Liu v Lam (No 2)

In Liu v Lam (No 2), the plaintiff sought a determination on costs, indemnity costs, and security for costs. The parties had engaged in litigation over a protracted period, with the plaintiff ultimately succeeding at trial. The primary dispute centred on whether ordinary costs should be apportioned between the parties, whether indemnity costs should be awarded for the entirety of the proceedings, and the appropriate quantum of indemnity costs. Additionally, the court had to decide whether the defendant's offer of compromise warranted an indemnity costs order from the time of the offer. Another point of contention was whether the defendant's deliberately and knowingly giving false evidence in response to a notice to admit justified an indemnity costs order.

The court examined the principles governing the apportionment of ordinary costs and concluded that such costs should be divided equally between the parties due to the nature of the litigation and the absence of exceptional circumstances warranting a deviation from the usual rule. Regarding indemnity costs, the court held that while the plaintiff was entitled to indemnity costs for the entire proceedings, the defendant's offer of compromise did not justify an indemnity costs order from the time of the offer. The court found that the offer did not sufficiently address the plaintiff's claims and did not meet the threshold for a significant and genuine offer that could result in such an order. Concerning the notice to admit, the court found that the defendant's false evidence warranted an indemnity costs order, as it had deliberately and knowingly provided misleading information, which prejudiced the plaintiff's case.

The court determined that the plaintiff was entitled to indemnity costs for the entire proceedings, with a specific order for costs from the time of the notice to admit. The court also ruled that the defendant's prospects of success on appeal and the arguable case were not relevant factors in deciding whether to return the security for costs. Given that the plaintiff was successful at trial and had been awarded costs, the court ordered the return of the security monies paid into court by the plaintiff. The defendant's intention to submit a notice of appeal did not alter the outcome, as the primary consideration was the plaintiff's success and the award of costs.