CHEN HONGQING v. ASIA CEMENT CORPORATION

CACV 408/2023, [2024] HKCA 463

On Appeal From [2023] HKCFI 2769

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 408 OF 2023

(ON APPEAL FROM HCA NO 1304 OF 2017)

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DECISION ON COSTS

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Hon G Lam JA (giving the Decision on Costs of the Court):

1.  The plaintiff commenced the action below by writ of summons in 2017 with a statement of claim served in 2018. His claim related to certain shares in China Shanshui Investment Co Ltd (“CSI”) held by six minority shareholders in CSI. The plaintiff claimed that those six shareholders had entered into a share pledge and guarantee agreement (“SPGA”) with him giving him a security interest over their shares in CSI, but that subsequently in breach of the SPGA they purported to sell their CSI shares to the defendant. He claimed reliefs to vindicate his interests in the CSI shares in question under the SPGA.

2.  On the defendant’s application, by his Decision dated 10 November 2023 K Yeung J ordered the writ and statement of claim to be struck out: [2023] HKCFI 2769.  The main reason was that the judge found the plaintiff to have put forward mutually contradictory cases in a way that constituted abusive conduct in litigation.  Costs of the action and the application were awarded in favour of the defendant, with a certificate for two counsel.  By a subsequent decision dated 7 February 2024, the judge acceded to the defendant’s application for variation of the costs order and ordered the costs awarded to be taxed on the indemnity basis.

3.  The plaintiff commenced an appeal against the judge’s order striking out the writ and statement of claim by notice of appeal dated 8 December 2023, seeking an order that the defendant’s strike-out summons be dismissed or that the plaintiff be at liberty to serve an amended statement of claim.  The plaintiff did not challenge the judge’s finding that he had engaged in abusive litigation conduct, but contended that he could advance a case based only on the written agreements without relying on his previous testimony on which the finding of abuse was based.

4.  The appeal was fixed to be heard on 30 April 2024.  On 12 March 2024, the plaintiff filed a request for dismissal of his appeal with costs.  As the defendant asked for costs to be awarded on an indemnity basis with a certificate for two counsel, we dismissed the appeal, reserving the question of costs to be dealt with by written submissions.

5.  We consider that the costs should be taxed on the usual party and party basis.  The fact that the plaintiff had been found to have engaged in abusive litigation conduct below is a relevant factor but it does not necessarily follow that the costs of an abandoned appeal should be paid on the indemnity basis.  Given the history of the matter, the case advanced by the plaintiff on appeal is inevitably inconsistent with some of the cases he had run before.  The ground of appeal was a narrow one and, in our view, not such as was obviously abusive in character.  The fact that the plaintiff abandoned the appeal does not take the defendant’s argument further.

6.  In relation to certificate for two counsel, it has been submitted on behalf of the plaintiff that a certificate is both unnecessary and inappropriate, perhaps without realising the inconsistency between them. It has been said in a number of cases including the pre-CJR cases cited by the plaintiff of PCCW-HKT Telephone Ltd v Telecommunications Authority (CACV 274/2003, 7 September 2004) at §10 and S v L (CACV 205/2007, 12 October 2007) §24, and the post-CJR cases of UDL Holdings Limited v Leung Yuet Keung (CACV 356/2008, 14 September 2009) and Dr Chan Hei Ling Helen v The Medical Council of Hong Kong (CACV 403/2006, 21 July 2009)that a certificate for two counsel is unnecessary in relation to proceedings in the Court of Appeal. This is said on the basis that parties coming to this court are generally entitled to have leading counsel should they so choose, and that a certificate is therefore unnecessary.  The plaintiff’s argument that the appeal was abandoned in good time before the substantive hearing may be relevant to the question of how much work done should be allowed on taxation, but not to the question of the certificate.  For the avoidance of doubt, we give a certificate for two counsel.

7.  There will be no order as to costs of the argument on costs.