TANG WAI HUNG v. GLORY SKY PRECIOUS METALS LTD

DCCJ 852/2019

[2023] HKDC 994

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 852 OF 2019

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BETWEEN

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REASONS FOR DECISION

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Introduction

1.  By summons dated 17 February 2023 (the “Summons”), the defendant applies for:-

(1) Leave to appeal out of time against my Decision dated 5 September 2022 (the “Main Decision”)[1]; and

(2) Leave to appeal out of time against my Decision dated 20 January 2023 (the “2^nd Decision”)[2].

2.  Unless otherwise indicated, I continue to use the same definitions in the Main Decision and the 2^nd Decision.

3.  I will begin by sorting out some preliminary matters. First, in §11 of the Main Decision, I acceded to the Stay Application, as a result of which this action is now stayed pending the final determination of the New Action. I however lifted the stay on 23 September 2022 for the limited purpose of allowing the defendant to apply for leave to appeal against the Main Decision.

4.  Second, in §4 of the 2^nd Decision, I gave reasons for the dismissal of the EOT Application. In gist, I took the view that the EOT Application was taken out incorrectly as a matter of procedure, but there was no substantive determination of an application for leave to appeal (out of time) against the Main Decision; the EOT Application was only an application to extend time to take out such an application. On this basis, I do not consider that the defendant is now precluded from taking out a proper application for leave to appeal out of time against the Main Decision, based on res judicata or otherwise. The plaintiff has not sought to argue otherwise.

The proposed grounds of appeal

5.  The proposed grounds of appeal are set out in the Schedule to the Summons (the “Schedule”). At the hearing, I confirmed with Mr Ching (solicitors for the defendant) that the grounds may be grouped into 4 categories (3 grounds relate to the Main Decision and another ground concerns the 2^nd Decision):-

Proposed appeal against the Main Decision

(1) §§1, 2 & 4 of the Schedule – the learned Master’s summary assessment of costs was so “obviously wrong” that I erred in not so finding. A related argument is that I should have exercised the discretion afresh in place of the Master’s assessment and I erred in not doing so (“Ground 1”);

(2) §3 of the Schedule – the Master’s assessment was clearly wrong in view of the written reasons provided by the Master through a Court letter dated 11 October 2022 (the “Letter”) which was requested by the defendant only after the handing down of the Main Decision (“Ground 2”);

(3) §6 of the Schedule – I erred in failing to adjourn the hearing on 29 August 2022 (which led to the Main Decision) and/or to direct written reasons from the Master to be obtained. It is also said that I failed to observe the duty to exercise case management powers properly (“Ground 3”);

Proposed appeal against the 2^nd Decision

(4) §§5 & 7 of the Schedule – I erred in not awarding costs of the Costs Appeal to the defendant or in acceding to D’s Variation Application in the 2^nd Decision (“Ground 4”).

Legal principles

6.  There can be no dispute on the applicable principles. Leave to appeal shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success or that there is some other reason in the interests of justice why the appeal should be heard: s 63A(2) of the District Court Ordinance (Cap 336). A reasonable prospect of success involves the notion that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125 at §17.

7.  Where the application for leave to appeal is made out of time, the prime considerations are set out in §4 of the 2^nd Decision.

8.  I also note that the proposed grounds of appeal only relate to costs. The principles set out in the White Book 2023 §59/0/54 apply as to the limited circumstances under which the Court of Appeal may interfere with an exercise of discretion (which includes decisions on costs).

Ground 1

9.  I explained in the Main Decision §§28-35 that I had no material or evidence to consider that the Master was “obviously wrong”. I am unable to see how I might arguably be said to have erred in so finding.

Ground 2

10.  The fundamental premise of this proposed ground is that I should now, and the Court of Appeal should in due course, consider the Letter which contains the Master’s reasons.

11.  The obvious hurdle is that the defendant has to get over the Ladd v Marshall conditions before new evidence may be adduced. In this connection, the Letter is obviously new evidence since it was not available before me on 29 August 2022 when the Costs Appeal was heard.

