XCHRX THE BANK OF EAST ASIA, LTD. v. YEUNG LAM WILSON AND OTHERS

HCMP4077/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.4077 OF 1998

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J U D G M E N T

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1. This is the 1st Defendant's appeal against the cost order of Master Sweeney dated 8th September 1999 ordering the 1st Defendant and the Plaintiff to pay the 3rd Defendant's costs of the hearing before him on 8th September 1999.

2. The Plaintiff was the chargee of a legal charge over a Property owned by the 1st and 2nd Defendants whereas the 3rd Defendant was the chargee of another legal charge. The hearing before the Master arose out of a dispute between the Plaintiff and the 3rd Defendant regarding which legal charge should take priority over the other legal charge. At the end of the hearing, the Master decided in the 3rd Defendant's favour : see paragraph 2 of the Master's order.

3. In the 3rd Defendant's written submissions, the 3rd Defendant stated that the 1st Defendant did not take a neutral stance at the hearing but took an active role and supported the Plaintiff's claim for priority : see paragraph 5 of the 3rd Defendant's written submissions.

4. The 1st Defendant confirmed at the appeal hearing he told the Master that the Plaintiff's charge should take priority over the 3rd Defendant's charge. I queried the 1st Defendant whether he said to the Master that he was only expressing a personal opinion which was not intended to be relied upon by anyone at that hearing. The 1st Defendant replied that he did not. In these circumstances, it was reasonable for anyone present at that hearing to consider the 1st Defendant's remarks to reflect his stance over that matter.

5. It has been said in quite a number of cases that in an appeal against a cost order made by the master, in order for the appellant to succeed, he must show that the order : -

(a) was unreasonable;

(b) erred in law; or

(c) failed to take into account proper matters or took into account matters which should not have been taken into account :

see, for example, Lessy Sarl v. Pacific Star [1996] 2 HKC 326; Hoddle v. CCF Construction [1992] 2 All ER 550; Paul Y-ITC Construction v. Kin Shing Company Ltd. [1999] 1 HKC 501; Venturetechno International v. New Century Chain Development Civil Appeal No.20 of 1996 and Hon Kwok Lun Wilson v. Shin Pok Lai Alvin HCA 10334/98.

6. In the circumstances set out above, I find that the Master did not err in making the said cost order. In fact, I would have made the same cost order in such circumstances.

7. The 1st Defendant argued at the appeal that the 3rd Defendant would have to incur the costs even if he had not made the aforesaid remark. I do not consider that to be a valid argument. If the 1st Defendant meant to say that the 3rd Defendant would have to attend the hearing before the Master in any event, I still consider that the cost order was correctly made. This is because the normal rule as to costs is that costs should follow the event. The 3rd Defendant was the winning party over the question of priority. By making the aforesaid remark, the 1st Defendant in effect made himself one of the opposing parties. The Court having ruled against the opposing party over that point, there is no reason why the 3rd Defendant as the winning party should not be entitled to recover its costs against the 1st Defendant as one of the opposing parties at the hearing.

8. For these reasons, the appeal is dismissed.