RIGHT STAR INVESTMENT CO LTD v. GRAND PALACE LTD

cacv 356/2007

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 356 of 2007

(on appeal from HCCW NO. 908 of 2005)

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J U D G M E N T

Hon Rogers VP:

1.  This is an application by Dr Huang to vary a costs order nisi which was made by this court when giving judgment on 12 June in this matter.  I say it is an application by Dr Huang because the application, properly made, was made by the company, and not by Dr Huang.  What Dr Huang says is that a letter was then written by the same solicitors who acted for the company to the court some time after the summons was issued, saying that the summons had actually been issued by him.

2.  That is not a proper way of dealing with an application.  If an application is to be made to this court, it should be made properly and by a summons.  It should not be made by a letter to the Registrar.

3.  But be that as it may, we have heard the application and it has taken a great deal longer than it was said in the summons it would take, unnecessarily so, in my view.

4.  The point at issue is this: that when the appeal was heard, this court was told that the appeal had been funded by Dr Huang.  It was an appeal in respect of a winding-up order that had been made.  Mr Kwok, who has appeared today, did not appear on that occasion.  We are told that the instructions to the previous Counsel were wrong.  I am not sure how far that takes it, because the evidence which has now come in has come in from a lady and it is far from satisfactory.  It is not all-encompassing by any manner of means and it raises more questions than it answers.

5.  But the short answer to it is Dr Huang, for reasons which Mr Kwok has enunciated - in other words, that he might not be believed - has failed to file any evidence at all and that is simply not an answer.  If Dr Huang wants to say that he did not fund the appeal, it was up to him to prove it and to say so himself and that he has failed to do.

6.  The point which is made on behalf of Dr Huang is that it is said that there is no jurisdiction, because section 52A(2) of the High Court Ordinance Cap. 4 prevents a costs order being made against a person who is not a party.  But in my view, Dr Huang made himself a party de facto on this appeal.

7.  It is challenged by the Respondents to the appeal as to whether there was any board authorisation authorising this appeal.  Given the fact that the company was wound up, I doubt that that could have happened, but quite clearly, and even on Mr Kwok’s own submissions today, it was Dr Huang who was giving instructions on this appeal and, by that, he has taken over the conduct of the appeal and he has, de facto, made himself a party to these proceedings.  In that respect I would refer to what Mrs Justice Le Pichon said in Re Datacom [2001] HKLRD 526.  In very similar circumstances in that case, as Mrs Justice Le Pichon pointed out, a person who takes over the conduct of an appeal in winding-up proceedings clearly makes himself a party.  This concept is extremely important in winding-up proceedings because it is very important when a company has been wound up that the assets are not depleted by frivolous appeals, as this one was.  It is for that reason that when security for costs are ordered, the court makes it very clear that the funds have to be arranged to be provided and not to be provided by the company itself.

8.  In this case, that is what happened.  There was an application for security for costs and on that application it was made very clear that the company should arrange for security to be given, not that it should give it itself.

9.  In those circumstances, in my view, there are no grounds for altering the order nisi that was made that Dr Huang should bear the costs of this appeal.  He instigated it.  He clearly instructed the solicitors.  He was behind the appeal.  He caused the appeal.  He made himself a party to this appeal and whether or not some of the moneys came from Madam Liu matters not.  The evidence which she provided was wholly insufficient to prove that ultimately he did not provide the money.

Hon Le Pichon JA:

10.  I agree with the judgment of the Vice-President and have nothing to add.

Hon Cheung JA:

11.  As it turns out, the real issue in this application is not so much about the jurisdictional issue raised by section 52A(2) of the High Court Ordinance, but whether Dr Huang is a party.  I agree entirely with what the Vice-President has said.