DBS BANK (HONG KONG) LTD v. HONOUR ELITE CORPORATION LTD AND OTHERS

HCMP 69/2025 &
HCMP 70/2025 &
HCMP 71/2025 &
HCMP 72/2025

[2026] HKCFI 1604

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 69 OF 2025 AND 70 OF 2025

AND 71 OF 2025 AND 72 OF 2025

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BETWEEN

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(Consolidated by the Order of the Honourable Madam Justice Au-Yeung dated 16 January 2026)

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D E C I S I O N

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INTRODUCTION

1.  By a judgment dated 16 January 2026 (“the Judgment”), this Court found that there are triable issues and granted unconditional leave to the Defendants to defend. This Court ordered that the 4 originating summonses be consolidated and continued as if begun by writ. This Court also ordered, on a nisi basis, that costs of the Defendants’ summonses for consolidation be the Defendants’ costs in the cause (“Costs Order”).

2.  This is the summons filed by the Defendants on 29 January 2026, seeking to vary the Costs Order such that (i) DBS Bank shall pay the costs of the Conversion Summons to the Defendants forthwith after summary assessment; or (ii) DBS Bank should pay the costs of the hearing of the Conversion Summons to the Defendants forthwith after summary assessment, and the costs of and occasioned by the Conversion Summonses be the Defendants’ costs in the cause.

3.  The Plaintiff submits that there are no grounds to vary and that the Defendants’ costs claimed are excessive and unreasonable.

LEGAL PRINCIPLES

4.  For interlocutory applications, costs to follow the event is an option: Order 62, rule 3(2A) of the Rules of the High Court (“RHC”).

5.  There is no rule that an immediate costs order should be made against every unsuccessful party in an interlocutory application: Midland Business Management Ltd v Lo Man Kui (No.2) [2011] 2 HKLRD 667, §11, Lam J (as he then was).

6.  The usual order on an order to continue an action as if begun by writ under Order 28, rule 8 is for costs to be in the cause: Hong Kong Civil Procedure 2025, Vol 1, §28/8/4.

7.  Similarly, where unconditional leave to defend is granted in respect of an O.14 application, the usual order is for costs to be in cause: HKCP, §14/7/13; Greater China Capital Inc v Gbtimes Limited [2018] 1 HKLRD 210 §12.2, Lam VP, as he then was.

8.  The Court is not bound to make the standard order in every case where it grants unconditional leave to defend. Whether the Court ought to depart from the standard order would depend on the facts of the particular case. The exercise of that discretion is highly fact-sensitive and other decisions involving different sets of facts are seldom of assistance: Fairmile Consultants Ltd v Esquel Enterprises Ltd [2020] HKCFI 253, §§14-16, DHCJ Le Pichon; Alviero Martini SpA v Bubble Retail Management Ltd (02/10/2009, HCA 1937/2008) at §26, DHCJ L Chan (as he then was).

9.  The Court may depart from the usual costs order where the plaintiff should have anticipated the factual disputes to be raised by the defendant; or that there are substantial disputes of facts which make it inappropriate or unsuitable for the originating summons procedure and the plaintiff’s resistance against an O.28 r.8 application is unreasonable; or that the defendant’s affirmation should reveal an entitlement to unconditional leave to defend, but the Plaintiff still pursues the application for summary judgment without good reason: HKCP, §28/8/4; ICBC v Tse Ching [2022] 6 HKC 730, §§30-31 (CA); Alviero Martini v Bubble Retail at §26.

10.  However, the mere fact that a line of defence was known to the plaintiff does not mean that he should not have sought summary judgment. Much depends on the available evidence and the assessment on the probity of proceeding by way of O.14 is very often a matter of judgment. A wrong judgment in this respect does not necessarily call for sanction in the same manner as an abuse of the procedure. See Greater China Capital §8 (CA).

11.  The modern trend is the encouragement of immediate payment of costs of interlocutory proceedings. Otherwise, this would weaken costs as a sanction against unwarranted application or resistance: Midland Business Management Ltd v Lo Man Kui (No 2), at §§9-12.

ANALYSES

12.  Mr John Chan submits that there was nothing to show that DBS Bank had unreasonably resisted the Conversion Summonses and the Court did not make any finding in the Judgment to that effect. In fact, to achieve procedural economy, DBS Bank had agreed to hear the 4 originating summonses together with the Conversion Summonses; and had generously allowed the Defendants to file and serve Yuen-2^nd a week prior to the main hearing (“the Hearing”) notwithstanding its obvious lateness.

13.  Whilst acknowledging Mr Chan’s submission, one should note that the Defendants succeeded in their Conversion Summonses on 2 limbs: (i) the No Right to Call in the Loans Defence and (ii) loss of a major client for DBS Bank’s breach of the prevention principle (Judgment, §83).

