Lau Muk Fat (Suing As the Manager of Lau Shau Wo Tso) v. Wong Kwok Wa and Others

HCA 1006/2017, HCA 1879/2011,
HCA 896/2012, HCA 897/2012 &
[HCA 802/2019 and HCMP 944/2018 (Consolidated)]
(Heard together)

[2023] HKCFI 135

HCA 1006/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1006 OF 2017

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_____________

AND

HCA 1879/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1879 OF 2011

_____________

_____________

AND

HCA 896/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 896 OF 2012

_____________

_____________

AND

HCA 897/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 897 OF 2012

_____________

_____________

AND

HCA 802/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 802 OF 2019

_____________

_____________

AND

HCMP 944/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 944 OF 2018

_____________

_____________

(HCA 802/2019 and HCMP 944/2018 Consolidated by the Order of

Madam Recorder Rachel Lam SC dated the 18^th day of October 2022)

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(Heard Together)

Before:  Madam Recorder Rachel Lam SC in Chambers

Date of Hearing:  10 January 2023

Date of Decision on Costs:  16 January 2023

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DECISION  ON  COSTS

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1.On 18 October 2022, I handed down a decision in these matters concerning various case management issues [2022] HKCFI 3166 (“18 October Decision”). This decision on costs is to be read together with that decision. Abbreviations and defined terms are adopted from the 18 October Decision.

2.This costs decision deals with the costs in respect of:

(1)  WKW’s Application;

(2)  Madam Mok’s Application; and

(3)  The Strike Out Application.

WKW’S APPLICATION

3.WKW’s Application for global consolidation of the various proceedings was dismissed.

4.Counsel Mr Tony H. H. Chow, who appeared for WKW, referred the Court to various cases where the Court had made neutral costs orders where applications for consolidation were rejected (Mass Ocean International Limited v Trinity Holdings (Hong Kong) Limited & Ors [2019] HKCFI 2323; Komal Patel & Ors v Chris Au & Ors, HCA 183/2014, unreported judgment dated 14 January 2016) and also where consolidation had been granted despite unsuccessful opposition (Wong To Yick Wood Lock Ointment Limited v Merika Medicine Factory Limited & Ors, HCA 562/2014, unreported judgment dated 10 March 2017). In each of these cases, the costs that were ordered after substantial argument was still “costs in the cause”.

5.The rationale underlying this approach appears to be that consolidation is often a complex and difficult case management issue (see for example paragraph 53 of Mass Ocean). Where any party does not act in a culpable way, the Court will be slow to impose costs consequences on any side if such issue of consolidation needs to be considered in due course.

6.Mr Chow further pointed to the fact that the Tso had not succeeded in persuading the Court to stay the Subsequent Actions, and as such, the overall stance taken in opposition had also failed.

7.Counsel Mr Billy Ma, who appeared for the Tso, sought to persuade the Court that the usual approach of costs following the event should apply (citing Kinetics Medical and Health Group Company Ltd & Ors v Dr Tse Ivan Cheong Yau, HCA 1115/2010, unreported judgment dated 7 April 2014).

8.At the hearing on costs, Mr Ma further submitted that there had been “culpable conduct” on the part of WKW in his conduct of the actions thus far, citing in particular his alleged fraudulent arrangement with Madam Mok (which core complaint is the subject of the Subsequent Actions), and also the sharp practice of WKW in seeking to further delay matters by raising the possibility of amending his defence if he were unsuccessful in his consolidation application (as had been foreshadowed in paragraph 49 of the 18 October Decision).

9.On the first point, I pointed out to Mr Ma that this Court would not consider this complaint of fraud as an established fact as yet, given this is the very subject matter of the consolidated action (as ordered in paragraph 62 of the 18 October Decision) and is yet to be determined. On the latter point, I was informed by Mr Chow that although at the subsequent case management hearing before the master, his client had sought leave to amend if so advised, such application was ultimately not made. There has thus not been any step taken which would further delay the trial of the Main Actions, which I understand will be set down shortly.

10.Considering matters in the round, and taking into account the case management steps taken to date in the lengthy history of this matter falls on the shoulders of all parties rather than any particular party being more culpable than the others (paragraph 47 of the 18 October Decision refers), I shall adopt the approach as customarily taken. The costs of and occasioned by WKW’s Application, including the costs of the hearing on costs, are thus to be costs in the cause of the respective actions (wherein the various summonses were issued).

MADAM MOK’S APPLICATION

11.Insofar as Madam Mok’s application is concerned, she was successful in her application to consolidate the Subsequent Actions. At the hearing, she had also argued that she was supportive of WKW’s Application, and her own application was an integral aspect of this “global consolidation” position.

