LAI HOI PING ( 黎海平) ( suing on his own behalf and on the behalf of all other members of Hong Kong Taxi Association 香港計程車會) TAM CHUN HUNG ( 譚駿雄) ( suing on his own behalf and on LAI HOI PING AND ANOTHER v. PERSONS OCCUPYING PORTIONS OF NATHAN ROAD NEAR TO AND BETWEEN ARGYLE STREET AND DUNDAS STREET TO PREVENT OR OBSTRUCT NORMAL VEHICULAR TRAFFIC FROM PASSING AND REPASSING THE OCCUPIED AREAS AND OTHERS

HCA 2104/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2104 OF 2014

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DECISION ON COSTS

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A. Introduction

1.  On 21 November 2014, I handed down judgment (“the Judgment”) allowing the plaintiffs’ application to amend the injunction order (“the Order”) sealed on 14 November 2014.

2.  In the Judgment, I also made a costs order nisi in the following terms:

“costs of the application be to the 2^nd and 3^rd defendants (given that the plaintiffs are seeking an indulgence of the court), save that the costs of this hearing be to the plaintiffs (given that the 2^nd and 3^rd defendants have lost in their opposition to the application) to be taxed if not agreed, with certificate for two counsel. The 2^nd and 3^rd defendants’ own costs be taxed in accordance with legal aid taxation.”

3.  This is now the applications by the 2^nd and 3^rd defendants[1] to vary the costs order nisi to the extent that costs of the hearing of the amendment application should also be to them, or alternatively, there should be no order as to costs in relation to the hearing.

4.  By consent, it was directed that the applications are to be dealt with on papers and the parties have respectively provided their written submissions.

5.  This is the decision on the costs variation applications. The decision should be read together with the Judgment.

B. These applications

6.  The in substance submissions of the 2^nd and 3^rd defendants (for convenience, collectively “the defendants”) in support of the variation applications are in principal that:

(1) The amendment application is entirely caused by the plaintiffs’ own failure in framing the original terms of the Order properly and the plaintiffs were seeking the court’s exercise of indulgence in remedying their own fault.  As a starting position, they should bear the entire costs of the amendment application.

(2) Given the history leading to the amendment application, it was not unreasonable for the defendants to oppose the application, including appearing at the hearing.

(3) As such, even though the defendants were eventually unsuccessful in their opposition, in all the circumstances, it would only be fair and just to require the plaintiffs to bear all the costs, or at the least it would not be just and fair to require the defendants to bear those parts of the costs.

7.  Costs is always a matter of wide discretion for the court.

8.  In relation to the costs of seeking amendments, it has been observed by Yam J in Lessy SARL v Pacific Star Development Ltd [1996] 2 HKLR 1 at 2C-F as follows:

“It is accepted by both sides that in the usual order in an application to amend, when the application was resisted, there should be two sets of costs, namely: (a) costs of and occasioned by the amendment shall be to the other side, in this case the plaintiffs, in any event, but (b) costs of the hearing before the tribunal shall be to the party who is successful in the argument, in this case the defendants, who were successful in obtaining leave to amend.

…

The rationale behind in differentiating these two sets of costs is not to encourage the other side who has decided to resist an application to amend to have a try-on. Otherwise the resisting party would be under an impression that, win or lose, they will get their costs any way. The resisting party should be deterred to adopt such an attitude. In deciding to resist the amendment they should know that in the event they have lost the argument, they would be ordered to pay the cost of the argument and that is the costs of the hearing whilst the first set of costs, (i.e. the costs of and occasioned by the amendment), would be to them in any event.” (emphasis added)

9.  Yam J’s above analysis was further considered by Deputy Judge Andrew Cheung (as the learned CJHC then was) in Man Fong Hang v Man Ping Nam [2002] 4 HKC 538, who observed at paragraph 24 as follows:

“However, as demonstrated by the facts in Lessy SARL itself, if there was a reasonable ground for resisting the application, then even if the application was eventually successful, the court could still award the second set of costs, ie the costs of the hearing, to the resisting party although he was unsuccessful in opposing the application. Needless to say, even in relation to this second set of costs, there is nothing to stop the court from taking into account and indeed the court should take into account any and all other relevant factors in the exercise of its discretion.” (emphasis added)

10.  Thus, in relation to an application, such as the amendment application, seeking the court’s indulgence which is contested, there are usually two sets of costs under consideration.  One is the costs of and occasioned by the amendment, which should generally be to the other side.  The other is the costs incurred in contesting the application.  As to this, the costs may be borne by the unsuccessful opposing party if the opposition can be regarded in all the circumstances as unreasonable, such as that it is a “try-on”. These are of course only general guidance on how the discretion may be exercised.  The court still retains the overall discretion in deciding what is the just and fair costs order to be made by taking into account all the circumstances of each case.  In particular, after Civil Justice Reform (“CJR”), under Order 62, rule 5, the court should also have regard to, among others, the conduct of the parties and the underlying objectives of Order 1A, rule 1 in considering costs.  These objectives include looking at the proportionality of costs in the conduct of proceedings.

11.  Bearing these in mind, I am of the view that it would be just and fair in all the circumstances of this case that there should be no order as to costs relating to the hearing of the amendment application.

