CANTON PLUS ENTERPRISE LTD AND ANOTHER v. TONG ZHENJUN AND OTHERS

HCA 227/2017
HCA 1026/2020 &
HCA 2132/2020

[2022] HKCFI 2256

HCA 227/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 227 OF 2017

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(By Original Action)

(By Counterclaim)

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AND

HCA 1026/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1026 OF 2020

AND

HCA 2132/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2132 OF 2020

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DECISION ON COSTS

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1.  On 1 February 2021, upon the defendants’ applications by summonses dated 25 and 26 January 2021 (“Security Discharge Applications”)  and upon the performance by Mr Lau Wing Yan[1] and/or the corporate entities owned and/or controlled by him of all acts necessary to furnish the plaintiffs with a package of security of a combined value of USD32,829,327.35(“Security Package”), I discharged the injunctions, and stayed the disclosure obligations, granted to the plaintiffs upon their ex parte applications on 5 January 2021 (“5.1.2021 Orders”). For further detail, see [2021] HKCFI 273.

2.  To complete the procedural background, this matter came before me again on 13 April 2021 because the parties could not agree on which firm of solicitors should be appointed to investigate the title to a landed property included in the Security Package.

3.  I reserved the costs of the Security Discharge Summonses to myself pending the provision of the Security Package.

4.  On 26 April 2021, Mr Justice Anthony Chan refused to continue, and discharged, the 5.1.2021 Orders after an inter partes hearing.  His lordship also forthwith released the defendants from providing the Security Package.

5.  In light of such rulings, by a letter dated 27 April 2021 to the parties, at the risk of stating the obvious, I pointed out that certain outstanding issues regarding the provision of the Security Package have become academic and would not be dealt with anymore.

6.  I further ordered, on a nisi basis, the plaintiffs to pay the defendants the costs of and occasioned by the Security Discharge Applications, to be taxed if not agreed with certificate for 2 counsel for the hearings on 29 January, 1 February and 13 April 2021 (“costs orders nisi”).

7.  The defendants now seek indemnity taxation and payment forthwith of their costs (“Variation Applications”).

8.  The plaintiffs do not (and cannot)  dispute that they should bear the defendants’ costs of the Security Discharge Applications.

9.  The Security Discharge Applications were just a response to the 5.1.2021 Orders.  They had no independent existence from the 5.1.2021 Orders.  They were compelled by the plaintiffs’ ex parte applications for, and obtainment of, the 5.1.2021 Orders.  They were made to mitigate the prejudicial effects such orders had on the defendants’ businesses.  The defendants made them expressly without prejudice to their then pending applications for discharge on the grounds of misrepresentation and material non-disclosure by the plaintiffs at the ex parte hearing.  The hearing before this court on 29 January 2021 was confined to the question whether the package of security offered to be put up by the defendants would adequately protect the plaintiffs assuming that the 5.1.2021 Orders were rightly granted.  Hence, the parties made submissions on, and I allowed, the Security Discharge Applications without any reference to the merits of the 5.1.2021 Orders.  It was understood on all sides that the discharge/stay of the 5.1.2021 Orders against the Security Package was just a practical stopgap measure balancing both sides’ interests pending the determination of their respective summonses for continuation/ discharge of the 5.1.2021 Orders. 

10.  That being the case, the costs of the Security Discharge Applications should not be treated differently from the costs of the defendants’ applications for discharge of the 5.1.2021 Orders premised upon the plaintiffs’ misrepresentation and material non-disclosure.

11.  Hence, on further reflection with the benefit of the parties’ written submissions, I agree with the defendants that the costs order nisi should be varied to give them indemnity costs, which shall be paid once such costs is taxed.

12.  For the above reasons, I hereby vary the costs order nisi as follows: “the plaintiffs shall pay the defendants the costs of and occasioned by the Security Discharge Applications, to be taxed on an indemnity basis, if not agreed, with certificate for 2 counsel for the hearings on 29 January, 1 February and 13 April 2021 and to be paid forthwith upon taxation of such costs”.

13.  I also order the plaintiffs to pay the defendants the costs of and occasioned by the Variation Applications, to be taxed on an indemnity basis, if not agreed, with certificate for one junior counsel and to be paid forthwith upon taxation of such costs.  I take the view that the Variation Applications could be ably and adequately dealt by one junior counsel on each side.