LEUNG WING SZE WINS AND ANOTHER v. LI OI LAM otherwise known as SARA LI AND ANOTHER

DCCJ 2022/2014

[2020] HKDC 238

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2022 OF 2014

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D E C I S I O N

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1.  On 29 November 2019 this Court handed down a judgment dismissing all the Plaintiffs’ (“Ps” and individually “P1” and “P2”) claims against the Defendants (“Ds” and individually “D1” and “D2”). At the same time, on Ds’ counterclaim this Court entered judgment in favour of D2 against the Ps together with injunction and a delivery order. Costs were also awarded in Ds’ favour.

2.  On 27 December 2019, the Ps took out a summons seeking:

i)  leave to appeal against the said judgment to the Court of Appeal (“CA”); and

ii)  a stay of execution.

3.  This Court directed the said summons be disposed of on paper without an oral hearing. As a result of the general adjournment due to local health condition, the last round of written submission was only received by this Court on 19 March 2020.

Applicable Principles for Leave to Appeal

4.  The legal principles applicable to leave to appeal are well-established. They are not in dispute. Section 63A of the District Court Ordinance, Cap 336 (“DCO”) is the governing provision. Section 63A(2) stipulates: -

“(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that—

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

5.  The relevant test of whether an appeal has a reasonable prospect of success under section 63A(2) of the DCO is whether the applicant can show that he has an arguable case with reasonable chances of success on appeal. It means an appeal with prospect that are more than “fanciful” but which do not need to be shown to be “probable”: see the Court of Appeal (“CA”) decision in KNM v HTF per Fok JA (as the learned PJ then was) at [9] [1]. The same test has been consistently applied by the CA: see for example, Yuen Oi Yee Lisa v Charoen Sirivadhanabhakdi & Others[2].

The Ps’ Proposed Grounds

6.  Mr KM Chong and Mr Alvin Cheng, Counsel for the Ps, set out their draft grounds of appeal in the said summons in 16 paragraphs. They refer to each paragraph a ground of appeal but see fit to group them under 4 heads. For convenience sake, this Court will adopt those headings, save and except the last one which should more logically be divided into 3 separate heads. There are therefore a total of 6 broad grounds of appeal.

I.  This Court erred in finding no partnership between P1 and D1 (paragraphs 1 and 2)

7.  Under this proposed broad ground, the Ps contended that this Court erred in law in its findings that the relationship between P1 and D1 was one of friendship rather than commercial. Particularly, it is suggested this Court has erred to come to the following findings. A particular paragraph of the judgment is also identified by counsel to each finding:

i)  P1’s involvement in the photo booth operation was purely on a friendly basis but not commercial ([81]);

ii)  the existence of an express agreement between the parties is a necessary pre-requisite for the existence of partnership ([84]); and

iii)  the failure on the part of the parties coming to terms on how to operate D2’s photo booth business is relevant for determination of the prior relationship between P1 and D2 ([87]).

8.  It is further submitted on the Ps’ behalf that in order to determine the existence of a partnership, “pertinent facts” should be considered as a whole, and the absence of an express agreement (oral or written) should not be conclusive. The “pertinent facts” identified in the Ps’ submission are:

i)  before commencement of their relationship, P1 and D1 contemplated profit might be derived from the operation of the photo booth business;

ii)  between October 2012 and June 2013, P1 had provided service in the operation of the photo booth business; and

iii)  P1 and D1 have together spent time and effort in contemplating the mode and operational details of photo booth business with a view to profit.

9.  So far as can be discerned from submission of Ps’ counsel, the Ps said since (i) intention to make profit lies at the very heart of a partner; (ii) the parties had “co-operated” in the photo booth business for a period of time; and (iii) P1 obtained a share/split of income derived from such business, the relationship between P1 and D1 therefore falls within the meaning of the Partnership Ordinance, Cap 38. 

