NG PING HEI FRANCIS v. CLUSTERTECH LTD

HCMP 418/2025

[2026] HKCFI 2783

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 418 OF 2025

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DECISION ON COSTS

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Introduction

1.  Following the handing down of my judgment on 15 October 2025 (the “Judgment”)  the parties have filed written submissions regarding the appropriate form of costs order so that I can deal with the issue on the papers.

2.  In the Judgment I set out my reasons for granting the Plaintiff’s application by way of originating summons (the “Summons”)  for an order pursuant to sections 435 and 620 of the Companies Ordinance (Cap 622)  (the “Ordinance”)  that the Defendant (Clustertech Limited)  provide him with copies of certain documents. I dismissed the Defendant’s application for a case management stay. I held that:

“Sections 430/435 and 618/620 provide a summary jurisdiction entitling the registered shareholder to obtain (rapidly and without undue cost)  the limited range of documents covered by the sections, a dispute and challenge as to whether the registered member is also the beneficial owner of the shares provides an insufficient basis and justification for a case management stay. The unqualified statutory right is given to the registered member.”

3.  The Plaintiff seeks an order that the Defendant pay his costs of the action (including costs of the hearing and all costs incurred, reserved or arising from the application and occasioned thereby)  with a certificate for two Counsel, to be taxed (on I assume the party to party basis)  if not agreed.

The Plaintiff’s submissions

4.  The Plaintiff submits that it is clear that his claim was successful and that costs should follow the event. The Defendant’s various defences all failed. The Court rejected:

(a).  the Defendant’s principal line of defence for a stay (see [35]-[37] of the Judgment).

(b).  the Defendant’s challenge to the Plaintiff's locus standi regarding the F-Shares. The Plaintiff's status as a registered holder was held to be sufficient (see [32] of the Judgment])  regardless of whether there was any triable issue regarding their beneficial ownership and regardless of the status of the V or D shares.

(c).   the Defendant’s automatic return argument regarding the D&V Shares (see [37] of the Judgment).

(d).  the Defendant’s serious allegation of “improper purpose”, which the Court found was “mere assertion … without any particulars … is wholly insufficient…” (see [38] of the Judgment).

5.  The Plaintiff also submits that this was a proper case for the Court to issue a certificate for two counsel. Instructing Senior Counsel in this case was reasonable and justified. This was because the Defendant’s opposition to the Plaintiff’s application had put in issue and raised a number of difficult questions of fact and law. The Defendant had argued that there was in Hong Kong a line of authorities that established a practice that the Court would stay, dismiss or adjourn sine die an application under sections 435 and 620 of the Ordinance in cases where there was a dispute as to beneficial ownership of the applicant’s shares. The Defendant had also sought to conflate the present proceedings with HCA 133/2020 and to raise a new action shortly before the hearing with regard to the V and D shares requiring an analysis of complicated statutory provisions. The Plaintiff had also been accused of improper conduct and breach of an undertaking given to the Court’s (which accusation had been abandoned in course of the hearing). These factors combined with the importance of the application to the Plaintiff made his instruction of Senior Counsel a reasonable and proper course to take.

The Defendant’s submissions

6.  The Defendant argues that there are compelling grounds in this case to depart from the usual position that costs follow the event. It argues that the Plaintiff’s success was confined to a narrow statutory entitlement under sections 435 and 620 of the Ordinance and the Court’s exercise of case management discretion. The Defendant’s opposition was not frivolous but had been founded on a serious and arguable case concerning beneficial ownership (which the Court had acknowledged at [35] of the Judgment).

7.  The Defendant seeks an order that there be no order as to costs or alternatively that the costs of the Summons follow the order as to costs in  HCA 1666/2025 and the F Share proceedings to be issued following HCA 133/2020. The Defendant noted that no F-share recovery proceedings had yet been commenced as the determination of Panven’s ownership rights remained to be decided and was pending in HCA 133/2020. The Defendant said that if no proceedings to recover the F-shares were commenced by Dr. Suen within 28 days of the Court’s decision in HCA 133/2020 then it would not oppose the usual costs order in favour of the Plaintiff being made in these proceedings (and the parties could then apply for such an order by consent and proceed with taxation if necessary.

8.  The Defendant argues that it would be premature and unjust to award the costs of the Summons to the Plaintiff where his beneficial ownership of the F, V and D Shares remained in dispute and being litigated in HCA 1666/2025 and related proceedings (HCA 133/2020 to decide Dr. Suen’s control of Panven). The Defendant says that if it succeeded in that action and Panven was then successful, the Plaintiff’s application will retrospectively be shown to have lacked any entitlement and may be treated as an abuse of process.

9.  The Defendant also argues that it had acted reasonably in opposing the Summons where doing so was an act of responsible governance and the relevant law was not settled (the Defendant says that the legal tension between a member’s entitlement under the register and a company’s right to resist disclosure where beneficial ownership was in doubt was not settled).

10.  The Defendant argues that alternatively, as it was premature to make an order for costs now, the decision on costs should be deferred (the usual rule must yield to the interests of justice). The ultimately outcome of and determining success in relation to the Summons could only be decided when the outcome of the related proceedings was known. The Defendant argues that the underlying principle remained that costs should reflect the substantive outcome.

11.  As regards the Plaintiff’s application for a certificate for two counsel, the Defendant argues (as I understand it)  that (a)  this is a case in which the instruction of Senior Counsel by the Plaintiff was unnecessary and excessive and (b)  the issue should be left to the taxing master and the taxation process.

12.  The Defendant says that the Summons involved no complex legal issues or of public importance and the Plaintiff only needed to instruct (as the Defendant had)  junior counsel.

