penalty, damages, etc in respect of any prosecution or conviction of any offence under the Building Ordinance,[24] it has to be noted that the Building Orders against the two subject premises were issued on 5 January 2009.  As the plaintiff had vacated the subject premises since 25 August 2012, any rectification works by the defendants should have been completed long before the trial.  Up to the time of the trial, there was no evidence that the defendants had faced any prosecution relating to the Building Orders; and 

(d) in the earlier part of the judgment, this court took note of the plaintiff’s submission that the defendants would no longer require any declaratory relief.[25] Then, in the latter part of the Judgment, this court said,

“It is also difficult to see why the defendants should be entitled to any remedies other than mesne profits and damages for the aborted work of the contractor and why the said mesne profits and damages are not sufficient remedies in the present case.”[26]

Therefore, it must be obvious that this court agreed with the plaintiff’s submission.

28. Thirdly, it is trite that a declaration can only be made after proper argument and cannot be made on admissions: see Hong Kong Civil Procedure 2015, at §15/16/2.  As aforesaid, Mr Yeung had made no submissions either in his closing or in any of his written submissions on declaratory reliefs.  As a result, Mr Hung made no submission on this topic either.  As such, there was simply no basis for this court to exercise its discretion and grant the defendants any of the declaratory reliefs pleaded in the Counterclaim.

Conclusion on the merits of the draft grounds of appeal

29. Based on the above discussion, I am firmly of the view that the draft grounds of appeal, whether taken individually or collectively, do not give raise to a reasonable prospect of success, not to say a real prospect of success.  In addition, I do not see any reason in the interests of justice why the appeal should be heard. Thus, even without taking into account that the application is out of time, I would refuse leave. 

Prejudice

30. I take into account that the plaintiff was informed of the defendants’ intention to appeal as early as 6 March 2015.  However, I note what was said by Le Pichon JA in Secretary for Justice v Hong Kong & Yaumatei Ferry Co Ltd, ante, that although the existence of prejudice to a would-be respondent was a ground for refusing an extension of time, the absence of prejudice to a would-be respondent is not a ground for extending time.

Conclusion: proposed appeal against the substantive orders out of time

31. In all the circumstances including but not limited to the four considerations listed above, I see no grounds for exercising my discretion in favour of the defendants.  I refuse the defendant’s application for leave to appeal out of time.

(ii) Appeal against the costs order

As to Grounds 4 to 10: the costs order

32. As regards Ground 4, namely the conduct of the plaintiff, this court noted in the judgment:-

“54. Although the defendants deny the existence of an “Oral Agreement to Renew”, it has not been asserted in their pleadings that the plaintiff is “making up” false allegations and thus guilty of contempt. More often than not, different parties to legal proceedings may have their own versions of the fact. That may due to different prospective or understanding. There are also possibilities of mistake and misunderstanding. If it is alleged by one party that the other side is being dishonest, then as a matter of fairness that needs to be properly pleaded so that the other side may respond to it. However, that has not been done in the present case.

55. As regards the allegation that the Plaintiff’s holding over was a “calculated” act to obtain more benefit for themselves to the prejudice of the defendants, that again has not been pleaded in the Counterpart.

…

57. Secondly, even if I was wrong about the lack of pleadings, there is still the problem of lack of evidence. There has not been a full trial and only Mr Luk has given evidence. It is not sufficient, in my view, for the defendants to just point to certain letters written by solicitors as contained in the trial bundle, the contents of which are not tested, and then to invite the court to jump to the conclusion that the plaintiff had committed dishonest or even criminal conduct. I note also that the letters relied upon by Mr Yeung in the “Addendum” were all written between July and October 2013 after the proceedings had commenced. In my assessment, little weight can be attached to them. The fact that the plaintiff concedes liability cannot be taken as an admission that they had “made up” false statements in the statement of claim.

58. Besides, there is also no basis for me to find that the plaintiff’s conduct of holding over was calculated to result in profit. On the other hand, there is evidence, which I accept, that the parties had been engaged in discussions on renewal and that the plaintiff had from time to time sent cheques for payment. Whilst it is obvious that the parties had held different views as to how the rectification work should go about, there is no evidence before me to show that the plaintiff’s alleged concern about the security of the premises regarding the proposed rectification work was false or unjustified. Whether or not the plaintiff was right in stopping the defendants’ contractor carrying out the rectification work is a different matter and the plaintiff has conceded liability on this point. As regards the risk of prosecution or enforcement action, there is no evidence before the court that the defendants had in fact been prosecuted by the Building Authority.” [27]

Although the above was said when this court considered the issue of exemplary damages, they are also pertinent to the issue of costs and this court had taken them into account in that regard. 

