PETER CHEUNG & CO., SOLICITORS (a firm) v. PERFECT DIRECT LTD

HCMP 2493/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2493 OF 2012

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DECISION ON COSTS

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Introduction

1.  In a decision handed down on 3 October 2016, the appeal against the master’s order was dismissed with costs.  This decision on costs deals with the parties’ disagreement regarding the basis of taxation. Unless otherwise expressly stated below, the same abbreviations used in the October 2016 decision will be used below.

Mr Yu’s case

2.  Mr Yu is the party which has been awarded costs, being the successful party of the said appeal.  The main thrust of Mr Yu’s argument is essentially that it is trite that, where a party fails to set aside or resist enforcement of an arbitral award, indemnity costs will normally be ordered:

(a)  Hong Kong Civil Procedure 2017, Vol 1, para 73/10/6;

(b)  Gao Haiyan & another v Keeneye Holdings Ltd & another CACV 79/2011 (12 January 2012), para 3 to 4;

(c)  Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 2) [2012] 4 HKLRD 569, para 15.

Perfect Direct’s case

3.  On the other hand, Perfect Direct, being the paying party, contends in gist that it has not acted improperly.

4.  Perfect Direct has however not addressed Mr Yu’s above main argument, despite that Mr Yu’s written submissions were served much earlier in early October 2016 while Perfect Direct’s written submissions were served after mid October 2016.

5.  Perfect Direct has not contended that the authorities referred to in para 2 above are wrongly decided or somehow irrelevant.  Nor has it contended that there were factors in this appeal which would justify a departure from the normal practice mentioned in those authorities.

Other matters

6.  The parties also disagree regarding whether Perfect Direct has been guilty of improper or abusive conduct.

7.  First, Mr Yu argues that Perfect Direct’s conduct in relation to the arbitral award has been abusive:

(1)  despite the Mainland arbitral award (November 2013), Perfect Direct did not seek to have it set aside in time (RHC Ord 73, r 10(6)), or to do so pursuant to s 84(3), Arbitration Ordinance (Cap 609);

(2)  instead, Perfect Direct commenced an action (HCMP 2493/2012) which was unsuccessful;

(3)  in defiance of the master’s order of 15 March 2016 (against which an appeal was lodged unsuccessfully), Perfect Direct failed to release the transfer documents for the shares of Bright Int’l.

8.  Secondly, Mr Yu argues that Perfect Direct’s case put forth earlier was unmeritorious and hopeless:

(a)  as has been found in the master’s decision and the October 2016 decision, the allegations put forth have all been raised before (except for “duress”), and rejected by the Mainland arbitral tribunal;

(b)  the duress allegation was in effect an “afterthought” (the October 2016 decision, para 20(c));

(c)  none of the said allegations amounted to the grounds set out in s 95, Cap 609 (on which Perfect Direct claimed to place reliance).

9.  Thirdly, Perfect Direct’s purported stance is that the whole matter should be adjourned until after the determination of its claim against Mr Yu (HCA 115/2013).  But as the master has found (and confirmed by the outcome of this appeal), the purported adjournment application is a disguised attempt to delay the arbitral award (by re-litigating issues which were the same as, or similar to, those already considered by the arbitral tribunal) (master’s decision, para 24; October 2016 decision, para 20).

10.  Relying on:

(1)  the Gao Haiyan decision, para 3, 7 and 11;

(2)  Chimbusco International Petroleum (Singapore) Pte Ltd and Fully Best Trading Ltd [2016] 1 HKLRD 582, para 15,

Mr Yu argues that unsuccessful proceedings arising out of, or in connection with, arbitral proceedings would still attract indemnity costs.

11.  In a relatively concise written submission, Perfect Direct makes no real effort to justify the matters set out in para 7 to 9 above, save to deny that it has acted improperly or abusively.  Most of the main arguments put forth are in substance arguments already raised in the appeal, and which found no favour in the October 2016 decision.

12.  I therefore agree with Mr Yu and disagree with Perfect Direct regarding these matters.

13.  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.

Conclusion

14.  The costs earlier awarded in Mr Yu’s favour should be taxable on indemnity basis.

Costs

15.  The costs incurred for this aspect of these proceedings, and which brought about the decision on costs, should be treated as part of the costs awarded to Mr Yu.