LAM YIU CHO AND ANOTHER v. ASIALAND LTD AND OTHERS

HCA 463/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 463 OF 2006

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BETWEEN

LAM YIU CHO 1st Plaintiff
NEW RAINBOW OVERSEAS INCORPORATED 2nd Plaintiff
and
ASIALAND LIMITED 1st Defendant
CHENG CHI HENG 2nd Defendant
ADVANCE PHARMACEUTICAL 3rd Defendant
COMPANY LIMITED
LOYAL ADVANCE LIMITED 4th Defendant

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AND

HCA 2339/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2339 OF 2007

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BETWEEN

MASTER SUM LIMITED Plaintiff
and
ASIALAND LIMITED 1st Defendant
CHENG CHI HENG 2nd Defendant
ADVANCE PHARMACEUTICAL 3rd Defendant
COMPANY LIMITED
LOYAL ADVANCE LIMITED 4th Defendant

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Before: Hon Chung J in Chambers

Date of Hearing: 20 November 2008

Date of Last Written Submission: 23 December 2008

Date of Handing Down Decision on Costs: 8 January 2009

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DECISION ON COSTS

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1. In a judgment handed down on 16 December 2008, final judgment was entered in the plaintiffs’ favour for $1.5 million, $400,000and $137,750. These sums were part of the monetary claims sought in the plaintiffs’ Ord. 14 summons taken out on 16 May 2008 (“the said summons”). The defendants were given unconditional leave to defend the rest of the claims.

2. The parties have subsequently lodged their respective written submissions as regards the costs of the said summons.

3. The plaintiffs contend the following costs order should be made:-

(a) in relation to the claim for $10 million (para. (a) and (c) of the said summons), there be no order as to costs;

(b) in relation to the claims for $1.5 million (para. (e) of the said summons), $400,000 (one of the three claims under para. (f)of the said summons) and $137,750 (para. (g) of the said summons), costs be to the plaintiffs;

(c) costs be in the cause in relation to the remainder of the said summons: Hong Kong Civil Procedure 2009, para. 14/7/13.

4. On the other hand, the defendants:-

(1) argue that, because the plaintiffs failed to obtain judgment in relation to para. (a) to (d) and two out of three claims underpara. (f) of the said summons for reasons already known (or ought reasonably to be known) to them, the court’s discretion as tocosts should be exercised in the manner provided for by RHC Ord. 14 r. 7(1);

(2) have not put forth any submissions as regards the costs in relation to para. (e) or (g) of the said summons.

They also estimated the argument on the above unsuccessful claims took up about two-thirds of the hearing time. Consequently, theplaintiffs should pay two-thirds of the costs of the said summons including two-thirds of the costs of the hearing on 20 November2008.

5. I do not agree entirely with the parties’ above arguments. What cannot be disputed is this: the plaintiffs have been successfulin relation to the claims set out in para. 3(b) above, but they have been unsuccessful in relation to the claims set out in para.4(1) above.

6. Leaving aside the hearing on 20 November 2008, it is difficult to estimate the extent of each party’s success or failure in relationto each head of claim by way of a percentage of the whole of the said summons. Different yardsticks can be used for such purpose. For example, percentages can be arrived at by comparing the respective amount of those claims against the amount of the whole claim,or by comparing the length of the affirmations and/or written submissions spent on each head of claim.

7. As for the hearing on 20 November 2008 (when taken together with the parties’ written submissions), I estimate that the time spenton the successful heads of claim to be about the same as that spent on the unsuccessful heads of claim.

8. In these circumstances, at least two options are open: the plaintiffs can be awarded half of the costs of the hearing and the defendantsawarded half of those costs; alternatively, each party is to bear its own costs of that hearing.

9. I consider the latter option (that is, each party is to bear its own costs of the hearing on 20 November 2008) to be more efficient,and will make an order to that effect. For the avoidance of doubt, costs for preparing the written submissions for use at that hearingare treated as part of the costs of that hearing.

10. Subject to that (and bearing in mind the difficulties set out in para. 6 above), I estimate that two-thirds of the costs of thesaid summons are attributable to the heads of claim set out in para. 4(1), while one-third of those costs is attributable to theheads of claims set out in para. 3(b) and 4(2) above. Accordingly, two-thirds of the costs of the said summons should be paid bythe plaintiffs in any event.

11. Para. 45 of the judgment handed down on 16 December 2008 purported to also deal with the Ord. 14 summons taken out in HCA 2339/2007. In a letter dated 23 December 2008, the defendants’ solicitors clarified that the summons had in fact been disposed of earlierby the parties’ consent. There was therefore no need for the court to deal with that summons. To avoid doubt, no order is madeon that summons. Accordingly, the said judgment should be read together with this paragraph.

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

Ms Audrey Eu, SC leading Mr Simon Yip, instructed by Messrs Lau, Kwong & Hung, for the Plaintiffs in both actions

Mr Paul Shieh, SC leading Ms Linda Chan, instructed by Messrs S. K. Lam, Alfred Chan & Co., for the Defendants in both actions