Chen Ha Ping Hepburn (As Executrix of the Estate of Chen Tsing Kwan, Deceased) and Others v. Chen Ting San Daniel also known as Chen Ting San and Daniel Chen and Others

HCA 570/2014 and
HCMP 868/2018
(Heard Together)
[2018] HKCFI 2244

HCA 570/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 570 OF 2014

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(Heard Together)

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D E C I S I O N

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The applications

1.At the commencement of the hearing, there were four Summonses before me.  They were:

(1)   A Summons issued by the 1^st defendant Daniel Chen (“Daniel”) in HCA 570/2014 (“HCA 570”) on 3 April 2018 for leave to appeal to the Court of Appeal against an Order made by DHCJSeagroatt dated 20 March 2018 (“the DHCJ Seagroatt Order”) (“the Leave to Appeal Summons”).

(2)   A Summons issued by the 2^ndplaintiff, Leeloong Investment Co Ltd (“Leeloong”), in HCA 570 on 21 May 2018 for an order that the Amended Writ of Summons and Amended Statement ofClaim (“the Amended Writ and Amended S/C”) be amended by striking out the name of Leeloong as a plaintiff and that all consequential amendments be made accordingly, on the ground that Leeloong had been improperly joined without its consent (“the Strike Out Summons”).

(3)   An Originating Summons issued on 11 June 2018 by the applicant in HCMP 868/2018 (“HCMP 868”), Leeloong, to setaside the Notice to Act filed in HCA 570 on 11 May 2018 by therespondent in HCMP 868, Messrs Lau Kwong & Hung (a firm of solicitors) (“LKH”), purportedly acting as the solicitors for Leeloong (“the Setting Aside OS”).

(4)   A Summons issued by the plaintiffs in HCA 570 on 14 September 2018 for further directions (“the Directions Summons”).

The relevant history of the proceedings

2.The Writ of Summons in HCA 570 was issued on 1 April 2014.  At that stage, there was only one plaintiff, namely, Chen Tsing Kwan (“the Father”), who subsequently died on 26 January 2015.  The then defendantsconsisted of Daniel and the present 2^nd and 3^rd defendant companies.  Daniel was a son of the Father.  After the death of the Father, his two other children, namely, Chen Ha Ping Hepburn (“Hepburn”) and Chen Ting Hoi (“CTH”), sought to carry on HCA 570 in the place of the Father.

3.On 7 February 2018, Hepburn and CTH caused to be issued a Summons seeking leave to amend the Writ and the Statement of Claim in HCA 570 for the purpose of re-constituting the action by adding new plaintiffs (including themselves and Leeloong) and by adding a new 4^thdefendant, Chen Ting Nam, another brother of theirs, so as to carry on the proceedings started by the Father (“the Amendment Application”).

4.In the meantime, Hepburn and CTH had instituted another set ofproceedings by Originating Summons under HCMP 86/2018 on 19 January2018 applying for leave, pursuant to section 732 of the Companies Ordinance (Cap 622), to bring proceedings on behalf of Leeloong against Daniel and Chen Ting Nam (“the SDA Application”).

5.The Amendment Application in HCA 570 went before Master Ho at a call-over hearing on 2 March 2018.  Master Ho ordered that it be adjourned to be heard with the SDA Application on 6 March 2018 at 9:30 am which was another call-over hearing.

6.On 6 March 2018, the two matters went before DHCJ Seagroatt.  The learned Judge further adjourned the Amendment Application to 20 March 2018 and made it clear to the parties that he would not be dealing with the SDA Application substantively at the adjourned hearing.

7.At the hearing on 20 March 2018 which lasted some 20 minutes, DHCJ Seagroatt made two Orders, one in HCA 570 and the other in the SDA Application:

(i)   In HCA 570, he ordered that:

“ The Plaintiff do have leave to amend and file the Writ of Summonsand the Statement of Claim contained therein in the manner as per the copy Amended Writ of Summons and Amended Statement of Claim annexed to the Summons within 7 days from the date of the Order.”

(the DHCJ Seagroatt Order)

(ii)   In the SDA Application, he ordered that:

“ The hearing of the Summons be adjourned for substantive argumentbefore a Judge to a date not earlier than the end of June, to be fixed after the close of pleadings in HCA 570/2014 by the end of May, with 3 hours reserved without reference to Counsel’s diaries (‘the Substantive Hearing’).”

