XCHRX HO YUK CHU t/a SKYFORCE ENGINEERING CO. v. SHUN HING REFRIGERATOR AIR-CONDITIONING ENGINEERING LTD.

HCA 10004/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10004 OF 1999

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J U D G M E N T

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1. This matter arose out of an appeal against the decision of Master Lung given on 13 January 2000 whereby he ordered that the default judgment dated 12 August 1999 be set aside with costs of the application before him to the plaintiff to be paid forthwith.

2. The Rules of the Court allow a party not satisfied with the order of a master to lodge a notice of appeal within 5 days, and there is no necessity of giving any grounds of appeal. The plaintiff duly took this liberty and lodged a notice of appeal on 18 January 2000.

3. On 27 January 2000 the plaintiff's solicitors wrote to the Defendant's solicitors enclosing a consent summons offering to withdraw the notice of appeal with cost of and occasioned by the application to be to the Defendant in any event.

4. The Defendant was happy to allow the plaintiff to withdraw the notice of appeal, but they wanted the cost order to be "the costs of and occasioned by and thrown away in this application be to the Defendant in any event". Apparently the reason for the concern that cost thrown away should be included was that on 22 January 2000 after they were in receipt of the notice of appeal, the Defendant's solicitors had already sent the papers to counsel for perusal with instruction to follow on 24 January 2000.

5. The Plaintiff did not agree to the inclusion of the words "cost thrown away" and wrote on 2 February 2000 that unless those words were deleted the plaintiff would proceed with the summons (sic) before me today. Not having received a favourable reply the Plaintiff wrote again on 8 February 2000 to say that unless the plaintiff would hear from the Defendant by 11 February 2000 the plaintiff would "proceed with the hearing without further notice and would seek cost against" the defendant.

6. The Defendant did not agree to the deletion of those words, but instead on 11 February 2000 offered that the cost should be "cost of and occasioned by the appeal and this application be to the Defendant".

7. The parties were well aware of the difference between cost to the defendant on the one hand and cost to the Defendant in any event on the other. The Plaintiff was not agreeable to have any order as to cost which would enable the defendant to obtain taxation at once. Hence on 11 February 2000 the plaintiff wrote back :

".... We fail to see your justification for requesting costs to be paid forthwith. We do not intended to moot the incidence of costs any further which serves no other purpose but to escalate costs. Hence, unless we receive your confirmation that the cost order is to be in any event by close of business, 15 February 2000, we shall proceed with the hearing and seek costs against you. ...."

8. The Defendant did not reply before the dead line imposed by the Plaintiff. Instead on 16 February 2000, their solicitors wrote back to give the reason for the Defendant's wanting to have cost forthwith. In short, their reason was that since in the proceedings before the Master, the order as to cost was that cost should be paid forthwith, it was just and convenient also to have the cost of the dismissal of the appeal against the decision of the Master to be paid forthwith so that both sets of cost could be determined in the same set of taxation proceedings. In fact the Plaintiff had since obtained an appointment for the taxation of the cost under the Master order to be heard on 7 April 2000.

9. It is plain from the recounting of the events that there was no agreement between the parties on the withdrawal of the appeal. In fact from the various letters of the Plaintiff's solicitors, it is plain that their position was that unless the defendant would agree to the cost order they proposed, the plaintiff would proceed with the hearing which could only mean in the context, proceed with the hearing of the notice of appeal which was fixed for hearing before the Judge in chambers today. There was never any unequivocal offer that the Plaintiff would abandon the appeal or consent to the dismissal of the appeal.

10. When the appeal was opened by counsel for the plaintiff before me today, it is plain that she did not intend to proceed with the appeal and the parties' arguments before me were directed on cost only.

11. In these circumstances, I think the right order that I should make is to dismiss the appeal and award cost to the Defendant. The only other question that I have to deal with is whether I should say cost to the defendant or cost to the Defendant in any event.

12. In Allied Collection Agencies Ltd. v Wood [1981] 3 All E R 176, at 181 Neill J reaffirmed that the usual order in interlocutory appeals, save in exception circumstances the cost order should be cost in any event. I can well see the justification for this approach as during the course of litigation, it is often the case that many interlocutory orders as to cost would be made, and it would be inconvenient to have many sets of taxation proceedings running in parallel with the litigation.

13. The question is whether there are any exception circumstances in this case. The defendant argued that because the cost order made by the Master was that cost should be paid forthwith, it would be just and convenient that the order for cost dismissing the appeal before the master should also be such that it would enable the defendant to get taxation forthwith so that the 2 sets of costs could be dealt with together. The Plaintiff on the other hand contended that the cost made by the Master was penal in nature, intending to show the courts' displeasure for the negligence or omission on the part of the Defendant's solicitors. I was told that although in the summons applying for the setting aside of the judgment, the defendant's solicitors had offered to bear the cost personally, the master did not make any order in those terms, nor was there any undertaking on the part of the defendant's solicitors given to the court to pay the cost. However, I was told by counsel for the Defendant that there was some arrangements between the solicitors and the clients on the question of cost. In these circumstances, I do not think that I can simply assume that if there should be taxation of both sets of costs, it would be convenient to have a set off, because it may be the case that the cost payable to the plaintiff may not have to be borne by the defendant.

14. Taking all circumstances into account, I do not think that the circumstances of this case was exceptional enough for me to depart from the general practice to order cost in any event. As the defendant had not cross-appealed on the order as to cost made by Master Lung, it is not for me to say whether Master Lung was correct in ordering cost to be paid by the defendant forthwith, instead of by the defendant's solicitors forthwith.

15. Thus to conclude I will dismiss the appeal with cost to the Defendant in any event.