QIANHAI XINHUAKANG FINANCIAL HOLDINGS (SHENZHEN) LTD v. CHEN JIARONG AND OTHERS

HCA 377/2018

[2019] HKCFI 363

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 377 OF 2018

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RULING ON COSTS

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1.  By my Judgment handed down on 11 December 2018, I dismissed the application by the 2^nd and 7^th defendants to strike out the Amended Writ and the Amended Statement of Claim on the grounds that they disclosed no reasonable cause of action and that they were frivolous or vexatious or otherwise an abuse of the process of the court.

2.  By my Judgment, I also made an order nisi that the costs of and incidental to the strike-out application be paid by the 2^nd and 7^th defendants,to be taxed if not agreed, with a certificate for two counsel.

3.  By its Summons issued on 21 December 2018, the plaintiff applied to have the said costs order nisi varied to the effect that the costs be paid by the 2^nd and 7^th defendants to the plaintiff forthwith and be summarily assessed with a certificate for two counsel.

4.  This application is opposed by the 2^nd and 7^th defendants.

5.  The parties have also agreed to have the application disposed of on paper.

6.  I have read and considered the said Submissions by the respective parties carefully.

7.  I have come to the conclusion that I should not vary the said costs order nisi.

8.  As the action will proceed to trial with the 2^nd and 7^th defendants remaining as parties to it, I take the view that I should not say much more about the merits of the case.

9.  I therefore give a brief summary of the reasons for my decision as follows:

(i)  It is trite that any decision on the question of costs is in the discretion of the court.

(ii)  It is also trite that not all interlocutory applications which are dismissed should result in an order for costs to be paid by the applicants forthwith or be assessed summarily.

(iii)  I do not take the view that the strike-out application is severable and self-contained from the rest of the action.  I think that there are many inter-related issues.

(iv)  I only decided to dismiss the strike-out application on the ground that it was not a plain and obvious case.

(v)  I did not decide that the strike-out application was plainly unmeritorious.

(vi)  On the question of cash-flow of the respective parties, I take the view on the evidence that neither side would be worried about cash-flow in the sum of about $1,000,000.  It is therefore not a significant factor in the context of this case.

(vii)  On the question of whether the expense of a separate taxation is justified, the plaintiff has asked for costs in the sum of just under $1,000,000 and the 2^nd and 7^th defendants have countered that with a figure of about half of that.  I take the view that the taxing master will be in a better position to arrive at a fair assessment than myself.  Furthermore, all the costs will have to be dealt with by the taxation process at the end of the case. The costs in question will only form a small part of that process. 

(viii)  On the question of enforcement by the plaintiff of any costs order against the 2^nd and 7^th defendants in light of the fact that the latter parties are both domiciled outside Hong Kong, in fact,on the Mainland, the plaintiff will always face such a problem, if it is a problem.  Furthermore, with the present arrangements for the reciprocal enforcement of civil judgments between the Mainland and the HKSAR, I do not feel that it will be an insurmountable problem.

Conclusion

10.  For the above reasons, I dismiss the plaintiff’s application to vary the said costs order nisi and the same is hereby made absolute.

11.  I make an order nisi that the plaintiff should pay the costs of and incidental to its present application, to be taxed if not agreed.