RICHFUL ENGINEERING LTD v. PINE YEAR DEVELOPMENT LTD AND ANOTHER

HCA2906/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2906 OF 2004

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

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

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

RULING  ON  COSTS

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

1. In the judgment handed down on 27 March this year, following a five-day contested trial hearing, I found in favour of the plaintiff in the sum of $840,000.   I awarded interest from the date of the writ and I made a costs order nisi in favour of the plaintiff.

2. The defendant now invites the court to revisit that order on various grounds.  Firstly, I am now told that there were various offers of settlement and a payment into court, viz. :

(1)  12 November 2004

Before the action was commenced, a Calderbank offer was made in the sum of $840,000; however it was made subject to the condition that the plaintiff provide an unconditional demand bond.

(2)  27 November 2008

The defendant offered $750,000 (after deducting an in any event costs order in its favour) but with no interest or costs included.

(3)  11 December 2008

There was a formal payment into court of $750,000 (calculated in the same way as above) but on this occasion no interest was included.  By that date I am informed that interest is estimated at something over $250,000.

3. I do not think any of these events are sufficient to disturb the costs order nisi.  As to :

(1) it was a conditional offer; the unconditional demand bond is an onerous condition and applying the appropriate legal test, I cannot say that the plaintiff ought reasonably to have accepted that offer;

(2) it excluded both interest and costs which would have raised the sum significantly above the $750,000 offered; and

(3) the actual payment in itself excluded interest, in other words it was some $250,000 short.

4. The next submission was the familiar one that, despite being the overall winner, the plaintiff lost on various issues, in particular on the original claim for $2.2 million which did not succeed and on the issue which required expert evidence and which the plaintiff also lost.

5. On the other hand, counsel for the plaintiff countered that there were various issues upon which he was successful and which also took up substantial time at the trial.

6. The normal way to protect oneself against an adverse costs order in a claim for damages is a payment into court which exceeds the sum ordered.  Albeit the defendant came close, for the reasons given above, the offers and payment in were all insufficient.

7. Having failed to protect itself in the conventional way, I see nothing unusual in the conduct or the outcome of the trial which persuades me to make any order other than the usual one that costs follow the event.

8. Accordingly, despite the helpful submissions from the defendant, I am not persuaded that I should disturb my original order as to costs and I decline to do so. 

9. Costs of today in favour of the plaintiff.