CIL HOLDINGS LTD v. THE STOCK EXCHANGE OF HONG KONG LTD

HCAL 950/2022

[2023] HKCFI 1618

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 950 OF 2022

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D  E  C  I  S  I  O  N

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A.  Introduction

1.  As any experienced litigator will know, any argument described by the Court as inventive will rarely, if ever, succeed. The inventive arguments put forward for the applicant (“Company”) in this case will not improve the batting average.

2.  The Company is and was at all material times a company incorporated in Bermuda, and listed on the Main Board of the putative respondent, The Stock Exchange of Hong Kong Limited (“Exchange”).

3.  The Company is the subject of a decision dated 1 August 2022 (“Decision”) made by the Listing Review Committee (“LRC”) of the Exchange, by which the LRC confirmed the earlier decision dated 29 April 2022 of the Listing Committee (“LC”) to delist the Company.

4.  By Form 86 dated 16 September 2022 – settled by leading and junior Counsel – the Company seeks leave to apply for judicial review to challenge the Decision. The challenge is not really based upon any specific facts or circumstances as have led to the Decision. Instead, the Company seeks to raise two grounds of review comprising systemic challenges to the way in which the Exchange’s delisting and decision-making processes are structured.

5.  I gave directions for the filing of evidential materials, so as to bring this matter to a rolled up hearing, which was subsequently fixed for today, 19 June 2023.

6.  However, on 10 May 2023, the Company’s former solicitors obtained an order to cease acting for the Company in this action. Nevertheless, since that date, the Company has neither instructed new solicitors nor has it obtained a court order as might permit a director of the Company to represent it for the purpose of carrying on these proceedings. This is apparently the case, notwithstanding that it seems that Mr Ke Jun Xiang, a director of the Company, informed the Exchange on 15 June 2023 that he intends to attend the rolled up hearing on behalf of the Company.

7.  Any such order would have to be made by a Registrar, and a Judge of the Court of First Instance has no jurisdiction to make any similar order. I acknowledge that Mr Ke had the courtesy to attend Court this morning, with a letter of authorisation from the Company. However, that does not change the position. There being no solicitors on record, and there being no court order permitting a director to represent the Company, I must treat the Company as not being present to pursue its application.

8.  For the avoidance of doubt, I see no reason why in the circumstances of the case any adjournment should be permitted to allow the Company either to instruct fresh solicitors or to obtain an order permitting a director to represent it. The date of today’s hearing was fixed on 27 October 2022 (approximately 8 months ago), and the Company’s former solicitors applied to cease to act by summons dated 4 April 2023 (over 2 months ago), which application was granted by order dated 10 May 2023 (almost 6 weeks ago).

9.  On that basis alone, the Company not being present and represented to pursue its own application for leave to apply for judicial review, the application stands to be dismissed. I so order.

10.  Nevertheless, and in part to discourage any other applicant taking up the inventive arguments advanced in this case, I shall also go on to consider the possible merits in the application – though the introductory paragraph to this Decision will have revealed that I do not consider there is in fact any merit in the application.

11.  I have, of course, been assisted by the skeleton submissions filed on behalf of the Exchange by Mr Victor Dawes SC, leading Mr Joshua Chan of Counsel. I did not need to call on them to make oral submissions at the hearing.

B.  Background

12.  In light of the nature of the proposed challenge to the Decision, the background to this case can be dealt with succinctly.

13.  The Company was listed on the Main Board of the Exchange in 1993. It has conducted various business, including: (1) the trading of server storage, multi-media, communication and other electronic products; (2) trading of building materials; and (3) trading of household products.

14.  On 15 May 2020, the Listing Division of the Exchange informed the Company of its decision to suspend trading in the Company’s shares under Rule 6.01(3) of the Listing Rules, on the ground that the Company had failed to maintain a sufficient level of operations and assets as required by Rule 13.24.

15.  That decision was reviewed by the LC, which on 18 September 2020 upheld the Listing Division’s decision to suspend trading in the Company’s shares. That decision was in turn upheld by the LRC.

16.  Trading in the Company’s shares has been suspended since 5 October 2020.

17.  On 29 December 2020, the Listing Division imposed certain Resumption Guidance, with a resumption deadline which expired on 4 April 2022.