10.  One of the hotly disputed issues is whether P1 and D1, as pleaded by Ps, associated themselves as business partners between October (or November as later conceded by P1 at trial) 2012 and June 2013. D1 strenuously denied. She said P1 only helped out on a friendly basis. The evidence relied on by P1 at trial included contemporaneous WhatsApp exchanges, emails, her participation in activities and events organized by Ds, alleged name cards, access card and almost everything she could think of. In this particular case, whether P1’s evidence was sufficient to substantiate a relationship of partnership is essentially a question of fact to be assessed by looking at all the evidence as a whole. It was the first issue to be resolved in the said judgment, see: [58(i)].

11.  All the evidence adduced by the parties have been analyzed in the said judgment, see: particularly [73] - [76], [79] - [87], [94] - [100]. This Court does not intend to repeat them here. Suffice it to say that the conclusion is overwhelmingly against P1. Further, this Court also found P1 and Flora unreliable witnesses. Theresia’s evidence, other than the part on HKJC’s[3] general operation and policy on appointment of contractors and related matters, is also unreliable and has to be looked at with scepticism.

12.  This Court is fully entitled to come to the factual findings as it did in the said judgment. Further, the Ps simply could not pinpoint any misapprehension of evidence on the part of this Court or any findings that no reasonable tribunal, when presented with the evidence now placed before this Court, would have come to. The Court’s findings cannot be said as plainly wrong.

13.  As regards the alleged error set out in [7(i)] above, this is a conclusion which this Court is fully entitled to come to after analysis of the evidence, particularly the WhatsApp messages exchanged between the parties, see: [81] of the said judgment and the footnotes of that paragraph. It is a finding of fact.  

14.  For [7(ii)], the alleged error is in fact a mis-comprehension and perhaps a distortion of what has been said in [84] of the said judgment which has nothing to do with what counsel has submitted. That paragraph of the judgment only stated that it was not until 3 June 2013 that some evidence suggesting some form of future co-operation appeared. This Court has never held that an existence of “an express agreement” (presumably counsel are referring to a written agreement) between the parties to be a pre-requisite for existence of a partnership.

15.  The alleged error repeated in [7(iii)] above is not understood. It suffices to say [87] of the said judgment has nothing to do with the alleged error. On the other hand, the failure on the part of the parties coming to terms on how to operate D2’s photo booth business must be, though not conclusive, a relevant consideration on whether the parties were in a partnership.

16.  Furthermore, the allegation that the “pertinent facts” are uncontroversial is totally not understood and in my view, incorrect. Those repeated in [8] above are over-simplified statements of facts out of context and are mostly unhelpful and misleading. Suffice it to say that after taking all the evidence as a whole, this Court concluded P1 helped out on a friendly basis, and the allegation of “co-operation partner” by P1 and making of money should be viewed in that light, see: [81] and footnotes 87 and 89 of the said judgment. The Ps are simply repeating their case which has already been rejected at trial.

II.  This Court erred to find the “green file” not jointly  earned information and Ps having infringed   copyrights of design belonging to D2 (paragraphs 3-8)

17.  Under this broad ground, the Ps appear to have taken issues on the following:

i)  the Ds had not pleaded the green file containing confidential information, the dimension of the photo booths being confidential and that the promotion kit contained copyright material, and yet this Court came to a conclusion that the said file contained confidential information or they are confidential ([124] of the said judgment), and that the Ps infringed copyrights of rate card, photo frame design company information, etc belonging to D2; and

ii)  this Court ought to have concluded that by reason of sections 173 and 232 of the Copyright Ordinance, Cap 528, the Copyright Tribunal should have exclusive jurisdiction over matters on breach of copyright instead of the District Court which does not have jurisdiction over copyright infringement   

18.  Although no written submission was made in respect of the subparagraph (i) above, it is submitted on Ps’ behalf that since subparagraph (ii) concerns a point of law and cannot be regarded as unarguable at this stage, leave to appeal should be granted.

19.  In the Court’s judgment, a court should not be barred from holding a document (and in the present case the green file and its contents) being of a confidential nature or containing confidential information even though the same are not pleaded if there is a dispute of evidence. In the present case, it is the Ps who asserted the materials in the green file are jointly earned materials which the Ds strenuously disputed. In so doing, the Court is exactly performing its function as a tribunal of fact. It has not been suggested on Ps’ behalf that, basing on the available evidence, the said finding of the Court is something which no reasonable tribunal of facts would have found.

