ALUHOUSE COMPANY LTD v. SUCCESS LANE DEVELOPMENT LTD

HCMP 967/2023

[2024] HKCFI 3221

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 967 OF 2023

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DECISION

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1.  For background of the matters, I refer to my Decision on Costs handed down on 9 May 2024[1] (the “Costs Decision”).  I adopt the same terms and abbreviations used therein.

2.  For reasons set out in the Costs Decision, I ordered that D shall pay P’s costs of this action (inclusive of all costs of and occasioned by the application for the Injunction, and the costs of and occasioned by the arguments on costs)  on an indemnity basis (the “Costs Order”).

3.  By summons of 23 May 2024, D seeks leave to appeal against the Costs Order.  The proposed Notice of Appeal is attached thereto.  Subsequently on 16 July 2024, and by consent, I allowed the Notice of Appeal to be amended (the “ANoA”). I have also handed down directions on the filing of written submissions with the view to the application being dealt with on the papers.  Pursuant to those directions, Mr Kay Chan and Ms Cyndi Ho, counsel for D, have filed their submissions in support (“D/Sub#1”)  and reply (“D/Sub#2”)  dated respectively 26 July and 6 September 2024.  Mr Alexsander Wong, counsel for P, has filed his written submissions in opposition (“P/Sub”).

4.  I have considered the ANoA and the proposed grounds set out therein.  I have considered the submissions and the authorities discussed therein. 

5.  The ANoA contains 2 proposed grounds (“Proposed Ground 1” and “Proposed Ground 2”).  Both focus upon P’s conduct when seeking the Injunction.  The main paragraphs of those 2 grounds read as follows:

“1. The Learned Judge failed to take recognisance adequately or at all of the documentary evidence in relation to [P] obtaining the ex-parte injunction by deliberately misleading this Honourable Court.

…

2. The Learned Judge failed to take recognisance adequately or at all of the sufficiency and validity of the ‘notice’ given by [P] for its application for an ex-parte injunction on notice, as well as all events leading and up to the grant of the ex-parte injunction before The Hon Mr. Justice Peter Ng.

…”

Submissions

6.  As summarised by Mr Chan[2] (the emphasis being his), “D’s main challenge would be the Learned Judge failed to take into account the basis on which P took out the Injunction, and D says it was not proper ex-parte on notice Injunction application from the outset.”

7.  Mr Chan places emphasis on the following matters:

(a)  The ex parte application for the Injunction was made on 21 June 2023 when the June SD would only expire on 23 June 2023;

(b)  Mr Chan acknowledges that 22 June 2023 was a public holiday, but maintains that “the fact that the June SD would only expire on Friday, 23 June 2023 would remain unchanged”[3];

(c)  The urgency was self-induced by P;

(d)  Mr Chan submits that “it was wholly because P failed to settle HK$85,000 and the outstanding interest owed to D causing the issuance of the June SD”[4];

(e)  Mr Chan raises issue as to the notice which P gave D in respect of the application for the Injunction.  He submits that (the emphasis again being his):

“13 … C&P only notified D by email on 21 June 2023 at 4:49 p.m. of the hearing time and date of the ex-parte Injunction hearing (Exhibit 39) …. It is submitted that P’s case that ‘it had only given notice at around 16:45 p.m.’ …, i.e. before the ex-parte Injunction hearing must be a blunt lie. In that email, C&P stated clearly that ‘the application is being heard now in Court 20, 9/F of the High Court before the Hon. Mr. Justice Ng’. Hence, relying on the sending time and the context of the email, the only reasonable conclusion would be that P merely sent the email to P after the commencement of the ex-parte Injunction hearing but not the otherwise.

14.  P attempted to explain that, despite the alleged ‘short notice’, Hon Ng J (the ‘Ex-parte Judge’)  had stood down the matter for 10 minutes for P to deal with matters in relation to the hearing bundle ... Nevertheless, D submits this is really a red herring as it was impossible for D to attend the Court within 10 minutes time, and the purpose of such a short adjournment was not for D to arrive and hence this could not assist P’s case to any extent.”

