VANTAGE TECHNOLOGY LTD v. CHEUNG CHOR KEUNG AND OTHERS

HCA 873/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 873 OF 2015

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DECISION
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1.  This is the return date for an Order 29 summons taken out by the plaintiff on 22 April 2015 at the time when this action was commenced. On 20 August 2015, the plaintiff issued a summons seeking to adjourn this hearing.

2.  The Order 29 summons issued on 22 April 2015 was fixed to be heard by the summons judge on 8 May 2015.  On 5 May 2015, the plaintiff’s former solicitors served a skeleton submissions dated 4 May 2015 for the 8 May hearing on the defendants seeking for an order in terms of the summons. 

3.  The defendants engaged solicitors, Hastings & Co.  On 6 May 2015 the defendants’ solicitors wrote to ask for the summons to be adjourned with proposed directions for filing of affidavit evidence.  On the same day, the former solicitors of the plaintiff asked the defendants to provide the “usual undertaking” before it would consider the proposal.  The defendants had no alternative but to instruct counsel to attend the 8 May hearing and filed written submissions dated 7 May 2015 contending that the summons should be dismissed alternatively for directions be given for a full substantive hearing.  After the filing of the skeleton submissions of the defendants, the parties then agreed to the proposed directions (without seeking for any undertaking), and sought and obtained a consent order from the court dated 7 May 2015.  The order also provides that the costs of the Order 29 summons be reserved.

4.  On 13 May 2015, the notice of hearing was issued fixing the 26 August 2015 as the hearing date for the substantive argument of the Order 29 summons.  It is also directed that both parties have to file their respective skeleton submissions on 21 August 2015. 

5.  On the same day, Godfrey Chun & Co wrote to the defendants stating that they had no further instructions to act for the plaintiff. 

6.  On 4 June 2015, an order was issued pursuant to a consent summons of the parties filed on 1 June 2015 providing for extension of time for the filing of affidavit evidence. 

7.  On 1 June 2015, the plaintiff also filed a Notice of change of solicitors to Ng, Au Yeung & Partners.

8.  Later on 8 July 2015, the plaintiff changed its solicitors to Benny Kong & Tsai. 

9.  The defendants filed reply evidence on 25 June 2015, but the plaintiff did not file any further evidence notwithstanding leave was given on 4 June 2015.  The defendants’ solicitors wrote on 24 July 2015 recording the same.

10.  On 17 August 2015, the defendants’ solicitors wrote to the plaintiff’s solicitors asking for a draft index of the bundle to be provided for their comments by 19 August 2015.

11.  The next day, the plaintiff took out the summons to adjourn the hearing for the Order 29 Summons with the supporting 3^rd affidavit of Mr Cheung Loi Kwai (“Mr Cheung”).  Understandably, the defendants’ solicitors replied by letter on the same date objecting to this last minute application.

12.  As directed by the court, the defendants’ counsel filed its skeleton submissions on 21 August 2015 dealing with the Order 29 summons.  The plaintiff filed its skeleton submissions dealing with the adjournment summons.  On 26 August 2015, a reply submission to the adjournment application was filed by the defendants and the plaintiff filed a 2^nd affirmation of Mr Yu Yee Sang Cyprianus (“Mr Yu”).

13.  At the hearing, the court ruled that the 3^rd affidavit of Mr Cheung and the 2^nd affirmation of Mr Yu be admitted in evidence.  The reason is that notwithstanding the evidence came in very late, but in the interests of justice and on balance, the evidence should be considered whether in the adjournment application or the Order 29 summons.

14.  In the course of the argument of the adjournment application, the alternative of a speedy trial was discussed and ultimately agreed by the parties.  The parties also agreed that the Order 29 summons be adjourned sine die with liberty to restore.  A set of agreed directions was discussed and approved by the court.

