Read the full judgment text of HCA 1659/2012 on BabelCite. This Court of First Instance judgment was delivered on 15 November 2022 before Hon Lok J.
Civil proceedings – costs – variation of costs order nisi – indemnity costs – whether defence and counterclaim scandalous or vexatious – whether sanctioned offer (Calderbank-type) obtained a better result – certificate for 2 counsel – mixed question of law and fact regarding partnership versus employment – start-up business context – game copyright ownership – migration of game business. This is a decision on costs in HCA 1659/2012 arising from the main judgment handed down on 28 March 2022 ([2022] HKCFI 899), in which Emagist succeeded on its claim that it owned the copyright of the Game and that ART and Simon were not partners of the Game Business, with damages measured by the payments made by Ryan into court. The Emagist Parties applied to vary the costs order nisi, seeking (i) indemnity costs on the ground that the defence and counterclaim of ART, Simon and Eric (the ARTSE Parties) were scandalous or vexatious and that the Game was surreptitiously and dishonestly removed; (ii) indemnity costs for the period after 4 September 2020 on the basis that the ARTSE Parties failed to obtain a better result than the Emagist's Offer of 7 August 2020; and (iii) a certificate for 2 counsel. Held, refusing the application: (1) The ARTSE Parties' defence and counterclaim were not dishonest, scandalous or vexatious to the extent that warranted indemnity costs; the court rejected their evidence on the Sun Chiu Kee Agreement on the balance of probabilities, but the legal relationship between the parties was a mixed question of law and fact, and the running of inconsistent defences in such circumstances was not improper. (2) Although the Emagist Parties obtained a better result on the issues tried, the Emagist's Offer required the ARTSE Parties to waive all future claims, and since Eric remained a partner proper and ART and Simon were shareholders who might pursue future claims for misappropriation of funds and wrongful allotment of shares, it was reasonable for the ARTSE Parties not to accept the offer. (3) The case did not involve difficult or complicated issues of law or fact warranting a certificate for 2 counsel, even though some written submissions were unnecessarily lengthy. The order nisi was made absolute; all costs to be taxed on a party-to-party basis with no certificate for 2 counsel; costs of the paper application awarded to the ARTSE Parties.
Legal issues: Whether indemnity costs should be awarded on the ground that the ARTSE Parties' defence and counterclaim were scandalous or vexatious · Whether indemnity costs should be awarded for the period after the Emagist's Offer of 7 August 2020 · Whether a certificate for 2 counsel should be granted
Outcome: The Emagist Parties' paper application to vary the costs order nisi is refused. The order nisi is made absolute. All costs are to be taxed on a party-to-party basis with no certificate for 2 counsel. The costs of the paper application are awarded to the ARTSE Parties.
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