ELDO TRADING CO LTD AND ANOTHER v. THE INCORPORATED OWNERS OF LUCKY COURT AND OTHERS

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

-----------------

JUDGMENT

-----------------

1. The plaintiffs and the defendant are engaged in litigation concerning the roof of a property known as Lucky Court. The applicants have some communications equipment on this roof. They want to remove it. The defendant has been raising some difficulties over this. The applicants issued summonses asking for an order that would permit them to remove the equipment. On the hearing of these summonses, Mr Merry, on behalf of the defendants, gave an undertaking that the defendant will allow the applicants to remove the equipment. Mr Chan is content with this. There is, therefore, now no need for any order in this respect. There remains the matter of the costs of the summonses. These summonses sought costs against the plaintiffs and the defendant on an indemnity basis. The applicants, recognising that the plaintiffs were never at fault, no longer seeks an order for costs against the plaintiffs, but the plaintiffs seek an order for costs against the applicants and against the defendant.

2. In the first place, the defendant agreed that the applicants could remove the equipment, but then, by a letter dated 16 October 1996, the defendant withdrew this agreement. The reason for this was that, "having considered [the applicants] request more carefully", the defendant thought that this was not provided for in an earlier order of court. This is what they said was the reason, but it appears that the defendant also wanted to be paid "the mesne profits for occupying that part of the building". This order of court, made on 1 December 1995, included an undertaking by the defendant that "without the prior approval of the plaintiffs in writing" the defendant was restrained from removing, or allowing the removal, of the equipment. It must have been perfectly clear to the defendant that the plaintiffs had already given this approval. The plaintiffs gave this approval again, but the defendant was unmoved. Only after the summonses were issued by the applicants did the defendant agree to the removal of the equipment, but they refused to bear the costs.

3. Mr Merry says that the defendant's attitude, and change of mind, was coloured by the aggressive litigation facing it. He says that the defendant cannot be blamed for being wrong on its interpretation of the court order. He argues that the defendant's attitude cannot be said to be unreasonable or irrational. I cannot agree. The defendant and the applicants entered into a perfectly reasonable agreement that would have permitted the applicants to remove the equipment without any problems. The defendants reneged on this agreement without proper justification. It must have been as plain as a pikestaff to any reasonably competent solicitor that the order of 1 December 1995 was no obstacle at all to implementing the agreement. The defendant obliged the applicants to come to this court seeking relief. It must pay for this. There was no reasonable basis for the defendant adopting its obstructive attitude. In these circumstances, it seems to me, it would be unjust to the applicants to make any other order than that the defendant pays the applicants' costs on an indemnity basis, so I make such an order.

4. The plaintiffs also seek a costs order against the defendant. Mr Merry says that the defendant has received no notice of this, but this is not so. On 4 November 1996 and 17 December 1996, the plaintiffs told the defendant in clear terms that it would hold the defendant responsible for any loss arising out of the defendant's refusal to allow the applicants to remove their equipment. It is clear to me that the defendant is entirely responsible for the parties in this matter having to come to court totally unnecessarily. The defendant is to pay the plaintiffs' costs on an indemnity basis.

5. The plaintiffs also want an order for costs against the applicants. The plaintiffs have been brought to court by the applicants. This was not justified because the plaintiffs were causing no difficulty about the removal of the equipment, but I can understand why the applicants did so. The applicants were seeking an order affecting property which was the subject of litigation between the plaintiffs and the defendant. Nevertheless, the plaintiffs are entitled to an order for costs against the applicants on a party and party basis, but, if these costs are recovered from the defendant, the applicants are absolved.