Tian Yao (Xiamen) Property Development Co Ltd and Another v. Right Margin Ltd

HCMP 2396/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 2396 OF 2015

(ON AN INTENDED APPEAL FROM HCA 265 OF 2013)

------------------------

------------------------

-------------------------

J U D G M E N T

-------------------------

1.This is an application by Tian Yao (Xiamen) Property Development Co Ltd (“Tian Yao”) and Chan Shu Chun (“Mr Chan”), who were the 2^nd and 3^rd defendants in the proceedings below, for an extension of time to appeal against the Decision of To J dated 15 July 2015, refusing to set aside a default judgment entered against Tian Yao and Mr Chan by Right Margin Ltd (“Right Margin”), the plaintiff in the proceedings below.

2.The background to the proceedings below can be briefly summarized as follows:

(1) Tian Yao, a Chinese company, was the developer of a residential and commercial development called International Plaza in Xiamen City.  It was a subsidiary of Tian Liang Limited (“Tian Liang”), a BVI company which was the 1^st defendant in the proceedings below.  Mr Chan was the sole shareholder of Tian Liang until Right Margin became the sole shareholder of Tian Liang in his place in April or May 2013, when it exercised its rights to do so under a share mortgage granted to it by Mr Chan in connection with the transactions described below.

(2) Right Margin is a Hong Kong company, and a member of the Chinachem Group of companies, a well known Hong Kong property developer.

(3) On 16 January 2009, Right Margin, Tian Liang and Tian Yao entered into an exclusive sales agency agreement in respect of 34 units in International Plaza (“the Agreement”).  The term of the Agreement was for two years, from 1 April 2009 to 31 March 2011.  Clauses 4.1 to 4.3 of the Agreement were of central relevance to these proceedings.  They provided as follows:

“4.1 The parties agreed that the selling price of the premises offered by exclusive agent [Right Margin] is RMB 18,000/m². [Right Margin] can sell the premises to third parties higher than the selling price (i.e. 18,000/m²). If the selling price by [Right Margin] is higher than the aforementioned agent selling price, the excessive portion will be received and owned by [Right Margin].

“4.2 Since [Tian Liang] and [Tian Yao] granted the exclusive sales agency right to [Right Margin], [Right Margin] is required to pay RMB 120,330,603 (agreed to HK$134,770,275.36) to [Tian Liang] and [Tian Yao] or the person or company designated by [Tian Liang] within 3 days since this Agreement has been signed by [Right Margin] and the conditions precedent under Section 7.1 to 7.6 of this Agreement has been satisfied. …

“4.3 The amount stated in Section 4.2 above paid by [Right Margin] to [Tian Liang] and [Tian Yao] shall be returned to [Right Margin] under Section 9 when the agency period expired and/or [Right Margin] submitted a written notice to [Tian Liang] and [Tian Yao] for the termination of the agency.”

(4) At around the same time, Mr Chan granted Right Margin a mortgage over all the shares of Tian Liang, Tian Liang pledged its shares in Tian Yao to Right Margin, and Mr Chan personally indemnified Right Margin against any loss that might be caused to it by any breach of the Agreement on the part of Tian Liang and Tian Yao.

(5) On 19 January 2009, Right Margin paid HK$134,770,275.36 to an associated company of Tian Liang, in accordance with Tian Liang’s instructions, pursuant to clause 4.2 of the Agreement.

(6) On the expiry of the Agreement, it was not extended. However, apart from making a payment of HK$5 million more than one year later, Tian Liang and Tian Yao did not repay Right Margin the advance made pursuant to clause 4.2 of the Agreement. Further, no payments were made to Right Margin in respect of excess sale proceeds as required by clause 4.1 of the Agreement.

(7) As a result, on 7 February 2013, Right Margin issued proceedings against Tian Liang, Tian Yao and Mr Chan. The writ claimed (among other things) payment of the sum of RMB 140,221,986 as a debt due from the defendants. This sum was made up of two elements:

(a) RMB 116,260,953 pursuant to clause 4.3 of the Agreement, being the RMB 120,330,603 advanced pursuant to clause 4.2 of the Agreement, less RMB 4,069,950, which was the equivalent of the HK$5 million part repayment; and

(b) RMB 23,961,033, being what Right Margin considered was the excess sale proceeds of units sold by it, to which it was entitled under clause 4.1 of the Agreement.