33. As regards Ground 5, which is about the assertion that the plaintiff had failed to serve a hearsay notice regarding Mr Luk’s evidence about what he had been told by his property agent Ms Tam without deciding whether there had in fact been a non-compliance of the procedural rules, it is difficult to see how this could have any significant impact on costs.  This court had not been asked to rule on the evidential point and no adjournment had been sought for or granted in relation to the perceived hearsay issue.  Whilst the defendants’ solicitors had done some inquiries as part of their pre-trial preparation with a view to verify what Ms Tam had allegedly said or not said, they would have conducted the enquiry regardless of whether there had been a hearsay notice.

34. As regards Ground 6, it is not correct that this court had failed to consider the case of the plaintiff about an alleged oral agreement.  To the contrary, one of the factors which this court had taken into account when considering costs was “the conduct of the parties both before and after the proceedings”[28]. This court said,

“24.  In relation to Miss Tam, the estate agent of the plaintiff, reasons have already been given as to why this court is not in a position to find that the plaintiff had committed dishonest or even criminal conduct (as suggested by the defendants) by having maintained a false case against the defendants.  From the materials available, what can be safely said is that the plaintiff should have known before trial that the evidence that Miss Tam might give would not be helpful to them and that their case of “oral agreement to renew” would be weakened as a result.  That may account for the plaintiff’s eventually concession on liability.  However, the fact that the plaintiff had initially maintained their case against the defendants knowing that it was weak is only one of the many factors that the court has taken into account when deciding costs.”  (Emphasis supplied)

In relation to the belated concession on liability, that should not be viewed in isolation. It should be viewed against the backdrop of the procedural history as discussed in the Ruling on Costs.[29]

35. As regards Grounds 7 and 10, it has to be pointed out that when Mr Hung admitted liability on behalf of the plaintiff, he made no concession on costs at all.  Moreover, from what transpired during the closing submissions on 7 January 2015, it is difficult to see how Mr Yeung could maintain that Mr Hung had made such a concession and that the defendants had relied on it:-

(a) When this court asked whether the parties could put their heads together to come up with a figure for settlement, Mr Hung replied that the parties were unable to settle, the stumbling block being costs.  Mr Hung said the plaintiff’s stance being that there should be no order as to costs, but the defendants insisted on the plaintiff paying costs[30]. At that point, Mr Yeung interjected by saying:-

“Okay. That would be a matter for a later stage, for the costs argument stage. Your Honour kindly indicated, nowadays, there is no certainty that the winning party must get costs. Your Honour has every discretion in deciding cost. …”[31]

(b) Towards the end of the trial, Mr Hung indicated that when the court had made the award there would be a question as to costs which would be hotly argued.  This court then said that there would be an order nisi as to costs.  Mr Hung responded by saying that the cost order nisi would be subject to further argument.  Mr Hung reiterated that his client reserved their position to argue costs.  When the court was about to retire to chambers, Mr Yeung asked whether the order nisi was costs to the defendants. The court replied that it simply could not tell what the order nisi was going to be right at that stage[32].

36. As regards the other grounds, as submitted by Mr Hung, they are no more than a repetition of the submission previously made by the defendants which had been dealt with in the Ruling on Costs.  It is trite that “costs follow the event” is only the starting point, especially in the post CJR era.  Mr Yeung has not addressed the reasons given by this court in the Ruling on Costs.  Mr Yeung has also failed to point out how the costs order exceeds the generous ambit within which reasonable disagreeable is possible or in what way it is in fact plainly wrong. 

Conclusion: proposed appeal against the Costs Order

37. In short, I am firmly of the view that the draft grounds of appeal against the Costs Order, whether taken individually or collectively, do not give raise to a reasonable prospect of success.  Besides, I do not see any reason in the interests of justice why the appeal should be heard.  In the circumstance, I refuse leave to appeal against the Costs Order. 

(iii)  The proposed appeal against the sealed Judgment

38. There was a complaint that the sealed order filed on 6 March 2015 has failed to include the order as contained in the Judgment that the defendants are successful in their counterclaims for mesne profit and damages for the aborted work of the contractor.  Mr Yeung said that the defendants’ solicitors had not been asked to comment on the draft order before it was submitted to this court for sealing. 

39. It is difficult how this can constitute a ground of appeal.  Mr Yeung agreed during submission that the proper course is to seek an amendment of the sealed order.  Mr Yeung said that the defendants’ solicitors could liaise with the plaintiff’s solicitors with a view to seek an amendment.  In the circumstances, this court is not required to rule on this matter.

COSTS 

40. As the defendants have failed in their present application in its entirety, I order costs against the defendants for this application, with certificate for counsel, to be taxed if not agreed.