Re Guy Kwok-hung Lam

CACV 393/2021, [2024] HKCA 88

On Appeal From ([2022] HKCA 1297

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 393 OF 2021

(ON APPEAL FROM HCB NO 4115 OF 2020)

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J U D G M E N T

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Hon G Lam JA (giving the Judgment of the Court):

1.On 20 September 2023, we gave our decision ([2023] HKCA 1099) on the application by the appellant (Lam) by summons for variation of the costs order nisi made in our judgment on the appeal ([2022] HKCA 1297). Among other things, we refused to order that the costs of the appeal that the respondent, Tor, was required to pay Lam should be assessed on the indemnity basis as opposed to the party and party basis. In particular, we rejected Lam’s contention that a party who has brought proceedings in Hong Kong in breach of an exclusive jurisdiction clause in favour of another forum should, as a rule, be required to pay costs on the indemnity basis when the proceedings were stayed or dismissed due to the existence of the exclusive jurisdiction clause.

2.Lam now seeks leave to appeal against that decision to the Court of Final Appeal. The ground advanced is that there are questions involved in the intended appeal which, by reason of their great general or public importance, or otherwise, ought to be submitted to the Court of Final Appeal for decision. Those questions as set out in Lam’s notice of motion are as follows:

(1)  Whether or not the bringing of a legal proceeding in breach of an exclusive jurisdiction clause in a contract should as a rule be visited with indemnity costs?

(2)  Whether or not costs on an indemnity basis should as a rule be awarded to a party against whom a proceeding was unsuccessfully brought in knowing breach of an exclusive jurisdiction clause in a contract?

3.It will be immediately apparent that the dispute concerns merely the basis of taxation of costs and that what is at stake is the potential difference in the amounts of costs that Lam could recover from Tor under the indemnity basis of taxation and the party and party basis respectively. We consider that, as with interlocutory procedural issues (see CSAV Group (Hong Kong) Ltd v Jamshed Safdar (2007) 10 HKCFAR 629), appeals to the Court of Final Appeal on questions of costs should be rare and exceptional.

4.It is true that a point of principle is involved in Lam’s contention that costs should be taxed on the indemnity basis, but we are not satisfied that this is a matter of great general or public importance.

5.Further, as the Court of Final Appeal has emphasised, the power to order indemnity costs is a discretionary one and it is necessary to steer clear of anything that might compromise its discretionary nature (see §23 of our Decision). To devise fixed categories of cases in which indemnity costs would as a rule be ordered must, it seems to us, be exceptional and not a course that should be taken without compelling reasons. We came to our decision in this case because we did not find any sufficient justification for the rule contended for by Lam. Having examined the submissions made by the parties in the present application, we consider, with respect, that the contrary is not reasonably arguable.

6.The linchpin of Lam’s argument – the English decision in A v B (No 2) [2007] 1 Lloyd’s Rep 358 – is in the final analysis based on differently worded rules of costs taxation and spurred by a concern, which Lam has not suggested to be applicable in Hong Kong, that recoverable costs would be diminished by the requirement of proportionality in CPR 44.4 (see §§31-32 of our Decision). Nor has Lam been able to give, in our view, a satisfactory answer to the question, given that he has an extant action brought in New York against Tor, why the Hong Kong court should award him costs on the indemnity basis as a proxy for damages for breach of contract, instead of simply awarding costs as such on the usual party and party basis. There is, after all, an exclusive jurisdiction clause in favour of New York in relation to claims arising out of the parties’ contract (see §29 of our Decision).

7.Question 2 is apparently directed to this court’s finding that Tor’s conduct was not sufficiently egregious to justify indemnity costs (see §35 of the Decision).[1] That is a decision on the facts of this case which cannot be elevated into a determination of principle.

8.Lam does not advance any submissions in this court on the “or otherwise” limb of section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance (Cap 484).

9.Accordingly, the application for leave is dismissed. Lam has to pay Tor’s costs of the application, which we summarily assess in the amount of HK$260,000.

Written submissions by Mr Jose Antonio Maurellet SC and Mr Nick Luxton, instructed by Freshfields Bruckhaus Deringer, for the Petitioner / Respondent

Written submissions by Mr Christopher To and Ms Hannah Tang, instructed by Fan & Fan, for the Debtor / Applicant