STEADFAST INTERNATIONAL LTD v. TUENBO CO LTD AND OTHERS

HCA 2095/2016

[2022] HKCFI 3578

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2095 OF 2016

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DECISION ON COSTS

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A. INTRODUCTION

1.  By a summons filed on 20 April 2022 (the “Summons”), the plaintiff applies to vary the costs order nisi made by this court dated 11 March 2022 (as contained in paragraph 59 of the Judgment also dated 11 March 2022 ([2022] HKCFI 717)  (the “Judgment”)).

2.  In this Decision on Costs, I shall adopt the abbreviations used in the Judgment.

3.  In the Judgment this court, inter alia:

(1)  dismissed paragraphs 2 and 3 of the summons filed on 1 March 2021 (the “2021 Summons”), in which the Tuenbo Parties sought a final judgment against Steadfast for prayers (xE)  to (xG)  in the Re-Amended Defence and Counterclaim (the “Order 14 Application”); and the discharge of the interlocutory injunction granted by this court against the Tuenbo Parties on 19 August 2016 (the “Discharge Application”); and

(2)  ordered the Tuenbo Parties to pay the costs of paragraphs 2 and 3 of the 2021 Summons to Steadfast, such costs are to be taxed if not agreed (with a Certificate for 3 Counsel).

4.  Steadfast seeks by the Summons to vary the aforementioned costs order nisi to add that the costs are to be taxed “and paid forthwith” if not agreed.

B.  RELEVANT LEGAL PRINCIPLES

5.  It is well settled that the court has a wide discretion to determine award of costs, including whether or not immediate payment of costs should be ordered.

6.  As held by Johnson Lam J (as he then was)  in Midland Business Management Ltd v Lo Man Kui (No 2) [2011] 2 HKLRD 667 at §§7 and 8, which was adopted by the Court of Final Appeal in Wing Fai Construction Co Ltd v Yip Kwong Robert (No 2) (2012)  15 HKCFAR 454 at §4, in determining whether to make an order for immediate taxation, the court takes into account the following factors:

(1)  the extent to which the proceedings are from a taxation point of view severable and self-contained from the rest of the action;

(2)  the justice of making such an order having regard to the effect on the cash flow of the respective parties; and

(3)  whether the amount at stake on the taxation was sufficient to justify putting the parties to the expense of having a separate taxation for it rather than bringing it in on the final taxation.

7.  Further, taking into account the underlying objectives in Order 1A, rule 1 of the Rules of the High Court, Cap 4A, in the exercise of the court’s discretion, unwarranted interlocutory applications should normally be sanctioned by an immediate costs order.  After the Civil Justice Reform, the court is more astute to the impact of costs on legal proceedings and an order for immediate payment of costs will be made more readily as a discipline against unmeritorious interlocutory applications (Midland Business Management Ltd (Supra)  §§9 to 12; see also Wing Fai Construction Co Ltd (Supra)  §§5 to 8).

8.  The above legal principles are not disputed by the Tuenbo Parties.

C.  DISCUSSION

9.  Applying these principles, I agree that this is a clear case where Steadfast should be entitled to immediate payment of costs.

10.  First, the Tuenbo Parties’ Order 14 and Discharge Applications are severable and self-contained from the rest of the action.  The very essence of the relief sought is predicated on the assumption that the application is severable and self-contained, ie the applicants should be entitled to immediate judgment without affecting the resolution of other issues in dispute in the action (if any remains).  In addition, the outcome of the said Applications does not, and would not, have any impact on the costs orders made in other stages of this action.

11.  Second, Steadfast is said to have incurred legal fees of at least HK$3.5 million in resisting paragraphs 2 and 3 of the 2021 Summons.  The costs incurred by Steadfast were bound to be substantial: (i) the substantive argument took two days in court, with involvement of three Counsel from each side; (ii) there were 12 hearing bundles, consisting of over 2,500 pages; and (iii) the Tuenbo Parties’ Applications concern disputes over the history of the Golden Lake Project which has lasted for 30 years and they involve complex factual, in particular accounting, issues.  The substantial costs involved clearly justifies the expense of a separate taxation.

12.  Third, there can be no objective justification for delaying the payment of costs until some indeterminate time in the future. This action is still at a relatively early stage.  Given the extensive amendment in the pleadings, parties will most likely need to take various further interlocutory steps before the trial can take place.  The trial of this action is thus unlikely to take place anytime soon, which means that Steadfast would be out of pocket for a substantial sum in the meantime, whilst the Tuenbo Parties evade the policy objectives referred to in paragraph 7 above.

13.  Last but not least, I agree that the Tuenbo Parties’ Order 14 and Discharge Applications were unwarranted and unmeritorious.  The Tuenbo Parties clearly failed to show that there was no triable issues in their Order 14 Application.  This court had no difficulty in rejecting the entirety of the Tuenbo Parties’ approach.  In this regard, I refer in particular to paragraphs 39, 40, 47 and 53 of the Judgment.

14.  Accordingly, for the reasons set out above, I make an order in terms of paragraph 1 of the Summons.  Further, I order the Tuenbo Parties to pay the costs of this application to Steadfast, such costs are to be taxed and paid forthwith if not agreed.