Lau Wing Yan and Others v. Chu Kong and Others

HCA 2562/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2562 OF 2014

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DECISION

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Introduction

1.This court handed down a decision dated 30 May 2016 (“the Decision”) whereby the two summonses of Mr Chu were dealt with after hearing the parties on the same at the hearing on 25 February 2016 (“the Hearing”). I shall refer to the Decision (and the Corrigendum) for the background facts and adopt their abbreviations used there.

2.By the Decision, I adjourned the substantive hearing of the Discharge Summons to be dealt with together with the trial of the main action. At the same time, I dismissed the X-Exam Summons.

3.On the question of costs, I made an order nisi that the costs of the X-Exam Summons be in the cause of the Discharge Summons with a certificate for two counsel. Though not expressly provided for, the costs of the Hearing regarding the Discharge Summons should clearly be in the cause of the Discharge Summons since both parties agreed that it should be adjourned.

4.The plaintiffs in the wake of the Decision took out a summons dated 10 June 2016 (“the Variation Summons”) to apply for an order that the costs order nisi be varied in the following manner:

“the costs of the X-Exam Summons be paid by Mr Chu to the plaintiffs forthwith with certificate for two counsel, to be taxed if not agreed.”

5.This court gave directions to the relevant parties to file their respective written submissions for the purpose of my disposal of the Variation Summons on paper to save costs. I have already perused such submissions and I am not persuaded that the costs order nisi should be varied in the manner proposed by the plaintiffs. My reasons appear as below.

Main reasons in the Decision

6.Before I deal with the arguments of the plaintiffs, it is necessary to summarise the major reasons for the adjournment of the Discharge Summons and my dismissal of the X-Exam Summons stated in the Decision. My reasons, very briefly put, are:

a.  I am aware that the Injunction ceased to have any practical effect on any of the defendants including Mr Chu before he took out the Discharge Summons by reason of certain events taking place subsequent to the grant of the Injunction. However, I was of the view that the court should still look into any impropriety of the Injunction and Mr Chu’s allegations of material non-disclosure arising from the Dubious Emails, are very much a live issue.

b.  Cross-examination is required so that the validity of the explanations given by Mr Yan and Ms Sun could be properly tested for the purpose of the Discharge Summons. It should be noted that the plaintiffs did not really argue against the necessity of cross-examination of the deponents. Their objection was that as a matter of principle, pre-trial cross-examination was undesirable.

c.  However, I accepted on the authorities helpfully cited to me that, given the particular circumstances of this matter, the Discharge Summons should best be dealt with at the trial. Mr Yan and Ms Sun are key witnesses of the plaintiffs and in the normal course of events, they should be expected to attend trial to testify in support of their claim. Whilst this court is of the view that it would not be right to make an order to compel them to attend the trial as witnesses for the plaintiffs, Mr Yan and Ms Sun should be cross-examined for the purpose of the Discharge Summons. This court then came to the conclusion that instead of ordering cross-examination, a direction should be made so that it would be in the best interests of the plaintiffs to secure their attendance at trial. On this basis, the X-Exam was dismissed.

7.The Hearing was ordered to be fixed for the specific purpose of the Discharge Summons and not the X-Exam Summons, which had not yet been taken out, pursuant to the order granted by Madam Recorder Linda Chan SC on 22 April 2015 (“the Order”) after hearing senior counsel for the plaintiffs and counsel for Mr Chu. Indeed, there had been a previous consent order made by Chow J on 25 March 2015 granting leave to the parties to fix a 3-hour hearing in consultation with counsel’s diary for the argument of the Discharge Summons. The first return day of X-Exam Summons was conveniently fixed to be heard at the Hearing for 3 minutes.

8.However, both parties resiled from their original positions in regard to the Discharge Summons at the Hearing. The plaintiffs contended that the Discharge Summons should not be disposed of separately from the trial. On the other hand, Mr Chu’s position was that the Discharge Summons should be dealt with in an interlocutory hearing prior to the trial with cross examinations of Mr Yan and Ms Sun. It follows that Mr Chu too agreed that the Discharge Summons could not be disposed of at the Hearing pending my decision as to whether the cross-examination should be allowed. The upshot was that in any event the Discharge Summons had to be adjourned for substantive arguments and could not be dealt with at the Hearing. As I indicated in the Decision, I had to determine when and then how the Discharge Summons was to be resolved.