18.  By its decision dated 29 April 2022, the LC rejected the Company’s application for an extension of the resumption deadline by 6 months, and decided to cancel the Company’s listing under rule 6.01A.

19.  Following the Company’s request for a review of that decision, the matter was heard on review by the LRC on 26 July 2022. By the Decision, dated 1 August 2022, the LRC decided to uphold the LC’s decision to cancel the Company’s listing.

20.  There having been a failure to resume trading by 4 April 2022, or even by the date of the hearing, the main question before the LRC was whether there were sufficient grounds to grant the Company an extension of time to fulfil the Resumption Guidance. The LRC reasoned that the Company had failed to demonstrate that it had substantially implemented steps with which would lead to resumption of trading, because there remained substantive issues as regards each aspect of the Resumption Guidance, without any assurance that they could be resolved quickly and/or were merely procedural in nature. On that basis, the LRC held that an extension of time was not warranted.

C.  Statutory Regulatory Framework

21.  I do not think I need to set out at any length in this Decision the legal and regulatory context of the listing and delisting regime in Hong Kong, which I have explained at length in previous cases such as Cai Zhenrong v The Stock Exchange of Hong Kong Ltd [2021] HKCFI 1899 at §§ 23-65.

22.  At §§54-61, I dealt in particular with the composition of the LRC, and how the relevant parts of the Listing Rules were amended in July 2019 following a consultation process leading to the Exchange’s publishing of its ‘Consultation Conclusions: Review Structure in Relation to Listing Committee Decisions’ issued in January 2019 (“RS Consultation Conclusions”). Those paragraphs can be read for the full detail there set out.

23.  However, as the intended challenge in this case relates primarily to the nomination and appointment of LRC members, it may be of assistance to set out in this Decision some reminder detail of the nomination and appointment process. There is, and can be, no dispute as to that process, which has been helpfully summarised by Mr Dawes in his skeleton submissions, broadly as follows:

(1)  Members of the LRC shall be appointed and re-appointed by the Exchange’s board of directors (“Board”), but the Board may only appoint or re-appoint persons who have been nominated by the Listing Nominating Committee: see Rules 2A.37C to 2A.37E.

(2)  The Listing Nominating Committee consists of three independent non-executive directors of Hong Kong Exchanges and Clearing Ltd (“HKEx”) and the Chairman and two executive directors of the Securities and Futures Commission (“SFC”).

(3)  Members of the chairman pool of the LRC shall also be nominated by the Listing Nominating Committee and appointed by the Board. The chairman pool shall comprise at least four members of the LRC: see Rule 2A.37E.

(4)  Members of the LRC shall normally be appointed for a term of approximately 12 months. All members of the LRC shall vacate office at the end of their term unless they are re-appointed by the Board for a further 12-month term or such shorter period as the Board may stipulate: see Rules 2A.37F and 2A.37G.

(5)  Members of the LRC may only remain in office for a maximum of 6 consecutive years (in addition to any period of appointment to fill a casual vacancy arising by reason of a member’s resignation, retirement or otherwise). A member who has served for the maximum period of 6 consecutive years may be eligible for re-appointment after the lapse of 2 years from the date on which he or she last vacates office. However, in exceptional circumstances, the Listing Nominating Committee shall have the discretion to nominate a person for re-appointment at any time before the lapse of that 2-year period and the Board shall have the power to appoint such person: see Rules 2A.37H and 2A.37I.

D.  Grounds of Intended Review

24.  In the Form 86, a brief overview of the legal and regulatory context is set out, before the intended grounds for judicial review are identified.

25.  Particular reference is made to the composition of the LRC, and to the various Consultation Conclusions. It is pointed out that: (1) members of the LRC will normally be appointed for a term of approximately 12 months and may only remain in office for a maximum of 6 consecutive years (“Expected Duration of Appointment”), so that re-appointment is contemplated by the Exchange; and (2) the Exchange has been and will continue to encourage more frequent turnover of members to ensure refreshing of ideas and perspective.

26.  I specifically note that though I have adopted the definition “Expected Duration of Appointment” offered by the Company in the Form 86, it seems to me to be a potentially loaded definition. Nevertheless, argument on the appropriate definition is unlikely to assist in the proper analysis.

