COQUEEN CO LTD v. CHUI WAI KWAN AND OTHERS

HCMP 438/2010

MISCELLANEOUS PROCEEDINGS NO. 438 OF 2010

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D E C I S I O N
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Introduction

1.  There are two summonses before the court.  The first one was taken out by the 2^nd Respondent (“Hing”) dated 17 April 2015 (the “Strike-out Summons”) seeking to strike out the Re-Amended Petition (“the petition”) of the Petitioner (“Coqueen”) dated 14 June 2011.  The second one was taken out by Coqueen dated 12 June 2015 (the “Withdrawal Summons”) seeking leave to withdraw the said petition.

2.  The 3^rd Respondent (the “Company”) which is the subject company in the petition, is a company incorporated in Hong Kong which carries on business of a renowned restaurant.  It is beneficially owned by siblings of the Chui’s family. The 1^st Respondent (“Wai”) and Coqueen were majority shareholders each holding 44.63% of the shares in the Company.  Four sister siblings, including Hing, were minority shareholders who together held the balance.  Coqueen is a company incorporated in Hong Kong for the purpose of holding shares in the Company on behalf of Wai’s elder brother (“Pui”) and his family.

The background

3.  The matter arose from a section 168A petition issued by Coqueen against the Wai and Hing, by which Coqueen sought to buy out Wai’s and Hing’s shares in the Company at a fair value to be determined by the court with a discount to reflect the loss suffered by the Company as a result of their unfair and prejudicial conduct.

4.  At a pre-trial review held on 27 August 2012, this court floated the idea of resolving the dispute between Coqueen and Wai by a sale of their shares in the Company to the higher bidder as between the two of them.  The petition against Hing would be disposed of after the bidding, depending on the outcome.  Hing’s position was that she would be happy to remain in the Company if Wai succeeded in the bidding, otherwise she would prefer to sell her shares in the Company to Coqueen at the bid price with her costs in the petition paid by Coqueen, to be taxed on party and party basis if not agreed.  By a letter dated 10 September 2012, Hing’s solicitors, Messrs Sit, Fung, Kwong & Shum (“SFKS”), informed Messrs Mayer Brown JSM (“MBJSM”), solicitors acting for Coqueen, of Hing’s offer in the event that Coqueen outbid Wai.

5.  The court’s suggestion was taken up by Coqueen and Wai.  In the ensuing months their solicitors negotiated and reached the terms of the bidding.  Hing was excluded from the negotiation and bidding process and protested that she was not informed of the progress.

6.  By a letter dated 19 October 2012 to MBJSM, SFKS sought a reply to their letter dated of 10 September 2012 and an update of the negotiation between Coqueen and Wai.

7.  By their letter dated 22 October 2012, MBJSM rejected Hing’s offer and counter-offered, in the event that it was successful in the bidding process, to buy her shares for $6,069,070 less a loan of about $2.1 million which the Company had obtained on her behalf and on the condition that each party to bear its own costs of the petition.  MBJSM wrote:

“ In other words, the purchase price offered by our clients to yours is based on the fair market value of the shares of [the Company] as assessed by our clients’ expert. Our clients wish to stress that it is only for settlement purpose that our clients are prepared not to insist on a discount factor in respect of your client’s minority holding in their offer as stated above. Your client should appreciate that her minority holding will attract a substantial discount in an ordinary sale and purchase.”

It should be noted that in this letter MBJSM changed the basis of assessment of the fair market value of the shares from that assessed by the court to that assessed by Coqueen’s expert; and is not claiming any discount for loss caused by Hing’s unfair prejudicial conduct or for minority shareholding.

8.  On 26 October 2012, Hing rejected the counter-offer.  The negotiation for settlement between Coqueen and Wai continued. 

9.  On 16 November 2012, MBJSM informed the court that Coqueen and Wai had reached agreement in principle to settle the petition together with a defamation action between the parties.  They also said that they were attempting to separately negotiate a settlement with Hing.

10.  Pending the negotiation between Coqueen and Wai, the hearing of the petition was adjourned to 27 November 2012. 

11.  By a letter dated 22 November 2012 to SFKS received at around 20:01 hours, MBJSM made the following offer and requested a response by 13:00 on the following day:

“ We are instructed to propose that conditional upon [Coqueen] and [Wai] executing a formal settlement agreement but not otherwise, our respective clients will also jointly apply for a stay of the subject petition as between them, and an adjournment of the trial scheduled to commence on 27 November 2012 sine die with liberty to restore, and in making this application [Coqueen] will agree to pay [Hing] costs of and occasioned by the adjournment on a party and party basis, to be taxed if not agreed. [Coqueen] further agrees that once the formal settlement agreement between [Coqueen] and [Wai] is duly performed, [Coqueen] will apply to withdraw the petition as against [Hing] and pay [Hing’s] costs of the petition on a party and party basis, to be taxed if not agreed.”

It should be noted that Coqueen abandoned the idea of buying Hing’s shares in the event that it was successful in the bidding.  Its new intention was to withdraw the petition against her regardless of the outcome of the bidding and to pay her costs of the petition.  Its new position was that if it won, it would keep Hing on board as a minority member of the Company; but if it lost, it would withdraw the petition against her as there would no useful purpose to continue with the petition to buy her minority shareholding when it would have sold its. 

12.  On 24 November 2012, SFKS responded out of time. They protested about the tight time schedule, but agreed to the proposed adjournment.  As for the proposed withdrawal of the petition, SFKS said that Hing’s entitlement to costs should not be dependent on Wai’s performance of the settlement agreement which she had never seen, but as a compromise, requested for Coqueen’s undertaking to withdraw the petition within two weeks of execution of the formal settlement agreement between Coqueen and Wai and to pay her costs of the petition to be taxed if not agreed.  While the delay in responding was not critical as time was probably not of the essence, the counteroffer was a rejection of the offer.  Regardless of the reasonableness of the rejection of the offer, with hindsight, it was unwise.  Hing is now left litigating on those costs and with the uncertainty of litigation almost three years after completion of the settlement agreement between Coqueen and Wai.

13.  At the hearing on 27 November 2012, Coqueen’s leading counsel, Mr Bleach SC, reneged the offer, which Coqueen was entitled to because of Hing’s counteroffer.  After informing the court that a binding agreement had been reached between Coqueen and Wai, Mr Bleach indicated that Coqueen was not prepared to withdraw the petition as against Hing until completion of the settlement agreement between Coqueen and Wai as much would turn upon who won the bidding.  The petition against Hing was adjourned sine die with liberty to restore and with costs to Hing.