8.The Amended Writ and Amended S/C the subject of the DHCJ Seagroatt Order was duly filed and served on the relevant parties thereafter.

9.On 3 April 2018, Daniel caused the Leave to Appeal Summons to be issued.

10.On 21 May 2018, Leeloong caused the Strike Out Summons to be issued.  The relief sought by that Summons read as follows:

“ 1. The Writ of Summons and Amended Statement of Claim herein be amended by striking out the name of Leeloong as a Plaintiff, and that all consequential amendments be made accordingly, on the ground that Leeloong has been improperly joined without its consent;

2. The Notice to Act filed herein on 11^th May 2018 by Messrs. Lau, Kwong & Hung to purportedly act as the solicitors of Leeloong be set aside, on the ground that Leeloong has never given Messrs. Lau, Kwong & Hung any authority to act on its behalf.

3. Time of service of this Summons be abridged.

4.   The 1^st Plaintiff do pay Leeloong costs of and incidental to this application, and the Defendants’ costs thrown away by Leeloong’s misjoinder in any event, such costs to be taxed if not agreed.”

11.Both the Leave to Appeal Summons and the Strike Out Summons in HCA 570 went before Au-Yeung J on 5 June 2018 at a 9:30 am hearing.  It was supposed to be a half-hour hearing.  The hearing lasted until 10:21 am.  The SDA Application was not before the learned Judge on that occasion.

12.It should be noted that, on the day prior to the said hearing before Au-Yeung J, that is, on 4 June 2018, the parties jointly fixed a date for the substantive hearing of the SDA Application.  It would be before Harris J on 7 September 2018.

13.I have been supplied with the transcript of the hearing before Au-Yeung J on 5 June 2018.  It appears that Au-Yeung J queried Mr Keith Lau, Counsel for Leeloong, on the viability of paragraph 2 of the Strike Out Summons on the ground that LKH had not been joined as a party for the purpose of the Strike Out Summons.  Mr Lau agreed that LKH should havebeen joined and there and then applied to delete paragraph 2 of the Strike Out Summons.  The learned Judge allowed the application.

14.At the end of the hearing on 5 June 2018, Au-Yeung J made an Order in HCA 570 in the following terms:

“ IT IS ORDERED that : -

1. Leave to Leeloong to withdraw paragraph 2 of Leeloong’s Summons;

2. Leave to the 1^st, 3^rd and 4^th Plaintiffs to file and serve an affirmation in opposition as regards paragraph 1 of Leeloong’s Summons within 28 days from the date of this Order;

3. Leave to Leeloong to file and serve an affirmation in reply within 14 days thereafter;

4. Leave to Leeloong to take out an application, if so advised, against Messrs. Lau, Kwong & Hung to set aside their Notice to Act filed on 11 May 2018 to purportedly act on Leeloong’s behalf within 7 days from the date hereof (‘the LKH’s Summons’);

5. Parties to LKH’S Summons shall endeavour to agree upon directions along the line of the directions given in respect of Leeloong’s Summons in this Order;

6. Leeloong’s Summons be adjourned to be heard together with the LKH’s Summons before the same Judge; and

7. Costs be reserved.”

15.In my view, the effect of paragraph 4 of the said Order of Au-Yeung J is that Leeloong should issue a new Summons (the LKH’s Summons) within 7 days in the same proceedings, namely, HCA 570, and not some new proceedings.  By paragraph 5 of her Order, the learned Judge even prescribed the way for the parties to agree directions regarding the LKH’s Summons to be issued.  By paragraph 6, she even directed that the two Summonses should be heard together by the same Judge.  Clearly, she would not have been in a position to give such directions if the institution of new proceedings were within her contemplation or within the scope of her Order.  Leeloong could easily have done that by issuing an inter partesSummons in HCA 570 summoning LKH (together with all the other parties) to attend court, LKH being already a firm of solicitors on the Court record in HCA 570. It would have involved less costs.

16.Instead of taking out “the LKH’s Summons” in HCA 570, however, Leeloong actually issued the Setting Aside OS on 11 June 2018.  This is contrary to the said Order of Au-Yeung J.

17.I have been informed by Counsel that, in the morning of 15 June 2018, the parties jointly fixed a date for the hearing of the following before a Judge:

(i)   the Leave to Appeal Summons;

(ii)   the Strike Out Summons (as amended by the said Order of Au-Yeung J); and

(iii)   the Setting Aside OS.

