CHOW STEEL INDUSTRIES PUBLIC CO LTD AND OTHERS v. KO SUNG AND OTHERS

HCMP 2711/2017

[2021] HKCFI 1147

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2711 OF 2017

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DECISION

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1.  By my Decision handed down on 26 March 2020 (the “26/3 Decision[1]”), I allowed the Continuation Summons and ordered that the Injunction be continued in the varied sum of THB439,377,853 (equivalent to HK$109,882,608). At the same time, I dismissed the Discharge Summons.

2.  In respect of costs, I made a costs order nisi (the “Costs Order Nisi”) that the costs of and occasioned by the Continuation Summons and the Discharge Summons be to Ps, to be taxed if not agreed.  I ordered further that any application for variation or summary assessment should be made by submissions to be filed within 14 days thereof.

3.  By submission of 6 April 2020, Messrs Fangda Partners (“FP” and “FP#1”) on behalf of Ps seeks:

“ an order for the costs of and occasioned by the Continuation Summons and the Discharge Summons (including any reserved costs) to the Plaintiffs forthwith, to be taxed if not agreed, with certificate for two counsel.”[2] (FP’s original emphasis)

4.  On behalf of D2, ONC Lawyers (“ONC”) by submissions of 9 April 2020 (“ONC#1”) seeks a different set of variations, to the effect that the costs of and occasioned by the Continuation Summons and the Discharge Summons be either costs in the cause or Ps’ costs in the cause.  

5.  For reasons set out in my Decision handed down on 17 July 2020, I varied the Costs Order Nisi and made an order as per Ps’ application in FP#1.  I refused D2’s application to vary.  I call them the “Costs Decision[3]”.

6.  By Summons on 31 July 2020, D2 seeks leave to appeal against the Costs Decision.

7.  I have subsequently given directions that the application be dealt with on the papers.

8.  ONC on 7 September 2020 filed their written submissions in support (“ONC#3”).  FP on 21 September 2020 filed their submissions in opposition (“FP#3”).  ONC on 30 September 2020 filed their submissions in reply (“ONC#4”).

9.  In ONC#4, ONC refers to the verdict handed down by the Thai Court in the Thai Action on 8 September 2020 (the “Verdict”).  By letter of 8 October 2020, FP objected to ONC doing that.

10.  Then by Summons of 21 October 2020 (the “Additional Evidence Summons”), D2 seeks leave to adduce for the purpose of these proceedings and any appellate proceedings therefrom copies of the following as additional evidence:

 (a)  the Verdict of the Thai Court;

 (b)  the court report of the Thai Court dated 8 October 2020 (the “Thai Court Report”);

 (c)  the English translation of the Verdict and the Thai Court Report; and

 (d)  the relevant Certificate of Notarial Services Attorney.

11.  The Additional Evidence Summons came before me on 24 November 2020.  The time allocated for the hearing (15 mins) was not sufficient.  Written submissions also had not been prepared.  I directed that written submissions be filed, and that the application be dealt with on the papers.

12.  On 1 December 2020, ONC filed their written submissions (“ONC#5”). FP filed their submissions in opposition on 14 December 2020 (“FP#4”). ONC filed their submissions in reply on 28 December 2020 (“ONC#6”).

The Additional Evidence Summons

13.  I consider the Additional Evidence Summons first.

14.  ONC has made clear that the Additional Evidence Summons is made pursuant to the Court’s inherent jurisdiction to admit additional evidence in relation to proceedings commenced under section 21M of the High Court Ordinance.

15.  Despite submissions to the contrary by FP, I am of the view that this Court has the jurisdiction to do so, and should exercise its jurisdiction in favour of the application given the relevance of the Verdict to those proceedings — see Ly Eco Limited v Thomas Karim Bellechili [2020] HKCFI 2538, per Lisa Wong J at §6.  After all, the Thai Action is the foreign proceedings which the present action is commenced in aid of.

16.  I allow the Additional Evidence Summons.  I order that D2 shall have costs of the Additional Evidence Summons, to be summarily assessed.  D2 is to file statement of costs within 14 days, Ps to file objections within 7, and D2 to file reply within 3.

