HCA1950/2017 FONG CHOK FUNG AND ANOTHER v. WAYTEX PLASTIC MANUFACTURING LTD AND ANOTHER - LawHero
HCA1950/2017
高等法院（民事訴訟）Deputy High Court Judge Alexander Stock SC22/12/2022[2023] HKCFI 204
HCA1950/2017
A A
B HCA 1950/2017 B
[2023] HKCFI 204
C C
IN THE HIGH COURT OF THE
D HONG KONG SPECIAL ADMINISTRATIVE REGION D
COURT OF FIRST INSTANCE
E E
ACTION NO 1950 OF 2017
__________________
F F
BETWEEN
G G
st
FONG CHOK FUNG (方作峰) 1 Plaintiff
H H
WONG SIU KI (黃紹祺) 2nd Plaintiff
I I
and
J J
st
WAYTEX PLASTIC MANUFACTURING LIMITED 1 Defendant
K （滙達塑膠製品有限公司） K
L
MA SAI PING （馬世平） 2nd Defendant L
_________________
M M
Before: Deputy High Court Judge Alexander Stock SC in Chambers (by
N N
paper disposal)
O Dates of Written Submissions: 23 December 2022, 30 December 2022 O
and 6 January 2023
P P
Date of Decision on Interest and Costs: 20 January 2023
Q Q
R
_______________________________ R
DECISION ON INTEREST
S S
AND COSTS
_______________________________
T T
U U
V V
- 2 -
A A
B B
1. By Judgment herein dated 14 December 2022 (the
C C
“Judgment”), I gave judgment for Ps in the amounts set out at §§86 and
D
87 (the “Judgment Sums”). The background and issues are set out in the D
Judgment, and I adopt the terminology therein.
E E
2. Pursuant to §§89 and 90 of the Judgment, Ps applied to vary
F F
the costs orders nisi and addressed their claim for interest. The parties have
G exchanged written submissions on these issues, which I now determine. G
H H
3. In relation to both interest and costs, Ps relied on two
I sanctioned offers dated 25 April 2022 and 10 June 2022 respectively, made I
by Ps to Ds, which offered amounts lower than the Judgment Sums, but
J J
which Ds did not accept.
K K
4. Ps sought orders for:
L L
(1) interest on the Judgment Sums from the date upon which each
M M
cause of action accrued until the latest date Ds could have
N accepted the first Sanctioned Offer without leave of the Court N
ie 23 May 2022 (the “1st Sanctioned Offer Date”) at 1%
O O
over HSBC’s best lending rates;
P P
(2) interest on the Judgment Sums after the 1st Sanctioned Offer
Q Q
Date at 10 % above the judgment rate;
R R
(3) costs on an indemnity basis after the 1st Sanctioned Offer Date;
S and S
T T
(4) interest on such costs at 10% above the judgment rate.
U U
V V
- 3 -
A A
B 5. In seeking items (2) to (4) above, Ps relied on Order 22 rule 24 RHC B
(Cap 4A).
C C
D INTEREST ON THE JUDGMENT SUMS UP TO THE 1ST SANCTIONED D
OFFER DATE
E E
F
6. Ds did not object to Ps’ proposed interest rates for this period, F
and made no submission as to the dates from which interest should start
G G
running (which were set out in some detail in Ps’ written submissions).
H H
7. Accordingly, I will award to Ps interest on the Judgment Sums
I from the dates when the causes of action accrued until 23 May 2022 at 1% I
over HSBC’s best lending rates which were applicable from time to time1.
J J
K INTEREST ON THE JUDGMENT SUMS AFTER THE 1ST SANCTIONED K
OFFER DATE
L L
8. A main item of controversy was whether Ps should be
M M
st
awarded elevated interest on the Judgment Sums after the 1 Sanctioned
N Offer Date. N
O O
9. The applicable principles are set out in: Qvist v Clatronic Far
P East Ltd [2020] 1 HKLRD 703 per Mr Recorder Stewart Wong SC at §§15- P
29; Zief Inc v Tekchandani and ors [2021] HKCFI 730 per Mr Recorder
Q Q
Eugene Fung SC; Wah Lun International Development Ltd v Lau Chiu
R Shing [2021] HKCFI 1976 per DHCJ William Wong SC at §§4-10. I will R
S 1
The dates on which the causes of action accrued and the applicable rates from time to time are as set S
out in §3 and the Schedule to Ps’ written submissions on interest, which were unchallenged on these
points.