20.  The finding of this Court relating to P1’s copying of the dimension of the photo booth casing is misconceived by the Ps’ counsel. The gist, as set out in [124(iv)] of the said judgment is this: the copying of the design and dimension of the photo booth owned by D2 was done by P1 surreptitiously for her own benefit and without Ds’ knowledge and consent. Again, this is a finding of fact which this Court is fully entitled to come to basing on the available evidence.

21.  Further, it is incorrect to say that no or insufficient pleadings have been raised by Ds in the pleadings regarding existence of the originality of design of photo frames, rate cards and/or company information. Although there are lots of rooms for improvement of the Ds’ pleadings, the issue that the size, fonts, layout as well as price list “resembled to that of [D2]” and the use by Ps without consent amounted to a breach had been raised in pleadings, see: [10.3], [10.7], [10.9], [10.12], [10.13], [26]-[27B], [28A], [28B] of the Re-Amended Defence and Counterclaim. The Ps also saw fit to rebut the Ds’ case by, inter alia, asking Flora to give evidence on their behalf. It therefore cannot be said the Ps were caught by surprise or did not have sufficient knowledge of the Ds’ case against them.

22.  On the point of jurisdiction, whether the District Court has jurisdiction over infringement of copyright has been dealt with in [53] - [57] of the said judgment. Counsel for the Ps now rely on sections 173 and 232 of the Copyright Ordinance, Cap 528 (“CO”). They also rely on Cheung Chi Wai v Chi Fung Engineering Ltd[4].

23.  In relation to the jurisdictional challenge, this Court has 3 observations.

24.  First, section 32(1) of the DCO expressly confers jurisdiction on the District Court to hear and determine action founded on tort. Infringement of copyright is a tort and is thus actionable in the District Court, provided the claim does not exceed the monetary jurisdictional limit. The said provisions of the CO, upon a fair reading, does not take away the jurisdiction of the District Court.

25.  Secondly, Mr Ho, Ds’ counsel, refers this Court to, and I think correctly, Windix Industries Limited v Telesonic Enterprises Limited & Anor[5] in which the plaintiff sued the defendant in the High Court for infringement of copyright. The matter was eventually settled at a sum within the District Court jurisdiction. Argument arose as to the applicable scale of taxation for costs. Hon. Suffiad J held in [28] of Windix (supra) that the proper course was for the plaintiff to start the proceedings in the District Court. It might then apply to transfer its claim to the High Court when it had become apparent that the damage might exceed the District Court jurisdictional limit. It was not appropriate for the plaintiff to do it the other way round. This case has been raised at trial.

26.  Thirdly, the reliance of Cheung Chi Wai (supra) is obviously wrong. That case was raised at trial by the Bench. The parties were invited to make submission on it. It has been discussed in the said judgment and is distinguishable. It concerns an action under the Trade Marks Ordinance, Cap 559 (“TMO”) which defines the court as the Court of First Instance. It does not concern the CO. The reliance on this case again, notwithstanding its apparent inapplicability, and the express discussion in the said judgment, (see: [56]), is not understood.

III  This Court erred in coming to a conclusion that  there being no contractual relationship between P2 and HKJC (paragraphs 9 & 10)

27.  Essentially, Mr Chong and Mr Cheng of counsel repeated in the present application the following facts, namely:

i)  on 3 June 2013, HKJC sent an email to P1 expressing interest in “your products and/or services” and requesting completion of a form;

ii)  on 5 June 2013, P1 did complete the form and returned;

iii)  on 9 July 2013, HKJC notified P1 that it had received the information; and

iv)  on 24 July 2013, HKJC notified P2 of the formal registration of P2 in its list of registered contractors.

