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In an action by the Plaintiff bank against the guarantor, the Court upheld the guarantee and found in favour of the Plaintiff, with an order nisi that the Plaintiff was to have the costs of the action, to be taxed if not agreed. The Plaintiff brought an application to vary the costs order nisi that declined the Plaintiff’s request that costs be awarded on an indemnity basis, in reliance of a contractual provision under the Guarantee which provided for indemnity costs to be paid to the Plaintiff bank in recovery of moneys due to it. The Plaintiff also argued that the Court should certify the case as being fit for two counsel.
The Honourable Mr. Justice Stone declined to follow the English decision in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No. 2) [1993] Ch 171, which was cited for the principle that the discretion of the Court in making costs orders should normally be exercised to reflect a contractual right to costs, if any. The Court formed the view that the exercise of the court’s jurisdiction as to costs cannot be fettered by any contractual costs provision. In the absence of any frivolous, unarguable and wholly unsustainable points raised by the Defendant, the Court perceived no basis to depart from the usual order that the losing party is to pay the other party’s costs on the normal “party and party” basis and dismissed the Plaintiff’s application to vary the order nisi.
Turning to the issue on whether there was a requirement for a judge to give a certificate for two counsel for their costs incurred in a High Court open trial to be allowed in taxation, the Court held that the post-Civil Justice Reform position was that no costs were to be allowed in respect of the appearance of two or more counsel before a High Court judge in open court unless the judge has certified such attendance as proper, pursuant to paragraph 2(3) of Part II of the First Schedule to O.62 under the Rules of the High Court of Hong Kong (Cap.4A, Sub.Leg.). In relation to costs of proceedings other than attendance in court, such costs, in the absence of a court order allowing two counsel on taxation, remain a matter of the taxing master’s discretion. In the present case the Court certified the trial to have been fit for two counsel.
Hong Kong Dispute Resolution Bulletin: For full analysis of this case subscribe to the Sweet & Maxwell HKDRB, produced in association with Clifford Chance.
This article is available in [2010] 7 HKDRB.
This is an application by the Respondent to vary a costs order nisi with respect to the Applicant’s unsuccessful application for leave to challenge the enforcement of an arbitral award pursuant to s.23(3)(b) of the Arbitration Ordinance. The Respondent argued that costs should not be taxed on a party to party basis. Instead, costs should be awarded in its favour on an indemnity basis.
It is clear that the introduction of the Civil Justice Reform reinforces the parties’ overriding duty to assist the Court in a just, cost-effectiveness and efficient manner. The Court applied the decision of the Honourable Mr. Justice Reyes in A v R [2009] 3 HKLRD 389 and ordered that costs be awarded on an indemnity basis.
The Honourable Mr. Justice Saunders gave effect to the underlying objectives under the O.1A, r.1 of the Rules of the High Court (Cap. 4A) as implemented by the Civil Justice Reform and held that the unsuccessful application to challenge an arbitrator’s award was unmeritorious and that an indemnity costs order should be made against the party who unsuccessfully challenged the enforcement of an arbitral award.
His Lordship allowed the Respondent’s application and ordered the Applicant to pay the Respondent’s costs on an indemnity basis and awarded a certificate for the two counsel instructed in the action.
Hong Kong Dispute Resolution Bulletin: For full analysis of this case subscribe to the Sweet & Maxwell HKDRB, produced in association with Clifford Chance.
This article is available in [2010] 5 HKDRB.
The plaintiff made a sanctioned offer pursuant to O.22 r.2 of the Rules of District Court (Cap. 336H – Sub. Leg.) to the defendant. The offer was not accepted by the defendant.
The plaintiff subsequently obtained a summary judgment against the defendant in the sum exceeding the sanctioned offer, and asked for interest on the judgment sum at 10% above the judgment rate and costs on an indemnity basis.
Deputy Judge Chan held that the defendant “had to take the consequences of having been beaten by a sanctioned offer which it had declined to accept”, and that the type of order requested by the plaintiff “had to be made unless the court considered it unjust to do so“. In his exercise of discretion, Deputy Judge Chan ordered interest on the damages at judgment rate plus 2%, and costs to be paid by the defendant on an indemnity basis with interest on such costs at 2% above judgment rate.
CJR Alerter: For full analysis of this case subscribe to the Sweet & Maxwell CJR Alerter, produced in association with Clifford Chance.
This article is available in [2009] 23 CJRA.
This case relates to a summons issued by Hawkins Development Limited (the “Company“), purportedly under O. 62 r. 9A (Rules of the High Court (Cap.4A – Sub. Leg.)), for an order that the amount paid into court by the petitioner as security for costs be paid out to the Company in part satisfaction of the costs payable by the petitioner following the dismissal of a winding up petition.
The petitioner argued that the court had no jurisdiction to make an interim payment of costs in proceedings that were not interlocutory application. The petitioner contended that the inherent jurisdiction of the court was confined to making good procedural lacunae.
The Honourable Madam Justice Kwan disagreed. She examined the new O. 62 r. 9A and O. 62 r. 21 under the Civil Justice Reform, and held that a procedural lacuna existed – “the power to make provisional summary assessments under rule 9A applies only to interlocutory applications, and there is no power under rules 21 to 21C to make an interim payment of costs which in the opinion of the court approximates the costs that would be allowed on taxation at the provisional taxation or a taxation hearing”. The Honourable Madam Justice Kwan exercised her inherent jurisdiction and ordered an interim payment of costs to the Company.
CJR Alerter: For full analysis of this case subscribe to the Sweet & Maxwell CJR Alerter, produced in association with Clifford Chance.
This article is available in [2009] 19 CJRA.
In this case, the court considered the new O.22 r.24 (Rules of the High Court (Cap.4A – Sub. Leg.)) and the court’s general discretion as regards litigation costs.
In awarding an indemnity costs order and ordering interest to be calculated at three per cent above the judgment rate, the court stated that “it is obvious the new rules encourage the parties to settle their litigation sooner rather than later“. This case provides helpful guidance on the interpretation of O.22 r.24.
CJR Alerter: For full analysis of this case subscribe to the Sweet & Maxwell CJR Alerter, produced in association with Clifford Chance.
This article is available in [2009] 18 CJRA.
The plaintiff succeeded in his claim against the defendant. The defendant was ordered by Judge Mimmie Chan to pay the plaintiff’s costs on an indemnity basis. This was because Judge Mimmie Chan found that the defendant had acted “unreasonably in the defence of these proceedings“, and unnecessarily increased the plaintiff’s costs. Judge Chan said that this undermined the objectives of the Civil Justice Reform (CJR) to increase the cost-effectiveness of any practice and procedure, to promote a sense of reasonable proportion and procedural economy, and to ensure that the resources of the court are distributed fairly.
CJR Alerter: For full analysis of this case subscribe to the Sweet & Maxwell CJR Alerter, produced in association with Clifford Chance.
This article is available in [2009] 16 CJRA.