14.  On 29 November 2012, a settlement agreement was entered into between Coqueen and Wai. 

15.  On 14 December 2012, SFKS wrote to MBJSM referring to their letter dated 22 November 2012 and the bidding process.  They confirmed Hing’s agreement with Coqueen withdrawing the petition upon completion of the settlement agreement.  In other words, Hing unconditionally accepted Coqueen’s offer in MBJSM’s letter dated 22 November 2012.  But MBJSM did not respond.

16.  At the bidding in December 2012, Coqueen outbid Wai.

17.  On 8 February 2013, SFKS sent two letters to MBJSM asking whether the settlement agreement between Coqueen and Wai had been completed and when Coqueen would withdraw the petition.  Again MBJSM did not respond.

18.  On 13 June 2013, SFKS wrote to MBJSM giving them ten days to confirm if Coqueen would withdraw the petition and intimated that if no reply was received, Hing would make an application to court seeking her costs of the petition.

19.  On 21 June 2013, MBJSM replied stating, amongst other things, that Coqueen had a meritorious and rightful claim for the relief sought in the petition against Hing with costs and had no instruction to withdraw the petition.  This is a total change of their position as conveyed in their letter of 22 November 2012, which was that Coqueen would withdraw the petition upon completion of the settlement agreement, regardless of their merit in the petition.

20.  In June 2013, Pui told Hing that the Company would not distribute dividend in the coming two years, contrary to the practice in the previous two years in which dividend in the sums of $22 million and $10 million were distributed.  Two of the sister siblings were also informed of the same.  The sister siblings discussed among themselves about selling their shares to Pui’s family.

21.  On 27 August 2013, MBJSM indicated in their open letter that Coqueen was fully prepared to proceed with the petition if an out of court settlement could not be reached within reasonable time.  The terms of the offer for an out of court settlement were contained in a without prejudice letter of the same date.  In that letter Coqueen offered to buy Hing’s shares for $6,950,000 less the amount of loan of about $2.1 million which the Company had obtained on her behalf.  The price included a 20% minority discount based on the reserved bid price.  It should be noted that Coqueen now claimed a minority discount but made no claim for discount because of loss caused by Hing’s unfair and prejudicial conduct.  Hing did not accept the offer.

22.  Between September 2013 and April 2014, a number of meetings were held between the sister siblings (Hing being represented by her daughter, Agnes) and Pui’s son, Duncan, about the sale and purchase of the sister siblings’ shares.  No agreement was reached.

23.  In May 2014, more substantial consensus was reached between sister siblings and Duncan.  The key point of disagreement was on the terms of payment.  Eventually, on 11 August 2014, the difference was removed by Duncan agreeing to pay the purchase price for Hing’s and one of the sister sibling’s (“Foon’s”) shares in full and the other two sister siblings’ shares by three instalments.  The following two terms under the Key Terms of the Sale and Purchase Agreement set out by Duncan are relevant:

(1) the purchaser shall be a wholly owned subsidiary of Coqueen Company Limited or jointly controlled company owned by Coqueen Company Limited and Chinese Food & Beverage Group Limited; and

(2) the purchase price shall be $4,182 per share, ie $6,954,666 for Hing’s shares.

24.  On 19 September 2014, through SFKS and Duncan’s solicitors, Foon and Hing as vendors entered into a sale and purchase agreement with Leading Win Development Limited (“Leading Win”) as purchaser for their shares in the Company (the “Share Purchase Agreement”).  The sale and purchase was completed within three days of execution of the agreement. The other two sister siblings also entered into similar agreements with Leading Win for the sale of their shares.

The relevant events in 2015

25.  Four months later, on 20 January 2015, SFKS filed and served a Notice of Intention to proceed with the petition on MBJSM. 

26.  By a letter dated 10 February 2015 to MBJSM, SFKS requested Coqueen to immediately withdraw the petition against Hing with costs, failing which an application to strike out the petition would be taken out.

27.  On 19 March 2015, MBJSM replied, stating, amongst other things, that Hing had no basis for claiming costs.  MBJSM indicated that Coqueen was prepared to withdraw the petition against Hing, but only with costs to be paid by Hing and gave her seven days to consider the offer. 

28.  On 17 April 2015, Hing took out the Strike-out Summons against Coqueen.

29.  By an open letter dated 30 April 2015, MBJSM proposed that:

(1) Hing to withdraw her Strike-out Summons with costs to Coqueen;

(2) Coqueen to withdraw the petition against Hing; and

(3) the above withdrawals were without prejudice to Coqueen and Hing seeking costs of the petition against each other.

But by a without prejudice letter of the same date, MBJSM offered that there be no order as to costs in respect of both the Strike-out Summons and the withdrawal of the petition.  That offer was not accepted by Hing.

30.  By an open letter dated 8 June 2015, MBJSM proposed that the petition be withdrawn by Coqueen with no order as to costs as between Coqueen and Hing.  Hing rejected that offer on 10 June 2015.

31.  On 12 June 2015, Coqueen took out the Withdrawal Summons seeking:

(1) withdrawal of the petition with no order as to costs as between Coqueen and Hing; and

(2) costs of the application be paid by Hing on an indemnity basis forthwith.

32.  On 23 June 2015, SFKS made the following offer:

(1) the petition be withdrawn with costs to Hing;

(2) the Strike-out Summons be withdrawn with no order as to costs;

(3) the Withdrawal Summons be withdrawn with no order as to costs; and

(4) the hearing on 4 August 2015 be vacated.

33.  On 7 July 2015, MBJSM made a counter-proposal accepting all of SFKS’s counter-offer except the question of costs of the petition.  MBJSM insisted that the petition be withdrawn with no order as to costs.

34.  In the light of the above event and the correspondence, there is no longer any issue that the petition should be withdrawn and it is unnecessary for Hing to proceed with her Strike-out Summons. Hing’s position is that she should have costs of the petition on party and party basis.  Coqueen’s position is that there should be no order as to costs.  Hence, it is the common consensus of counsel for both Coqueen and Hing that the real issue in controversy between the parties is who should bear Hing’s costs in the petition.  Once this issue is determined, the matters raised by the two summonses and the issue of costs of those two summonses will fall neatly into place.

