A A
B B
DCCJ 3647/2014
[2021] HKDC 179
C C
IN THE DISTRICT COURT OF THE
D D
HONG KONG SPECIAL ADMINISTRATIVE REGION
E CIVIL ACTION NO. 3647 OF 2014 E
F F
BETWEEN
G LAI KIM MING JOSEPH TRADING AS G
JOE LINES COMPANY Plaintiff
H H
I
and I
J J
MACROTECH SECURITY &
K K
MANAGEMENT SERVICES LIMITED Defendant
L L
M M
Before: His Honour Judge Edmond Lee in Chambers
N Dates of Written Submissions: 9 and 27 November, 7 December 2020 N
Date of Decision: 11 February 2021
O O
P DECISION ON COSTS P
Q Q
Introduction
R R
1. This is an application by the plaintiff for variation of a costs
S S
order nisi (“costs variation application”), which is contested by the
T defendant. T
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A A
B B
2. This was originally a case of business dispute between the
C parties under two actions, DCCJ 3392/2014 and DCCJ 3647/2014, which C
were heard together. By a judgment handed down on 4 September 2020
D D
(“Judgment”), with respect to this action DCCJ 3647/2014, I made a costs
E order nisi, which should become absolute in 14 days in the absence of any E
parties’ objection, that the plaintiff should pay the defendant 50% of its
F F
costs with certificate for one counsel (“costs order nisi”)1.
G G
3. By a summons filed on 16 October 2020 (“Summons”), the
H plaintiff applied for: H
I I
(a) leave to apply out of time to vary the costs order nisi;
J J
(b) an order that the costs order nisi be varied such that it provides
K
that the defendant should pay the plaintiff costs of this action K
or alternatively, that the defendant should pay the plaintiff
L L
such costs of this action as the Court thinks fit; and
M
(c) an order that the defendant should pay the plaintiff costs of M
this application.
N N
4. In support of this application, the plaintiff filed the 2 nd
O O
affidavit of Chan Chi Hung2 on 5 November 2020, the purpose of which
P was to explain the delay in making this application and urge the Court to P
exercise its discretion to allow this application out of time.
Q Q
R 5. First of all, the defence objects to the plaintiff’s filing of the R
2nd affidavit of Chan Chi Hung, arguing that it was done without the leave
S S
1
T Judgement dated 4 September 2020, at paras. 198 and 200 T
2
The handling solicitor of the firm acting for the plaintiff
U U
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A A
B B
of the Court or not pursuant to any Court’s direction, that it contained
C mostly matters beyond the defendant’s knowledge, and that it should have C
been filed at the same time when the Summons for the costs variation
D D
application was filed on 16 October 2020.
E E
6. It is not exactly correct nor fair to criticize the plaintiff for
F filing the said affidavit without the leave of the Court or not pursuant to F
any Court’s direction. In fact, prior to the filing of this Summons, there
G G
was correspondence between the parties and the Court, and it was directed
H in the Court’s letter dated 29 September 2020, among other things, that if H
the then intended summons was to be taken out by the plaintiff, it should
I I
be accompanied by an application for time extension with cogent reason(s)
J J
explaining the delay.
K K
7. The fact that a party’s affidavit containing matters not within
L the knowledge of the other party, which is common, should not be a bar to L
the filing of that affidavit. It is at the end of the day for the Court to decide
M M
what matters contained in the affidavit are to be accepted and what weight,
N if any, is to be attached thereto. N
O O
8. No doubt it should be more appropriate for the plaintiff to file
P the Summons and the supporting affidavit at the same time. Nevertheless, P
the late filing of the affidavit was done before the time due for the parties
Q Q
to file their respective submissions. As such, it caused no prejudice or
R unfairness to the defendant who had the opportunity to consider and reply R
when preparing its written submission to oppose this application.
S S
9. In any event, in making an application for an extension of
T T
time, a clear statement of the reasons for the inability to comply with the
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A A
B B
stipulated time limit should normally be provided, and that the requirement
C of an explanation for delay on an application for time is the norm3. C
D 10. I am prepared to accept the 2nd affidavit of Chan Chi Hung for D
the purpose of this costs variation application and would consider the
E E
matters deposed therein when needed.
F F
11. Also, the defendant objects to this application by the plaintiff,
G G
arguing that:
H H
(a) the Court is now functus officio and has no jurisdiction to deal
I with this costs variation application; I
(b) if the Court is not functus officio and still has jurisdiction to
J J
deal with this costs variation application, leave should not be
K granted to the plaintiff to make this application out of time; K
and
L L
(c) if leave is to be granted to the plaintiff to make this costs
M variation application out of time, the application should be M
N
refused and the costs order nisi should be made absolute. N
O 12. These are in fact the key issues of this costs variation O
application. I shall deal with them one after another.
P P
Q
Is the Court now functus officio and has no jurisdiction to deal with this Q
costs variation application?
R R
13. The relevant statutory provisions are O. 42, r. 5B(3) and O. 3,
S S
r. 5(1) and (2) of the Rules of the District Court, Cap. 336H (“RDC”):-
T T
3
See Hong Kong Civil Procedure 2021, at para. 3/5/2
U U
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A A
B B
Handing down reasons for judgment or order (O. 42, r. 5B)
C C
(1) …
D (2) … D
(3) Where a written judgment is handed down pursuant to
this rule the Court may make therein an order nisi as to
E costs and, unless an application has been made to vary E
that order, that order shall become absolute 14 days after
F the decision is pronounced 4. F
(4) …
G Extensions etc., of time (O. 3, r. 5) G
(1) The Court may, on such terms as it thinks just, by order
H H
extend or abridge the period within which a person is
required or authorized by these Rules, or by any
I judgment, order or direction, to do any act in any I
proceedings.
J (2) The Court may extend any such period as is referred to J
in paragraph (1) although the application for extension is
K
not made until after the expiration of that period. K
(3) …
L L
M
14. The relevant dates are:- M
N N
4 September 2020 – the Judgment, with the costs order
O nisi, was handed down O
18 September 2020 – the costs order nisi became absolute
P P
upon expiry of 14 days
Q 12 October 2020 – the Judgment was sealed Q
16 October 2020 – the plaintiff filed a summons to
R R
vary the costs order nisi
S S
T T
4
In fact, I made an order to the same effect, at para. 198 of the Judgment
U U
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A A
B B
15. The defendant does not dispute that the Court has power to
C extend time even after a costs order nisi has become absolute, but, by C
5
relying on the cases RTX Products Hong Kong limited v Li Yiu Fai and
D D
Poon Ching Man v Lam Hoi Pun 6, argues that the Court does not have
E power or jurisdiction to vary a costs order nisi once the judgment E
containing the costs order has been sealed7.
F F
16. In the Court of Appeal’s decision in Ma Wan Farming Ltd v
G G
8
Chief Executive in Council & Anor , an authority heavily relied upon by
H the plaintiff, Liu JA stated that:- H
I I
“A judgment clearly takes effect from the date of its
pronouncement but when a handed down judgment contains a
J provisional costs order, the provisional costs order would J
nevertheless remain tentative, albeit made in a final judgment and
the tentative costs order is liable to be re-ventilated as provided
K K
for in O. 42 r. 5B(6)9 … If an extension were granted for making
an application under O. 42 r. 5B(6), the order nisi would not
L become absolute because it shall become absolute ‘unless an L
application has been made to vary’ it within the time prescribed
or extended. The order nisi may be made absolute if the
M application is dismissed or otherwise made final subject to some M
variation if the application succeeds. The order nisi may be
N altogether replaced. Time for appeal against costs would run N
from a final costs order and the procedural predicament
postulated by Mr Dykes would not arise. In my view, this court
O has jurisdiction to extend time to the appellant for making an O
application to vary the order nisi…”10
P P
Q 5 Q
HCA 1777/2009, decision dated 12 November 2014, by Hon Anthony Chan J
6
DCPI 1585/2011, decision dated 22 April 2015, by Deputy District Judge Winnie Tsui (as she then
R was) R
7
See Skeleton submissions of the defendant, at para. 9
S 8
[1998] 2 HKLRD 314 S
9
O. 42, r. 5B(6) in the Rules of the High Court (Cap. 4A) is the equivalent provision of O. 42 r. 5B(3)
T of the Rules of the District Court (Cap. 336H) T
10
317F-I of the reported judgment
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A A
B B
17. The above was confirmed in another Court of Appeal’s
C decision in Tang Man Kit & Anor v Hip Hing Timber Company Limited11, C
where Cheung JA (representing the majority’s decision) stated that:-
D D
“6. In Ma Wan Farming Limited v. the Chief Executive in
E Council and another (No. 2) [1998] 2 HKLRD 314, this Court E
(Nazareth VP, Liu and Mayo JJA) was of the view that the
court has jurisdiction under Order 3, Rule 5 and Order 59, Rule
F F
10 to allow time to be extended for a variation of the costs nisi.
G 7. … G
H 8. … H
I 9. I am further of the view that Ma Wan Farming Limited I
was correctly decided. Liu JA held that Rule 5B(6) implicitly
authorizes a party to apply to vary an order nisi within 14 days.
J As the 14 days is a time prescribed by the Rules for the doing J
of an act in any proceedings, Order 3, Rule 5 and Order 59,
Rule 10 (inherent jurisdiction), would allow such a time to be
K K
extended.
L 10. I think the reasoning is sound and supported by the L
wording of Order 3, Rule 5(1) which provides that
M M
‘5. (1) The Court may, on such terms as it thinks
just, by order extend or abridge the period within
N N
which a person is required or authorized by these
rules, or by any judgment, order or direction, to
O do any act in any proceedings.’ (emphasis added) O
P
As Rule 5B(6) provides for 14 days for a party to vary the order P
nisi, Order 3 Rule 5(1) is engaged. Once there is jurisdiction
to extend time, the application to extend time can be made
Q either before or after the time prescribed by the rules. This is Q
also clear from Order 3, Rule 5(2) which provides that
R R
‘(2) The Court may extend any such period as is
referred to in paragraph (1) although the
S application for extension is not made until after S
the expiration of that period.’
