GOLDEN SCENE CO LTD v. CITY ENTERTAINMENT CORPORATION LTD

HCA 2804/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2804 OF 2002

______________________

J U D G M E N T

______________________

1. This is an appeal by the plaintiff from the orders of Master Raymond Ho made on 28 February 2003.

2. On the plaintiff's application for summary judgment the master ordered that judgment be entered for the plaintiff for the sums of :

(a) HK$1,898,777.75;

(b) HK$1,440; and

(c) HK$21,300.00.

He also ordered that interest be paid on the said sums as set out in the order until full payment. However, the master also ordered that the said judgment be stayed until trial of the counterclaim in this action. The plaintiff appeals against the order for a stay.

3. On the plaintiff's application by summons dated 30 December 2002 for an order that the amended defence and counterclaim be struck out, the master dismissed the plaintiff's summons. The plaintiff also appeals against this order.

4. On the defendant's application by summons dated 7 January 2003 for leave to re-amend the amended defence and counterclaim in the terms of the draft annexed to the summons, the master made an order that the defendant do have leave to re-amend the amended defence and counterclaim in the terms of the draft annexed to the summons. The plaintiff also appeals against this order.

5. There has been no appeal by the defendant against the order giving judgment to the plaintiff. The defendant, therefore, accepts that judgment was correctly entered for the plaintiff by the master. The question to consider on the appeal is whether or not it was right for the master to order a stay of the judgment until trial of the counterclaim. It is also necessary to consider whether or not the master's other orders were correct.

6. Pursuant to the master's order, the defendant filed and served the re-amended defence and counterclaim dated 3 March 2003 ("the RADC"). The defendant's pleaded case is as set out in the RADC which is the defendant's latest pleading. I have to consider whether the RADC or any part thereof should be struck out.

7. The background facts are that the defendant is and was at all material times part of the Golden Harvest Group of Companies under the control of Golden Harvest Entertainment (Holdings) Limited, a company incorporated in Bermuda. It is a listed company in Hong Kong. Golden Harvest Entertainment Co. Ltd. ("Golden Harvest") and Panasia Films Limited ("Panasia") all formed part of the Golden Harvest Group. Golden Harvest's business includes the distribution and production of motion pictures in Hong Kong, and other parts of Asia. Its distribution business is carried out through a number of wholly-owned subsidiaries, one of which is Panasia. The defendant is a subsidiary of the Golden Harvest Group and owns and operates a movie cinema in Hong Kong and programmes motion pictures for screening in its cinema.

8. At all material times, Ms Winnie Tsang Lai Fun ("Ms Tsang") was employed by Golden Harvest under an employment agreement dated 30 June 1995. As stated in the employment agreement, the title of her post was general manager of Panasia. She was employed from 1 July 1995 until 30 September 1998.

9. It is pleaded in the RADC that Ms Tsang owed duties to Golden Harvest, Panasia and other companies of the Golden Harvest Group including the defendant. This included a fiduciary duty not to compete and not to make a secret profit from her position.

10. It is also pleaded that following the conclusion of the employment agreement she entered into a consultancy agreement with Golden Harvest dated 28 September 1998 ("consultancy agreement"), whereby she, through the plaintiff, acted as a consultant to Golden Harvest from 1 October 1998 to 30 September 1999 in connection with the distribution and marketing of its films.

11. The complaint of the defendant is that Ms Tsang, through the plaintiff, obtained a distribution agreement with Kadokawa Shoten Publishing Co., Ltd. ("Kadokawa"), a Japanese company carrying on the production, publication and distribution of motion picture worldwide. Kadokawa was, at all material times, the owner of three movies "Ring", "Rasen" (later called "Spiral") and "Sleepless Town" ("the movies"). Prior to the termination of her employment with Golden Harvest, Kadokawa was looking to find a distributor for the movies in Hong Kong. By a letter dated 24 June 1998 Kadokawa offered Golden Harvest and/or Panasia a licence for the movies. Kadokawa also proposed that Golden Harvest and/or Panasia become its agent in the Asian region for all countries except Hong Kong, Taiwan and Korea ("the agency offer").

12. At para. 17 of the RADC it is pleaded that Ms Tsang represented Golden Harvest and/or Panasia in negotiations with Kadokawa. Prior to the termination of her employment on 30 September 1998, the material terms of a distributorship agreement with respect to the movies were agreed in principle between Kadokawa and Golden Harvest and/or Panasia. On or about 24 September 1998, Kadokawa sent a draft distribution agreement to Golden Harvest for signing on behalf of Golden Harvest and/or Panasia. It is alleged that Ms Tsang neglected to execute the distribution agreement, to accept the agency offer or to respond to Kadokawa on behalf of Golden Harvest and/or Panasia.