28.  The contractual relationship, as framed on behalf of the Ps in [19] of the Ps’ submission, is as follows:

“in consideration of P2 demonstrating its suitability/capability to the satisfaction of the Jockey Club, the latter registered P2 in its list of registered contractors so that, whenever the occasion arises calling for its service, P2 would be given an opportunity to tender for such work.” (Emphasis supplied)

29.  It is further submitted on the Ps’ behalf that under the said contractual relationship, P2’s “opportunity to tender” when the occasion arises is a contractual right. Counsel for the Ps, however, cite no authorities in support. 

30.  The question of whether there is a contract between HKJC and P2 is a mixed question of law and facts. The above cited facts were only part of the overall evidence in the weighing balance. The matter was more particularly discussed in [50] and [128] - [135] of the said judgment. Most importantly, Theresia had testified (and this Court accepted) that according to the HKJC’s policy of registering contractors, being on the list of registered contractors did not mean that the HKJC was obliged to offer jobs to or make purchase from them, see: [130] - [131] of the said judgment.

31.  The pleaded contract was somewhat different from what had now been submitted by the Ps, see: the relevant pleadings repeated in [128] of the said judgment. The pleadings alleged a contract to provide service “whenever called upon to do so” instead of “an opportunity to tender”. It seems that the Ps are asserting a “standing relationship” which is, of itself, a contractual relationship. In any event, the facts of the case neither support a “standing contract” to provide service as originally pleaded (see [50] of the said judgment) nor an alleged contract conferring an “opportunity to tender”. Under the originally pleaded contract, the evidence did not support a registered contractor being obliged to work whenever called upon to do so. A contract making process, normally, a tender process was also required. The evidence also did not suggest P2 being obliged to tender whenever HKJC requires such service. It is this Court’s finding in the said judgment that being on HKJC’s list only serves to facilitate the Club or the Club’s members to do a selection. It is only preliminary to a contract but not itself a contract. No legal authorities have been given to support the proposition that the “opportunity to tender” is a contractual right of P2 vis-à-vis HKJC.

IV  The Court erred in applying the law in procuring   breach of contract (paragraphs 11 & 12)

32.  So far as can be discerned from [11] and [12] of the draft notice of appeal and [22] - [26] of the skeleton submission lodged on Ps’ behalf, the gist of this broad ground is this. The leading authority for the tort of procuring breach of contract is OBG Ltd v Allan[6]. This case was relied on in the said judgment, see: [47] of the said judgment. The first element of the tort requires the Ps to prove the existence of a contract between 2 parties. The “contract” means, submitted by Mr Chong and Mr Cheng, no more than a “contractual relationship” between the 2 parties than a “concluded contract”, see: [23] of the Ps’ submission. 

33.  The submission comes with considerable surprise. It has to be stressed that we are here not playing a game of semantics. There is no relationship between two parties that can qualify as a “contractual relationship” without there being a concluded contract between them. Accordingly, behind every “contractual relationship” there must be a concluded contract. With respect, the argument is unhelpful and its logic difficult to follow. Further, it seems the Ps are suggesting that the relationship between P2 and HKJC are something short of contractual in a legal sense.

34.  In the Court’s judgment, the challenge under this broad ground is essentially launched at this Court’s findings of primary fact based on which a conclusion of there being no contractual relationship between P2 and HKJC was reached. Again, bare allegation without particularity of any fault on the part of this Court is insufficient. This Court is fully entitled to come to the present conclusion it did based on the available evidence.

V  The Court erred in holding the defence of justification/qualified privilege applicable in respect of the letters (paragraphs 13-14)

35.  The exact meaning of this ground cannot be fully understood from the draft notice of appeal (c.f. [13] and [14]) and submission (c.f. [27] and [28]). So far as can be discerned, it appears that counsel have a rather layman understanding of “justification” of this legal defence. They submit since there is no “justification” for the Ds to issue the letters, this Court must be in error when holding the defence of justification justified.

36.  Further, by reason of what counsel have asserted in [27] of the submission, it appears that counsel consider certain findings of fact based on which this Court found in Ds’ favour on the defence of justification wrong.