T T
11
CACV 137/2002, judgment dated 8 June 2006
U U
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A A
B 11. This reasoning is supported by authorities such as B
Manley Estates Ltd. v. Benedek [1941] 1 All ER 248 and
C Regina v. Bloomsbury & Marylebone County Court ex parte C
Villerwest Ltd [1976] 1 WLR 362. The fact that Rule 5B(6)
provides for an eventual event, namely, the order becoming
D absolute is not a basis for excluding the jurisdiction. In terms D
of logic, it is no different from, for example, an order giving
E
judgment or dismissing an action unless a party perform E
certain acts within a specified period. In such a case, the court
still has jurisdiction to extend time for the act to be done after
F the period has expired. While I appreciate the requirement of F
finality of a decision, the rationale for making a provisional
order on costs is that arguments have not been heard and hence
G G
the parties are given time to vary the order. This being the case
it is inconceivable that the jurisdiction to vary the costs order
H can only be exercised if an application is made within the 14- H
day period but not otherwise. This being the case, Ma Wan
Farming Limited is binding on this Court and hence the Court
I retains jurisdiction to extend time.” I
J 18. In a more recent Court of Appeal’s decision in Re Good Idea J
International Ltd 12 , a case also heavily relied upon by the plaintiff, in
K K
which the first respondent sought leave to appeal against the order of
L Harris J in granting the plaintiff’s application for leave to extend the time L
period for convening an Extraordinary General Meeting under a consent
M M
order. The first respondent’s main argument was that the Court did not
N have jurisdiction to extend time as it had been rendered functus officio by N
the consent order. It was argued that, the general power to extend time
O O
under O. 3, r. 5(1) of the Rules of the High Court (Cap. 4A) did not apply
P P
to a stipulation of time under a final judgment disposing of the entire
Q
proceedings in the absence of any express or implied liberty to apply Q
provision. When refusing leave to appeal, Cheung CJHC (as he then was)
R R
stated that:-
S S
“…we take the view that O. 3, r. 5(1) is wide enough to cover
stipulations as to time contained in final judgments. O. 3, r. 5
T T
12
[2012] 4 HKLRD 186
U U
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A A
B expressly refers to ‘judgment’, without differentiating between B
a final judgment and an interlocutory judgment. The fact that
C O. 45, r. 6(1) deals with extensions of time under some C
overlapping circumstances does not require O. 3, r. 5(1) to be
given a restrictive interpretation, which serves no meaningful
D purpose.”13 D
E 19. I have also considered the two case authorities, RTX (a Court E
of First Instance decision) and Poon Ching Man (a District Court decision),
F F
relied upon by the defendant, where the orders nisi in question had already
G been sealed at the time when the applications to vary the same were made. G
H H
20. For the case RTX, it is, first of all, worth-noting that Anthony
I Chan J considered the application to vary the order nisi was “hopelessly I
unmeritorious” and that it was “extraordinary” for it to be made almost 3
J J
years after the order had become absolute14. In passing, the learned judge
K expressed his view that “once the order has become absolute, I am inclined K
to the view that any disagreement will then have to be pursued on appeal”15.
L L
He went on to express that, even if the Court retained jurisdiction over the
M order nisi, no time extension should be allowed as the lapse of 3 years was M
a serious erosion of the principle of finality to litigation and the potential
N N
injustice to the other party was obvious 16 . Finally, the learned judge
O concluded that he “see[s] no justification for a variation of the [order nisi] O
and no reason at all to allow an extension of time to enable the defendant
P P
to apply to do so (assuming that the court retains jurisdiction over the
Q Q
R R
13
See para. 8 of the judgment
S S
14
See paras. 2 and 5 of the judgment
15
T See para. 9 of the judgment T
16
See para. 10-11 of the judgment
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A A
B B
matter)”17. I am of the view that the above comment on the jurisdiction
C issue is obiter and therefore not binding. C
D 21. The other case Poon Ching Man requires more detailed D
consideration. After recognizing the principle under Andayani v Chan Oi
E E
Ling 18 (i.e. by the common law, the court is functus officio when the
F judge’s order had been drawn up, entered or otherwise perfected) as well F
as RTX and considering a number of case authorities, Deputy District
G G
Judge Winnie Tsui (as she then was) set out four categories of cases which
H involve a court revisiting a previous order which had been sealed19. The H
only category of cases which was of direct relevance to that case, so is for
I I
20
the present case as accepted by the plaintiff here , is the last category of
J
the “statutory rules” cases, which refer to the cases where the court, J
K
pursuant to applicable rules of court, amends a previous order, including K
but not limited to enlarging time specific in it.
L L
22. The learned judge then considered the relevant authority Re
M M
Good Idea21, where the Court of Appeal took the view that O. 3, r. 5 was
N wide enough to cover all judgments, be they final or interlocutory22. The N
learned judge observed at paragraph 34 of her judgment:-
O O
P
“34. It seems sufficiently clear that the principle underlying P
the decision is that the court may revisit a previous order, even
Q Q
17
See para. 16 of the judgment
18
R [2000] 4 HKC 233 R
19
The four categories of cases are “manifest intention” cases, “slip rule” cases, “liberty to apply” cases
and “statutory rules” cases, see para. 13 of the judgment
S S
20
See P’s Reply Submissions at para. 4
21
T See para. 19 here T
22
Re Good Idea International Investment Ltd [2012] 4 HKLRD 186 at para. 8
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A A
B after sealing, if a power is conferred on it to do so under the B
applicable rules of court. In Re Good Idea, the applicable rule
C of court was RHC Order 3 rule 5. In such an instance, the C
court’s power to revisit stems not from its original jurisdiction
over the case, which has come to an end upon sealing
D (applying the principle of functus officio), but from a “fresh” D
power to act conferred on it by the statute. Such power is of
E
course to be exercised strictly in accordance with the E
provisions of the applicable rule.” (original emphasis)
F F
23. The learned judge went on to draw support to the above
G
observation from Re L and B (children) (care proceedings: power to revise G
judgment) [2013] UKSC 8, where Lady Hale SCJ on the one hand
H H
recognized the common law principle that when a judgment is perfected a
I judge is not allowed to revisit it and on the other hand stated that a court I
may do so where there is an express power to vary or revoke, which was
J J
consistent with the decision in Andayani and echoed the position of the
K Hong Kong courts in the “statutory rules” cases23. K
L 24. I pause here to quote the comment of Lady Hale in Re L and L
B, to which I entirely agree, “Where there is a power to vary or revoke,
M M
there is no magic in the sealing of the order being varied or revoked. The
N question becomes whether or not it is proper to vary the order.”24. N
O O
25. The learned judge in Poon Ching Man eventually stated
P emphatically at paragraph 46 of her judgment:- P
Q “46. Having considered the authorities at some length, I Q
now return to how the principle established in the “statutory
R rules” cases should be applied to the plaintiff’s application to R
vary the costs order nisi in this case. But for the reason stated
in §§48 to 50 below, I would be inclined to hold that the court
S does have jurisdiction, which it derives from the express power S
23
T see paras. 37-45 of the judgment T
24
See para 37 of the judgment
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A A
B given under RDC Order 3 rule 5, to extend the 14-day time B
limit stipulated in the order (by operation of RDC Order 42
C rule 5B(3)) so as to bring the plaintiff’s application to vary C
within time. I would be inclined to treat it as an instance of the
court exercising a power conferred on it by the applicable rules
D of court to revisit a previous order, namely, to vary a time limit D
imposed in that order, just as in Re Good Idea.”
E E
26. The learned judge, however, when deciding on that particular
F jurisdiction issue in Poon Ching Man at paragraphs 48 to 50 of her F
judgment, took the view that the case before her was indistinguishable
G G
from RTX and, because RTX was a decision of the Court of First Instance
H and under the rule of stare decisis, the learned judge felt she was bound by H
it. Therefore, notwithstanding her conclusion drawn from the authorities
I I
25
and her view as clearly expressed in paragraph 46 of her judgment , she
J J
decided that she had no jurisdiction to revisit the costs order nisi upon the
K
sealing of the order26. K
L 27. I should mention that the judgment as well as the costs order L
in Poon Ching Man were appealed against. The Court of Appeal
M M
nevertheless declined to deal with the learned judge’s decision on her
N jurisdiction to extend time because the Court felt it did not have the benefit N
of proper arguments27. Instead, the Court of Appeal dealt with the actual
O O
costs order. For the sake of completeness, I set out the useful comments
P of the Court of Appeal on that particular jurisdiction point as follows:- P
Q Q
“42. In light of what had been said, we shall confine ourselves
to the following brief comments on the jurisdiction point:
R R
S S
25
See para. 25 here
26
T See para 51 of the judgment T
27
Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815, at paras 30-31 and 42
U U
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A A
B (a) There are 2 Court of Appeal judgments suggesting that B
the court has jurisdiction to extend time for varying a costs
C order nisi after it had become absolute: Ma Wan Farming Ltd C
v Chief Executive in Council (No 2) [1998] 2 HKLRD 314;
Tang Man Kit v Hip Hing Timber Co Ltd CACV 137 of 2002,
D 8 June 2006; D
(b) At the same time, in both instances, the courts actually
E refused to vary the costs order; E
(c) Also in both instances, the applications for variation
F F
were made within a relatively short period after the expiry of
the 14-day limit.