12.  I am not satisfied that the 1^stLadd v Marshall condition is met, in that the defendant is unable to show that the Letter could not have been obtained for use at the 29 August 2022 hearing with reasonable diligence. Indeed, the main reason for dismissing the Costs Appeal was precisely that the Master’s reasons were not obtained: Main Decision §§29-31.

13.  The defendant submits that the Ladd v Marshall conditions may be relaxed in certain exceptional circumstances, citing A Solicitor v The Law Society of Hong Kong[2021] HKCA 1662 at §§19-22. I do not consider the defendant to have come anywhere near to show exceptional circumstances; it would hardly be “an affront to one’s sense of fairness or justice” (A Solicitor at §§21-24) not to admit the new evidence when it was squarely the defendant’s duty to obtain it in the first place. Further, the Master’s reasons were certainly not “a matter which have occurred” after the Costs Appeal was heard. While it is true that the Letter (i.e. the document itself) was requested for by the defendant and hence came into existence after the hearing, the contents therein (i.e. the Master’s reasons) were certainly not matters which have occurred afterwards. In other words, the 1^stLadd v Marshall condition is not met simply because the document sought to be adduced comes into existence after the hearing: see e.g. Tsui Yin Fong v Edward Johnson (unreported, HCMP 2878/2012, 5 March 2013) at §16.

14.  This proposed ground does not enjoy a reasonable prospect of success.

Ground 3

15.  It is extraordinary that this argument is advanced. The defendant did not apply for an adjournment before or at the hearing on 29 August 2022, and it is now effectively trying to shift the blame to the court by saying that the court should adjourn on its own motion.

16.  The short point is this. It is incumbent for the defendant (and its lawyers) to properly prepare for the Costs Appeal. Upon basic research, or at the latest by the time the plaintiff’s skeleton was received, it would be clear that the Master’s reasons in her assessment of costs are absolutely essential to the court’s determination of the Costs Appeal. However, the defendant (and its lawyers) chose to do nothing. The natural course was for me to dismiss the Costs Appeal: see Main Decision §§28-31. I do not see how I may be said to have erred in not adjourning the hearing to enable the defendant to obtain the Master’s reasons when the defendant itself has not so applied.

Ground 4

17.  I am unable to see how I might be said to have erred by ordering costs of the Costs Appeal to follow the event. In particular I bear in mind the high threshold where the Court of Appeal might interfere with an exercise of discretion. This proposed ground does not enjoy a reasonable prospect of success.

Other considerations

18.  Even if I am wrong on the assessment of the merits of the proposed appeal grounds, I would have dismissed the Summons on the basis that there is no good explanation for the delay in applying for leave to appeal:-

(1) In Mr Ching’s 4^th affirmation dated 2 March 2023, he set out the events which, in his view (or in the defendant’s view), justified the delay, essentially that it was reasonable for the defendant to wait for the result of D’s Variation Application before deciding whether to apply for leave to appeal (see Ching 4^th §21);

(2) I do not accept those reasons as good or valid reasons for the delay at all, because the proposed appeal against the Main Decision is not tied with the result of the 2^nd Decision. The Summons was therefore taken out after a very significant period of delay (the deadline to apply for leave to appeal fell on 19 September 2022);

(3) But taking the defendant’s case to the highest, the application for leave to appeal should have been made within 14 days of 20 January 2023 when the 2^nd Decision was handed down, and the application deadline fell on 3 February 2023. In this regard, the Main Decision and the 2^nd Decision were obviously interlocutory decisions or orders, so O 58 r 2(4)(c) of the Rules of the District Court applies. There was no explanation (let alone a good explanation) for the period of delay from this date up to the taking out of the Summons on 17 February 2023.

19.  Insofar as is necessary, I would also refuse leave in the interests of proportionality and procedural economy even if I were to find that the proposed appeal has a reasonable prospect of success: Daimler AG v Helge Herbert Leiduck (unreported, HCA 4089/1994, 29 August 2016) at §7 and the cases cited therein. In pursuing the Costs Appeal, the defendant was basically not happy that the Master assessed costs at HK$1,400; the costs statement dated 14 April 2022 lodged by the defendant asked for costs in the sum of HK$111,875. Given the amount at stake, I can still understand the defendant to consider it financially justified to pursue the Costs Appeal. But I am surprised that the defendant thought it was commercially worthwhile to take the matter further to the Court of Appeal upon the dismissal of the Costs Appeal. It is a classic interlocutory skirmish that only serves to escalate costs and should be discouraged: Ho Yuen Ki Winnie v Ho Hung Sun Stanley (unreported, HCMP 1009/2009, 24 August 2009) at §22.

Conclusion

20.  For these reasons, none of the proposed grounds has a reasonable prospect of success. I am unable to see any other reason in the interests of justice why the appeal should be heard. I therefore refuse to give leave to appeal and the Summons is dismissed.

Costs of the Summons

21.  Costs should follow the event. I order that costs of the Summons be paid by the defendant to the plaintiff.

22.  At the hearing, I canvassed with the parties whether execution of such costs order should be stayed pending the determination of the New Action (as I did in §42 of the Main Decision). Upon consideration, I take the view that it is inappropriate to stay such execution. Since I have lifted the stay specifically to enable the defendant to pursue this application for leave to appeal, and now that I have dismissed the Summons, the consequence of facing an adverse costs order arising out of the dismissal should in my view form part and parcel of the lifting of the stay.

23.  I therefore order that the defendant shall pay costs forthwith and such costs shall be summarily assessed. For this purpose, the plaintiff shall lodge and serve a statement of costs within 7 days, and the defendant shall lodge and serve its statement of objections within 7 days thereafter. The assessment will then take place on paper.

Mr Kelvin Cheung, of Kelvin Cheung & Co, for the plaintiff

Mr Ching Ming Yu, of Ching & Co, for the defendant

DCCJ 852/2019

[2023] HKDC 75

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 852 OF 2019

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REASONS FOR DECISION

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1.  This Decision should be read together with my Decision handed down on 5 September 2022 (the “Main Decision”)[1]. Unless otherwise indicated, I continue to use the same definitions.

2.  In paragraphs 41 and 42 of the Main Decision, I made a costs order nisi that:

(1)  Costs of the Stay Application be reserved; and

(2)  Costs of the Costs Appeal to be paid by the defendant to the plaintiff to be taxed if not agreed with certificate for counsel, but execution of such costs order be stayed pending the final determination of the New Action.

3.  At the hearing on 31 October 2022, I heard the following ancillary matters flowing from the Main Decision:

(1)  By summons dated 19 September 2022, the plaintiff applies to vary the costs order nisi, to the effect that costs of the Costs Appeal shall be summarily assessed (“P’s Variation Application”).
This is notwithstanding that even with summary assessment, execution of such costs order will still be stayed pending the final determination of the New Action;

(2)  By summons dated 7 October 2022, the defendant applies for an extension of time to take out an application for leave to appeal (the “EOT Application”);

(3)  By summons dated 14 October 2022, the defendant applies to vary the costs order nisi out of time, such that there shall be no order as to costs of the Costs Appeal (“D’s Variation Application”).

4.  I dismissed the EOT Application at the hearing with brief oral reasons given. In short, it is procedurally wrong to apply for time separately from an application for leave to appeal. The authorities are very clear, that in considering whether to allow an application for leave to appeal out of time, one of the prime considerations is the merits of the intended appeal. It is also relevant to consider the length of the delay and the reasons for it: see for example Chow Kin Hang Ali v Secretary for Justice[2022] HKCA 1814 at §17. At the hearing before me, I was not provided with the reasons for the delay, and no proposed grounds of appeal were provided or articulated. It was not even known whether the defendant intended to apply for leave to appeal (so the EOT Application was basically a blanket leave for time if an application for leave to appeal is eventually desired). In the circumstances, there was no basis for me to extend time in such a blanket fashion. I ordered costs of the EOT Application to be paid by the defendant to the plaintiff and execution be stayed pending the final determination of the New Action. The question as to whether such costs shall be summarily assessed or payable in any event is dealt with below (the parties agree that this question will be answered identically as that for P’s Variation Application).

5.  I further gave directions at the hearing for parties to lodge skeleton submissions in relation to P’s Variation Application and D’s Variation Application so that the matter will then be dealt with on paper. After fully considering those written submissions, this is my decision on the 2 summonses.

P’s Variation Application

6.  I bear in mind the principles stated in Midland Business Management Ltd v Lo Man Kui (No 2) [2011] 2 HKLRD 667 in considering whether it is appropriate to order summary assessment of costs.

7.  After considering the circumstances of this case, I decline to order summary assessment of costs of the Costs Appeal for 2 reasons.

8.  First, the plaintiff applied for a stay of this action pending the final determination of the New Action, which I granted for reasons stated in the Main Decision. I find it unattractive for the plaintiff then to come and ask the court to take further procedural steps in this action which has been stayed as sought by the plaintiff himself.

9.  Second, one of the main reasons for conducting summary assessment is such that there is an immediacy to pay costs, and this serves as a deterrent against the taking out of unmeritorious applications (see Midland §§9-12). Here, even if I conduct summary assessment of costs of the Costs Appeal, execution of such order will be stayed in any event. I consider this to be a weighty factor against summary assessment on the facts of the present case.

10.  I therefore dismiss P’s Variation Application.

11.  It also follows that costs of the EOT Application shall be paid by the defendant to the plaintiff in any event (and execution be stayed pending the final determination of the New Action). For the benefit of the taxing master, 15 minutes of the hearing on 31 October 2022 were attributable to the EOT Application.

D’s Variation Application

12.  The defendant’s main argument for variation is that the Costs Appeal was not pursued unreasonably. There are also suggestions that I erred in dismissing the Costs Appeal. These arguments may be disposed of briefly.

13.  My decision on the Costs Appeal stands until it is overturned by the Court of Appeal (and there is as yet no application for leave to appeal). The hard truth is that the defendant pursued the Costs Appeal and lost. In addition, as explained in the Main Decision, I was also of the view that the Costs Appeal did not get off the ground since the defendant was unable to pinpoint how the learned Master erred in law or failed to take into account relevant matters (or took into account irrelevant matters), and the defendant has singularly failed to overcome the threshold applicable to the Costs Appeal: see Main Decision §§28, 31. Accordingly, I see no reason to depart from the usual rule that costs should follow the event.

14.  I therefore dismiss D’s Variation Application.

Costs of the variation applications

15.  With neither of the variation applications successful, I consider it fair that there should be no order as to costs of the 2 summonses including the hearing on 31 October 2022 (save the 15 minutes attributable to the EOT Application). I so order.

Mr Lawrence Cheung, instructed by Kelvin Cheung & Co (filing written submissions dated 6 October 2022) and Mr Tony Luk of Kelvin Cheung & Co (attending the hearing on 31 October 2022 and filing written submissions dated 17 November 2022), for the plaintiff

Mr Ching Ming Yu of Ching & Co, for the defendant

DCCJ 852/2019

[2022] HKDC 952

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 852 OF 2019

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REASONS FOR DECISION

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1.  There are 2 matters before the court:-

(1)  By a Notice of Appeal dated 5 May 2022, the defendant seeks to appeal against the costs order made by Master June Cheung on 26 April 2022 (the “Costs Appeal”); and

(2)  By summons dated 3 August 2022 (the “Stay Application”), the plaintiff applies to stay all further proceedings in this action pending the final determination of DCCJ 2961/2022 (the “New Action”).

2.  It is convenient to first deal with the Stay Application.

Background facts leading to the Stay Application

3.  In this action which was commenced in 2019, the plaintiff claims to be a victim of certain wrongful conduct committed by the defendant’s staff members regarding what is commonly known as “London gold trading”.

4.  The plaintiff alleges that by a letter dated 25 August 2021 from Messrs Ching & Co (“CC”), solicitors for the defendant, the defendant offered “to pay a sum of HK$200,000 all inclusive, in full and final [settlement of] all possible claims between the parties including but not limited to all the claims in this action, interest thereon, and costs”[1]. This settlement offer was said to be accepted by the plaintiff through his solicitors’ letter dated 27 August 2021[2] (the “Settlement Agreement”).

