Y, S v. GI, GG

HCCT 117/2024

[2025] HKCFI 3633

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 117 OF 2024

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D E C I S I O N

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1.  On 11 March 2025, this Court made an order on the summons issued by the 1^st Defendant on 13 December 2024 (“Security Summons”), for the Plaintiffs to give security for the 1^st Defendant’s costs in the sum of HK$2,000,000 by payment into court within 21 days (“Security Order”). The Security Order was made in terms of paragraph 2 of the Security Summons, that if the security is not given within the time specified by the Court, “the Plaintiffs’ application by way of Originating Summons filed on 4 October 2024” to set aside the Final Award in the arbitration “be dismissed with costs to the 1^st Defendant on an indemnity basis”.

2.  At the hearing of the Security Summons on 11 March 2025, which led to the making of the Security Order, the parties had by their respective skeleton submissions presented their arguments on the costs to be made on the Security Summons. Both parties asked for the costs of the Security Summons to be granted to them.

3.  After the grant of the Security Order, the Plaintiffs failed to provide security as ordered by the Court. Pursuant to paragraph 2 of the Security Order, the Originating Summons to set aside the award was dismissed, with costs as provided for on the express terms of the Security Order.

4.  The 1^st Defendant submitted a draft order on 16 April 2025 (“Draft Order”), for approval by the Court. The Draft Order provided for the “costs of the Originating Summons to be paid by the Plaintiffs to the 1^st Defendant “on an indemnity basis with 2 certificates for Counsel forthwith, to be summarily assessed”. The Draft Order was not approved by the Court, as paragraph 2 of the Security Order had simply provided for the Originating Summons to be dismissed “with costs to the 1^st Defendant on indemnity basis”, and there was no application to amend the order to provide either for certificate for 2 counsel, or for the costs to be summarily assessed.

5.  The 1^st Defendant accordingly issued a summons on 9 May 2025 (“Costs Summons”), pursuant to Order 62 rule 9 RHC, seeking costs of the Originating Summons to be paid by the Plaintiffs to the 1^st Defendant “on indemnity basis, to be summarily assessed”. Order 62 rule 9 is the usual provision in the Rules for costs to be summarily assessed for

6.  The Plaintiffs opposed the Costs Summons, on the ground that the Security Order already made a final order for the costs of the Originating Summons, which was not expressed as an order nisi, the Court is functus, the only avenue left for the 1^st Defendant is to appeal against the order, and its Costs Summons is an abuse.

7.  I refer to my Decision in Techteryx Ltd v Legacy Trust Company Limited & others [2025] HKCFI 2056 and in particular paragraphs 6 to 7 thereof, which deal with the authorities cited by the Plaintiffs in this case (Chan Sung Kei t/a Chan Shun Kei Construction Works v Hong Kong Construction (Hong Kong)  Ltd, HCCT 2/2011 21 August 2014, Ghazi Faidi v Qantex Capital Markets Limited & Ors [2025] HKCA 342 and Kung Kwok Wai David v Commissioner of Estate Duty). It is not necessary to repeat the matters found.

8.  On the facts of the present case, although the Security Order including the sanction for the dismissal of the Originating Summons and the costs of such dismissal was made in terms of what the 1^st Defendant itself sought by the Security Summons, at the hearing of the Security Summons, only the costs of the Security Summons were argued by the parties (although they chose to do this on a very limited basis). There were no submissions made on the position of the costs of the Originating Summons, if security was not furnished in accordance with any order by the Court.

9.  The dismissal of the Originating Summons with costs came into effect and operation on 1 April 2025, after the lapse of 21 days for the provision of security in accordance with the Security Order. 

10.  In all fairness, since the parties did not have the opportunity to address the Court on the question of the costs of the Originating Summons, the costs order reflected in paragraph 2 of the Security Order (and which came into operation on 1 April 2025)  may be regarded as an order nisi, subject to variation which can be sought by either party, with detailed submissions on costs. A costs order nisi becomes absolute 14 days thereafter, unless an application is made for its variation.

11.  In this case, the Costs Summons was issued only on 9 May 2025. Even if the costs order for the dismissal of the Originating Summons was an order nisi, it would have become absolute on 15 April 2025.

12.  However, I accept the submissions made by the 1^st Defendant, that since the costs order on the dismissal of the Originating Summons was not drawn up, the Court is not functus and retains the inherent jurisdiction to consider the order. The Draft Order submitted on 16 April 2025 was not approved, and the 1^st Defendant issued its Costs Summons on 9 May 2025, by which it only seeks summary assessment. Paragraph 2 of the Security Order already provides for costs of the Originating Summons to be paid by the Plaintiffs on indemnity basis, and a variation is not necessary to provide for that.

13.  There is nothing unjust to make an order for summary assessment of the costs of the Originating Summons, as this is a practice encouraged by the court where such an order is practicable and appropriate on the facts of the case. There is nothing complex about summarily assessing the costs incurred on the Originating Summons for the setting aside. The usual course is to permit the Plaintiffs in this case to file their statement of objections to the 1^st Defendant’s costs break down, and for costs to be summarily assessed on that basis after receiving the Plaintiffs’ objections.

14.  In the circumstances, I am prepared to make an order to provide for the costs of the Originating Summons to be summarily assessed. The 1^st Defendant has already filed its Statement of Costs, and the Plaintiffs are given leave to file its Statement of Objections within 14 days.

15.  No further order for costs will be made on the Costs Summons.