G G
(d) It is not clear from the judgments whether the costs
order absolute had been perfected. There was no discussion in
H Ma Wan and the majority’s decision in Tang Man Kit on the H
implication of the court being functus officio after sealing of
the order (if the costs order absolute had been sealed) though
I I
Chung J (who would have decided differently in Tang Man Kit
but for Ma Wan) adverted to it at paragraph 28, citing his own
J judgment in Syed Haider Yahya Hussain v Registrar of Births J
and Deaths HCAL 73 of 1999, 12 July 2005;
K (e) The functus officio point was taken up again by K
Anthony Chan J in RTX Products v Li Yiu Fai HCA 1777 of
2009, 12 Nov 2014 in refusing to entertain an application for
L L
variation of a costs order nisi after the sealing of the order;
(f) In the present case, the Judge considered herself to be
M M
bound by the decision of Anthony Chan J but she also opined
that an application for variation might fall within the principles
N discussed in Re Good Idea International Investment Ltd N
[2012] 4 HKLRD 186 and Re L & B [2013] 1 WLR 634 by
way of exception to the general principle of functus officio;
O O
and
(g) For reasons we have canvassed earlier, without proper
P P
arguments before us, we shall not express any concluded view
on the controversy. However, we would add that even
Q assuming that the court has jurisdiction to entertain the Q
application, it may not be just an application to extend time.
Rather, it also involves the setting aside of the order absolute
R that had been entered. If the nature of the application is viewed R
in that way, it is at least arguable that the considerations in
S Order 2 Rule 5 should also be relevant.” S
T T
U U
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A A
B B
28. Having carefully considered all the above authorities, I am in
C full agreement with the detailed analysis of Deputy District Judge Winnie C
Tsui (as she then was) on the jurisdiction issue in Poon Ching Man, except
D D
that, with respect, I do not share her view that the decision on the
E jurisdiction issue in RTX is binding as I find it to be comments as obiter E
for the reasons stated above28.
F F
29. In any event, I am of the view that I should follow the Court
G G
of Appeal’s decisions in Ma Wan, Tang Man Kit (the majority’s decision)
H and in particular, Re Good Idea (where a consent order was the subject H
matter) on this very jurisdiction issue. The starting and fundamental point
I I
for consideration is that, O. 3, r. 5(1) should be given a natural
J J
interpretation, it is wide enough to cover stipulations as to time contained
K
in final as well as interlocutory judgments, this rule explicitly confers the K
widest measure of discretion and draws no distinction whatsoever between
L L
various classes of cases29. I therefore come to conclude that this Court
M
have power or jurisdiction to revisit, and vary if needed to, the costs order M
nisi even when the Judgment containing it has been sealed.
N N
Whether leave should not be granted to the plaintiff to make this costs
O O
variation application out of time?
P P
30. The Court of Final Appeal in Astro Nusantara International
Q Q
B. V. v PT Ayunda Prima Mitra 30 observed that it had often been
R emphasised that the discretion to extend time conferred by O. 3, r. 5 is R
S S
28
See para. 20 above
29
T See Hong Kong Civil Procedure 2021, at paras. 3/5/1 and 3/5/2 T
30
[2018] HKCFA 12
U U
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A A
B B
broad and unrestricted, which was designed to enable justice to be done
C between the parties, and held that the proper test involves looking at all C
relevant matters and considering the overall justice of the case, eschewing
D D
a rigid mechanistic approach31.
E E
31. In order to succeed on the application for leave to extend time,
F the plaintiff must show that there is justifiable reason for not making the F
application within time and there are merits in varying the costs order32.
G G
H 32. Also, the Court is also required to take into consideration H
whatever consequences that would follow from a time extension when
I I
exercising its discretion33.
J J
33. I also take note of the Court of Appeal’s comment in Poon
K K
Ching Man where it was observed that, it may not be just an application to
L
extend time, rather, it also involves the setting aside of the order absolute, L
and it is at least arguable that the considerations in O. 2, r. 5 should also be
M M
relevant34.
N N
34. O. 2, r. 5 of RDC provides:-
O O
5. Relief from sanctions (O. 2, r. 5)
P P
(1) On an application for relief from any sanction imposed
for a failure to comply with any rule or court order, the
Q Q
Court shall consider all the circumstances including—
R R
31
See paras. 53 and 90 of the judgment of Astro Nusantara, and also Hong Kong Civil Procedure
2021, at para. 3/5/2
S S
32
Tang Man Kit, at para. 12
33
T Ma Wan, at para. 317C T
34
Poon Ching Man, CA decision, at para. 42(g)
U U
V V
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A A
B (a) the interests of the administration of justice; B
C
(b) whether the application for relief has been made C
promptly;
D (c) whether the failure to comply was intentional; D
(d) whether there is a good explanation for the failure
E to comply; E
(e) the extent to which the party in default has
F F
complied with other rules and court orders;
G (f) whether the failure to comply was caused by the G
party in default or his legal representative;
H (g) in the case where the party in default is not legally H
represented, whether he was unaware of the rule or
court order, or if he was aware of it, whether he
I I
was able to comply with it without legal assistance;
J (h) whether the trial date or the likely trial date can still J
be met if relief is granted;
K (i) the effect which the failure to comply had on each K
party; and
L (j) the effect which the granting of relief would have L
on each party.
M M
(2) An application for relief must be supported by evidence.”
N N
35. The plaintiff’s solicitors sought to explain by the 2 Affidavit nd
O O
of Chan Chi Hung (“CCH’s Affidavit”) as to why it took so long for the
P plaintiff to take out the Summons for this costs variation application. The P
following matters are of relevance:-
Q Q
R (a) The Judgment was handed down on 4 September 2020, R
meaning that the costs order nisi contained therein would
S S
become absolute on 18 September 2020.
T T
U U
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A A
B B
(b) It was asserted that the plaintiff’s legal team took time to
C consider the judgment, to discuss with the trial counsel, to C
advise the plaintiff and to obtain instructions from the
D D
plaintiff, for this trial involving many factual issues and
E disputes35. E
F (c) It was also asserted that a “summons was therefore intended F
to be issued on 17 September 2020” (i.e. one day before the
G G
order nisi became absolute)36.
H H
(d) The plaintiff’s legal team was “worried about having to recall
I and reconsider voluminous materials, documents, and I
transcripts of the trial” and that trial counsel had other work
J J
commitments during the months of October and November
K 202037. K
L (e) On 17 September 2020, the plaintiff’s solicitors sent a L
litigation clerk to the District Court in the hope of issuing a
M M
summons and securing a later hearing date for the variation
N application; however, the clerk was informed by the Listing N
Officer that no hearing date would be fixed because she did
O O
not have my diary when I was at that period of time seconded
P to the High Court. The litigation clerk was told to leave with P
the Listing Officer the summons and the counsel’s diary38.
Q Q
R R
35
CCH’s Affidavit, at paras. 3-4
S S
36
CCH’s Affidavit, at para. 4
T 37
CCH’s Affidavit, at para. 5 T
38
CCH’s Affidavit, at paras. 7-8
U U
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A A
B B
(f) There were further verbal communications between the
C Listing Officer and the plaintiff’s solicitors (through the C
handling solicitor or the litigation clerk) as well as written
D D
correspondence passed between the plaintiff’s solicitors and
E my clerk between 18 September and 29 September 202039. E
F (g) On 12 October 2020, the plaintiff presented the summons for F
this costs variation application to the District Court and, after
G G
consultation by the Listing Officer with the Court’s diary,
H eventually had it filed on 16 October 2020 H
I I
36. The plaintiff’s explanation for the delay is that the 28-day-
J
delay was “inadvertent and arose out of an overly cautious but now J
K
perhaps erroneous worry for the amount of preparation” required for the K
variation application, and it is submitted that the delay was relatively short
L L
and not intentional and that it did not cause any prejudice to the defendant40.
M M
37. The defendant’s stance was that the earliest time the plaintiff
N showed an intention to challenge the costs order was allegedly on 17 N
September 2020, one day before the costs order nisi would turn absolute,
O O
appeared to be an afterthought. Furthermore, such “inadvertence” sat
P uncomfortably with the fact that a statutory demand was issued by the P
plaintiff’s solicitors against the defendant for the judgment debts on 16
Q Q
September 2020. It is submitted that, the plaintiff had only himself and his
R legal team to blame, asking the Court to revisit a costs order absolute and R
its judgment having been sealed would cause serious injustice and
S S
T 39
CCH’s Affidavit, at paras. 9-12 T
40
CCH’s Affidavit, at para. 15
U U
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A A
B B
prejudice to the defendant, and that no credible explanation for the delay
C had been put forward to warrant the Court’s exercise of discretion in his C
41
favour .
D D
38. First of all, I am prepared to accept that the plaintiff’s
E E
solicitors’ litigation clerk attended the District Court, intending to issue a
F summons and secure a later date for hearing to apply for varying the costs F
order nisi, on 17 September 2020. It seems to me that if the clerk did go
G G
to the District Court on that day, i.e. a day before the costs order nisi had
H become absolute, but for the fact that I was at that time sitting in another H
Court and therefore the Listing Officer did not have my diary, the plaintiff
I I
would have filed the summons with a return date fixed on that particular
J
day. Further, various correspondence between the plaintiff’s solicitors and J
K
the Court showed that the plaintiff’s solicitors had been concerned with K
(though erroneously) the time and efforts required for the preparation of
L L
this costs variation application and thus endeavoured to secure a latest
M
possible hearing date. All these appear to have explained the plaintiff’s M
failure in taking out the Summons in time or at least not being able to do
N N
so sooner than they actually did.
O O
39. The delay of 28 days (or 24 days, if the date of presentation
P of the Summons to the Listing Officer is to be counted) in filing the P
Summons, though not insubstantial, does not amount to a bad delay in the
Q Q
circumstances of this case. More importantly, the delay, in my view, had
R not caused any real or substantial prejudice to the defendant. R
S S
40. I have also considered and found that there are at least some
T T
41
See skeleton submissions of the defendant, at paras. 14 and 15
U U
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A A
B B
merits in this costs variation application. As said, the proper test involves
C looking at all the relevant matters and considering the overall justice of the C
case. It would not be just to shut out a party from arguing a meritorious
D D
case simply because of a delay of 20 odd days, in particular in the
E somewhat unusual circumstances, as described above 42, of this case. E
F 41. Having considered all the circumstances, I am prepared to F
exercise my discretion to grant an extension of time so as to allow the
G G
plaintiff to proceed with this costs variation application.
