ANGLO STARLITE INSURANCE CO LTD (In Liquidation) v. TRIPLE INVESTMENTS LTD AND OTHERS

HCA 394/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 394 OF 2010

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BETWEEN

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(Heard Together)

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D E C I S I O N

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1.  There are three applications for variation of costs orders nisi. Both sides have agreed that these applications can be disposed of on paper and without a hearing.

2.  On 11 October 2010, Master Hui ordered Mr and Mrs Balani to be joined as defendants in these three actions.  Master Hui also ordered the costs of the applications be in the cause save that the costs of the argument be borne by Mr and Mrs Balani.

3.  Mrs Balani appealed against these orders but not Mr Balani.  I dismissed her appeals on 7 December 2010.  I also ordered her to pay 50% of the costs of the appeal with certificate for counsel.  The reason for not requiring her to pay the plaintiff the full costs was because the plaintiff had not pleaded the particulars of dishonest or fraudulent breach of trust allegedly committed by her.  The particulars were only contained in the affidavits of the plaintiff used in support of the applications for joinder before the Master.  I did not disturb the Master’s orders of costs.

4.  Mrs Balani wants to vary all the costs orders both before the Master and on appeal.  She seeks to have no order as to costs in respect of the appeals or for the argument before the Master.  For the orders that the other costs of the applications before the Master be in the cause, she seeks to change them to orders awarding the costs to her.

5.  Her counsel submitted that the Master was wrong in allowing the joinder when the particulars were wholly lacking.  The Master’s orders for joinder were therefore wrongly made.  The Master ought to have allowed the applications conditionally upon the particulars being pleaded in the statements of claim.  The draft amended statements of claim as produced before the Master did not have these particulars.

6.  Counsel for the plaintiff however submitted that no formal pleadings needed be filed for the applications for joinder, the draft amended statements of claim were produced to inform the parties and the court of the nature of the claims against the Balanis.  Affidavits can often be used to satisfy the requirements of joinder in O.15 r.6(2)(b)(i) and (ii) of the RHC.  The Master made the orders on the basis of all the materials before him which included the affidavit evidence.

7.  I agree with the counsel for the plaintiff that the Master was right in making the orders without imposing any condition that the amended statements of claim to be filed pursuant to the orders should contain the necessary particulars.  The task of the Master was to decide whether there was sufficient reason to join the Balanis as defendants.  He had no task to scrutinize the draft pleadings which were merely produced for reference.  That is why the Master’s orders will not preclude the Balanis from seeking further and better particulars of the amended statements of claim that were filed later.  There is therefore no basis to vary the Master’s orders of costs for the arguments before him.

8.  Regarding the costs of the applications before the Master apart from the costs of argument, counsel for Mrs Balani submitted that the plaintiff applied for indulgence to amend and should pay the costs of the applications.  Counsel further submitted that the Master was wrong in not requiring particulars to be pleaded in the amended statements of claim.  I have already held against the second point.

9.  On the first point, the usual practice is to require the party seeking indulgence to pay costs.  However in the present case, Mrs Balani had positively opposed the applications by filing affidavits thereby occasioning more work and more costs.  She lost her opposition.  I think the Master was benevolent to her in ordering the costs be in the cause. I do not see any basis to vary the incidence of these costs.

10.  Regarding the costs of the appeals, counsel for Mrs Balani submitted that she should have appealed rather than seeking further and better particulars.

11.  Counsel also submitted that a plaintiff will not be given costs in successfully opposing a striking out if the claim has to be improved by amendment so as to constitute an arguable cause of caution.

12.  That may be right.  However, Mrs Balani did not apply for further and better particulars.  She took the wrong route of appealing when she had been properly joined by the orders of the Master.

13.  I ordered the particulars to be included in the amended statements of claim just to avoid the need for further applications as there was clear justification for them and they have been spelt out in the affidavits already.  I ordered Mrs Balani to pay only 50% of the costs of the appeals just to express the court’s disapproval of the plaintiff’s insistence that there are already sufficient particulars when there are not.

14.  For these reasons, there is also no basis to vary the costs orders nisi for the appeals.  I therefore dismiss Mrs Balani’s applications to vary the costs orders nisi.  I also order her to pay the costs of these applications to the plaintiff forthwith with certificate for counsel.  If the parties cannot agree on the amount of these costs within 14 days, they may fix a 9:30 a.m. hearing before me for summary assessment.