27.  Reference is then made to the relevant parts of the Listing Rules, as amended in July 2019, concerning the nomination and appointment of LRC members. Under those provisions, the LRC members and chairmen are appointed by the Directors of the Exchange, i.e. the Board, and nominated by its Listing Nominating Committee.

28.  There are two proposed grounds for review, being that:

(1)  Ground 1: The composition of the LRC is unconstitutional, or there is apparent bias.

(2)  Ground 2: There was illegality / a failure to consider relevant factors / Wednesbury unreasonableness or irrationality.

29.  Though the heading to Ground 2 might suggest that it is a challenge to the specific underlying circumstances of this case, it is in fact primarily directed at an alleged failure to address the interest of public shareholders in listed companies who are liable to suffer loss or prejudice if such companies’ listing (including the Company’s listing) is cancelled. As already identified, this is in reality a systemic challenge.

30.  I can deal in turn with each intended ground.

E.  Ground 1: Unconstitutionality / Apparent Bias

31.  In the Form 86, this Ground is said to arise because the composition of the LRC violates Article 10 of the Hong Kong Bill of Rights (“BOR 10”), which is engaged when a party appears before a decision-making body of the Exchange.

32.  Specifically, it is suggested that the LRC is not to be seen as an independent or impartial tribunal. But it is asserted and – in light of the submissions made by Mr Dawes – it is common ground that the requirement of independence and impartiality under BOR 10 is the same as the test against bias at common law. Therefore, I agree with Mr Dawes that the Court need not specifically decide in this case whether BOR 10 is applicable to the LRC’s review process (and whether that process actually involves the Company’s rights and obligations in a suit at law) – a point on which the Exchange says it reserves its position. If the charge of apparent bias at common law is dismissed, the BOR 10 complaint must also fall away.

33.  It is also common ground – and little if any authority is needed for the proposition – that the test for apparent bias is whether a fair-minded and informed observer, having considered the relevant facts, would conclude that there is a reasonable apprehension of bias. The ultimate question is whether a reasonable, objective and informed person would on the correct facts reasonably apprehend that the decision-maker has not brought or will not bring an independent and impartial mind to bear on the adjudication of the case, namely a mind which is open to persuasion by the evidence and the submissions raised by the parties.

34.  The Form 86 argues that the fair-minded and informed observer would conclude that the Expected Duration of Appointment and the appointment mechanism for LRC members give rise to a reasonable apprehension of bias that the members of the LRC might be adversely affected by the hope of re-appointment as LRC member or inclusion in the chairman. The suggestion is that (1) the absence of any security of tenure, (2) the relatively short term of appointment, (3) the lack of any guideline on the Exchange’s discretion in re-appointment, combined with (4) the lack of independence in the Board or the listing nominating subcommittee, result in a real risk that the LRC members might be influenced by their “hopes and fears” as to personal advancement, when making their decisions. The reference to “hopes and fears” comes from previous authority where an apparent relationship of dependency between the decision-maker and the appointing body, and the hopes and fears as to his possible treatment by that body, were said to point strongly away from independence.

35.  The Form 86 also argues that the real risk that LRC members are not seen to be independent and impartial is supported by the factual matrix surrounding the appointment process because:

(1)  LRC members are appointed by the Board and nominated by the Listing Nominating Committee, and control of their appointment is not in the hands of the judiciary or an independent commission.

(2)  As Rule 2A.21 provides that the Listing Nominating Committee shall comprise three non-executive directors of HKEx and the chairman and two executive directors of the SFC, so that HKEx (the parent company of the Exchange) holds an effective veto over decisions of the Listing Nominating Committee, including the nomination of LRC members.

(3)  LRC members may be re-appointed by the Board, and may be appointed to the pool of chairmen. As only some of the LRC members may be re-appointed, and where no criteria for re-appointment are specified, there is a real risk that the Exchange would be perceived to re-appoint members or chairmen who are seen to be able to contribute to “continuity and consistency in decision-making”, and that LRC members, in the hope of re-appointment or advancement, may appear to be influenced by their dependence on the Exchange when performing their functions.

(4)  Re-appointment and advancement provide real incentives for the LRC members to be influenced by and to further HKEx or Exchange’s policy preference, which at present favours an effective delisting framework, in disregard of the interests of minority public shareholders who would be ‘stuck’ in the delisted company (see, also, Ground 2). In particular, membership or chairmanship of the LRC is a highly regarded post in the finance industry with prestigious reputation, resulting in intangible but real benefits to the successful candidates, apart from the remuneration they would receive.