(8) As none of the defendants acknowledged service or gave notice of their intention to defend the proceedings, Right Margin entered default judgment against them on 9 April 2013 (in relation to Tian Liang and Tian Yao) and 15 April 2013 (in relation to Mr Chan). Thereafter, Right Margin exercised its rights under the share mortgage to transfer the shares in Tian Liang to itself, thereby becoming the owner of the entire issued shareholding in Tian Liang. Subsequently, it took steps to enforce the default judgments in Xiamen. On 24 July 2014, the solicitors acting for the defendants applied (on behalf of all of them) to set aside the default judgments. There was a complication in relation to Tian Liang, as it was by then owned and controlled by Right Margin. Eventually, the application was amended so as to be brought by Tian Yao and Mr Chan only, with a separate summons being taken out by Tian Yao and Mr Chan seeking to intervene in the proceedings on behalf of Tian Liang, and to apply to have the judgment against Tian Liang set aside as well. Owing to problems with service of the latter summons, when the matter came before To J, he decided to adjourn it, but to proceed in any event with the former summons so far as Tian Yao and Mr Chan were concerned.

3.On that application, To J rejected a preliminary submission that the default judgment was irregular, by reason of having been entered for too much, and should on that ground be set aside without consideration of the merits.

4.He went on to consider the merits of the defences advanced by Tian Yao and Mr Chan, and came to the following views:

(1) Tian Yao and Mr Chan had no defence in relation to the repayment claim mentioned in paragraph 2(7)(a) above.  In coming to this view, he rejected arguments that the sum involved should be denominated in Hong Kong dollars and not RMB, and that the HK$5 million repayment had not been taken into account by Right Margin.

(2) He held that while RMB 22,732,939 of the excess sales proceed claim referred to in paragraph 2(7)(b) above was admitted, there was an arguable partial defence in relation to the balance of RMB 1,228,094, arising from Tian Yao and Mr Chan’s evidence to the effect that certain of the sales on which Right Margin relied had in fact fallen through and not been completed, so that no excess sales proceeds had been realised so as to become payable to Right Margin.

(3) Although he rejected an argument that claims by Tian Yao totalling RMB 12,185,435.84, in respect of amounts said to be due from Right Margin for tax liabilities payable to the Xiamen authorities and service charges payable to Tian Yao, could be set off against Tian Yao’s liabilities to Right Margin under clauses 4.1 and 4.3, he accepted that such claims were arguable, and could be the subject of a counterclaim.

5.In the result, To J amended the amount of the default judgment to RMB 138,993,892 to reflect the extent to which he considered an arguable defence had been made out, and in addition granted a stay of execution in relation to the counterclaims, rounding up their amount to RMB 13,500,000 for the purposes of such stay.

6.Dissatisfied with this outcome, Tian Yao and Mr Chan applied to To J for leave to appeal against his decision.  When that application came on for hearing, To J pointed out that leave to appeal was not required, since the effect of his judgment was to refuse to set aside a default judgment, so that an appeal against it lay as of right: see RHC Order 59, rules 21(1)(a) and 21(2)(h).  Unfortunately for Tian Yao and Mr Chan, by the time this happened, the time for appealing against To J’s decision had expired, necessitating their present application for an extension of time to appeal.  In the event, the application was made on 25 September 2015, some 12 days late.

7.Mr Hung, appearing for Tian Yao and Mr Chan, submitted that in all the circumstances, including the fact that the mistake as to whether or not leave to appeal was required was apparently shared by both sides, the short delay of 12 days should be regarded as excusable.  Mr Fung SC, appearing for Right Margin, submitted that the delay was inexcusable, and that the intended appeal has no prospects of success.

8.It is well established that the court has a discretion to extend time for serving a notice of appeal.  In Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd [2001] 1 HKC 125, Le Pichon JA identified the factors to be taken into account as:

(1)  the length of the delay;

(2)  the reasons for the delay;

(3)  the chances of the appeal succeeding if time is extended;

(4)  the degree of prejudice that the respondent would suffer.

Le Pichon JA also held that where the delay was insubstantial but inexcusable, the party seeking an extension of time had to show a real prospect of success on the appeal.

9.In this case, the length of the delay is clearly insubstantial.  However, I am satisfied that the delay was not excusable.

10.Mr Hung sought to argue that the way in which the order below was framed, amending the amount of the initial default judgment rather than simply dismissing the summons seeking to set it aside, it was excusable for those advising Tian Yao and Mr Chan to have regarded the judgment as interlocutory such as to require leave to appeal.  This cannot be right.  On any view, the outcome of the hearing below was to affirm the default judgment to the extent of the amended amount, so that the upshot was that Tian Yao and Mr Chan remained subject to a very substantial judgment against them.  It cannot seriously be suggested that this was not a judgment by which, in the terms of RHC Order 59 rule 21(1)(a), determined in a summary way the substantive rights of a party to an action.  Nor can it sensibly be contended that To J had done something other than to refuse to set aside the default judgment that had been entered – he clearly left it in place to a very substantial extent, so that the order clearly fell within RHC Order 59 rule 21(2)(h).

11.In these circumstances, a failure on the part of those advising Tian Yao and Mr Chan properly to read or understand the rules cannot be regarded as excusable: see Law Bing Kee v Person(s) in Occupation of RP (unreported, HCMP 672/2013, 9 May 2013, per Fok JA at paragraph 17).  In my view, this is so whether or not the misapprehension was shared by the other side.

12.It is therefore necessary for Tian Yao and Mr Chan to demonstrate that their proposed appeal has a real prospect of success.

13.As to this, Mr Hung submitted that there were three arguments to be advanced on appeal which had real prospects of success. These were:

(1)   That the default judgment was irregular, in that it was not in fact a claim for a debt or liquidated amount, and was thus improperly entered pursuant to RHC Order 13 rule 1, so that it should be set aside without investigation of the merits.  This related, I think, to that part of the default judgment which was based on the excess sales proceeds claim.

(2)   To J was wrong to construe clauses 4.2 and 4.3 of the Agreement as requiring the payment and repayment of the sum there identified in RMB rather than Hong Kong Dollars.

(3)   To J was wrong to fail to draw adverse inferences against Right Margin in respect of the construction argument just mentioned, and in consequence to fail to prefer the defendants’ construction in favour of Hong Kong Dollars as the currency of the obligations, by reason of Right Margin’s failure to call two witnesses mentioned in the evidence of Mr Chan as having been involved in the negotiations as to clauses 4.2 and 4.3.

14.Dealing first with the argument that the default judgment should have been set aside as of right for irregularity, Mr Fung SC responded that:

(1)   This was a new point, not taken below.

(2)   It was, in any event, wrong, as the entirety of the judgment entered was in respect of debts or liquidated claims.

15.Although Mr Hung sought to suggest, by reference to the written submissions lodged below, that the point was in fact raised before To J, it seems clear that, in the form that it is now put, it was not.  The argument below as to the regularity or otherwise of the default judgment centred on the claim that it was for too much, an argument which To J dealt with and rejected in his judgment, and which is not now renewed.  Although there was, as Mr Hung points out, a complaint to the effect that the default judgment was a hybrid or combination judgment, the hybrid or combination complained of does not, on a fair reading of the submissions below, clearly relate to the debt/damages dichotomy that Mr Hung now seeks to rely on.  There is a complaint about the allegedly impermissible merging of two claims of different natures, but it was not suggested that the relevant difference was that one was a claim in debt but the other not.  The difference was said to be that one was a claim for return of a sum of money, whereas the other was a claim for a share of profits.  There was also a complaint that there was an impermissible combination of two claims denominated in different currencies, an argument that is only correct if the claim for repayment was a Hong Kong dollar obligation (as Tian Yao and Mr Chan suggest) rather than an RMB obligation (as Right Margin contend, and as To J found).

16.However, even if one assumes that the point is one which is open to Mr Hung, it does not, in my view, assist him, as I do not consider that it has any prospect of success.  It is not, as I understand it, suggested that the claim for the return of the payment (whatever its denomination in terms of currency) is anything other than a claim for a debt or liquidated sum.  The argument is that the claim for the excess profits under clause 4.1 of the Agreement is not a claim for a debt or liquidated sum, but is unliquidated in nature.

