LEE MAN BIU AND OTHERS v. HUNG WAN HOI GILBERTAND OTHERS

HCCW 281/2014

[2019] HKCFI 400

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 281 OF 2014

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AND

HCCW 372/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING UP) PROCEEDINGS NO 372 OF 2014

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(Consolidated pursuant to the order of the Honourable Mr Justice Harris dated 2 March 2015)

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D E C I S I O N

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1.  At paragraph 149 of my judgment handed down on 16 July 2018 [2018] HKCFI 1658, I made a costs order nisi that the Petitioners do pay the Respondents the costs of both sets of proceedings. The 2^nd and 3^rd Petitioners have since applied by summons dated 13 August 2018 to vary the order nisi to an order that the 1^st Petitioner pay the costs.

2.  The application was late but the delay was relatively short and one which I am prepared to excuse having regard to the special circumstance that the 2^nd and 3^rd Petitioners were both in Dalian during the month of July 2018 preparing for the 3^rd Petitioner’s wedding and were not aware of the costs order nisi against them until their return to Hong Kong in August 2018.  The order as drawn up was one for an order nisi, and Mr Chan who appears for the Respondents has not taken any point in his skeleton on the timing.

3.  The 2^nd and 3^rd Petitioners have explained that they did not take an active part in the litigation, essentially entrusting it to the 1^st Petitioner who was their husband and father respectively.  They say they signed documents relating to these proceedings at the 1^st Petitioner’s request without raising any objection.  In itself this is not a ground for excusing them from liability to pay costs.  Each of the two applicants was represented by the same solicitors as the 1^st Petitioner.  Each had signed statements of truth to their pleadings.

4.  There is, in my view, however a valid ground for the application on orthodox principles.  As Mr Chan has pointed out, the general starting point is that costs should follow the event: RHC Order 62 rule 3(2).  The outcome of the trial of the two petitions is that the Petitioners’ petition against the Respondents failed, and that the Respondents’ petition was successful but only as against the 1^st Petitioner.  As stated in paragraph 143 of my judgment, this Court expressly declined to make a buy‑out order against the 2^nd and 3^rd Petitioners on the basis that the Respondents have not sufficiently established their involvement in and responsibility for the acts complained of (and I note there is no appeal against that decision).  It seems to me that the event of the two sets of proceedings together is essentially a draw as between the Respondents and the 2^nd and 3^rd Petitioners.

5.  The costs order nisi at paragraph 149 therefore, as it seems to me now, does not accurately reflect the result of the litigation, and was made in that way, I confess, simply because it did not occur to me to be important to distinguish between the Petitioners, who are a family, as regards the question of costs.  Now that the 2^nd and 3^rd Petitioners have taken the point, which is indeed supported by the 1^st Petitioner, there is in my view no reason why costs should not broadly follow the event so that there should be no order as to costs between the Respondents and the 2^nd and 3^rd Petitioners.

6.  Mr Chan says that even on the Respondents’ petition, the 2^nd and 3^rd Petitioners have effectively failed on certain issues, but there were no issues which were specifically and exclusively raised by the 2^nd and 3^rd Petitioners, let alone any that added significantly to the length or complexity of the proceedings.  All the issues were being fought out between the Respondents and the 1^st Petitioner who undoubtedly was the principal actor on the Petitioners’ side.  Mr Chan also argues that it was justified and reasonable for the Respondents to seek a buy‑out order against the 2^nd and 3^rd Petitioners as well.  I need not find any unreasonable conduct on the part of the Respondents in having proceeded against the 2^nd and 3^rd Petitioners.  It suffices to say that in the circumstances I consider that Mr Chan has not demonstrated anything that warrants a departure from the general rule.

7.  The application is therefore granted, and the costs order nisi is to be substituted with an order that (i) the 1^st Petitioner do pay the Respondents the costs of both sets of proceedings; and (ii) there be no order as to costs as between the 2^nd and 3^rd Petitioners and the Respondents.

[Discussion on costs]

8.  There will be no order as to costs on the 2^nd and 3^rd Petitioners’ summons.