14.  Limb (i) was found to be triable based on inadequacy of DBS Bank’s own documents (Judgment, §§38-46, 50).

15.  Mr Chan submits that despite the centrality of the Right to Call Loan Issue to the Court’s reasoning, this ground was never raised in Yuen-1^st. The pre-Hearing correspondence only focussed on the alleged breach of confidentiality (“Confidentiality Issue”). The Right to Call Loan Issue was only obliquely raised in the belated Yuen 2^nd (and DBS Bank had no opportunity to respond or have the last word), merely as part of the Defendants’ purported defence on the Confidentiality Issue and not as an independent ground to resist summary determination.

16.  Hence, Mr John Chan submits, on the basis of the Defendants’ two affirmations in opposition, DBS Bank had properly proceeded on the bases that that DBS Bank had the right to call loans and that the Defendants’ default was uncontroversial between the parties.

17.  Mr John Chan points out that the first time that the Defendants purportedly raised the Right to Call Loan Issue was by the Defendants’ skeleton submission dated 28 July 2025 (filed 2 days before the Hearing and after the Plaintiffs’ skeleton submission). Only by then, the Defendants had shifted their focus of their case at the last minute. By this time, all costs of and occasioned by the Hearing had already been incurred. The Defendants had therefore failed to discharge their burden to raise any arguable defence in good time, and it was therefore reasonable for DBS Bank to resist the Conversion Summonses.

18.  I am unable to agree. The obligation is on every lender, who calls in a loan to see that he has the right to do so in accordance with the terms of the loan agreement. It has been the Defendants’ case all along that the Defendants had been repaying the mortgage repayments on time: Judgment §38; Yuen 1^st §32. That was just another way of saying that the Plaintiff did not have the right to call in the loans.

19.  Limb (ii) was put in issue in correspondence. Back on 25 March 2025, the Defendants had already referred to the correspondence exchanged between the parties setting out the disputes since February 2024 and have already proposed that the proceedings be consolidated and continued as if they had been begun by writ as there were substantial disputes of facts. On 28 July 2025, the Defendants even offered to continue paying the mortgage instalments and that the proceedings be dismissed.

20.  Upon sight of the Defendants’ correspondence and affirmations, DBS Bank ought to have anticipated that there would be substantial factual disputes so that the originating summons procedure would not be appropriate and it would have been likely that the Court would have penalized DBS Bank on costs upon making an order to continue the proceedings as if commenced by writ: Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35, § 49, Recorder Fok SC (as he then was).

21.  Mr John Chan submits that the Court has found against the Defendants on multiple aspects of the Confidentiality Issue, including the alleged lost tenancies and the alleged loss arising from blocking of the Defendants’ accounts (Judgment, §§77-79). That was true but, contrary to his submission, there was no finding that the evidence on the causation between the Plaintiff’s alleged breach of confidentiality and CNAM’s loss was inadequate and weak (Judgment, §73) or that the Defendants’ purported defence was shadowy. The Court in fact commented that the evidence was consistent with the Defendant’s business losing a major client and the failure of DBS Bank to sue CNAM brought into question DBS Bank’ good faith (Judgment, §§72 and 74).

22.  In my view, the Breach of Prevention Principle Defence was a substantial defence and it was raised in correspondence. DBS Bank could not have thought that the Defendants would not pursue this defence at the Hearing.

23.  The overall position was that DBS Bank fought hard to resist the Conversion Summons and insisted on getting summary judgment despite the correspondence and the written submission of the Defendants. It should bear costs, even though the Defendants lost on some arguments.

24.  With regard to the letter dated 28 July 2025, I place little weight on it now. It is more relevant to the overall costs should this action end up in a trial in which the Defendant succeeds.

25.  For the reasons given under Limb (i) and/or (ii), I vary the costs order nisi and order the Plaintiff to pay the costs of the Conversion Summonses, including the Hearing.

26.  I have considered the first 2 costs statements of the Defendants. I deal with the grounds of objection on a broad-brush basis. There is no justification for 3 solicitors but I note that the handling partner is charging less than the maximum hourly rate that he can. The case did generate some necessary correspondence but, with the involvement of counsel, it was not really necessary for solicitors to review and prepare skeleton submissions. Costs in relation to Yuen-2^nd should be allowed but those for the correspondence seeking DBS Bank’ consent to file should not, due to the late filing. Perusal of the Judgment should be allowed anyway, in view of the Costs Summons.

27.  The updated costs statement is to seek costs for the summons for extension of time for DBS Bank to lodge and serve submission for the Costs Summons (“the Time Summons”). I decline to accept this updated costs statement. The usual costs for a Time Summons is $1,040. DBS Bank waited till the due date for lodging the submission to file the Time Summons. Its solicitors sent a letter to the Court on 6 March 2026 (which effectively made an uninvited written submission on the Time Summons) and attached parties’ correspondence. That approach was something which the courts have always rejected, for it, amongst others, forced the opponent to send an uninvited reply to the Court. I grant the Defendants higher costs at $2,600 to mark the disapproval of the Court towards DBS Bank.

28.  Considering all the circumstances, I order that DBS Bank do pay the Defendants $420,000 for the Conversion Summonses, $50,000 for the Costs Summons and $2,600 for the time summons.