The date fixed was 5 September 2018, ie, two days before the hearing by Harris J of the SDA Application scheduled to take place on 7 September 2018.

18.The three Summonses set out in paragraph 17 above came before me on 5 September 2018.  Even before hearing Counsel, I had formed the preliminary view that the most logical and sensible thing to do was to adjournthe three Summonses pending the decision by Harris J on the SDA Application.  After hearing Counsel, I ordered that the three Summonses be adjourned to a later date pending further directions to be given by the Court after the decision by Harris J on the SDA Application.

19.On 7 September 2018, Harris J granted the SDA Application.  This meant that the plaintiffs in HCA 570 other than Leeloong would be ableto make Leeloong a co-plaintiff in order to sue the defendants in that action.

20.I thereafter gave directions that the three Summonses should be restored for hearing before me on 21 September 2018.

What happened at the 21 September 2018 hearing

21.At the hearing before me on 21 September 2018, the following things happened:

(i)   Mr Keith Lau, Counsel for Leeloong, applied to withdraw the Strike Out Summons (as amended by the said Order of Au-Yeung J) on the ground that paragraph 1 thereof had becomeacademic by reason of the decision of Harris J granting the SDA Application.  I granted the application and allowed the Strike Out Summons to be withdrawn.

(ii)   Mr Matthew Heung, the solicitor for Daniel, applied to withdraw the Leave to Appeal Summons.  I granted the application and allowed the Leave to Appeal Summons to be withdrawn.

(iii)   Mr Alan Kwong, Counsel for the plaintiffs other than Leeloong in HCA 570, indicated that in view of the withdrawals referred to in (i) and (ii) above, he no longer needed a re-grant of leave to file and serve the Amended Writ and Amended S/C under paragraph 1 of the Directions Summons.  I then gave directions for the further conduct of HCA 570 under the remainder of the Directions Summons.

22.There were then two matters left for me to deal with:

(i)   Mr Lau indicated that Leeloong would still wish to pursue the Setting Aside OS.

(ii)   The parties would wish to put forward arguments in relation to the question of costs relating to the various Summonses.

23.I shall deal with both matters together as I believe that they are inter-related.  Before I do that, however, I would first set out some of the legal principles pertinent to the matters before me.

The law

24.It is trite that questions of costs are always in the discretion of the court, depending on the circumstances of each case.  That is the overriding principle.

25.It appears that there is not much dispute between the two sides, in particular, between Mr Lau and Mr Kwong, about the principles and considerations applicable in a case where there has been a withdrawal of anapplication or a claim by a party.  Both sides have referred me to the Decision by DHCJ Le Pichon in Re China Solar Holdings Ltd (HCCW 108/2015, unreported, 1 March 2016) in which the learned Judge set out the applicable principles in paragraph 17 of her Decision as follows:

“ 17. A convenient summary of the applicable principles is to be found in §6 of Moore-Bick LJ’s judgment in English Court of Appeal decision in Brookes v HSBC Bank plc [2011] EWCA Civ 354:

‘ (1) when a claimant discontinues the proceedings, there is a presumption by reason of CPR 38.6 that the defendant should recover his costs; the burden is on the claimant to show a good reason for departing from that position;

(2) the fact that the claimant would or might well have succeeded at trial is not itself a sufficient reason for doing so;

(3) however, if it is plain that the claim would have failed, thatis an additional factor in favour of applying the presumption;

(4) the mere fact that the claimant’s decision to discontinue may have been motivated by practical, pragmatic or financial reasons as opposed to a lack of confidence in the merits of the case will not suffice to displace the presumption;

(5) if the claimant is to succeed in displacing the presumption he will usually need to show a change of circumstances to which he has not himself contributed;

(6)   however, no change in circumstances is likely to suffice unless it has been brought about by some form of unreasonable conduct on the part of the defendant which inall the circumstances provides a good reason for departing from the rule.’”

Discussion

26.Bearing in mind the applicable principles as set out above, I shall proceed to examine the development of the proceedings and the conduct of the parties between the time when the parties appeared before Master Ho on 2 March and before me on 21 September 2018.

27.I have been told that, during the appearance before Master Ho on 2 March 2018, the plaintiff (at that time there was only one plaintiff, Chen Tsing Kwan who was deceased) submitted to the Master that the Amendment Application should be heard together with the SDA Application.  The Master obviously thought that it was sensible and hence he ordered that both applications should be heard together by DHCJ Seagroatt on 6 March 2018.  That, in my view, must be a logical and sensible move.