Leave to appeal

17.  The threshold test for leave to appeal for interlocutory appeals pursuant to section 14AA of the High Court Ordinance is “a reasonable prospect of success”.

18.  The Draft Notice of Appeal (the “Draft NOA”) contains 13 paragraphs. As ONC put it, those 13 paragraphs fall into two broad grounds:

 (a)  The “First Ground”, that this Court has erred as a matter of principle in holding that for an application under section 21M of the High Court Ordinance, the application for an interim relief is itself the cause, and the Thai Action should not be taken as the cause to which the costs concerned should be linked (§§1‑5 of the Draft NOA); and

 (b)  The “Second Ground”, that this Court has erred in exercising its discretion in refusing to order that costs be in the cause (or be Ps’ costs in the cause) (§§6‑13 of the Draft NOA).

19.  In respect of the First Ground:

 (a)  I do not find it to be reasonably arguable;

 (b)  At §16 of the Costs Decision, I made reference to the wording of section 21M. The relief that may be sought under section 21M is statutorily stipulated as “interim relief”.  It was on that basis that I formed the view that “for an application under s 21M, the application for an interim relief is itself the ‘cause’.  There is no other substantive underlying ‘proceedings’ or ‘cause’ ”;

 (c)  §§3 and 4 of the Draft NOA are not reasonably arguable.  The discretion on costs has not been fettered.  I have at §§19 to 23 of the Costs Decision proceeded to consider whether the costs in question should be ordered to be in the cause of the substantive application for the “interim relief”.  On the facts, I formed the view that it should not;

 (d)  §5 of the Draft NOA is not reasonably arguable.  I repeat §§13 to 18 of the Costs Decision.  I reiterate in particular §§15 and 17.  In Minmetals, there were no discussions as to the appropriateness of treating the foreign proceedings as the “cause”.

20.  In respect of the Second Ground:

 (a)  I decided on the facts of the case and on this Court’s application of the Compania Test that it was neither fair nor appropriate to order that the costs of the Continuation Summons and the Discharge Summons be costs in “that ‘cause’ ” (ie the substantive application for interim relief by the Originating Summons under section 21M);

 (b)  The proposed paragraphs in the Draft NOA that I erred in the exercise of my discretion are in my view not reasonably arguable;

 (c)  in respect of §6 of the Draft NOA, King Fung Vacuum is for the reasons I have set out in the Costs Decision distinguishable;

 (d)  In respect of §7 of the Draft NOA, in so far as it relates to the First Ground, I repeat my views above on the First Ground;

 (e)  In respect of §8 of the Draft NOA:

 (i)  I explained at §21 that I applied the Compania Test;

 (ii)  The Compania Test, as explained by the Court of Final Appeal, is the test to be applied in section 21M proceedings;

 (iii)  It was on that basis that I observed that there was force in FP#2 that I have effectively granted the relief sought by Ps by the Originating Summons;

 (iv)  §8 is not reasonably arguable;

 (f)  §9 of the Draft NOA merely seeks to recite the reasons I gave;

 (g)  §10 is not reasonably arguable.  I was not commenting on Ps’ conduct of the proceedings.  I was at §21(e) making observations on the effect of linking the costs of the Continuation Summons and the Discharge Summons to that “cause” (ie the Originating Summons);

 (h)  §11 is not reasonably arguable.  ONC have had full opportunities to deal with FP#2 (and see §21(d) of the Costs Decision);

 (i)  §§12 and 13 are not reasonably arguable.  This court has not fettered any discretion it has, but has considered all the relevant circumstances in deciding how the discretion should be exercised.

21.  I therefore refuse D2’s application for leave to appeal.

22.  As leave is refused, D2’s further application for stay pending appeal is not engaged[4].

23.  I order that Ps shall have costs of D2’s application for leave to appeal against the Costs Decision.  Ps are to file statement of costs within 14 days, D2 to file objections within 7, and Ps to file reply within 3.