Waddington Ltd v. Chan Chun Hoo Thomas and Others
Read the full judgment text of CACV 142/2015 on BabelCite. This Court of Appeal judgment was delivered on 24 December 2019 before Poon CJHC, Kwan VP, Yuen JA.
Civil procedure – leave to appeal to Court of Final Appeal – costs – derivative action – minority shareholder – interim payment application – indemnity basis versus party and party basis – Indemnity Principle – whether question of great general or public importance – Court of Appeal's discretion on costs – Waddington took out derivative action on behalf of Profit Point against Thomas Chan and succeeded – trial judge ordered Thomas Chan to pay sum into court and ordered Company to indemnify Waddington – Waddington applied for interim payment of $30m from sum in court – Company opposed – trial judge ordered interim payment of $23m subject to undertakings – Company appealed – Court of Appeal dismissed Company's appeal with order nisi for costs – Court ordered costs on party and party basis – Waddington sought leave to appeal to Court of Final Appeal on basis of costs – whether interim payment application by minority shareholder in derivative action engages Indemnity Principle such that costs should be paid on indemnity basis out of Company's assets – Court of Appeal held interim payment application was for Waddington's sole benefit and not a necessary part of performance of duties for Company's benefit – discretionary decision on costs does not raise question of great general or public importance – leave to appeal refused – Notice of Motion dismissed with costs summarily assessed at $250,000.
Legal issues: Whether the proposed ground of appeal involves a question of great general or public importance warranting leave to appeal to the Court of Final Appeal
Outcome: Application for leave to appeal to the Court of Final Appeal dismissed with costs.
Cited by 8 cases
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CACV 142/2015 [2019] HKCA 1452 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 142 OF 2015 (ON APPEAL FROM HCA NO 3291 OF 2003) ________________________ BETWEEN
________________________ Before: Hon Poon CJHC, Kwan VP and Yuen JA in Court Dates of the Plaintiff’s Written Submissions: 1 and 22 June 2017 Date of the 5th Defendant’s Written Submissions: 15 June 2017 Date of Judgment: 24 December 2019 ________________________ J U D G M E N T ________________________ Hon Poon CJHC: 1.I agree with the judgment of Yuen JA. Hon Kwan VP: 2.I agree with the judgment of Yuen JA. Hon Yuen JA: 3.This is an application for leave to appeal to the Court of Final Appeal from a decision of this court on the basis of costs to be paid in an interlocutory appeal. 4.The history of this matter relevant to this application has been set out in this court’s Judgment of 17 February 2016. 5.Very briefly, Waddington had taken out a derivative action on behalf of Profit Point (“the Company”) against Thomas Chan (“TC”). Waddington was successful. The trial judge made an order that TC pay a sum into court, and also made various costs orders vis-a-vis Waddington, TC and the Company, including an order that the Company indemnify Waddington [1]. 6.Subsequently, Waddington applied to the trial judge for an interim payment of $30m from the sum in court. The Company opposed the application, but the judge ordered interim payment of $23m subject to various undertakings from Waddington. 7.The Company appealed that order, which appeal was dismissed by this court on 17 February 2016 with an order nisi that it pay Waddington’s costs of the appeal [2]. We gave directions that written submissions be lodged on the basis of those costs. 8.Waddington submitted that it should be paid the costs on an indemnity basis, which was opposed by the Company. After consideration of the written submissions from both sides, we gave Judgment on 20 April 2017 ordering that costs be paid on a party and party basis. The reasons for this basis were set out at §§5-6:
9.It is against this basis of costs that Waddington is seeking leave to appeal to the Court of Final Appeal. It suggests that the appeal involves the following question of great general or public importance:
10.In my view, it should first be noted that what we were concerned with was an interim payment application, and secondly that the application was for the benefit of Waddington and it alone. It was not a necessary part of the performance of its duties for the Company’s benefit. As noted in the Judgment, it had not been suggested that if the interim payment application had been unsuccessful, that TC’s appeal against the main judgment in the derivative action would have gone undefended. Absent evidence that TC was still in control of the Company, the Company’s board was entitled to oppose the application, for an interim payment would result in the reduction of the sum in court (on which interest would accrue). 11.Our decision on the basis of costs was made in the exercise of the court’s discretion in the circumstances above. I do not see how it leads to a question of great general or public importance. Accordingly the Notice of Motion is dismissed with costs which we summarily assess at $250,000. The delay in rendering this Judgment is regretted.
Ms Audrey Eu, SC and Mr Justin Lam, instructed by Kao, Lee & Yip, for the Plaintiff (Applicant) Mr Edward Chan, SC and Mr Law Man Chung, instructed by ONC Lawyers, for the 5th Defendant (Respondent) |
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