Wasted Costs Orders in Hong Kong: A 2025 Retrospective on Accountability

(A) Introduction

Hong Kong Courts have intensified scrutiny of legal representatives’ conduct in 2025, emphasizing strict adherence to procedural discipline and professional accountability. This trend is illustrated in Anthonia Louise Zoya Anton v Hong Kong Aircraft Engineering Company Limited & Another (HCPI 152/2021 and HCPI 153/2021, date of judgment: 6 June 2025),[1] where the Court held Plaintiff’s Counsel personally liable for wasted costs because of non-compliance with Practice Direction 5.4, resulting in an adjourned hearing. This ruling marked the second wasted costs order of 2025 tied to Practice Direction 5.4 violations, following Farman v Secretary for Justice (DCCJ 4463/2023, date of judgment: 23 January 2025)[2].

This article analyzes three major cases regarding wasted costs orders from January 2025 to June 2025, highlighting practitioners' duty to comply with orders and Practice Directions.

(B) Meaning of “Wasted Costs”

Order 62 rules 8, 8A and 8B of the Rules of the High Court (Cap. 4A) (“RHC”) govern legal representatives’ personal liability for wasted costs.

The circumstances under which the Court may make a wasted costs order are set out in Order 62, rule 8(2) of the RHC. The Court may make a wasted costs order against a legal representative, only if— (a) the legal representative, whether personally or through his employee or agent, has caused a party to incur wasted costs as defined in Section 52A(6) of the High Court Ordinance (Cap. 4) (“HCO”); and (b) it is just in all the circumstances to order the legal representative to compensate the party for the whole or part of those costs.

Wasted costs are defined in Section 52A(6) of the HCO as “any costs incurred by a party as a result of (a) an improper or unreasonable act or omission; or (b) any undue delay or other misconduct or default, on the part of any legal representative, whether personally or through an employee or agent of the legal representative”.

If the above conditions are met, the Court may—(a) disallow the costs between the legal representative and his client; and (b) direct the legal representative to— (i) repay to his client costs which the client has been ordered to pay to other parties to the proceedings; or (ii) indemnify other parties against costs incurred by them.[3]

The underlying principle is that the Court has a right and a duty to supervise the conduct of its solicitors, and visit with penalties any conduct of a solicitor which is of such a nature as to tend to defeat justice in the very cause in which he is engaged professionally.[4]

An application for a wasted costs order may be initiated by a party making an application, or by the Court of its own motion.[5] A two-stage test applies.[6] In the first stage, the Court must be satisfied that—(i) it has before it evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made; and (ii) the wasted costs proceedings are justified notwithstanding the likely costs involved. In the second stage, the Court must consider, after giving the legal representative an opportunity to give reasons why the Court should not make a wasted costs order, whether it is appropriate to make such order. The Court may proceed directly to the second stage if it is satisfied that the legal representative has already had a reasonable opportunity to give reasons why the Court should not make a wasted costs order.[7]

(C) Cases regarding Wasted Costs Orders from January 2025 to June 2025

(1)   Chan Yuet Chun v Hospital Authority (DCPI 1749/2020, date of judgment: 8 January 2025)[8] 

The Defendant, by way of Summons filed on 24 May 2024 (the “Summons”), applied to strike out parts of the Plaintiff’s witness statement filed on 15 December 2023 (the “P’s WS”).

The Court found that substantial costs were wasted in preparing the P’s WS as substantial parts contained inadmissible evidence and were struck out and the P’s WS was prepared in an unreasonable, unsatisfactory, frivolous and cost-disproportionate manner in blatant disregard of the rules under Order 38 rule 2A of the Rules of the District Court (Cap. 336H) (“RDC”) and the legal principles.

The Court held that the first stage for a wasted costs order under Order 62 rule 8B RDC was satisfied, given evidence justifying proceedings. The Plaintiff’s solicitors confirmed that they did not oppose the wasted costs directions. As such, the Court made a wasted costs order against the Plaintiff’s solicitors:

(a)   Costs of the Summons adjudged payable by the Plaintiff to the Defendant be borne by the Plaintiff’s solicitors personally;

(b)   No legal aid taxation of half of the Plaintiff’s own costs in respect of preparation of the P’s WS;

(c)    No legal aid taxation of the Plaintiff’s own costs in respect of the Summons.

This case shows the strict enforcement of the witness statements requirements under Order 38 rule 2A RDC. A witness statement must contain only material facts within the witness's personal knowledge. Failure to filter out inadmissible material will trigger personal liability for wasted costs.

(2)  Farman v Secretary for Justice (DCCJ 4463/2023, date of judgment: 23 January 2025) [9]

The Plaintiff’s solicitors applied to vary the costs order nisi made by His Honour Judge  Andrew Li on 30 August 2024 by way of Summons filed on 12 September 2024 (the “Summons”).