The general legal principles on costs of withdrawal of application

35.  Under Order 21 of the Rules of the High Court, a plaintiff has two options if he wishes to discontinue an action commenced by him against a defendant.  First, he may, without leave of the court, discontinue the action not later than 14 days after service of the defendant’s defence on him by serving a notice of discontinuance on the defendant under rule 2.  Alternatively, he may seek court’s leave to discontinue the action under rule 3(1).  There may be costs consequences under both options.

36.  As for costs under the first option, discontinuation with leave, Order 62 rule 10(1) provides:

“ Where a plaintiff by notice in writing and without leave … withdraws any particular claim made or question raised by him therein as against any defendant, the defendant may tax … his costs occasioned by the matter withdrawn … and if the taxed costs are not paid within 4 days after taxation, may sign judgment for them.”

The rationale is that a defendant should not be out of pocket in defending a proceeding commenced by the plaintiff who then chooses not to proceed with it.  While the plaintiff is entitled to withdraw the action without leave of the court, the defendant is entitled to his costs as of right and enter judgment for costs within four days after taxation. 

37.  If a plaintiff wishes to avoid the consequence of having to pay costs for the withdrawal, he may seek the court’s leave to discontinue under Order 21 rule 3(1).  Under this rule, the court has complete discretion to grant leave to discontinue on such terms as to costs as it thinks fit.  The guiding principle is fairness and justice in the circumstances: Covell Matthews & Partners v French Wools Ltd[1]. Invariably the court takes into account two legal principles when deciding on the terms as to costs.  First, Order 62 rule 10(1) provides a convenient starting point.  Second, the principle that costs follow event usually applies.

38.  A plaintiff applying under this rule has to show he has a good reason to discontinue the action.  What is a good reason depends on the circumstances of the case.  Examples of good reasons include: that the dispute has become academic; that a crucial witness has died or has otherwise become unavailable; that the subject matter of litigation has ceased to exist; or that the defendant has no means to satisfy any judgment which may be awarded against him.  A good reason does not necessarily entitle a plaintiff to unconditional leave to discontinue.  It is only the threshold which he must overcome before the court would even consider whether to grant leave to discontinue on terms without costs.  Absence of good reason must necessarily mean the starting point applies

39.  If a good reason is shown, the second principle comes into play.  Because of the starting point and the general rule that costs follow event, plaintiffs are frequently given leave to discontinue or withdraw only on terms of their paying the defendants’ costs, unless the court is satisfied that it has a proper basis for making a different order: Lloyds Bank Ltd v National Westminster Bank Ltd[2]. This principle was confirmed by the English Court of Appeal in that same case[3].  Hence, it was described as the “general rule” by Keith J (as he then was) in Trend Publishing (HK) Ltd v Vivien Chan & Co (a firm)[4] and by Chadwick LJ in BCT Software Solutions Ltd v C Brewers & Sons Ltd[5].

40.  To persuade the court to depart from the general rule, the minimum a plaintiff has to do is to show that the discontinuance is for reasons other than an acknowledgment of defeat or likely defeat.  The most direct way of proof is to show that he will succeed in a postulated trial.  The burden of proof is on the plaintiff and the standard of proof is the usual civil standard.  Proof of a prima facie case is not enough.  The court has to be satisfied on proper factual basis, whether based on agreed fact or determined fact, that the plaintiff will succeed.  Discontinuance under such circumstances is consistent with the underlying objective of Order 1A.  It is also beneficial to the defendant in that further costs to be incurred by him leading to nowhere but his eventual defeat are saved.  The defendant can have no complaint that he was made to incur costs in an action which he is bound to lose but which the plaintiff chooses not to proceed.  If the plaintiff is able to discharge this burden of proof, fairness and justice must require that he be permitted to discontinue his action without costs consequence.

41.  However, very often there may not be sufficient material before the court to enable the court to be satisfied that the plaintiff or the defendant will succeed in a postulated trial.  As the court’s duty is to make a determination on costs on proper factual basis, it will make factual finding within the confines of what is reasonably necessary in the situation.  Where the circumstances permit, the court may adopt a broad approach which would enable the court in a comparatively short time to decide without giving a fully reasoned judgment which party will succeed and hence whether the case before it is one to which the general rule should apply: R v Holderness Borough Council Ex p James Robert Developments Ltd[6].  But, there may be circumstances where the court cannot make a decision one way or the other without a trial of most of the issues in dispute involving costs which would be out of all proportion with the costs at stake. In that scenario, the court has to accept that it is impossible to make any order; and no order would probably best serve the justice of the situation and the interests of the parties: Brawley v Marczynski[7].

42.  The court’s discretion to impose terms as to costs under this rule is very wide.  It is not confined to cases where discontinuance is equated with an acknowledgment of defeat or likely defeat.  As the authorities have shown, costs may be imposed where justice requires that the defendant should recover his costs even when the plaintiff has discontinued the proceedings for reasons other than the certainty of defeat: Inchroy Credit Corporations Ltd v Cheung Man Cheung[8] and Trend Publishing (HK) Limited v Vivien Chan & Co (a firm)[9].

43.  Except on one point, Mr Ma, counsel for the Petitioner, has no dispute with the above legal principles.  He also described it as the “usual rule” for leave to be given on terms of the plaintiff paying the costs of the defendant.  But he argues, quoting Trend Publishing (HK) Ltd v Vivien Chan & Co (a firm)[10], that the general rule does not apply where the discontinuance or withdrawal is due to the underlying disputes having been settled and become academic.  He submits that under those circumstances, the proper order is that there should be no order as to costs.

44.  With respect, the authorities have repeatedly rejected the proposition that there is any convention or practice of making no order as to costs merely because the dispute has been settled except as to costs or has become academic.  The decision in Trend Publishing (HK) Ltd v Vivien Chan & Co (a firm) is one which turned on its facts.  In the end, Keith J (as he then was) held that the plaintiff was bound to fail in the action and allowed the appeal by ordering that the master should have made discontinuance of the action conditional upon the plaintiff paying the defendant’s costs.