37.  The ground set out in [35] above (i.e. [13] of the draft notice of appeal) is totally misconceived and again quite surprising. It deserves no further response. Justification is a legal defence available to a maker of a statement defamatory of the complainant by showing the statement being substantially true and correct. It should not be understood in the way that counsel do.

38.  As for the other matters raised under this broad ground (i.e. [14] of the draft notice of appeal), the Ps are in fact raising a factual challenge. It is this Court’s finding that the making of the statement by D2 was in good faith and for the sole and dominant purpose of protecting a legitimate interest, see: [163] of the said judgment. To repeat of a rejected allegation of malice without particulars adds nothing to a ground. It is unhelpful or useless for a party to repeat statements which have either been rejected or only partly true or regarded as immaterial. Counsel simply fail to pinpoint the faults or mistakes which render this Court’s finding of fact a mistake and thus has become an error as a matter of law.

VI  The Court erred in holding there being no malicious/injurious falsehood (paragraphs 15-16)

39.  Again, the exact meaning of this ground cannot be fully understood from the draft notice of appeal (c.f. [15] and [16]) and submission (c.f. [29] and [30]). In [29] of the submission, Mr Chong and Mr Cheng have this to say on Ps’ behalf:

“This cause of action is ancillary to the cause of action (2) [i.e. libel and justification/qualified privilege] above. If libel cannot be justified, there must be falsity in the publication of the contents of the relevant letters to the Jockey which, on their contents are clearly made with a view to prevent Jockey Club from continue with its business relationship with P2.” (highlighted added)

40.  From the aforesaid, it appears counsel are suggesting if libel could not be justified by the Ds (again presumably, the word “justified” is used in a literal but not the legal sense), there must be falsity in the publication. However, in the present case, the Ds can successfully establish the defence of justification and qualified privilege, see: [151] - [155] and [156] - [164] of the said judgment. It is the findings of this Court the statements in the letters in question were not false, and they were not made maliciously with a view to injure.

41.  Further, [15] of the draft notice of appeal states that [42] - [50] of the judgment suggest the existence of a contractual relationship being a pre-condition for a cause of action on malicious falsehood to be founded.

42.  Counsel for the Ps made no elaboration on the aforesaid assertion. In the Court’s judgment, it is incorrect for counsel to say so. The Court discussed the law on malicious falsehood in [38] - [45] of the said judgment. It went on to discuss the law on procuring/inducing breach of contract in [46] - [50]. When discussing the former, there is no suggestion whatsoever that a concluded contractual relationship is required between any parties in order to found a claim on the said tort. The reasons for such misunderstanding on the part of Ps’ counsel is not understood. 

43.  Reading the draft notice and submission as a whole, essentially the Ps are challenging the findings of facts based on which judgment was entered on Ds’ counterclaim against Ps. In this leave application, the Ps are basically repeating her own evidence given at trial which has either been rejected, or held as half-truth or immaterial. They simply fail to pinpoint whether, and if so, to what extent this court has misread or miscomprehend evidence such that it amounts to an error in law in coming to such factual findings.

Conclusion on the Summons

44.  Most of the above grounds of appeal are against this Court’s findings of fact. It is trite that the appeal court will not lightly disturb a trial court’s findings of primary facts unless there is a misapprehension of evidence or that the conclusion is one which no reasonable tribunal of facts will come to based on the available evidence and is plainly wrong. The Ps cannot pinpoint the alleged errors of this Court with particularities. Further the legal argument raised are poor, unarguable and not supported with legal authorities. There is also no challenge that any of the legal principles applied to the 5 causes of action pleaded by the parties are wrong. There is simply no reasonable prospect of success in the appeal.

45.  There are also no other grounds which justify leave should be granted under the “interests of justice” limb.

Disposition

46.  The Ps’ leave to appeal application should be, and is hereby, dismissed.

47.  Since the leave to appeal application is dismissed, there is simply no ground to deprive Ds of the fruit of the judgment. The Ps’ stay of execution application is also dismissed.

