RICHOLD S.A. v. NEW ECLAT MANUFACTURING LTD

HCA 1408/2006

in the high court of the

hong kong special administrative region

court of FIRST INSTANCE

ACTION NO. 1408 of 2006

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J U D G M E N T

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1.  This appeal has been settled to a certain extent.  I have been presented with a consent summons, the first part of which I have indicated to the parties that I am not prepared to make, but I am prepared to make an order dismissing this appeal.  Nobody has voiced objection to that.   So that takes care of paragraph 1.   Paragraph 2 is unnecessary, and to be precise in fact the date cannot be vacated because the parties are here already.

2.  As regards paragraph 3, this is intended to be a reflection of the order which was made by Saunders J on 7 September.  What had happened is the Master had ordered delivery-up of a parcel of diamonds, the parcel in this instance being rather large, I am informed.  The order that the judge made on that occasion was that the defendant shall deliver up the diamonds as detailed in the judgment of Master de Souza dated 12 May 2009 (“diamonds”) to Ferrier Hodgson to be held by it as a custodian, subject to the following conditions:

(a)    that the plaintiff is entitled to take issue on the genuineness and genesis of the diamonds as delivered up by the defendant to Ferrier Hodgson;

(b)    that the plaintiff is entitled to free inspection of the diamonds as delivered up by the defendant to Ferrier Hodgson upon giving five days’ prior notice to the defendant’s solicitors, and the defendant shall be entitled to be present at the inspection;

(c)    that the plaintiff shall pay all the fees and expenses of Ferrier Hodgson by acting as a custodian first, and the costs of and occasioned by the appointment of the custodian shall be costs in the cause of the appeal by the defendant against the judgment of Master de Souza dated 12 May 2009, or subject to other order of the court as the court deems appropriate; and

(d)    Ferrier Hodgson is to keep the diamonds as delivered up by the defendants until final determination of the appeal or further order of the court.

3.  I have been informed that there has been a lengthy inspection of the diamonds, and the issue between the parties is the question of costs.  The plaintiff wishes to have the costs in relation to Ferrier Hodgson taxed because they want to know where they are, which is fair enough.

4.  The order which the plaintiff seeks is that the defendant do pay the plaintiff the costs of and occasioned by the appointment of Ferrier Hodgson as the custodian pursuant to paragraph 2(c) of the order dated 7 September 2009 made by Saunders J in any event to be taxed if not agreed, and that the cost order be taxed immediately without waiting for the conclusion of this action.  That, in the circumstances, seems to me to be in order.  Those costs are going to be different from any further proceedings in this action and I consider that there can be an adequate division in respect to it.

5.  The order which the plaintiff seeks goes on, however: “and, for the avoidance of doubt, such costs shall include all the fees and expenses of Ferrier Hodgson and all the costs and expenses of the plaintiff and its solicitors for and in relation to the inspection of “Diamonds” as delivered to Ferrier Hodgson pursuant to paragraph 2(b) of the Order.”

6.  Taking the last part first, namely the costs and expenses of the plaintiff and its solicitors, although the paragraph 2(b) of Saunders J’s order talks about free inspection of the diamonds for the plaintiff I do not read that as being that if the plaintiff chooses to inspect the diamonds before it actually gets them in its own possession it is entitled to charge the defendant for doing so.  So I do not propose to make the order in those terms.

7.  As regards the first part, the fees and expenses of Ferrier Hodgson, those should be fees and expenses of Ferrier Hodgson acting as custodian.  But I would note this for the benefit of the Taxing Master.  Paragraph 2(b) of the order states that upon giving a 5 days’ prior written notice to the defendant’s solicitors, the defendant shall be entitled to be present at the inspection.  This is a matter between the parties.  The plaintiff wants to inspect them.  They can have their people there.  The defendant wants to be there to make sure that nothing untoward happens.  It does not seem to me to be necessary that Messrs Ferrier Hodgson stay there the whole time whilst the inspection process is going on.  The parties are protected.

8.  It seems to me that the intent and purpose of Saunders J’s order was: “If the plaintiff wants to inspect it, all right, Ferrier Hodgson has got to cough up the diamonds, or a parcel of diamonds, or whatever, and the cost of doing that will no doubt be part of their custodian fees.”  But it seems to me totally unnecessary that somebody from Ferrier Hodgson should stay there the whole time if somebody from the defendant is there the whole time.  It is not for me to sort out the costs, but that seems to me to be the meaning and intent of the order.  I say so for the benefit of the Taxing Master when he comes to the taxation.

9.  So I will make the order as I have indicated.  In other words, the appeal is dismissed.  Paragraphs 1 and 2 of the order therefore goes on that basis.  Paragraph 3, down to the words “Ferrier Hodgson” but including the words “acting as a custodian”, but the remainder, the last three lines of what has been referred to as the “consent summons” be deleted.  Paragraphs 4 and 5 of the order can remain as is.