DEUTSCHE BANK AKTIENGESELLSCHAFT ALSO KNOWN AS DEUTSCHE BANK AG ACTING THROUGH ITS SINGAPORE BRANCH v. ORIENT PROFIT INVESTMENT LTD AND ANOTHER

HCMP 734/2024 and HCA 2072/2024
(Heard Together)
[2026] HKCFI 910

HCMP 734/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 734 OF 2024

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AND

HCA 2072/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2072 OF 2024

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(Heard Together)

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D E C I S I O N

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1.  I refer to my judgment dated 5 November 2025. There are now the following applications before me:

(1)  in the HCA action:

(a)  an application by Mr Samson Lam to vary my costs order nisi so as to award costs on a party-and-party basis, instead of on a solicitor-and-own-client basis,

(b)  if Mr Lam succeeds in persuading me that my costs order nisi should somehow be varied, an application by Deutsche Bank to vary such costs order so as to award costs on an indemnity basis, rather than on a party-and-party basis, and

(c)  a separate application by Deutsche Bank for a certificate for two counsel.

(2)  in the HCMP action:

(a)  an application by Orient Profit that its liability for the costs of the action (including any interest thereon) be limited to the proceeds from any sale of the Silver Crest Property, and

(b)  an application by Deutsche Bank that there be certificate for two counsel.

2.  On Deutsche Bank’s applications for certificate for two counsel, the complications and consequences of both actions justified the instruction of two counsel. The respective certificates are consequently granted.

3.  On Mr Lam’s variation application, Mr Lam argues that there are no exceptional circumstances justifying the award of costs on a solicitor-and-own client basis. I disagree. The guarantee upon which Deutsche Bank sued Mr Lam provided for any legal costs incurred in connection with the enforcement of the guarantee to be recoverable on a solicitor-and-own client basis. The solicitor-and-own-client basis further reflects the Court’s disapproval of the fact that, in giving evidence, Mr Lam had a “propensity to say whatever may be expedient for his position at a given moment” with the result that “at trial he may well have been lying about lying, because it would help his wife’s case and (indirectly) his own”. Such propensity is further apparent in Mr Lam’s submissions to vary the costs order nisi in which he makes new unfounded allegations of dishonesty on Deutsche Bank’s part.

4.  Therefore, subject to certificate for two counsel being granted, the Court’s order nisi in the HCA action becomes absolute. It is unnecessary to deal with Deutsche Bank’s contingent application for a variation of the costs order nisi to award costs on an indemnity basis.

5.  On Orient Profit’s variation application, Orient Profit argues that the limitation for which it contends would be in accordance with the terms of the Second Mortgage and such terms should be given effect. I disagree. The terms of the Second Mortgage do not bind the Court which has an unfettered discretion in the award of costs. To apply the terms of the Second Mortgage to cap the costs of the HCMP action as Orient Profit submits would lead to moral hazard. It would mean that, regardless of the lack of merit in Orient Profit’s case, it could nonetheless argue its case and prolong enforcement against it, all at Deutsche Bank’s expense. Orient Profit’s conduct in such circumstances would simply eat into any proceeds available to Deutsche Bank from the Second Mortgage. At the end of the day, the Court found Ms Chan’s evidence on Orient Profit’s behalf to lack credibility and Orient Profit’s defence based on that evidence to be unmeritorious. The Court dismissed the defence. Costs should follow the event in the usual way. There is no basis for ordering that Orient Profit’s liability for the legal costs of the HCMP action to be capped because of the Second Mortgage.

6.  Subject to certificate for two counsel being granted, the Court’s order nisi in the HCMP action becomes absolute.

7.  The costs orders nisi in the HCA and HCMP actions were provisional orders made without hearing the parties. The parties were thus entitled to have their say on the provisional orders and to apply to vary the same. Accordingly, in the absence of compelling reason, the cost consequences of the respective variation applications should be subsumed within (and follow) the now absolute costs orders in the HCA and HCMP actions. There are no compelling reasons to deviate from this normal practice.

8.  The Court has thus far only dealt with the incidence (as opposed to the quantification) of costs. Orient Profit suggests that there was no need for Deutsche Bank to apply to vary the costs order nisi in the HCMP action, since Orient Profit would readily have agreed to certificate for two counsel, if asked beforehand. Orient Profit therefore submits that, in any event, it should not have to bear the costs of Deutsche Bank’s application to vary the costs order nisi in the HCMP action. I am unable to accept Orient Profit’s submission as far as the incidence of costs is concerned. Whatever Orient Profit’s position, it was incumbent on Deutsche Bank to apply to the Court and persuade the Court that a certificate for two counsel was justified. By contrast, Orient Profit’s argument goes towards quantification. At taxation, it would be open to Orient Profit to submit that the costs sought by Deutsche Bank in connection with its variation application are unreasonable.

9.  Deutsche Bank and Orient Profit both provided Statements of Costs in connection with their variation applications. But, in my view, the costs of the HCA and HCMP actions (including the costs of the variation applications) should be taxed and assessed by the master as a whole in the usual way. It would not be appropriate in the circumstances of this case to deal piecemeal with the costs of only those parts of the HCA and HCMP actions concerning the parties’ variation applications. I therefore decline to carry out a summary assessment of the costs of the parties’ variation applications.