28.When the matters went before DHCJ Seagroatt, he adjourned the Amendment Application for a substantive hearing on 20 March 2018 but made it clear that he would not want to deal with the SDA Application substantively on 20 March 2018.

29.On 20 March 2018, the learned Judge made the two Orders as set out in paragraph 7 above.  This actually had the effect of de-linking the SDA Application from the Amendment Application.  If the Amendment Application were to be heard after the SDA Application, no problem would have arisen.  That was, of course, not what happened.

30.I have been informed by Mr Kwong that he did not request the learned Judge to adopt such a course.  Having read the transcript of the proceedings before DHCJ Seagroatt, it appears to me that the learned Judge was of the view that Mr Kwong’s clients had ample justification in issuing the two applications.  With a view to having good and efficient case management, the learned Judge granted the Amendment Application at the very short hearing on 20 March 2018 so that, if and when the SDA Application was granted, there would be no further delay about the filing of pleadings.

31.I have been further informed by Mr Kwong that, although theydid not ask for it, his clients were happy to go along with the course adopted by DHCJ Seagroatt.

32.Mr Kwong’s clients, however, went further.  They took the viewthat by granting the Amendment Application, the learned Judge had impliedlygiven leave to them to join Leeloong as a plaintiff.  They therefore instructedtheir solicitors, LKH, to file a Notice to Act on 11 May 2018 as the solicitors acting for Leeloong.

33.That must be wrong for the following reasons:

(i)   Order 15, rule 6(4) of the Rules of the High Court (“RHC”) is clear that no person can be added as a plaintiff without his express consent.

(ii)   Leeloong (under the control of Daniel) never gave its consent to be added as a plaintiff in HCA570.

(iii)   Leeloong (under the control of Daniel) never gave instructions to LKH to act as its solicitors in HCA 570.

34.I therefore take the view that as at April and May 2018, there were justifications for:

(i)   Daniel to apply for leave to appeal against the DHCJ Seagroatt Order;

(ii)   Leeloong to apply to set aside the said Notice to Act filed by LKH purportedly as Leeloong’s solicitors.

35.I shall now examine the correspondence between the solicitorsfor the parties for the purpose of assessing the reasonableness of the conduct of the parties in a situation where the difficulty was not exactly or entirely of their own creation, at least, at the initial stage.

36.On 4 April 2018, Messrs Chow Griffiths & Chan (“CGC”), the solicitors for Leeloong, wrote to LKH to put on record that Leeloong had never consented to its joinder as a plaintiff and that it had never given any authority for LKH to act as its legal representative.  CGC reserved Leeloong’s right to make applications to oppose the joinder and strike out the relevant parts of the Amended Writ and Amended S/C.

37.On 9 April 2018, LKH replied to CGC saying that reliance would be placed on the DHCJ Seagroatt Order unless and until Leeloong could succeed in an appeal against that Order.

38.By a letter to LKH dated 13 April 2018, CGC pointed out Leeloong’s reliance on Order 15, rule 6(4) of the RHC and that LKH had no consent from Leeloong to act for it.

39.By a letter to LKH dated 15 May 2018, CGC protested in relation to the Notice to Act filed on 11 May 2018 and gave notice that Leeloong would apply to set it aside.

40.By a reply to CGC dated 16 May 2018, LKH again referred to the DHCJ Seagroatt Order and argued that that Order had the effect of giving authority to LKH to act for Leeloong.  It further argued that the DHCJ Seagroatt Order could be construed as enabling LKH’s clients to proceed with a derivative action at Common Law.

41.Such argument by LKH, in my view, is wrong.

42.The argument between the solicitors continued in further correspondence.

43.After the hearing before Au-Yeung J on 5 June 2018 referred to above, in a letter to CGC dated 7 June 2018, LKH said the following:

“ We refer to the hearing dated 5^th June 2018 before Madam Justice Queeny Au-Yeung where the Court commented that the Notice to Act filed by our firm to act for Leeloong Investment Company Limited (‘Leeloong’) appeared to be improper. However, Madam Justice Queeny Au-Yeung also commented it is procedurally improper for you to apply to strike out our firm’s Notice to Act without joining our firm as a party to the Summons. Given this comment, your Counsel Mr. Keith Lau promptly withdrew the second paragraph of the said Summons whilst Mr. Lau indicated that a new application will be made shortly to strike out our Notice to Act.

