KONG MEAU CO. LTD. v. TSE MOON KAM MACKIN

HCA 11348/97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 11348 OF 1997

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J U D G M E N T

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1. This is my judgment on the matter of costs. The Plaintiff asked for costs of the action and costs of the counterclaim having won the action and the counterclaim.

2. Mr. Thomas Chan for the Defendant argued very strongly that I should order costs to the Plaintiff only on the District Court scale. His argument was based on the following factors. First, he said that the High Court has the jurisdiction to transfer the case down to District Court and that clearly emerges from Section 14 of the District Court Ordinance. But the trouble of that submission is that he overlooked the facts of these proceedings. Action was started on 25th October by the Plaintiff against the Defendant and amongst the prayers for the claim were:

1) injunction

2) the vacant possession of the car park, and

3) damages

3. The injunction is clearly only within the jurisdiction of the High Court and this has been conceded by Mr. Thomas Chan. So when the action was commenced, it was rightly commenced in the High Court and can only could be commenced in the High Court.

4. When the car was taken back by the Defendant and the claim of the Plaintiff was amended in February 1998, how has the proceeding changed? The proceeding was changed in that the Plaintiff added a claim for the loss of rental resulting from the loss of the car. That claim for loss of rental was quantified in the sum of HK$180,000.00. That therefore clearly took the case beyond the jurisdiction of District Court and that state of affair continued from February 1998 until the third day of the trial when, as a result of the Court, pointing out some of the difficulties of the Plaintiff, namely it required the matching of the various vacant premises to the car park loss that the Plaintiff, out of its generous concession and having regard to the expenses of continuing litigation, decided not to pursue that claim for the loss rental. It was probably a commercial decision, but in any event, it is not a decision that could have been easily made.

5. Up to that time, there is no question that the District Court has jurisdiction and on the third day when that happened, I was asked by Mr. Thomas Chan whether the Court might consider sending the case away to a lower court and the Court said no because we had come so far. The Court indicated that we must finish the case. To my mind, Section 14 really did not come into play at all until when the case was close to completion. I therefore see no justification for the contention of Mr. Thomas Chan that the Plaintiff should be awarded costs of the whole action only on the District Court scale.

6. The second contention of Mr. Thomas Chan is even more bold if I may put it in a most mutual and non controversial way. He contended that the Plaintiff had been guilty of misconduct and neglect within the meaning of Order 62 Rule 7. In that, the Plaintiff are knowing that it could not possibly succeed on the rent claim, had in February 1998 deliberately manufactured that claim in order to bring itself within the High Court jurisdiction. Now, let us look at the history of the matter. The Plaintiff certainly has strong belief in respect of this claim, to the extent that the Plaintiff brought Order 14 application including the claim for loss rent. The Plaintiff all along had prepared his case on the basis that it was likely to succeed. It was only on the third day in the circumstances as I described that it decided to give up that part of the claim. I can therefore see no justification for the irresponsible allegation made in open court to me that the Plaintiff had knowingly been responsible for misconduct for this claim of rent and I find as a fact that there has been no misconduct or neglect, on the part of the Plaintiff as to justify the invocation of Order 62 Rule 7 and I regret that counsel has seen fit to make such an irresponsible allegation with absolutely no basis for it.

7. It remains therefore, that the Plaintiff has succeeded in the claim and the question is should they be deprived of its High Court costs and what are the circumstances as to justify this? I have been referred by Mr. Thomas Chan to the case of Smith v. Tanrich Investment of Jerome Chan J. reported in 1995 1 HKLR. The situation of that case is wholly different from this case. There, the case was from the very beginning within the jurisdiction of the District Court and the parties had deliberately, both sides had thought that the case should be in the High Court when it could well have been brought in the District Court. So the facts are very different and the situation there was totally diverse from our case. I see, therefore, no basis for this judgment of Jerome Chan J. of being of any assistance to me whatsoever.

8. I have considered all the circumstances of this case. In my view and in the exercise of my discretion, I have no hesitation in ordering that the costs of the action including the costs of the counterclaim, should be wholly paid by the Defendant on the High Court scale.