H H
I Whether this costs variation application should be granted and what the I
costs order absolute should be?
J J
K
42. The two actions, DCCJ 3392/2014 and DCCJ 3647/2014, K
were heard together. At the end of my judgment, I made a costs order nisi
L L
for each of them.
M M
43. In DCCJ 3392/2014, I found that the plaintiff succeeded in all
N his claims under Issues 1 and 2 for the full sum of HK$660,000, the set- N
off of the unpaid loan of HK$100,000 owed to the defendant was not in
O O
issue, and that the plaintiff was entitled to all his costs43.
P P
44. In DCCJ 3647/2014, where there were 5 issues (Issues 3 to 7)
Q Q
in dispute, I found that the plaintiff succeeded in Issues 3, 4 and 7 but failed
R in Issues 5 and 6. I took the view that Issues 5 and 6 were discrete from R
the rest of the controversies and added a lot to the complexity and the
S S
42
The plaintiff’s solicitors being overly or even erroneously cautious about preparing this application
T and the Listing Officer not having my diary when first approached for issuing the summons T
43
Judgement dated 4 September 2020, at para. 199
U U
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A A
B B
length of the trial. Having considered all the circumstances,
C notwithstanding that the plaintiff succeeded in some issues, I ordered that C
44
the plaintiff should pay the defendant 50% of its costs .
D D
45. The plaintiff argued that the proper costs order for the action
E E
DCCJ 3647/2014 should be costs be to the plaintiff for three reasons: (a)
F the plaintiff succeeded in the two actions on different legal bases; (b) the F
plaintiff succeeded in most of the claims on the facts or the law in DCCJ
G G
3647/2014 but for two issues; and (c) the plaintiff’s conduct for the two
H losing issues was in the course of ordinary litigation and they did not add H
much to the length or complexity of the case45.
I I
J 46. The defendant argued that the costs order nisi for DCCJ J
3647/2014 was the proper order to make, which was of unassailable
K K
reasoning and wholly in line with the established legal principles 46.
L L
47. On reflection, I am convinced by the plaintiff’s argument that
M M
the plaintiff succeeded in the two actions, namely DCCJ 3392/2014 and
N DCCJ 3647/2014, on different legal bases. N
O 48. Although the exact nature of the business relationship O
between the plaintiff and the defendant (Issue 1)47 was the common and
P P
primary issue in both actions, it was not the “element” of the plaintiff’s
Q claim in the first action DCCJ 3392/2014. The fundamental issue in that Q
R R
44
Judgement dated 4 September 2020, at para. 200
S 45
Plaintiff’s submissions, at para. 8 S
46
Skeleton submissions of the defendant, at para. 17
T T
47
The plaintiff’s case was that the business relationship was one of contractual joint venture whereas
the defendant’s case was that it was one of agency
U U
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A A
B B
first action was whether there was an oral agreement, and what its terms
C were, between the parties on provision of “additional work” by the plaintiff C
at the material time.
D D
49. By contrast, in the second action DCCJ 3647/2014, that
E E
particular Issue 1, namely the nature of the parties’ business relationship,
F depending on what exactly it was, formed the basis of the defendant’s F
counterclaim and that of the plaintiff’s defence thereto.
G G
H 50. As such, I am now convinced that the relevant costs issues in H
the two respective actions, notwithstanding that there existed a common
I I
and primary issue (Issue 1) as aforesaid, should be approached and
J considered separately. J
K K
51. Leaving aside the common issue of the parties’ business
L
relationship (Issue 1) and looking at the key issues of the second action L
DCCJ 3647/2014 from a global view, there were five issues as follows:-
M M
N Issue 3 – the termination agreement (and its terms) N
Issue 4 – the profits for July and August 2014
O O
Issue 5 – the properties claim
P P
Issue 6 – the bonus claim
Q Q
Issue 7 – the defendant’s counterclaim (the plaintiff’s
R implied and/or fiduciary duties) R
S S
52. In the Judgment, in summary, I found the plaintiff succeeded
T in 3 out of 5 of those issues (Issues 3, 4 and 7) but failed in the remaining T
2 issues on various claims for properties and bonus (Issues 5 and 6).
U U
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A A
B B
53. The general principle, which is beyond argument, is that costs
C are matters of discretion of the Court. C
D 54. Costs should follow the event, except when it appears to the D
Court that in the circumstances of the case some other order should be
E E
made as to the whole or any part of the costs: O. 62, r. 3(2) of RDC.
F F
55. O. 62, r. 5(1) of RDC sets out a number of factors which the
G G
Court should take into account when exercising its discretion. I set out
H below those factors which I consider to be relevant to the present case: H
I I
(a) the underlying objectives set out in RDC O. 1A, r. 1;
J (b) the conduct of all the parties; and J
(c) whether a party has succeeded on part of his case, even if he
K K
has not been wholly successful.
L L
56. With respect to the conduct of the parties, O. 62, r. 5(2) of
M M
RDC elaborates on the factors to be considered, which include, whether it
N was reasonable for a party to raise, pursue or contest a particular issue and N
the manner in which he has done so.
O O
P 57. A successful party to an action should not be ordered to pay P
any part of the costs of the hearing simply because he has failed to prove
Q Q
all of the allegations made, unless he has acted improperly or unreasonably
R in raising issues and that the issue must be something so distinct and R
separate in itself that the decision of it constitutes an “event”48.
S S
T T
48
See Hong Kong Civil Procedure 2021, at para. 62/3/3
U U
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A A
B B
58. The plaintiff in his written submission, in particular in
C Annexes 1 and 2 (“General survey of pleadings and evidence”), set out a C
lot of details of the proceedings. I do not find that useful. I am mindful of
D D
the apposite remarks of Deputy High Court Judge Marlene Ng (as she then
E was) in Lam Po Yee & anor v. Dr Chan Yee Shing aka Dr Chan Yee Shing E
Alvin49,
F F
“... in an application for variation of costs order nisi, it is
inappropriate to call upon the court to revisit all aspects of the
G litigation and conduct a minute fact-finding exercise to G
determine the rights and wrongs of all aspects of the conduct of
the litigation. Such approach would only add unnecessarily to
H costs.” H
I 59. In my view, it would not be right nor necessary to undertake I
an arithmetic exercise by working out how much time and efforts had been
J J
spent by the Court and the parties in handling each and every issue or
K aspect of the case. K
L L
60. Suffice to say, Issues 5 and 6, i.e. the plaintiff’s claims for his
M contributions towards various properties of the business and those under M
the bonus saving agreement between the parties, for which the plaintiff
N N
failed to prove his case, appear to me to be distinct and separate from the
O rest of the controversies in this case. More importantly, those two issues O
were far from straightforward as the plaintiff sought to rely on alternative
P P
bases of implied terms and different forms of trust. They clearly added a
Q lot to the complexity of the case, as plenty of financial documents were Q
produced, considerable time was taken up and counsel made lengthy
R R
factual and legal submissions in dealing with them.
S S
T T
49
[2018] HKCFI 870 (dated 30 April 2018), at para. 118
U U
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A A
B B
61. I do not consider it reasonable for the plaintiff to raise and
C pursue Issues 5 and 6 in the manner in which he did. In my view, such C
issues should not have been raised, or at least should not have been pursued
D D
in the scope or argued to the extent or with such complexity as the plaintiff
E did. The plaintiff’s such conduct in the litigation in this case should be E
reflected in the relevant costs order and it is only just and fair to do so.
F F
62. The plaintiff, in his written submission, submitted that he
G G
should recover all costs in DCCJ 3647/2014 or as a fallback position, 80%
H to 90% of the costs50. On the other hand, the defendant, in the written H
submission, whilst opposing this costs variation application, submitted that,
I I
even if the plaintiff’s case was to be taken to the highest, his awarded costs
J J
should not be more than 50%51.
K K
63. Having re-considered all the circumstances of the case, I am
L of the view that the plaintiff should be awarded costs for the action DCCJ L
3647/2014 but they should be reduced by 50%, for the aforesaid reasons.
M M
N Disposal N
O 64. To conclude, for this costs variation application under the O
Summons, I order that: -
P P
Q (a) the plaintiff be granted leave to apply out of time to vary the Q
costs order nisi; and
R R
(b) the costs order nisi be varied and made absolute such that the
S S
50
T See plaintiff’s submissions, at para. 31-32 T
51
See skeleton submissions of the defendant, at para. 22
U U
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A A
B B
defendant should pay the plaintiff 50% of the costs of the
C action DCCJ 3647/2014, with certificate for counsel, to be C
taxed if not agreed.
D D
65. Finally, I have to deal with the costs of this costs variation
E E
application. In essence, there are two applications, (a) application for leave
F to apply out of time to vary the costs order nisi and (b) application for F
variation of the costs order nisi.
G G
H 66. For application (a), the general position is that costs of H
applications to extend time should be borne by the party applying52, I see
I I
no reason to order the otherwise, and that means the plaintiff here should
J bear all the relevant costs. For application (b), the plaintiff succeeded in J
the application for variation of the costs order nisi and therefore, as a
K K
general rule, should be entitled to the relevant costs.
L L
67. Having considered all the circumstances in the round, I am of
M M
the view that the plaintiff’s entitlement to the costs under application (b)
N should be offset by his responsibility for the costs under application (a). It N
is therefore fair to make an order nisi that there be no order as to costs for
O O
this costs variation application under the Summons and I so order.
