Lo Kai Shui v. Hsbc International Trustee Ltd and Others

HCA 404/2018

[2021] HKCFI 3853

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 404 OF 2018

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DECISION ON COSTS

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1.This is a decision on costs in relation to the following 5 summonses (collectively, the “Summonses”) as between the plaintiff, the 1^st defendant and the 2^nd defendant:

(1)     The plaintiff’s Summons dated 16 January 2020 (“Exclusion Summons”) for an order, inter alia, that:

(a)     Tabs G-1 and G-2 (“Tabs”) of Exhibit “YSYS-1” to the Affidavit of Yiu Susan Yuen Shan dated 30 September 2019 (“Affidavit”) filed by the 1^st defendant be excluded as evidence in this action; and

(b)     Paragraph 18 (“Paragraph”) of the Affidavit be struck out or expunged.

(2)     The plaintiff’s Summons dated 24 July 2020 (“Amendment Summons”) for leave to amend the Exclusion Summons, in particular to add that “no party be entitled to rely on or adduce the material contained in the Tabs for the purposes of or at the hearing of D1’s Summons dated 30 September 2019 and D2’s Summons dated 30 September 2019 (collectively, “Strikeout Summonses”)”;

(3)     The plaintiff’s Summons dated 24 July 2020 (“Directions Summons”) for directions for the filing of evidence in respect of the Exclusion Summons and Amendment Summons;

(4)     The 1^st defendant’s Summons dated 4 August 2020 (“Withdrawal Summons”) for an order, inter alia, that:

(a)     The 1^st defendant do have leave to withdraw the Tabs and the Paragraph; and

(b)     The Tabs and the Paragraph be expunged from the court’s record.

(5)     Consent Summons dated 17 September 2020 (“Consent Summons”).

2.In order to determine the proper costs order to be made on the Summonses, it is necessary to refer to the procedural history leading to the resolution of the Summonses as set out in paragraphs 6 to 26 of the Written Submissions of the 1^st defendant on costs.

3.In support of its Strikeout Summons, the 1^st defendant filed the Affidavit, in which the 1^st defendant relied on a secret audio recording of a conversation between the plaintiff and Madam Lo, the plaintiff’s mother (“Recording”) recorded by Madam Lo’s maid (ie Tab G-1) and the transcript of selected excerpts of the Recording (“Transcript”) (ie Tab G-2) with the aim of suggesting that the plaintiff may have had some kind of involvement in Madam Lo’s Proceedings.

4.For the purpose of this Decision, the starting point is the Exclusion Summons dated 16 January 2020, in which the plaintiff sought orders that:

(1)     Tabs G-1 and G-2 of Exhibit “YSYS-1” to the Affidavit be excluded as evidence “in this action”; and

(2)     Paragraph 18 of the Affidavit be struck out or expunged.

5.In his evidence in support of the Exclusion Summons, Mr Gilbert Kwok of the plaintiff’s former solicitors invited the court to exclude the Recording and the Transcript (rather than Tabs G-1 and G-2 of the Affidavit) as evidence in this action on two broad grounds:

(1)     The 1^st defendant failed to obtain leave from the court, contrary to an Order made by Master Hui in Madam Lo’s Proceedings.

(2)     The Recording and the Transcript are hearsay evidence which should be excluded pursuant to section 47 of the Evidence Ordinance (Cap 8) on the ground that the exclusion of such evidence is not prejudicial to the interests of justice.

6.It is ambiguous as to whether the Exclusion Summons was targeted at (a) the admissibility of the Recording and Transcript generally, or (b) the reference to and exhibition of the Recording and Transcript in the Affidavit.

7.The wording of the Exclusion Summons itself suggested that the application was only targeted at the reference to the Recording and Transcript in the Affidavit, yet the plaintiff’s evidence suggested that he aimed to exclude the use of the Recording and Transcript more generally.

8.Faced with this ambiguity, the solicitors of the 2^nd defendant and the 1^st defendant repeatedly and separately requested confirmation as to whether the plaintiff sought to exclude the use of the Recording and Transcript generally in these proceedings.