13. On 2 November 1998, under fax cover sheet of Panasia Ms Tsang faxed Kadokawa claiming that Golden Harvest and/or Panasia were not interested in acquiring the distribution rights in the movies, but that a company that she controlled namely, the plaintiff was willing to acquire the distribution rights on the same terms as those offered by Kadokawa to Golden Harvest and/or Panasia. Kadokawa responded to Ms Tsang stating that it would like to conclude the distribution agreement with the plaintiff but that it wanted to receive a statement by fax to the effect that Golden Harvest decided not to distribute the movies and would have no objection if Kadokawa sold the movies to any other company in Hong Kong. It is also alleged that on the previous day, 1st November 1998, Ms Tsang faxed the agent for one of the actors appearing in "Sleepless Town" stating that the plaintiff was the distributor of the film in Hong Kong.

14. By a letter dated 5 November 1998 signed by Mr. Peter Tam, director of Golden Harvest, Golden Harvest confirmed to Kadokawa that it had decided not to distribute the movies and that it had no objection if Kadokawa sold the movies to any other company in Hong Kong. On 12 November 1998 a distribution agreement was signed between Kadokawa and the plaintiff. It is also alleged that by December 1998 the plaintiff had agreed to become Kadokawa's agent in Asia on similar terms to those offered by Kadokawa to Golden Harvest and/or Panasia in the agency offer ("the agency agreement").

15. The defendant also alleges that at the time of the plaintiff entering into the distribution agreement with Kadokawa, Kadokawa was either finishing or producing the sequel to "Ring" called "Ring 2". As pleaded, it was a custom in the motion picture distribution industry that a distributor having the exclusive rights to the movie should be given the right of first refusal to a sequel upon the same terms save as to the provision of the payment of the minimum guarantee. It is alleged that Ms Tsang wrongfully represented to Kadokawa that Golden Harvest, Panasia and the Golden Harvest Group had made a policy decision in September 1998, that Golden Harvest and Panasia should not acquire distribution rights in movies generally or in the movies in particular. It is further alleged that Ms Tsang was aware that neither Golden Harvest, Panasia nor Golden Harvest Group had made such a policy decision.

16. The defendant's case is that in breach of her employment agreement and the consultancy agreement Ms Tsang :

(a) deliberately neglected on behalf of Golden Harvest and/or Panasia to properly sign, progress or bring into binding effect the distribution agreement sent by Kadokawa to Golden Harvest;

(b) deliberately neglected on behalf of Golden Harvest and/or Panasia to properly sign, progress or bring into binding effect the agency offer;

(c) informed Kadokawa that Golden Harvest and/or Panasia were no longer interested in acquiring the distribution rights in the movies or any movies generally;

(d) introduced Kadokawa to the plaintiff as a distributor of the movies, in place of Golden Harvest and/or Panasia;

(e) introduced Kadokawa to the plaintiff as its agent in the Asian region in place of Golden Harvest and/or Panasia and diverted Golden Harvest and/or Panasia's business opportunities to the plaintiff.

17. The defendant further alleges that the plaintiff wrongfully and unlawfully induced and procured Ms Tsang to commit the breaches of her duties under the employment agreement and the consultancy agreement. It is pleaded that the plaintiff's wrongful and unlawful inducement of the breaches of contract was carried out for the purpose and intention of interfering with and injuring and did so interfere with and injure the trade and business of the defendant. As a result, Golden Harvest and/or Panasia lost the benefit of the distribution agreement, including the right of first refusal of the distribution rights to "Ring 2" and the agency agreement. By reason of the plaintiff's unlawful interference with the trade and business of the defendant, it is alleged that the defendant has lost the profits it would have made had it received the movies including "Ring 2" from Golden Harvest and/or Panasia for screening in its cinema, has lost the benefit of its distributors (Golden Harvest and/or Panasia) having an agency agreement with Kadokawa and has been greatly injured in its trade and business. Damages are counterclaimed by the defendant.