P P
Q Q
R R
( Edmond Lee )
S District Judge S
T T
52
O. 62, r. 3(4) of RDC
U U
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A A
B B
Mr Jonathan Ah-Weng, instructed by So, Lung & Associates, for the
C plaintiff C
D Mr Lawrence Cheung and Mr Johnny Chan, instructed by T.K. Tsui & Co., D
for the defendant
E E
F F
G G
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V
DCCJ3647/2014 LAI KIM MING JOSEPH TRADING AS JOE LINES CO v. MACROTECH SECURITY & MANAGEMENT SERVICES LTD - LawHero
LAI KIM MING JOSEPH TRADING AS JOE LINES CO v. MACROTECH SECURITY & MANAGEMENT SERVICES LTD
A A
B B
DCCJ 3647/2014
[2021] HKDC 179
C C
IN THE DISTRICT COURT OF THE
D D
HONG KONG SPECIAL ADMINISTRATIVE REGION
E CIVIL ACTION NO. 3647 OF 2014 E
F F
BETWEEN
G LAI KIM MING JOSEPH TRADING AS G
JOE LINES COMPANY Plaintiff
H H
I
and I
J J
MACROTECH SECURITY &
K K
MANAGEMENT SERVICES LIMITED Defendant
L L
M M
Before: His Honour Judge Edmond Lee in Chambers
N Dates of Written Submissions: 9 and 27 November, 7 December 2020 N
Date of Decision: 11 February 2021
O O
P DECISION ON COSTS P
Q Q
Introduction
R R
1. This is an application by the plaintiff for variation of a costs
S S
order nisi (“costs variation application”), which is contested by the
T defendant. T
U U
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A A
B B
2. This was originally a case of business dispute between the
C parties under two actions, DCCJ 3392/2014 and DCCJ 3647/2014, which C
were heard together. By a judgment handed down on 4 September 2020
D D
(“Judgment”), with respect to this action DCCJ 3647/2014, I made a costs
E order nisi, which should become absolute in 14 days in the absence of any E
parties’ objection, that the plaintiff should pay the defendant 50% of its
F F
costs with certificate for one counsel (“costs order nisi”)1.
G G
3. By a summons filed on 16 October 2020 (“Summons”), the
H plaintiff applied for: H
I I
(a) leave to apply out of time to vary the costs order nisi;
J J
(b) an order that the costs order nisi be varied such that it provides
K
that the defendant should pay the plaintiff costs of this action K
or alternatively, that the defendant should pay the plaintiff
L L
such costs of this action as the Court thinks fit; and
M
(c) an order that the defendant should pay the plaintiff costs of M
this application.
N N
4. In support of this application, the plaintiff filed the 2 nd
O O
affidavit of Chan Chi Hung2 on 5 November 2020, the purpose of which
P was to explain the delay in making this application and urge the Court to P
exercise its discretion to allow this application out of time.
Q Q
R 5. First of all, the defence objects to the plaintiff’s filing of the R
2nd affidavit of Chan Chi Hung, arguing that it was done without the leave
S S
1
T Judgement dated 4 September 2020, at paras. 198 and 200 T
2
The handling solicitor of the firm acting for the plaintiff
U U
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A A
B B
of the Court or not pursuant to any Court’s direction, that it contained
C mostly matters beyond the defendant’s knowledge, and that it should have C
been filed at the same time when the Summons for the costs variation
D D
application was filed on 16 October 2020.
E E
6. It is not exactly correct nor fair to criticize the plaintiff for
F filing the said affidavit without the leave of the Court or not pursuant to F
any Court’s direction. In fact, prior to the filing of this Summons, there
G G
was correspondence between the parties and the Court, and it was directed
H in the Court’s letter dated 29 September 2020, among other things, that if H
the then intended summons was to be taken out by the plaintiff, it should
I I
be accompanied by an application for time extension with cogent reason(s)
J J
explaining the delay.
K K
7. The fact that a party’s affidavit containing matters not within
L the knowledge of the other party, which is common, should not be a bar to L
the filing of that affidavit. It is at the end of the day for the Court to decide
M M
what matters contained in the affidavit are to be accepted and what weight,
N if any, is to be attached thereto. N
O O
8. No doubt it should be more appropriate for the plaintiff to file
P the Summons and the supporting affidavit at the same time. Nevertheless, P
the late filing of the affidavit was done before the time due for the parties
Q Q
to file their respective submissions. As such, it caused no prejudice or
R unfairness to the defendant who had the opportunity to consider and reply R
when preparing its written submission to oppose this application.
S S
9. In any event, in making an application for an extension of
T T
time, a clear statement of the reasons for the inability to comply with the
U U
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A A
B B
stipulated time limit should normally be provided, and that the requirement
C of an explanation for delay on an application for time is the norm3. C
D 10. I am prepared to accept the 2nd affidavit of Chan Chi Hung for D
the purpose of this costs variation application and would consider the
E E
matters deposed therein when needed.
F F
11. Also, the defendant objects to this application by the plaintiff,
G G
arguing that:
H H
(a) the Court is now functus officio and has no jurisdiction to deal
I with this costs variation application; I
(b) if the Court is not functus officio and still has jurisdiction to
J J
deal with this costs variation application, leave should not be
K granted to the plaintiff to make this application out of time; K
and
L L
(c) if leave is to be granted to the plaintiff to make this costs
M variation application out of time, the application should be M
N
refused and the costs order nisi should be made absolute. N
O 12. These are in fact the key issues of this costs variation O
application. I shall deal with them one after another.
P P
Q
Is the Court now functus officio and has no jurisdiction to deal with this Q
costs variation application?
R R
13. The relevant statutory provisions are O. 42, r. 5B(3) and O. 3,
S S
r. 5(1) and (2) of the Rules of the District Court, Cap. 336H (“RDC”):-
T T
3
See Hong Kong Civil Procedure 2021, at para. 3/5/2
U U
V V
-5-
A A
B B
Handing down reasons for judgment or order (O. 42, r. 5B)
C C
(1) …
D (2) … D
(3) Where a written judgment is handed down pursuant to
this rule the Court may make therein an order nisi as to
E costs and, unless an application has been made to vary E
that order, that order shall become absolute 14 days after
F the decision is pronounced 4. F
(4) …
G Extensions etc., of time (O. 3, r. 5) G
(1) The Court may, on such terms as it thinks just, by order
H H
extend or abridge the period within which a person is
required or authorized by these Rules, or by any
I judgment, order or direction, to do any act in any I
proceedings.
J (2) The Court may extend any such period as is referred to J
in paragraph (1) although the application for extension is
K
not made until after the expiration of that period. K
(3) …
L L
M
14. The relevant dates are:- M
N N
4 September 2020 – the Judgment, with the costs order
O nisi, was handed down O
18 September 2020 – the costs order nisi became absolute
P P
upon expiry of 14 days
Q 12 October 2020 – the Judgment was sealed Q
16 October 2020 – the plaintiff filed a summons to
R R
vary the costs order nisi
S S
T T
4
In fact, I made an order to the same effect, at para. 198 of the Judgment
U U
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A A
B B
15. The defendant does not dispute that the Court has power to
C extend time even after a costs order nisi has become absolute, but, by C
5
relying on the cases RTX Products Hong Kong limited v Li Yiu Fai and
D D
Poon Ching Man v Lam Hoi Pun 6, argues that the Court does not have
E power or jurisdiction to vary a costs order nisi once the judgment E
containing the costs order has been sealed7.
F F
16. In the Court of Appeal’s decision in Ma Wan Farming Ltd v
G G
8
Chief Executive in Council & Anor , an authority heavily relied upon by
H the plaintiff, Liu JA stated that:- H
I I
“A judgment clearly takes effect from the date of its
pronouncement but when a handed down judgment contains a
J provisional costs order, the provisional costs order would J
nevertheless remain tentative, albeit made in a final judgment and
the tentative costs order is liable to be re-ventilated as provided
K K
for in O. 42 r. 5B(6)9 … If an extension were granted for making
an application under O. 42 r. 5B(6), the order nisi would not
L become absolute because it shall become absolute ‘unless an L
application has been made to vary’ it within the time prescribed
or extended. The order nisi may be made absolute if the
M application is dismissed or otherwise made final subject to some M
variation if the application succeeds. The order nisi may be
N altogether replaced. Time for appeal against costs would run N
from a final costs order and the procedural predicament
postulated by Mr Dykes would not arise. In my view, this court
O has jurisdiction to extend time to the appellant for making an O
application to vary the order nisi…”10
P P
Q 5 Q
HCA 1777/2009, decision dated 12 November 2014, by Hon Anthony Chan J
6
DCPI 1585/2011, decision dated 22 April 2015, by Deputy District Judge Winnie Tsui (as she then
R was) R
7
See Skeleton submissions of the defendant, at para. 9
S 8
[1998] 2 HKLRD 314 S
9
O. 42, r. 5B(6) in the Rules of the High Court (Cap. 4A) is the equivalent provision of O. 42 r. 5B(3)
T of the Rules of the District Court (Cap. 336H) T
10
317F-I of the reported judgment
U U
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A A
B B
17. The above was confirmed in another Court of Appeal’s
C decision in Tang Man Kit & Anor v Hip Hing Timber Company Limited11, C
where Cheung JA (representing the majority’s decision) stated that:-
D D
“6. In Ma Wan Farming Limited v. the Chief Executive in
E Council and another (No. 2) [1998] 2 HKLRD 314, this Court E
(Nazareth VP, Liu and Mayo JJA) was of the view that the
court has jurisdiction under Order 3, Rule 5 and Order 59, Rule
F F
10 to allow time to be extended for a variation of the costs nisi.
G 7. … G
H 8. … H
I 9. I am further of the view that Ma Wan Farming Limited I
was correctly decided. Liu JA held that Rule 5B(6) implicitly
authorizes a party to apply to vary an order nisi within 14 days.
J As the 14 days is a time prescribed by the Rules for the doing J
of an act in any proceedings, Order 3, Rule 5 and Order 59,
Rule 10 (inherent jurisdiction), would allow such a time to be
K K
extended.
L 10. I think the reasoning is sound and supported by the L
wording of Order 3, Rule 5(1) which provides that
M M
‘5. (1) The Court may, on such terms as it thinks
just, by order extend or abridge the period within
N N
which a person is required or authorized by these
rules, or by any judgment, order or direction, to
O do any act in any proceedings.’ (emphasis added) O
P
As Rule 5B(6) provides for 14 days for a party to vary the order P
nisi, Order 3 Rule 5(1) is engaged. Once there is jurisdiction
to extend time, the application to extend time can be made
Q either before or after the time prescribed by the rules. This is Q
also clear from Order 3, Rule 5(2) which provides that
R R
‘(2) The Court may extend any such period as is
referred to in paragraph (1) although the
S application for extension is not made until after S
the expiration of that period.’
