Chen Hongqing v. Liu Yiu Keung Stephen and Others

HCA 1699/2019

[2021] HKCFI 2746

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1699 OF 2019

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BETWEEN

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Before:  Hon K Yeung J in Chambers

Date of Written Submissions by the Plaintiff:  29 March 2021

Date of Written Submissions by Jinan Group:  7 April 2021

Date of Decision on Costs:  13 September 2021

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D E C I S I O N

O N  C O S T S

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1.By my decision handed down on 23 February 2021 (the “Decision”)[1], I allow the Jinan Summons and inter alia granted leave to Jinan Group to be joined as a defendant.  I, as per the terms of the Jinan Summons, made an order nisi that the costs of and occasioned by this application be reserved (the “Costs Order Nisi”).

2.By letter of 3 March 2021, Messrs Linklaters on behalf of Jinan Group made an application for an order that the Costs Order Nisi be varied.

3.On 12 March 2021, I gave directions on the filing of submissions, and directed further that the matter be dealt with on the papers.

4.Parties have since filed their submissions:

(a)  of Mr Vincent Lung and Ms Astina Au of 29 March 2021 for Chen HQ; and

(b)  of Mr Anson Wong SC and Mr Ross Li of 7 April 2021 for Jinan Group.

5.In Mr Wong’s submissions, he sets out at §4 the costs order which Jinan Group seeks to vary the Costs Order Nisi to:

(a)  Costs of the [Jinan Summons] incurred after 25 March 2020 be paid by [Chen HQ] to Jinan Group forthwith, to be taxed if not agreed with certificate for two counsel; and

(b)  Save as aforesaid, costs of [the Jinan Summons] be in the cause of the Action.

6.Mr Lung’s primary position is that Jinan Group’s interest in the Subject Shares and its exact role it will play in the action are matters to be investigated at trial.  It is therefore fair and appropriate to reserve costs until all intricacies in the dispute are finally resolved.  As a fallback, he submits that the costs of the Jinan Summons should be in the cause of the Action.

7.At the time when I made the Costs Order Nisi, I felt restricted by §5 of the Jinan Summons which asks for costs to be reserved.

8.But as has been explained by Messrs Linklaters in their letter of 3 March 2021, at the time when the Jinan Summons was issued, it was not certain whether Chen HQ would oppose the same.  Costs was proposed to be reserved against that background.  Subsequently, by letter of 25 March 2020, Messrs Gallant on behalf of Chen HQ indicated that the application would be opposed.

9.As pointed out by Mr Wong in his submissions, the single issue before this Court in considering the Jinan Summons was whether Jinan Group had satisfied the relevant threshold such that it ought to be joined as a party at the stage of the determination of the Jinan Summons.

10.I have ruled at §43 of the Decision that Jinan Group had clearly made out a case for it to be joined. 

11.I have also observed that Chen HQ’s characterization of the present action in opposing the application had led to some very strained and technical legal arguments which were, with respect, hardly necessary (§§34-35).  I was not satisfied that those arguments were engaged (§40).  I observed further that even on the arguments that were run on Chen HQ’s behalf, there were potentially complicated matters which take the case out of those “plain and obvious” ones which may justify a scrutiny of merits or an adjudication of facts at the interlocutory stage (§39).

12.I am of the view that the opposition of the Jinan Summons was unmeritorious. 

13.I derive assistance from Midland Business Management Ltd v Lo Man Kui [2011] 2 HKLRD 667, per Lam J (as the Permanent Judge then was)  at §§7, 9-12.

14.Given the severable and self-contained nature of the Jinan Summons, and my view that the opposition of the Jinan Summons has been unmeritorious, I accede to Jinan Group’s application for variation.  I vary the Costs Order Nisi as per the terms set out in §5 above.

15.Chen HQ should also bear the costs of this application for variation, to be dealt with as part of and together with the costs of the Jinan Summons (but with certificate for one counsel only).

Written Submissions by Mr Vincent Lung and Ms Astina Au, instructed by Gallant, for the Plaintiff

Written Submissions by Mr Anson Wong SC and Mr Ross Li, instructed by Linklaters, for Jinan Group (the 1,169^th Defendant)