OSMAN MOHAMMED ARAB and WONG KWOK KEUNG THE JOINT AND SEVERAL TRUSTEES IN BANKRUPTCY OF YUNG KWOK LEONG, A BANKRUPT v. YUNG KA CHUN AND ANOTHER

HCA 1248/2021

[2025] HKCFI 545

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1248 OF 2021

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D E C I S I O N

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1.  The applicable principles are trite and not in dispute by the parties. Costs are in the discretion of the Court. The prime objective is to do justice between the parties. In respect of the discontinuance of proceedings, the general rule is that the other party is entitled to costs if the application was discontinued by the discontinuing party.

2.  This is the application by the Plaintiff (“P”)  to discontinue: (1) the Summons for specific discovery against the 1^st Defendant (“D1”)  and the 2^nd Defendant (collectively, “Ds”)  dated 28 August 2024 (“SD Summons”); and (2)  the Summons for disclosure under s.21 of the Evidence Ordinance, Cap.8 dated 28 August 2024 against Bank of China (HK)  Ltd (“BOC”)  (“S.21 EO Summons”).

3.  Having heard the submissions of Mr Robinson, solicitors appearing on behalf for P, and Ms Lo, counsel appearing on behalf of Ds, I am satisfied that in the circumstances of the present case, justice requires a different order from the general rule (i.e. P is entitled to the costs of the SD Summons and the application to discontinue).

4.  Firstly, the application for specific discovery against Ds has been rendered unnecessary or academic because of something that Ds have done which could have been done prior to the application being made by P: see Re Peaktop Technologies (USA)  Hong Kong Ltd [2007] 4 HKLRD 207 at §8 per Barma J (as he then was)  and Hong Kong Civil Procedure 2025, Vol.1, §21/5/12A. 

5.  The request made by letter from P’s solicitors dated 25 March 2024 was almost identical to the Schedule to the SD Summons (“the Schedule”).  However, it was only by the 1^st Affidavit of D1 filed on 18 December 2024 (“D1’s Affidavit”)  in opposing the SD Summons that D1 confirmed on oath, save for those further documents disclosed in relation to paragraph 4 of the Schedule, that he did not have the requested documents in his possession, custody or control.

6.  Whilst Ms Lo submitted that there was no delay or inaction in filing D1’s Affidavit and there was an admission that D1 did not have the requested documents, by relying on the letter of Ds’ solicitors dated 23 September 2024 to P’s solicitors (which stated that BOC did not have statements or records 9 years old), Ds’ solicitors in effect had only responded to paragraph 5 of the Schedule and gave reasons for opposing that paragraph but not the other 4 paragraphs.  It was not until D1’s Affidavit that there was confirmation on oath that all 5 categories of documents in the Schedule are not in Ds’ possession.

7.  Besides, the fact of the matter remains that the Summonses have been rendered unnecessary because D1’s admission that the Loan Agreement was unrelated to the purchase of the Properties.  Even though there was some allusion that most if not all of the proceeds of the Loan Agreement was used in D1’s business ventures in D1’s witness statement filed in March 2024, it was only in D1’s Affidavit that this is put beyond doubt.

8.  Secondly, P is the effective winner by “substantially achieving what he/she sought in the application”: see Hong Kong Civil Procedure 2025, Vol.1, §21/5/12A.

9.  The SD Summons sought an order that Ds be required, within 14 days of the order to be made, to make an affirmation affirming whether any documents in the Schedule has been in his/her possession, custody, or power and to make available for inspection such documents in Ds’ possession, custody or power.  In D1’s Affidavit, he further disclosed documents not previously disclosed in discovery.  Thus by D1’s Affidavit, P has substantially achieved what was sought in the SD Summons.  Even if P would not have entirely succeeded to obtain every category of documents sought had the application gone ahead, at the very least P got D1’s Affidavit and D1’s confirmation on oath that Ds did not have the documents sought.

10.  Notwithstanding some complaints by Ms Lo that there were delays in P’s application to discontinue the SD Summons (1 month after the D1’s Affidavit was filed), I do not regard this as serious delay in view of the intervening holidays or sufficient so as to sway my exercise of discretion.  Nor is there anything in the fact that the SD Summons was not taken out until after extensions granted to do so.  In P’s Timetabling Questionnaire, P’s solicitors have explained the reason for not taking the application before 23 May 2024.

11.  In respect of the S.21 EO Summons, Ms Lo accepts that Zhang and Ds are not the Respondents to this Summons.  Where costs of this Summons have now been agreed between P and BOC, and I cannot see what costs were properly incurred by Ds who are not party to this Summons (and Mr Robinson confirmed that P would not be seeking costs against Ds for this Summons), I will not award costs in favour of Ds.  

12.  As for the costs of the Summons to discontinue, it follows from my view that the SD Summons and S.21 EO Summons were rendered unnecessary because of the actions of D1 that P should have the costs of this Summons.

13.  I therefore make an order in terms of the draft Order as amended by me.

14.  P submitted a Statement of Costs (with revisions)  at the end of the hearing for summary assessment of P’s costs.  Ds were directed to lodge and serve any objection to the Statement of Costs within 14 days and P to lodge and serve any reply within 3 days thereafter for summary assessment by me on paper.