GREATER CHINA CAPITAL INC (a company incorporated in British Virgin Islands) v. GBTIMES LTD (formerly known as GLOBAL BROADCASTING MEDIA MANAGEMENT LTD) (a company incorporated in Finland)

HCA 1455/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1455 OF 2015

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DECISION

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1.  By summons, dated 4 February 2016, the plaintiff applied for summary judgment. On 8 July 2016, a Master gave judgment for part of the plaintiff’s claim. On 15 July 2016, the defendant appealed pursuant toOrder 58. On 24 March 2017, I allowed the appeal, set aside the Master’sorders, dismissed the plaintiff’s Order 14 application for summary judgment and gave the defendant unconditional leave to defend. I made an order nisi that the plaintiff pay the defendant’s costs of the plaintiff’s Order 14 application for summary judgment before the Master. As to the costs of the appeal, I made a costs order nisi that the plaintiff pay the defendant’s costs.

2.  By summons, dated 6 April 2017, the defendant applied for a variation of each of my costs orders nisi such that costs should be taxed and paid forthwith, alternatively to be assessed under Order 62, rule 9A, with a certificate for two counsel.  By an amended summons, dated 25 May 2017, the plaintiff applied for a variation of each of my costs orders nisi so that the costs of both the plaintiff’s Order 14 application before the Master and the costs of the appeal are in the cause. 

3.  After hearing counsel on 13 June 2017, I dismissed the defendant’s application.  As for the plaintiff’s application, I varied my costs orders nisi so that the costs of the plaintiff’s Order 14 application before the Master are costs in the cause.  I did not vary my costs order in respect of the appeal.  I handed down written reasons on 29 August 2017.

4.  The defendant has applied for leave to appeal my decision to vary my costs order nisi (except the provision for a certificate for two counsel),my decision to dismiss its application (except my refusal to grant a certificate for two counsel) and my summary assessment of the plaintiff’s costs in respect of the two summonses, dated 6 April 2017 and 7 April 2017 respectively.

5.  The defendant counsel’s first point was that the plaintiff’s counsel had conceded on 13 June 2017 that costs should follow the event.  Counsel referred me to the Plaintiff’s Skeleton Argument, dated 9 June 2017, paragraph 5(2).  In that paragraph, counsel submitted: “The dismissal option under O.14, r.7 is typically exercised by way of an order for payment of costs forthwith. …”  I do not read that as the concession contended for by the defendant’s counsel.  The use of the word “typically” indicates that counsel recognized that the Court retains a discretion.

6.  Counsel’s second point was that, if the plaintiff’s application was dismissed pursuant to Order 14, rule 7, then the pre-condition for dismissal, that the plaintiff knew that the defendant relied on a contention which would entitle him to unconditional leave to defend, had been met, such that the discretion left to the Court with respect to costs was very narrow.  Counsel submitted that the proper order was to require the plaintiff to pay the defendant’s costs forthwith.

7.  Counsel’s final point was that, in any event, the usual rule should apply and costs should follow the event.

8.  During the hearing on 13 June 2017, the defendant’s counsel referred me to Order 14, rule 7 and submitted that, where a plaintiff knew that there was an arguable defence, the Court should use its power to dismiss an Order 14 application with costs more freely.  Counsel submitted that the plaintiff had such knowledge.  A further submission was that, independently of Order 14, rule 7, the court may also dismiss an Order 14 application where there are inherent concerns in respect of the plaintiff’s own case sufficient to demonstrate that the plaintiff’s case is unfit for an Order 14 application.  Counsel submitted that the plaintiff’s case was unfit for an Order 14 application.

9.  Regarding the costs before the Master, as I explained in paragraph 6 of my Decision on Costs, dated 29 August 2017, when I dismissed the plaintiff’s application on 13 June 2017 I did not do so as an exercise of the power given by Order 14, rule 7(1). I simply dismissed the application.  I did not accede to counsel’s submission regarding Order 14, rule 7(1) submission for the reasons given in paragraphs 7 and 8 of my Decision on costs.

10.  The defendant’s counsel submits that in paragraphs 7 and 8 I have applied the wrong test.  He submits that the test is not one of misusebut only a consideration as to whether the case is not within Order 14 or, as the defendant’s counsel submits is the position in this matter, the plaintiff had knowledge of the defendant’s contention which would entitle it to unconditional leave to defend.