Costs

48.  Mr Ho on behalf of the Ds asks for costs on indemnity basis on the ground that the leave application is devoid of merit with grounds advanced containing fatally incorrect representations of evidence and findings. It is submitted Ps’ submissions are not only misleading but deceptive, and the application should never have been made. Mr Ho relies on Town Planning Board v Society for Protection of Harbour Ltd (No. 2)[7].

49.  The CFA’s decision in Town Planning Board (No. 2) (supra) remains the leading authority on how justice can be attained by awarding an indemnity costs. The principles have been referred to with approval in subsequent CFA decisions, e.g. Leung Chun Kwong v Secretary for the Civil Service[8] and Commissioner of Inland Revenue v Poon Cho-ming, John[9].

50.  In the recent decision of Poon Cho-ming (supra), Hon Bokhary NPJ has helpfully distilled a summary of the propositions derived from of Town Planning Board (No. 2) (supra)[10] at [4]:

“4. (a) In certain circumstances, costs may be awarded on a more generous than usual basis of taxation so as to achieve a fairer result.

(b) It is for the receiving party to show that the case has some special or unusual feature.

(c) Such features are not confined to an ulterior motive, an improper purpose, deception or underhand conduct on the part of the paying party.

(d) Neither the attributes of the parties nor the character of the proceedings are irrelevant to the question of whether a more generous than usual basis of taxation should be ordered.

(e) The discretion to order a more generous than usual basis of taxation is not to be fettered or circumscribed beyond the requirement that such taxation be ordered only when it is appropriate to do so.

(f) As to that, the grounds on which a more generous than usual basis of taxation is to be ordered must be connected with the case.  That extends to - but no further than to - any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation.”

51.  Indemnity costs were awarded in favour of the Town Planning Board in Town Planning Board (No. 2) (supra) on, inter alia, grounds that the proceedings were instituted to vindicate the public interest rather than to enforce some private right or interest; to protect a public asset which is a central element in Hong Kong’s heritage; if not for the proceedings the public interest in securing compliance with the law would not have prevailed and resulted in the resolution of fundamental legal issues; and the Society has very limited resources and financially dependent on donations, etc.

52.  Leung Chun Kwong (supra) and Poon Cho-ming (supra) were cases in which the CFA refused to award indemnity costs. In Leung Chun Kwong (supra) the appellant Mr Leung advanced arguments similar to those advanced by the Board in Town Planning Board (No. 2) (supra). The Court has this to say at [15] of the decision in rejecting his argument:

“Whilst we have some sympathy for the appellant because of the extent to which he will be out of pocket despite winning this litigation, we are satisfied that this is not an appropriate case for indemnity taxation of the appellant’s costs. We do not consider the behaviour of the respondents in making the challenged decisions and thereafter in contesting the judicial review proceedings, then pursuing the appeal to the Court of Appeal and thereafter resisting the appeal to this Court was so unreasonable and without merit as to be deserving of a costs sanction usually reserved for those cases in which there has been something improper or inappropriate or wholly unreasonable in the administrative decisions under challenge or in the conduct of the proceedings.”

53.  In Poon Cho-ming (supra), the successful taxpayer asked for indemnity costs on bases that the Commissioner had pursued an unreasonable and unmeritorious appeal despite the law being settled and primary facts unchallenged; dressing up and revisiting of plainly found facts in guise of legal issues; adding unnecessary burden, inconvenience, anxiety, adverse publicity and distress suffered by the taxpayer.

54.  In refusing to grant costs on indemnity basis, Hon Bokhary NPJ refused to accept the dressing up ground. Further the learned Non-Permanent Judge regarded the Commissioner’s conduct not unreasonable and grounds not without merit. It was also considered that anxiety, distress, annoyance, demand on time, effort and financial pressure brought about by litigation, though deserving sympathy, might be normal incidence of litigation. All these were not factors which could support an award of indemnity costs.

