LAI PIT YOK PIUS also known as LAI PIK YOK v. LAI YAN

DCCJ 4080/2023

[2026] HKDC 139

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4080 OF 2023

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BETWEEN

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REASONS FOR DECISION ON COSTS

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1.  The 5-day trial of this action was scheduled to be heard before me commencing on 20 January 2026. By a joint application by a consent summons taken out on 23 December 2025, on which I made an order in terms, the action was settled with the issue of costs to be substantively argued on 20 January 2026.

2.  At the conclusion of the hearing, I ordered the Defendant (“D”) to pay the Plaintiff (“P”) the costs of this action, including the costs of this costs contest, with certificate for counsel, to be taxed if not agreed. These are my reasons.

3.  The background matters necessary to understand these reasons can be very briefly stated, as follows. P is suing for the vacant possession of a “Ding House” situated in Sai Kung. The right to build the Ding House was applied for in P’s name and after completion of its construction in 1983, it has been registered in the Land Registry also in P’s name. According to P, the price for the land and all constructions costs were paid by him; and ,by an oral license, he allowed his parents and D, his younger brother to live there, as he had been working in the United Kingdom since around 1966. By 2013, both parents have passed away. Then after, there were incidents in which P attempted to assert his right on the Ding House. In 2019, P demanded D to pay rent but was refused by D. D’s case is that he was the true beneficial owner of the Ding House under a common intention constructive trust or a resulting trust or by virtue of proprietary estoppel, in that it was agreed that the right to build the Ding House was applied for in P’s name and the Ding House also registered in P’s name nominally only, that he indeed paid for everything, from land price to the costs of construction to upkeep of the Ding House and additionally he took care of all the living expenses of the parents until their respective demise.

4.  Together with P’s wife, the remaining 3 siblings (apart from P and D) of the 5 children of the parents all filed witness statements as P’s witnesses attesting to the veracity of P’s version and speaking against D’s version.

5.  The terms of settlement are that judgment be entered against D ordering him to deliver vacant possession of the Ding House within 3 months, and there be no order on Prayers (2) to (4) and (6) of the Statement of Claim, which seek mesne profits and damages resulting from the wrongful occupation since 1 March 2023, interest on mesne profits and/or damages, and further or other relief.

6.  Mr Wong, counsel for P, relied simply on the fact that P is the overall successful party and there are no exceptional circumstances justifying departure from the general rule of costs following the event.

7.  Mr Yim, counsel for D, contended for no order as to costs.

8.   Where an action is compromised, though on a without admission basis, but on terms giving the plaintiff essentially or substantially the relief he seeks in the action, which the defendant has been resisting, the Court generally exercises its discretion awarding to the plaintiff the costs of the action on the basis that he is considered as substantially the winner (eg Re Chinese United Establishment Ltd HCCW 291/1994, unrep, Rogers J (as he then was), upheld by the CA in CACV 214/1995, unrep, 24 April 1996; Graham M Morley v Kwan Wo San & Others HCA 4366/2003, unrep, 30 December 2009, Recorder Jat SC; Chan Kai Yan and Another v Leung Chi Kit and Others [2013] 3 HKLRD 550).

9.  There may be cases in which it is not clear from the terms of settlement whether it can fairly be said that the plaintiff has been substantially successful. In such cases the Court will be required to consider the merits of the case or to determine whether it is probable that the plaintiff would have been substantially successful; but this process should be as economical as is consistent with the Court’s duty to decide the issue fairly. (Chan Kai Yan and Another v Leung Chi Kit and Others §15; Famous Marvel Co Ltd and Others v Conversant Group Ltd and Others HCA 2153/2009, unrep, 29 October 2012, Q Au-Yeung J). For that purpose, the judge has a wide discretion not only as to the manner by which the issue of costs is to be determined (including adopting a broad brush approach), as to what findings to make, what evidence should be received, including directing evidence to be filed and/or directing the witnesses to be cross examined generally or in respect of some particular issues. (Famous Marvel Co Ltd and Others v Conversant Group Ltd and Others §22; Glory Empire Global Ltd v Bateson Investment Ltd HCA 866/2017, unrep, 17 August 2017, A Chow J (as he then was) §44).

10.  In this case, though in the settlement the main relief of vacant possession was given by D to P and therefore D did not, and in my view cannot, dispute that P was the effective winner, Mr Yim contended merely that as the merits of the parties’ respective case have not been adjudicated, the appropriate costs order was no order.

11.  Acting on the principles above alluded to and at the hearing, I enquired with Mr Yim whether it was D’s stance that D’s case has merits and would have won, or was likely to win, if the issue were to be litigated and that D only agreed to the settlement based on other reasons despite such strong merits, and whether D would be proffering evidence to that effect or would seek directions on the cross-examination of the witnesses on the witness statements they have filed. Mr Yim readily replied that such was not D’s stance.

12.  Thus, I cannot accept the submission that no order on costs is appropriate simply because the merits have not been decided, rather, by D previously resisting but now settling on terms that judgment be entered giving vacant possession to P, I would give P his costs on the basis that he is the effective winner.

13.  Mr Yim next contended that there should be some reduction on P’s costs.

14.  First, he relied on the settlement term that there be no order on Prayers (2) to (4) and (6), effectively to equate D with a party that also wins some. I reject that contention as P’s mesne profits claim and claim for damages are but reliefs consequential on P’s case that D is a trespasser, and not relief sought based on some other separate causes of action. Moreover, I enquired and Mr Yim confirmed, that it was not D’s case that unusual or even substantial costs have been spent on these 2 reliefs such that their abandonment should merit depriving P some of his costs.

15.  Second, Mr Yim said that substantial renovation expenses have been spent by D to improve the Ding House, and P now would be effectively gaining an unjust windfall, and the Court should take that into account to do justice between the parties. However, on closer examination the contention did not hold water at all to begin with. In that these renovations took place in 2022 when P has been asserting his position on various occasions after 2013 and particularly in 2019 when P demanded D to pay rent. D therefore chose to incur that expenditure based on his own insistence that he was entitled to the Ding House. It was thus a position of his own making.

16.  For these reasons, I made the costs order as above said.