IMAGE TECHNOLOGY (HONG KONG) LTD. (IN LIQUIDATION) v. HO YING CHEONG and Others

IN THE MATTER OF THE COMPANIES ORDINANCE (CAP. 32)
AND
IN THE MATTER OF IMAGE TECHNOLOGY (HONG KONG) LIMITED

Court of Appeal

(Civil Appeal No. 108 of 1997)

(ON APPEAL FROM COMPANIES WINDING-UP NO. 342/1996,
HIGH COURT ACTION NOS.6861/1993 AND 9302/1993)

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J U D G M E N T

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Liu, JA:

1. Suffice it to say that there were two costs orders made by Cheung, J in three High Court actions. One series of orders were made on the 10 October 1996 and the other on 5 November 1996. The Official Receiver qua Liquidator feels aggrieved by these costs orders. Having obtained leave, he seeks to bring these orders before this court on appeal.

2. Miss Wong, counsel for the 1^st respondent takes a preliminary point. Shortly put, as submitted by counsel, this appeal is, in the circumstances, incompetent.

3. In the Notice of Appeal filed by the Official Receiver qua Liquidator, the only orders sought to be appealed against are the costs orders I have referred to, namely (1) on 10 October 1996, the 1^st respondent's costs to be borne by the Official Receiver, and (2) on 5 November 1996, the 1^st respondent's costs to be borne by the Official Receiver on a common fund basis. Grounds in support are set out in the Notice of Appeal. This court is asked to grant the following relief:

"The Official Receiver and Liquidator will seek an order from the Court of Appeal that awards of costs against the Official Receiver be quashed, alternatively that such orders as may be just be substituted therefor."

4. To begin with, the alternative prayer is in terms so unparticularised as would amount to naught. Order 59 rule 3 (2) of the Rules of Supreme Court enjoins an intended appellant to specify the precise form of relief he proposes to ask the court to make. Order 59 rule 3(2) reads:

"Notice of Appeal may be given either in respect of the whole or in respect of any specified part of the judgment or order of the Court below and every such notice must specify the grounds of the appeal andthe precise form of the order which the appellant proposes to ask the Court of Appeal to make." (Emphasis suffice)

5. To all intents and purposes, therefore, the Notice of Appeal seeks to impugn the costs orders made in the three High Court actions by Cheung, J. and the quashing order prayed for from this court is again in respect to these awards of costs against the Official Receiver made in those High Court actions.

6. Before us, Miss Wong, counsel for the 1^st respondent places on record that irrespective of the outcome of the intended appeal which the Official Receiver seeks to prosecute, costs awarded and to be awarded here against the Official Receiver will not be enforced against the Official Receiver. Money will simply not change hands, she says. On that factual premise, counsel submits that there is no lis existing between the parties to this intended appeal. We have not heard anything said to the contrary on that factual premise.

7. The Official Receiver seeks to challenge orders of costs and is, as his stance is formulated in the Notice of Appeal, wholly unconcerned with any basis on which the costs orders were made. Mr Smith, counsel for the Official Receiver accepts that the 1^st respondent has, in the circumstances, no interest in the result of the appeal. Counsel directs this court to the constitutional point which presumably comprises the erudite issues set out in the grounds in support of the Official Receiver's appeal, but evidently the orders complained of and the relief sought from us are exclusively referable to costs which is no longer of practical significance. That is the only lis before the court, and the supporting grounds take it no further. On the ratio of the authorities cited by Miss Wong, counsel for the 1^st respondent, neither party would seem to have any interest in the outcome of the intended appeal. This court is not even asked, pursuant to Order 59 rule 3(2) RSC, to pronounce upon any abstract questions of law. Within the narrow compass of the intended appeal, the Official Receiver has also no further interest. The cases to which our attention has been drawn are Sunlife Assurance Company of Canada v. Jervis, [1994] A.C. 111 and Ainsbury v. Millington, [1987] 1 W.L.R. 379.

8. The question of costs falls away. There is clearly no, so to speak, living issue, and the appeal is, in my view, incompetent. I would extend to the Official Receiver an opportunity to withdraw this appeal with leave, otherwise on the clear authorities and the unchallenged factual premise, I would dismiss it.

Wong, J:

9. I agree with the judgment given by Mr Justice Liu that this appeal is incompetent and should be dismissed if it is not withdrawn.

Barnett, J:

10. I, too, agree that this appeal should either be withdrawn or, if not, that it should be dismissed.

11. I perfectly understand the Official Receiver's concern about the principle as to whether costs can be ordered against the Official Receiver in his office as opposed to any company in winding up or other party that he may be representing in a particular set of proceedings.

12. As long as the orders made by Cheung, J., against which this appeal lies, as long as those orders stood, the Official Receiver was of course liable to have the costs as taxed enforced against him. Those orders would also provide persuasive authority for other courts to the effect that costs can properly be ordered against the Official Receiver as opposed to some other party whom he might be representing.

13. But the Official Receiver's liability to those costs became academic once the Director of Legal Aid, who was providing legal aid for the 1^st respondent, the effective respondent to this appeal, stated in his letter sent to the Officer Receiver a few days ago on 17 July that the Director would not enforce the orders as to costs against the Official Receiver. That position has been repeated by counsel Miss Wong today. The position therefore that there is no longer any matter of substance remaining between the parties. What remains would be an exercise, if it was allowed to continue, that would amount to no more than giving advice to the Official Receiver.

14. Further, and sadly, if the appeal continued, there would also be the ventilation of animosity that appears to have crept into the debate between the parties to this appeal.

15. Miss Wong in her submission relied upon two authorities which have been mentioned by Liu, J.A. i.e. Sunlife Assurance Company of Canada v. Jervis andAinsbury v. Millington. Both decisions were decisions of the House of Lords which has put the position very clearly. Mr Smith, for the Official Receiver, sought to distinguish them on the basis that leave is needed to appeal to the House of Lords which is not the position which obtains in this court. While that of course is true, it does not in my view affect the principle laid down in those cases, a principle which should be applied in this particular appeal.