LO SUM YEE v. SUPERIOR BENEFIT LTD t/a JADE RATTAN WARE AND ANOTHER

HCPI 1010/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1010 OF 2006

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RULING ON COSTS

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1. After I handed down my Ruling on 26 June 2009, the 1^st and 2^nd Defendants were dissatisfied with the costs order nisi made in relation to the costs of the hearing on 29 April 2009.  They sought to vary it.

2. This is the Order made in paragraph 22 of my Ruling dated 26 June 2009:

“22.     Prior to the hearing on 29 April 2009, I decided the Official Solicitor should be asked to look into the matter of the minor’s allegations against the Next Friend.  It might have been made out of an abundance of caution, but the welfare of any child must be more important than concerns of time and costs.  Arrangements were made so that the hearing on 29 April 2009 was attended by the parties and the representative of the Official Solicitor.  Part of that hearing was spent on hearing the parties’ submissions on the claim for Loss of Earning Capacity.  It is my view that the 1^st & 2^nd Defendants should only bear 50% of the costs of that hearing and that there should be no order as to costs of the other 50%.  There is no good reason to make the 1^st & 2^nd Defendants bear the costs of the hearing when the court gave directions to the Official Solicitor.”

3. In relation to the hearing on 29 April 2009 the 1^st and 2^nd Defendants made a joint application to vary the costs order nisi.  They submitted inter alia:

“In the ruling it was held that the Plaintiff shall only be awarded costs on the District Court scale but the costs arguing the scale of costs have not been dealt with.  Your attention is drawn to the fact that each party has filed at least 2 skeleton submissions and gave an oral submission in the hearing on 29^th April 2009 in relation to this issue.  But the Plaintiff ultimately fails to persuade the court for an award of her costs on High Court scale.

As a result we submit that costs of the 1^st Defendant and of the 2^nd Defendant preparing the skeleton submissions, perusing the other parties’ skeleton submissions and 25% of the hearing on 29^th April 2009 shall be borne by the Plaintiff on party-and-party basis. Each of the 1^st and 2^nd Defendants shall only bear 12.5% of the costs of that hearing, while there is no order as to the costs of the remaining 50%.”

4. In other words, not being content with having to bear only 50% of the costs, the 1^st and 2^nd Defendants want the Plaintiff to be responsible for more of the costs incurred in relation to that hearing.  They wanted the 1^st and 2^nd Defendants’ burden to be further reduced by half.  Furthermore, they wanted to be awarded the costs of preparing their skeletons and making their oral submissions.

5. In support of their contentions, the 1^st and 2^nd Defendants referred to the rulings made by Mr Justice Stone in HCCL 59/2004 on 31 July 2008 and on 2 September 2008.  See Akai Holdings Ltd (In Liquidation) v Thanakharn Kasikorn Thai Chamkat (Mahachon) (31 July 2008, HCCL 59/2004).

6. In essence, the rulings made by Mr Justice Stone were put forward as authorities for the proposition that the court had the power to award costs to the “losing party” on discrete issues argued, if it was just to do so.

7. I have considered the authority relied upon carefully, but I am not persuaded that it is appropriate to vary the costs order nisi made for the reasons appearing below.

8. When the decision was made to have the 1^st and 2^nd Defendants bear only 50% of the costs of the hearing on 29 April 2009, all the circumstances of the hearing had been carefully weighed and considered.  I took into account what had transpired during the hearings.  I decided that the 1^st & 2^nd Defendants should not be burdened with the costs of the involvement and attendance of the Official Solicitor.

9. I noted that the claim for Loss of Earning Capacity was the core of the Plaintiff’s claim.  It was the sum claimed for Loss of Earning Capacity that boosted the claim into the jurisdiction of the High Court.  Without the sum sought for Loss of Earning Capacity, the action was clearly within the jurisdiction of the District Court.  All the factors later raised by the 1^st & 2^nd Defendants had been considered at the material time.  For instance at paragraph 22 of the earlier Ruling I wrote “part of the hearing was spent on hearing the parties’ submissions on the claim for Loss of Earning Capacity”.

10. Mr Justice Stone himself was wary of “filleting”, or artificially separating the issues in an action, just to support a case that a party had unjustifiably raised a certain or certain issues.  See paragraph 28 in his ruling dated 31 July 2008, where said:

“Certainly so far as the Commercial Court is concerned, it is recognised that commercial disputes often are complex and involve interwoven strands of fact and law; thus, unless discrete points safely can be isolated and can be shown to have lead to a wastage of time and costs, both at trial and during the interlocutory process, the practice of this court is not to engage in any “filleting” of cases according to the success or failure of the disparate issues which, when taken cumulatively, constitute the dispute to be judged.”

11. After the advent of Civil Justice Reform, it would be a step backwards to deal with a matter of costs as suggested by the 1^st & 2^nd Defendants.  Order 1A and the underlying objectives aim to increase “costs effectiveness”; “expeditiousness”; “proportionality”.  When the 1^st & 2^nd Defendants apply to the court to “fillet discrete issues of costs” in relation to a hearing that lasted a mere 19 minutes, it is not effective, expeditious or proportional.

12. As costs are always a matter within the discretion of the Court, I do not consider it appropriate to vary the cost order made in relation to the hearing on 29 April 2009.  The order that “the 1^st & 2^nd Defendants bear 50% of the costs of the hearing on that day, with no order as to costs of the remaining 50%” is made absolute.

13. Finally, I find that it would be just to make no order as to the costs of the arguments or hearing on 30 July 2009.

Representation: