Hangzhou Jiudang Asset Management Co Limited & Anor v Kei Kin Hung

Where a claimant succeeds on a summary judgment application, the ordinary rule is that the claimant should recover its reasonable costs. An earlier overstatement of the claim does not, by itself, justify a costs-of-issues order or a reduction in the costs of the application. The relevant question is the extent to which costs were wasted because of the issue giving rise to the correction. That question may be left to detailed assessment where the necessary evidence is unavailable.

An interim payment on account of costs must be a reasonable amount which leaves sufficient margin to ensure that the paying party is not overpaid when the costs are finally assessed.

The claimants obtained summary judgment in the action. They subsequently accepted that their claims for default interest had been substantially overstated and proposed amendments to reflect the corrected calculation.

The parties then made written submissions on the costs of the summary judgment application, the costs of the action, and an interim payment on account. The defendant argued that the overstatement justified a costs-of-issues order and that any interim payment should be limited to 70% of the claimed costs.

The court therefore had to determine the appropriate costs order, the treatment of costs said to have been wasted by the interest-rate mistake, and the amount of the interim payment.

1. Summary judgment application. The claimants were wholly successful on the application and were entitled to recover their reasonable costs. The fact that the claim had initially been overstated did not warrant a reduction in those costs because the point had been abandoned before the hearing, the pleading had been amended, and no hearing time had been spent on it.
2. The extent to which costs had been wasted because the issue was raised was a matter for the costs judge on detailed assessment. No evidential basis existed for making a reduction at this stage. The court therefore allowed £47,780 for the application after reducing the claimed quantum by £3,000 for two specific costs items.
3. Costs of the action. The claimants had succeeded in the action and were ordered to pay the claimants’ costs, subject to detailed assessment if not agreed. The costs judge would determine whether any costs, including those associated with amending the Particulars of Claim, should be disallowed or reduced because of the mistake.
4. Interim payment. Under Civil Procedure Rules 1998, CPR 44.2(8), the court had to order payment of a reasonable amount on account of costs. The amount had to leave a sufficient margin to ensure that the costs judge could conduct the final assessment without the defendant being exposed to overpayment. An interim payment of £110,000, approximately 50% of the amount claimed, was ordered.

Not an appeal. The judgment determined costs following the court’s summary judgment decision handed down on 19 December 2022; the citation of that decision was not stated in the judgment.