CONNAUGHT WEST LTD v. GLOBAL FIDUCIARY SOLUTIONS LTD AND OTHERS

HCA 525/2017

[2019] HKCFI 2934

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 525 OF 2017

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BETWEEN

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DECISION ON COSTS

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1.  At the end of the hearing on 26 September 2019, I allowed the defendants’ summons dated 18 September 2019 (“the Amendment Summons”) for leave to amend their summons dated 14 May 2019 (“the May 2019 Summons”), and dismissed the plaintiff’s summons dated 23 September 2019 for striking out both the May 2019 Summons and the Amendment Summons (“the Strike Out Summons”). I ordered the parties to file written submissions on costs after the handing down of my reasons for decision. I also gave directions for the filing of affidavit evidence and adjourned the May 2019 Summons as amended for substantive argument on a date to be fixed.

2.  My Reasons for Decision were handed down on 11 October 2019.  Further, the parties’ written submissions on costs have now been filed and considered by the Court.

A. The Amendment Summons

3.  Where a party seeks leave to amend his pleading and the application is unsuccessfully opposed in court, there are usually two sets of costs: (1) the costs of and occasioned by the amendment would be paid by the applicant in any event, and (2) the costs of the hearing would be paid by the party who failed in opposing the amendment: Lessy SARL v Pacific Star Development Ltd [1996] 2 HKLR 1 at 2C – J (Yam J).

4.  The party seeking to amend usually bears the costs of and occasioned by the amendment because he would be regarded as someone seeking the indulgence of the court in making the amendment. On the other hand, the party opposing the amendment application unsuccessfully usually bears the costs of the hearing because he would be regarded as someone who has unnecessarily or unreasonably refused to consent to the application. See Daimler AG v Leiduck (re: expert evidence) (No 3) [2018] 1 HKLRD 1188 at §§10 – 16 (Lisa Wong J).

5.  The defendants accept that the usual costs order for amendment is for the applicant to bear the costs of and occasioned by the amendments.  However, they submit that the Court should depart from the usual order and make an order that the costs of and occasioned by the amendments be in the cause of the amended May 2019 Summons.

6.  I am unable to accept this submission.  By the Amendment Summons, the defendants sought the Court’s indulgence to allow them to change the reliefs sought in the May 2019 Summons.  As a matter of principle, they should be responsible for the plaintiff’s costs which are incurred as a result of the amendments.  For instance, the defendants accepted at the hearing on 26 September 2019 that additional affidavit evidence would need to be filed by the plaintiff to deal with the defendants’ amendments. Such costs should be borne by the defendants.  The costs of and occasioned by the amendments should not depend on the outcome of the amended May 2019 Summons.

7.  Accordingly, the costs of and occasioned by the amendments (except such costs which are covered by the other orders made herein) should be borne by the defendants.

8.  As far as the costs of resisting the Amendment Summons are concerned, the plaintiff was unsuccessful in opposing the amendment application and it seems to me that the costs of resisting the Amendment Summons should be borne by the plaintiff in accordance with the usual rule.

B. The Strike Out Summons

9.  The plaintiff was also unsuccessful in its Strike Out Summons which, in any event, was in my view taken out unnecessarily.  Costs should follow the event.  Accordingly, the costs of and occasioned by the Strike Out Summons should be borne by the plaintiff.

C. The May 2019 Summons

10.  As a result of my order allowing the defendants’ amendment application, the original reliefs in the May 2019 Summons have now been replaced by a set of new and different reliefs.  It is not difficult to see that some of the work that the plaintiff has already carried out for opposing the May 2019 Summons (in its original form), and some of the evidence that the plaintiff has already adduced, may still be relevant for the purpose of the determination of the amended May 2019 Summons.  However, the same may not be true for some of the other work and other evidence carried out and adduced on behalf of the plaintiff, which may be regarded as “wasted”.  

11.  In these circumstances, it seems to me that (1) half of the costs of the May 2019 Summons (in its original form) incurred prior to 26 September 2019 should be borne by the defendants, and (2) the other half of the costs of the May 2019 Summons (in its original form) incurred prior to 26 September 2019 should be in the cause of the amended May 2019 Summons.

D. Costs of the hearing on 26 September 2019

12.  The hearing on 26 September 2019 was ultimately used for the following: (1) the defendants’ clarification of their position in relation to the reliefs sought in the May 2019 Summons (in its original form), (2) the determination of the Amendment Summons, (3) the determination of the Strike Out Summons, and (4) the giving of directions following the Court’s determination of (2) and (3). 

13.  Most of the time spent at the hearing on 26 September 2019 was taken up by the parties’ submissions on (2) and (3), which the defendants prevailed in the end.  To reflect this, it seems to me that 80% of the costs of the hearing on 26 September 2019 incurred by the defendants should be borne by the plaintiff.  No order as to costs is made in respect of the remaining 20%.

E. Disposition

14.  Both parties have made submissions that certain parts of the costs should be summarily assessed on paper.  However, they have both failed to file any statement of costs pursuant to paragraphs 7 and 8 of Practice Direction 14.3.  In any event, given the nature of the costs orders that I have made, it is inappropriate for a summary assessment of costs to be conducted at this stage. In these circumstances, I decline to carry out any summary assessment of costs. I order that all the costs that are made in this Decision shall be taxed if not agreed.

15.  As neither party is wholly successful in getting what they seek on costs, I make no order as to costs in relation to the written submissions on costs filed by the parties.