18. There is also a counterclaim for declarations and compensation as follows :

“ (1) a declaration that the Defendant (jointly with other companies in the Golden Harvest Group) is at law and equity entitled to the Plaintiff's business;

(2) alternatively a declaration that the Defendant (jointly with other companies in the Golden Harvest Group) is entitled to a charge over that business and the assets comprised in it, and an account of the sums to be secured by such charge;

(3) alternatively compensation for breach of fiduciary duty. "

19. The averments in support of the declarations sought are to be found at paras. 37A, 37B and 37C of the RADC. These are as follows :

"37A	Furthermore, in the premises pleaded at paragraphs 14 to 32 above, Ms Tsang, acting through her vehicle the Plaintiff, wrongfully and in breach of the fiduciary duties pleaded at paragraph 11(c) above, appropraited corporate opportunities belonging to Golden Harvest, Panasia and the Defendant (amongst other companies in the Golden Harvest Group), including the opportunities :
	(a)	to distribute the Movies;
	(b)	to accept the Agency Offer;
	(c)	to be given first refusal on sequels to the Movies on favourable terms (as pleaded in paragraph 27 above); and
	(d)	(in the case of the Defendant and others) to screen the Movies and their sequels at its cinema.
37B	The corporate opportunities thereby appropriated by the Plaintiff were the foundation of the Plaintiff's business (Ms Tsang having been employed on a full-time basis by Panasia until 30 September 1998; immediately before the wrongful appropriation). Consequently, the Plaintiff's business represents and/or is the ascertainable proceeds of the Plaintiff's appropriation of the corporate opportunities belonging to the Defendant and to other companies in the Golden Harvest Group. Accordingly, the Defendant (jointly with other companies in the Golden Harvest Group) is at law and in equity entitled to the Plaintiff's business, alternatively to a charge over that business and the assets comprised in it.
37C	If, but for the matters pleaded in this Defence, the Plaintiff would be entitled to claim against the Defendant in respect of the matters pleaded in its Statement of Claim (as to which no admission is made) that claim would be a book debt or book debts of the Plaintiff's business. By reason of the matters pleaded at paragraph 37B above, that book debt would be the property of the Defendant. In the premises paragraphs 6, 7, the third sentence of paragraph 8, the fourth sentence of paragraph 9, paragraphs 10 and 11 of the Statement of Claim are denied. "

20. At para. 11 of the RADC it is alleged that Ms Tsang owed certain duties not only to Golden Harvest and Panasia but also to the other companies of the Golden Harvest Group including the defendant. One such alleged duty was a fiduciary duty not to compete and not to make a secret profit from her position.

21. Mr. Hingorani, for the defendant, in his closing submissions informed me that he was no longer pursuing the allegation that Ms Tsang owed duties to other companies in the Golden Harvest Group including the defendant. That, in my view, was a fair and proper concession to make. Ms Tsang was employed by Golden Harvest and her job title was general manager of Panasia. At most, it could be said that she owed duties to those two companies. It is inconceivable, in my view, that she owed any duties to other companies in the Golden Harvest Group, including the defendant. There is no basis for alleging that she owed duties, including fiduciary duties, to the defendant. The assertion is obviously unsustainable. As this is no longer maintained, it is only right and proper that those parts of the defendant's pleading which are founded on the basis of such assertion be struck out.

22. The parts of RADC which ought to be struck out are as follows :

(a) at para. 4, the words "as more specifically pleaded in paragraph 37C below" in the fourth line;

(b) at para. 11, the words "and the other companies of the Golden Harvest Group including the Defendant" in the second and third lines;

(c) at para. 37A, the words "and the Defendant (amongst other companies in the Golden Harvest Group)" in the fourth and fifth lines;

(d) at para. 37A, the whole of sub-para. (d);

(e) the whole of paras. 37B and 37C;

(f) paras (1), (2) and (3) of the prayer for relief in the counterclaim.

Mr. Hingorani did not dispute that the above matters in the RADC ought to be struck out. I make an order that the parts of the RADC as set out above be struck out.

23. What is left in the counterclaim is the claim for unliquidated damages for tortuous interference with trade and business. It is clear that an intention to injure a defendant has to be shown in an action for interference by unlawful means (para. 24-88 Clerk & Lindsell on Torts (18th Edn.).

24. It is alleged that the plaintiff was owned and controlled by Ms Tsang. It has been specifically pleaded at para. 35 of the RADC that the plaintiff's wrongful and unlawful inducement of the breaches of contract was carried out with the purpose and intention of interfering with and injuring, and did so interfere with and injure, the trade and business of the defendant.