45.  The legal principles applicable to the issue of costs upon discontinuance of an action by way of settlement were fully discussed in Brawley v Marczynski.  In that case, the dispute was settled save as to costs.  The judge found that the defendant had conducted the litigation in an improper manner and ordered him to pay the costs of the action on indemnity basis.  On appeal, the English Court of Appeal upheld the judge’s order as to costs.    Longmore LJ said:

“ 18 As far as Mr Shipley's third point on the law is concerned, there is in my judgment no tradition in these matters of there being “no order as to costs” merely because a dispute has been settled except as to costs. No doubt if it is truly impossible to say what the likely outcome would have been it is a possible order. But if one looks at the authorities referred to by Mr Shipley one finds that the position is much more precisely expressed. I refer firstly to R v Holderness Borough Council, Ex p James Robert Developments Ltd 66 P & CR 46. Butler-Sloss LJ said, at pp 56–57:

“It is not the function of the courts to make decisions on academic issues of law where there is no dispute to resolve. I have great sympathy with a view as to the undesirability of deciding an important issue in a dispute which no longer exists for the purpose of determining who pays the costs of litigation which has otherwise come to an end. In this case however there are now considerable costs incurred on both sides and, with regret, I cannot see how the court can bar the parties from obtaining a decision as to who should pay those costs. The issue of costs alone may keep litigation alive, see Ainsbury v Millington [1987] 1 WLR 379. The court is not in a position to assess the correct costs order without an evaluation of the prospects of success had the application for judicial review been heard and determined.”

19 In a dissenting judgment but on this point not substantially dissenting from Butler-Sloss LJ, Simon Brown LJ said, at p 52:

“I recognise, of course, that costs applications have to be entertained and resolved. But not, I would suggest, by litigating the case for all the world as if the substantive issues need to be resolved for their own sake. In my judgment an altogether broader approach should be adopted. One which enables the court in a comparatively short time to decide, and decide moreover without giving a fully reasoned judgment, into which general category of discontinuance the case falls.”

20 I pause to observe that that is just what Laddie J did in this case.

21 For my part, I find most helpful the principles which Scott Baker J deduced from the authorities in R (Boxall) v Waltham Forest London Borough Council (unreported) 21 December 2000. He set out those principles as follows:

“(i) The court has power to make a costs order when the substantive proceedings have been resolved without a trial but the parties have not agreed about costs. (ii) It will ordinarily be irrelevant that the claimant is legally aided. (iii) The overriding objective is to do justice between the parties without incurring unnecessary court time and consequently additional cost. (iv) At each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties. (v) In the absence of a good reason to make any other order the fall back is to make no order as to costs. (vi) The court should take care to ensure that it does not discourage parties from settling judicial review proceedings for example by a local authority making a concession at an early stage.”

(My emphasis underlined)

It is clear from the above dicta that the prime objective of the court in such a situation is to do justice between the parties.  For that purpose Longmore LJ even endorsed the rather empirical approach of Simon Brown LJ in R v Holderness Borough Council, Ex p James Robert Developments Ltd of adopting a broad brush approach to decide within a comparatively short time and without having to give a fully reasoned judgment where merit is likely to lie. Longmore LJ is far from saying that whenever a dispute has been settled save as to costs, then the court should make no order as to costs.  Such an order should only be made as a fallback or last resort when it is truly impossible to determine the likely outcome of the trial.  He approved the principles which Scott Baker J deduced from the authorities in R (Boxall) v Waltham Forest London Borough Council[11] that how far the court should investigate into the unresolved factual disputes depends on all the circumstances of the case, including the amount of cost at stake and conduct of the parties.

46.  In BCT Software Solutions Ltd v C Brewers & Sons Ltd, Mummery LJ had no disagreement that Brawley v Marczynski did not purport to lay down any general principle that the court should make no order as to costs whenever it is difficult, as opposed to impossible, to ascertain from the terms of a settlement who is the winner and who is the loser.  Mummery LJ said[12]:

“17 BCT's submission that the judge should have made no order as to costs is particularly difficult to accept. That form of order certainly has its attractions in cases where it is difficult to fathom from the terms of a settlement who is the winner and who is the loser. It is an obvious candidate for serious consideration. There is, however, no convention that such an order should be made whenever the court is asked to decide costs on the settlement of the case: see Brawley v Marizynski (No 1) [2002] EWCA Civ 756, at [18]; [2003] 1 WLR 813 at 819B.”

(My emphasis underlined)

Chadwick LJ expressed the sentiment that the court should not abdicate from its function of adjudicating the issue of costs; and emphasised the need to have a proper factual basis upon which to decide this question of costs.  He said[13]:

“ 23 In addressing that question the court must have regard to the need (if an order about costs is to be made) to have a proper basis of agreed or determined facts upon which to decide, in the light of the principles set out under the other provisions in CPR 44, what order should be made. The general rule, if the court decides to make an order about costs, is that the unsuccessful party will be ordered to pay the costs of the successful party – CPR 44.3(2)(a). But the court may make a different order – CPR 44.3(2)(b). Unless the court is satisfied that it has a proper basis of agreed or determined facts upon which to decide whether the case is one in which it should give effect to “the general rule” – or should make “a different order” (and, if so, what order) – it must accept that it is not in a position to make an order about costs at all. That is not an abdication of the court’s function in relation to costs. It is a proper recognition that the course which the parties have adopted in the litigation has led to the position in which the right way in which to discharge that function is to decide not to make an order about costs.”

(My emphasis underlined)

This later Court of Appeal decision also unequivocally rejected Mr Ma’s proposition that an order of no costs should be made whenever the court is asked to determine the question of costs where a case has been settled save as to costs.  The Court of Appeal only stressed the need to have a factual basis to make any costs order.  No order as to costs is only an order of last resort when the court is truly not in a position to make an order about costs at all, without incurring costs which are out of all proportion to the costs at stake.

47.  The following principles may be distilled from Covell Matthews & Partners v French Wools Ltd and Brawley v Marczynski andthe authorities cited therein. 

48.  First, the general rule is for the plaintiff to be given leave to discontinue or withdraw only on terms of his paying the defendants’ costs, unless the court is satisfied that it has a proper basis for making a different order.  The burden of persuading the court to depart from the general rule is on the plaintiff. 

49.  Second, while the court should not make decisions on academic issues of law where there is no dispute to resolve, it may have to do so where the issue of costs so requires.  The issue of costs has to be dealt with in accordance with the usual principle of costs to follow the event, that is, which party is likely to have succeeded had the action taken its full course.  Hence, another general rule is for the plaintiff to pay the defendant’s costs, if discontinuance is equated with an acknowledgment of defeat or likely defeat.  

