CHEN HONGQING v. ASIA CEMENT CORPORATION

HCA 1304/2017

[2024] HKCFI 438

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1304 OF 2017

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DECISION ON COSTS

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1.  For reasons set out in my Decision handed down on 10 November 2023[1] (the “10/11 Decision”), this Court allowed ACC’s Summons, struck out Chen HQ’s Writ and SoC, and dismissed his claims against ACC as pleaded therein. In §41 thereof, I made a costs order nisi that the costs of the entire action, including those of and occasioned by the Summons (with certificate for 2 counsel in that regard) be to ACC, to be taxed if not agreed (the “Costs Order Nisi”).

2.  By letter of 15 November 2023 from its solicitors, ACC seeks a variation of the Costs Order Nisi, to the effect that all costs be taxed on the indemnity basis.

3.  Pursuant to directions this Court subsequently handed down, Mr Abraham Chan SC leading Mr Joshua Chan have lodged their written submissions in support and reply (“ACC/Sub” and “ACC/Reply” respectively), and Mr Law Man-Chung SC leading Mr Danny Tang have lodged their submissions in opposition (“Chen/Sub”).  I have considered them.  I have also considered the authorities referred to therein.

4.  For the following reasons, I accede to ACC’s application to vary and order that the costs of the entire action, including the costs of and occasioned by the Summons for striking out, be taxed on the indemnity basis:

(a)  Both parties have cited to me Choy Yee Chun v Bond Star Development Ltd [1997] HKLRD 1327.  It is true, as submitted by Mr Law, that to depart from the usual taxation basis, it is incumbent on ACC to show some special or unusual feature.  But as highlighted by Mr Chan:

“A case in which the successful party has demonstrated that the proceedings were initiated or prosecuted by the unsuccessful party in a manner which constitutes that party’s proceedings an abuse of the process of the court might well be a candidate for an award of taxation of costs on an indemnity basis.”[2]

(b)  Once and so long as that is recognised and acknowledged, it serves little purpose in going through previous cases involving abuse of process to say that indemnity costs were not awarded in any particular cases, as Mr Law does in §§3-5 of Chen/Sub with reference to inter alia Wu Yang v Dayuan International Development Ltd (HCCW 103/2015, 30 July 2015) and Chan Chun Chuen v Kao, Lee & Yip [2018] HKCFI 1933.  Chan Chun Chuen in any event involved very different facts, which I have explained in the 10/11 Decision;

(c)  The nature and seriousness of the abuse involved in each case will of course have to be gauged;

(d)  The abusive litigation conduct involved in this case is significant.  I repeat what I have observed in section E of the 10/11 Decision. I repeat my acceptance of Mr Chan’s submissions, that Chen HQ’s motive behind the numerous changes to his story is an opportunistic one to gain what he or his backers believed to be strategic advantages in the fight for overall control over CSCG and CSI;

(e)  I note this as also material.  The version put forward in the SoC from day one of this action is already the third version that Chen HQ had run.  I repeat §17 of the 10/11 Decision.  Chen HQ did so in the face of the criticisms made by Lam J in the 31/5 Reasons.  It were not as if Chen HQ’s case only changed after the issue and filing of the Writ and SoC herein, though his case indeed changed further afterwards.  Viewed from this angle, abusive litigation conduct was involved from the very outset;

(f)  The inconsistent cases were put forward by Chen HQ on oath;

(g)  As I have observed in §21 of the 10/11 Decision, Chen HQ has failed to even tender any explanation for the multiple shifts;

(h)  Mr Law submits that ACC has not been successful on all grounds.  That with respect misses the point, as ACC succeeded on the Abusive Litigation Conduct Ground, which was in any view the main ground.  I accept Mr Chan’s submission in this regard[3];

(i)  In ACC/Sub[4], Mr Chan refers this Court to other cases (though part of the Shanshui matters) wherein Chen HQ’s litigation conduct was subject to adverse judicial criticisms.  Mr Law takes issue with such references[5]. On the matters before this Court, I do not need to refer to those other criticisms in deciding this application;

(j)  Mr Law submits that it is important to have regard to the realities of hostile litigation.  In my view, it is even more important to bear firmly in mind that whatever the extent of the hostility, parties are not permitted to resort to abusive litigation conduct of the type which Chen HQ has been found to have engaged in;

(k)  I accept Mr Chan’s submission that this is precisely the type of cases where it is appropriate for the Court to mark its strong disapproval of such litigation conduct by way of an indemnity costs order.

5.  For the above reasons, I vary the Costs Order Nisi from what it is to the following, that Chen HQ shall pay to ACC the costs of the entire action, including for avoidance of doubt those of and occasioned by ACC’s Summons of 20 March 2023, including in turn those of and occasioned by the present application for variation of the Costs Order Nisi, with certificate for 2 counsel in those regards, to be taxed on the indemnity basis if not agreed.