25. It was submitted by Mr. Jat S.C., for the plaintiff, that even if Ms Tsang was the directing will or mind of the plaintiff, it could hardly be said that she had been "induced and procured" by the plaintiff to breach her contractual obligations with Golden Harvest and Panasia. He submitted that there was nothing to suggest that she undertook any "persuasion or inducement" qua directing will of the plaintiff which caused herself, qua herself, to break her contract.

26. Mr. Hingorani, however, submitted that the plaintiff knew about the contracts that Ms Tsang had with Golden Harvest and/or Panasia and that the plaintiff had dealings with Ms Tsang knowing that those dealings would be inconsistent with the contracts. As the design was common to both the plaintiff and Ms Tsang, therefore, an actionable interference was committed. At para. 24-49 of Clerk & Lindsell it is stated that :

“ It is established that, where a third person with knowledge of a contract "has dealings with the contract breaker which the third party knows to be inconsistent with the contract, he has committed an actionable interference. "

27. I see the force of Mr. Jat's submissions. However, I am unable to say that the defendant's allegations are incontestably bad or obviously unsustainable.

28. The plaintiff's case is that Ms Tsang ceased her employment with Golden Harvest on 30 September 1998 and became a consultant as from 1 November 1998. She also ceased to be a director of Golden Harvest on 30 September 1998. It is the plaintiff's case that it was Golden Harvest which decided not to take up the distributorship of the movies and the agency agreement with Kadokawa because of its internal financial problems. Ms Tsang was given permission to take up the distributorship of the movies after Golden Harvest had decided against taking it up. The plaintiff's case is that at a meeting with Mr. Raymond Chow and Mr. Peter Tam in the latter part of September 1998 Ms Tsang was informed that Panasia was running at a loss. For that reason the post of the general manager would be cut. Ms Tsang would be dismissed as an employee but would act as a consultant to provide services for the marketing of films already purchased. It was also decided that Panasia would suspend the purchase of new films.

29. Mr. Tam confirmed in his evidence that the decision was made by Mr. Raymond Chow, the Chairman of Golden Harvest to suspend further acquisitions of foreign films, including those that were under negotiation, but in respect of which distribution agreement had not yet been signed. He confirmed that Ms Tsang was informed of this at a meeting in the latter part of September 1998 when Mr. Chow confirmed to Ms Tsang the reorganisation in Panasia and her new role and that she was instructed not to sign any more agreements for the acquisition of foreign films for distribution, including the distribution agreement for the movies. The letter from Mr. Peter Tam dated 5 November 1998 faxed to Kadokawa also tends to support the plaintiff's case.

30. Mr. Tam also produced a memorandum which he had sent to Mr. Jeff Courtney dated 18 March 1999. Mr. Courtney was the chief financial officer of the group after Village Road Show joined the group in around December 1998. He had inquired about the arrangement of Ms Tsang. By the memorandum dated 18 March 1999, Mr. Tam informed Mr. Courtney of the decision made in September 1998 that no purchase of new films would be made by Panasia and that in effect Ms Tsang was able to perform other work for non Golden Harvest entities.

31. The documentary evidence tends to support the plaintiff's case that Golden Harvest had decided against taking up the distributorship of the movies with Kadokawa. Mr. Raymond Chow, however, denies that there was a decision to suspend the acquisition of films and he denies the allegations of the plaintiff as to what transpired at the meeting in the latter part of September 1998. These are disputed issues of fact. It cannot be resolved on affidavit evidence alone.

32. Although the plaintiff's documentary evidence tends to weaken the defendant's counterclaim, it seems to me that this is a matter which ought to be left to be determined at trial. It seems to me that the counterclaim ought not to be struck out although it appears to me to be weak.

33. Mr. Jat also criticized the late attempt by the defendant to estimate the amount of damages that the defendant would suffer and complained that the same was an exaggeration of the damages that the defendant would suffer. It is pertinent to note that the complaints made in the counterclaim have already formed the basis of a separate action in HCA 3077 of 2002. This was an action commenced on 12 August 2002 by Golden Harvest, Panasia and Golden Harvest Entertainment (Holdings) Ltd. against Ms Tsang and the plaintiff herein as defendants. An attempt was made by a summon dated 20 September 2002 in those proceedings for leave to amend the writ by adding the defendant herein, Conneway Films Co. Ltd., Real Merry Ltd. and Rich Will Ltd. as plaintiffs in HCA 3077 of 2002. That application was not pursued with. It was only in the further affirmation evidence of Ms Belinda Tang made on 3 April 2003 that estimates of the loss suffered by the Golden Harvest Group and the defendant herein were given. It was Mr. Jat's submission that this was an exaggeration in an attempt to bring a counterclaim for an amount in excess of the plaintiff's claims. Ms Tsang states at para. 3 of her affirmation as follows :

