SUCCESS TOP (ASIA) LTD v. SZE KIN YU

DCCJ 1858/2022

[2024] HKDC 530

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1858 OF 2022

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BETWEEN

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DECISION

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1.  There are two summonses before this court today.

2.  On 18 October 2023, I dismissed the plaintiff’s appeal against Master Matthew Ho’s decision with a costs order nisi, requiring the plaintiff to pay the defendant the costs of the appeal, with a certificate for counsel, and such costs to be taxed if not agreed (“the Decision”, published under neutral citation [2023] HKDC 1451).

3.  Now, the 1^st summons is that the defendant applies to vary the costs order nisi from taxation to summary assessment. The 2^nd summons is that the plaintiff applies for leave to appeal to the Court of Appeal against the Decision.

1^st Summons - Variation of costs order nisi

4.  The issue before the court is whether the court should vary the costs order nisi from taxed costs to summary assessment.

5.  By a solicitors’ letter dated 24 October 2023, the defendant applied to vary the costs order nisi for summary assessment. Upon the plaintiff’s objection and this court’s direction, the defendant filed a summons dated 11 December 2023 seeking for serving the Summons out of time and a variation order to vary the costs order nisi to “the plaintiff shall pay the defendant the costs of the appeal with certificate for counsel to be summarily assessed and payable forthwith.”

6.  The defendant relies on the following provisions.

7.  Order 62 rule 9A provides:

“(1) Where the Court has determined an interlocutory application at any stage of proceedings and orders a party to pay costs in respect of the interlocutory application to any other party, it may, if it considers it appropriate to do so but subject to rule 9C —

(a) make a summary assessment of the costs by ordering payment of a sum of money to that other party in lieu of taxed costs;

(b) make a summary assessment of the costs by ordering payment of a sum of money to that other party in lieu of taxed costs but subject to the right of either party to have the costs taxed pursuant to paragraph (2); or

(c) order that the costs be taxed in accordance with this Order.”

8.  Practice Direction 14.3 provides:

“6. Upon the disposal of any application, cause or matter, the Court may make one of the following orders in respect of the costs of and incidental thereto:

(1) summary assessment of such costs, in which event Part C(1) below applies;

(2) provisional summary assessment of such costs; or

(3) taxation of such costs, in which event Part C(2) below applies.

The Court will give preference to the first two options where an interlocutory application is concerned, unless there is good reason not to do so, e.g. where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily.”

9.  Mr Siu, counsel appearing for the defendant, confirms that the defendant did not request a summary assessment at the last hearing. However, he contends that the plaintiff’s appeal against Master Matthew Ho’s decision is a stand-alone application. The activities relating to that application are readily identifiable. The costs relating to that application are self-contained. Mr Siu therefore submits that it is appropriate to vary the costs order nisi to provide for summary assessment. Reliance is placed on Hornor Resources (International) Co Ltd v Savvy Resources Ltd, unreported, HCA 335/2010, 21 April 2010, per Chu J (as she then was):

“6. … The activities relating to the applications and that are relevant to inter-partes costs should be readily identifiable. Further, as the proceedings in the action (other than those relating to the injunction) have been stayed pending arbitration, the costs in question will be self-contained.

7. The primary purpose of summary assessment of costs is the saving of costs and time. A full taxation, which involve the preparation of a full itemized bill of costs and a detailed list of objection and call-over and substantive hearings, will entail a lot of more costs as well as time. For a short matter like the present, it will not be in the parties’ interest to undergo a full taxation.”

10.  Mr Yeung, the director acting on behalf of the plaintiff, states that the defendant’s summons for the variation was filed out of time, and no leave shall be given to the defendant to file the same.

11.  However, in my view, this is similar to the situation of Waddington Limited v Chan Chun Hoo Thomas, unreported, HCA 3291/2003, 7 March 2006, where the application was first by letter within time, although the summons was issued out of time. In that case, Barma J (as he then was) granted leave to the defendant. I would adopt the same analysis that the defendant’s intention to make the application was at least notified to the court and to the other party within the time limit (see paragraph 16 of Waddington), and I therefore grant the defendant an extension of time to file the summons.

12.  Further, Mr Yeung on behalf of the plaintiff also submits that, as stated in the White Book 2024 para 62/9A/1, “… either party is entitled to insist on a taxation of the costs …”

13.  I cannot accede to Mr Yeung’s submissions. Mr Yeung was incorrect in omitting the first half of the sentence, which reads, “where the court has made a provisional summary assessment of the costs of the interlocutory application …” This is the provisional summary assessment referred to in Order 62 rule 9A(1)(b). However, the costs order I made was not a provisional summary assessment, which was subject to either party's right to the costs taxed.

14.  Overall, there is no prejudice to the plaintiff, whether the costs were summarily assessed or to be taxed. The plaintiff has not shown any ground that the costs cannot be dealt with summarily (Order 62 rule 9C(1)(a)).

15.  I do not agree with the plaintiff’s submission that once the court has made an order nisi for the costs to be taxed, the court cannot change it to summary assessment. Order nisi was made before hearing the parties’ submissions, and Order 42 rule 5B was made to cater to this situation. It was allowed in Hornor Resources.

