Wong Yu Cho Rolly T/a The Hong Kong Museum Of Stone Sculpture & Asian Art v Lam Kwok Man

CourtDistrict Court (Hong Kong)
Judgment Date10 March 2008
Judgement NumberDCCJ5422/2006
Subject MatterCivil Action
DCCJ005422A/2006 WONG YU CHO ROLLY t/a THE HONG KONG MUSEUM OF STONE SCULPTURE & ASIAN ART v. LAM KWOK MAN

DCCJ5422/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5422 OF 2006

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BETWEEN
WONG YU CHO ROLLY trading as THE HONG KONG MUSEUM OF STONE SCULPTURE & ASIAN ART Plaintiff
and
LAM KWOK MAN Defendant

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Coram: H H Judge Marlene Ng in Chambers (Open to the Public)

Date of Hearing: 4th March, 2008

Date of Handing Down Ruling: 10thMarch, 2008

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RULING ON COSTS

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I. Background

1. On 31st January 2008, I handed down my decision in respect of the Defendant’s Amended Summons for striking out the whole or part of the Statement of Claim in the present action or alternatively staying the present action pending disposal of High Court Action no.2456 of 2005, and, where applicable, for extending time to file/serve the Defence (“Decision”). For the sake of convenience, I shall adopt the abbreviations in my Decision.

2. I dismissed the Defendant’s application to strike out the DC Statement of Claim or the DC Negligence Claim as pleaded therein on the ground of abuse. I further dismissed the Defendant’s application to stay the present action pending the disposal of the HC Action on the ground that the two actions are based on the same alleged facts and causes of action. Instead, I granted leave to the Defendant to file and serve his Defence within 14 days. Further, on my own motion, I transferred the present action to the Court of First Instance.

3. I granted a costs order nisi that the Defendant do pay the Plaintiff costs of the Amended Summons on District Court scale to be taxed if not agreed in any event, and that the costs of the present action in the District Court up to the date of the Decision be reserved to the Court of First Instance (“Costs Order Nisi”).

II. Application to vary the Costs Order Nisi

4. By a Summons dated 12th February 2008 (“Costs Summons”), the Defendant applied to vary the Costs Order Nisi. Although the Costs Order Nisi also dealt with costs of the present action in the District Court up to the date of my Decision, the written submissions of Mr Baillie, solicitor for the Defendant, made clear the Costs Summons only sought to vary the costs nisi in relation to the Amended Summons.

5. Mr Baillie submitted it was arguable that the Plaintiff should be liable for the Defendant’s costs of the Amended Summons, but the Defendant was prepared to accept “costs in the cause of the action” which would be fair to both parties. The Defendant also required the Plaintiff to pay costs of the Costs Summons.

III. Defendant’s grounds for the Costs Summons

6. The Defendant’s solicitors wrote to the Plaintiff (with copy to the court) on 13th February 2008 setting out the grounds for the reliefs sought in the Costs Summons. The Defendant claimed as follows :

The ground for the application to vary the costs order is that you were not completely successful on the application, in that Her Honour ruled :
(a) that the maintaining of the second, separate action in the District Court against our client is inappropriate (given that you already have a High Court action running in respect to substantially the same cause(s) of action); and
(b) that therefore the District Court action should be transferred to the High Court.

Accordingly, we say that the appropriate and fair costs order is : costs in the cause. The effect of that order is that the winner of the action as a whole will be entitled to the costs of the application, assuming the trial judge makes the usual order that costs follow event.”

7. The Defendant’s grounds were further elaborated in Mr Baillie’s written submissions, namely, that the Costs Order Nisi should be varied because (a) the Plaintiff was not wholly successful, and (b) the Plaintiff’s conduct in commencing and maintaining the present action “when the same negligence facts alleged in [the HC Action], and embarrassing pleading/position as to exactly what case of action Plaintiff relies on ……” was calculated to occasion unnecessary litigation and expense.

8. At the hearing of the Costs Summons, the Plaintiff claimed he had not received Mr Baillie’s written submissions. Mr Baillie insisted his firm had served his written submissions on the Plaintiff. To overcome such contention between the parties, I requested Mr Baillie to make full oral submissions (including the legal principles drawn from the authorities he cited), which were translated to the Plaintiff by the court interpreter. I am satisfied the Plaintiff has not been prejudiced.