“ The main loss suffered by the Defendant arises from the fact that, thanks to the Plaintiff's act, the Plaintiff, and not one of the Defendant's own sister companies, decided upon the Picture Release Pattern ("PRP") of the Movies in Hong Kong. The PRP is the strategy for releasing a film in cinemas. Essentially, the most profitable PRP for the Golden Harvest Group is to have screenings of the film in its initial launch period concentrated in Golden Harvest cinemas. If another Golden Harvest company had had control of the screening rights, the Group would have been in a position to choose a PRP of this sort, and thereby to generate more profit for the Defendant and for the Group as a whole. The difference in profitability for one of our cinemas between a film released on a PRP chosen by us, compared with one chosen by an unconnected company, can be as much as a loss of market share of up to 50%. "

She estimates the loss suffered by the defendant at HK$2,402,810.70. It is difficult to see what loss the defendant has suffered as the movies were in fact exhibited in the defendant's cinema. It is the Plaintiff's case that the defendant has suffered no loss as the movies were in fact screened at the defendant's cinema. The defendant has given some estimate of loss although the extent of the loss is dubious. However, this is a matter which ought to be resolved at trial.

34. I turn to consider whether or not the master ought to have ordered a stay of the judgment pending trial of the counterclaim. The counterclaim is for unliquidated damages. It is important to bear in mind that the plaintiff's claim is for the liquidated sums as pleaded in the statement of claim. These are for amounts of film rentals and expenses for promotional material during the period from October 2001 to April 2002. It is also important to bear in mind that the agreements for the exhibition of films, the subject matter of the plaintiff's claim, were in respect of other films, not the movies. Undoubtedly the films were exhibited and film rentals have been due for some time now. The relevant invoices were dated from 28 December 2001 to 22 May 2002. There is no suggestion whatsoever that the plaintiff is not entitled to the film rentals.

35. In Esso Petroleum v. Milton [1997] 1 WLR 939, Simon Brown L.J. said at page 949 :

“ The modern law on equitable set-off starts with Hanak v. Green [1958] 2 Q.B. 9, the case which decided that an unliquidated counterclaim can in certain circumstances be set off against a liquidated debt - cases within group 3 of Morris L.J.'s analysis, at p. 23 : "in which a court of equity would have regarded the cross-claims as entitling the defendant to be protected in one way or another against the plaintiff's claim." Morris L.J., at p. 24, referred to Bankes v. Jarvis [1903] 1 K.B. 549 and spoke of the "close relationship [which existed there] between the dealings and transactions which gave rise to the respective claims," and Sellers L.J., referring to the three cross-claims in Hanak v. Green itself, said, at p. 31, of one that "it arises directly under and affected the contract on which the plaintiff herself relies," and described the other two as "closely associated with and incidental to the contract ... on which the plaintiff sues for breach ..." Hanak v. Green did not, however, seek to deal specifically with the requisite closeness. For that one goes to Federal Commerce & Navigation Co. Ltd. v. Molena Alpha Inc.[1978] Q.B. 927, and in particular this passage from the judgment of Lord Denning M.R., at pp. 974-975 :

“ We have to ask ourselves: what should we do now so as to ensure fair dealing between the parties? ... This question must be asked in each case as it arises for decision: and then, from case to case, we shall build up a series of precedents to guide those who come after us. But one thing is quite clear: it is not every cross-claim which can be deducted. It is only cross-claims that arise out of the same transaction or are closely connected with it. And it is only cross-claims which go directly to impeach the plaintiff's demands, that is, so closely connected with his demands that it would be manifestly unjust to allow him to enforce payment without taking into account the cross-claim."

For equitable set-off to apply it must therefore be established, first that the counterclaim is at least closely connected with the same transaction as that giving rise to the claim, and second that the relationship between the respective claims is such that it would be manifestly unjust to allow one to be enforced without regard to the other."