50.  Third, the court may only determine the question of costs on proper factual basis.  How far the court should look into the previously unresolved substantive issues depends on proportionality and the good sense of the court.  On the one hand, the more substantial are the costs, the more detailed investigation is required.  But on the other hand, the costs of such investigation should not be out of proportion to the costs at stake because to undertake such a course of inquiry would be contrary to the underlying objective of Order 1A.  Where appropriate, the court may take a broad brush approach to reach within a comparatively short time and without having to give a fully reasoned judgment a conclusion of the factual basis required to determine the costs issue. It may draw inferences from the terms of the settlement and facts which are not in dispute.

51.  Fourth, the court should not abdicate from its function of adjudicating on costs merely because there are complicated factual disputes.  But, if it is impossible to come to a conclusion as to the likely outcome of the trial without an investigation involving costs which would be out of all proportion to the costs at stake, the court must accept it is truly impossible to determine the question of costs and the appropriate order is to make no order as to costs.  In that scenario, no order probably best serves the justice of the situation and the interests of the parties.  

52.  Fifth, the court’s discretion under Order 21 rule 3 is very wide.  It may impose terms as to costs even where the discontinuance is for reasons other than an acknowledgement of defeat or likely defeat.  The court may take into account the parties’ conduct of the litigation.  The overriding principle is what fairness and justice require in the circumstances. 

Coqueen’s case

53.  Coqueen’s case is that this petition is one which involves very complicated disputes of fact but was settled without any agreement or determination on those factual disputes.  By the settlement, Coqueen obtained what it sought to obtain by the petition and should be treated as having succeeded.  Coqueen is therefore entitled to costs.  Its alternative case is that there is no factual basis on which the court can determine which party has succeeded or would win.  Hence, the court should make no order as to costs. To minimise controversies and by way of concession, Coqueen seeks leave to withdraw the petition with no order as to costs.  Hing disputes Coqueen’s case.  Thus, the burden is on Coqueen to persuade this court to depart from the general rule.

Whether there was any settlement between Coqueen and Hing

54.  Hing disputes that the Share Purchase Agreement was a settlement of the petition between her and Coqueen.  She argues that it is a separate agreement between her and Leading Win.  Coqueen’s case is that it is a 50% shareholder of Leading Win which acted as its nominee in the purchase of Hing’s shares.  Hence, the Share Purchase Agreement was in substance an agreement between Hing and Coqueen.

55.  On the fact, Coqueen’s latest offer to buy Hing’s shares was contained in MBJSM’s without prejudice letter dated 27 August 2013. In an open letter of the same date, MBJSM gave a warning that Coqueen will proceed with the petition if an out of court settlement could not be reached within reasonable time.  In September 2013, whether by coincidence or by design, the sister siblings, including Hing, were informed that the Company would not be distributing dividend in the coming two years.  The sister siblings started negotiation with Pui’s son, Duncan, for the sale and purchase of their shares.  The negotiation went on for a year.  Despite the threat of proceeding with the petition, no action was taken by MBJSM during the one year period when negotiation was taking place.  Mr Ma argues that the sister siblings knew that the purchaser would be a wholly owned subsidiary of Coqueen or a jointly controlled company owned by Coqueen and Chinese Food & Beverage Group Limited and that the negotiation was made on behalf of Coqueen.  

56.  In the circumstances, it is unrealistic to suppose the purchase of the shares by Leading Win had nothing to do with Coqueen.  However, despite the connection with Coqueen, there is not a scintilla of evidence that Leading Win was its nominee.  There is no evidence that the negotiation was conducted on behalf of Coqueen; or that the sale and purchase was between Coqueen and Hing.  On the contrary, the Share Purchase Agreement mentioned nothing about Coqueen and is totally silent about any settlement of the petition.  From the Share Purchase Agreement, it appears that Leading Win was not represented by MBJSM.  Coqueen had been represented by MBJSM throughout these four years since commence of the proceedings until now.  It therefore appears to be the deliberate choice of Coqueen, Pui, Duncan or Leading Win (whoever it was) not to involve MBJSM in this agreement.  This suggests that the Share Purchase Agreement was separate and distinct from the petition.  Furthermore, if it was Hing’s and Coqueen’s common intention that the Share Purchase Agreement was a settlement of the petition, it is difficult to see how solicitors properly instructed would have made no reference to Coqueen and the petition in the agreement.  The irresistible inference is that Leading Win who gave instructions to its solicitors, never had the settlement of the petition in mind; and neither had Coqueen nor Hing.

57.  More significantly, the sale and purchase of shares was not one between Leading Win and Hing alone.  The background shows that it was part of a collective action amongst all four sister siblings and Leading Win.  Hing and Foon entered into an agreement on immediate payment terms, while the other two sister siblings entered into another agreement on instalment terms.  The sale and purchase of Hing’s shares is far from being a settlement of a dispute between Coqueen and Hing.

58.  For the present purpose of determining whether the sale and purchase was in substance a settlement of the petition, I would be prepared to adopt a more relaxed attitude and treat Leading Win as a corporate vehicle to carry out the settlement, disregarding all arguments about separate corporate personality.  But the factual circumstances mentioned in the above paragraph made it amply clear that the common intention of Hing and Leading Win was that the sale and purchase of Hing’s shares was not in any way connected with their dispute in the petition.  That makes it impossible for me to adopt that more relaxed approach.  Accordingly, I am driven to the conclusion that Coqueen was not a party to the Share Purchase Agreement and that sale and purchase was not a settlement of the petition. 

Whether Coqueen has obtained substantially the relief it sought

59.  Mr Ma argues that by the Share Purchase Agreement Coqueen has obtained substantially the relief it sought in the petition.   However, Mr Fung, counsel for the 2^nd Respondent, argues that Hing’s shares were acquired by Leading Win as it is well established law that a holding company has no legal or beneficial interest in property of its subsidiary: Prest v Petrodel Resources Ltd[14]; Re Yung Kee Holdings Ltd[15]; and Re Chun Yip Holdings Ltd[16].  Coqueen is a 50% shareholder of Leading Win.  It is not entitled to even half of Hing’s shares sold to Leading Win, not to mention that Hing’s sale was a sale to a non-party and the principle of separate corporate personality.  Thus, even though its jointly owned subsidiary has acquired Hing’s shares, it cannot be said that the Share Purchase Agreement was a settlement between Hing and Coqueen or that Coqueen obtained what it sought to obtain by the petition.

