KIMBERLEY ASSETS MANAGEMENT LTD v. GOLDEN STAR OVERSEAS LTD AND OTHERS

LDBM 291/2004

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. 291 of 2004

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DECISION

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1.  This is an application to vary a costs order nisi.

2.  Briefly, by the present proceedings, the Flat Owner sued the Roof Owner and the Incorporated Owners (“the IO”) of the subject building for an injunction and damages in respect of water leakage problem. After trial, I found the IO wholly liable for the problem, and the claim against the Roof Owner was dismissed.

3.  As the IO was only joined in the proceedings on 19 November 2009, and that the Flat Owner was pursuing its claim against two respondents, I made an order nisi that the IO should pay half of the costs of the proceedings from that day to the date of the Judgment, including Certificate for Counsel for the 4 days trial before me, at District Scale, to be taxed if not agreed. The Flat Owner considered that it should be awarded more costs and as such, took out the present application.

4.  To complete the whole story of the costs order nisi, I should mention that, as between the Flat Owner and the Roof Owner, I did not order the former to pay any costs to the latter because I found, inter alia, the conduct of the Roof Owner should not be endorsed in the circumstances. Further, in relation to the third party proceedings between the Roof Owner and the IO, I made no order as to costs. There has been no application to vary these parts of my costs order nisi.

5.  Coming back to the application of the Flat Owner, it asked for the following variations.

(a) all (not just half) of the costs,

(b) costs as from 25 September 2009 (not just from 19 November 2009),

(c) including all costs reserved, and

(d) inclusive of costs of the claim against the Roof Owner and any costs relating to the third party proceedings.

6.  Upon consideration of the evidence, authorities and submissions from the parties, I have decided to allow 5 (a), (b) and (c). As to (d), it is refused.  My reasons appear in below.

7.  Mr. Lucas drew my attention to paragraph 62/1/5 of the HKCP 2011 at p.1090. It stated that:

“ “Sanderson order” – Where a plaintiff has properly, in the court’s view, sued two defendants with his claim against them in the alternative but succeeds against only one, the court may order that the successful defendant’s costs be paid by the unsuccessful defendant. If the court orders that the costs be paid by the unsuccessful defendant to the successful, this is normally called a Sanderson order….”    

8.  Further, he also referred me to the authority of Leung Lai Ha and Ho Wong Yan v. Hon Sau Ling and Ho Chung Kai (Civil Appeal No. 71 of 1992).  Bokhary, J (as he then was) said that:

“It seems to me that after a trial or capitulation, it is very easy with the benefit of the hindsight which one obtains in that fashion, to lose sight of some of the uncertainties which surrounded the case at an earlier stage. It is never easy to decide these things on paper. In fact, it is impossible if “decide” means to come to a final conclusion rather than merely form a tentative view of probabilities….”

9.  To these authorities, Mr. Cheung was disputing them as a matter of principle. He only reiterated that costs remained a matter within the sole discretion of the court and asked me to maintain my exercise of discretion as before.

10.  Upon reviewing the chronology of the parties’ disputes, including in particular that both the Roof Owner and the IO were at all material times declining the liability towards the water seepage problem, and that the ultimate question had to be resolved and only resolved by the acceptance of Dr Lam’s expert opinion dated 3 February 2010, it is quite true that the Flat Owner did face a dilemma and her decision to sue the Roof Owner and the IO (or to be more precise, to join the IO as a respondent on 19 November 2009) was  proper in the circumstances.

11.  Hence, I am persuaded to vary the costs order nisi to allow not only half of the costs, but all of them to the Flat Owner. It should not be deprived of half of the costs to pursue its case.  

12.  Besides, as to the limitation of the costs order from 19 November 2009, I also accept the following submission from Mr. Lucas:

“3. The normal order is to grant a party his costs without stating the date from which costs are to be payable with the effect that a party can claim his costs from the time he consulted solicitors so as to include the costs of advice on the merits of the claim and the costs of the preparation of the application, including, if a taxing master considers it reasonable in the circumstances, the costs of instructions counsel to advise….”

13.  Indeed, in my experience as a taxing master in the High Court, the winning party will usually be able to recover not only the costs in the proceedings but also all those incurred prior to the proceedings in preparation for those proceedings, subject to the appropriate test under taxation.  

14.  Regarding “costs reserved”, although Mr. Lucas was not been able to identify any such costs order to me, I heard no strong argument from Mr. Cheung in that respect. I further take the view that it must be a good practice to take a conservative approach. Such variation is therefore allowed.

15.  Finally, as to 5 (d), having varied the costs from “half” to “all”, the first part of the order sought is not necessary anymore. Regarding the costs for the third party proceedings, as a matter of procedure, they are only relevant as between the Roof Owner and the IO, I see no justification to allow any costs thereof for the Flat Owner.

16.  To sum up, I will vary the costs order nisi at paragraph 49(c) of the Judgment dated 17 February 2011 herein to: The 3^rd Respondent do pay the Applicant’s costs of the action, inclusive of all costs reserved, from 25 September 2009 to the date of the said Judgment, with Certificate for Counsel for hearings from 7 to 10 December 2011 at District Court Scale, to be taxed if not agreed. 

17.  There is also a costs order nisi that the 3rd Respondent do also bear the costs of the Applicant in relation to the application and hearing on 4 April 2011, at District Court Scale, to be taxed if not agreed.