T T
U U
V V
- 4 -
A A
B not repeat the principles, but rely on and apply the summaries in those B
decisions.
C C
D 10. Ds did not dispute that the powers to order elevated interest D
and costs were engaged, since Ps obtained a more favorable result than was
E E
offered in either of the sanctioned offers. Accordingly, the Court should
F make orders as set out in Order 22 rule 24(2) and (3), unless it considers it F
unjust to do so.
G G
H
11. Ds argued that it would be unjust to award (inter alia) elevated H
interest, for the following reasons.
I I
12. First, Ds said that the sanctioned offers were made at an
J J
advanced stage of the proceedings with trial initially scheduled to start on
K 15 September 2022. K
L L
13. However, I do not see that as a reason why it would be unjust
M to order elevated interest. Given the advanced stage of the proceedings, Ds M
should have been well-placed to assess the merits of the sanctioned offers
N N
when they were made.
O O
14. Second, Ds complained that Ps did not suggest the basis of
P calculation for the figures offered. In particular, no amount was identified P
Q
by Ps for their profit-share claim, and Ps’ pleadings only asked for such Q
claims to be assessed.
R R
15. However, whilst a defendant should not be required to make
S S
a decision whether to accept a sanctioned offer without a careful review of
T the case with proper information, a defendant ought to make reasonable T
efforts to settle including, where appropriate, seeking further information:
U U
V V
- 5 -
A A
B see Qvist §§21 & 22. Insofar as Ds wished to have further information as B
to the breakdown of the sums offered, they could have sought such
C C
information. In any event, the correct calculation of Ps’ profit-share
D entitlement was of its nature a matter within Ds’ knowledge: see Judgment D
E
§30. E
F 16. Third, Ds said they had an arguable case throughout the trial, F
and the Judgment acknowledged that portions of Ps’ evidence was thin or
G G
less than ideal: Judgment §§33, 62, 73 and 84.
H H
17. It is true that portions of Ps’ documentary evidence could have
I I
been firmer. However, I do not consider that this renders it unjust to order
J elevated interest, particularly given the manner in which Ds conducted the J
litigation: Judgment §§6, 22-30, 35, 41, 58, 71, 72 & 82.
K K
18. Further, the two offers appear to be genuine and were each
L L
substantially below the Judgment Sums.
M M
19. In the circumstances, I am not satisfied that it would be unjust
N N
to order elevated interest, and I will so order.
O O
20. The rate of such interest should be proportionate to the
P circumstances, including whether a defendant took entirely bad points or P
Q
behaved unreasonably in the settlement process or litigation. The Q
maximum uplift should be reserved for the worst kind of case.
R R
21. Taking all the circumstance in the round (including the
S S
matters at §16 above), I do not consider this the worst kind of case. I will
T award an elevated interest rate of 2% above the judgment rate after the 1 st T
Sanctioned Offer Date.
U U
V V
- 6 -
A A
B INTEREST ON THE JUDGMENT SUMS FROM THE DATE OF B
JUDGMENT
C C
D 22. I accept Ds’ submission that in all the circumstances, post- D
judgment interest should run at the judgment rate: compare Zief at §§38-
E E
44.
F F
INDEMNITY COSTS
G G
23. The arguments on indemnity costs under Order 22 rule
H H
24(3)(a), were the same or very similar to those canvassed above.
I I
24. For essentially the same reasons, I do not think that it has been
J J
shown to be unjust to order indemnity costs after the 1st Sanctioned Offer
K Date, and I will so order. K
L INTEREST ON COSTS L
M M
25. Ps sought interest on their costs from 24 May 2022 onwards,
N at 10% above the judgment rate. Ds argued that any interest on costs from N
that date should be at half of the rate of elevated interest on the Judgment
O O
Sums, up until judgment: Golden Eagle International (Group) Ltd v GR
P Investment Holdings Ltd [2010] 3 HKLRD 273 per Lam J (as he then was) P
at §§16-19.
