DCCJ289/2021 SPARKLE CAPITAL LTD v. CHAN WAI MAN also known as CHAN WAI MAN IVAN - LawHero
DCCJ289/2021
區域法院（民事）Deputy District Judge Ebony Ling (Paper Disposal)12/3/2025[2025] HKDC 366
合併案件：DCCJ289/2021DCCJ1380/2018
DCCJ289/2021
A A
B B
DCCJ 836 & 1380/2018 & 289/2021 (Consolidated)
C [2025] HKDC 366 C
D D
IN THE DISTRICT COURT OF THE
E HONG KONG SPECIAL ADMINISTRATIVE REGION E
CIVIL ACTION NOS 836 & 1380 OF 2018 & 289 OF 2021
F F
G ---------------------------------------------- G
BETWEEN
H H
SPARKLE CAPITAL LIMITED Plaintiff
I and I
CHAN WAI MAN
J (also known as CHAN WAI MAN IVAN) Defendant J
K K
(Actions consolidated by Order of
L Mr Registrar Ho dated 2nd May 2018 and L
Order of Master B. Mak dated 7th July 2021)
M ---------------------------------------------- M
N N
Before: Deputy District Judge Ebony Ling (Paper Disposal)
O Date of the Defendant’s Submission: 4 February 2025 O
Date of the Plaintiff’s Submission: 12 February 2025
P P
Date of the Defendant’s Reply Submission: 18 February 2025
Q Date of Decision: 13 March 2025 Q
R R
---------------------------
S DECISION S
---------------------------
T T
U U
V V
-2-
A A
B B
A. Introduction
C C
1. This is the defendant’s application (the “Application”) to
D D
vary the costs order nisi made by the court in the judgment dated 28
E November 2024 (the “Judgment”). E
F F
2. The trial of this action took place in October 2024. In the
G Judgment, the court: G
H H
(a) allowed the plaintiff’s claim for breach of the
I Employment Contract1 by the defendant, but held that I
the plaintiff had failed to establish that it had suffered
J J
any loss or damage, and in consequence awarded the
K plaintiff nominal damages of HK$1; K
L L
(b) dismissed all the other claims of the plaintiff;
M M
(c) dismissed the defendant’s counterclaim for unlawful
N N
termination of his Employment Contract and wages in
O lieu of notice; O
P P
(d) allowed the defendant’s counterclaim for outstanding
Q wages and annual leave pay, and Q
R R
S S
T T
1
Unless otherwise stated, the abbreviations and definitions in the Judgment are adopted.
U U
V V
-3-
A A
B B
(e) made a costs order nisi that the defendant do pay 50%
C of the plaintiff’s costs of this action (including all costs C
reserved), with certificate for one counsel, to be taxed
D D
if not agreed (the “Costs Order nisi”).
E E
3. In making the Costs Order nisi, the court considered in
F F
paragraph 145 of the Judgment that:
G G
(a) The main disputes in these proceedings concern the
H H
existence of the alleged Oral Agreement and
I defendant’s breaches of the Employment Contract, I
both of which the court found in favour of the plaintiff.
J J
K (b) The above led to the dismissal of the defendant’s K
counterclaim for unlawful termination of his
L L
employment and payment in lieu of notice.
M M
(c) No or minimal time was spent on the defendant’s
N N
counterclaim for arrears of wages and annual pay leave.
O O
(d) Some of the alleged breaches of the Employment
P P
Contract and the plaintiff’s claim in misrepresentation
Q and breach of confidence failed. Q
R R
S S
T T
U U
V V
-4-
A A
B B
4. By a summons dated 11 December 2024 (the “Summons”),
C the defendant made the Application to vary the Costs Order nisi to an order C
that:
D D
E (a) The plaintiff do pay 50% of the defendant’s costs of this E
action (including all costs reserved), with certificate for
F F
one counsel, to be taxed if not agreed;
G G
(b) Alternatively, there be no order as to costs.
H H
I 5. The Application is opposed by the plaintiff, who invites the I
court to dismiss the Application; alternatively, to vary the Costs Order nisi
J J
to one which gives the plaintiff a lower percentage of its costs of the action.