12.Counsel Mr Raymond Tsang, who appeared for Madam Mok, also prayed in aid of Komal Patel (above) to suggest that the usual starting point was costs in the cause. He then cited Ling Man Yiu Raymond t/a Build Tech Engineering Co v Yau Luen Metal Works Ltd [2022] HKDC 18, to argue that the court will depart from the usual order if the application is unreasonably opposed. He submitted that the Tso had unreasonably opposed Madam Mok’s Application in seeking to stay the Subsequent Actions, and/or (as a fallback) in opposing consolidation and instead proposing that they should only be heard together.

13.Considering matters in the round, I similarly do not think that the Tso’s position was altogether unreasonable. Insofar as the Tso’s predominant stance (in answer to the proposal for global consolidation) was to proceed to trial for the Main Actions, this aspect was successful. Madam Mok’s stance as to her own application for consolidation was not entirely straightforward, in that it was not confined to her application alone. Both in her written submissions and at the substantive hearing, she had tied her fortunes together with WKW’s Application in supporting the “global consolidation” proposed by WKW, of which her own application was a crucial piece. In the circumstances, the parties had had to argue the various options, in order to enable the Court came to the determination in the 18 October Decision.

14.Taking into account the above circumstances, I order that the costs of Madam Mok’s Application, including the costs of the hearing on costs, shall be costs in the cause of the consolidated action (which consolidation has been ordered at paragraph 60 of the 18 October Decision).

15.Parties were also agreed that the costs of the amendments to pleadings (ordered at paragraph 60 of the 18 October Decision) shall be costs in the cause of the consolidated action, and this I order accordingly.

16.I would also note that I had considered whether Madam Mok and/or the 1006 Dings should be made liable in costs together with WKW for the approach taken in terms of the “global consolidation”. However, at the end of the day I did not consider this necessary or appropriate. First, I have accepted that the overall picture was complex and necessitated by the developments over the long history of the case, thus making costs in the cause a fairer outcome. Secondly and in any event, I accept the submissions that Madam Mok’s and the 1006 Dings’ stance at the substantive hearing did not substantially add to the arguments to be canvassed. This is particularly so in the case of the 1006 Dings, who had remained essentially neutral to the question of global consolidation. Their respective approaches thus did not cause much by way of additional costs.

THE STRIKE OUT APPLICATION

17.Insofar as the Strike Out Application was concerned, the 1006 Dings were not successful in striking out, but the action was stayed.

18.Ms Evelyn Cheng by her written submissions proposed that:

(1)  Costs up to the call-over hearing on 16 December 2021 for the Strike Out Summons should be to the 1006 Dings, to be taxed if not agreed, with certificate for counsel; and

(2)  Thereafter, there should be no order as to costs. This applies to the hearing on costs as well.

19.Mr Ma proposed that the 1006 Dings should pay all costs of and occasioned by the Strike Out Application on the grounds that the application was unreasonably taken out, and unreasonably maintained (despite the Tso having indicated that it was amenable to a stay).

20.On balance, I consider Ms Cheng’s proposal to be the fairest in the circumstances where:

(1)  The Strike Out Application was partially successful in that the HCA 1006/2017 Action has been stayed. This was a necessary outcome insofar as case management was concerned.

(2)  However, the parties had all proceeded to argue the strike out and, as I had alluded to in paragraphs 56 and 57 of the 18 October Decision, neither side had followed up on the possibility of the stay after the events of late 2021.

21.I thank counsel for their assistance.

Mr Billy Ma instructed by Messrs Hong Lee & Co for the Plaintiff in HCA 1879/2011, HCA 896/2012, HCA 897/2012, HCA 1006/2017 & the consolidated action of HCA 802/2019 and HCMP 944/2018

Mr Ho Hin Chow Tony instructed by Messrs Cheung, Chan & Chung for the 1^st Defendant in HCA 1006/2017, HCA 1879/2011, HCA 896/2012, HCA 897/2012 & the consolidated action of HCA 802/2019 and HCMP 944/2018

Wriiten Submissions from Ms Evelyn Cheng instructed by Messrs S H Chou & Co, and hearing attended by Mr Chou Sing Hong of Messrs S H Chou & Co for the 2^nd - 12^th Defendants in HCA 1006/2017, the 2^nd Defendant in HCA 896/2012 and the 2^nd - 13^th Defendants in HCA 1879/2011 & the consolidated action of HCA 802/2019 and HCMP 944/2018

Mr Raymond Tsang instructed by Messrs K B Chau & Co for the 14^th Defendant in the consolidated action of HCA 802/2019 and HCMP 944/2018