60.  Putting that aside, what Coqueen sought against Hing in the petition was an order that she sell her shares to Coqueen at a fair value to be determined by court with a discount to reflect the loss suffered by the Company as a result of her unfair and prejudicial conduct.  There is no evidence as to the fair value which the court would have determined.  But according to MBJSM’s letter of 27 August 2013, the fair value according to Coqueen’s expert with a 20% minority discount was $6,950,000, which was only $4,666 short of the actual sale price.  I am prepared to treat the difference as insignificant and to take a broad brush approach to assume any difference in valuation between Coqueen’s expert and the court as negligible.

61.  Mr Fung argues that the sale price for the shares was much improved over Coqueen’s offer in August 2013 as Hing was not required to give credit to the loan of about $2.1 million which the Company had obtained on her behalf.  Hence, he argues, Coqueen has not obtained what it sought to obtain by the petition.  With respect, I do not agree.  Whether Hing has to give credit to that loan is neither here nor there, as it remains her liability for as long as it has not been repaid (the issue of limitation apart) and there was nothing in the Share Purchase Agreement waiving that loan as between Hing and Coqueen.

62.  However, one matter which cannot be overlooked is that the basis of the price has changed from discount for loss suffered because of Hing’s unfair and prejudicial conduct to a minority discount.  It is also important to note that the unit price paid by Leading Win to the other three sister siblings, against whom Coqueen had no complaint of unfair and prejudicial conduct, was the same.  Accordingly, the price paid for Hing’s shares could not have been at a discount to reflect the loss suffered by the Company as a result of Hing’s unfair and prejudicial conduct.  That Coqueen obtained a discount for something else which is same or in excess of the discount for loss does not matter.  The change in the basis of valuation simply means Coqueen has not obtained the relief it sought.  It also reflects an acknowledgment on the part of Coqueen of a likely defeat were the petition to proceed to trial in that it would be unable to prove Hing’s unfair and prejudicial conduct, the loss to the Company or causation. 

63.  Mr Ma argues that had the petition proceeded to trial which led to an order directing Hing to sell her shares without discount, costs would follow the event such that Coqueen would be entitled to costs.  He submits the fact that Hing’s shares were sold at a price without discount to reflect the loss suffered by the Company as result of her unfair and prejudicial conduct could not have entitled Hing to costs of the petition. With respect, there is absolutely no basis for such submissions.  The court would not have ordered Hing to sell her shares, whether with or without discount, unless Coqueen was able to prove unfair and prejudicial conduct.  Thus, Mr Ma’s argument is based on a presupposition that Coqueen would succeed in the petition.  But there is no factual basis for such presupposition.  The position remains that if Coqueen was unable to prove such unfair and prejudicial conduct, Hing would be entitled to costs.   

64.  Furthermore, if Coqueen genuinely considered it had obtained what it sought in the petition against Hing, it would no doubt have demanded Hing to pay the costs of the petition immediately after the execution of the Share Purchase Agreement in September 2014 or sought judgment against her on the basis that she had effectively consented to the relief sought by selling her shares at a discount.  None of those actions had been taken.  Instead, it was SFKS who first initiated action by issuing a notice of intention to proceed with the petition in January 2015.

65.  Even assuming that Coqueen had caused Leading Win to purchase Hing’s share, it has not obtained what it sought to obtain by the petition.  The purchase was not at a discount to reflect the loss suffered by the Company as result of Hing’s unfair and prejudicial conduct. 

Whether the court is in a position to make an order for costs

66.  In view of the conclusions in the preceding two sections, Mr Ma’s argument that the court should find Coqueen has succeeded and should have costs against Hing simply falls away. 

67.  In his alternative argument, Mr Ma submits that the court is not in any position to make an order for costs and Coqueen’s application for discontinuance should be granted on terms of no order as to costs.  The petition in this case is a section 168A petition involving very complicated factual disputes.  The Re-Amended Petition runs up to 144 pages.  There was also a cross-petition by Wai against Pui and Coqueen.  There was no cross-petition by Hing.  Coqueen’s case is that Wai and Hing acting in collusion conducted the affairs of the Company in a manner unfairly prejudicial to the interests of the members generally or some of them including Coqueen.  A lot of factual disputes was raised, none of which has been agreed or determined.  Hence, Mr Ma argues that there is no factual basis on which the court could determine who would win had the petition proceeded to trial and hence the appropriate order for the court to make is no order as to costs.

68.  The major disputing parties were Wai and Coqueen who each held 44.63% of the shares in the Company, while Hing only held 2.77%. Hing was deliberately excluded from the settlement negotiation and bidding process.  Against such a background, it would not be difficult to come to a view that to determine the question of who, as between Hing and Coqueen, would win the petition, even by making a very rudimentary determination of the issues raised by the parties’ pleaded case, would involve costs which would be out of any proportion to the costs of the petition incurred up to the present stage of the proceedings.  But this does not mean the court should abdicate from determining this issue.

69.  The court’s duty is to make an order of costs as long as it can ascertain the factual basis for making an order.  The present case is a not one in which it is impossible for the court to come to a conclusion as to the likely outcome of the petition without a full hearing.  The court can take a broad brush approach and determine by drawing inferences from the parties’ conduct whether the sale and purchase of Hing’s shares was an acknowledgment of defeat by Coqueen.  This can be done without engaging in a very costs wasting investigation into all the allegations of unfair and prejudicial conduct and loss suffered by the Company. 

70.  As early as 22 November 2012, MBJSM offered to withdraw the petition against Hing with costs to Hing upon Wai executing a formal settlement agreement with Coqueen, regardless of whether Coqueen won or lost the bidding.  While this may be treated as a neutral event and not indicative of any acknowledgment of defeat, it sets the background against which to view Coqueen’s conduct.  Coqueen made two subsequent changes in its position.

71.  The bidding was concluded in December 2012 with Coqueen outbidding Wai.  Despite repeated reminders from SFKS to withdraw the petition, MBJSM did not respond for seven months until 21 June 2013 and only after having been threatened with an application to court.  Then MBJSM asserted that Coqueen had a meritorious and rightful claim and would not withdraw the petition. 

72.  In June 2013, the sister siblings were informed, whether by coincidence or design, that the Company would not be distributing dividend in the coming two years, contrary to what it did in the past.  That was timely followed by MBJSM’s two letters dated 27 August 2013 offering to buy Hing’s shares for $6,950,000 with 20% minority discount and a threat to proceed with the petition if no settlement was reached.  Then, Coqueen stood by and watched Duncan negotiate with Hing and the other sister siblings for the sale and purchase of their shares.  