K K
6. On 8 January 2025, the Court ordered (by consent) (the
L L
“Order”), inter alia, that the Application be dealt with by way of paper
M disposal. M
N N
B. The Application
O O
7. In the Application, the defendant relies inter alia on the
P P
ground that it had made previous Calderbank offers to the plaintiff to settle
Q the matter, all of which were not accepted by the plaintiff. Q
R R
S S
T T
U U
V V
-5-
A A
B B
8. On 27 June 2024, the defendant’s solicitors, Messrs Ma Tang
C & Co (“MT”), wrote to the plaintiff’s solicitors, Messrs Li, Kwok & Law C
(“LKL”), setting out the purported weaknesses of the plaintiff’s claims and
D D
offering to:
E E
(a) pay a sum of HK$307,500 (the “Settlement Sum”) to
F F
the plaintiff;
G G
(b) relinquish all of the defendant’s counterclaims against
H H
the plaintiff;
I I
(c) undertake inter alia to return certain intellectual
J J
properties and all confidential information in the
K defendant’s possession; and K
L L
(d) bear his own costs of the consolidated action
M M
(the “1st Offer”).
N N
O 9. The plaintiff did not accept the 1st Offer. O
P P
10. On 16 October 2024, MT wrote to LKL, inviting the plaintiff
Q to seek no order on its claim and offering to: Q
R R
(a) pay the Settlement Sum to the plaintiff;
S S
(b) seek a dismissal of his counterclaim against the plaintiff;
T T
and
U U
V V
-6-
A A
B B
C (c) seek no order as to costs of the consolidated action C
D D
(the “2nd Offer”).
E E
11. The plaintiff did not accept the 2nd Offer.
F F
G 12. According to the affirmation filed by the plaintiff, there were G
verbal negotiations between the parties, which did not result in any
H H
settlement. The plaintiff also pointed out that the 1st and 2nd Offers came
I rather late. I
J J
13. In the Application, the defendant also relies on inter alia the
K following matters: K
L L
(a) the plaintiff was only awarded nominal damages in
M relation to its claim for breach of the Employment M
Contract;
N N
O (b) all other claims made by the plaintiff were dismissed O
and all other reliefs sought were rejected;
P P
Q (c) the defendant has succeeded in his counterclaim for Q
outstanding wages and annual leave pay;
R R
S (d) the unproven or abandoned allegations made by the S
plaintiff were extensive and disparate from the
T T
successful claims; and
U U
V V
-7-
A A
B B
C (e) the need to engage expert evidence (and the C
considerable time and costs incurred as a result thereof)
D D
arose because of the plaintiff’s allegations of failure to
E deliver work products and intellectual properties, E
which were rejected by the court.
F F
G C. Relevant Legal Principles G
H H
14. It is trite that the court has a wide discretion on matters
I concerning costs, but such discretion must be exercised judicially. I
J J
15. Order 62 rule 5(1) of the Rules of District Court (Cap 336H)
K sets out a list of factors that the court shall, as may be appropriate in the K
circumstances, take into account in exercising its discretion as to costs.
L L
These factors include the underlying objectives set out in Order 1A rule 1,
M conduct of the parties, whether a party has succeeded on part of his case, M
even if he has not been wholly successful, and any admissible offer to settle
N N
made by a party. Order 62 rule 5(2) then sets out the conduct of the parties
O for the purpose of rule 5(1)(e). O
P P
16. Both parties acknowledged that the starting point is costs
Q should follow the event. However, the defendant contends that where only Q
nominal damages have been awarded, the starting point is that the plaintiffs:
R R
S “… are not to be regarded as successful plaintiffs, and the court S
will normally treat the defendants as having succeeded and
T
award the defendants the costs of the action, whether or not the
T
defendants have at any stage made a payment into court of
nominal damages...”
U U
V V
-8-
A A
B B
C See: Hong Kong Civil Procedure 2025, §62/2/6, applied in eg Perfect Best C
Asset Management Inc v ADL Express Ltd & anor [2021] HKCFI 3021,
D D
§§3-4.