We insist that since DHCJ Seagroatt has granted our clients leave to amend the Statement of Claim in HCA 570/2014 as per thedraft Statement of Claim to the Summons dated 7^th February 2018, where it is clearly stated our firm is the solicitors acting for all the Plaintiffs, it follows that we should represent the 2^ndPlaintiff at least for the purposes of the amendments. Otherwise, there wouldbe no firm representing the 2^nd Plaintiff (i.e. Leeloong), despite the leave being granted by the Court. We stress our intention is to await the outcome of substantive hearing before Harris J on 7^th September 2018 (the ‘September Substantive Hearing’), and we have no intention to take any steps in the proceedings (including taking out interlocutory applications).

Indeed, if we succeed in the September Substantive Hearing,you will have no ground to insist that the joinder and our Noticeto Act be struck out. On the contrary, if we fail to obtain leave to commence derivative action in the September Substantive Hearing, our joinder and our Notice to Act will be liable to be struck out.

Be that as it may, as indicated in Court, we, with the view ofsaving time and costs, propose that our Notice to Act be withdrawnby Consent Order before the September Substantive Hearing isconcluded. We take the view that this is the most reasonableand expeditious way to resolve the above matter without troubling the Court to deal with this matter. This proposal is, of course, without prejudice to our firm’s position of representing the 2^nd Plaintiff/Leeloong upon being successful and/or obtaining statutory leave to prosecute the derivative action at the September Substantive Hearing.

If you find our proposal agreeable, please let us have your draft Consent Summons for our perusal.”      [emphasis added]

44.By another letter to CGC written on 15 June 2018 but which was wrongly dated “8 June 2018”, LKH made certain proposals as follows:

“ D. Reasonable and common sense approach to the present situation

We are of the view that the matters in Section B above would most likely resolve themselves after the substantive hearing of HCMP 86/2018 (for leave to commence derivative action on behalfof Leeloong which is scheduled to be heard on 7^th September 2018) (‘September Substantive hearing’) for the reasons that:

1. If the Court decides that leave to commence derivative action be granted, then it follows that the pleadings should be kept as they stand, and Leeloong’s place as the 2^nd Plaintiff in the present proceedings should also stand undisputed and presumably your client would have no objection to our firm acting for Leeloong with respect to the derivative action;

2. If, however, the Court decides that the said leave should not be granted, then it follows that Leeloong should not be the 2^nd Plaintiff in the present action, and the corresponding parts of the pleadings should be deleted.

We take this opportunity to cite again Madam Justice Queeny Au-Yeung’s comment that enough of the Court’s time and resources have been wasted in the present case (see Section B above). We are of the view that the above proposal will go towards saving all parties’ time and costs and avoid troubling the Court with unnecessary proceedings, which will soon become academic one way or the other. As part of this proposal, we have already writtento you in a separate letter dated 7^th June 2018 to prepare our firm’s withdrawal of our Notice To Act by consent (and this is without prejudice to our firm’s rights to file another Notice to Act upon the conclusion of the September Substantive Hearing before Harris J on 16^th September 2018). However, you do not see fit to favour us with a reply.

….

As regards the Notice to Act filed by our firm, in light of the indication made by Madame Justice Queenie Au-Yeung at the hearing on 5^th June 2018, we are prepared to accept paragraph 1 of the Originating Summons dated 11^th June 2018 by consent solely for the purposes of saving time and costs and to avoid unnecessary satellite litigation.

However, we take the view that it may be not appropriate for you to take out a new Originating Summons, and this is not the correct procedure. We take the view that the matter shall be dealt with under HCA 570/2014, not under a set of newproceedings. Please kindly consider your position, and enlighten us as to why you would take out a new Originating Summons, as opposed to an application under HCA 570/2014.

As regards, paragraphs 2 and 3 of your Originating Summons, we take the view that your stance is misconceived, and as such wepropose that the same be adjourned to be heard after the September Substantive Hearing. In this connection, we will need 28 days to file and serve the affirmation in opposition.

With respect to the alleged misjoinder of Leeloong, we propose that paragraphs 1, 3 and 4 of your Summons dated 21^st May 2018 be adjourned to be heard after the September Substantive Hearing by consent, and we be given 28 days to file the affirmation in opposition.