5.  It is then said that the defendant retraced from and repudiated the Settlement Agreement by insisting on additional terms being inserted into the settlement. The plaintiff therefore commenced the New Action on 2 August 2022, essentially for specific performance of the Settlement Agreement. The Stay Application was taken out the next day.

Analysis of the Stay Application

6.  In my view, it is clear that this action should be stayed pending the final determination of the New Action.

7.  At this stage I am unable to form a conclusive view as to the underlying merits of the New Action. I simply observe that in various letters from CC sent in December 2021 and January 2022, a caveat was inserted which appeared to indicate the defendant’s acknowledgement that the Settlement Agreement had been concluded[3]. Accordingly, the plaintiff’s claim in the New Action cannot be dismissed out of hand.

8.  As submitted by Mr Cheung, counsel for the plaintiff, if in the New Action the Settlement Agreement is found to exist (which at least is reasonably arguable as I have held above), this action should necessarily come to an end; the underlying dispute herein has been fully and finally settled. From a case management perspective, it is plainly desirable for this action to be stayed in the meantime, thereby saving costs and judicial resources.

9.  I further note that the defendant does not have a counterclaim in this action. A stay brings no real prejudice to the defendant.

10.  As I understand from Mr Ching who appears for the defendant, he is not seriously objecting to the Stay Application. His real complaint is about delay: the plaintiff should have started the New Action and applied for a stay much earlier. But I do not think this argument affects the overall analysis. As I postulated at the hearing, if the plaintiff had commenced the New Action and applied for a stay earlier (ie with reasonable diligence soon after he realised that the defendant was not honouring the Settlement Agreement), Mr Ching accepts that the defendant would have no real difficulty in consenting to a stay of this action. I do not see how the defendant’s position would now be different simply because the application was taken out a few months later.

11.  I will therefore accede to the Stay Application. I also vacate the hearing of the case management summons on 16 September 2022 at 9:30 am.

Should I entertain the Costs Appeal in light of the stay?

12.  I raised with the parties at the hearing whether, if I am minded to grant a stay, I should still proceed to hear the Costs Appeal. My concern is that, depending on the findings in the New Action, the proper construction of the terms of the Settlement Agreement may have the effect (and I do not rule on this issue one way or the other) of settling and extinguishing all past and future costs orders as between the parties[4]. If that turns out to be the case, the Costs Appeal is wholly academic and irrelevant.

13.  To err on the side of caution, I invited the parties to fully address me on the Costs Appeal on a provisional basis. After consideration, and not without some hesitation, I am prepared to rule on the Costs Appeal notwithstanding the stay. It seems to me that this is the most cost-effective way of handling the matter, especially if it is found in the New Action that the Settlement Agreement was not concluded or the terms do not cover future costs orders on a proper construction. After all, I have heard full submissions on the Costs Appeal and the parties had expected me to deal with the question.

Background facts leading to the Costs Appeal

14.  By 2 separate summonses dated 27 July 2021 and 3 August 2021, the defendant sought further and better particulars of the Statement of Claim and the Reply. The summonses were returnable on 25 August 2021. The requests for particulars were preceded by correspondences but the plaintiff provided no response.

15.  By a letter from the plaintiff’s solicitors Messrs Kelvin Cheung & Co (“KCC”) dated 20 August 2021 (but CC said they only received on 24 August 2021), the plaintiff basically agreed to provide all the particulars sought but proposed costs to be in the cause. The costs provision was not agreeable to the defendant and therefore the hearing went ahead on 25 August 2021 before Master Maurice Lam.

16.  What happened at that hearing is in dispute. The defendant says that the plaintiff changed its stance at the hearing by not agreeing to provide the particulars sought. But the terms of the order eventually made by the learned Master are not in dispute between the parties. He adjourned the summonses for substantive argument together with directions for the filing of affirmations. He also reserved costs.