17.As to this, a debt or liquidated demand is described in the White Book as follows, at paragraph 6/2/4:

“a liquidated demand is in the nature of a debt, i.e. a specific sum of money due and payable under or by virtue of a contract. Its amount must either be already ascertained, or capable of being ascertained as a mere matter of arithmetic. If the ascertainment of a sum of money, even though it be specified or named as a definite figure, requires investigation beyond mere calculation, then the sum is not a ‘debt or liquidated demand’ but constitutes ‘damages’ (see Bright Islands Corp v Chao [2002] 2 HKLRD 97 (CA))”.

18.Based on that definition, Mr Hung submitted that in order to determine the amount of the excess sale proceeds, one would have to identify which units had been sold; in relation to each apartment sold, work out the extent to which the sale price exceeded RMB 18,000 per square metre; multiply that by the area of the apartment; and add together all the results for each of the apartments sold.  This, he suggested, went beyond a “mere matter of arithmetic” and required “investigation beyond mere calculation”.  The claim to excess sale proceeds was, therefore, not a claim for a debt or liquidated sum, and could not be the subject of a default judgment under RHC Order 13 rule 1, so that the default judgment entered pursuant to that rule was irregular.

19.With respect, I disagree.  It is clear from Mr Hung’s description of the steps needed to work out the amount of the excess sale proceeds that all that is involved is a series of arithmetical operations, based on a formula specified in the contract.  True it is that some of the inputs may need to be supplied, and may even be the subject of dispute (as is the case here in relation to the number of apartments sold), but that does not alter the nature of the claim from liquidated to unliquidated.

20.That this is so is, I think, clear from a number of authorities, including Onway Engineering Ltd v Shun Wing Construction & Engineering Co Ltd (unreported, HCA 88/2008, [2008] HKEC 1942, DHCJ Carlson, at paragraphs 23-24); Lee Kwok Wing v Chung Chuen Hei [2014] 4 HKLRD 917 (per DHCJ Lisa Wong SC, at paragraphs 66 to 76); and Re The Grande Holdings Ltd (unreported, CACV 40/2015, 24 November 2015, per Cheung JA at paragraphs 6.1 to 6.19).  In each of these cases, the fact that further information was required in order to establish the amount of the debt or liquidated demand, and that there might be some dispute as to what the position actually was, or indeed that the calculations required under the contract to ascertain the amount might be complicated, did not make the claim in question an unliquidated one.  What was important was that once the inputs were known, the amount due was ascertainable by a process of calculation specified by the parties in their contract, without the need for further agreement from the parties, or assessment by the court by reference to general legal principles, thus going beyond what was provided for by the contract.

21.Mr Hung also relied on the discussion of what constitutes a liquidated debt in MacPherson’s Law of Company Liquidation, where it is stated at paragraph 12-025 that:

“In general terms, a claim which is unliquidated simply involves one which cannot be ascertained in money terms. In Ex p. Ruffle (In re Dummelow) Mellish LJ said that an unliquidated debt includes all cases of damages where a jury must ascertain the quantum and those debts where the creditor fairly admits that the amount cannot be stated.

Others have sought to be more technical in their explanation of the meaning of unliquidated.  It has been said that an unliquidated debt may be described as a debt which is not for a specific amount, but one which involves a calculation of elements the selection of which depends on a court’s ruling. For there to be a liquidated claim the claimant must be able to point to a scale of charges or some positive data which makes cler the amount of the claim.  If an action involves a claim where no one can say positively beforehand whether the claimant will recover a set amount then the claim is unliquidated.”

22.Mr Hung submitted that in this case, the court would have to decide whether, on the true construction of the Agreement, excess sales proceeds were payable only in relation to units whose sale was completed, or were also payable in respect of units whose sale was agreed, but which ultimately were not completed because the buyer had backed out of the transaction (this being the basis on which Tian Yao and Mr Chan disputed their liability in respect of the RMB 1,228,094 which formed part of Right Margin’s claim for excess sale proceeds).

23.Again, I do not think that this takes matters any further from Tian Yao and Mr Chan’s point of view.  I would first observe that the passage in MacPherson refers to an “unliquidated debt”, suggesting that the focus is not on the distinction between a claim in debt and a claim in damages, which is the relevant distinction for the purposes of RHC Order 13 rule 1.  Moreover, as appears from the Grande Holdings decision (referred to above), difficulty in calculation or computation will not prevent a debt from being regarded as liquidated, even for the purposes of winding up proceedings.  Further, the dispute between the parties here relates to the construction of the Agreement.  Once that dispute is resolved, the quantification of the excess sale proceeds is, as I have explained above, simply a matter of calculation.  The calculation is one which is laid down in the Agreement, and once the true scope of the Agreement is determined, and the relevant inputs are identified, does not require any agreement on the part of the parties or assessment by the court.  The claim therefore remains, in my view, one for a debt or liquidated amount.