E E
17. I agree with the defendant that the two cases cited by the
F F
plaintiff are distinguishable. First, in Tang Kam Wah v Fung Kam Shu
G [2002] HKDC 487, which was an adverse possession case, although the G
defendant was only awarded nominal damages for his counterclaim, the
H H
court granted the injunction sought by the defendant. This justified the
I costs order of 95% of costs of the proceedings be paid by the plaintiff to I
the defendant.
J J
K 18. Secondly, as to Cosme De Net Co Ltd v Lam Kin Ming [2021] K
HKDC 445, the plaintiff succeeded in obtaining the injunctions sought.
L L
The court therefore awarded costs in favour of the plaintiff even though the
M claims for damages failed. M
N N
19. However, as mentioned above, other than nominal damages,
O the plaintiff failed to obtain any of the reliefs sought in this action. O
P P
D. Analysis
Q Q
20. First, on one hand, I agree with the defendant’s counsel that
R R
given the plaintiff was only awarded nominal damages for the only
S successful claim for breach of the Employment Contract, following Perfect S
Best Asset Management (supra), it cannot be regarded as the successful
T T
party in respect of its claims.
U U
V V
-9-
A A
B B
C 21. Secondly, although the plaintiff’s success in defending C
against the existence of the alleged Oral Agreement led to the dismissal of
D D
the defendant’s counterclaim for unlawful termination of his employment
E and payment in lieu of notice, all other claims made by the plaintiff were E
dismissed.
F F
G 22. Finally, although the 1st and 2nd Offers were not sanctioned G
offers, they can still be taken into account in considering the issue of costs
H H
pursuant to Order 62, rule 5(1)(d) of the Rules of the District Court: see
I Choi Tak Man v Chan Yuk Lan, Didi & anor [2017] 5 HKLRD 619, at §23. I
J J
23. That said, the 2nd Offer was made very late – only a week
K before trial. By then, most costs have been incurred. Little weight, if any, K
should be given to it in deciding the Application.
L L
M 24. However, in MT’s letter dated 27 June 2024 mentioned above, M
when making the 1st Offer, MT on behalf of the defendant specifically
N N
highlighted the plaintiff’s difficulty in proving its alleged damages. The
O plaintiff nevertheless chose to proceed and was awarded only nominal O
damages.
P P
Q 25. By reason of all the above reasons, I agree with the defendant Q
that the plaintiff should not be awarded costs of the action.
R R
S 26. That said, as explained in the Judgment, first, the court’s S
finding against the major issue of the existence of the alleged Oral
T T
Agreement has led, not only to the defendant’s failure in defending against
U U
V V
- 10 -
A A
B B
the plaintiff’s claim for breach of the Employment Contract, but also to the
C dismissal of the defendant’s counterclaim for unlawful termination of his C
employment and payment in lieu of notice.
D D
E 27. Secondly, no or minimal time was spent at trial on the E
defendant’s successful counterclaim for arrears of wages and annual pay
F F
leave.
G G
28. Thirdly, although the plaintiff’s allegations of failure to
H H
deliver work products and intellectual properties were rejected by the court,
I they were part and parcel of the plaintiff’s claim for breach of the I
Employment Contract and could not be said to be disparate or improperly
J J
or unnecessarily made. In the premises, the plaintiff’s lack of success in
K such issues should not attract a costs sanction. K
L L
29. In the premises, despite making the Calderbank offers, I do
M not agree that the defendant should be awarded any costs. M
N N
E. Conclusion
O O
30. By reason of the above, I agree with the defendant that the
P P
Costs Order nisi should be varied to an order that there be no order as to
Q the costs of the action. Q
R R
31. Accordingly, I make an order in terms of paragraph 2 of the
S Summons. S
T T
U U
V V
- 11 -
A A
B B
32. As to the costs of the Application, I make a costs order nisi
C that the costs of and occasioned by the Application be paid by the plaintiff C
to the defendant, with certificate for one counsel, to be taxed if not agreed.