17.  The substantive argument hearing was scheduled on 11 January 2022.

18.  By KCC’s letter dated 28 December 2021, the plaintiff indicated (again) that particulars would be provided within 28 days and proposed costs in the sum of HK$1,500 be to the defendant. The defendant found the costs provision unacceptable. Further correspondences ensued between the parties but eventually no agreement was reached (and no consent summons was signed, whether substantively relating to the provision of particulars by the plaintiff or on costs).

19.  By a court note dated 10 January 2022, Master June Cheung vacated the hearing on 11 January 2022 and directed the parties to jointly report to the court as to their agreements and disagreements such that the summonses would be dealt with by paper disposal. This led to a joint letter dated 13 January 2022 from the parties to the court. The agreed items were (i) for the plaintiff to provide the particulars sought and (ii) for the plaintiff to pay the defendant’s costs of the summonses to be summarily assessed. The disputed items were (i) whether costs shall be assessed on an indemnity basis, (ii) how and when the costs were to be summarily assessed, and (iii) how costs of the call-over hearing on 25 August 2021 and the 2 affirmations filed by the defendant on 8 September 2021 and 10 January 2022 should be addressed. The last disputed item (ie item (iii)[5]) was stated in the joint letter to be “proposed by the Plaintiff only” (the “Plaintiff’s Proposed Item”).

20.  The plaintiff provided the particulars sought on 4 February 2022.

21.  On 13 April 2022, Master June Cheung ordered costs of the summonses to be paid by the plaintiff to the defendant on a party and party basis to be summarily assessed on paper. Directions were also given for the lodging of a statement of costs and a statement of objections.

22.  Pausing here, one of the defendant’s argument in the Costs Appeal is the costs order made by the learned Master on 13 April 2022 was a rejection of the Plaintiff’s Proposed Item. As I understand it, the argument is that by not specifically addressing the costs matters stated in the Plaintiff’s Proposed Item, the learned Master ruled that those costs are payable by the plaintiff as part of the costs of the summonses (with quantum to be subsequently assessed). I will have to return to the argument below.

23.  The defendant lodged a statement of costs on 14 April 2022 seeking costs of the summonses at HK$111,875. The plaintiff lodged his statement of objections on 21 April 2022 only allowing costs in the sum of HK$1,400, reflecting the usual costs of attending the call-over hearing at HK$700 for each of the summonses.

24.  On 26 April 2022, Master June Cheung summarily assessed costs of the summonses at HK$1,400. No written reasons were given for the summary assessment. This is the order which is the subject of the Costs Appeal. The defendant contends that the assessed figure is unreasonably low.

The Costs Appeal – applicable legal principles

25.  Parties have no dispute on the applicable legal principles. This is an appeal against a costs order made by a master, and hence it will not be dealt with by an actual rehearing of the matter: White Book 2022 §58/1/6.

26.  Rather, as stated in Paul Y-ITC Constructions Ltd v Kin Shing Co Ltd [1999] 1 HKC 511 at 515A (emphasis added):-

“As this is an appeal as to costs only from the discretion of the Master, such application should not be allowed unless it can be shown that the order made by the Master was unreasonable or erred in law ie, if he either failed to take into account proper matters or took into account matters that should not have been taken into account.”

27.  The same principles apply in respect of a costs order made by way of summary assessment: see 廖煒基 訴 楊日昇 (unreported, HCPI 379/2015, 16 May 2017) per Lok J; Ho Pui Lan v Sham Yick Chun Gary (unreported, HCMP 707/2014, 6 August 2014) per Deputy High Court Judge Kent Yee.

Analysis of the Costs Appeal

28.  The Costs Appeal does not get off the ground, for the simple reason that the defendant is unable to pinpoint how the learned Master erred in law or failed to take into account relevant matters (or taking irrelevant matters into account).

29.  The difficulty I have is that I do not have the benefit of the learned Master’s reasons in making the costs order as she did. Accordingly, there is no way for me to in effect assume or speculate, as Mr Ching urges me to do, what went through the mind of the learned Master and whether on that assumed state of mind she has erred.

30.  Mr Ching has confirmed that the defendant has not requested the learned Master to provide reasons leading to the costs order that she made.

