HONG JING CO LTD v. ZHUHAI KWOK YUEN INVESTMENT CO LTD

HCA 156/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 156 OF 2006

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R U L I N G

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1.  On 28 April 2006, I dismissed an application by Zhuhai Kwok Yuen to set aside an ex parte order obtained by Hong Jing granting leave to serve the writ out of the jurisdiction.  I made an order nisi that Zhuhai Kwok Yuen must pay Hong Jing’s costs on the application.

2.  The parties now come before me seeking to vary the costs order.  It is agreed that the order should be varied to provide for a certificate for two counsel.  Zhuhai Kwok Yuen seeks the addition of the words “in any event” to the requirement to pay costs.  Hong Jing says that those words should not be added, and that if there is to be any variation in the order, the costs should be payable forthwith.

3.  It is well settled that where an order for costs in interlocutory proceedings is silent as to the time of payment, the consequence is that the court is presumed to have intended that there be immediate recovery of costs: see Aktieselskabet Dansk Skibfinansiering v Wheelock Marden & Co Ltd & Ors [1994] 1 HKC 607.  Costs are usually paid and taxed after the conclusion of the trial.  In interlocutory applications that conventional practice is reflected by the use of the words “in any event” in the costs order: see Asia-Pacific Infrastructure Development Ltd v Ing Yim Leung Alexander & Ors Unreported, HCA 16778/199, Halsbury’s Practice Area Edition Civil Procedure Part II para 90.1188.1.

4.  Zhuhai Kwok Yuen were perfectly entitled to challenge the ex parte order.  They did so on proper grounds and it cannot be said in any way that the proceedings have been conducted either in bad faith or dishonestly.  It is right that at the end of the day Zhuhai Kwok Yuen had virtually no reply to the argument that the ex parte order ought to be allowed to stay, but that is not to say that there was simply no argument.

5.  Mr Chang SC says that there may never be a trial, and that consequently, unless the order for costs is an order payable forthwith, Hong Jing may never get their costs.  I think that is highly unlikely.  The amount at stake is HK$171.99 million and that sum is held by solicitors in Hong Kong.  In the absence of a trial or consent orders Zhuhai Kwok Yuen will not be able to recover that sum.  The prospect that it would simply abandon such a very substantial sum is simply beyond belief.  Mr Chang says too that Zhuhai Kwok Yuen is an overseas company with no assets in Hong Kong.  That is right, but the high likelihood of this action proceeding to a conclusion is such as to outweigh that factor.

6.  In the whole of the circumstances, upon reflection, I have come to the conclusion that the usual procedure, namely that the costs should be taxed and paid only after the case has been finally determined, should follow. 

7.  The order nisi is varied in the following terms: Zhuhai Kwok Yuen must pay Hong Jing’s costs in any event, to be taxed on a party and party basis, with a certificate for two counsel, on the application to set aside the grant of leave to serve the writ out of the jurisdiction.