36. He also said at page 951 :

“ The mere fact that both claim and counterclaim arise out of a single trading relationship between the parties is in my judgment wholly insufficient to supply the close link necessary to support an equitable set-off. "

37. In my view, equitable set-off is not available to resist the plaintiff's claim.

38. The following passage appears at 14/4/14 of the Hong Kong Civil Procedure 2004 at pg. 158 :

“ An analysis of the authorities as to what orders should be made where the defendant raises a set-off or counterclaim shows that there are four different classes or groups of such orders, namely :

1. where the defendant can show an arguable set-off, whether equitable or otherwise, he is entitled to leave to defend to the extent of the set-off and the court had no discretion;

2. where the defendant sets up a bona fide counterclaim arising out of the same subject matter as the action and connected with the grounds of defence, the order should not be for judgment on the claim, subject to a stay pending trial of the counterclaim, but should be for unconditional leave to defend, even if the defendant admits the whole or part of the claim;

3. where there is no defence to the claim but a plausible counterclaim of not less than the claim is set up, judgment should be for the plaintiff on the claim with costs, stayed until trial of the counterclaim;

4. where the counterclaim arises out of a separate and distinct transaction or is wholly foreign to the claim, judgment should be for the plaintiff with costs without a stay; the lack of clarity between classes 2., 3. and 4. gives the court freedom to respond to the perceived justice of the individual case (United Overseas Ltd v. Peter Robinson Ltd, unreported, March 26, 1991, CA Transcript 91/0297, per Bingham L.J.) "

39. It was Mr. Jat's submission that the counterclaim arose out of a separate and distinct transaction. There was no sufficient connection with the plaintiff's claim and there should be no stay of the judgment pending trial of the counterclaim.

40. It seems to me that the submission has considerable force. The counterclaim is in respect of a separate matter. It is in respect of damages for the tort of unlawfully interfering with the business of the defendant. It is a claim for unliquidated damages. It was in relation to the procuring of breaches of contract of Ms Tsang with Golden Harvest. The distribution agreement entered into by the plaintiff with Kadokawa was in respect of the movies which were distributed in 1998 and 1999. The plaintiff's claim is in respect of rentals and promotional expenses for different films which were exhibited between December 2001 and April 2002.

41. It has been borne in mind that the defendant has been in receipt of the income from the exhibition of the said different films. The defendant has received cash from box office receipts, as well credit card payments. It has been in receipt of that money for some time now. There can be no dispute that the judgment sum is owing to the plaintiff.

42. It seems to me that this case falls within paragraph 4. at 14/4/14 of Hong Kong Civil Procedure 2004 as the counterclaim arises out of a separate and distinct transaction. It is also wholly foreign to the claim. I have no hesitation in coming to the view that the justice of the case demands that there be no stay of the plaintiff's judgment pending trial of the counterclaim. It would, in my view, be manifestly unjust to the plaintiff that there should be a stay of the judgment pending trial of the counterclaim which, as I have said, appears to me to be a weak counterclaim. There should, therefore, be judgment for the plaintiff with costs without a stay.

43. In the circumstances, I allow the appeal of the plaintiff and vary the order of the master to the extent that there be no stay of the plaintiff's judgment pending trial of the counterclaim.

44. The appeal in respect of the order dismissing the plaintiff's application made on 30 December 2000 is dismissed. The plaintiff's appeal in respect of the master's order giving leave to re-amend the amended defence and counterclaim by the summons issued by the defendant dated 7 January 2003 is allowed as I have ordered parts of the RADC to be struck out.

45. I have not heard arguments on costs. I shall make an order nisi as to costs. It seems to me that most of the time was spent on the plaintiff's appeal on the order for stay and the application to strike out the RADC. The plaintiff has succeeded on both of these. It, however, has failed on the appeal against the order refusing to strike out the amended defence and counterclaim. As most of the time spent on the appeal was on the matters in respect of which the plaintiff has succeeded, it seems to me that it would be right to make an order that the defendant do pay three-quarters of the plaintiff's costs of the hearing before me with certificate for 2 counsel. The costs order made by the master on the plaintiff's summons dated 19 September 2002 was costs to be paid by the defendant to the plaintiff with certificate for counsel. This order for costs should not be disturbed. The costs order made by the master on the plaintiff's summons dated 30 December 2002 was costs to be paid by the plaintiff to the defendant. This order for costs should not be disturbed. The order for costs on the defendant's summons dated 7 January 2003 made by the master was that costs be paid by the plaintiff to the defendant. I set aside this order and make an order that the costs of and occasioned by the summons dated 7 January 2003 be costs to the plaintiff to be paid by the defendant with certificate for counsel. The above orders for costs are orders made nisi.