11.  I do not agree with counsel’s submission.  The effect of the submission is to read “may dismiss the application with costs and may require the costs to be paid by him forthwith” as “shall dismiss the application with costs and shall require the costs to be paid by him forthwith”.  If all that is required is a finding that the plaintiff had knowledge of the defendant’s contention which would entitle it to unconditional leave to defend, then there would be no discretion.  And yet, “may” clearly provides for the exercise of discretion and in the exercise of that discretion I considered that whether the plaintiff had misused Order 14 to be a relevant consideration.

12.  The defendant’s counsel submits that, if I did not apply Order 14, rule 7(1), nevertheless I did not give reasons for not applying the usual rule of costs following the event.  I refer to paragraph 9 of the Decision on costs.  I believed it to be clear that, as I declined to proceed under Order 14, rule 7(1) and because I concluded that the plaintiff had not misused Order 14, the costs before the Master should be costs in the cause.

13.  As I had made an order that the costs of the application before the Master are in the cause, then the defendant’s application for costs to be taxed and paid forthwith if not agreed or alternatively to be summarily assess under Order 62, rule 9A failed.

14.  With regard to the defendant’s application for the costs of the appeal to be taxed and paid forthwith if not agreed or alternatively to be summarily assessed under Order 62, rule 9A, the defendant’s counsel makes two points. 

15.  First, that I ignored that, when the plaintiff succeeded before the Master, it obtained summary assessment of costs, to be paid within 14 days.  I am not bound by the Master’s decision and I have given my reasons for my decision in paragraph 12 of my Decision on costs.

16.  Second, that I ignored that I conducted a summary assessment of the plaintiff’s costs of the applications to vary my costs orders nisi.  The defendant’s counsel submitted that rejecting the defendant’s applicationfor costs of the appeal to be paid forthwith or summarily assessed was unfair.  I considered the appeal and the applications to vary my costs orders nisiseparately and I reached different conclusions with respect to each separately.  I do not agree that that approach was unfair.

17.  The Court of Appeal does not interfere readily in the exerciseof a Judge’s discretion.  I consider that I exercised my discretion judiciallyand based on correct principle.  I am not satisfied that the intended appeal has a reasonable prospect of success and I refuse leave to appeal.

18.  As I have declined to grant leave to appeal, I dismiss the defendant’s summons, dated 23 June 2017, and order the defendant to pay the plaintiff’s costs of this leave application.

19.  The plaintiff’s counsel submitted that the defendant is in contempt of the order to pay costs of 13 June 2017 and is acting oppressively by failing to pay what is due to the plaintiff and in bringing frivolous or abusive applications in the hope of exhausting the plaintiff’s financial resources on interlocutory activity so that the plaintiff is forced to abandon the case.  The plaintiff invited me to dismiss the defendant’s summons with indemnity costs, to be assessed summarily.

20.  With regard to contempt of court, neither counsel developed submissions on the point.  Moreover, I consider such a serious allegation is one in respect of which the parties should have the opportunity to provide evidence.  There was no such opportunity.  For these reasons, I decline to make an order for indemnity costs.

21.  With regard to the submission that the defendant is making oppressive, frivolous and vexatious applications, I do not think the defendant’s conduct can be characterized as such at this stage.  The defendant’s appeal against the Master’s orders succeeded.  Applications for costs to be taxed and paid forthwith are quite commonplace and the result is a matter for a court’s discretion.  With regard to the defendant’s particular applications, the manner in which they were conducted was not oppressive and they were supported by considered submissions; they were not frivolous or vexatious.  I make the same observation in respect of the application for leave to appeal.  I decline to order indemnity costs.

22.  I was not provided with a statement of costs at the hearing and so there was no opportunity to hear submissions and assess the costs at the one event.  What would be required now are directions as to the filing of a statement of costs and submissions from both parties and for the preparation of such submissions by the respective legal representatives for consideration either on paper or at another hearing.  I shall not assess the costs summarily.  Rather than come back to this matter, I consider the preferable course to be to leave the assessment of costs to be carried out together with any future costs assessment.