Sbc Cpa Ltd v. Au Ka Man Silkie and Others

HCA 1502/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1502 OF 2014

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D E C I S I O N

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INTRODUCTION

1.The basic facts of this case have been set out in my earlier decision handed down on 28 August 2015 (“the Decision”) and will not be repeated here.  In this decision, I shall adopt the expressions and abbreviations as defined in the Decision.

2.At paragraph 66 of the Decision, I made an order nisi that the plaintiff shall pay to the defendants the costs of and occasioned by the Injunction Summons and Discharge Summons, including all costs reserved, to be taxed on an indemnity basis if not agreed, with certificate for one counsel.

3.On 10 September 2015, the plaintiff applied by summons (“the variation summons”) to vary the costs order nisi and seek the following order instead:-

(1)  costs of and occasioned by the Injunction Summons up to and including 20 November 2014 (including the costs of the hearing before L Chan J on 14 November 2014) be in the cause, and thereafter be to the defendants to be taxed on an indemnity basis if not agreed, with certificate for one counsel, and such costs to be paid forthwith after agreement or taxation; and

(2)  costs of and occasioned by the Discharge Summons be the defendants’ costs in the cause, to be taxed on an indemnity basis if not agreed, with certificate for one counsel.

4.Subsequently, the parties agreed to dispose of the variation summons by means of written submissions.

5.I have now received written submissions from the plaintiff, the 1^st defendant, the 2^nd defendant and the 3^rd defendant respectively.  This is my decision on the variation summons.

Discussion

6.As mentioned at paragraph 64 of the Decision, the costs order nisi was made to mark the court’s disapproval of the plaintiff’s conduct, namely, that the plaintiff had mis-used the court’s process or jurisdiction by publishing untrue or unfair misrepresentations about the Chan Order to the plaintiff’s employees and clients to the prejudice of the defendants.

7.In his submissions in support of the variation summons dated 6 October 2015, Mr Chang raises 4 main points:-

(1)  The Injunction Summons itself was not issued for an ulterior motive or improper purpose.

(2)  The plaintiff is, in reality, the “real winner” in relation to the Injunction Summons and Discharge Summons.

(3)  There are no exceptional circumstances warranting full deprivation of the plaintiff’s costs in the Injunction Summons and Discharge Summons.

(4)  A blanket award of indemnity costs against the plaintiff is harsh, disproportionate and unfair.

8.At paragraph 59 of the Decision, I expressed the view that since the 1^st defendant was not seeking an order of committal against the plaintiff, it was not necessary for me to make a formal finding of contempt of court against the plaintiff.  However, as apparent from the principles which I referred to at paragraphs 28 to 48 of the Decision, had it been necessary to do so, I would have made a finding contempt of court against the plaintiff.

9.It is well established that in a contempt case, the court may make an indemnity costs order against the contemnor although there is no general rule that such order should be made.  Whether it is appropriate to do so depends on all the circumstances and involves an exercise of the court’s discretion.  One important consideration is whether the contemnor’s conduct has resulted in a separate penalty which sufficiently expresses the court’s disapproval; in which case, indemnity costs as an additional penalty may not be justified.  See Libertarian Investments Limited v Thomas Alexej Hall, FACV 14/2012 (11 March 2014), at paragraph 6 per Ribeiro PJ.

10.In my view, the same principles apply where a party’s conduct amounts to an abuse of the court’s process.

11.In the present case, whether one characterises the plaintiff’s conduct as a contempt of court or an abuse of process, it was, in my view, serious in nature.  The misrepresentation of the Chan Order was clear, so also was the prejudice or potential prejudice to the defendants consequent upon such misrepresentation.  It is also relevant that the plaintiff had at all material times the benefit of legal advice.

12.Notwithstanding the points urged by Mr Chang on behalf of the plaintiff, I consider that an order requiring the plaintiff to pay indemnity costs in respect of the whole Injunction Summons and Discharge Summons to be justified and necessary to mark the court’s disapproval of the plaintiff’s conduct, and just and fair in all the circumstances of the case. In this regard, I also take into account the fact that there is no suggestion that the defendants intend to institute separate proceedings to commit the plaintiff for contempt of court (see paragraph 8 of Mr Kwan’s skeleton submission dated 20 October 2015).  Should such proceedings be instituted in future, the court dealing the matter of contempt can take into account the order made herein.

13.In all, I dismiss the variation summons with costs to the defendants, to be taxed on a party-to-party basis if not agreed.

Mr Jonathan Chang and Ms Jacqueline Law, instructed by Lo & Lo, for the plaintiff

Mr Steven Kwan, instructed by Mason Ching & Associates, for the 1^st defendant

Wong Chun Yat, the 2^nd defendant, in person

Chiu Cheuk Laam, the 3^rd defendant, in person