GLORY SKY FINANCE LTD v. WONG KOON YEE AND OTHERS

HCMP 2378/2017

[2020] HKCFI 1191

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2378 OF 2017

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DECISION ON COSTS

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A.    Introduction

1.  On 7 May 2020, judgment was handed down in this action with a costs order nisi (“the Judgment”).

2.  According to the costs order nisi (set out in paragraph 40 of the Judgment):-

(1)     costs of the proceedings up to (and including) the hearing on 17 April 2018, save and except costs of the hearing on 8 December 2017, be paid by the 1^st, 2^nd and 3^rd Defendants on an indemnity basis, to be taxed if not agreed;

(2)     there be no order as to costs in respect of the hearing before Deputy High Court Judge R Pang SC on 8 December 2017; and

(3)     costs of the proceedings which have been incurred since 23 April 2018 be paid by the Intervener to the Plaintiff, to be taxed if not agreed.

3.  By letter dated 7 May 2020, Messrs Ching & Co (for the Plaintiff) wrote to the Court seeking to vary the costs order nisi.  The Plaintiff referred to the fact that the Intervener sent two letters (one dated 29 March 2018 from Messrs Francis Kong & Co (for the Intervener) to Messrs Ching & Co and the other one dated 16 April 2018 from the Intervener to the Court).  As contended by Messrs Ching & Co, solicitors for the Plaintiff, “the Plaintiff ought to have been given the costs of considering the letters and the costs of dealing with the same at the hearing that took place on 17 April 2019”.

4.  The Plaintiff’s present application is therefore only confined to the costs of considering the above two letters.  The Plaintiff asks the Court to vary the costs order nisi as against the Intervener to the extent that the date specified in paragraph 2(3) above, i.e. 23 April 2020 should be changed to 29 March 2018 or 16 April 2018.  

5.  I have ruled in favour of the Plaintiff against both the Defendants and the Intervener on the substantive merits of this case. Insofar as the Plaintiff’s application relates to “the costs of dealing with the same at the hearing” on 17 April 2018, the costs order nisi against the Defendants has already covered the costs of the hearing on 17 April 2019.  It is incumbent upon the Plaintiff to prove that the costs of considering the two letters have been reasonably incurred for the purpose of the hearing on 1 7 April 2019 if it intends to include the same for the purpose of taxation of costs as between the Plaintiff and the Defendants, if required.

6.  The hearing on 17 April 2018 primarily focused on the Plaintiff’s claim against the Defendants.  Although counsel for the Plaintiff did refer me to the Intervener’s position in his submissions, the time spent on that issue was minimal as I indicated to counsel at the hearing that the Intervener should be further asked to confirm whether it would participate in these proceedings.

7.  Pursuant to the directions given on 11 May 2020, Messrs Ching & Co wrote to the Court on 15 May 2020 providing further submissions in support of the application.  Most of those submissions are mere repetitions of the contents of the correspondence between the parties, which can be found in the hearing bundles.  Here, I only wish to address the following key points raised by the Plaintiff.

8.  First, the Plaintiff complains that the Intervener failed to formally appear at the hearing on 11 April 2018   Had the Intervener managed to do so, as contended by the Plaintiff, “the Plaintiff’s application could and would have been completely dealt with at the hearing that took place on 17^th April 2018, and the hearing of 11^th May 2018 could and would have been avoided”.  This, I think, is neither here nor there.  The fact that an additional hearing was necessitated by the Intervener’s delayed response has already been addressed in the costs order nisi which provides that the costs of the proceedings which have been incurred since 23 April 2018 (i.e. including the hearing on 11 May 2018) shall be paid by the Intervener to the Plaintiff.

9.  Second, the Plaintiff argues that the Intervener had already registered its “opposition”, thereby drawing the battle line, in Messrs Francis Kong & Co’s letter dated 29 March 2018 and the Intervener’s letter dated 16 April 2018 further elaborated its position.  It is, nonetheless, wrong and unreasonable for the Plaintiff to expect that it would be entitled to claim the costs of every step it took in connection with this case against a losing party.  In civil litigation, it is quite common that the parties may need to explore the positions of each other and make enquiry before they substantially embark on (or continue) legal proceedings.   Such preliminary enquiry may or may not eventually help resolve the dispute but they would normally assist the parties in mapping out what further actions should be taken.

10.  In the circumstances, the Plaintiff should at least be advised that it would need to incur some costs for the purpose of dealing with the preliminary enquiry as mentioned above and such costs may not be recoverable at the end of the day.  As a matter of illustration, had the Intervener in this case finally decided to consent to the Plaintiff’s application after a few rounds of correspondence (in which disputes and arguments were raised by the Intervener), it would have been difficult for the Plaintiff to identify any justifiable basis to seek the costs of “dealing with” such correspondence by way of an action or an application.

11.  The costs order nisi provides that costs of the proceedings which have been incurred since 23 April 2018 shall be paid by the Intervener to the Plaintiff.  As explained in paragraph 39 of the Judgment, 23 April 2018 was the date on which the Intervener confirmed in writing that it wished to take part in the proceedings.  I cannot see why the choice of such a date can be said to be wrong in principle, given that the question of costs is always within the court’s discretion.

12.  Finally, the Plaintiff in its submissions keeps alleging that “quite substantial costs” were incurred in dealing with the two letters. One must not, however, lose sight of the reality that, after all, the Plaintiff’s present application is only confined to the costs of considering these two letters (i.e. a 1-page letter and a 2 ½-page letter).   It is hard to understand how and why “substantial costs” could have been incurred in this regard.  Such an overstatement made on behalf of the Plaintiff is not at all helpful.

13.  For the above reasons, I order that the Plaintiff’s application to vary the costs order nisi be dismissed and that costs of this application be to the Intervener, to be taxed if not agreed. I also order that the costs order nisi made on 7 May 2020 be made absolute.