HUA TYAN DEVELOPMENT LTD v. ZURICH INSURANCE CO LTD AND ANOTHER

HCA 480/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 480 OF 2009

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BETWEEN

HUA TYAN DEVELOPMENT LIMITED Plaintiff

and

ZURICH INSURANCE COMPANY LIMITED 1st Defendant
(formerly known as ZURICH INSURANCE COMPANY)
COURTESY INSURANCE CONSULTANTS LIMITED 2nd Defendant

____________

Before: Hon Chung J in Chambers

Date of Last Written Submissions on Costs: 31 October 2012
Date of Decision on Costs: 12 December 2012

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DECISION ON COSTS

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Introduction

1. This decision on costs is related to the costs order nisi made in the judgment I handed down on 6 August 2012. In the 6 August judgment:

(a) the plaintiff was called “the Insured”;

(b) the 1st defendant was called “the Insurer”;

(c) the 2nd defendant was called “the Broker”.

The same terms as above will be used below.

2. In short, by a Summons taken out on 20 August 2012, the Broker seeks to vary the said costs order nisi, which mandates that the defendants (that is, the Insurer and the Broker) do pay the costs of this action to the Insured to be taxedif not agreed. The Broker asks the court to order:

(1) the Insured’s costs be paid by the Insurer alone;

(2) the “Broker’s costs of the main proceedings of this action” (which I understand to mean the “Broker’s costs of theplaintiff’s claim”) be also paid by the Insurer.

(all of the above costs are to be taxed if not agreed)

3. The Broker’s application is based entirely on the premise that, of the two defendants, it was the only successful defendant: para4.1 and 4.2, Broker’s submission; para 2, Broker’s reply submissions.

4. Both the Insured and the Insurer oppose the Broker’s application. They both disagree with the Broker’s above case, and contendin effect that the Broker was also an unsuccessful defendant in relation to the plaintiff’s claim: para 11, Insured’s submissions;para 10 to 11 and 13, 17, Insurer’s submissions.

5. I agree with the above submissions of the Insured and the Insurer. The 6 August judgment made express adverse findings against theBroker: see para 23 to 32 (witness’ credibility), 34 (especially 34(b) and (d) to (f)) (findings of fact), and 77 to 107 thereof(dispute between the Insured and the Broker).

6. There is thus no merit as regards the variation sought at para 2(1) above.

7. In relation to the variation sought at para 2(2) above, I also agree with the Insurer’s argument to the effect that (at least toa very large extent) the claim brought by the Insured against the Broker did not concern the Insurer: para 11 and 13 to 18, Insurer’ssubmissions. (The Insured is neutral about this aspect.)

8. Further, as can be seen from the 6 August judgment, at trial the Insurer’s case was based almost entirely on arguments relatingto the construction of the relevant documents. The factual background put forth by the Broker was also relied on for such purpose.

9. On the other hand, on the question of construction of the relevant documents, the Broker wavered between whether to agree with theInsured’s contentions and the Insurer’s contentions (but appeared to adopt the latter stance at trial: see the first reasonsfor ruling handed down on 20 July 2012 (leave to withdraw admission), especially at para 4, 6 to 7 and 9 to 12).

10. Admittedly there were also parts of the Insured’s case which only involved the Insurer just as there were parts of the Broker’scase which only involved the Broker, though these were not substantial (relative to those set out in para 7 to 9 above). It wouldbe practically difficult, from a taxation viewpoint, to separate them from one another. For this reason, I do not propose to makea costs order which would necessitate such an exercise to be undertaken.

11. By reason of the above matters, the Broker’s application for variation is dismissed.

Costs order nisi

12. There is no apparent reason to depart from the usual rule that costs should follow the event. There will accordingly be a costsorder nisi pursuant to Ord 42 r 5B(6) that the costs of the summons be paid by the Broker to the Insurer and the Insured.

13. I consider summary assessment of costs to be appropriate. The above costs shall thus be so assessed. For this purpose:

(a) the Insurer and the Insured be at liberty to lodge with court and serve their own statement of costs within 7 days from today;

(b) the Broker be at liberty to lodge with court and serve statements of objections within 7 days thereafter.

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

S K Lam, Alfred Chan & Co, for the plaintiff

Mr Russell Coleman, SC, instructed by Reed Smith Richards Butler, for the 1st defendant

Leung & Lau, for the 2nd defendant