IN THE SUPREME COURT OF HONG KONG
|LEUNG CHEUNG HONG
|GOLDEN POND RESTAURANT LIMITED
Coram: Hon Jerome Chan, J. in Chambers
Date of hearing: 20 January 1997
Date of handing down judgment: 21 March 1997
J U D G M E N T
1. This was an application for review of taxation under Order 62 r.35 of the Rules of the Supreme Court. Judgment was entered by consent on 18 February 1995. The defendant was to pay the costs of the plaintiff, to be taxed if not agreed. Being an aided person, the plaintiff's own costs were to be taxed in accordance with legal aid regulations. On 18 May 1995, appointment for taxation of costs was filed by the plaintiff. On 16 June 1995, the defendant's solicitors made a Calderbank offer to settle the plaintiff's costs at the sum of $550,000. This was rejected by the plaintiff's solicitors on 20 June 1995. On 6 July 1995, a sum of $600,000 was paid into court by the defendant purportedly to be in satisfaction of the plaintiff's costs in lieu of taxation. On 4 August 1995, the defendant's list of objections was served on the plaintiff. The call-over took place on 7 August 1995. The bill was taxed on 17 November 1995 but was part-heard adjourned. On 29 November 1995, a further sum of $30,000 was paid into court by the defendant, making a total of $630,000. Taxation of the bill was finalised on 8 March 1996. Taxed costs were allowed at $561, 342, less than the first amount paid into court. After an exchanged of correspondence between the solicitors, an amendment to the application for review and three hearings, review of the taxed bill was completed on 27 September 1996 when the master confirmed the taxed costs. On 9 October 1996, the defendant sought further review to a judge. That review was heard and the taxed costs were further confirmed on 20 January 1997 with reasons reserved. I now hand down the reasons therefor.
2. The issues to be determined on the review were : (1) Could Order 62 r.5 be activated by the defendant's payment into court of the sum of $630,000? (2) What would be, if any, the effect of the defendant's Calderbank offer on the taxation of costs, in particular, when the plaintiff (the recipient) was an aided person?
Order 62 Rule 5
3. Order 62 r.5 provides that the court shall take into account the specified offers and/or payments into court when exercising a discretion as to costs. The applicability of that provision to the determination of costs of substantive proceedings has never been doubted. It was however very much in contention if such a provision could also be applicable to the determination of costs in a taxation.
4. The offers specified in sub-paragraphs (a) and (c) of r.5 could not be relevant to the offers made by the defendant in respect of the costs of taxation herein. The defendant also conceded that sub-paragraph (b) had no application in that the purported payments totalling $630,000 were not validly made under Order 22. The concession was properly made for two reasons.
5. Firstly, as a matter of formal requirement the forms under which the purported payments were made were defective in that they were not in conformity with Form No.23 of Appendix A. Furthermore, no Order 22 payment into court could be made in respect of taxation proceedings.
6. What is the scope of operation of r.5(b)? It is clear that "payment into court" must necessarily be a reference to lawful payments into court. Payments into court could only be lawfully made pursuant to an order of court, or under the rules or practices of the court. Thought theoretically possible, I am unable to envisage any order outside Order 22 for making payment into court that could have any direct relevance to the question of costs of the proceedings. Apart from payment into court pursuant to an order of the court, litigant can only pay money into court if specifically authorised by the rules or practices of the court. I was not referred to, nor am I aware of, any inherent right of a litigant to make payment of money into court. The existence of such "right" could not be consistent with legal principles nor common sense. No person, let alone an officer of court, could be made an involuntary custodian or trustee of funds without some form of overriding authority or principle of law. The consequences and implications of an unrestricted and uncontrolled right of litigants unilaterally placing funds in court thereby conferring liability and duties upon an officer of court as custodian or trustee of such fund are wholly unacceptable. It has not been shown to me that such chaos and anarchy represented the correct position in law. In the premises, though r.5(b) made no specific reference to "payment under Order 22", the only reasonable construction of the provision would necessarily include such a reference. I am satisfied that the reason for not making express reference to Order 22 was because of the absence of such a need. For...