16.  The legal authorities submitted by the plaintiff did not add further to its case.

17.  In such circumstances, I allow the costs order nisi be varied to the defendant’s costs to be summarily assessed.

2^nd Summons - Leave to appeal

18.  The test for granting leave to appeal is whether the appeal has a “reasonable prospect of success”; or whether there is some other reason in the interests of justice why the appeal should be heard.” (District Court Ordinance (Cap 336), s 63A(2) and the White Book 2024, para 59/2A/4).

19.  The plaintiff relies on 3 grounds:

(1) New evidence – the letter of District Lands Office dated 18 October 2023 (“the DLO Letter”);

(2) Director’s fund in support of the plaintiff’s litigation; and

(3) The plaintiff was not given sufficient time by the Master to address the defendant’s bill of costs and to deal with the defendant’s skeleton submissions and list of authorities.

20.  Ground 1—New evidence. I find the DLO Letter is not admissible as further evidence on the appeal as it failed to satisfy the conditions of Ladd v Marshall.

21.  The Ladd v Marshall conditions are:

(1) that the evidence could not have been obtained with reasonable diligence for the use at the hearing below;

(2) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and

(3) the evidence must be apparently credible though it need not be incontrovertible.

22.  It should be noted that the DLO Letter was issued in response to Success Leading Investment Limited, not the plaintiff herein. Therefore, it is not the plaintiff’s document. Furthermore, the complaint concerns the placement of miscellaneous articles in car parking spaces or adjoining areas, not the defendant’s area on the 20^th Floor.

23.  As pointed out by Mr. Siu, while Mr. Yeung claimed that the DLO Letter belonged to him as the addressee Success Leading is also one of the companies he owned or operated, the DLO Letter was actually written in response to the letter from Success Leading dated 25 September 2023. Therefore, it was self-serving for Mr Yeung to have written a letter to the District Lands Office on 25 September 2023 after the hearing and claimed the reply letter received in October as new evidence. In this regard, I agree with Mr Siu that the DLO Letter is not something that could not have been obtained with reasonable diligence before that hearing.

24.  For the aforementioned reasons, I find that the DLO Letter is not relevant to the plaintiff’s claim.

25.  But all that aside, I also find that the DLO Letter merely stated the obvious that it was the management office’s responsibility under the DMC, and stated that the management office had taken follow-up actions in dealing with the miscellaneous articles in the car parking spaces and adjoining areas. It would not have any important effect on the Decision.

26.  I therefore reject the DLO Letter as new evidence and refuse to grant leave on this ground of appeal.

27.  Ground 2—Director’s fund. Mr Yeung says that he, as a director of the plaintiff, is willing to provide funds and guarantees to pursue the plaintiff’s litigation.

28.  However, I agree with Mr. Siu’s submissions that the plaintiff’s affirmation was carefully framed “to provide funds and guarantee in pursuing the plaintiff’s litigation,” and, to date, there is still no guarantee or undertaking to pay any adverse costs order by the director.

29.  I repeat the reason I gave in paragraph 35 of the Decision.

30.  I also repeat paragraph 36 of the Decision that the plaintiff has admitted that it has no asset to pay for any costs consequence of the litigation.

31.  This ground simply has no merit.

32.  Ground 3—Insufficient time given to the plaintiff. The plaintiff challenges that the 50% discount given by the Master on the defendant’s bill of costs did not adequately reflect the insufficient time given to the plaintiff to respond.

33.  Mr Siu submits, and I agree, that the plaintiff did not make any submission on the 50% discount during the last rehearing, it should not be allowed to make any new submissions at the present application for leave hearing.

34.  In any event, I believe that I have adequately dealt with this ground in paragraphs 39 to 41 and 45 to 47 of the Decision.

35.  I refuse to grant leave on this ground.

36.  To conclude, I fail to see how the plaintiff’s appeal would have any reasonable prospect of success.

Conclusion

37.  For the above reasons, the plaintiff’s application for leave to appeal (plaintiff’s summons dated 1 November 2023) is dismissed. Costs of the said application to be paid by the plaintiff to the defendant forthwith, with certificate for counsel, to be summarily assessed.

38.  The defendant’s application to vary the costs order nisi (defendant’s summons dated 11 December 2023) is allowed. I make an order in terms of the summons. Costs of the said application to be paid by the plaintiff to the defendant forthwith, with certificate for counsel, to be summarily assessed.

39.  I shall record that the actual time used for today’s hearing is 50/50 for the two summonses, and the parties have agreed that costs should follow the event.

40.  Since the defendant has already submitted his statement of costs for summary assessment (dated 29 December 2023) for the above two summonses, I direct the plaintiff to lodge and serve its list of objections (if any) on or before 12 April 2024.

41.  As to the costs of the appeal (plaintiff’s notice of appeal dated 13 March 2023 against the Master’s decision) and the costs of the defendant’s summons to file and serve affirmation (summons dated 21 June 2023) in the cause of the appeal against the Master’s decision, the defendant has submitted his statement of costs (dated 8 December 2023). I direct the plaintiff to lodge and serve its list of objections (if any) on or before 22 April 2024.

42.  The above summary assessments will be conducted on paper.