15.  The only issue in dispute between the parties is the question of costs.  The plaintiff asked that the costs of the Order 29 summons and of this hearing be reserved.  The defendants disagreed and asked for an order that “the costs of the Order 29 summons be reserved, save and except the costs of the 8 May 2015 hearing and the costs of 26 August 2015 hearing be to the defendants to be taxed if not agreed and payable forthwith.  Costs of the summons dated 20 August 2015 be to the defendants.”

16.  In brief, the defendants contend that for the 8 May hearing, faced with the skeleton submissions of the plaintiff dated 4 May 2015 and the stance taken by the plaintiff’s solicitors on 6 May 2015, the defendants had no alternative but to instruct counsel to attend the hearing and prepared and filed submissions on 7 May 2015.  It was only after counsel had been briefed and skeleton submissions filed that the plaintiff agreed to what was proposed on 6 May 2015 by Hastings & Co.  The costs incurred by the defendants should therefore be borne by the plaintiff.  I agree with the submissions of Mr Yan SC, for the defendants. The fact that 6 May 2015 letter was seeking the “usual undertaking” but eventually none was pursued demonstrates that the proposed directions from Hastings & Co should have been agreed early on and then no costs of instructing counsel to appear at the hearing would have had to be incurred.  In the court’s discretion, it is right that the plaintiff should bear the costs of the hearing on 8 May 2015.  The defendant asked for certificate for two counsel and no real objection was taken, and it is so ordered. 

17.  As to the costs of the hearing on 26 August 2015, an adjournment was sought very last minute, the day before the skeleton submissions have to be filed.  Normally costs of and occasioned by an adjournment would have to be borne by the party seeking the court’s indulgence.  In this case, it should not be different.  The fact that the hearing dealt also with the proposed directions and that the defendants consented to the adjournment does not alter this.  The consent order was reached with a view to bring the real issue properly before the court as opposed to shadow boxing with partial evidence being filed.  I commend counsel of both parties to have sensibly agreed to this course.

18.  Further I would also note that after the date has been fixed and since the letter dated 24 July 2015 from Hastings & Co, there was no sign of any possibility of adjournment and counsel would have been briefed by 20 August 2015 when the adjournment summons was taken out, if submissions had to be and indeed were filed on 21 August 2015. 

19.  The plaintiff explained that the adjournment was necessitated by the emails and documents that were deleted by the 1^st defendant and thus leading to the late discovery recently.  The defendants pointed out that the 1^st defendant had back in April 2014 told the plaintiff that any accidental deletions would be in the plaintiff’s server.  There is no need and indeed not right for this court to comment on the merits of the case.  Suffice it to note that the evidence of Mr Yu is that the documents and emails now located was from the off‑site external server for emails of the plaintiff which was retrieved and now kept on site in the plaintiff’s office.  Why such investigation was not conducted or why such documents or emails could not have been discovered earlier irrespective of the number of servers the plaintiff had at the relevant time is a matter that may remain unanswered. 

20.  In the court’s view, this argument, if it remains, may be a matter for the trial judge.  At this stage where the question of costs is considered, the explanations set out above is not adequate to dispose of the general approach for the party seeking indulgence to bear the costs of and occasioned by the adjournment summons which includes the costs of the hearing on 26 August 2015.

21.  The final matter that has to be considered is whether costs should be taxed and payable forthwith as opposed to in any event.  Whilst it was unfortunate that the costs of the two hearings had to be incurred, it is not appropriate, in the court’s view, in these early days of the action for an order that costs be paid forthwith.  In my discretion, such costs should be taxed and payable in any event and I so order.

22.  I therefore order and direct that:

(1) Costs of the Order 29 summons dated 22 April 2015 be reserved, save and except the costs of the 8 May 2015 hearing and the costs of 26 August 2015 hearing be to the defendants, in any event, to be taxed if not agreed, with certificate for two counsel. 

(2) Costs of the adjournment summons dated 20 August 2015 be to the defendants in any event, to be taxed if not agreed.