T T
11
CACV 137/2002, judgment dated 8 June 2006
U U
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-8-
A A
B 11. This reasoning is supported by authorities such as B
Manley Estates Ltd. v. Benedek [1941] 1 All ER 248 and
C Regina v. Bloomsbury & Marylebone County Court ex parte C
Villerwest Ltd [1976] 1 WLR 362. The fact that Rule 5B(6)
provides for an eventual event, namely, the order becoming
D absolute is not a basis for excluding the jurisdiction. In terms D
of logic, it is no different from, for example, an order giving
E
judgment or dismissing an action unless a party perform E
certain acts within a specified period. In such a case, the court
still has jurisdiction to extend time for the act to be done after
F the period has expired. While I appreciate the requirement of F
finality of a decision, the rationale for making a provisional
order on costs is that arguments have not been heard and hence
G G
the parties are given time to vary the order. This being the case
it is inconceivable that the jurisdiction to vary the costs order
H can only be exercised if an application is made within the 14- H
day period but not otherwise. This being the case, Ma Wan
Farming Limited is binding on this Court and hence the Court
I retains jurisdiction to extend time.” I
J 18. In a more recent Court of Appeal’s decision in Re Good Idea J
International Ltd 12 , a case also heavily relied upon by the plaintiff, in
K K
which the first respondent sought leave to appeal against the order of
L Harris J in granting the plaintiff’s application for leave to extend the time L
period for convening an Extraordinary General Meeting under a consent
M M
order. The first respondent’s main argument was that the Court did not
N have jurisdiction to extend time as it had been rendered functus officio by N
the consent order. It was argued that, the general power to extend time
O O
under O. 3, r. 5(1) of the Rules of the High Court (Cap. 4A) did not apply
P P
to a stipulation of time under a final judgment disposing of the entire
Q
proceedings in the absence of any express or implied liberty to apply Q
provision. When refusing leave to appeal, Cheung CJHC (as he then was)
R R
stated that:-
S S
“…we take the view that O. 3, r. 5(1) is wide enough to cover
stipulations as to time contained in final judgments. O. 3, r. 5
T T
12
[2012] 4 HKLRD 186
U U
V V
-9-
A A
B expressly refers to ‘judgment’, without differentiating between B
a final judgment and an interlocutory judgment. The fact that
C O. 45, r. 6(1) deals with extensions of time under some C
overlapping circumstances does not require O. 3, r. 5(1) to be
given a restrictive interpretation, which serves no meaningful
D purpose.”13 D
E 19. I have also considered the two case authorities, RTX (a Court E
of First Instance decision) and Poon Ching Man (a District Court decision),
F F
relied upon by the defendant, where the orders nisi in question had already
G been sealed at the time when the applications to vary the same were made. G
H H
20. For the case RTX, it is, first of all, worth-noting that Anthony
I Chan J considered the application to vary the order nisi was “hopelessly I
unmeritorious” and that it was “extraordinary” for it to be made almost 3
J J
years after the order had become absolute14. In passing, the learned judge
K expressed his view that “once the order has become absolute, I am inclined K
to the view that any disagreement will then have to be pursued on appeal”15.
L L
He went on to express that, even if the Court retained jurisdiction over the
M order nisi, no time extension should be allowed as the lapse of 3 years was M
a serious erosion of the principle of finality to litigation and the potential
N N
injustice to the other party was obvious 16 . Finally, the learned judge
O concluded that he “see[s] no justification for a variation of the [order nisi] O
and no reason at all to allow an extension of time to enable the defendant
P P
to apply to do so (assuming that the court retains jurisdiction over the
Q Q
R R
13
See para. 8 of the judgment
S S
14
See paras. 2 and 5 of the judgment
15
T See para. 9 of the judgment T
16
See para. 10-11 of the judgment
U U
V V
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A A
B B
matter)”17. I am of the view that the above comment on the jurisdiction
C issue is obiter and therefore not binding. C
D 21. The other case Poon Ching Man requires more detailed D
consideration. After recognizing the principle under Andayani v Chan Oi
E E
Ling 18 (i.e. by the common law, the court is functus officio when the
F judge’s order had been drawn up, entered or otherwise perfected) as well F
as RTX and considering a number of case authorities, Deputy District
G G
Judge Winnie Tsui (as she then was) set out four categories of cases which
H involve a court revisiting a previous order which had been sealed19. The H
only category of cases which was of direct relevance to that case, so is for
I I
20
the present case as accepted by the plaintiff here , is the last category of
J
the “statutory rules” cases, which refer to the cases where the court, J
K
pursuant to applicable rules of court, amends a previous order, including K
but not limited to enlarging time specific in it.
L L
22. The learned judge then considered the relevant authority Re
M M
Good Idea21, where the Court of Appeal took the view that O. 3, r. 5 was
N wide enough to cover all judgments, be they final or interlocutory22. The N
learned judge observed at paragraph 34 of her judgment:-
O O
P
“34. It seems sufficiently clear that the principle underlying P
the decision is that the court may revisit a previous order, even
Q Q
17
See para. 16 of the judgment
18
R [2000] 4 HKC 233 R
19
The four categories of cases are “manifest intention” cases, “slip rule” cases, “liberty to apply” cases
and “statutory rules” cases, see para. 13 of the judgment
S S
20
See P’s Reply Submissions at para. 4
21
T See para. 19 here T
22
Re Good Idea International Investment Ltd [2012] 4 HKLRD 186 at para. 8
U U
V V
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A A
B after sealing, if a power is conferred on it to do so under the B
applicable rules of court. In Re Good Idea, the applicable rule
C of court was RHC Order 3 rule 5. In such an instance, the C
court’s power to revisit stems not from its original jurisdiction
over the case, which has come to an end upon sealing
D (applying the principle of functus officio), but from a “fresh” D
power to act conferred on it by the statute. Such power is of
E
course to be exercised strictly in accordance with the E
provisions of the applicable rule.” (original emphasis)
F F
23. The learned judge went on to draw support to the above
G
observation from Re L and B (children) (care proceedings: power to revise G
judgment) [2013] UKSC 8, where Lady Hale SCJ on the one hand
H H
recognized the common law principle that when a judgment is perfected a
I judge is not allowed to revisit it and on the other hand stated that a court I
may do so where there is an express power to vary or revoke, which was
J J
consistent with the decision in Andayani and echoed the position of the
K Hong Kong courts in the “statutory rules” cases23. K
L 24. I pause here to quote the comment of Lady Hale in Re L and L
B, to which I entirely agree, “Where there is a power to vary or revoke,
M M
there is no magic in the sealing of the order being varied or revoked. The
N question becomes whether or not it is proper to vary the order.”24. N
O O
25. The learned judge in Poon Ching Man eventually stated
P emphatically at paragraph 46 of her judgment:- P
Q “46. Having considered the authorities at some length, I Q
now return to how the principle established in the “statutory
R rules” cases should be applied to the plaintiff’s application to R
vary the costs order nisi in this case. But for the reason stated
in §§48 to 50 below, I would be inclined to hold that the court
S does have jurisdiction, which it derives from the express power S
23
T see paras. 37-45 of the judgment T
24
See para 37 of the judgment
U U
V V
- 12 -
A A
B given under RDC Order 3 rule 5, to extend the 14-day time B
limit stipulated in the order (by operation of RDC Order 42
C rule 5B(3)) so as to bring the plaintiff’s application to vary C
within time. I would be inclined to treat it as an instance of the
court exercising a power conferred on it by the applicable rules
D of court to revisit a previous order, namely, to vary a time limit D
imposed in that order, just as in Re Good Idea.”
E E
26. The learned judge, however, when deciding on that particular
F jurisdiction issue in Poon Ching Man at paragraphs 48 to 50 of her F
judgment, took the view that the case before her was indistinguishable
G G
from RTX and, because RTX was a decision of the Court of First Instance
H and under the rule of stare decisis, the learned judge felt she was bound by H
it. Therefore, notwithstanding her conclusion drawn from the authorities
I I
25
and her view as clearly expressed in paragraph 46 of her judgment , she
J J
decided that she had no jurisdiction to revisit the costs order nisi upon the
K
sealing of the order26. K
L 27. I should mention that the judgment as well as the costs order L
in Poon Ching Man were appealed against. The Court of Appeal
M M
nevertheless declined to deal with the learned judge’s decision on her
N jurisdiction to extend time because the Court felt it did not have the benefit N
of proper arguments27. Instead, the Court of Appeal dealt with the actual
O O
costs order. For the sake of completeness, I set out the useful comments
P of the Court of Appeal on that particular jurisdiction point as follows:- P
Q Q
“42. In light of what had been said, we shall confine ourselves
to the following brief comments on the jurisdiction point:
R R
S S
25
See para. 25 here
26
T See para 51 of the judgment T
27
Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815, at paras 30-31 and 42
U U
V V
- 13 -
A A
B (a) There are 2 Court of Appeal judgments suggesting that B
the court has jurisdiction to extend time for varying a costs
C order nisi after it had become absolute: Ma Wan Farming Ltd C
v Chief Executive in Council (No 2) [1998] 2 HKLRD 314;
Tang Man Kit v Hip Hing Timber Co Ltd CACV 137 of 2002,
D 8 June 2006; D
(b) At the same time, in both instances, the courts actually
E refused to vary the costs order; E
(c) Also in both instances, the applications for variation
F F
were made within a relatively short period after the expiry of
the 14-day limit.