31.  The defendant has therefore singularly failed to overcome the hurdle that is applicable in the Costs Appeal. Obviously, given the applicable legal principles cited above, even if I would personally have summarily assessed a higher figure, it is not a reason for me to disturb the costs order made by the learned Master.

32.  That is sufficient to dispose of the Costs Appeal. But for the sake of completeness, I will deal with some of the major points raised by Mr Ching on behalf of the defendant.

33.  First, the defendant argues that the plaintiff changed his stance at the 25 August 2021 hearing (see paragraph 16 above) and intended to oppose the 2 summonses. This necessitates the preparation of various affirmations and documents in anticipation of a full-blown substantive argument, and the Master should therefore have allowed some costs for those items.

34.  I am unable to accept this argument. Its fallacy is to assume that the learned Master summarily assessed costs at HK$1,400 on an identical basis as submitted by the plaintiff in the statement of objections. But this is not necessarily the case; they are infinite permutations as to what items the learned Master has allowed and for how much. The learned Master was also entitled to take into account (it being one of the considerations that is relevant) the fact that the plaintiff had already agreed to provide the particulars sought before the 25 August 2021 call-over hearing, and on that basis costs of the subsequent affirmations and documents should only be minimal (e.g. the affirmations should only exhibit the letter showing the plaintiff’s agreement to provide particulars, as opposed to a justification as to why the particulars sought are relevant and necessary).

35.  A related argument is this. Mr Ching urges me to ascertain for myself whether the plaintiff in fact changed its stance at the 25 August 2021 hearing, by listening to the court audio recording or locating the hearing notes of Master Maurice Lam. This completely misses the point: the question is not whether the plaintiff changed its stance at that hearing, but rather whether the learned Master has taken that into account in carrying out the summary assessment. There is no material upon which I can conclude that she erred in this regard.

36.  Second, the defendant argues that, by making the costs order as the learned Master did on 13 April 2022, she has accepted in principle that the costs of the call-over hearing on 25 August 2021 and the 2 affirmations filed by the defendant on 8 September 2021 and 10 January 2022 shall be payable by the plaintiff (see paragraph 22 above). As the argument runs, it was then incorrect for the learned Master to go back and disallow the same items in the summary assessment process 2 weeks later.

37.  I confess to have some difficulty in understanding the argument. By making the costs order on 13 April 2022, I do not think the learned Master in fact ruled on what items should be allowed and what should not be allowed. It was merely a general order identifying the scope of the plaintiff’s costs liability such that the statement of costs may be prepared on that basis, and it is the summary assessment process that decides what is and is not allowed. I am unable to see anything wrong in that approach at all.

38.  Third, the defendant complains that the learned Master failed to give reasons for her summary assessment, particularly in view of a material dispute as to whether the plaintiff changed his stance at the 25 August 2021 hearing. This is a bad argument. As a matter of practice, summary assessments are commonly conducted by the court without the master or the judge giving reasons; the whole point of summary assessment is to avoid a line-to-line taxation process and is designed to be broad-brushed. Further, if the defendant feels aggrieved by the assessed figure and brings an appeal, given the applicable legal principles cited above, it is incumbent for the defendant to write to the learned Master to request for reasons in carrying out the assessment. By not doing so, the defendant runs the risk that the appellate court has no legal basis to overturn the subject costs order.

39.  For these reasons, the Costs Appeal is dismissed.

Disposition and costs

40.  Accordingly, I accede to the Stay Application and dismiss the Costs Appeal.

41.  On a nisi basis, I make the following costs orders:-

(1)  Costs of the Stay Application be reserved;

(2)  Costs of the Costs Appeal shall follow the event, ie to be paid by the defendant to the plaintiff to be taxed if not agreed with certificate for counsel.

42.  In view of the matters set out in paragraph 12 above, I also order that execution of the costs order in paragraph 41(2) above be stayed pending the final determination of the New Action.

Mr Lawrence Cheung, instructed by Kelvin Cheung & Co, for the plaintiff

Mr Ching Ming Yu of Ching & Co, for the defendant