36.  I can refer to these various factors in the two preceding paragraphs as the “Combined Factors”.

37.  The Form 86 acknowledges – as it must – that (1) the mere fact that the members of the tribunal are appointed by the executive or public authority in question does not, by itself, infringe the requirement of independence and impartiality, and (2) a professional body such as the Exchange can adopt self-regulation, and the fact that members of particular committees were also elected members of the then council of the Exchange has been held by the Court of Appeal to full short of any appearance of bias. Both concessions seem to me at least significantly to weaken the “hopes and fears” argument.

38.  However, the Form 86 argues that Ground 1 is not premised simply upon the identity of the appointing authority, because the risk of bias arises out of the combined effect of the wide range of the Combined Factors, resulting in what the Company asserts is a relationship of “dependence” between the LRC members’ prospects of personal advancement on the one hand, and the Exchange’s unfettered discretion on nomination and re-appointment on the other.

39.  Lastly, it is argued in the Form 86 that the fact that LRC decisions are subject to judicial review does not provide any cure to procedural defects. This is said to be because (1) judicial review is curative if and only if the supervisory Court can be considered to have full jurisdiction, but (2) the judicial review court has no, or insufficiently wide jurisdiction, to reach its own conclusion on primary facts, or to hear all way evidence, or to substitute its own views as to credibility, so that (3) the availability of judicial review is not sufficient to cure the breach of BOR 10 and the common law right against apparent bias.

40.  I agree with Mr Dawes’ submission that the Combined Factors, whether taken together or individually or in any combination, do not begin to give rise to any reasonable apprehension of bias.

41.  As Mr Dawes correctly submits, the fundamental premise of the argument – namely, that the Exchange seeks to ensure that listed issuers are delisted (or that review applications are dismissed) and will seek to influence the LRC member appointment process to secure such a result – is utterly baseless. It is perfectly plain that the Exchange’s interest in review proceedings before the LRC is not to achieve any particular result in any particular case, but to ensure that the regulatory framework is properly applied and that each case is decided on its merits. Delisting issuers otherwise than in accordance with the Listing Rules would not contribute to the Exchange’s statutory objective of maintaining an orderly, fair and informed market. It would likely do the opposite. If the LC has made an error in its delisting decision as regards any listed issuer, it is naturally desirable from the Exchange’s perspective for the erroneous decision to be overturned.

42.  Further, the Company’s reference to the Exchange’s aim of ensuring continuity and consistency in decision-making seems to me an attempt to re-run an argument which I comprehensively dismissed in the Cai Zhenrong case at §111, where I held:

I also think [Counsel’s] attempt to use the reference to “consistency” in decision-making is untenable. If the submission was intended to suggest that the encouragement to “consistency” somehow amounted to encouragement to the LRC simply to uphold decisions of the Listing Committee, it is a suggestion without any proper basis. Indeed, as I have indicated, at the review hearing in this case the Company specifically referred to and relied upon a previous decision in which the LRC had overturned the Listing Committee. In any event, as that submission implicitly recognised, the relevant “consistency” to which reference is made in the consultation documents is to a consistent application of similar principles to similar sets of facts. There is not only nothing inherently wrong with such an approach, it is an approach – dare I say it – consistently promoted by courts as a facet of the proper and fair administration of justice. Consistency is a badge of fairness, not unfairness.

43.  Again, a fair-minded and informed observer who has considered all the relevant facts would not conclude that the nomination and appointment mechanism gives rise to any reasonable apprehension of bias.

44.  As has been pointed out above, the persons comprising the Listing Nominating Committee identify that it is not controlled by the Exchange. Further, as is pointed out in the evidence filed for the Exchange – but as is also evident from the decisions made by the LRC – such decisions are made collectively, and the individual contributions of LRC members are neither recorded nor apparent. On that basis, it would be impractical to seek to evaluate the performance of any individual LRC member in any specific case when considering a decision whether to re-appoint that member for another term. I also note from the evidence that no member who has sought re-appointment to the LRC has not been re-appointed, which identifies no differentiation between them.