The hearing for the Summons was originally scheduled on 24 October 2024. However, the  Plaintiff’s solicitors lodged the hearing bundle with the Court at 5:18 pm on 23 October 2024, leaving the Court insufficient time to prepare for the case. As a result, the hearing was adjourned to 28 October 2024. The Court ordered the Plaintiff’s solicitors to bear personally the wasted costs resulting from this adjournment, which was caused by their failure to comply with Practice Direction 5.4. The principal of the Plaintiff’s solicitors did not object to this order. The wasted costs were summarily assessed at HK$6,900 and ordered to be paid forthwith to the Defendant.

As to whether the Plaintiff’s solicitors should personally bear the costs of any part of proceedings, the Plaintiff’s solicitors argued that they should not bear costs incurred on the following grounds: (a) before rejecting the Department of Justice’s proposal to refer the costs matter to a Judge, they "truly believed" the Master had sufficient authority to resolve it; and (b) regarding other parts of the proceedings, they acted "promptly and reasonably throughout" with "no serious misconduct".

The Court rejected the above arguments and found that the Summons was totally misconceived and without merit. As such, the Plaintiff’s solicitors were ordered to personally bear the wasted costs for issuing the Summons and for the hearing on 28 October 2024, summarily assessed at HK$50,000 be borne by the Plaintiff’s solicitors to be paid forthwith.

This case demonstrates the strict enforcement of Practice Direction 5.4. Failure to comply with the deadlines set out in Practice Direction 5.4 will result in personal liability for wasted costs arising from adjournments. 

(3)   Anthonia Louise Zoya Anton v Hong Kong Aircraft Engineering Company Limited & Another (HCPI 152/2021 and HCPI 153/2021, date of judgment: 6 June 2025) [10]

The 2^nd Defendant appealed against the decision of Master Matthew Leung dated 6 August 2024 by way of a summons dated 2 August 2024 (the “Summons”). The appeal hearing was fixed for 15 October 2024.
 

The Plaintiff’s Counsel failed to lodge skeleton submissions by the deadline set out in paragraph 12 of Practice Direction 5.4 (i.e. by 10:00 am, 10 October 2024).[11] Instead, he submitted the submissions only on 14 October 2024 at 10:18 a.m., less than 24 hours before the appeal hearing. As such, the Court had insufficient time to prepare for the case and the appeal hearing was adjourned.

The Plaintiff’s Counsel argued that the delay was caused by the late receipt of the 2^nd Defendant’s appeal hearing bundle and his pupil’s inability to notify the Court of the anticipated delay on 9 October 2024 due to missing contact details for the judge’s clerk.

The Court rejected all the arguments raised by the Plaintiff’s Counsel on the following grounds:

(1)  A party’s duty to lodge his submissions and list of authorities is independent of the duty of his opponent when observing the timeline stated under Practice Direction 5.4. The Plaintiff’s Counsel could and should have prepared his own submissions and lodged them with the Court regardless of receiving the 2^nd Defendant’s submissions.

(2) The contact details of the clerk of the Court were public information available on the Judiciary’s directory and website. There was no valid reason for the failure to notify the Court. Even if notified, late submission would still breach paragraph 12 of Practice Direction 5.4, making adjournment inevitable.

 

Further, the Court set out the legal principles and test of a wasted costs order. It referred to Ma So So v Chin Yuk Lun & Another [2004] 3 HKLRD 294 as follows:

“6. In considering the exercise of the jurisdiction under this rule, the court should approach the matter by dealing with the following questions:
(1) Whether the solicitor was responsible for (i) acting improperly or without reasonable cause or (ii) for undue delay or any other misconduct or default in any proceedings.
(2) Whether such conduct of the solicitor caused costs to be incurred or wasted. This is a question of causation. The causal link between the solicitor’s conduct and the extent of costs incurred or wasted must be established.
(3) Whether the court should exercise its discretion to make an order.
Compare Ridehalgh v Horsefield at [1994] Ch 205 at 231F.”

 

The Court also endorsed Marlene Ng J’s observations regarding the definitions of “improper or unreasonable act or omission” as stated in paragraph 42 of Chiu Sui Ching v Cheng Kwai Hung & Others [2023] HKCFI 1417:-
 

“Improper” is plainly the more “serious” category of conduct concerned, but “it does not require proof of bad faith”. “It would perhaps be more accurate to describe [the impugned conduct] as conduct which involves a failure on the part of the solicitor to fulfil his duty to the court and to realise his duty to aid in promoting in his own sphere the cause of justice (Myers v Elman [1940] AC 282; KB Chau & Co (a firm) v China Finance Trust & Investment Corp [1995] 2 HKLR 567 (CA). The conduct must be inexcusable and such as to merit reproof (J v C [1995] 1 HKLR 19). The test was whether the conduct amounted to a serious dereliction of duty (Que Jocelyn Co (t/a Scented Delights) v Broadair Express Ltd [1999] 3 HKLRD 104).”

 

The Court explained that the test was whether the conduct amounted to a serious dereliction of duty. The conduct complained of needs not be criminal, needs not involved peculation or dishonesty. A gross neglect of inaccuracy in a matter which it is a legal representative’s duty to ascertain with accuracy will suffice.  It is a conduct which involves a failure on the part of the legal representative to fulfill his duty to the court and to realise his duty in aid of promoting his own sphere the cause of justice.  The conduct must be inexcusable and such as to merit reproof.    
 