Obviously, under paragraph 6 of the Order dated 5^th June 2018 made by Queeny Au-Yeung J, the said application should be heard together with the application to strike the Notice to Act. As already pointed out, we have invited you to enlighten us as to why it would be correct to take out a new Originating Summons as opposed to an application under HCA 570/2014. In this connection, you may wish to consider withdrawing the Originating Summons.

Please kindly let us know your position within the next 7 days.  If you find our proposals agreeable, please kindly prepare the consent summons for our review.  We do urge you to deal with the matters reasonably and to avoid unnecessary satellite litigation.”         [emphasis added]

45.I should note that I have been informed by Counsel for the parties that the hearing date of 5 September 2018 had already been fixed in the morning of 15 June 2018 before the letter referred to in paragraph 44 above was received by CGC.

46.I should also note that it does not appear that letters similar to those referred to in paragraphs 43 and 44 above had been written by LKH to the solicitors for Daniel.  At least, my attention has not been drawn to such letters.  Nevertheless, I am quite certain that Daniel would have been made aware of the said letters by CGC.

47.By its letter to LKH dated 22 June 2018, CGC said, inter alia, the following:

“ 5. We do not agree that the hearing of the Leeloong’s Summons and LKH’s Summons would need to be heard together after the substantive hearing of HCMP86/2018 on 7 September 2018. The determination of our client’s Summonses is independent of the issues in HCMP86/2018;

6. We would like to point out that your Counsel did at the hearing on 5 June 2018 repeatedly submit to the Court trying to have the hearing of the Leeloong’s Summons together with the hearing for the setting aside of your Purported Notice to Act filed on 11 May 2018 to be heard after the hearing on 7 September 2018, and request to withdraw the said Purported Notice to Act on your behalf. Your Counsel’s submission and request were not accepted.

….

9.   Regarding your request for our clarifications as to why the LKH’s Summons was issued in the form of an Originating Summons separately against your firm, we see no reason why we are obliged to offer you any explanation and/or clarification in respect thereof; and

10.   In regards to the LKH’s Summons, if you are agreeable to paragraph 1 thereof, we see no reason why our client should not be entitled to paragraphs 2 and 3 thereof.”    [emphasis added]

48.As stated above, on 7 September 2018, Harris J granted the SDA Application.

49.By a letter to Messrs Leonard K L Heung & Co, the solicitors for Daniel, and CGC, dated 12 September 2018, LKH proposed as follows:

(i)   the parties should make a joint application for the re-grant of leave for the filing of the Amended Writ and Amended S/C;

(ii)   the parties to agree on the time-table for filing further pleadings;

(iii)   leave be granted to Daniel and Leeloong to withdraw all their three applications; and

(iv)   LKH’s clients should be paid the costs of all the three applications.

50.There was then further correspondence between the solicitors on the question of costs.

The Setting Aside OS

51.In light of all the circumstances set out above, I dismiss the Setting Aside OS issued by Leeloong.

52.It is correct that the Notice to Act filed by LKH on 11 May 2018should not have been filed.  Now that it had been filed and has remained on the Court record, it makes no sense for it to be set aside and then for a new Notice to Act to be filed again by LKH.

53.Since Harris J has granted the SDA Application, one of the consequences is that Leeloong has become a plaintiff in HCA 570 and that for the purpose of the conduct of this action Leeloong is under the control ofHepburn and CTH.  It is they who have instructed LKH to act for Leeloong in the action.  It is also in accordance with the principle that all plaintiffs in a case should have the same legal representation.

54.Furthermore, I have listened to the recording of the proceedings before Harris J on 7 September 2018.  After he had delivered his Decision orally and when a certain Counsel, probably Mr Lau, raised the question about the legal representation of Leeloong, the learned Judge made a remark to the effect that it would only be natural and logical for Leeloong to have the same legal representation as the other plaintiffs, unless there was a conflict of interests situation.  I am unable to see any conflict of interests situation.

55.Most important of all, litigation is not a game.  The underlying objectives of the Rules of the High Court are clearly set out in Order 1A, rule 1(1).  They include: increasing the cost-effectiveness of any practice and procedure; ensuring that a case is dealt with as expeditiously as is reasonably practicable and ensuring that the resources of the Court are distributed fairly.  Both the Court and the lawyers involved have a duty to give effect to such underlying objectives.  To deal with the Notice to Act in the way suggested by Mr Lau would be acting contrary to the underlying objectives.