G G
(d) It is not clear from the judgments whether the costs
order absolute had been perfected. There was no discussion in
H Ma Wan and the majority’s decision in Tang Man Kit on the H
implication of the court being functus officio after sealing of
the order (if the costs order absolute had been sealed) though
I I
Chung J (who would have decided differently in Tang Man Kit
but for Ma Wan) adverted to it at paragraph 28, citing his own
J judgment in Syed Haider Yahya Hussain v Registrar of Births J
and Deaths HCAL 73 of 1999, 12 July 2005;
K (e) The functus officio point was taken up again by K
Anthony Chan J in RTX Products v Li Yiu Fai HCA 1777 of
2009, 12 Nov 2014 in refusing to entertain an application for
L L
variation of a costs order nisi after the sealing of the order;
(f) In the present case, the Judge considered herself to be
M M
bound by the decision of Anthony Chan J but she also opined
that an application for variation might fall within the principles
N discussed in Re Good Idea International Investment Ltd N
[2012] 4 HKLRD 186 and Re L & B [2013] 1 WLR 634 by
way of exception to the general principle of functus officio;
O O
and
(g) For reasons we have canvassed earlier, without proper
P P
arguments before us, we shall not express any concluded view
on the controversy. However, we would add that even
Q assuming that the court has jurisdiction to entertain the Q
application, it may not be just an application to extend time.
Rather, it also involves the setting aside of the order absolute
R that had been entered. If the nature of the application is viewed R
in that way, it is at least arguable that the considerations in
S Order 2 Rule 5 should also be relevant.” S
T T
U U
V V
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A A
B B
28. Having carefully considered all the above authorities, I am in
C full agreement with the detailed analysis of Deputy District Judge Winnie C
Tsui (as she then was) on the jurisdiction issue in Poon Ching Man, except
D D
that, with respect, I do not share her view that the decision on the
E jurisdiction issue in RTX is binding as I find it to be comments as obiter E
for the reasons stated above28.
F F
29. In any event, I am of the view that I should follow the Court
G G
of Appeal’s decisions in Ma Wan, Tang Man Kit (the majority’s decision)
H and in particular, Re Good Idea (where a consent order was the subject H
matter) on this very jurisdiction issue. The starting and fundamental point
I I
for consideration is that, O. 3, r. 5(1) should be given a natural
J J
interpretation, it is wide enough to cover stipulations as to time contained
K
in final as well as interlocutory judgments, this rule explicitly confers the K
widest measure of discretion and draws no distinction whatsoever between
L L
various classes of cases29. I therefore come to conclude that this Court
M
have power or jurisdiction to revisit, and vary if needed to, the costs order M
nisi even when the Judgment containing it has been sealed.
N N
Whether leave should not be granted to the plaintiff to make this costs
O O
variation application out of time?
P P
30. The Court of Final Appeal in Astro Nusantara International
Q Q
B. V. v PT Ayunda Prima Mitra 30 observed that it had often been
R emphasised that the discretion to extend time conferred by O. 3, r. 5 is R
S S
28
See para. 20 above
29
T See Hong Kong Civil Procedure 2021, at paras. 3/5/1 and 3/5/2 T
30
[2018] HKCFA 12
U U
V V
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A A
B B
broad and unrestricted, which was designed to enable justice to be done
C between the parties, and held that the proper test involves looking at all C
relevant matters and considering the overall justice of the case, eschewing
D D
a rigid mechanistic approach31.
E E
31. In order to succeed on the application for leave to extend time,
F the plaintiff must show that there is justifiable reason for not making the F
application within time and there are merits in varying the costs order32.
G G
H 32. Also, the Court is also required to take into consideration H
whatever consequences that would follow from a time extension when
I I
exercising its discretion33.
J J
33. I also take note of the Court of Appeal’s comment in Poon
K K
Ching Man where it was observed that, it may not be just an application to
L
extend time, rather, it also involves the setting aside of the order absolute, L
and it is at least arguable that the considerations in O. 2, r. 5 should also be
M M
relevant34.
N N
34. O. 2, r. 5 of RDC provides:-
O O
5. Relief from sanctions (O. 2, r. 5)
P P
(1) On an application for relief from any sanction imposed
for a failure to comply with any rule or court order, the
Q Q
Court shall consider all the circumstances including—
R R
31
See paras. 53 and 90 of the judgment of Astro Nusantara, and also Hong Kong Civil Procedure
2021, at para. 3/5/2
S S
32
Tang Man Kit, at para. 12
33
T Ma Wan, at para. 317C T
34
Poon Ching Man, CA decision, at para. 42(g)
U U
V V
- 16 -
A A
B (a) the interests of the administration of justice; B
C
(b) whether the application for relief has been made C
promptly;
D (c) whether the failure to comply was intentional; D
(d) whether there is a good explanation for the failure
E to comply; E
(e) the extent to which the party in default has
F F
complied with other rules and court orders;
G (f) whether the failure to comply was caused by the G
party in default or his legal representative;
H (g) in the case where the party in default is not legally H
represented, whether he was unaware of the rule or
court order, or if he was aware of it, whether he
I I
was able to comply with it without legal assistance;
J (h) whether the trial date or the likely trial date can still J
be met if relief is granted;
K (i) the effect which the failure to comply had on each K
party; and
L (j) the effect which the granting of relief would have L
on each party.
M M
(2) An application for relief must be supported by evidence.”
N N
35. The plaintiff’s solicitors sought to explain by the 2 Affidavit nd
O O
of Chan Chi Hung (“CCH’s Affidavit”) as to why it took so long for the
P plaintiff to take out the Summons for this costs variation application. The P
following matters are of relevance:-
Q Q
R (a) The Judgment was handed down on 4 September 2020, R
meaning that the costs order nisi contained therein would
S S
become absolute on 18 September 2020.
T T
U U
V V
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A A
B B
(b) It was asserted that the plaintiff’s legal team took time to
C consider the judgment, to discuss with the trial counsel, to C
advise the plaintiff and to obtain instructions from the
D D
plaintiff, for this trial involving many factual issues and
E disputes35. E
F (c) It was also asserted that a “summons was therefore intended F
to be issued on 17 September 2020” (i.e. one day before the
G G
order nisi became absolute)36.
H H
(d) The plaintiff’s legal team was “worried about having to recall
I and reconsider voluminous materials, documents, and I
transcripts of the trial” and that trial counsel had other work
J J
commitments during the months of October and November
K 202037. K
L (e) On 17 September 2020, the plaintiff’s solicitors sent a L
litigation clerk to the District Court in the hope of issuing a
M M
summons and securing a later hearing date for the variation
N application; however, the clerk was informed by the Listing N
Officer that no hearing date would be fixed because she did
O O
not have my diary when I was at that period of time seconded
P to the High Court. The litigation clerk was told to leave with P
the Listing Officer the summons and the counsel’s diary38.
Q Q
R R
35
CCH’s Affidavit, at paras. 3-4
S S
36
CCH’s Affidavit, at para. 4
T 37
CCH’s Affidavit, at para. 5 T
38
CCH’s Affidavit, at paras. 7-8
U U
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A A
B B
(f) There were further verbal communications between the
C Listing Officer and the plaintiff’s solicitors (through the C
handling solicitor or the litigation clerk) as well as written
D D
correspondence passed between the plaintiff’s solicitors and
E my clerk between 18 September and 29 September 202039. E
F (g) On 12 October 2020, the plaintiff presented the summons for F
this costs variation application to the District Court and, after
G G
consultation by the Listing Officer with the Court’s diary,
H eventually had it filed on 16 October 2020 H
I I
36. The plaintiff’s explanation for the delay is that the 28-day-
J
delay was “inadvertent and arose out of an overly cautious but now J
K
perhaps erroneous worry for the amount of preparation” required for the K
variation application, and it is submitted that the delay was relatively short
L L
and not intentional and that it did not cause any prejudice to the defendant40.
M M
37. The defendant’s stance was that the earliest time the plaintiff
N showed an intention to challenge the costs order was allegedly on 17 N
September 2020, one day before the costs order nisi would turn absolute,
O O
appeared to be an afterthought. Furthermore, such “inadvertence” sat
P uncomfortably with the fact that a statutory demand was issued by the P
plaintiff’s solicitors against the defendant for the judgment debts on 16
Q Q
September 2020. It is submitted that, the plaintiff had only himself and his
R legal team to blame, asking the Court to revisit a costs order absolute and R
its judgment having been sealed would cause serious injustice and
S S
T 39
CCH’s Affidavit, at paras. 9-12 T
40
CCH’s Affidavit, at para. 15
U U
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A A
B B
prejudice to the defendant, and that no credible explanation for the delay
C had been put forward to warrant the Court’s exercise of discretion in his C
41
favour .
D D
38. First of all, I am prepared to accept that the plaintiff’s
E E
solicitors’ litigation clerk attended the District Court, intending to issue a
F summons and secure a later date for hearing to apply for varying the costs F
order nisi, on 17 September 2020. It seems to me that if the clerk did go
G G
to the District Court on that day, i.e. a day before the costs order nisi had
H become absolute, but for the fact that I was at that time sitting in another H
Court and therefore the Listing Officer did not have my diary, the plaintiff
I I
would have filed the summons with a return date fixed on that particular
J
day. Further, various correspondence between the plaintiff’s solicitors and J
K
the Court showed that the plaintiff’s solicitors had been concerned with K
(though erroneously) the time and efforts required for the preparation of
L L
this costs variation application and thus endeavoured to secure a latest
M
possible hearing date. All these appear to have explained the plaintiff’s M
failure in taking out the Summons in time or at least not being able to do
N N
so sooner than they actually did.
O O
39. The delay of 28 days (or 24 days, if the date of presentation
P of the Summons to the Listing Officer is to be counted) in filing the P
Summons, though not insubstantial, does not amount to a bad delay in the
Q Q
circumstances of this case. More importantly, the delay, in my view, had
R not caused any real or substantial prejudice to the defendant. R
S S
40. I have also considered and found that there are at least some
T T
41
See skeleton submissions of the defendant, at paras. 14 and 15
U U
V V
- 20 -
A A
B B
merits in this costs variation application. As said, the proper test involves
C looking at all the relevant matters and considering the overall justice of the C
case. It would not be just to shut out a party from arguing a meritorious
D D
case simply because of a delay of 20 odd days, in particular in the
E somewhat unusual circumstances, as described above 42, of this case. E
F 41. Having considered all the circumstances, I am prepared to F
exercise my discretion to grant an extension of time so as to allow the
G G
plaintiff to proceed with this costs variation application.
