COMPANIA SUD AMERICANA DE VAPORES S.A. v. HIN PRO INTERNATIONAL LOGISTICS LTD

HCMP 664/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 664 OF 2016

(ON AN INTENDED APPEAL FROM DCCJ NO 3986 of 2014)

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REASONS FOR DECISION
AND DECISION ON COSTS

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Hon Lam VP (giving the Reasons for Decision and Decision on Costs of the Court):

1.  We are not satisfied that the intended appeal has any reasonable prospect of success.  Nor are we satisfied that there is any other reason in the interest of justice for leave to appeal to be granted.  We therefore dismissed the summons of 21 March 2016.  The following are our brief reasons.

2.  We agree with the submission of Mr Hui that the correct test for determining whether there is any equitable set off is the one adopted by Judge Leung at the court below, viz whether the cross claim should flow from the dealings and transactions which gave rise to the subject matter of the claim so that it would be manifestly unjust to allow one to be enforced without regard to the other (see paragraph 40 of the judgment below).  This is not disputed by Mr Chu.

3.  Applying this test, the judge explained in the judgment below why the cross claims relied upon by the Defendant (the mainland judgments and costs orders obtained in the Hong Kong proceedings) could not sustain a defence of set off in respect of the Plaintiff’s case based on the costs order made by the English High Court.

4.  We do not find any reasonably arguable basis to disturb the judge’s conclusion.  With respect, Mr Chu’s submissions that because these disputes arose out of “a continuous case circling around the world” and the English costs order is part and parcel to the reflective judgment which “should not be construed independently” are unarguable.

5.  The English costs order stemmed from the dismissal of the application for adjournment by the Defendant in the English proceedings and it is to compensate the Plaintiff in respect of costs incurred in opposition to the application for adjournment.  There is no arguable basis to suggest that it is part of the reflective judgment.

6.  Though in a very general sense, the English costs order could be described as stemming from proceedings concerning the disputes on the bill of ladings in question, we do not accept that such a nexus is arguably sufficient to render its enforcement manifestly unjust if no account is taken of the cross claims.  The mainland judgments had been reversed on appeal.  The costs orders in the Hong Kong proceedings have yet to be taxed.  More importantly, as the judge quite rightly noted at paragraph 42 of the judgment below, the nature of the costs orders, the reasons for the costs orders and the status of the costs orders in Hong Kong differ from the English costs order.

7.  As said in the course of oral hearing, there is nothing inherently unjust (not to mention manifest injustice for the purpose of equitable set off) in allowing the Plaintiff to recover the costs under the English costs order in advance of the Defendant’s enforcement of the Hong Kong costs order.

8.  The judge had duly considered the judgments in HCMP 1449 of 2014 and CACV 243 of 2014.  We do not think the judge had misunderstood those judgments.  There is nothing in those judgments which is inconsistent with the judge’s decision.

9.  For these reasons, the summons of the Defendant was dismissed with costs.  Having considered counsel’s submissions on costs and the up-dated costs statement of the Plaintiff, we fix the costs of the Plaintiff at $85,000.