56.I am further of the view that the filing of the Notice to Act wasonly an irregularity and not a nullity which has been cured as a result of the granting of the SDA Application by Harris J.  See RHC Order 2, rule 1.

The question of costs

57.I shall now deal with the question of costs under the three applications in light of all the circumstances and legal principles set out above.

A.   The Setting Aside OS

58.Leeloong insisted on arguing the Setting Aside OS despite the granting of the SDA Application by Harris J and has lost.  I see no reason why costs should not follow the event.  I therefore order that Leeloong should pay the costs of and incidental to the Setting Aside OS to LKH to be taxed if not agreed.

B.   The Strike Out Summons

59.The Strike Out Summons was withdrawn before me on 21 September 2018.  Both Mr Kwong and Mr Lau ask for costs to be paid to their respective clients.

60.The presumption that a discontinuing or withdrawing party should pay costs to the other side should apply unless such presumption can be displaced along the lines of the principles enunciated in the Brookes case as set out in paragraph 25 above.

61.I should first point out that, in my judgment, the Strike Out Summons (as amended by the said Order of Au-Yeung J) was doomed to failure from the start.  The Amended Writ and Amended S/C having been filed pursuant to the DHCJ Seagroatt Order, whether that Order is right or wrong, that pleading cannot be struck out or amended in any way unless and until the DHCJ Seagroatt Order has been successfully appealed against.

62.Secondly, I find that there has been no change of circumstances or unreasonable conduct on the part of Hepburn and CTH which would assist Leeloong in displacing the presumption.  Indeed, Hepburn and CTH had been very reasonable in suggesting that further steps in the proceedingsshould be put on hold pending the resolution of the SDA Application which would make most if not all the issues academic.

63.I therefore order that Leeloong should pay the costs of and incidental to the Strike Out Summons to Mr Kwong’s clients, namely, the 1^st, 3^rd and 4^th plaintiffs in HCA 570, to be taxed if not agreed.

C.   The Leave to Appeal Summons

64.The Leave to Appeal Summons was withdrawn before me on 21 September 2018.  Mr Heung has submitted that I should make no order as to costs in respect thereof.  On the other hand, Mr Kwong submits that Daniel should pay costs to his clients.

65.The same considerations apply as in the case of the Strike Out Summons.  I can find nothing which assists Daniel in displacing the presumption.

66.I therefore order that Daniel should pay the costs of and incidental to the Leave to Appeal Summons to the plaintiffs to be taxed if not agreed.

D.   Other points

67.For the avoidance of doubt, I make it clear that my orders for costs above do cover the hearings before me on 5 and 21 September 2018.

68.Mr Kwong has submitted that costs awarded to his clients should be on an indemnity basis.  Having considered all the circumstances, in particular, the fact that it was DHCJ Seagroatt who de-linked the Amendment Application from the SDA Application (though, no doubt, with the best will in the world) and the fact that the Notice to Act should really not have been filed (albeit that there was a subsequent offer by LKH to withdraw it voluntarily or set it aside by consent), I have decided that justice will be done sufficiently if my orders for costs are all on a party and party basis.

69.I understand from the draft Decision of Harris J that the parties have agreed that the question of the applicants’ indemnification for Leeloong’s costs in HCA570 be adjourned.  No doubt, in due course, the parties will also argue on the question of the indemnification of the costs to be paid by Leeloong as ordered by me above.

Conclusion

70.In summary, I have made orders for costs as follows:

(i)   In the Setting Aside OS, as set out in paragraph 58 above and on a party and party basis.

(ii)   In the Strike Out Summons, as set out in paragraph 63 above and on a party and party basis.

(iii)   In the Leave to Appeal Summons, as set out in paragraph 66 above and on a party and party basis.

Mr Keith Lau, instructed by Chow Griffiths & Chan, for the applicant
(in HCMP 868/2018) and the 2^nd plaintiff (in HCA 570/2014)

Mr Alan Kwong, instructed by Lau Kwong & Hung, for the respondent
(in HCMP 868/2018) and the 1^st, 3^rd and 4^th plaintiffs (in HCA 570/2014)

Mr Heung Man Yick Matthew, of Leonard K L Heung & Co,
for the 1^st defendant (in HCA 570/2014)

The 2^nd and 3^rd defendants (in HCA 570/2014) were not represented and did not appear

Attendance of Nixon Peabody CWL, for the 4^th defendant (in HCA 570/2014) was excused