73.  For 19 months since June 2013 when it indicated it had a meritorious and rightful claim against Hing, Coqueen did not proceed with the petition and did nothing until February 2015 when SFKS threatened to make application to court.  Coqueen offered no good explanation for its inaction except that it was waiting for the negotiation for the sale and purchase of the shares between Duncan and the sister siblings.  Coqueen was not a party to the Share Purchase Agreement.  No explanation was given why Coqueen was not a party to the agreement.  MBJSM also apparently took no part in the negotiation or the execution of the agreement.  If Coqueen had in mind that the Share Purchase Agreement was a settlement of the petition, there was no reason why that was not stated in the agreement.  It had all along been represented by one of the leading solicitors firms in Hong Kong and advised by senior counsel.  MBJSM had all along maintained an extremely aggressive and uncompromising stand.  In the circumstances, that explanation is rather thin.  The inaction suggests to me to be a realisation by Coqueen of the uncertainty if not the weakness of its case against Hing.

74.  A more significant conduct is Coqueen’s offer to buy Hing’s shares in August 2013.  Coqueen presented the petition in June 2011, alleging Hing of unfair and prejudicial conduct causing loss to the Company. On its behalf, MBJSM maintained that position, asserted that Coqueen had a meritorious and rightful claim against Hing, and threatened it would not withdraw the petition.  Then 26 months later, in their letter dated 27 August 2013, MBJSM offered to buy Hing’s shares at a minority discount.  They changed the basis of the discount from discount for Hing’s unfair and prejudicial conduct which Coqueen had maintained for 26 months to a mere minority discount.  The letter was written by MBJSM, a very reputable firm of solicitors, which had hitherto taken a very aggressive attitude in this litigation.  This change could not have been an accidental slip by MBJSM or caused by frolics of its junior solicitors.  It must have been a conscious and considered decision, properly made and possibly with senior counsel’s opinion. Coqueen has not put forward any explanation for the change.  The only inference which could reasonably be drawn from that change is that Coqueen realised it may not be able to succeed in proving unfair and prejudicial conduct, loss to the Company or causation, and decided that it would be safer to buy Hing out relying on the usual minority discount. 

75.  Another very damaging piece of evidence to Coqueen’s case is that the unit price for Hing’s shares actually sold was exactly the same as that for the shares of the other three sister siblings, against whom Coqueen had no complaint of unfair and prejudicial conduct.  That price, therefore, contained no element of discount for unfair and prejudicial conduct.  There was no suggestion of a “bundle deal” between the sister siblings and Leading Win that the sister siblings would accept a reduction in price for Hing’s unfair and prejudicial conduct or that Leading Win would give Hing a higher price if the other three sister siblings also sold their shares and then discounted it for her unfair and prejudicial conduct.  Indeed, there is no evidence that Leading Win ever bargained for a lower price for Hing’s shares because of her unfair and prejudicial conduct.  It is Coqueen’s case that the purchase by Leading Win was in substance its purchase.  Then its agreement to buy at that price based on minority discount only may also be taken as Coqueen’s acknowledgment of defeat or likely defeat.

76.  The only reasonable inference that could be drawn from the change in the basis of discount and the actual sale and purchase of Hing’s shares at the same unit price as the other sister siblings’ shares taken together is that Coqueen acknowledged the weakness in its case of unfair and prejudicial conduct against Hing.  The purchase at that price was a clear and unequivocal acknowledgment of defeat or likelihood of defeat in being unable to prove Hing’s unfair and prejudicial conduct, loss to the Company or causation.  Having regard to the circumstances of this case, I consider such inference irresistible and very reliable.

77.  It may well be that having acquired Wai’s shares, Coqueen considered it not worthwhile proceeding with the petition against Hing for practical reasons.  The costs may not worth it or that it may be to Coqueen’s benefit to keep Hing as a minority member in the Company.  If these were the case, Coqueen had not said so.  Even if it were, Coqueen has not advanced any reason why the general rule should not apply.

Conclusion on costs of the petition

78.  Coqueen instituted proceedings against Wai and Hing seeking an order that they sell their shares to Coqueen at a fair value to be determined by court with a discount to reflect the loss suffered by the Company as a result of their unfair and prejudicial conduct.  The petition against Wai was settled while that against Hing was held in abeyance pending the settlement with Wai.  For 19 months since June 2013, Coqueen maintained that it had a meritorious claim against Hing and would proceed with the petition.  Despite the settlement agreement with Wai was completed in June 2013, Coqueen did not proceed.  Instead, it stood by and watched Duncan negotiate with Hing and the other three sister siblings for the sale of their shares to its 50% owned subsidiary, Leading Win.  For reasons as I have explained that sale was not a settlement of the petition between Hing and Coqueen. While that sale rendered the petition academic because Hing’s shares ceased to exist, Coqueen did not get through that sale what it sought to obtain by the petition.  That sale was engineered by Coqueen.  It reflected Coqueen’s acknowledgment that it may not succeed in proving Hing’s unfair and prejudicial conduct, loss to the Company or causation. 

79.  Coqueen presented the petition against Hing and now chooses not to proceed.  Hing was made to incur costs in defending the petition.  Coqueen has failed to establish any proper basis that the general rule should not apply.  Furthermore, the overwhelming inference to be drawn from the circumstances, in particular the price offered for the purchase of Hing’s shares is that the purchase of Hing’s share at that price was an acknowledgment by Coqueen of defeat or likely defeat in that it would be unable to prove Hing’s unfair and prejudicial conduct, loss suffered by the Company or causation.  Having regard to all these consideration, there is no reason why the general rule should not apply.  Furthermore, fairness and justice also require that Coqueen should pay Hing’s costs in defending the petition.

The 2^nd Respondent’s Strike-out Summons

80.  By the Strike-out Summons, Hing seeks:

(1) to strike out the petition on the ground of abuse of the process of the court, inordinate and inexcusable delay; and breach of Order 1A rule 1(b) of the Rules of the High Court;

(2) costs of the application against Coqueen on indemnity basis; and

(3) costs of the petition against Coqueen on party and party basis.

81.  Coqueen now no longer wishes to proceed with the petition against Hing.  It is common consensus of the parties that the petition should be withdrawn.   Hing’s shares had been sold.  There is no purpose to proceed with the petition.  The petition should be withdrawn.  It follows that it is now unnecessary for Hing to proceed with the Strike-out Summons which should be withdrawn.  The only question is costs.

