Waddington Ltd v. Chan Chun Hoo Thomas and Others
Read the full judgment text of HCA 3291/2003 on BabelCite. This High Court CFI judgment was delivered on 23 February 2017.
1. I have before me two applications to vary the costs orders nisi which I made in paragraph 23 of my previous decision handed down on 6 December 2016, as follows:-
Cites 1 case
|
HCA 3291/2003 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 3291 OF 2003 _______________
________________________ D E C I S I O N ________________________ INTRODUCTION 1.I have before me two applications to vary the costs orders nisi which I made in paragraph 23 of my previous decision handed down on 6 December 2016, as follows:-
2.The plaintiff now seeks, by a summons dated 14 December 2016 as amended by a further summons dated 15 December 2016, the following costs orders instead:-
3.On the other hand, the 5th defendant seeks, by a summons dated 20 December 2016, the following costs orders-
4.By way of alternative, the 5th defendant seeks an order that: (i) the 1st defendant and the 5th defendant shall pay the plaintiff the costs of the Waddington Summons, and (ii) the plaintiff shall pay the 5th defendant the costs of the Profit Summons. COSTS OF THE WADDINGTON SUMMOMS 5.By the Waddington Summons, the plaintiff sought an order that (i) the Shortfall, (ii) the post-judgment interest on the Shortfall at the judgment rate from 18 December 2013 to the date of payment in, and (iii) the post-judgment interest on the Judgment Sum at the judgment rate from 18 December 2013 to 21 March 2014, be paid into court. 6.The 1st defendant opposed (i) and (ii) above, but was prepared to pay the post-judgment interest referred to in (iii) above (in the sum of HK$683,078.03) into court. In respect of (i), the 1st defendant contended that the Shortfall should be paid to the 5th defendant directly, instead of into court. In respect of (ii), the 1st defendant contended that the Shortfall did not carry any further post-judgment interest. 7.The 5th defendant opposed (i), (ii) and (iii) above, contending that the amounts of interest (in so far as payable) should be paid to it directly, instead of into court. 8.For the reasons given in my written decision dated 6 December 2016, I rejected the 1st and 5th defendants’ respective arguments and made the order sought by the plaintiff under the Waddington Summons. 9.In relation to the costs of the Waddington Summons, since both the 1st defendant and the 5th defendant unsuccessfully opposed that summons, prima facie both ought to pay the plaintiff’s costs. 10.The plaintiff has not advanced any reason in its skeleton argument dated 20 February 2017 as to why the 5th defendant should not be liable to the plaintiff for the costs of the Waddington Summons. However, in his oral submissions, Mr Lam on behalf of the plaintiff argues that the 1st defendant, but not the 5th defendant, should be liable for those costs because the primary responsibility to pay the interests fell on the 1st defendant. 11.On the other hand, Mr Law on behalf of the 5th defendant argues that the major issues in relation to the Waddington Summons were between the plaintiff and the 1st defendant. This is not correct. There were two major points raised in relation to the Waddington Summons: (i) whether the amounts of interest ought to be paid into court or to the 5th defendant directly, and (ii) whether the Shortfall should carry any further post-judgment interest. Although the 5th defendant maintained a neutral position in respect of point (ii), it made detailed submissions on point (i), contending that the amounts in question ought to be paid to it directly. 12.Mr Law further argues that the 5th defendant was entitled to make submissions in respect of point (i), because “it has concerns that any payment-in might be treated by Waddington as its reserve funds for satisfaction of its costs order”. I accept that the 5th defendant was entitled to make submissions on point (i), but its opposition to the Waddington Summons was ultimately not accepted by the court. 13.There is no good reason why the 5th defendant should not be liable to pay costs for its unsuccessful opposition to the Waddington Summons. In all, the costs order nisi previously made, namely, that the 1st defendant and the 5th defendant shall pay the plaintiff its costs of the Waddington Summons, is confirmed. Further, the plaintiff’s costs are to be assessed on a common fund basis, if not agreed, in line with the previous order made by Mr Recorder P Fung SC in March 2014. COSTS OF THE PROFIT SUMMOMS 14.By the Profit Summons, the 5th defendant applied for leave to intervene in the Waddington Summons, and for an order that the hearing of that summons be adjourned so that it could be heard together with a separate application made by the plaintiff seeking disclosure of information relating to the 5th defendant’s funder(s) in this litigation (“the Disclosure Application”). I accepted the former application but rejected the latter one. As earlier mentioned, I made an order nisi that the 5th defendant shall pay the plaintiff its costs in relation to the Profit Summons, and there be no order as to costs as between the 5th defendant and the 1st defendant in relation to that summons. 15.None of the parties has sought to vary the second aspect of the order nisi, ie that there be no order as to costs as between the 5th defendant and the 1st defendant in relation to the Profit Summons. 