GOLDJET DEVELOPMENT LTD v. RANDAL ALAN WHITECOTTON AND ANOTHER

HCA 2337/2018

[2025] HKCFI 6423

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2337 OF 6423

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DECISION

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INTRODUCTION

Introduction

1.  This is the Plaintiff’s application by summons dated 3 December 2025 (the “Variation Summons”) as amended by its summons dated 8 December 2025 (the “Amendment Summons”) seeking to vary the interest order and costs order of this Court’s judgment dated 19 November 2025 (the “Judgment”). By that Judgment, the Plaintiff obtained, inter alia, an order for recovery of US$1,631,075 illegally transferred from its bank account with Standard Chartered Bank (Hong Kong) Limited in Hong Kong (the “said sum”) to the bank account of PT Soeria during a kidnapping incident which occurred in the 1^st Defendant’s apartment in Indonesia between 7 and 11 October 2012.

2.  The 1^st Defendant is legally represented by Ms Chui of Messrs Bowers (“Bowers”) which represented him at the trial of the action. However, according to Ms Chui, Bowers had received no further instructions from the 1^st Defendant and have taken out a summons to apply to cease to act for him. That summons was listed for hearing before a master on 15 December 2025. In the circumstances, understandably the assistance which Ms Chui could offer to the Court is very limited. She raised no challenges against the legal principles cited by Mr Li of Messrs Dentons Hong Kong LLP (“Dentons”) for the Plaintiff. In any event, the legal principles applicable to these applications are very well settled.

3.  The 2^nd Defendant had been served with notice of hearing of the trial of this action and of these applications. He ceased participating in this action since 21 November 2024 and Judgment was also made against him. He did not appear at this hearing.

The Amendment Summons

4.  By this summons, the Plaintiff seeks to expand the remedies sought in the Variation Summons, dispense with service of this summons on the 2^nd Defendant, abridgment of time of service in respect of this summons on the 2^nd Defendant, leave to rely on the 2^nd Affirmation of Lo Chi Hang dated 8 December 2025, and costs of this application.

5.  The Variation Summons was taken out within 14 days of handing down of the Judgment. The Amendment Summons was taken out within three days thereafter, obviously due to immature consideration before taking out the Variation Summons. This Court is satisfied that the amendments are necessary to enable the real question in controversy between the parties to be determined and that the summons was taken out promptly. This Court does not consider the Defendants would suffer any prejudice as a result of the amendments. In fact, no argument of prejudice was advanced on behalf of the 1^st Defendant. As the 2^nd Defendant was in default as to acknowledgment of service, pursuant to Order 65, rule 9 of the Rules of the High Court (“RHC”), service of this summons on him was not required. No abridgment was necessary. Accordingly, leave is granted to the Plaintiff to amend the Variation Summons. As leave is granted as an indulgence, the Court makes no order as to costs of this application. Thus, the Court makes an order in terms of paragraphs 1 to 3 of the Amendment Summons.

THE VARIATION SUMMONS

The factual background

6.  For the purpose of determining the Variation Summons, the following findings of the Court in this action are relevant. The Defendants lured Ariani, the sole director of the Plaintiff, to the 1^st Defendant’s apartment where their underlings staged a robbery posing as Indonesian police officers. They forced Ariani to transfer US$ 21 million to the bank account of PT Soeria. The Defendants were the mastermind of this kidnapping incident. At trial, one of the 1^st Defendant’s defence was that the incident was a “deal-gone-wrong” between Soura, whom he believed to be the ultimate beneficial owner of the Plaintiff, and the Indonesian police.