Besides, the Court referred to paragraph 30 of Practice Direction 5.4 regarding consequences of non-compliance[12] and stated that the failure to comply with the directions contained in the Practice Direction, in the absence of any satisfactory explanations, can amount to serious dereliction of duty on the part of an advocate and should be penalized in costs.
 

In light of the above, the Court concluded that the Plaintiff's Counsel's failure to lodge submissions on time constituted an improper act/omission and a serious dereliction of duty. This breach directly caused the adjournment and wasted costs. The conduct was inexcusable and merited reproof. As such, the Plaintiff’s Counsel was held personally responsible for the wasted costs incurred as a result of the adjournment of the hearing on 15 October 2024, including the costs of the 2^nd Defendant’s solicitors and the 2^nd Defendant’s Counsel in attending the hearing on that day. Those costs were summarily assessed at HK$75,000 (which including the 2^nd Defendant’s Counsel’s fee on that day (charged on a refresher basis)) and ordered to be paid forthwith by the Plaintiff’s Counsel.

 
On a separate note, the Court clarified the procedure for seeking a “waiver” under paragraph 29 of Practice Direction 5.4.[13] Such “waiver” cannot be obtained from the opposing party or parties. It must be obtained from the court. Most importantly, the duty under paragraph 12 of Practice Direction 5.4 is owed to the Court and not to his opponent. As such, it is wrong and inappropriate for a party to approach the opposing party or parties to either notify them or seek their indulgence or consent for the lateness in lodging their skeleton submissions or list of authorities.

This case illustrates the strict enforcement of Practice Direction 5.4. The Court clearly stated that late submission of skeleton submissions constitutes an improper act/omission and a serious dereliction of duty. Notably, it clarified that a party’s duty to lodge his submissions and list of authorities is independent of the duty of his opponent when observing the timeline stated under Practice Direction 5.4. Such non-compliance triggers personal liability for wasted costs under paragraph 30 of Practice Direction 5.4.  

(D) Key Takeaways

In conclusion, the above case authorities clearly demonstrate the Court’s zero tolerance for breaches of Practice Directions. In particular, the deadlines set out in Practice Direction 5.4 are strictly enforced. Practitioners must proactively prepare their submissions and lists of authorities based on these deadlines, independent of any delays caused by opponents. Blaming opponents is not a valid reason for non-compliance. Failure to meet the Practice Direction 5.4 deadline without a satisfactory explanation risks personal costs liability.

 
Wasted costs orders serve as a crucial tool for maintaining professional accountability. They empower the Courts to hold solicitors personally liable for costs arising from “improper, unreasonable, undue delay, other misconduct or default”. All practitioners must therefore take their obligations under the Practice Directions seriously.

 

 

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[1] https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=169443&QS=%28%7BANTHONIA+LOUISE+ZOYA+ANTON%7D+%25parties%29&TP=JU

[2] https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=165884&QS=%28%7BFarman%7D+%25parties%29&TP=JU

[3] Order 62, rule 8(2) of the Rules of the High Court (Cap. 4A)

[4] Hong Kong Civil Procedure (Hong Kong White Book) 2025, paragraph 62/8/1

[5] Order 62 rule 8A of the Rules of the High Court (Cap. 4A)

[6] Order 62, rule 8B of the Rules of the High Court (Cap. 4A)

[7] Order 62, rule 8B(2) of the Rules of the High Court (Cap. 4A)

[8] https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=165564&QS=%28%7BChan+Yuet+Chun%7D+%25parties%29&TP=JU

[9] https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=165884&QS=%28%7BFarman%7D+%25parties%29&TP=JU

[10] https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=169443&QS=%28%7BANTHONIA+LOUISE+ZOYA+ANTON%7D+%25parties%29&TP=JU

[11] Paragraph 12 of Practice Direction 5.4: The respondent should serve on the other party and lodge with the Court his skeleton argument and list of authorities at least 48 hours before the hearing (excluding Saturdays, Sundays and general holidays).

[12] Paragraph 30 of Practice Direction 5.4: Those not observing or complying with these directions may be called upon to explain such failure and, in the absence of a satisfactory explanation, may be penalized in costs irrespective of whether or not they are the parties who succeed on the application.  Parties are warned that to ensure observance of and compliance with these directions, a party who has breached any of such directions may, despite his success in the application or appeal, still be deprived of all or part of his costs of the application or appeal as a penalty.  Further, such costs penalty may be imposed irrespective of whether or not the breach has resulted in any adjournment of the hearing or any other forms of wastage of time or costs.

[13] Paragraph 29 of Practice Direction 5.4: A party may apply to the hearing Judge by way of letter with a copy to the other side for waiver or abridgement of any of the requirements in this Practice Direction provided that such application should be made well in advance before the hearing with reasons provided.  Only in exceptional circumstances will a waiver be given.