82.  Coqueen seeks costs of the summons against Hing on indemnity basis.  The basis of its claim is that the issue of the summons is an abuse of the process of the court.  Mr Ma argues that there was no basis for the issue of the summons as there was no abuse of court process in Coqueen presenting the petition against Hing or inordinate and inexcusable delay in the prosecution of the petition causing prejudice to the defendant.  To determine the question of costs of this summons by going down this path to decide who is going to win would require almost a full hearing of the petition.  The costs thus incurred would be out of all proportion to the costs at stake.  It would be contrary to the principle in Brawley v Marczynski.  Besides, the real crux in the two summonses is who should bear the costs of the petition.  That question has been determined in favour of Hing.  On the face, Hing should have costs of the summons.  Though this summons is withdrawn, this is clearly not a case in which the general rule should apply.  The determinative factor is reasonableness in issuing the summons.

83.  Mr Ma argues that prior to Hing issuing the Strike-out Summons, consensus had been reached between MBJSM and SFKS that the petition would be withdraw, leaving costs to be determined by court.  It was therefore unreasonable for Hing to have issued the summons.

84.  Mr Fung disputes that there was any such consensus reached on withdrawing the petition.  The first time MBJSM intimated this position unequivocally to Hing was on 30 April 2015.  From November 2012 to early 2015, Hing had repeatedly asked Coqueen to withdraw the petition against her with Coqueen paying her costs.  All her requests were rejected.  In their letter dated 10 February 2015, SFKS asked MBJSM to immediately withdraw the petition with costs and gave Coqueen six weeks to accept the offer, failing which an application to strike out would be made.  The offer was rejected by MBJSM on 19 March 2015.  MBJSM counteroffered to withdraw the petition with costs to be paid by Hing and gave her seven days to consider.  Hing did not accept that counteroffer and issued the Strike-out Summons on 17 April 2015.  What Hing asked was withdrawal of the petition with costs against Coqueen.  What Coqueen offered was withdrawal with costs to be determined by court. Withdrawal and costs should be treated as one package.  I am unable to agree with Mr Ma that there was any consensus reached to withdraw the petition leaving costs to be determined by court prior to Hing taking out the Strike-out Summons on 17 April 2015. 

85.  Mr Ma argues that SFKS should have responded to MBJSM’s letter of 19 March 2015 and had they done so, MBJSM would have applied to withdraw the petition and invite the court to determine the issue of costs.  I do not consider there is any realism in Mr Ma’s suggestion.  Hing asked for costs of the petition.  MBJSM’s counteroffer was that Hing should pay Coqueen’s costs.  There was no sense of sincerity or seriousness in such a counteroffer.  It cannot even be described as a “counteroffer”. It was an outright rejection of Hing’s offer.  It would be a waste of time to continue any further dialogue.  To recover her costs of the petition, Hing was left with the option of taking out an application seeking for costs of the petition or leaving it to Coqueen’s initiative.  Coqueen has not been responsive and letters from SFKS were left unanswered for months.  It is uncertain when Coqueen will initiate action.  In the circumstances, Hing could not be criticised as having acted unreasonably in taking out the Strike-out Summons.  Coqueen could have, if it wished, taken out the Withdrawal Summons on 27 March 2015 after the seven days’ period for Hing to consider its offer had lapsed.  It cannot blame Hing for taking steps timously to pursue her rights but not blame itself for not taking out the Withdrawal Summons any earlier and for waiting for its opponent to take the initiative.  This is not a case in which the general rule should apply.  It is one in which the parties’ conduct is determinative of costs.  The application was rendered academic as result of the petition having been withdrawn.  Despite Hing’s repeated requests, the petition was not withdrawn.  Coqueen only sought to withdraw the petition after the issue of Hing’s Strike-out Summons.  Hing has not acted unreasonably in taking out the summons.  Fairness and justice require that Hing should have her costs of this application.

86.  Accordingly, the Strike-out Summons should be withdrawn with costs to the 2^nd Respondent.

The Petitioner’s Withdrawal Summons

87.  By the Withdrawal Summons, Coqueen seeks:

(1) leave to withdraw the petition;

(2) costs of the summons against Hing on indemnity basis; and

(3) no order as to costs of the petition as between Coqueen and Hing.

It is now uncontroversial between Coqueen and Hing that the petition should be withdrawn.   The differences between the parties are as to the costs of the petition and costs of the Withdrawal Summons.  For reasons as given above, Coqueen should pay Hing’s costs of the petition.

88.  Coqueen seeks costs of the Withdrawal Summons on indemnity basis against Hing.  The basis of Coqueen’s claim is that before Hing issued the Strike-out Summons, MBJSM had informed her and SFKS that Coqueen was prepared to withdraw the petition against Hing subject to Hing paying the costs of the petition; that it had improved its offer to the extent of settling the whole matter with no order as to costs against her; but Coqueen’s goodwill fell on death ears.  With respect, I take a wholly different view.  For reasons as given above, I find that Hing is entitled to costs of the petition.  I also find that it was not unreasonable for Hing to take out the Strike-out Summons and Coqueen is responsible for its own inaction.   

89.  Accordingly, in respect of the Withdrawal Summons, paragraph 1 should be allowed, ie the petition against the 2^nd Respondent be withdrawn, but with costs to the 2^nd Respondent; and paragraphs 2 and 3 of the summons should be dismissed.  The Petitioner should pay the 2^nd Respondent’s costs of the summons and the application.

Conclusion   

90.  I, therefore, make the following orders:

(1) In respect of the Petitioner’s Withdrawal Summons:

(a) under paragraph 1 of the summons, the Re-Amended Petition against the 2^nd Respondent be withdrawn with costs to the 2^nd Respondent, including all reserved costs and costs in the cause, to be paid by the Petitioner on party and party basis, to be taxed if not agreed;

(b) paragraphs 2 and 3 of the summons be dismissed; and

(c) the Petitioner shall pay the 2^nd Respondent’s costs of the application on party and party basis with certificate for two counsel, to be taxed if not agreed; and

(2) In respect of the 2^nd Respondent’s Strike-out Summons:

(a) the summons be withdrawn;

(b) the Petitioner shall pay the 2^nd Respondent’s costs of the summons and the application on party and party basis with certificate for two counsel, to be taxed if not agreed.