D D
Any application to vary such costs order nisi should be made within 14
E days from the date of this decision. E
F F
G G
( Ebony Ling )
H Deputy District Judge H
I I
Mr Richard Leung, leading Mr Tommy Cheung, instructed by Li, Kwok &
J Law, for the Plaintiff J
K Mr Danny K K Chan, leading Mr Benjamin Chong and Mr Johnson K
Cheung, instructed by Ma Tang & Co, for the Defendant
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V
SPARKLE CAPITAL LTD v. CHAN WAI MAN also known as CHAN WAI MAN IVAN
A A
B B
DCCJ 836 & 1380/2018 & 289/2021 (Consolidated)
C [2025] HKDC 366 C
D D
IN THE DISTRICT COURT OF THE
E HONG KONG SPECIAL ADMINISTRATIVE REGION E
CIVIL ACTION NOS 836 & 1380 OF 2018 & 289 OF 2021
F F
G ---------------------------------------------- G
BETWEEN
H H
SPARKLE CAPITAL LIMITED Plaintiff
I and I
CHAN WAI MAN
J (also known as CHAN WAI MAN IVAN) Defendant J
K K
(Actions consolidated by Order of
L Mr Registrar Ho dated 2nd May 2018 and L
Order of Master B. Mak dated 7th July 2021)
M ---------------------------------------------- M
N N
Before: Deputy District Judge Ebony Ling (Paper Disposal)
O Date of the Defendant’s Submission: 4 February 2025 O
Date of the Plaintiff’s Submission: 12 February 2025
P P
Date of the Defendant’s Reply Submission: 18 February 2025
Q Date of Decision: 13 March 2025 Q
R R
---------------------------
S DECISION S
---------------------------
T T
U U
V V
-2-
A A
B B
A. Introduction
C C
1. This is the defendant’s application (the “Application”) to
D D
vary the costs order nisi made by the court in the judgment dated 28
E November 2024 (the “Judgment”). E
F F
2. The trial of this action took place in October 2024. In the
G Judgment, the court: G
H H
(a) allowed the plaintiff’s claim for breach of the
I Employment Contract1 by the defendant, but held that I
the plaintiff had failed to establish that it had suffered
J J
any loss or damage, and in consequence awarded the
K plaintiff nominal damages of HK$1; K
L L
(b) dismissed all the other claims of the plaintiff;
M M
(c) dismissed the defendant’s counterclaim for unlawful
N N
termination of his Employment Contract and wages in
O lieu of notice; O
P P
(d) allowed the defendant’s counterclaim for outstanding
Q wages and annual leave pay, and Q
R R
S S
T T
1
Unless otherwise stated, the abbreviations and definitions in the Judgment are adopted.
U U
V V
-3-
A A
B B
(e) made a costs order nisi that the defendant do pay 50%
C of the plaintiff’s costs of this action (including all costs C
reserved), with certificate for one counsel, to be taxed
D D
if not agreed (the “Costs Order nisi”).
E E
3. In making the Costs Order nisi, the court considered in
F F
paragraph 145 of the Judgment that:
G G
(a) The main disputes in these proceedings concern the
H H
existence of the alleged Oral Agreement and
I defendant’s breaches of the Employment Contract, I
both of which the court found in favour of the plaintiff.
J J
K (b) The above led to the dismissal of the defendant’s K
counterclaim for unlawful termination of his
L L
employment and payment in lieu of notice.
M M
(c) No or minimal time was spent on the defendant’s
N N
counterclaim for arrears of wages and annual pay leave.
O O
(d) Some of the alleged breaches of the Employment
P P
Contract and the plaintiff’s claim in misrepresentation
Q and breach of confidence failed. Q
R R
S S
T T
U U
V V
-4-
A A
B B
4. By a summons dated 11 December 2024 (the “Summons”),
C the defendant made the Application to vary the Costs Order nisi to an order C
that:
D D
E (a) The plaintiff do pay 50% of the defendant’s costs of this E
action (including all costs reserved), with certificate for
F F
one counsel, to be taxed if not agreed;
G G
(b) Alternatively, there be no order as to costs.
H H
I 5. The Application is opposed by the plaintiff, who invites the I
court to dismiss the Application; alternatively, to vary the Costs Order nisi
J J
to one which gives the plaintiff a lower percentage of its costs of the action.
