北京旭阳伟业煤焦化工有限公司 v. Himadri Chemicals & Industries Ltd

HCMP 3305/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3305 OF 2013

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DECISION ON APPLICATION TO
VARY COSTS ORDER NISI

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1.On 10 September 2015, I handed down a decision on the defendants’ summons dated 21 July 2014 (“the Defendants’ Summons”), together with a costs order nisi.

2.The 1^st and 2^nd defendants applied to vary the costs order and each filed submissions pursuant to my directions dated 10 September 2015.  The plaintiff also filed submissions in answer.

3.Having reviewed the grounds of my decision on the summons and having considered the submissions of both parties, I find no reason to upset my exercise of discretion in arriving at the terms of the costs order nisi.  The subject action is proceeding ancillary to the main proceedings to enforce an arbitration award that remained unchallenged.  The enforcement proceedings are based on facts and documents many of which are undisputed.

4.In my decision on the Defendants’ Summons I exercised the wide discretion given to me under Order 28, rule 4 of the Rules of the High Court on the further conduct of the proceedings as would secure the just, expeditious and economical disposal of the matter, treating the substantive hearing of the Summons as a case management hearing.  The outcome reflects but a limited level of success on the part of the defendants in their application.  In so doing, I did, as I was entitled to, take a view on the merits of the defence case and the nature of the proceedings as stated above.  The subject application being interlocutory in nature, the principle that costs should normally “follow the event” applies as an option rather than as a prescribed usual order: See Hong Kong Civil Procedure 2016 Vol 1, §62/3/3B.  With those factors in mind, I was driven to the conclusion that the costs order I shall make absolute after minor variations will do justice between the parties.

5.As explained in my decision of 10 September 2015, the ordering of the proceedings to continue as a writ action was principally based on a desirability for pleadings to be filed to facilitate the trial of the action, rather than any view I took that the plaintiff should have anticipated a substantial dispute on the facts, or that there were serious allegations of fraud over and above inferences of sham transactions to be drawn from largely undisputed facts and documents.

6.I also accept the submissions on costs made on behalf of the plaintiff on the history of the conduct of the hearings in relation to the Defendants’ Summons and the filing of the multiple affirmations.  I do not regard the latter as a ground in itself that would support the application made under the Defendants’ Summons. Further, I am satisfied that the need for the 30 September 2014 hearing to be adjourned to give time to the plaintiff to file further evidence was necessitated by the 1^st defendant’s failure to bring to the attention of the court what had been in its possession (but not the possession of the plaintiff) that would have completed an otherwise misleading picture it presented.  I am entitled to take a dim view of the conduct of these proceedings on the part of the defendants, as well as the merits of the defence case, and reflect such views in my decision on costs herein.

7.The 2^nd defendant, a wholly‑owned subsidiary of the 1^st defendant, had throughout made no independent contribution of its own, whether in terms of evidence filed or submissions advanced, apart from jumping on the band wagon of the 1^st defendant.  The need for separate appearance at the hearings of the Summons has not been made out.  In any event, in view of the relationship between the defendants, the merits of their identical case advanced in defence and the conduct of these proceedings by the 2^nd defendant, I consider the order I shall make absolute with regard to the 2^nd defendant’s costs also accords with the overall justice of the matter.

8.I also consider an order for indemnity costs as suggested by both defendants entirely inappropriate, whether on account of the two letters written by the respective defendants’ solicitors to the plaintiff’s solicitors prior to the 13 February 2015 hearing, or on any other ground.

9.I am satisfied that the costs order nisi should be varied only to the extent of specifying, for the avoidance of doubt, the dates of the four hearings of the Summons therein, as follows:

(1)  costs of the 1^st and 2^nd defendants’ Summons dated 21 July 2014 (“the Summons”) including the costs of the hearing of the Summons on 30 July 2014, but excluding the costs of the hearings of the Summons on 30 September 2014, 13 February 2015 and 5 August 2015 (“the Three Hearings of the Defendants’ Summons”), be costs in the cause;

(2)  half of the costs of the Three Hearings of the Defendants’ Summons incurred by the 1^st defendant be paid by the plaintiff to the 1^st defendant, to be taxed if not agreed; and

(3)  there be no order as to the costs of the Three Hearings of the Defendants’ Summons incurred by the 2^nd defendant.

10.I would further make an order that there be no order as to the costs of the application made to vary the costs order nisi, including the costs of the preparation of submissions filed in relation to the application.

Dentons Hong Kong, for the plaintiff

Arun Nigam Associates, for the 1^st defendant

Massie & Clement, for the 2^nd defendant