HANSEN INTERNATIONAL LTD v. HIGH FASHION APPAREL LTD AND OTHERS

HCA 1724/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 1724 OF 2014

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REASONS FOR DECISION
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1.  There are a total of 5 summonses in HCA 1724/2014 in relation to which I have to determine the question of costs, including various costs reserved by different judges when the summonses came before them on different occasions.  The parties are agreed, I understand, that the court ought to take a global view of the 5 summonses and do not have to deal with the costs of each summons individually, having regard to the fact that the 5 summonses were inter-linked and the way in which they came to be issued and pursued.  I believe that this the right and sensible way to proceed, certainly in respect of the “1^st and 2^nd injunction summonses” dated 3 and 4 September 2014 respectively, the “discharge summons” dated 4 September 2014 and the “variation summons” dated 30 September 2014.

2.  Leaving aside for the moment the position of the 4^th defendant, Mr Chain (for the 1^st defendant, “Hansen”) argues that although each side has been successful on some of the issues, the conduct of the 1^st to 3^rd defendants (“the HFA parties”) has led to unnecessary duplication or wastage of costs.  This is a reference to the fact that the HFA parties made separate applications for (i) leave to appeal against Deputy High Court Judge B Chu’s order dated 8 September 2014 (“the 8 September Order”) and stay of execution of that order pending appeal, and (ii) variation of the same order, which led to 2 separate hearings, one before Recorder L Wong SC on 11 September 2014 resulting in an interim suspension of part of the 8 September Order, and the other before Deputy High Court Judge B Chu on 8 October 2014 resulting in essentially the same interim suspension of the 8 September Order (with some minor variations).

3.  Mr Chain also relies on the fact that the catalyst of this litigation was the Purported Resolution which it is now accepted was invalid, and the fact that of the various grounds of material non disclosure originally raised by the HFA parties, only one ground was ultimately accepted by the court.

4.  Lastly, the vast amount of materials placed before the court, according to Mr Chain, was relevant to the question of balance of convenience in relation to the injunction sought by Hansen regarding the Purported Resolution, and not just the injunction regarding the No Future Removal Issue.

5.  All in all, Mr Chain says that Hansen ought to be entitled to an appropriate portion of the overall costs (say 60%); alternatively he says that there should be no order as to costs or the costs should be in the cause.

6.  On the other hand, Mr Maurellet for the HFA parties argues that if one disregards the form of the 2 applications (ie the leave to appeal summons and the variation summons) and looks at the substance, there would need to be 2 hearings in any event in order to get the interim suspension of the 8 September Order, one ex parte (presumably with notice) and the other inter parties.  The wasted costs, in the scale of the matter, would be minimal.

7.  Mr Maurellet also argues that although a large number of complaints were relied upon by Hansen at the original ex parte application before Au-Yeung J on 2 September 2014, if one looks at the position holistically, at the end of the day, Hansen has succeeded only on the Purported Resolution issue, but even then it is now clear that it has brought no benefit to Hansen because Madam Leong, I am told, was removed as CEO of the 4^th defendant in May this year.  However, as I remarked in the course of the hearing, I believe that the position should be viewed as at the date of the hearing in October last year.  In any event, although Hansen has not brought any legal challenge against the removal of Madam Leong in May this year, Hansen does not accept that the removal was lawful or proper.

8.  All in all, Mr Maurellet argues that the HFA parties ought to be entitled to 90% of the overall costs (or such other percentage as the court considers to be just).

9.  Looking at the matter holistically, as I am invited by counsel to do, I consider that this is a case where it is difficult to say which side has been the real winner.  Each side has won on some issues and lost on others.  A lot of legal costs have been incurred, but it is questionable whether they have brought any real benefits to any party at the end of the day.  In all the circumstances, I consider that the fair order to make is no order as to costs in so far as Hansen and the HFA parties are concerned.  This applies to the 1^st and 2^nd injunction summonses, the discharge summons and the variation summons, including all costs previously reserved on those summonses.

10.  In so far as the 4^th defendant is concerned, it has to be joined as a party because the various orders sought affected its operations and it is entitled to seek legal advice to protect its interest.  However, there was no reason for it to instruct counsel, still less senior counsel, to attend the hearing on 28 October 2014 in relation to the 1^st and 2^nd injunction summonses and the discharge summons.  As a matter of fact, senior counsel for the 4^th defendant did not make any substantive submissions on the 1^st and 2^nd injunction summonses or the discharge summons but merely adopted the submissions made by senior counsel on behalf of the HFA parties.

11.  In the circumstances, I consider that the costs of the 4^th defendant on the 4 summonses (ie the 1^st and 2^nd injunction summonses, the discharge summons and the variation summons) should be costs in the cause of this action, with the qualification that counsel’s fees for the hearing on 28 October 2014 and for the present hearing in relation to the 4 summonses be disallowed.

12.  In so far as the “leave to appeal summons” is concerned, it is dismissed with no order as to costs, including the costs previously reserved.