W. M. CONSTRUCTION LTD. AND OTHERS v. CHAN YIU TUNG AND OTHERS

HCMP 266/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 266 OF 2014

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DECISION ON COSTS

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Introduction

1.  This action has substantially (if not wholly) been disposed of by the decision handed down on 29 August 2014 (“the Aug 2014 decision”).  The parties’ earlier cross-applications for an interlocutory injunction have been disposed of by way of their cross-undertakings (para 2, the Aug 2014 decision).  The abbreviated terms used in the Aug 2014 decision will be used herein for convenience and consistency.

2.  The Aug 2014 decision gave directions for the parties (except the 3^rd defendant) to address the court regarding costs; written submissions were subsequently lodged with court by the parties for such purpose.

3.  In brief, the plaintiffs argue in their written submissions that they are the successful parties, and thus seek costs against the defendants to be taxed if not agreed on indemnity basis.  Meanwhile, the defendants take the opposite view, and consider themselves to be successful in this action.  Accordingly, they seek costs against the plaintiffs, with certificate for two counsel.

This action and the interlocutory injunction applications

4.  As has been briefly mentioned in the Aug 2014 decision (para 9 thereof), the parties were opposing camps of the Association, each alleging the other side to have wrongfully intruded into the Association’s management and affairs.

5.  More precisely, in this action, commenced in January 2014, the following annual general meetings were challenged:

(a)     the one held on 6 June 2013 (where Chan became the Association’s president) (“the Jun 2013 AGM”);

(b)     the one held on 16 January 2014 (where someone from the plaintiffs’ camp was elected as its president (despite the president election on 6 June 2013)) (“the Jan 2014 AGM”).

Both parties sought in this action to have the “unfavourable” election results (and the related annual general meetings) declared invalid.

6.  The interlocutory applications (para 1 above, and para 2, the Aug 2014 decision) were related to the relief sought in this action: pending the determination of this action, they sought to enjoin the other “camp” from acting upon, or holding itself out as, the elected office holders, or from managing the Association; those applications ended with both “camps” undertaking to the court not to do so.

7.  Further, they agreed to convene an annual general meeting for 2012/2013 to resolve the above (and perhaps also any other) “internal” dispute by members’ vote.  Dispute remained as regards who can vote at the scheduled meeting; hence the Aug 2014 decision (that is, who can vote as the Association’s full members, as a matter of construction of the Association’s M/A and A/A).

This application for costs

8.  Taking a global view, in the light of the outcomes summarized at para 1, 6 and 7 above, it cannot be said either party have prevailed over the other.  For this reason, insofar as the said outcomes are concerned, I disagree with both parties when they respectively contend they have been the successful party.

9.  As regards the outcome brought about by the Aug 2014 decision, there is again dispute as regards who has been successful.

10.  The plaintiffs argue that they have been successful because:

(1) the Aug 2014 decision has pronounced the defendants had no locus standi in the Association, and thus ought not have opposed this action and so on;

(2) the plaintiffs have also been successful regarding the other relief sought herein: the Jun 2013 AGM was conceded to be invalid, and it was further conceded another annual general meeting should be held.

The plaintiffs have however ignored their own “concessions” to the like effect (in relation to the Jan 2014 AGM).

11.  The defendants argue that they have been successful because:

(a) the plaintiffs have “abandoned” the relief they sought as to the validity of the Jun 2013 AGM;

(b) they have also “abandoned” their stance that the Jan 2014 AGM was validly held.

12.  As is apparent from the contents of the Aug 2014 decision, it was concerned with the outstanding dispute summarized at para 7 above.

13.  In relation to that issue, the plaintiffs fairly (and correctly) accept that the defendants have been partly successful: para 18 to 19, plaintiffs’ reply submissions on costs.  While the defendants do not appear to dispute that, they assert that the plaintiffs have “shifted the goalpost” and raised an “opportunistic” issue concerning the defendants’ locus standi.

14.  I do not consider the defendants’ categorization of the issues to be apt.  But irrespective of whether some points took up slightly more time than the others, or whether some were “substantial” and others were “opportunistic” (whatever that categorization is supposed to entail), the fact remains both parties were engaged “on all fronts”.  Perhaps the issue relating to the defendants’ locus standi took up slightly less time than the other aspects of construction, but, as the plaintiffs correctly submit, that issue is no less important than any of the others (at least so far as the defendants are concerned).

Conclusion

15.  By reason of the above matters, I conclude that neither party has prevailed over the other.

16.  It is therefore appropriate to order that each party is to pay its own costs (including any outstanding reserved costs).

Other matters

17.  The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the decision on costs and its comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.