CHINA MERCHANTS KIN SWISS TRANSPORTATION CO LTD AND ANOTHER v. TREASURE WISE LTD AND OTHERS

HCA 344/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 344 OF 2007

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BETWEEN

CHINA MERCHANTS KIN SWISS TRANSPORTATION COMPANY LIMITED 1st Plaintiff
ORIENTURE INDUSTRIES LIMITED 2nd Plaintiff
and
TREASURE WISE LIMITED 1st Defendant
LUEN FAT TANNERY LIMITED 2nd Defendant
LUEN TAI LEATHER COMPANY LIMITED 3rd Defendant

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Before: Hon Chung J in Chambers

Dates of Hearing: 10 September and 3 November 2009

Date of Decision: 3 November 2009

Date of Handing Down Reasons for Decision: 16 November 2009

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REASONS FOR DECISION

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Introduction

1. In a judgment handed down on 20 November 2008 (after the trial of this action), a costs order nisi was made in the plaintiffs’ favour as follows:-

“… the 1st Defendant [D1] do pay the costs of this action … to be taxed if not agreed”.

No application was made to vary the order; it became absolute subsequently.

2. This action was tried on 19 to 21 & 23 November 2007 and 4 to 5 and 7 to 8 August 2008. In a ruling handed down on 11 January2008, it was ruled that:-

(a) the parts of the expert evidence to which the plaintiffs had raised objections were inadmissible;

(b) D1’s application to adduce additional expert evidence be dismissed insofar as the plaintiffs had raised objection to thesame.

3. The costs order dated 11 January 2008 awarded the following costs in the plaintiffs’ favour:-

(1) costs of the plaintiffs’ application to exclude parts of the expert evidence;

(2) costs of D1’s application to adduce additional expert evidence.

The said order included certificates for two counsel in respect of both sets of costs.

4. Those costs came to be taxed by the master. In a “Note of Ruling” dated 21 August 2009, the master recorded that the plaintiffs’costs for preparing the expert evidence should not be allowed, and gave reasons for so deciding. It is common ground, however, thattaxation of costs has not been concluded, but was adjourned on 21 August 2009 pending the outcome of this application.

5. The “Note of Ruling” set out two reasons for disallowing the above-mentioned costs:-

“… costs of Ps to prepare for their own ‘inadmissible’ expert evidence could not be recovered under party-and-party taxation. They were ruled out by the Trial Judge and had never been deployed before the Court.

Ps attempted to argue that it was not something meant by the Trial Judge. However, they could not find anything in the Order or Judgmentto that effect. I further consider that it was too late for Ps to argue the matter at the taxation. They should have brought up the matter before the Judge if they wanted to argue for it” (emphasissupplied) (para. 8 and 9 thereof).

This Application

6. The plaintiff took out this application on 20 August 2009, purportedly pursuant to RHC Ord. 20 r. 11 and the court’s inherentjurisdiction. D1 opposed this application. At the end of the hearing, I dismissed the application, indicating reasons for doingso would be handed down later. They are as follows.

7. The first ground of opposition put forth was that this application does not fall within either the said rule or inherent jurisdiction.

8. The commentaries to Ord. 20 r. 11 explain the court’s powers under that rule:-

“This rule … applies only in cases where there is a clerical mistake in a judgment or order or an error arising from an accidental slip or omission, for example, arithmetical error in the calculation of damages or if there is some ambiguity in expression in anunambiguous decision … ” (Hong Kong Civil Procedure 2010, Vol. 1, para. 20/11/1).

9. The court’s inherent jurisdiction is also summarized there:-

“Apart from the rule, the court has an inherent power to vary its own orders so as to carry out its own meaning and to make itsmeaning plain” (Hong Kong Civil Procedure 2010, para. 20/11/1).

10. But the powers are not unlimited:-

“The error or omission must be an error in expressing the manifest intention of the court; the court cannot correct a mistake ofits own in law or otherwise, even though apparent on the face of the order” (Hong Kong Civil Procedure 2010, para. 20/11/1).

Of particular relevance to this application is the following commentary:-

“A mistake as to the legal effect of a conventional order cannot be susceptible to amendment under this rule” (Hong Kong Civil Procedure 2010, para. 20/11/1).

11. Instances where the courts have refused applications similar to the present included:-

(a) refusal by the court of appeal to insert a direction for allowance of shorthand notes of evidence: Glasier v. Rolls (1889) 62 LT 305;

(b) refusal to certify for two counsel: Re Ley’s Will Trusts, Somerset v. Ley [1964] 1 WLR 640.

12. D1 relied on the court of appeal’s judgment in The Bank of China v. Xinyuan Trading Co. Ltd. and Another, CACV 276/1998 (21 June 2000). The appellant applied to include a certificate for two counsel which was not part of the originalcosts order. In refusing the application, the court said:-

“What is now sought to be done is to use the slip rule to insert, into this court’s original order as to costs, a provision whichis not there, not because of any slip in expressing the court’s intention but because it was not originally asked for” (p. 3).

This is similar to what was involved in this application.

13. The plaintiffs submitted that the court would have given the direction sought in this application if it had been sought at the time. But if such course had in fact been taken, it is highly likely D1 would have sought to address the court on the issue: see similarobservations in The Bank of China above, p. 3. The issue was therefore not one which can properly be regarded as “a clerical mistake” or “an accidental slip or omission”.

14. To avoid doubt, the remarks in para. 13 above are not intended to indicate if the costs of the “inadmissible” expert evidenceshould or should not be allowed on taxation pursuant to the costs orders referred to in para. 1 and 3 above.

15. The language used in the costs order referred to in para. 1 and 3 above is clear. They are “conventional orders” in the senseboth that costs are a common feature in civil litigation and that the language used is commonly seen in similar orders.

16. How the language used in those costs orders is to be understood is something entirely within the precinct of the taxing master untilthe conclusion of the taxation of costs before him.

17. The other ground of opposition concerned the substantive merits of this application, namely, whether the costs relating to the expertevidence, having been ruled “inadmissible”, ought to be recoverable on party-and-party taxation.

18. Because I have concluded the plaintiffs had failed to establish a proper basis for making this application, and the taxation beforethe master has not been concluded, I will refrain from commenting on this aspect of this application at present.

Other Matters

19. The plaintiffs have fairly accepted that, because of the language used in the “new” Ord. 62 r. 33 (especially Ord. 62 r. 33(1)(a)and (2)), this application cannot be treated as a review of taxation by the judge.

(Andrew Chung)
Judge of the Court of First Instance
High Court

Mr Patrick Fung, SC instructed by Messrs Wilkinson & Grist, for the Plaintiffs

Ms Audrey Eu, SC leading Mr Willard Li, instructed by Messrs Kao, Lee & Yip, for the 1st Defendant