(f)  Mr Chan then submits[5] that:

“… had D’s stance been ventilated to this Honourable Court on 21 June 2023, it is highly probable that the Ex-parte Judge would not grant the Injunction but dismissed P’s Ex-parte Summons dated 21 June 2023 … right away. In that case, it is further submitted the usual costs order could be no order as to costs or even costs to D for the ex-parte Injunction hearing if the Court was satisfied that P should not make the application for Injunction in the first place. This would also save parties’ time and costs to come back on the Return Day for further arguments in relation to the Injunction, including the issue of costs. Hence, it now renders the costs of the Return Day and the parties’ arguments on costs redundant and D humbly asks the Court for those costs.”

(g)  Mr Chan cites a number of decisions on applications for ex parte orders and their discharge (which I have considered).  Focusing upon the 2 proposed grounds, Mr Chan concludes:

(i)  in respect of Proposed Ground 1, that:

“from the mere fact that the Ex-parte Judge was misled by P into believing that ‘notice’ of the application had been given to D prior to the hearing and that the case papers were only emailed to D after the hearing, it is submitted that the ex-parte Injunction obtained under these circumstances could be discharged with costs as it was obtained irregularly”[6];

(ii)  in respect of Proposed Ground 2, that:

“it is submitted that given no sufficient or valid notice had been given to D before the commencement of the ex-parte Injunction hearing and that there was, in fact, no urgency to support P’s ex-parte application, the Injunction order ought to be discharged in this regard.”

8.  Mr Wong summarises his submissions in opposition as follows (the emphasis again being his):

“(1) Whether or not D may (or may not) potentially set aside the Ex Parte Injunction is irrelevant to the question of costs. This is now a hypothetical/academic question. The Court has correctly taken into account the relevant pre-action conducts of the parties, which if D had acted reasonably would have averted these proceedings altogether. The Court therefore did not fail to take into account relevant matters …;

(2) Insofar as it is necessary, P submits that D is overly presumptuous to suppose that the Ex Parte Injunction would be discharged at any hypothetical inter partes hearing (had there been a necessity for the parties to proceed with the action, i.e. D insisting on presenting a winding up petition). On the contrary, P would likely be able to obtain an injunction at a hypothetical inter partes hearing on the merits. There is therefore nothing to impugn the Court’s finding that ‘P has obtained what it set-off to obtain’ as a basis of exercising the discretion on costs …; and

(3)  D did not dispute the findings and conclusions of the Court in relation to any of the pre-action conducts, which formed the crucial basis of the Court’s exercise of discretion and, on these findings, the decision is clearly one that is within the range of reasonableness that the Court of Appeal would not interfere …”

9.  In reply, Mr Chan revisit the facts.  He makes submissions on the test for granting leave.  He further makes submissions on 2 cases P relies on in relation to the Courts’ considerations relevant to costs (La Chemise Lacoste v Sketchers USA [2006] EWHC 3642 (Ch), at §12, and Cosmigo Limited v Monin Asia KL Sdn Bhd (HCMP 905/2017, 8 November 2017, at §9).

Consideration

10.  Costs are discretionary.  Both parties accept that the principles and considerations set out in Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815 at §34 apply.

11.  My Costs Decision is factual and facts driven.  I have set them out in details in the Costs Decision.  Specifically in respect of the conduct of the application for the Injunction, I repeat §42. 

12.  The overall facts in my view amply justify my conclusions reached in §§47 and 48, and justify my exercise of discretion in making the Costs Order. I have taken into account all relevant matters, and have not taken into account any irrelevant considerations.  I have not misapplied the law. 

13.  In my view, and having considered Poon Ching Man, I am not satisfied that this is a case which the Court of Appeal may intervene.

14.  I am not satisfied that the proposed appeal has any reasonable prospect of success, or that “interest of justice” justifies the granting of leave.  I reject Mr Chan’s submissions in this regard[7].

Conclusion

15.  I refuse D leave to appeal.

Costs

16.  I make a costs order nisi that D shall bear the costs of this application, with certificate for counsel, to be taxed if not agreed together with the costs of the action.