9.For the reasons set out in paragraph 12 of the 1^st defendant’s Written Submissions, the net position was that even after three months of correspondence, it remained wholly unclear whether the plaintiff sought to exclude the use of the Recording and the Transcript generally in these proceedings.

10.As a result, the parties were unable to reach consensus as to how to dispose of the Exclusion Summons.

11.In light of the impasse between the parties, the 1^st defendant attempted to take steps to progress the matter.

12.By its without prejudice letter dated 2 June 2020, the 1^st defendant offered to dispose of the Exclusion Summons on the basis that:

(1)     the 1^st defendant would voluntarily withdraw the Tabs and expunge paragraph 18 of the Affidavit;

(2)     the Exclusion Summons would be withdrawn with no order as to costs;

(3)     the 1^st defendant’s right to rely on the Recording and the Transcript would be reserved, and any issues regarding the admissibility of the same would be dealt with as and when they arose.

13.However, the plaintiff refused to consent to the 1^st defendant’s proposal unless it also obtained a confirmation from the 2^nd defendant to the effect that the 2^nd defendant would not seek to reintroduce the Recording and the Transcript into the evidence relied upon in support of its strike-out application (the “Confirmation”).

14.The plaintiff insisted upon this requirement notwithstanding the fact that:

(1)     The 2^nd defendant had not, up to that point in time, sought to rely on the Recording and the Transcript in support of its strike-out application;

(2)     The plaintiff had not filed its evidence in opposition to the 1^st defendant’s and the 2^nd defendant’s strike-out applications, meaning it was unclear what evidence the 1^st defendant and the 2^nd defendant would have to adduce in reply.

15.As a result, the parties were, again, unable to dispose of the Exclusion Summons by agreement.

16.In light of the plaintiff’s stance, on 4 August 2020, the 1^st defendant took out the Withdrawal Summons, in which it sought leave to withdraw the Tabs and expunge paragraph 18 of the Affidavit.

17.In response, the plaintiff indicated that he opposed the Withdrawal Summons on the following grounds:

(1)     The Withdrawal Summons cannot dispose of the Exclusion Summons since the latter sought relief in different terms.

(2)     The court has jurisdiction to grant pre-emptive relief of the type sought by the plaintiff in his Exclusion Summons and Amendment Summons, so the 2^nd defendant had no proper basis to resist the Amendment Summons.

(3)     The Withdrawal Summons was defective in that it failed to comply with the mandatory rule requiring a supporting affidavit under RHC Order 32, rule 1.

(4)     The 1^st defendant had not established that its application was jurisdictionally sound.

18.The Amendment Summons, Directions Summons and Withdrawal Summons were heard by this court on 3 September 2020.

19.In his Skeleton Submissions for the 3 September 2020 hearing, the plaintiff’s counsel submitted that (a) the court did not have jurisdiction to grant an order in terms of the Withdrawal Summons without a supporting affidavit, and (b) the plaintiff was entitled to quia timet relief to restrain the 1^st defendant and the 2^nd defendant from adducing or relying on the Recording and the Transcript in the present proceedings.

20.In other words, the plaintiff only made clear for the first time, shortly before the 3 September 2020 hearing, that he was in fact seeking to prevent the 1^st defendant and the 2^nd defendant from making use of the Recording and the Transcript generally in these proceedings to restrain a threatened or potential breach of confidence.

21.At the hearing on 3 September 2020, this court rejected the plaintiff’s submissions on jurisdiction and granted an order in terms of the Withdrawal Summons.

22.Thereafter, the plaintiff agreed to withdraw the Exclusion Summons and Amendment Summons.

23.From the procedural history set out above, I agree with the 1^st defendant’s submission that the court should order the plaintiff to pay costs of each of the Summonses to the 1^st defendant for the following reasons:

(1)     The core dispute between the parties was whether the plaintiff is entitled to exclude the use of the Recording and the Transcript not just for the purposes of the 1^st defendant’s strike-out application, but also at trial and more generally in these proceedings.