12.  In this respect, it is pertinent to look at the relevant events leading to the hearing on 21 November 2014.  They can be summarised as follows:

(1) The plaintiffs sought to amend the Order and the description of the 1^st defendant in the writ shortly after the hearing of the 3^rd defendant’s application for leave to appeal by the Court of Appeal on 14 November 2014.[2]  This was however done by the plaintiffs’ solicitors (PK&A) writing to the court unilaterally asking an amendment in the late afternoon of the same day (which was a Friday) without notifying the defendants.  The court then wrote to PK&A asking them to identify the court’s power to do so in the absence of consent from the other parties and without hearing them.  The court’s letter was copied to the defendants.

(2) Notwithstanding the above, PK&A sent a 1^st fax to the court in the morning of 15 November 2014 (which was a Saturday) attaching thereto a draft amended Order apparently asking the court to endorse it.  Again, this fax was not copied to the defendants.

(3) It was only later in that morning that PK&A sent a 2^nd fax to the court (this time copied to the defendants) asserting that the amendment was necessitated by “the directions” of Court of Appeal given at the leave hearing.  It was further stated that the legal representatives of the defendants present at that hearing did not raise any objections when the plaintiffs’ leading counsel gave the undertaking to the Court of Appeal to apply to this court to amend the Order.  In my view, these statements cannot be correct.  The amendments were necessitated not by “the directions” of the Court of Appeal.  It was an observation at that hearing by the appellate court that the description as originally drafted in the writ and thus the Order might to be too vague which might lead to enforcement difficulties.[3]  It was upon this observation that Mr Mok SC for the plaintiffs undertook to apply to this court to amend them.  There was no direction from the Court of Appeal as if that was the source of the jurisdiction.  Further, as the application to amend had not been made to this court, it also cannot be said that the defendants had therefore implicitly consented to the amendment application when they were present at the hearing before the Court of Appeal.

(4) On that day (ie, 15 November 2014), the 2^nd defendant’s solicitors (JCC) wrote to PK&A and copied to the court indicating that he should not be taken to have consented to any such amendment at the hearing before the Court of Appeal (in particular as his counsel, although being present, took no part in that appeal as the 2^nd defendant had not filed a leave to appeal application at that time).  JCC asked the plaintiffs to put forward their proposals as to how the application to amend would conform to the requirements in Order 20 for amendments.

(5) In light of the positions taken by the parties, on 17 November 2014, the court gave directions that the parties shall inform the court in writing by 18 November 2014 of any objections (and the basis thereof) to the intended amendments.  The court would deal with the objections on paper.  This resulted in the 3^rd defendant’s solicitors (D&A) making submissions in their letter dated 18 November 2014, disputing that the court had any jurisdiction to amend the Order under the slip rule: it was the 3^rd defendant’s position that the court was by then functus in relation to the Order and the amendment amounted to substantive amendment and thus could not come within the slip rule.  PK&A also provided their submissions supporting the amendment in a letter dated 18 November 2014.

(6) On 18 November 2014, the court gave further directions that there should be a 30-minute hearing on the application to amend on 21 November 2014, and that the parties shall provide their supplemental submissions by 20 November 2014.

(7) The parties (including both the 2^nd and 3^rd defendants) duly filed their submissions for that hearing.

(8) On 20 November 2014 at about 5:11pm, after the parties had filed their supplemental skeleton submissions by noon, the court sent a fax to the parties drawing their attention to two cases, namely, Law Wa Duen v Boldwin Construction Co Ltd (unreported, CACV 1835/2001, 5 December 2001) and Penrice v Williams (1883) 23 Ch D 353.  Those cases concern the power to amend under the “liberty to apply” jurisdiction, which had not been expressly addressed by the plaintiffs before.

(9) As mentioned above, I handed down the Judgment allowing the amendment after the hearing.[4]

13.  Given the above background, in particular in light of the plaintiffs’ failure in the beginning to point out clearly as to the court’s jurisdiction to amend the Order, it cannot be said that the defendants were acting unreasonably in opposing the application on jurisdiction points.  In this respect, the court also does not endorse the plaintiffs’ conduct in initially simply writing to the court on an ex parte basis seeking to amend the Order without notifying the defendants and without even identifying in the letters on what legal basis (even after the court had invited them to do so) they could ask the court to amend the sealed Order.

14.  On the other hand, the court also notes (as it set out at paragraph 4 of the Judgment) that the amendment sought would cause no prejudice to these opposing defendants.  The defendants (in particular the 2^nd defendant) had made substantial arguments in opposing the amendment application and thus contributed to the costs so incurred.  This should also not be encouraged in the present context, in particular in light of the spirit of CJR that parties shall conduct litigation in a proportionate manner.

15.  When all these matters are taken into account, I am of the view that the just and fair costs order in relation to the hearing is that there should be no order as to costs.

C. Conclusion

16.  For the above reasons, I would vary the costs order nisi to the extent that there be no order as to costs.  Thus, the final and absolute costs order of the amendment application is: costs of and occasioned by the application be to the 2^nd and 3^rd defendants (save that there be no order as to costs of the hearing, which should include the costs incurred in preparing the various submissions filed in support and in opposition to the application), to be taxed if not agreed.  The 2^nd and 3^rd defendants’ own costs be taxed in accordance with legal aid taxation.

17.  As the defendants are successful in these variation applications, they should have the costs of these applications, to be taxed if not agreed, with certificate for two counsel.

[4]  See the Judgment for the bases of allowing the amendment.