Q Q
R
26. There is no evidence as to when Ps’ costs were paid after the R
st
1 Sanctioned Offer Date. Accordingly, I accept Ds’ submissions here. I
S S
will award interest on Ps’ costs incurred from 24 May 2022 up to the
T Judgment, at a rate of 5%. T
U U
V V
- 7 -
A A
B DISPOSITION B
C C
27. I will award simple interest to Ps on the Judgment Sums
D referred to at §§86 & 87 of the Judgment: D
E E
(1) from the dates when the causes of action accrued until 23 May
F
2022, at 1% over HSBC’s best lending rates which were F
appliable from time to time ;2
G G
(2) from 24 May 2022 until the date of Judgment, at 2% over the
H H
judgment rate;
I I
28. After the date of Judgment, interest on the Judgment Sums
J J
will run at the judgment rate.
K K
29. The costs order nisi pronounced at §89 of the Judgment shall
L be varied to provide that Ps’ costs in this action, including any costs L
reserved, be paid by Ds, to be taxed if not agreed:
M M
N (1) on a party-and-party basis up to 23 May 2022; N
O (2) on an indemnity basis from 24 May 2022; O
P P
(3) with interest on Ps’ costs incurred from 24 May 2022 up to the
Q date of Judgment, at 5%. Q
R R
S 2
Footnote 1 above is repeated. S
T T
U U
V V
- 8 -
A A
B 30. As to the costs of Ps’ applications on interest and costs, I will B
award these to Ps but on a party-and-party basis, to be taxed if not agreed.
C C
D D
E E
F F
G G
(Alexander Stock SC)
H Deputy High Court Judge H
I I
Written submissions by Mr Avery Chan, instructed by Messrs Iu, Lai & Li,
J J
for the 1st and 2nd Plaintiffs
K K
Written submissions by Mr Sunny Chan and Mr Samkei Chan, instructed by
Messrs Chan, Evans, Chung & To, for the 1st and 2nd Defendants
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V
FONG CHOK FUNG AND ANOTHER v. WAYTEX PLASTIC MANUFACTURING LTD AND ANOTHER
A A
B HCA 1950/2017 B
[2023] HKCFI 204
C C
IN THE HIGH COURT OF THE
D HONG KONG SPECIAL ADMINISTRATIVE REGION D
COURT OF FIRST INSTANCE
E E
ACTION NO 1950 OF 2017
__________________
F F
BETWEEN
G G
st
FONG CHOK FUNG (方作峰) 1 Plaintiff
H H
WONG SIU KI (黃紹祺) 2nd Plaintiff
I I
and
J J
st
WAYTEX PLASTIC MANUFACTURING LIMITED 1 Defendant
K （滙達塑膠製品有限公司） K
L
MA SAI PING （馬世平） 2nd Defendant L
_________________
M M
Before: Deputy High Court Judge Alexander Stock SC in Chambers (by
N N
paper disposal)
O Dates of Written Submissions: 23 December 2022, 30 December 2022 O
and 6 January 2023
P P
Date of Decision on Interest and Costs: 20 January 2023
Q Q
R
_______________________________ R
DECISION ON INTEREST
S S
AND COSTS
_______________________________
T T
U U
V V
- 2 -
A A
B B
1. By Judgment herein dated 14 December 2022 (the
C C
“Judgment”), I gave judgment for Ps in the amounts set out at §§86 and
D
87 (the “Judgment Sums”). The background and issues are set out in the D
Judgment, and I adopt the terminology therein.
E E
2. Pursuant to §§89 and 90 of the Judgment, Ps applied to vary
F F
the costs orders nisi and addressed their claim for interest. The parties have
G exchanged written submissions on these issues, which I now determine. G
H H
3. In relation to both interest and costs, Ps relied on two
I sanctioned offers dated 25 April 2022 and 10 June 2022 respectively, made I
by Ps to Ds, which offered amounts lower than the Judgment Sums, but
J J
which Ds did not accept.