H H
I Whether this costs variation application should be granted and what the I
costs order absolute should be?
J J
K
42. The two actions, DCCJ 3392/2014 and DCCJ 3647/2014, K
were heard together. At the end of my judgment, I made a costs order nisi
L L
for each of them.
M M
43. In DCCJ 3392/2014, I found that the plaintiff succeeded in all
N his claims under Issues 1 and 2 for the full sum of HK$660,000, the set- N
off of the unpaid loan of HK$100,000 owed to the defendant was not in
O O
issue, and that the plaintiff was entitled to all his costs43.
P P
44. In DCCJ 3647/2014, where there were 5 issues (Issues 3 to 7)
Q Q
in dispute, I found that the plaintiff succeeded in Issues 3, 4 and 7 but failed
R in Issues 5 and 6. I took the view that Issues 5 and 6 were discrete from R
the rest of the controversies and added a lot to the complexity and the
S S
42
The plaintiff’s solicitors being overly or even erroneously cautious about preparing this application
T and the Listing Officer not having my diary when first approached for issuing the summons T
43
Judgement dated 4 September 2020, at para. 199
U U
V V
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A A
B B
length of the trial. Having considered all the circumstances,
C notwithstanding that the plaintiff succeeded in some issues, I ordered that C
44
the plaintiff should pay the defendant 50% of its costs .
D D
45. The plaintiff argued that the proper costs order for the action
E E
DCCJ 3647/2014 should be costs be to the plaintiff for three reasons: (a)
F the plaintiff succeeded in the two actions on different legal bases; (b) the F
plaintiff succeeded in most of the claims on the facts or the law in DCCJ
G G
3647/2014 but for two issues; and (c) the plaintiff’s conduct for the two
H losing issues was in the course of ordinary litigation and they did not add H
much to the length or complexity of the case45.
I I
J 46. The defendant argued that the costs order nisi for DCCJ J
3647/2014 was the proper order to make, which was of unassailable
K K
reasoning and wholly in line with the established legal principles 46.
L L
47. On reflection, I am convinced by the plaintiff’s argument that
M M
the plaintiff succeeded in the two actions, namely DCCJ 3392/2014 and
N DCCJ 3647/2014, on different legal bases. N
O 48. Although the exact nature of the business relationship O
between the plaintiff and the defendant (Issue 1)47 was the common and
P P
primary issue in both actions, it was not the “element” of the plaintiff’s
Q claim in the first action DCCJ 3392/2014. The fundamental issue in that Q
R R
44
Judgement dated 4 September 2020, at para. 200
S 45
Plaintiff’s submissions, at para. 8 S
46
Skeleton submissions of the defendant, at para. 17
T T
47
The plaintiff’s case was that the business relationship was one of contractual joint venture whereas
the defendant’s case was that it was one of agency
U U
V V
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A A
B B
first action was whether there was an oral agreement, and what its terms
C were, between the parties on provision of “additional work” by the plaintiff C
at the material time.
D D
49. By contrast, in the second action DCCJ 3647/2014, that
E E
particular Issue 1, namely the nature of the parties’ business relationship,
F depending on what exactly it was, formed the basis of the defendant’s F
counterclaim and that of the plaintiff’s defence thereto.
G G
H 50. As such, I am now convinced that the relevant costs issues in H
the two respective actions, notwithstanding that there existed a common
I I
and primary issue (Issue 1) as aforesaid, should be approached and
J considered separately. J
K K
51. Leaving aside the common issue of the parties’ business
L
relationship (Issue 1) and looking at the key issues of the second action L
DCCJ 3647/2014 from a global view, there were five issues as follows:-
M M
N Issue 3 – the termination agreement (and its terms) N
Issue 4 – the profits for July and August 2014
O O
Issue 5 – the properties claim
P P
Issue 6 – the bonus claim
Q Q
Issue 7 – the defendant’s counterclaim (the plaintiff’s
R implied and/or fiduciary duties) R
S S
52. In the Judgment, in summary, I found the plaintiff succeeded
T in 3 out of 5 of those issues (Issues 3, 4 and 7) but failed in the remaining T
2 issues on various claims for properties and bonus (Issues 5 and 6).
U U
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A A
B B
53. The general principle, which is beyond argument, is that costs
C are matters of discretion of the Court. C
D 54. Costs should follow the event, except when it appears to the D
Court that in the circumstances of the case some other order should be
E E
made as to the whole or any part of the costs: O. 62, r. 3(2) of RDC.
F F
55. O. 62, r. 5(1) of RDC sets out a number of factors which the
G G
Court should take into account when exercising its discretion. I set out
H below those factors which I consider to be relevant to the present case: H
I I
(a) the underlying objectives set out in RDC O. 1A, r. 1;
J (b) the conduct of all the parties; and J
(c) whether a party has succeeded on part of his case, even if he
K K
has not been wholly successful.
L L
56. With respect to the conduct of the parties, O. 62, r. 5(2) of
M M
RDC elaborates on the factors to be considered, which include, whether it
N was reasonable for a party to raise, pursue or contest a particular issue and N
the manner in which he has done so.
O O
P 57. A successful party to an action should not be ordered to pay P
any part of the costs of the hearing simply because he has failed to prove
Q Q
all of the allegations made, unless he has acted improperly or unreasonably
R in raising issues and that the issue must be something so distinct and R
separate in itself that the decision of it constitutes an “event”48.
S S
T T
48
See Hong Kong Civil Procedure 2021, at para. 62/3/3
U U
V V
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A A
B B
58. The plaintiff in his written submission, in particular in
C Annexes 1 and 2 (“General survey of pleadings and evidence”), set out a C
lot of details of the proceedings. I do not find that useful. I am mindful of
D D
the apposite remarks of Deputy High Court Judge Marlene Ng (as she then
E was) in Lam Po Yee & anor v. Dr Chan Yee Shing aka Dr Chan Yee Shing E
Alvin49,
F F
“... in an application for variation of costs order nisi, it is
inappropriate to call upon the court to revisit all aspects of the
G litigation and conduct a minute fact-finding exercise to G
determine the rights and wrongs of all aspects of the conduct of
the litigation. Such approach would only add unnecessarily to
H costs.” H
I 59. In my view, it would not be right nor necessary to undertake I
an arithmetic exercise by working out how much time and efforts had been
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spent by the Court and the parties in handling each and every issue or
K aspect of the case. K
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60. Suffice to say, Issues 5 and 6, i.e. the plaintiff’s claims for his
M contributions towards various properties of the business and those under M
the bonus saving agreement between the parties, for which the plaintiff
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failed to prove his case, appear to me to be distinct and separate from the
O rest of the controversies in this case. More importantly, those two issues O
were far from straightforward as the plaintiff sought to rely on alternative
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bases of implied terms and different forms of trust. They clearly added a
Q lot to the complexity of the case, as plenty of financial documents were Q
produced, considerable time was taken up and counsel made lengthy
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factual and legal submissions in dealing with them.
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T T
49
[2018] HKCFI 870 (dated 30 April 2018), at para. 118
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61. I do not consider it reasonable for the plaintiff to raise and
C pursue Issues 5 and 6 in the manner in which he did. In my view, such C
issues should not have been raised, or at least should not have been pursued
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in the scope or argued to the extent or with such complexity as the plaintiff
E did. The plaintiff’s such conduct in the litigation in this case should be E
reflected in the relevant costs order and it is only just and fair to do so.
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62. The plaintiff, in his written submission, submitted that he
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should recover all costs in DCCJ 3647/2014 or as a fallback position, 80%
H to 90% of the costs50. On the other hand, the defendant, in the written H
submission, whilst opposing this costs variation application, submitted that,
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even if the plaintiff’s case was to be taken to the highest, his awarded costs
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should not be more than 50%51.
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63. Having re-considered all the circumstances of the case, I am
L of the view that the plaintiff should be awarded costs for the action DCCJ L
3647/2014 but they should be reduced by 50%, for the aforesaid reasons.
M M
N Disposal N
O 64. To conclude, for this costs variation application under the O
Summons, I order that: -
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Q (a) the plaintiff be granted leave to apply out of time to vary the Q
costs order nisi; and
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(b) the costs order nisi be varied and made absolute such that the
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50
T See plaintiff’s submissions, at para. 31-32 T
51
See skeleton submissions of the defendant, at para. 22
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defendant should pay the plaintiff 50% of the costs of the
C action DCCJ 3647/2014, with certificate for counsel, to be C
taxed if not agreed.
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65. Finally, I have to deal with the costs of this costs variation
E E
application. In essence, there are two applications, (a) application for leave
F to apply out of time to vary the costs order nisi and (b) application for F
variation of the costs order nisi.
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H 66. For application (a), the general position is that costs of H
applications to extend time should be borne by the party applying52, I see
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no reason to order the otherwise, and that means the plaintiff here should
J bear all the relevant costs. For application (b), the plaintiff succeeded in J
the application for variation of the costs order nisi and therefore, as a
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general rule, should be entitled to the relevant costs.
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67. Having considered all the circumstances in the round, I am of
M M
the view that the plaintiff’s entitlement to the costs under application (b)
N should be offset by his responsibility for the costs under application (a). It N
is therefore fair to make an order nisi that there be no order as to costs for
O O
this costs variation application under the Summons and I so order.
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( Edmond Lee )
S District Judge S
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52
O. 62, r. 3(4) of RDC
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Mr Jonathan Ah-Weng, instructed by So, Lung & Associates, for the
C plaintiff C
D Mr Lawrence Cheung and Mr Johnny Chan, instructed by T.K. Tsui & Co., D
for the defendant
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F F
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K K
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M M
N N
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Q Q
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T T
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