(2)     The 1^st defendant’s position was that it was willing not to rely on the Recording and the Transcript for the purposes of the striking out application, but was entitled to reserve its right to make use of the materials at some other point in time in these proceedings.  The plaintiff unreasonably failed to accept the 1^st defendant’s proposal, which necessitated the taking out of the Withdrawal Summons.

(3)     This core dispute was ultimately resolved in the 1^st defendant’s favour. Notwithstanding the plaintiff’s active opposition (see paragraphs 17 to 19 above), an order was made in terms of the Withdrawal Summons, following which the plaintiff withdrew its Exclusion Summons and Amendment Summons.

(4)     In the circumstances, the plaintiff should pay the 1^st defendant’s costs as (a) the plaintiff was not the “effective winner”, and (b) the plaintiff’s conduct was unreasonable, resulting in substantial wastage of time and costs.

24.As regard the 2^nd defendant, by way of background:

(1)     The Recording was disclosed by the 2^nd defendant as item 7 of his List of Documents dated 31 October 2018.

(2)     The plaintiff has never challenged this item (or indeed any item on the 2^nd defendant’s List of Documents).

(3)     The Tabs and the Affidavit were filed by the 1^st defendant only in support of its strike-out application against the plaintiff.

(4)     The 2^nd defendant is not a party to the 1^st defendant’s strike-out application.  The 2^nd defendant has issued his own strike-out application and has filed his own evidence in support thereof.

(5)     The 2^nd defendant has not at any point sought to rely on the Recording in his strike-out application.

25.On 10 June 2020, the plaintiff proposed to the 1^st defendant that the Exclusion Summons be disposed of by consent (instead of being withdrawn), with no order as to costs, to which the 1^st defendant agreed on 17 June 2020.

26.However, on 23 June 2020, the plaintiff then requested for the very first time that the 2^nd defendant should give the Confirmation.  The 2^nd defendant refused.

27.The 2^nd defendant refused to provide the Confirmation because the plaintiff was not entitled to it.  By its terms, the 2^nd defendant was required to confirm that he would not seek to adduce (or otherwise rely upon) the Tabs and the Affidavit “in any other manner” for the purposes of or at the hearing of the 1^st defendant’s and the 2^nd defendant’s strike-out applications.

28.In the 2^nd defendant’s strike-out application, he had the right to file his evidence in reply on a review of the plaintiff’s evidence in opposition to the 2^nd defendant’s strike-out application.  As submitted by the 2^nd defendant, the Confirmation sought impermissibly to restrict that right.

29.As far as the 2^nd defendant is concerned, at the 3 September 2020 hearing, this court ordered that the 2^nd defendant do file and serve his affirmation in opposition to the Exclusion Summons and Amendment Summons by 16 September 2020. This deadline was set by the court in acknowledgement of the 2^nd defendant’s submission that he would need to review the plaintiff’s evidence in opposition to the 2^nd defendant’s strike-out application before he could decide whether to provide the Confirmation.  The 2^nd defendant eventually provided the Confirmation on 14 September 2020 by way of an affirmation after reviewing the plaintiff’s evidence filed on 11 September 2020.

30.In light of the plaintiff’s unreasonable conduct as described above in seeking to involve the 2^nd defendant in what was entirely a dispute between the plaintiff and the 1^st defendant as to the evidence filed by the 1^st defendant’s strike-out application, I agree that the plaintiff should be ordered to pay the 2^nd defendant’s costs of the Exclusion Summons, Amendment Summons, Withdrawal Summons, Directions Summons and Consent Summons.

31.For the reasons set out above, I order that the plaintiff do pay the costs of each of the Summonses, including the costs of the costs submissions, to respectively the 1^st defendant and the 2^nd defendant (with a Certificate for 2 Counsel for the 1^st defendant).

Written submissions by Mr Andrew Lynn, instructed by Messrs Cocking & Co LLP, for the plaintiff

Written submissions by Mr Eugene Fung, SC, leading Mr Joshua Chan, instructed by Messrs Gibson, Dunn & Crutcher, for the 1^st defendant

Written submissions by Messrs Herbert Smith Freehills, for the 2^nd defendant