K K
4. Ps sought orders for:
L L
(1) interest on the Judgment Sums from the date upon which each
M M
cause of action accrued until the latest date Ds could have
N accepted the first Sanctioned Offer without leave of the Court N
ie 23 May 2022 (the “1st Sanctioned Offer Date”) at 1%
O O
over HSBC’s best lending rates;
P P
(2) interest on the Judgment Sums after the 1st Sanctioned Offer
Q Q
Date at 10 % above the judgment rate;
R R
(3) costs on an indemnity basis after the 1st Sanctioned Offer Date;
S and S
T T
(4) interest on such costs at 10% above the judgment rate.
U U
V V
- 3 -
A A
B 5. In seeking items (2) to (4) above, Ps relied on Order 22 rule 24 RHC B
(Cap 4A).
C C
D INTEREST ON THE JUDGMENT SUMS UP TO THE 1ST SANCTIONED D
OFFER DATE
E E
F
6. Ds did not object to Ps’ proposed interest rates for this period, F
and made no submission as to the dates from which interest should start
G G
running (which were set out in some detail in Ps’ written submissions).
H H
7. Accordingly, I will award to Ps interest on the Judgment Sums
I from the dates when the causes of action accrued until 23 May 2022 at 1% I
over HSBC’s best lending rates which were applicable from time to time1.
J J
K INTEREST ON THE JUDGMENT SUMS AFTER THE 1ST SANCTIONED K
OFFER DATE
L L
8. A main item of controversy was whether Ps should be
M M
st
awarded elevated interest on the Judgment Sums after the 1 Sanctioned
N Offer Date. N
O O
9. The applicable principles are set out in: Qvist v Clatronic Far
P East Ltd [2020] 1 HKLRD 703 per Mr Recorder Stewart Wong SC at §§15- P
29; Zief Inc v Tekchandani and ors [2021] HKCFI 730 per Mr Recorder
Q Q
Eugene Fung SC; Wah Lun International Development Ltd v Lau Chiu
R Shing [2021] HKCFI 1976 per DHCJ William Wong SC at §§4-10. I will R
S 1
The dates on which the causes of action accrued and the applicable rates from time to time are as set S
out in §3 and the Schedule to Ps’ written submissions on interest, which were unchallenged on these
points.
T T
U U
V V
- 4 -
A A
B not repeat the principles, but rely on and apply the summaries in those B
decisions.
C C
D 10. Ds did not dispute that the powers to order elevated interest D
and costs were engaged, since Ps obtained a more favorable result than was
E E
offered in either of the sanctioned offers. Accordingly, the Court should
F make orders as set out in Order 22 rule 24(2) and (3), unless it considers it F
unjust to do so.
G G
H
11. Ds argued that it would be unjust to award (inter alia) elevated H
interest, for the following reasons.
I I
12. First, Ds said that the sanctioned offers were made at an
J J
advanced stage of the proceedings with trial initially scheduled to start on
K 15 September 2022. K
L L
13. However, I do not see that as a reason why it would be unjust
M to order elevated interest. Given the advanced stage of the proceedings, Ds M
should have been well-placed to assess the merits of the sanctioned offers
N N
when they were made.
O O
14. Second, Ds complained that Ps did not suggest the basis of
P calculation for the figures offered. In particular, no amount was identified P
Q
by Ps for their profit-share claim, and Ps’ pleadings only asked for such Q
claims to be assessed.
R R
15. However, whilst a defendant should not be required to make
S S
a decision whether to accept a sanctioned offer without a careful review of
T the case with proper information, a defendant ought to make reasonable T
efforts to settle including, where appropriate, seeking further information:
U U
V V
- 5 -
A A
B see Qvist §§21 & 22. Insofar as Ds wished to have further information as B
to the breakdown of the sums offered, they could have sought such
C C
information. In any event, the correct calculation of Ps’ profit-share
D entitlement was of its nature a matter within Ds’ knowledge: see Judgment D
E
§30. E
F 16. Third, Ds said they had an arguable case throughout the trial, F
and the Judgment acknowledged that portions of Ps’ evidence was thin or
G G
less than ideal: Judgment §§33, 62, 73 and 84.
