SINO FAVOUR DEVELOPMENT LTD AND ANOTHER v. KAN WAI MING AND OTHERS

HCA1517-1521/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1517 OF 2005

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BETWEEN

SINO FAVOUR DEVELOPMENT LIMITED 1st Plaintiff
SHINY DEVELOP LIMITED 2nd Plaintiff
and
KAN WAI CHUNG 1st Defendant
BARBICAN CAPITAL INVESTMENT LIMITED 2nd Defendant
TSANG WING KEI, WILKIE 3rd Defendant

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AND

ACTION NO. 1518 OF 2005

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BETWEEN

SINO FAVOUR DEVELOPMENT LIMITED 1st Plaintiff
SHINY DEVELOP LIMITED 2nd Plaintiff
and
KAN KAR FAI 1st Defendant
BARBICAN CAPITAL INVESTMENT LIMITED 2nd Defendant
TSANG WING KEI, WILKIE 3rd Defendant

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AND

ACTION NO. 1519 OF 2005

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BETWEEN

SINO FAVOUR DEVELOPMENT LIMITED 1st Plaintiff
SHINY DEVELOP LIMITED 2nd Plaintiff
and
KAN WAI MING 1st Defendant
BARBICAN CAPITAL INVESTMENT LIMITED 2nd Defendant
TSANG WING KEI, WILKIE 3rd Defendant

———————-

AND

ACTION NO. 1520 OF 2005

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BETWEEN

SINO FAVOUR DEVELOPMENT LIMITED 1st Plaintiff
SHINY DEVELOP LIMITED 2nd Plaintiff
and
LAU FOOK KEUNG 1st Defendant
BARBICAN CAPITAL INVESTMENT LIMITED 2nd Defendant
TSANG WING KEI, WILKIE 3rd Defendant

———————-

AND

ACTION NO. 1521 OF 2005

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BETWEEN

SINO FAVOUR DEVELOPMENT LIMITED 1st Plaintiff
SHINY DEVELOP LIMITED 2nd Plaintiff
and
KAN FOR PING STEVEN 1st Defendant
BARBICAN CAPITAL INVESTMENT LIMITED 2nd Defendant
TSANG WING KEI, WILKIE 3rd Defendant

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(Consolidated by Order of the Honourable Mr Justice Saunders
dated 12 August 2005)

Before : Hon Bharwaney J in Chambers

Date of Ruling on Costs : 6 May 2010

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RULING ON COSTS

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1. On 12 February 2010 I dismissed the 1st defendants’ application for specific discovery against the non-party and ordered that the costs of the application below be paidby the 1st defendants to the non-party to be taxed on a common fund basis, if not agreed, and be paid by the 1st defendants to the plaintiffs to be taxed on a party and party basis, if not agreed.

2. I also made a costs order nisi that the costs of the appeal before me be paid by the 1st defendants to the non-party to be taxed on a common fund basis, if not agreed, and be paid by the 1st defendants to the plaintiffs to be taxed on a party and party basis, if not agreed.

3. The 1st defendants have applied to vary my costs order nisi, and, in his written submission dated 18 March 2010, Mr Simon Lam, counsel for the 1st defendants, relied on the decision of the Court of Appeal in Thomas Vincent v. South China Morning Post Publishers Limited, CACV253/2002 and submitted that my costs order should reflect the parties’ respective failure and success in the appeal and thatthere ought to be an appropriate apportionment of the costs according to the time and expenses involved in the hearing of and preparationfor the different issues. He further submitted that it was wrong in principle for an appellant who is partly successful in the appealto be ordered to pay the entire costs of the other party to the appeal.

4. I can deal with the position of the non-party very quickly.

5. At the hearing before Master de Souza, the non-party only asked for costs on a common fund basis but was awarded costs on an indemnitybasis.

6. On the appeal before me, Mr K.M. Chong, for the non-party, very sensibly did not press the point as to costs and said that he wouldbe content with an order for costs on the common fund basis in favour of his clients. Mr Lam, for the 1st defendants, did not object to such an order being made if I dismissed his clients’ appeal. In the event, I did dismiss the appealand ordered that the costs of the application below be paid by the 1st defendants to the non-party to be taxed on a common fund basis, if not agreed, and that the costs of the appeal be paid by the 1st defendants to the non-party, also to be taxed on a common fund basis, if not agreed.

7. Mr Lam submitted that the non-party should be made to pay part of the costs of the appeal because they had not expressed any intentionto give up the benefit of the Master’s costs order made in their favour for taxation on an indemnity basis and only conceded thepoint in the course of the hearing of the appeal before me.

8. I am not impressed by this submission and I uphold the costs order nisi I had made with regard to the costs of the non-party. On the appeal, the time spent on the issues of costs as between the 1st defendants and the non-party was minimal. Further, in reality, there is probably very little, if any, difference in the final figurethat is obtained after taxation conducted on a common fund basis and after a taxation conducted on an indemnity basis.

9. Mr C.Y. Li, in his written submissions for the plaintiffs dated 25 March 2010, submitted that the question of costs was not a discreteor separate issue of the appeal but was being addressed as part and parcel of the appeal hearing and that, in any event, the matterof costs must be treated as an integral part of the substantive hearing unless the matter came before the court as a costs only appeal.

10. The award of costs is discretionary. It is not and should not become the practice of the court to engage upon a detailed analysisof the matter and give detailed reasons for its order on costs, and satellite litigation on the issue of costs is to be discouraged.

11. I am persuaded that I should vary my costs order nisi so far as the award of costs in favour of the plaintiffs is concerned. The 1st defendants was partially successful on the appeal against the order of the Master below. I was persuaded to set aside the orderfor costs on an indemnity basis and to replace it with an order for costs on a party and party basis in favour of the plaintiffs. Nevertheless, the substantial part of the costs incurred in the preparation of the appeal and during the hearing of the appeal wasincurred on the merits of the substantive appeal. In these circumstances, I conclude that 80% of the plaintiffs’ costs of theappeal be paid by the 1st defendants to the plaintiffs, to be taxed on a party and party basis, if not agreed.

12. The costs of this application to vary my costs order nisi can be treated as part of the costs of the appeal.

(Mohan Bharwaney)
Judge of the Court of First Instance
High Court

Mr C.Y. Li, instructed by Messrs Kam & Fan, for the Plaintiffs

Mr Simon K.C. Lam, instructed by Messrs Fung Wong Ng & Lam, for the 1st Defendants

Mr K.M. Chong and Ms Emma Wong, instructed by Messrs Y.S. Lau & Partners, for the Non-Party