ALLIED EVER HOLDINGS LTD v. LI SHU CHUNG AND OTHERS

CACV 11/2018

[2021] HKCA 976

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 11 OF 2018

(ON APPEAL FROM HCCW NO. 497 OF 2009)

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DECISION ON COSTS

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Hon Cheung JA (giving the decision of the Court on costs) :

1.  On 27 April 2021, we dismissed the Liquidators’ appeal against the judgment of Deputy High Court Judge To who, amongst other things, removed them as the Liquidators of the Petitioner. The Judge had also ordered the Liquidators to pay costs to the Petitioner on an indemnity basis with certificate for four counsel.

2.  The Liquidators requested the issue of costs of the appeal and below be dealt with on paper which we will now do.

3.  The Liquidators seek the following orders :

1)  In respect of the appeal they should pay 75% of the Petitioner’s costs of the appeal, while the Petitioner should pay 25% of the Liquidator’s costs of the appeal to be taxed on party‑and‑party basis with certificate for two counsel;

2)  The Judge’s costs order below be set aside and substituted with the above like order; and

3)  The Liquidators have the costs of the present costs submissions.

4.  The Petitioner asks the costs of the appeal on an indemnity basis with certificate for three counsel.

5.  As the Liquidators failed in their appeal, there is no issue that they should bear the costs of the appeal.  The issue is about the basis of taxation and apportionment.  The Court of Final Appeal in Town Planning Board v Society for Protection of Harbour Ltd (No 2) (2004) 7 HKCFAR 114 at [17] and [18] reaffirmed that it is undesirable to attempt to define the circumstances in which an award for indemnity costs are made, and the discretion is not to be fettered beyond the requirement that indemnity costs must be appropriate.  Further, conduct of the parties during the litigation as well as conduct leading to the litigation are not irrelevant to the exercise of discretion to award indemnity costs.

6.  A high threshold is required for the removal of liquidators which is based on the exceptional behaviour of the liquidators.  The Petitioner had succeeded both in the Court below and before us in overcoming this threshold requirement.  We are of the view that an order for indemnity costs is amply appropriate.  Despite the fact that we were against the Petitioner on the Mazars issue, it is successful in resisting the appeal.  We will not order an apportionment of the costs.  In view of the complexity of the case, we will grant certificate for three counsel.

7.  We see no basis to vary the costs order below.

8.  We further order the Liquidators to pay the Petitioner the costs of this application on an indemnity basis with certificate for two counsel.