SHINEWING SPECIALIST ADVISORY SERVICES LTD v. CHEN YUNG NGAI KENNETH (AS THE LIQUIDATOR OF HEMPSTONE LIMITED (IN COMPULSORY LIQUIDATION) ) AND OTHERS

HCCW 279/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO 279 OF 2010

---------------------------

---------------------------

----------------------------

AND

HCCW 346/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO 346 OF 2010

---------------------------

---------------------------

----------------------------

AND

HCMP 117/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 117 OF 2014

---------------------------

---------------------------

----------------------------

AND

HCMP 118/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 118 OF 2014

---------------------------

----------------------------

----------------------------

________________________

D E C I S I O N

________________________

1.  On 21 August 2015 Master Hui, as part of the process of taxation in these proceedings, made an order that the Claimant shall bear 20% of the 1^st Respondent and the 2^nd to 7^th Respondents’ costs of the taxation, such costs to be determined by summary assessment if not agreed.

2.  That order has not been sealed.  It would appear that the 1^st Respondent was unclear whether the order that had been made in their favour allowed them to recover not only a proportion of their legal costs incurred but also the 1^st Respondent’s own costs. 

3.  As a consequence the 1^st Respondent issued four summonses in the various proceedings on 13 November.  Paragraph 1 of each of the summonses reads as follows:

“that part of the Order made by Master Hui dated 21 August 2015 herein where the Claimant was ordered to pay 20% of the 1^st Respondent’s costs of the taxation be clarified so as to read:

‘The Claimant should bear 20% of the 1^st Respondent’s costs of the taxation, such costs are inclusive of:

(a) the 1^st Respondent’s own fees and expenses of the taxation; and

(b) taxing fees’ ”

4.  The summonses were heard by Master Hui on 20 November 2015.  The Master dismissed each of these summonses and made no order as to costs.  The orders have been sealed.

5.  However, during the course of the hearing on 20 November 2015 (of which there is a transcript), the Master said at p. 12 letter G of the transcript “I believe the liquidator’s costs must include the whole set of costs, the liquidator’s and also legal costs.”

6.  On 4 December 2015 the Claimant issued a Notice of Appeal against the Master’s decision.  The Notice of Appeal read as follows:

“TAKE NOTICE that the above-named Claimant intends to appeal against that part of the Decision of Master Hui given on the 21^st day of August 2015 that the Claimant do bear 20% of the 1^st Respondent’s costs of the taxation (“Decision”) which was clarified on the 20^th day of November 2015 that:-

1. The 1^st Respondent’s costs of the taxation is inclusive of his own fees and expenses; and

2. There be no order as to costs in respect of the 1^st Respondent’s clarification application.”

7.  It seems to me that at present there is nothing for the Claimant or the 1^st Respondent to appeal.  As I have already mentioned the order of 21 August has not been sealed.  The summonses issued on 13 November 2015 were dismissed. 

8.  I do not think that observations made during the course of the hearing on 20 November can give rise to an appealable determination.  What is required is this.  The order made on 21 August 2015 should be sealed, when it has been sealed and it is clear what its terms are both parties can consider whether or not they need to appeal that order.  If that order is not subject to appeal, then I would expect that taxation to proceed, and if an issue arises during the taxation as to whether or not the 1^st Respondent is entitled to recover, pursuant to whatever the final form of the 21 August order is, its own costs of dealing with the taxation (which I am told are in the order of HK$4 million), the Master will have to produce a determination which will be reduced into writing, in a form which constitutes an appealable determination.  That determination could either be made as one of principle before the taxation of the actual costs incurred by the liquidator is undertaken or, if it is felt more efficient, it would be as a consequence of an assessment of the liquidator’s own costs.

9.  It does not seem to me that it particularly matters which course is taken other than to the extent it is the most efficient and cost effective method.  It would, however, result in there being something which would be open to appeal. 

10.  I, therefore, dismiss the Claimant’s Notice of Appeal, and I will hear the parties on costs.

(Submissions on costs)

11.  Costs to be reserved.