K K
6. On 8 January 2025, the Court ordered (by consent) (the
L L
“Order”), inter alia, that the Application be dealt with by way of paper
M disposal. M
N N
B. The Application
O O
7. In the Application, the defendant relies inter alia on the
P P
ground that it had made previous Calderbank offers to the plaintiff to settle
Q the matter, all of which were not accepted by the plaintiff. Q
R R
S S
T T
U U
V V
-5-
A A
B B
8. On 27 June 2024, the defendant’s solicitors, Messrs Ma Tang
C & Co (“MT”), wrote to the plaintiff’s solicitors, Messrs Li, Kwok & Law C
(“LKL”), setting out the purported weaknesses of the plaintiff’s claims and
D D
offering to:
E E
(a) pay a sum of HK$307,500 (the “Settlement Sum”) to
F F
the plaintiff;
G G
(b) relinquish all of the defendant’s counterclaims against
H H
the plaintiff;
I I
(c) undertake inter alia to return certain intellectual
J J
properties and all confidential information in the
K defendant’s possession; and K
L L
(d) bear his own costs of the consolidated action
M M
(the “1st Offer”).
N N
O 9. The plaintiff did not accept the 1st Offer. O
P P
10. On 16 October 2024, MT wrote to LKL, inviting the plaintiff
Q to seek no order on its claim and offering to: Q
R R
(a) pay the Settlement Sum to the plaintiff;
S S
(b) seek a dismissal of his counterclaim against the plaintiff;
T T
and
U U
V V
-6-
A A
B B
C (c) seek no order as to costs of the consolidated action C
D D
(the “2nd Offer”).
E E
11. The plaintiff did not accept the 2nd Offer.
F F
G 12. According to the affirmation filed by the plaintiff, there were G
verbal negotiations between the parties, which did not result in any
H H
settlement. The plaintiff also pointed out that the 1st and 2nd Offers came
I rather late. I
J J
13. In the Application, the defendant also relies on inter alia the
K following matters: K
L L
(a) the plaintiff was only awarded nominal damages in
M relation to its claim for breach of the Employment M
Contract;
N N
O (b) all other claims made by the plaintiff were dismissed O
and all other reliefs sought were rejected;
P P
Q (c) the defendant has succeeded in his counterclaim for Q
outstanding wages and annual leave pay;
R R
S (d) the unproven or abandoned allegations made by the S
plaintiff were extensive and disparate from the
T T
successful claims; and
U U
V V
-7-
A A
B B
C (e) the need to engage expert evidence (and the C
considerable time and costs incurred as a result thereof)
D D
arose because of the plaintiff’s allegations of failure to
E deliver work products and intellectual properties, E
which were rejected by the court.
F F
G C. Relevant Legal Principles G
H H
14. It is trite that the court has a wide discretion on matters
I concerning costs, but such discretion must be exercised judicially. I
J J
15. Order 62 rule 5(1) of the Rules of District Court (Cap 336H)
K sets out a list of factors that the court shall, as may be appropriate in the K
circumstances, take into account in exercising its discretion as to costs.
L L
These factors include the underlying objectives set out in Order 1A rule 1,
M conduct of the parties, whether a party has succeeded on part of his case, M
even if he has not been wholly successful, and any admissible offer to settle
N N
made by a party. Order 62 rule 5(2) then sets out the conduct of the parties
O for the purpose of rule 5(1)(e). O
P P
16. Both parties acknowledged that the starting point is costs
Q should follow the event. However, the defendant contends that where only Q
nominal damages have been awarded, the starting point is that the plaintiffs:
R R
S “… are not to be regarded as successful plaintiffs, and the court S
will normally treat the defendants as having succeeded and
T
award the defendants the costs of the action, whether or not the
T
defendants have at any stage made a payment into court of
nominal damages...”
U U
V V
-8-
A A
B B
C See: Hong Kong Civil Procedure 2025, §62/2/6, applied in eg Perfect Best C
Asset Management Inc v ADL Express Ltd & anor [2021] HKCFI 3021,
D D
§§3-4.
E E
17. I agree with the defendant that the two cases cited by the
F F
plaintiff are distinguishable. First, in Tang Kam Wah v Fung Kam Shu
G [2002] HKDC 487, which was an adverse possession case, although the G
defendant was only awarded nominal damages for his counterclaim, the
H H
court granted the injunction sought by the defendant. This justified the
I costs order of 95% of costs of the proceedings be paid by the plaintiff to I
the defendant.