The legal principles on indemnity costs

7.  By this summons, the Plaintiff seeks to vary the costs order from taxation on party and party basis to indemnity basis. The principles applicable to indemnity costs are well settled. The starting point for taxation in hostile litigation is that costs should be taxed between party and party: see Town Planning Board v Society for Protection of the Harbour Ltd (No 2)[1] and Overseas Trust Bank Ltd v Coopers & Lybrand (a firm)[2]. To qualify for costs on an indemnity basis, the successful party must show some special or unusual feature in the case. The proceedings must be instituted or prosecuted in circumstances as to constitute an affront to the court. Usually there must be something disgraceful in the conduct of the losing party or his legal representatives as to cause the court to feel a proper sense of indignation. Normal litigious hostility would not suffice: see Town Planning Board v Society for Protection of the Harbour Ltd (No 2)[3]; Overseas Trust Bank Ltd v Coopers & Lybrand (a firm)[4] and Man Fong Hang v Man Ping Nam[5].  In exercising its discretion as to costs, the court must take into account the conduct of both the successful and the losing parties before, as well as during the proceedings: see Order 1A, rule 1(1) and Order 62, rule 5 of the RHC.

8.  If unreasonable conduct is relied on, the losing party’s conduct would need to be unreasonable to a high degree. In this context, “unreasonableness” does not mean merely wrong or misguided in hindsight: see Kiam v MGN Ltd (No 2)[6].  Advancing a case which is difficult, unlikely to succeed or which in fact fails, or without any foundation in law or fact, or devoid of merits, is not necessarily in itself a sufficient reason for an award of indemnity costs: see Overseas Trust Bank[7]; Shaina Investment Corporation v Standard Bank London Ltd[8]; Golden Sand Marble Ltd v Hsin Chong Construction Co Ltd[9]; Kao, Lee & Yip (a firm) v Midland Realty International Limited[10]. The court’s finding that the claim or the ground of defence is plainly and obviously incredible on the fact, or that the evidence has been deliberately untruthful will not necessarily in itself warrant an order for indemnity costs. The conduct of the losing party must be of a more venal kind and the conduct of the litigation has in some sense been wicked: see Choy Yee Chun v Bond Star Development Ltd[11]; and Kao, Lee & Yip[12].

Misleading and untruthful defence

9.  The Plaintiff’s claim for indemnity costs is based on the Defendants’ conduct in the litigation in three respects: (1) deliberately running a misleading and untruthful defence; (2) raising numerous scandalous and irrelevant matters; and (3) attempting to intimidate the Plaintiff’s witnesses and its solicitors.

10.  Initially, the Defendants’ defence filed on 23 March 2021 was one of no knowledge of the kidnapping incident and denial. In his 1^st and 2^nd Affidavits filed in support of their summons filed on the same date seeking to strike out the Plaintiff’s claim, the 1^st Defendant referred to the kidnapping incident as the “supposed kidnapping” and emphatically denied having any involvement in the incident. He even described Ariani’s version of events as “fabricated” and “untrue” and the Plaintiff’s action as “disingenuous”. Then, he admitted the kidnapping incident occurred in his Amended Defence, but denied he was a party and claimed that he was a victim. He said that the incident was likely to be a “deal-gone-wrong” between Soura and the Indonesian police. His case was that the Plaintiff is a company held by Ariani as nominee for Soura; that Ariani was a bar girl in a hooker bar; that Ariani and Soura were engaged in an intimate relationship; that they were implicated in a murder; that Soura entered into a deal with the Indonesian police to secure Ariani’s release and to clear himself of suspicion for the murder; that Soura failed to pay bribe to the police; and that the police robbed the Plaintiff as a means of recovery against Soura.

11.  Except for the nominee issue, all these allegations were wholly rejected or not proven. On the nominee issue, the Court found it was irrelevant as a matter of law[13]. It may be said that this point was necessary to support the Defendants’ “deal-gone-wrong” proposition so as to shift the responsibility for the kidnapping incident to the Indonesian police. But even this proposition was not accepted by the Court[14]. It is the Court’s finding that the kidnapping incident was staged by the Defendants. The truthfulness or otherwise of the defence is known to the Defendants. There is no doubt that they deliberately and knowingly advanced misleading and untruthful defence right from the start of the proceedings. Furthermore, when he came under oath to testify before the Court, the 1^st Defendant remained untruthful. The Court found he did not have a true story to tell, but had been trying to improve a previous imperfect concoction which he had made as the proceedings progressed[15].