24.For the foregoing reasons, I think it is clear that the claim for excess sale proceeds is just as much a claim for a debt as the claim for the return of the advance.  This point therefore does not provide any basis for extending the time for appealing.

25.During the course of his submissions, Mr Hung raised a further argument in relation to the regularity of the default judgment, suggesting (as he had argued below) that it was not open to the judge to simply reduce the amount of the default judgment to the amount which he regarded as incontestable, leaving it to Right Margin to pursue the balance of the claim if it were minded to do so.  This was a point considered and rejected by To J at paragraph 50 of his judgment.  In my view, it was open to the judge to take this course.  Mr Hung suggested that RHC Order 13 does not provide for such a course to be taken, and that the correct approach, once it was accepted that some part (however small) of the claim was subject to dispute, was to set aside the default judgment in its entirety, and leave it to Right Margin to make further applications under RHC Order 14 and/or Order 27 (for summary judgment or judgment on admissions) in order to restore their position.

26.With respect, I do not think that this is right. Such an approach seems to be unduly technical, and would result only in delay and wasted costs.  As such, it is contrary to the approach of the courts to avoid unnecessary cost and expense, and pointless satellite litigation, that has been in place since the Civil Justice Reform in 2009.  Unless compelled to take this course, I would not, and am satisfied that the Court of Appeal would not, accede to it.  In my view, there is nothing in RHC Order 13 that requires such a course to be followed.  On the contrary, rule 9 provides that “the Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of the this Order”.  Such a course has been taken in a number of English cases (see Ban Hin Lee Bank Bhd v Sonali Bank (unreported) 9 November 1988 (CA) Transcript No 927 of 1988 per Staughton LJ); RP Electromechanical Enterprise Ltd v Brewer (unreported, 11 February 1993 (CA) Transcript No 165 of 1993, per Glidewell LJ; and BCCI (Overseas) Ltd v Habib Bank Ltd [1999] 1 WLR 41, per Park J at p.46E-H), and I see no reason why the same course should not be followed here.  I therefore do not think that this contention provides any proper basis for an appeal, and thus the point cannot justify an extension of the time for appealing.

27.Mr Hung’s second contention related to To J’s conclusion that the obligation to repay the sum paid under clause 4.2 of the Agreement was denominated in RMB, rather than Hong Kong dollars.  Tian Yao and Mr Chan claimed that Tian Liang and Tian Yao having received HK$134 million odd from Right Margin, their obligation under clause 4.2 was to return that sum.  Right Margin’s position was that the Agreement called for payment of the RMB amount of RMB 120 million odd, and that, notwithstanding that this amount was in fact paid in Hong Kong dollars on the basis of an agreed exchange rate, their obligation was to provide the RMB amount, so that they should be repaid the same RMB amount.

28.To J was of the view that the obligations were denominated in RMB.  He reached this conclusion principally by reference to the terms of the contract itself (see paragraph 33 of his judgment), and regarded the surrounding factual matrix as being supportive of this conclusion, having regard to the facts set out in paragraphs 34 to 35 of his judgment.  In particular, he noted:

(1)   the fact that the initial amount was calculated by reference to data and information relating to the 34 units to be sold through Right Margin, which were located in China, and was stated in RMB terms;

(2)   the explanation for the inclusion of a Hong Kong dollar equivalent amount advanced by Mr Chan, which the judge regarded as confirmatory of the fact that the initial obligation of Right Margin under clause 4.2, and hence the obligation of Tian Liang and Tian Yao under clause 4.3, was denominated in RMB.

29.Mr Hung submitted that the judge was in error, having failed to take account of the following matters, which made it at least arguable that the obligations should be understood as being denominated in Hong Kong dollars:

(1)   Mr Chan’s unchallenged explanation as to the circumstances in which the parties set the amount of the deposit and the reasons for the reference to a Hong Kong dollar amount in clause 4.2.

(2)   The fact that payment was made by Right Margin in Hong Kong dollars.

(3)   The fact that a partial repayment (of HK$5 million) was made in Hong Kong dollars.