55.  It is trite that the question of costs is a matter of discretion of the court taking into consideration of all the circumstances of a case including conducts of the parties, see: O.62 r.5 RDC. In the Court’s judgment, the principles set out in Town Planning Board (No. 2) (supra), cited with approval in Leung Chun Kwong (supra) and Poon Cho-ming (supra), are not inconsistent[11] with those previously established in Choy Yee Chun v Bond Star Development Limited[12] and Sung Foo Kee Limited v Pak Lik Company (a firm)[13]. In fact, Town Planning Board (No. 2) (supra) has expressly stated it will be undesirable to set any limit on the scope of the special or unusual features under which the court should award indemnity costs, see: [4(c)] paraphrased in [50] above; and [16] - [17] of Town Planning Board (No. 2) (supra).

56.  In Sung Fook Kee Limited (supra), the CA considered indemnity costs should appropriately be granted in cases with special or unusual features, including

(i)  cases where there was deception or underhand conducts;

(ii)  litigation that was ill-advised or stupidly or bitterly conducted;

(iii)  cases conducted in such a way where a sense of considerable injustice could be felt if costs had been whittled away down to the costs on a standard basis;

(iv)  cases brought with ulterior motive or for an improper purpose;

(v)  cases conducted in bad faith or as a personal vendetta;

(vi)  cases conducted in an improper or oppressive manner; and

(vii)  cases that have caused costs to be incurred irrationally or out of proportion as to what is at stake.

57.  The CA in Choy Yee Chun (supra), after approving the principles set out in Sung Foo Kee Limited (supra), accepted the granting of indemnity costs against the appellant a correct exercise of discretion in respect of his bogus claim, with the appellant colluded with witnesses to pursue an entirely false defence, intended to exert pressure on the respondent to pay as much compensation as possible.

58.  In Huge Dragon Corporation Limited v The Incorporated Owners of Lung Mun Oasis[14], the CA considered what constitutes appropriate circumstances for award of an indemnity costs must be fact-sensitive. It was decided proceedings which should never have been brought or defended but the party nevertheless unreasonably and unjustifiably persisted might be visited with indemnity costs[15].

59.  Turning specifically to the present leave application, it is obvious from the above that the Ps have dressed up issues relating to findings of facts as issues of law. As said, the Ps also failed totally to pinpoint any misapprehension of evidence resulting in the alleged errors in the findings of fact. It is simply a repetition of the argument and assertion which have been advanced before this Court, and been rejected.  

60.  Further, the alleged issues of law are, with respect, badly framed and un-arguable. In respect of some grounds, they are advanced on the basis of a twisted, and thus misunderstood meaning of the said judgment. Some are based on a wrong understanding of the law. Those grounds are misconceived and should never have been raised.

61.  Taking the example of jurisdiction, the Ps relied on Cheung Chi Wai (supra). It is patently obvious that the case concerns the TMO, not the CO. The discussion of the whole judgment was devoted to whether the District Court has jurisdiction over TMO. Nothing regarding the CO was touched upon. Yet this case was relied on by Ps’ counsel. It is a wholesale repetition of what has been submitted and rejected at trial. The problem is that there is no elaboration or submission of any sort that helps expand any principle which one can distil from that case to the copyright issue.

62.  Another example is the misconceived meaning of justification in the context of defamation. The adoption of the said misconceived meaning in the draft notice of appeal and submission is, with respect, unacceptable and surprising. This Court cannot help forming a view that the leave application is vexatious with Ps’ counsel desperately coming up with all sorts of grounds that they could ever think of for the Ps to pursue after the Ds. They are totally misleading and is an affront to the Court.

63.  It has to be remembered that this is a leave to appeal application. The parties have already had the benefit of one round of thorough and extensive submission at the conclusion of trial. Further, they now have the benefit of the said judgment which should help focus the issues. From the above discussion, it is obvious the Ps could hardly frame any question which entitles them to take the matter further to the CA. In other words, the leave application should never have been brought. The grounds of appeal are so devoid of merit, unarguable, based on distorted understanding of the said judgment and vexatious. This Court considers it fair to make a robust costs order on indemnity basis as a deterrence to this kind of groundless application.

Disposition on Costs

64.  The Ps are hereby ordered to pay Ds’ costs of the leave application on indemnity basis, with certificate for counsel, to be taxed if not agreed.