BEST & BEST INTERNATIONAL INVESTMENT LTD. v. RICHARD TAI & CO., SOLICITORS (A FIRM)

CACV 143/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. CACV 143 OF 2001

(ON APPEAL FROM HCMP NO. 5268 OF 2000)

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D E C I S I O N

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Hon. Rogers VP:

1. This is an application in respect of the costs of the appeal which this Court decided on 18 September. As matters have turned out, affidavits have been filed and it is not possible for this Court to take the matter further in respect of the matters raised on those affidavits, although those matters may well become relevant when the case goes to the Court below.

2. Mr Chow, on behalf of the 1st respondent, the firm of solicitors, asked that their costs be paid out of the fund which is now in Court, on an indemnity basis. No objection has been made to the fact that it should be paid out of the fund, although brief objection was made that it should be on an indemnity basis. It should be stated, however, that the grounds upon which it was said that those costs should not be on an indemnity basis were eventually withdrawn.

3. As regards Mr Chan Tak's costs, again, he is entitled to his costs, such costs as he can obtain on taxation. Those too should be paid out of the sum of money which has been paid into Court.

4. I would only add this, that this may not be the end of the orders as to costs in this matter. As indicated in the judgment which we gave on 18 September, at the root of the dispute between the appellant and the 2nd respondent is the validity of the resolution which appointed Mr Lam Wai Hong, or purported to make Mr Lam Wai Hong a shareholder and backdate that shareholding and to appoint him a director.

5. If Mr Lam Wai Hong never was a shareholder, as this Court considered must have been the case because one cannot backdate a shareholding, the validity of his appointment as a director may be in doubt. If that were so, any action which Mr Lam Wai Hong has taken as a director would be invalid, and any resolution of the directors based upon Mr Lam Wai Hong's acting as a director would also be invalid.

6. This, in turn, may impinge upon the validity of the appointment of the solicitors who have acted on behalf of the company. If that be so, the appointment of those solicitors to act on behalf of the company in this action and in the appeal would be invalid and the costs could then be ordered to be paid by the solicitors personally.

7. In those circumstances, as I say, this might not be the end of the matter if, at the end of the day, Mr Lam Wai Hong's appointment as a director fails.

Hon. Le Pichon JA:

8. I agree.