12.  The standard of misconduct has to be very high to justify indemnity costs. This conduct without more is not sufficient. However, it may aggravate the Defendants’ other acts of misconduct or may together with the other misconduct constitute sufficient basis for indemnity costs. 

The Defendants’ smearing campaign

13.  Mr Li submits that in what appears to be a tactical manoeuvre designed to divert attention from their involvement in the kidnapping incident and to lower the esteem of the Plaintiff’s witnesses in the eyes of the Court, the Defendants resorted to raising a barrage of scandalous matters to badmouth the Plaintiff’s witnesses, such as:

(1)  The 1^st Defendant’s allegation that (i) 90% of his conversation with Ariani during his visit to her home before the kidnapping incident were her attempts to try and get him to find her a ‘white guy’ to marry[16] and (ii) Soura came to know Ariani at a hooker bars[17];

(2)  MJK’s contentions that (i) Soura forged documents and tempered with witnesses; (ii) Soura was using Ariani as he did with his other exploitations on vulnerable women[18]; and (iii) Ariani tried to hustle men via online dating sites[19];

(3)  the 1^st Defendant’s allegation that both Ariani and Soura were involved in Sapto’s murder[20]; and

(4)  the 1^st Defendant’s bare suspicion that the kidnapping incident was likely to be a “deal-gone-wrong” between Soura and the Indonesian police[21].

14.  These allegations are all rejected by the Court. They are clearly scandalous, vexatious and have the effect of lowering the esteem of Ariani and Soura in the eyes of the Court. These allegations achieved nothing for the defence, but added salt to the wound they inflicted on Ariani. They are indicative of malice and bad faith. They created a feeling of indignation. The 1^st Defendant’s conduct in this litigation is wicked and of a more venal kind. The Defendants’ raising such irrelevant, baseless and scandalous accusations, mostly with the aim of smearing the Plaintiff’s witnesses, was also contrary to the underlying objectives set out in Order 1A, rules 1(a), (c) and (f) of RHC.

Intimidation of Plaintiff’s witness and solicitor

15.  Behind the Court, since 5 October 2020 Bowers had been threatening Ariani and Soura through Dentons, accusing them of giving false evidence and committing perjury in instituting this action and threatened to instigate contempt/committal proceedings against them or refer them to the Department of Justice for criminal prosecution. The threats escalated with time. On 18 January 2022, Bowers informed the Plaintiff that they had made reports against “bad actors behind [Dentons’] BVI client company and its related/associated companies” of having committed very serious crimes to the US Federal Bureau of Investigation, US Senators and representatives in the US Senate and House of Representatives respectively in California where Soura was believed to be living and elsewhere in the United States. Though the “bad actors” had not been named, obviously Bowers were referring to Soura, if not also Ariani. On 6 April 2022, Bowers even threatened to apply for Stop Orders to be made against the Plaintiff’s witnesses who are found to have given untrue evidence in their affidavit/affirmation or in their live testimony at trial so that contempt/committal proceedings may be brought against them and prosecuted against them whilst they remain Hong Kong.