45.  Further, as I noted in the Cai Zhenrong case at §§108-110, under the LRC review regime, neither the LC nor the LRC consists of any representatives of the SFC or the Exchange. Both committees are comprised of various individuals representing the various interests of investors, representatives of listed issuers and market practitioners such as lawyers, accountants, corporate finance advisers and exchange participants. All of them are appointed because of their experience in the market. Therefore, given the diversity, expertise and professional experience of these individuals, it is highly unlikely that the LC or LRC acting collectively would be biased (or be perceived to be biased) towards one side or the other. It is also of some importance that the current rules were put in place following a public consultation, where the proposals received support from the majority of respondents representing all aspects of market participation. There is also the safeguard in the practice that individual members of the relevant LRC identify themselves (names and positions held) at the start of the hearing, declaring a lack of any conflict, and inviting the parties to confirm whether they have any objection to any individual member or not.

46.  As a matter of fact, as the transcript shows, that happened at the LRC review hearing in this particular case. Indeed, it was Mr Ke himself who expressed the Company’s lack of objection to the presence of any member of the LRC panel conducting the review. Mr Ke certainly raised no suggestion such as the Company now makes that the whole process of review by the LRC is tainted by the illegality or appearance of bias on the part of the members of the LRC. The transcript also identifies that the LRC made its decision by applying the Rules to the facts, having kept their minds open to the evidence presented and submissions made by or for the Company.

47.  I do not think it can be reasonably argued that, as a result of the system of their appointment, the members of the LRC are – or would be reasonably be perceived to be –subordinate to one of the interested parties or biased. (As an aside, I would note that insofar as there is an allegation of apparent bias in any individual case, the remedy afforded through judicial review is curative.)

48.  Ground 1 is not reasonably arguable with any prospect of success, and it follows that leave to apply for judicial review on that Ground is refused.

F.  Ground 2: Illegality / Failure to Consider Relevant Factors / Wednesbury Unreasonableness or Irrationality

49.  In the Form 86, the Company asserts that the Exchange has committed an error of law in giving effect to (1) the 18-month prescribed remedial period, (2) the ‘Consultation Conclusions: Delisting and Other Rule Amendments’ published on 25 May 2018 (“DORA Consultation Conclusions”), and (3) the Guidance Letter HKEX-GL95-18 on the subject of ‘Guidance on long suspension and delisting’ issued in May 2019 and updated in September 2019, October 2019 and June 2022 (“Guidance Letter”).

50.  In passing, I note that the Form 86 defines the 18-month prescribed remedial period as the “Fixed Delisting Period”, which definition I shall avoid as being perhaps somewhat tendentious. If that definition were somehow to be taken as suggesting that at the end of the prescribed remedial period the suspended issuer would be delisted, come what may, that would be an error. Whilst the 18-month period may be considered to be ‘fixed’ as a period within which the suspended issuer is supposed to – and incentivized to – act promptly towards resumption, what happens during or at the end of that period will vary from one case to the next.

51.  The Company refers to the statutory duty (“Section 21(2) Duty”) found in section 21(2) of the Securities and Futures Ordinance Cap 571 (“SFO”), which mandates that the Exchange should: (a) act in the interest of the public, having particular regard to the interest of the investing public; and (b) ensure that the interest of the public prevails where it conflicts with the interest of the Exchange.

52.  The Company then argues that the Section 21(2) Duty, the objectives of the SFO as well as Rule 13.24 of the Listing Rules or mandate the Exchange to give sufficient regard to public shareholders’ interest in having access to the market to trade their shares. The argument continues that, in giving effect to the prescribed remedial period, the DORA Consultation Conclusions and the Guidance Letter:

(1)  The LRC has failed to ask the right question or apply the right test, in that the LRC has failed to address the interest of the public shareholders who are liable to suffer loss or prejudice if the Company’s listing is cancelled despite (a) the steps taken by the Company to facilitate resumption and/or (b) the Company’s prospects of restructuring and having a viable and sustainable business.

(2)  The LRC breached its Section 21(2) Duty, in that giving effect to an effective delisting framework, the LRC preferred the interests of the Exchange, the quality of the market that it operates and the exchange’s reputation over the interest of the investing public. Because HKEx is a for-profit company, and because of the effective control by HKEx over the nomination process of LRC members, that creates a conflict of interest. The public shareholders are effectively forced to be ‘stuck’ in a delisted company, which is an undesirable practice.

