DIAMOND TREASURE LTD v. MAN KAM LEUNG AND ANOTHER

DCCJ 4419/2014

[2025] HKDC1252

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4419 OF 2014

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DECISION

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Introduction

1.  In paragraph 43 of my decision dated 17 February 2025, I made a costs order nisi that the plaintiff shall pay the 1^st respondent the costs of this application with certificate for counsel, to be taxed if not agreed (“the costs order nisi”).

2.  By the plaintiff’s letter dated 28 February 2025, the plaintiff applied for variation to either of the following:

(1)  there be no order as to costs as between the plaintiff and the 1^st respondent in respect of the application;

(2)  alternatively, the plaintiff shall pay the 1^st respondent 50% of the costs of the application with certificate for counsel, to be taxed if not agreed.

Ground 1

3.  Mr Tommy Cheung, counsel for the plaintiff, submitted that the plaintiff’s application for a non-party costs order against the 1^st respondent was prima facie justified and the plaintiff has successfully joined the 1^st respondent as a party for the purpose of costs.

4.  On the other hand, Mr Cheung submitted, that the 1^st respondent’s technical arguments were clearly unmeritorious and were rejected by this court.  Such objection caused the plaintiff (and this Court)  time and resources to tackle the same.  The plaintiff was the successful party at the 1^st stage of the non-party costs order application.

5.  Mr Cheung described that the plaintiff was the successful party under one main issue.  Thus, it is justified to make no order as to costs of the application.

6.  Mr Cheung sought reliance on Wing Hong Construction Ltd (In Liq)  v Hui Chi Yung [2022] 2 HKLRD 123 and Ng Yuk Pui Kelly v Dung Wai Man [2019] HKCFI 1157.

7.  In Wing Hong (supra), the learned Recorder joined the non-party at the 1^st stage but dismissed non-party costs summons.  In the overall exercise of his discretion, he made no order as to costs of the application.

8.  Likewise in Ng Yuk Pui Kelly (supra), the learned Judge allowed the joinder but declined to order non-party costs. In relation to the costs of the application, the learned Judge was of the view that there should be no order as to costs for the joinder and the enquiry.

9.  With respect, I do not agree that by persuading the court to allow the joinder, the plaintiff as the applicant was successful in “one main issue” and thus no order as to costs is justified.

10.  The appropriate costs order to be made is essentially at the discretion of the court.  In exercising the discretion, the court has to consider all the circumstances of the case.

11.  The plaintiff as the applicant must pass the 1^st stage in order to get its application off the ground.  However, this does not mean that the plaintiff would thereby be protected against costs.

12.  Having said that, however, I do not overlook the fact that the 1^st respondent had resisted the 1^st stage but unsuccessfully. In all fairness, he should not be awarded costs arising therefrom.

Ground 2

13.  Secondly, Mr Cheung submitted that the 1^st respondent had brought suspicion on himself so that the plaintiff should not be penalized by an adverse costs order.

14.  In essence, Mr Cheung is saying that the 1^st respondent had control of the 2^nd defendant and funds of the 2^nd defendant were transferred to the 1^st respondent.

15.  Given that the 1^st respondent was the sole shareholder and director of the 2^nd defendant, the interaction between them in terms of fund transfers cannot be seen as suspicious.  This particularly so when the question under consideration is whether the plaintiff should not be ordered to bear the costs of an unsuccessful application against the 1^st respondent.

16.  I do not find favour in Ground 2.

Ground 3

17.  Lastly, Mr Cheung submitted that the relative conduct of the plaintiff and the 1^st respondent in the present and related proceedings does not support awarding costs in favour of the 1^st respondent.

18.  By this ground, Mr Cheung criticized the 1^st respondent that he did not substantively oppose the plaintiff’s application for the interim continuation of the Mareva injunction in the return day hearing on 21 June 2024 and only sought leave to respond by filing evidence on that day.  Such evidence was only filed after multiple rounds of time extension on 14 October 2024.

19.  On the other hand, the plaintiff was under time pressure to take steps to safeguard its rights and has diligently conducted investigation into the suspicious conduct of the 1^st respondent.

20.  Mr Cheung submitted that the relative conduct of the plaintiff and the 1^st respondent should be taken into account when considering the costs order absolute.

21.  With respect, the submission of Mr Cheung is urging this Court to consider irrelevant matters.

22.  The plaintiff is indeed entitled to take action to preserve the fruit of the judgment.  However, there is no reason to criticize the 1^st respondent for “not substantively oppose” the continuation of the injunction but sought to file evidence on the return day and which were eventually filed after a few time extensions.

23.  In any event, I do not accept that such conduct of the 1^st respondent in a separate proceedings is relevant to the present application.

24.  Ground 3 is therefore rejected.

Conclusion and Order

25.  For the foregoing reasons, I am satisfied that the costs order nisi should be varied to the extent that the plaintiff shall pay the 1^st respondent 50% of the costs of the application with certificate for counsel, to be taxed if not agreed.  Accordingly, the costs order nisi is made absolute as varied.

Costs

26.  In respect of the costs of the present application, I made a costs order nisi that there be no order as to costs of this application.

27.  In the absence of any application for variation by letter within 14 days from the date of this decision, the costs order nisi of this application shall become absolute.