16.  All these threats and actions were made or taken on the basis that Ariani’s and Soura’s evidence were false and would be deliberately given knowing that they were false. Bowers would not know whether the evidence were false. But they would not have taken the above actions unless so instructed by the Defendants. It could not be said that Bowers were just doing what they did as competent lawyers to protect their clients’ interest from being harassed by a malicious civil action. On the Court’s finding, the Plaintiff had proved its case and except for the nominee issue, almost all of the Defendants’ allegations are false. The Defendants who personally staged the kidnapping incident must know that Ariani and Soura were telling the truth, at least on all material issues. They must also know through their personal knowledge (not by reason of the Court’s finding) that the threats they instructed Bowers to deliver had no factual basis. It could not be open to them to argue that they did not know what they instructed Bowers to do for them was wrongful or had no factual basis. On any objective view, the Defendants caused Bowers to deliver those threats with the ulterior motive of deterring the Plaintiff from pursuing its claim against them and deterring Ariani and Soura from coming to Hong Kong to testify. This Court holds a strong feeling of indignation at such disgraceful conduct.

17.  What is worst is, as Mr Li submits, the Defendants even attempted to interfere with the Plaintiff’s legal representative from representing the Plaintiff. On 24 October 2020, a US lawyer acting on the 2^nd Defendant’s instruction wrote to Dentons claiming that Dentons “erroneously” served pleadings on the 2^nd Defendant and requesting Dentons to address those “errors”. Not being satisfied with Denton’s response dated 28 October 2020, the US lawyer sent an email to Dentons’ Boston office managing partner on 8 December 2020 complaining of “unfair and deceptive acts and practices” employed by Dentons in treating the 2^nd Defendant as a proper defendant in these proceedings and indicating that Dentons’ actions had caused financial damage to the 2^nd Defendant. Two days later, Bowers joined in and claimed inter alia, that Dentons “mistakenly (but bizarrely and deliberately)”served these proceedings on the 2^nd Defendant and that suing an incorrect party is a breach of Massachusetts law entitling the 2^nd Defendant to claim damages. They also copied their letters to Dentons’ managing partner putting pressure to bear on the handling solicitors.

18.  Meanwhile on a separate front, through Bowers, the Defendants called into question Dentons’ compliance with the relevant requirements on anti-money laundering and client due diligence with respect to the Plaintiff and alleged that Dentons chose to ignore numerous “red flags”. The basis of Bowers’ accusation is not entirely clear, but the pressure they were exerting is clear.

19.  For the same reasons as stated in paragraph 16, this Court is satisfied that the Defendants caused the US lawyer and Bowers to exert these pressures on Dentons with the ulterior motive of deterring them from continuing to represent the Plaintiff in the further prosecution of this action. Attempt to prevent a person from accessing his lawyer for the purpose of pursuing his legal rights is an assault on the civil justice system in Hong Kong. The Court holds an extreme sense of indignation against the Defendants’ such conduct.

20.  For reasons as summarized in paragraphs 14 and 19, the Defendants’ litigation conduct was wicked and of a venal kind and created an extreme feeling of indignation. Such conduct was also aggravated by their misleading and untruthful defence. Having regard to the totality of the Defendants’ conduct, indemnity costs are well justified.

Sanctioned offers

21.  The Court is now informed that the Plaintiff had served the 1^st Defendant with a sanctioned offer on 6 June 2025 to accept a payment of US$1,549,521.25 inclusive of interest together with the Plaintiff’s costs of this action in full and final settlement of the whole of the Plaintiff’s claims. The offer represented a 5% discount of the said sum claimed and its claim for interest. Pursuant to Order 22, rule 16(1), the expiry date for the Defendants to accept the sanctioned offers without leave of the court fell on 4 July 2025. The cut-off date for the 1^st Defendant was 4 July 2025. The sanctioned offer was sent to the 2^nd Defendant by air mail on 6 June 2025. The cut-off date for the 2^nd Defendant was thus 18 November 2025, being the day before the Court pronounced the Judgment: see Tsoi Hak Kong Herbert v Kok Wai Chun[22].  The 1^st Defendant reacted by asking the Plaintiff to withdraw its claim and pay his costs. That amounted to an implied rejection of the offer. The 2^nd Defendant did not respond.