16.In respect of the first aspect of the order nisi, the 5th defendant submits that either (i) the plaintiff should pay the 5th defendant its costs in relation to the Profits Summons, or (ii) there should be no order as to costs as between the plaintiff and the 5th defendant, on the ground that the 5th defendant succeeded in obtaining leave to intervene in the Waddington Summons despite the plaintiff’s opposition which Mr Law submits was wholly misconceived. Mr Law also argues that although the court declined to adjourn the hearing of the Waddington Summons, the 5th defendant’s application for such direction was sought with a view to saving costs and to ensure that all issues can be dealt with in one go. 17.In relation to the Profits Summons, the focus of the arguments at the hearing on 1 December 2016 was not in fact on whether the 5th defendant should be allowed to intervene in the Waddington Summons, but whether the amounts of interest ought to be paid to the 5th defendant directly, instead of into the court. Further, it is obvious that the 5th defendant sought leave to intervene not for the sake of intervening, but in order to enable it to advance arguments as to why the amounts in question should be paid to the 5th defendant directly. As it was, the 5th defendant’s arguments were rejected by me. I do not consider the fact that the 5th defendant was granted leave to intervene to be of much significance in relation to the issue of the costs of the Profits Summons. 18.In so far as the 5th defendant’s application for adjournment of the hearing of the Waddington Summons is concerned, that was rejected for the reason given in paragraph 12 of my written decision dated 6 December 2016, namely, that I failed to see any reason why the Waddington Summons should be heard together with the Disclosure Application. The two applications concerned completely different matters and were independent of each other. 19.The 5th defendant failed to achieve the purpose of seeking leave to intervene in the Waddington Summons (namely, to resist the plaintiff’s application for payment into court), and further failed to obtain an adjournment of the hearing of the Waddington Summons. In my view, the Profits Summons should be regarded as having arisen incidentally to the Waddington Summons. In all the circumstances, I consider that the 5th defendant ought to pay the plaintiff its costs incurred in relation to the Profit Summons. 20.I therefore confirm the order nisi that the 5th defendant shall pay the plaintiff its costs in relation to the Profit Summons, and there be no order as to costs as between the 5th defendant and the 1st defendant in relation to that summons. The plaintiff’s costs to be paid by the 5th defendant are to be assessed on a common fund basis, if not agreed. FURTHER INDEMNITY SOUGHT BY THE PLAINTIFF 21.On the question of indemnity, the Waddington Summons may be regarded as part and parcel of the steps taken by the plaintiff in this multiple derivative action to pursue a claim against the 1st defendant for the benefit of the 5th defendant. In principle, the plaintiff ought to be indemnified by the 5th defendant in respect of any costs incurred which it may not be able to recover from the 1st defendant. For this purpose, the plaintiff’s costs should be assessed on a common fund basis (see Wallersteiner v Moir (No 2) [1975] QB 373, at 391-392 per Lord Denning MR and at 403 per Buckley LJ). 22.However, I have already ordered the 5th defendant to pay, along with the 1st defendant, the plaintiff’s costs incurred in relation to the Waddington Summons, also to be assessed on a common fund basis. There is thus no purpose in making any further costs indemnity order in favour of the plaintiff in relation to the costs of the Waddington Summons. The same logic applies to the plaintiff’s costs incurred in relation to the Profits Summons. 23.In all, I decline to make any further costs indemnity order in favour of the plaintiff in respect of the Waddington Summons and the Profits Summons. 24.I shall now hear the parties on the question of the costs of the various applications before me. [The court heard further submissions made on behalf of the plaintiff, the 1st defendant and the 5th defendant.] 25.The plaintiff and the 5th defendant has each been largely unsuccessful in its respective application(s) to vary the costs orders nisi. I consider that it would be fair in the circumstances to make no order as to costs as between them in respect of the plaintiff’s summonses dated 14 December 2016 and 15 December 2016 respectively and the 5th defendant’s summons dated 20 December 2016, including the costs of the hearing today, and I so order. 26.Mr Lam informs the court that the plaintiff will not be maintaining the application for an indemnity in respect of its present applications. I should mention that I would not, in any event, order the 5th defendant to indemnify the plaintiff in respect of the costs of their summonses dated 14 December 2016 and 15 December 2016 respectively, because (i) the plaintiff has been largely unsuccessful in those applications (save in respect of the basis of assessment of the costs to be paid by the 1st defendant and the 5th defendant[1]), and (ii) the application for indemnity cannot be regarded as an application made for the benefit of the 5th defendant. 27.The 1st defendant has been successful in resisting the variations sought by the plaintiff and the 5th defendant in so far as he might be affected by them. I consider that his costs should be borne by the plaintiff and the 5th defendant, to be assessed on a party and party basis, if not agreed, and I so order. 28.Lastly, I should mention that I would not in any event have been disposed to deal with these summonses by written submissions only. I consider the oral submissions to be helpful in distilling and clarifying the true issues between the parties on the various summonses, and also in answering a number of queries that I had in my mind when reading the papers and the parties’ respective submissions. [Costs were then summarily assessed.]
Mr Justin Lam, instructed by Kao, Lee & Yip, for the plaintiff Mr Daniel Shum, of K & L Gates, for the 1st defendant Mr Law Man-chung, instructed by ONC Lawyers, for the 5th defendant [1] The plaintiff did not, as a matter of fact, ask for the costs to be assessed on a common fund basis in its summonses. | ||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCA 3291/2003