13.  On the issue of whether a certificate should be granted now, the Defendant said as follows in his written submissions

“…. any certificate (if ever granted)  should be confined to junior Counsel: So Ching Wan v Assen Ltd [2023] HKCFI 2153, §274. No Bill of Costs has yet been filed (rightly so as parties are disputing liability at this stage, not quantum); D reserves the right to file responsive List of Objections if and when the matter proceeds to taxation and is prepared to make further submissions with taxing master. Summary assessment (if raised)  is plainly inappropriate: the application was not interlocutory in nature, factually protracted, Senior Counsel was involved: China Agri v Wang Siu Qun [2014] HKCU 145, §24; in the unlikely event so directed, D similarly reserves the right to file its responsive Statement of Objections.”

Discussion and decision

14.  It seems to me that the Plaintiff is right to say that he was clearly the successful party on the Summons and that there is no justification for departing from the usual rule that costs follow the event. I accept his submissions on this point as summarised above. I shall order that the Defendant shall pay the Plaintiff’s costs of and occasioned by the Summons, to be taxed on a party-to-party basis if not agreed.

15.  The fact that the Defendant had put forward an arguable case that the F shares held by the Plaintiff were held on trust and that the Plaintiff had agreed to transfer the D and V shares to it, or that Dr Suen had given a good reason as to why Panven had been unable to assert its claim as beneficial owner against the Plaintiff, does not assist the Defendant on the costs issue. These points did not justify (for the reasons I gave)  the Defendant’s opposition to the Summons. As I held, being registered was the critical factor and the dispute as to beneficial ownership did not disentitle the Plaintiff to the relief he sought. The Defendant’s opposition was misconceived and failed and costs should follow the event.

16.  As regards the Plaintiff’s application for a certificate for two counsel, I note that [2(3)] of Part II of the First Schedule to Order 62 of the Rules of the High Court (HKHCR)  states that “No costs shall be allowed in respect of … more counsel than one appearing before a … judge, …. unless the …. judge … has certified the attendance as being proper in the circumstances of the case.” (5)  of Part II of she First Schedule states that the amount of the fees to be allowed to counsel is in the discretion of the taxing master.

17.  The Plaintiff referred to and filed a copy of [62/App/48] in the Appendix to O.62 in the HKCP 2025 (which is also included in the HKCP 2026 but not the HKCP 2024). The Appendix is an extract from the High Court Taxation Guide prepared by the High Court Taxing Masters and is not intended to be definitive or comprehensive but rather a guide to the relevant general principles (see 62/App in the HKCP 2025). [62/App/48] refers to the judgment of Master Poon in Xinyuan Trading Co Ltd v NPH Petrochemical Ltd(HCA 18159/1998,CACV 276/1998, [2000]HKEC 1740) in which Master Poon said as follows (my underlining):

“In the absence of a court order whether to allow two counsel on taxation is a matter of the taxing master’s discretion….

After the abrogation of the two-counsel rule, the client and his solicitor, when instructing counsel, have to decide whether to instruct a leader and if so, whether to instruct a junior also? Depending on the choice made, the client will be represented either by a junior counsel alone, or by leading counsel alone, or by both. On taxation, the taxing master has to determine whether or not the costs were necessary or proper and he must necessarily do so after the event, when leading counsel was in fact instructed. Because leading counsel can now accept instructions without a junior, the first step is to ask whether it was necessary or proper to instruct a leader, even if one counsel was required or actually briefed. In this connection, the following factors are relevant:

(1)  the nature of the case;

(2)  difficult questions of fact or law;

(3)  the complexity, difficulty or novelty of the issues involved;

(4)  the skill, specialised knowledge or expertise required for the case;

(5)  where money or property is involved, its amount or value;

(6)  the importance of the matter to client;

(7)  the general importance of the case, for example as affecting other cases;

(8)  if a junior counsel had already been instructed, the experience, competency and seniority of that junior;

(9)  whether the other side has instructed a leader: see British Metals Corporation Ltd v. Ludlow Brothers (1913)  Ltd [1938] Ch. 774.

The above list is not exhaustive. Depending on the circumstances, other reasons why a leader is required may exist.

The next question is if a leader is instructed, should a junior be instructed also. Again, the taxing master will have to decide if the employment of the junior was necessary or proper in the circumstances…”

18.  In So Ching Wan v Assen Ltd [2023] HKCFI 2153 (cited by the Defendant)  Master Lai said as follows (my underlining):

“271. When a hearing judge in the Court of First Instance grants certificate for two counsel for an application, the judge must be of the view that the application involved certain complex issues of law which justify the involvement of more than one counsel. Usually, in such case, one of the counsel will be a Senior Counsel or a senior junior leading a junior counsel. In determining whether fee of Senior Counsel is allowed, the correct question for the taxing master is not whether the case was well within the capabilities of junior counsel but rather whether or not it was reasonable and proportionate to instruct Senior Counsel. (See R v Dudley Magistrates’ Court Ex p Power City Stores Ltd (1990)  154 JP 654; (1990)  154 JPN 490; (1990)  140 New LJ 361).

19.  It seems to me that in this case it is proper to grant a certificate for two counsel. It seems to me that it was reasonable in the circumstances for the Plaintiff to instruct leading and junior counsel in relation to the Summons. The issues raised by the Defendant in opposition to the Summons involved some unsettled points of law regarding the interpretation and application of sections 435 and 620 of the Ordinance (as the Defendant itself acknowledged), some tricky issues regarding the impact on the exercise of the Court’s discretion of the related proceedings and the need to respond to certain serious allegations regarding the integrity of the Plaintiff. On balance, even though the application ultimately related to a narrow point of construction and related to limited range of facts and a limited quantity of evidence, these factors are sufficient to justify making a two-counsel order.