LEE WAI MAN v. TSO YAN

HCA 11301/97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 11301 OF 1997

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J U D G M E N T

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1. This is an appeal by the Defendant from the order of Master Wilson made on 18 April 2000 whereby he ordered that the costs order made at the assessment on 12 November 1999 is to be on the High Court scale.

2. The matter arises in this way. Default judgment for damages to be assessed was entered by the Plaintiff against the Defendant in February 1998. The Plaintiff was the purchaser and the Defendant was the vendor of a flat at Sing Woo Road, Happy Valley, Hong Kong. The assessment of damages arose out of the Defendant's failure to complete the sale of the flat to the Plaintiff.

3. The assessment of damages came before Master Wilson. Master Wilson gave judgment on 12 November 1999 and assessed damages against the Defendant in the sum of $120,000. By the final judgment after assessment of damages, the Master also ordered that costs of the action be to the Plaintiff "to be taxed if not agreed, with certificate for counsel". This has been conveniently referred to in the appeal before me as "the first order" and I shall refer to it as such. The first order was sealed and perfected on 23 November 1999.

4. There is no dispute that on 12 November 1999 after the damages were assessed by Master Wilson, counsel for the Plaintiff did apply to the Master for the costs order to be awarded on the High Court scale. However, the Master suggested that the matter should be decided by the taxing master on a taxation of costs. It is also said that counsel then appearing for the Defendant also supported the Master's suggestion. Although at one stage in his submissions, Mr Lam, Counsel for the Plaintiff, said that the Defendant was thereby estopped from resiling on that suggestion, in the course of his arguments, however, he, very properly, abandoned any suggestion of there being an estoppel against the Defendant in the light of the evidence.

5. The question of costs proceeded to taxation and the matter came before Master Lok on 17 December 1999. He came to the view that he did not have the jurisdiction to make the order sought by the Plaintiff by its summons dated 16 December 1999. Master Lok, by his order of 17 December 1999, ordered, inter alia, that there be a rehearing of the taxation before another Master and that the taxation hearing be adjourned to a date to be fixed.

6. On an application by letter dated 14 March 2000 from the Plaintiff's solicitors to the Practice Master, the matter eventually came before Master Wilson on 18 April 2000 whereby he ordered that :

"Costs order made at assessment on the 12th day of November 1999 is to be on the High Court scale and no order as to costs of to-day".

The order of 18 April 2000 was conveniently referred to as "the second order" and I shall also refer to the same as such.

7. The first point that is made on behalf of the Defendant is that the first order having been perfected on 23 November 1999, Master Wilson did not have the jurisdiction to re-hear or to review or to vary the first order. It is said that the second order was, in effect, a further order as to the scale of costs which had been dealt with finally by the perfection of the first order.

8. It was submitted on behalf of the Plaintiff that on 12 November 1999, Master Wilson did not decide on the question of scale of costs and that there had been no determination on the merits of the application to have the costs taxed on the High Court scale. It was said that, because of this, it was permissible for Master Wilson to make the second order even though the first order had been perfected. The Plaintiff also submitted that Master Wilson was entitled to make the second order under the slip rule, namely, under O. 20; r. 11, Rules of the High Court.

9. It is important, in my judgment, to construe the costs' order that was made in the first order. By the first order, costs of the action were awarded to the Plaintiff "to be taxed if not agreed". The words are clear and simple. They clearly mean that the costs, if not agreed, are to be taxed upon the ordinary principles of taxation. In Lui Po Leung v Tam Kwok Hung [1985] 1 HKC 224 @225, Power J. (as he then was) decided that the words "plus costs to be taxed" mean what they say, namely, costs to be taxed upon the ordinary principles of taxation. I respectfully adopt the approach of Power J (as he then was). In my judgment, the construction of the first order is that the costs, if not agreed, are to be taxed upon the ordinary principles of taxation.

10. S. 43(2) of the District Court Ordinance provides as follows :

"Where any proceedings in which the Court has jurisdiction are brought in the Court of First Instance costs shall be recoverable on such scale and in such amount as would have been recoverable if the proceedings had been brought in the Court, unless the proceedings were so brought by leave of the Court of First Instance or unless the Court of First Instance otherwise orders."

11. The assessment of damages was in the sum of $120,000, this being the upper limit of the jurisdiction of the District Court. So, under S. 43(2) of the District Court Ordinance, unless the proceedings were brought by leave of the Court of First Instance or unless the Court of First Instance otherwise orders, the costs shall be recoverable on the District Court scale as if the proceedings had been brought in the District Court. As the proceedings had not been brought by leave of the Court of First Instance and there had been no order otherwise, it is not surprising that Master Lok felt that he did not have the jurisdiction to tax the bill of costs on the High Court scale.

12. I refer also to what Power J. (as he then was) said in Lui Po Keung v Tam Kwok Hung [1985] 1 HKC 224@226 :

"I must be bound by the words to which the parties agreed and which were that there be judgment for 'the sum of $50,000 plus costs to be taxed if not agreed'. I cannot look beyond this formula of words which, as I have already indicated, means cost to be taxed upon the ordinary principles of taxation which, in the circumstances, means taxation upon the District Court scale."

13. In this case, the words in the first order are clear and the ordinary principles of taxation apply. By virtue of S. 43(2) of the District Court Ordinance, this means taxation on the District Court scale. It is clear to me that Master Wilson made no order on the Plaintiff's application on 12 November 1999 to have the costs awarded on the High Court scale, he preferring to leave it to the taxing master. The effect of the first order is that the ordinary principles of taxation should apply and, as I have said, in the circumstances that means taxation upon the District Court scale. The first order having been perfected on the 23 November 1999, I am satisfied that Master Wilson had no jurisdiction to vary that order by the making of the second order. Although Master Wilson took the view that he was not conducting a review but simply clarifying the first order, I am satisfied that the second order was not a mere clarification of the first order but was, in effect, a variation of the first order. (See also Reigate Corporation v Wilkinson [1920] W.N. 150)

14. I also do not think that the slip rule provides any assistance to the Plaintiff. O. 20; r. 11, Rules of the High Court provides as follows :

"Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on motion or summons without an appeal."

In my judgment, there was no clerical mistake in the first order. There was also no error arising from any accidental slip or omission.

15. Although the Plaintiff relied on Doswell v Norton (1902) 18 T.L.R. 228 mentioned in marginal note 20/11/2 in the White Book, it is clear from the later authorities of Bentley v O'Sullivan [1925] W.N. 95 and Sutherland v Hanevig [1921] 1 K.B. 336 that the decision of Doswell v Norton was strongly criticised by the Court of Appeal in those two later cases. Counsel for the Defendant also relied on R. v. Cripps, Ex p. Muldoon and others [1983] 3 W.L.R. 465.

16. I am satisfied that the slip rule is not applicable in the circumstance of this case and the Plaintiff cannot rely on the slip rule for the making of the second order in this case. I am satisfied that the second order was one made without jurisdiction and ought to be set aside.

17. I should also mention that although the Plaintiff initially took the point as to whether I had jurisdiction to hear this appeal because of O. 58; r. 2(b), Rules of the High Court, this point was abandoned by counsel for the Plaintiff.

18. In the circumstances, the appeal is allowed. The order of Master Wilson made on 18 April 2000 is set aside.