IV. Plaintiff’s affirmation

9. The Plaintiff all along acts in person. He filed an affirmation on 28th February 2008 to oppose the Costs Summons. Since this is an application to vary the Costs Order Nisi in relation to the Amended Summons that has already been the subject of my Decision, it is inappropriate to receive further evidence on the costs issue. However, having read through the Plaintiff’s affirmation of 28th February 2008, I find it is more in the nature of written submissions than fresh affirmation evidence. Indeed, the contents of the Plaintiff’s affirmation of 28th February 2008 are similar to that of his written submissions of 3rd March 2008. Mr Baillie did not object to the Plaintiff’s affirmation of 28th February 2008, so I shall receive the same as part of the Plaintiff’s written submissions.

10. Several peripheral matters raised by the Plaintiff can be disposed of quickly :

(a) The Plaintiff claimed he should not bear costs of the Defendant’s application to amend the Summons. In fact, the Costs Order Nisi does not deal with such costs issue. I made a final order on costs in respect of such application in favour of the Plaintiff as set out in paragraph 10 of the Decision.
(b) The Plaintiff claimed he had good prospects of success in respect of his claims in the present action, and the factual disputes between the parties over the Assault Claim deserved to be adjudicated by trial. However, this is irrelevant on the question of costs of the Amended Summons for the Defendant accepted that in dealing with the Amended Summons he would not take issue over the merits of the Plaintiff’s claim set out in the DC Statement of Claim (see paragraph 24 of the Decision).
(c) The Plaintiff claimed that without an appeal against the Decision, the Costs Order Nisi could not be impugned. This is incorrect since Order 42 rule 5B of the Rules of the District Court (“RDC”) provides that “[where] a written judgment is handed down pursuant to this rule the Court may make therein an order nisi as to costs and, unless an application has been made to vary that order, that order shall become absolute 14 days after the decision is pronounced”. The Costs Summons was filed within the prescribed period of 14 days, and the Defendant is entitled to apply to vary the Costs Order Nisi even though he has not sought leave to appeal against the Decision.

V. Principles

11. The starting point is that subject to section 53 of the District Court Ordinance Cap.336 and Order 62 rule 2(4) of the RDC, the court has a complete discretion on costs. The cardinal rule is that costs should follow event except when it appears to the court that in the circumstances of the case some other order should be made (see Order 63 rule 3(2) of the RDC). The rationale is obvious. If it transpires that the applicant’s claim/application is ill-founded, the respondent should in general be entitled to recover his costs in answering such claim/application. The underlying objective is to indemnify the successful respondent. It also helps to compel an applicant to carefully assess the strength of his claim/application before commencing/issuing the same.

12. I do not disagree with the proposition that in exercising discretion on costs, the court may in appropriate circumstances take into account the “successful” party’s own conduct. “In the case of a wholly successful defendant the judge must award him costs unless there is evidence: (1) That the defendant brought about the litigation; or (2) has done something connected with the institution or conduct of the suit calculated to occasion unnecessary litigation and expense; or (3) has done some wrongful act in the course of which the plaintiff complains. Per Atkin L.J. in Ritter v Godfrey [1920] 2 K.B. 47” (see Hong Kong Civil Procedure 2008 Vol.1 para.62/3/3 at p.960).

13. Mr Baillie also referred to Order 62 rule 7 of the RDC as follows :

“(1) Where in any cause or matter any thing is done or omission is made improperly or unnecessarily by or on behalf of a party, the Court may direct that any costs to that party in respect of it shall not be allowed to him and that any costs occasioned by it to other parties shall be paid by him to them.
(2) Without prejudice to the generality of paragraph (1), the Court shall for the purpose of that paragraph have regard in particular to the following matters, that is to say-
(a) the omission to do any thing the doing of which would have been calculated to save costs;
(b) the doing of any thing calculated to occasion, or in a manner or at a time calculated to occasion, unnecessary costs;
(c) any unnecessary delay in the proceedings.”

14. Mr Baillie cited Scherer & anor v Counting Instruments Ltd & anor [1986] 1 WLR 615, which was referred to in the local judgments of Town Planning Board v Society for Protection of the Harbour Ltd (No.2) (2004) 7 HKCFAR 114 and SPC Credit Limited formerly known as Security Pacific Credit (Hong Kong) Limited v Wong Kam Biu CACV158/1999 (unreported, 21st September 1999). In Scherer, Buckley LJ in giving...

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