22.  As the Plaintiff obtained a judgment better than its sanctioned offer, the Defendants should now be visited with the consequences provided for in Order 22, rules 24(2) and (3), including interest on the whole or part of any sum of money (excluding interest) awarded to the Plaintiff at a rate not exceeding 10% above judgment rate for some or all period after the latest date on which the Defendants could have accepted the offer without leave of the Court; costs on indemnity basis after the cut-off date and interest on those costs at a rate not exceeding 10% above judgment rate. Order 22, rule 24(4) further stipulates that the Court shall make the above orders unless the Court considers it unjust to do so.

23.  In determining whether it is unjust to award indemnity costs and/or interest on costs, the Court is entitled to and should take into account the conduct of the unsuccessful party over the course of the litigation and the reasonableness of its non-acceptance of the successful party’s sanctioned offer. The onus is on the unsuccessful party to show any unjust factors: see Chan Wai Chung v China Travel Tours Transportation Development (HK) Ltd[23]. The factors listed under Order 22, rule 24(5) which the Court should take into account include: (1) the terms of the sanctioned offer; (2) the stage in the proceedings at which the sanctioned offer was made; (3) the information available to the parties at the time when the sanctioned offer was made; and (4) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the sanction offer to be made or evaluated. Neither the 1^st nor the 2^nd Defendant offered any argument that it would be unjust to invoke those sanctions.

24.  In determining the sanctions to be imposed, the Court must consider the parties’ conduct against its finding of fact in this case, in particular, that the Defendants masterminded and staged the kidnapping incident. They knew they have no right to force the transfer of funds from the Plaintiff’s bank and that they have no defence. In simple words, they wrongfully took away the Plaintiff’s money under violent circumstances and were only asked to repay the Plaintiff at a discount. In that light, the terms of the sanctioned offer is more than reasonable. The Defendants had all the information available at the time when the sanctioned offer was made to enable them to make a proper decision. The offer was made in good time, a month before trial, for the Defendants to accept. It must also be borne in mind the principle of corporate personality. Even if the Defendants felt they were owed money by Soura, as mentioned in the Judgment, they have no right to recover against his nominee or the assets of his nominee. There is nothing to suggest the Plaintiff had acted improperly with regard to the giving or refusing to give information for the purpose of enabling the sanctioned offer to be evaluated and accepted. Instead of accepting the sanctioned offer, the 1^st Defendant contested the action rigorously. He testified and call a witness, smeared Ariani and Soura. Apart from adding salt to the Plaintiff’s wound, he aggravated its loss by wasting its costs. The 2^nd Defendant did no less harm. By not accepting the sanctioned offer, he made it necessary for the Plaintiff to prove its case against him. The Defendants must be visited with maximum sanction under Order 22, rule 24(2) and (3).

Conclusion

25.  The Plaintiff asked for all costs, including reserved costs, to be taxed on indemnity basis. This Court has no knowledge of any of the proceedings leading to the making of any such reserved costs and Mr Li is unable to assist. This Court does not know what issues were raised and determined in those proceedings and the parties’ litigation conduct. This Court does not even know who was the successful party. Therefore, the order which this Court shall make will not cover reserved costs, if any.

26.  For reasons as explained in paragraphs 6 to19, the Plaintiff is entitled to indemnity costs under general principle of law and Order 62, rule 5 of RHC by reason of the Defendants’ litigation conduct and partly under Order 22, rule 24(3) of RHC for failing to accept the sanctioned offer. In addition, for reasons as explained in paragraphs 20 to 23, the Plaintiff is entitled to interest on costs under Order 22, rule 24(2) of RHC.

27.  For the above reasons, save for the reserved costs, I grant the Plaintiff order in terms of the Variation Summons as amended. For avoidance of doubt, this order does not cover the costs orders in the four summonses determined during the trial of this action and the reserved costs. Reserved costs, if any, shall be awarded to the successful party in the relevant proceedings and be taxed on party and party basis with certificate for two counsel as originally provided in paragraph 191(4) of the Judgment.