TANG CHUNG WAH ALAN v. CHEN YUNG NGAI KENNETH

HCMP 113/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2476 OF 2013

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1.  These were applications by Alan Tang and Shinewing SAS respectively (“the applicants”) for leave to appeal costs orders made on 14 March 2014.  At the conclusion of the hearing the applications were dismissed with costs. My reasons appear below.

2.  On 14 March 2014 I handed down my written decision on costs.  The background and the applications in respect of which costs had to be dealt with appear in my Decision and will not be repeated here.

THE ORDERS

3.  In HCMP 113/2013 (“the removal application”) it was ordered that 100% of the costs be paid by Mr Tang on any indemnity basis.  In HCCW 279/2010, it was ordered that 100% of the costs be paid by Mr Tang on a party and party basis.

4.  It is to be noted that in HCMP 113/2013 the only difference between costs Mr Tang was willing to pay (ie 100% of the costs on a party and party basis) and the court order (on any indemnity basis) was the basis of costs.  It would now appear from his draft notice of appeal that he wishes to resile from his position and is intending to seek an order that there be no order as to costs in the removal application.

5.  As regards HCCW 279/2010 (“the production application”), the only difference was as to the proportion of costs to be borne by him, with the court ordering 100% and Mr Tang’s offer of 50%.  Again, he seeks to resile from that position if leave were granted and is also intending to seek an order that there be no order as to costs in the production application as well.

THE APPLICABLE PRINCIPLES

6.  It is trite law that courts are reluctant to allow appeals on costs only.  The CJR has not relaxed the high hurdle that an applicant faces in making such applications.  It has to be shown that the judge had failed to exercise the court’s discretion or exercised upon a false principle, or did not exercise it judicially or the exercise of discretion was demonstrably flawed: see Hi‑Tech Precision Products Ltd v Soundwell Far East Ltd, unreported, CACV 294/2003, 25 May 2005, §8.

7.  For these applications, the applicants are represented by an entirely new legal team.  

8.  The written submissions of Mr Cheung, counsel for Mr Tang, are replete with “sound bites” abstracted from the transcript of the hearing on 27 August 2013.  I was surprised to see the transcript in the hearing bundle as I had not acceded to any application for a transcript of the hearing. Apparently, leave was obtained from a master during a period when I was not sitting.

9.  Where the court has given a written decision on the issue which is the subject of the application for leave to appeal, the transcript becomes entirely irrelevant.  That should be borne in mind when considering applications for a transcript.

10.  Mr Cheung (who did not appear in any of the earlier proceedings) put forward several grounds as to why leave should be granted. I propose to deal with them in turn.

A. The court failed to consider Mr Tang’s offer to settle for $7.5 million which should have been taken into account for both orders

11.  It was said that a reference to this offer can be found at §55 of Mr Tang’s first affirmation.  However it is clear from that paragraph that the offer was made only to “Camp A shareholders” who are only part of the shareholders, there being also Camp B shareholders.

B. The costs issue should have been dealt with as a single incident

12.  I understood this to mean that only one comprehensive costs order should have been made.  But there were two separate applications the costs of which were outstanding.

13.  In so far as it is suggested that the costs order for each of the applications should have been the same, I confess to having some difficulty in following the logic since there were two separate and different applications before the court.  While they were intertwined in some respects, they involved different parties.

C. The court should have considered whether or not Mr Chen should bear some of the costs

14.  This was premised on the fact that Mr Chen as the liquidator was responsible for issuing the fee notes.  Essentially the complaint was that SWSAS was not being paid because Mr Chen through his falling out with Mr Tang was dilatory in pursuing fees.

15.  This overlooks the fact that it was open to Mr Tang to make an interim fee application at any time.  But he did not do so until several months after the August hearing.  I see no merit in this argument.

D. The court erred in not considering the common fund basis as an alternative

16.  The special circumstances justifying the indemnity basis appears in §27 of the Decision.

17.  The so‑called grounds are misconceived and wholly devoid of merit. The applications should not have been made.