J J
K 18. Secondly, as to Cosme De Net Co Ltd v Lam Kin Ming [2021] K
HKDC 445, the plaintiff succeeded in obtaining the injunctions sought.
L L
The court therefore awarded costs in favour of the plaintiff even though the
M claims for damages failed. M
N N
19. However, as mentioned above, other than nominal damages,
O the plaintiff failed to obtain any of the reliefs sought in this action. O
P P
D. Analysis
Q Q
20. First, on one hand, I agree with the defendant’s counsel that
R R
given the plaintiff was only awarded nominal damages for the only
S successful claim for breach of the Employment Contract, following Perfect S
Best Asset Management (supra), it cannot be regarded as the successful
T T
party in respect of its claims.
U U
V V
-9-
A A
B B
C 21. Secondly, although the plaintiff’s success in defending C
against the existence of the alleged Oral Agreement led to the dismissal of
D D
the defendant’s counterclaim for unlawful termination of his employment
E and payment in lieu of notice, all other claims made by the plaintiff were E
dismissed.
F F
G 22. Finally, although the 1st and 2nd Offers were not sanctioned G
offers, they can still be taken into account in considering the issue of costs
H H
pursuant to Order 62, rule 5(1)(d) of the Rules of the District Court: see
I Choi Tak Man v Chan Yuk Lan, Didi & anor [2017] 5 HKLRD 619, at §23. I
J J
23. That said, the 2nd Offer was made very late – only a week
K before trial. By then, most costs have been incurred. Little weight, if any, K
should be given to it in deciding the Application.
L L
M 24. However, in MT’s letter dated 27 June 2024 mentioned above, M
when making the 1st Offer, MT on behalf of the defendant specifically
N N
highlighted the plaintiff’s difficulty in proving its alleged damages. The
O plaintiff nevertheless chose to proceed and was awarded only nominal O
damages.
P P
Q 25. By reason of all the above reasons, I agree with the defendant Q
that the plaintiff should not be awarded costs of the action.
R R
S 26. That said, as explained in the Judgment, first, the court’s S
finding against the major issue of the existence of the alleged Oral
T T
Agreement has led, not only to the defendant’s failure in defending against
U U
V V
- 10 -
A A
B B
the plaintiff’s claim for breach of the Employment Contract, but also to the
C dismissal of the defendant’s counterclaim for unlawful termination of his C
employment and payment in lieu of notice.
D D
E 27. Secondly, no or minimal time was spent at trial on the E
defendant’s successful counterclaim for arrears of wages and annual pay
F F
leave.
G G
28. Thirdly, although the plaintiff’s allegations of failure to
H H
deliver work products and intellectual properties were rejected by the court,
I they were part and parcel of the plaintiff’s claim for breach of the I
Employment Contract and could not be said to be disparate or improperly
J J
or unnecessarily made. In the premises, the plaintiff’s lack of success in
K such issues should not attract a costs sanction. K
L L
29. In the premises, despite making the Calderbank offers, I do
M not agree that the defendant should be awarded any costs. M
N N
E. Conclusion
O O
30. By reason of the above, I agree with the defendant that the
P P
Costs Order nisi should be varied to an order that there be no order as to
Q the costs of the action. Q
R R
31. Accordingly, I make an order in terms of paragraph 2 of the
S Summons. S
T T
U U
V V
- 11 -
A A
B B
32. As to the costs of the Application, I make a costs order nisi
C that the costs of and occasioned by the Application be paid by the plaintiff C
to the defendant, with certificate for one counsel, to be taxed if not agreed.
D D
Any application to vary such costs order nisi should be made within 14
E days from the date of this decision. E
F F
G G
( Ebony Ling )
H Deputy District Judge H
I I
Mr Richard Leung, leading Mr Tommy Cheung, instructed by Li, Kwok &
J Law, for the Plaintiff J
K Mr Danny K K Chan, leading Mr Benjamin Chong and Mr Johnson K
Cheung, instructed by Ma Tang & Co, for the Defendant
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V