(4)   The fact that Right Margin’s former solicitors had, in a letter dated 14 April 2011, apparently proceeded on the basis that the parties’ obligations under clauses 4.2 and 4.3 were denominated in Hong Kong dollars.

(5)   The absence of any provision in the Agreement for the exchange rate to be used in connection with any conversion of the repayment amount from RMB into Hong Kong dollars.

30.In construing the Agreement, the starting point must be the terms of the Agreement itself.  This is particularly so where there is, as there is in the Agreement, an entire agreement clause.  The terms of the Agreement are, to my mind, clear.  By stating that the obligation of Right Margin was to pay to Tian Liang and Tian Yao a specified amount denominated in RMB, the Agreement made it clear that the obligation was denominated in RMB.  The provision of an agreed Hong Kong dollar equivalent in brackets reinforces this conclusion, by stipulating that the Hong Kong dollar amount is the equivalent of the RMB amount to be paid.  The corresponding repayment obligation in clause 4.3 must therefore, be denominated in the same currency. In this, therefore, I am in complete agreement with the judge.

31.Nor is there anything in Mr Hung’s complaints. As the judge pointed out, where the property in question was in China, was to be sold in China at prices denominated in RMB, and Right Margin would be earning its income from its efforts as sale agent in RMB (this being the currency in which the excess sale proceeds would be earned), and Tian Yao was itself a Chinese company, it made perfectly good commercial sense for the payment to be calculated and defined in RMB terms.  There is nothing surprising or exceptional in this, and it serves only to reinforce the natural reading of clause 4.2.

32.As to the specific matters relied on by Mr Hung:

(1)   Mr Chan’s explanation does not take things any further in relation to the denomination of the obligations.  It merely provides an explanation of why it was thought necessary, or desirable, to include a Hong Kong dollar equivalent for purposes of settlement.  Mr Chan’s subjective understanding is, with respect, irrelevant.

(2)   The payment of the initial amount in Hong Kong dollars does not assist Tian Yao or Mr Chan, as this was specifically agreed as an authorised mode of performance of the clause 4.2 obligation by Right Margin.

(3)   Similarly, the partial repayment in Hong Kong dollars takes matters no further either.  Repayment, in any currency other than RMB, would simply have to be converted into RMB in order to work out the remaining balance.

(4)   The judge recognised that Right Margin’s former solicitors’ letter provided some limited support for Tian Yao and Mr Chan’s position (see paragraph 37 of the judgment below).  However, he did not think that it was sufficient to overcome the other difficulties facing their proposed construction of the Agreement.  In my view, he was perfectly entitled to come to this view.

(5)   The absence of an agreed exchange rate or mechanism for determining one in relation to the repayment does not assist Tian Yao and Mr Chan.  Absent agreement, any repayment in a currency other than RMB would simply fall to be converted to RMB at then prevailing rates of exchange.

33.This proposed ground of appeal is therefore lacking in merit, and cannot amount to a basis for acceding to the application to extend time for appealing.

34.The final point taken by Mr Hung, concerning the suggested drawing of adverse inferences against Right Margin by virtue of their failure to adduce evidence from their representatives in the negotiations with Mr Chan, is, with respect, misconceived.  As I have explained in paragraph 30(1) above, even taken at face value, Mr Chan’s evidence as to these negotiations does not provide a basis for thinking that Tian Yao’s and Mr Chan’s argument on the denomination point have any substance.  That being so, the failure of Right Margin to controvert that evidence can make no difference, and this argument does not provide Tian Yao and Mr Chan with prospects of success on appeal so as to call for an extension of time to be granted.

35.The proposed appeal is therefore not one with any prospect of success, and I therefore dismiss the application for an extension of time for appealing.

36.So far as costs are concerned, the application having failed, it follows that Tian Yao and Mr Chan must pay Right Margin’s costs.  Having considered the Statement of Costs submitted by Right Margin and the objections to it raised by Tian Yao and Mr Chan, while I would accept that some reduction is called for, I do not think that the appropriate reduction would be as much as Tian Yao and Mr Chan suggest.  In my view, those costs should be assessed on a gross sum basis in the amount of HK$200,000.

Mr Andy Hung, instructed by B.C. Chow & Co, for the plaintiffs

Mr Eugene Fung SC, instructed by Norton Rose Fullbright Hong Kong, for the defendant