(3)  The LRC acted contrary to the statutory objective of the SFO in protecting the investing public.

(4)  The Decision to cancel the Company’s listing status was irrational, as no sensible person who had applied his mind to the question to be decided could have arrived at it, as this was not an extreme case warranting cancellation.

53.  There is nothing in this argument. In addition to the fact that some of the argument is premised upon matters which I have already rejected above, I would identify the following.

54.  In so far as the argument amounts to a criticism that there has been failure to take into account the interests of public shareholders, that is in substance identical to the challenge which I considered and rejected in the Cai Zhenrong case at §121. I pointed out that the weighing and balancing exercise based on factors such as potential harm to investors has been taken into account in the process of amendment to the Listing Rules, following industry-wide consultation. Part of the consideration necessarily takes into account the position of investors in any particular company, as well as investors in the wider market. In any event, the effect of delisting is so obvious to everyone involved in the process (including that of review) that it is unlikely something that would need to be expressly mentioned.

55.  In so far as the argument amounts to a criticism of the sufficiency of weight given to any particular factor, it is of course trite that matters of weight are for the decision-maker (subject only to challenge on the ground of irrationality, a high hurdle to surmount). I agree with the submission made by Mr Dawes that, having regard to the consultations and considerations which led to the amendment of the Listing Rules – which I summarised in, amongst other decisions, the Cai Zhenrong case at §§ 23-42 – it was plainly open to the Exchange to take the view that long-suspended issuers should be delisted in accordance with the procedure set out in the Guidance Letter.

56.  In so far as the argument amounts to a suggestion that there has been systemic breach of the Section 21(2) Duty, the suggestion is ill-informed. If the Company is suggesting that listed companies should never be delisted if that would cause harm to minority shareholders, I see no basis for such a suggestion. Indeed, the suggestion is contrary to the statutory provision found in section 21 of the SFO itself. The Section 21(2) Duty forms part of and exists to complement the overall duty under section 21(1) to ensure an orderly, informed and fair market. Even the relevant duty under section 21(2)(a) is to act in the interest of the public and investing public as a whole, not the interests of any particular minority shareholders of any particular listed company.

57.  Therefore, I accept Mr Dawes’ submission that it was open to the Exchange to take the view that the delisting of long-suspended issuers in accordance with the amended delisting regime is overall beneficial to the public and the investing public as a whole, which may balance and outweigh the harm resulting to the minority shareholders of any specific delisted company.

58.  It is also useful to keep in mind – as has been pointed out in numerous previous decisions, including the Cai Zhenrong case at §§42 and 127 – that the objective of the current regime under the Listing Rules is not to facilitate resumption of trading. Instead, the Listing Rules as amended are intended to provide an effective delisting framework to enable the Exchange to meet its primary statutory obligation to maintain a fair, orderly and informed market for the trading of securities, by delisting issuers that no longer meet the continuing listing criteria, and by doing so in a timely manner, incentivising suspended issuers to act promptly towards resumption and deterring other issuers from committing material Rule breaches.

59.  In this particular case, the Company was seeking an extension of time to the prescribed remedial period, and it was not entitled to an extension of time merely because it might think itself able to demonstrate the likely fulfilment of the resumption guidance at some point in time after the deadline, with some harm to minority shareholders if the Company were instead to be delisted before that fulfilment might be achieved. I see nothing illegal, unreasonable or irrational in the Decision of the LRC in this case.

60.  Ground 2 is not reasonably arguable with any prospect of success, and it follows that leave to apply for judicial review on that Ground is refused.

G.  Result

61.  The Company’s application for leave to apply for judicial review is dismissed. It is dismissed both on the basis that (1) the Company is not properly present or represented to be able to pursue its own application and (2) the application is without merit.

62.  In the exercise of my discretion as to costs, I see no reason why costs should not follow the event.

63.  The Exchange has asked for a costs order including a certificate for two Counsel. That seems to me to be appropriate where the Form 86 was settled by leading and junior Counsel, and it was unclear until the start of the hearing this morning whether the Company might have instructed new solicitors and/or Counsel to represent it.

64.  In the circumstances, I order the Company to pay the costs of the Exchange, to be taxed if not agreed, with certificate for two Counsel.