Wing Ming Garment Factory Ltd v The Incorporated Owners Of Wing Ming Industrial Centre And Another

Court:Court of Appeal (Hong Kong)
Judgement Number:CACV27/2008
Judgment Date:29 Dec 2011
HCA8805D/1993 WING MING GARMENT FACTORY LTD v. THE INCORPORATED OWNERS OF WING MING INDUSTRIAL CENTRE AND ANOTHER

HCA8805/1993
& CACV27/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 8805 OF 1993

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BETWEEN

WING MING GARMENT FACTORY LIMITED Plaintiff

and

THE INCORPORATED OWNERS OF WING MING INDUSTRIAL CENTRE 1st Defendant
NEW GAS & COMPANY (a firm) 2nd Defendant

and

ESSMAN CONSTRUCTION COMPANY LIMITED Third Party

-------------------------

AND

CIVIL APPEAL NO. 27 OF 2008

(ON APPEAL FROM HIGH COURT ACTION NO. 8805 OF 1993)

------------------------

BETWEEN

WING MING GARMENT FACTORY LIMITED Plaintiff

and

THE INCORPORATED OWNERS OF WING MING INDUSTRIAL CENTRE 1st Defendant
NEW GAS & COMPANY (a firm) 2nd Defendant

and

ESSMAN CONSTRUCTION COMPANY LIMITED Third Party
-------------------------

Before : Mr Recorder Jat SC in Chambers

Date of Hearing : 9 December 2011

Date of Judgment : 29 December 2011

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JUDGMENT

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1. Before the Court are two appeals from the orders of Master Hui made on 1 September 2011 dismissing the applications by the Plaintiff and the Third Party (for convenience I shall simply refer to both of them as “Appellants”) to strike out the 2nd Defendant’s (“D2”) two Notices of Commencement of Taxation of Costs (“Notices”) dated 8 June 2011 filed in HCA8805/1993 and CACV27/2008 respectively, and extending time to commence taxation.

2. In issue on this appeal is the Court’s approach in an application for extension of time to commence taxation proceedings made after the expiry of the 2-year period prescribed under RHC O.62 r.22(7) introduced by amendments made under the Civil Justice Reform .

Material facts

3. The relevant facts are not in dispute. The taxation arose from a High Court action (HCA8805/1993) and the ensuing appeal (CACV27/2008).

4. On 20 December 2007, Reyes J dismissed the action and the Third Party’s counterclaim. The Appellants were ordered to pay D2’s costs. That costs order became absolute on 3 January 2008.

5. The Appellants appealed against Reyes J’s judgment. The Court of Appeal dismissed the appeal on 2 June 2008 with costs. The costs order in the Court of Appeal became absolute on 11 July 2008.

6. On 24 July 2008, the Appellants applied for leave to appeal to the Court of Final Appeal. The leave application process took more than a year, involving a number of hearings before the Court of Appeal and the Appeal Committee. It is unnecessary to go into the details. In short, there were two unsuccessful applications for stay of execution and two

applications for leave to appeal to the Court of Final Appeal. The last application ended on 16 September 2009, when the Appeal Committee granted the Plaintiff leave to appeal on one issue only. In the process, a number of costs orders were made against the Appellants in favour of D2.

7. However, on 3 November 2009, the Appellants abandoned the intended appeal.

8. In the meantime, D2 did not take steps to have the costs orders in its favour taxed. On 18 February 2010, D2’s solicitors (“W&C”) wrote to the Appellants’ (then) solicitors proposing a global settlement of all costs orders in favour of D2 in the total sum of $2.5 million. No reply was given.

9. The Appellants changed solicitors in March 2010. The settlement proposal was repeated in W&C’s letter to the Appellants’ new solicitors on 26 March 2010. Again, no reply was given.

10. In August and September 2010, the Appellants changed their solicitors to the firm now representing them (“OHS”).

11. In November 2010, W&C on behalf of D2 instructed a law costs draftsman to prepare a formal bill of costs. The formal bill was ready on 12 April 2011. This was sent to OHS under cover of a letter dated 14 April 2011 from W&C, who stated that if the Appellants did not accept the bill within 14 days, D2 would proceed to taxation without further notice. OHS replied stating that they were seeking instructions and requested W&C to withhold further action for 7 days.

12. On 24 May 2011, W&C gave final notice to OHS to provide substantive reply to W&C’s letter dated 14 April 2011. On 2 June 2011, OHS replied to W&C, raising the point that D2’s entitlement to commence taxation had been time-barred on 2 April 2011 under O. 62 r. 22(7).

13. On 6 June 2011, D2 filed the Notices, which led to the Appellants issuing the strike out applications on 28 June 2011.

14. On 18 July 2011, D2 issued two summonses under O. 62 r. 16(1) seeking extensions of time to commence taxation.

The taxation provisions

15. RHC O.62 r. 22(7), which was introduced as part of the CJR, provides that:

“A party is not entitled to commence taxation proceedings under rule 21 —

(a) after the expiry of 2 years from the completion date; or

(b) where the Court has extended the period specified in sub-paragraph (a), after the expiry of the period as extended,

whichever is later.”

16. Since both the costs orders at first instance and in the Court of Appeal were made before the commencement of O. 62 r. 22(7), by...

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