H H
17. It is true that portions of Ps’ documentary evidence could have
I I
been firmer. However, I do not consider that this renders it unjust to order
J elevated interest, particularly given the manner in which Ds conducted the J
litigation: Judgment §§6, 22-30, 35, 41, 58, 71, 72 & 82.
K K
18. Further, the two offers appear to be genuine and were each
L L
substantially below the Judgment Sums.
M M
19. In the circumstances, I am not satisfied that it would be unjust
N N
to order elevated interest, and I will so order.
O O
20. The rate of such interest should be proportionate to the
P circumstances, including whether a defendant took entirely bad points or P
Q
behaved unreasonably in the settlement process or litigation. The Q
maximum uplift should be reserved for the worst kind of case.
R R
21. Taking all the circumstance in the round (including the
S S
matters at §16 above), I do not consider this the worst kind of case. I will
T award an elevated interest rate of 2% above the judgment rate after the 1 st T
Sanctioned Offer Date.
U U
V V
- 6 -
A A
B INTEREST ON THE JUDGMENT SUMS FROM THE DATE OF B
JUDGMENT
C C
D 22. I accept Ds’ submission that in all the circumstances, post- D
judgment interest should run at the judgment rate: compare Zief at §§38-
E E
44.
F F
INDEMNITY COSTS
G G
23. The arguments on indemnity costs under Order 22 rule
H H
24(3)(a), were the same or very similar to those canvassed above.
I I
24. For essentially the same reasons, I do not think that it has been
J J
shown to be unjust to order indemnity costs after the 1st Sanctioned Offer
K Date, and I will so order. K
L INTEREST ON COSTS L
M M
25. Ps sought interest on their costs from 24 May 2022 onwards,
N at 10% above the judgment rate. Ds argued that any interest on costs from N
that date should be at half of the rate of elevated interest on the Judgment
O O
Sums, up until judgment: Golden Eagle International (Group) Ltd v GR
P Investment Holdings Ltd [2010] 3 HKLRD 273 per Lam J (as he then was) P
at §§16-19.
Q Q
R
26. There is no evidence as to when Ps’ costs were paid after the R
st
1 Sanctioned Offer Date. Accordingly, I accept Ds’ submissions here. I
S S
will award interest on Ps’ costs incurred from 24 May 2022 up to the
T Judgment, at a rate of 5%. T
U U
V V
- 7 -
A A
B DISPOSITION B
C C
27. I will award simple interest to Ps on the Judgment Sums
D referred to at §§86 & 87 of the Judgment: D
E E
(1) from the dates when the causes of action accrued until 23 May
F
2022, at 1% over HSBC’s best lending rates which were F
appliable from time to time ;2
G G
(2) from 24 May 2022 until the date of Judgment, at 2% over the
H H
judgment rate;
I I
28. After the date of Judgment, interest on the Judgment Sums
J J
will run at the judgment rate.
K K
29. The costs order nisi pronounced at §89 of the Judgment shall
L be varied to provide that Ps’ costs in this action, including any costs L
reserved, be paid by Ds, to be taxed if not agreed:
M M
N (1) on a party-and-party basis up to 23 May 2022; N
O (2) on an indemnity basis from 24 May 2022; O
P P
(3) with interest on Ps’ costs incurred from 24 May 2022 up to the
Q date of Judgment, at 5%. Q
R R
S 2
Footnote 1 above is repeated. S
T T
U U
V V
- 8 -
A A
B 30. As to the costs of Ps’ applications on interest and costs, I will B
award these to Ps but on a party-and-party basis, to be taxed if not agreed.
C C
D D
E E
F F
G G
(Alexander Stock SC)
H Deputy High Court Judge H
I I
Written submissions by Mr Avery Chan, instructed by Messrs Iu, Lai & Li,
J J
for the 1st and 2nd Plaintiffs
K K
Written submissions by Mr Sunny Chan and Mr Samkei Chan, instructed by
Messrs Chan, Evans, Chung & To, for the 1st and 2nd Defendants
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V