Société Générale, Singapore Branch v. Inter Pacific Group Pte Ltd and Others

HCA 1617/2019

[2020] HKCFI 2267

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1617 OF 2019

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BETWEEN

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Before:  Mr Recorder Manzoni SC in Chambers

Date of Hearing:  22 June 2020

Date of Decision:  10 July 2020

Date of Decision on Costs:  7 September 2020

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DECISION ON COSTS

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1.By a decision dated 10 July 2020 ([2020] HKCFI 1508) on the return date of an inter partes summons in which the plaintiff bank sought to maintain an ex parte injunction granted by Deputy High Court Judge MK Liu preserving the assets of the 8^th and 9^th defendants up to the sums of US$24,963,178.64 and US$6,652,507.63 respectively, I ordered a variation of the injunction.

2.The effect of the variation was that:

2.1.  the sums injuncted were reduced to HK$3,445,888.78 and HK$6,783,017.53 respectively; and

2.2.  the 8^th and 9^th defendants were not entitled to deduct legal or business expenses from those sums.

3.I made a costs order nisi that the plaintiff is to pay the costs of the 8^th and 9^th defendants to be taxed if not agreed.

4.The plaintiff has applied to vary that costs order nisi. The thrust of the argument is that contrary to the conclusion that I reached in paragraph 100 of my 10 July 2020 decision, the plaintiff has in fact achieved more by coming to court than it could have achieved by accepting the offer of the 8^th and 9^th defendants contained in various letters that the plaintiff has shown to the court. It is suggested that what has been achieved is the removal of the entitlement to deduct legal or business expenses from the reduced injuncted sums, which the 8^th and 9^th defendants had not offered. The plaintiff seeks an order that costs should be in the cause.

5.The 8^th and 9^th defendants resist the variation on the basis that, essentially, all argument before the court surrounded the maintenance of the injunction at the higher sums, and there was little or no argument surrounding legal and/or business expenses.

6.I accept the proposition made by the plaintiff that it has in fact achieved more by way of my judgement than was offered by the 8^th and 9^th defendants in the letters. All the offers made expected, or expressly provided, that legal and business expenses would be withdrawn from the sums to be paid into court. It was not until the hearing itself that counsel for the 8^th and 9^th defendants conceded on his feet that it was inappropriate to insist on such deductions.

7.Therefore, I accept that it is appropriate for me to reconsider the question of costs.

8.I should ask myself who do I consider to be the prevailing party, and whether prevailing party should be entitled to recover its costs or whether there are any circumstances in which I should depart from that position.

9.The comment that I made in paragraph 100 of my 10 July 2020 decision is symptomatic of the thrust of the arguments that were raised in court, and their resolution.

10.I agree with the 8^th and 9^th defendants that the entire thrust of the plaintiff’s argument was around maintaining the originally injuncted sums. There was very little, if any, argument made by the plaintiff that legal and business expenses should not be allowed to be deducted. Indeed if such an argument had been advanced the plaintiff itself would have sought a variation to the original injunction, because that original injunction allowed the payment of business and legal expenses. But the plaintiff did not seek such a variation, and, as recorded in paragraph 23 of my 10 July 2020 decision, the plaintiff’s primary stance was that I should not be concerned about the detail of the requirements for either a Mareva injunction or a proprietary injunction because those questions had already been addressed by previous decisions of the court, differently constituted.

11.I did not accept that the previous decisions of the court bound me.  In the circumstances I was obliged to make an assessment of the various competing interests with little guidance from the plaintiff as to how I should exercise my judgement on the many points that became important. This was recorded in paragraph 23 of my 10 July 2020 decision.

12.However, I went on to assess the various matters that I considered to be important, and I concluded that the injunction should not be maintained in the higher sums ordered on an Ex Parte basis. 

13.In those circumstances I have no doubt that the 8^th and 9^th defendants are properly to be considered as the prevailing party. They achieved almost everything that they sought to achieve, being the reduction of the amounts injuncted.  It is correct that they did not maintain an ability to deduct legal and business expenses, but that is not something which was argued for by the plaintiff, but rather was a judgement I reached based upon the concession made by the 8^th and 9^th defendant’s counsel during the course of argument. In my view this does not justify a departure from what I consider to be the usual position on costs, namely that the prevailing party is entitled to his costs.

14.In all the circumstances, I decline to vary the costs order nisi. I now make the costs order nisi absolute. The plaintiff is to pay the costs of the 8^th and 9^th defendants to be taxed if not agreed.

Mr Alan Kwong, instructed by Stephenson Harwood, for the plaintiff

Mr Kenneth C L Chan and Mr Billy N P Ma, instructed by Patrick Ma & Tse, for the 8^th and 9^th defendants