9.I was of the view that in light of the agreed position of the parties that the Discharge Summons should not be disposed of at the Hearing, and the fact how it should be resolved had not been canvassed before it was set down for substantive arguments at the Hearing, my resolution of the X-Exam Summons by way of its dismissal was more or less akin to a direction to facilitate the resolution of the Discharge Summons together with the trial of the action. Thus, despite Mr Chu’s failure in the X-Exam Summons, departing from the general rule, I made the costs order nisi.

This application

10.The present application for variation is primarily premised upon a letter issued by the plaintiffs to Mr Chu about a week before the Hearing (“the Letter”) after receiving the X-Exam Summons a few days ago.

11.By the Letter, on a without prejudice basis, the plaintiffs suggested to Mr Chu that both the Discharge Summons and the X-Exam Summons should be adjourned and heard together with the trial of the action or alternatively both summonses should be adjourned sine die with liberty to restore after trial before the trial judge. The plaintiffs also suggested to vacate the Hearing with costs reserved.

12.For completeness, Mr Chu’s legal representatives first surprisingly took issue with the nature of the Letter and then replied that he did not agree to have his discharge application to be heard together with the trial and that he insisted on cross-examination of Mr Yan and Ms Sun on their affirmations. He also ascertained the position of the plaintiffs regarding his X-Exam Summons. By another letter of the same date, without waiting for a reply from the plaintiffs, he made it clear that both senior and junior counsel had been instructed to argue the X-Exam Summons at the Hearing.

13.In neither letters did Mr Chu mention about the Discharge Summons. This is understandable because the X-Exam Summons had to be determined first and it was unlikely that the Discharge Summons could be proceeded with on the same day whatsoever the determination was. I hence cannot agree that Mr Chu only indicated that he would not argue the Discharge Summons at the Hearing through his senior counsel.

14.The plaintiffs now argue that had the suggestion in the Letter been accepted by Mr Chu, the Hearing would have been avoided and costs could have been saved. Now that this court agreed that the Discharge Summons should be adjourned to be heard at the trial as suggested by the plaintiffs, they should be entitled to costs as a matter of simple logic.

15.When I made the costs order nisi, of course I was not aware of the existence of the Letter, let alone its contents including the suggestion.

16.Though I accept the well-reasoned submissions of Mr Wong that the Discharge Summons should be dealt with together with the trial of the main action, I am convinced, and Mr Wong did not argue otherwise, that the affirmation evidence of Mr Yan and Ms Sun should be tested by cross-examination. I cannot accept that the suggestion is satisfactory for a fair and cost-effective disposal of the Discharge Summons.

17.First, the plaintiffs show no intention, let alone giving any assurance, to make available Mr Yan and Ms Sun at trial for cross-examination. Quite on the contrary, the Letter showed that the plaintiffs found it necessary to oppose the X-Exam Summons even at trial.

18.Further, if the plaintiffs’ suggestion was accepted, though the Hearing would have been avoided, further costs and delay could only be caused in respect of the Discharge Summons and the X-Exam Summons or even the trial itself. This is obviously undesirable. The Letter and the suggestion therein do not really assist the plaintiffs.

19.As explained above, I am in agreement with Mr McCoy’s submission that the X-Exam Summons was dismissed on the basis of a case management decision on the conduct of the Discharge Summons. Though in the Decision, I stated that there had been no directions given as to when the Discharge Summons should be heard when the X-Exam was taken out. It was an obvious slip and the Hearing was fixed specifically to hear the Discharge Summons pursuant to the Order. I actually meant that no direction had ever been given as to how it should be resolved[1].

Conclusion and order

20.In the premises, I believe that I have good reasons to depart from the general rule of costs following the events.

21.I dismiss the Variations Summons accordingly. Costs should follow the events. The plaintiffs should pay the costs of Mr Chu in respect of the Variation Summons forthwith, to be taxed if not agreed. For taxation purposes, I make it clear that I do not think engagement of counsel in this matter is justified given the simplicity and straightforwardness of this application. It could well be handled by the solicitors of the parties.

22.That said, I thank all counsel involved for their helpful and succinct written submissions.

Mr Anson Wong SC and Mr Alan Kwong, instructed by DLA Piper Hong Kong, for the 1^st, 2^nd, 3^rd and 4^th plaintiffs

Mr Gerard McCoy SC and Mr Toby Brown, instructed by Howse Williams Bowers, for the 1^st defendant