Toyota Boshoku Europe N.V. v. Kingsville (HK) Enterprises Ltd and Others

HCA 452/2022

[2024] HKCFI 231

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 452 OF 2022

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BETWEEN

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DECISION ON COSTS

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1.In the Decision dated 24 August 2023, after hearing the parties on the Plaintiff’s Summons dated 26 May 2022 (the “Summons”), this Court continued the interlocutory proprietary injunction (the “Proprietary Injunction”)  and the Mareva Injunction (the “Mareva Injunction”)  (collectively the “Injunctions”)  ordered ex parte by Deputy High Court Judge Jenkin Suen SC on 25 May 2022 against the 7^th Defendant (“D7”), together with other ancillary disclosure orders.  However, for the reasons explained in the Decision, whilst this Court maintained the amount subject to the Mareva Injunction at USD311,833 as sought by the Plaintiff (“P”), this Court reduced the funds subject to the Proprietary Injunction from USD311,833 to HK$10,318.25.

2.On costs, in the Decision, this Court made an order nisi that D7 do pay costs of the Summons to P forthwith, except that costs of the banker’s disclosure order be in the cause of this action. (the “Costs Order Nisi”).

3.On 7 September 2023, D7 applied by summons for variation of the Costs Order Nisi to the extent that it should be required to pay only 50% of P’s costs of the Summons insofar as the Injunctions and the ancillary disclosure order are concerned (the “Variation Summons”).

4.On 21 September 2023, P’s costs of the Summons, per the Costs Order Nisi, were summarily assessed at HK$260,000.

5.The Variation Summons was directed to be disposed on paper. Written submissions for D7’s application, P’s opposition and D7’s reply were sequentially filed.

6.Having considered the parties’ submissions, I refuse to vary the Costs Order Nisi.

7.Firstly, P remains the overall winner of the Summons. P asked that D7’s money in the sum of USD311,833 be frozen.  It gets what it wanted.  USD311,833 is frozen under the Mareva Injunction.  Although the fund subject to the Proprietary Injunction is limited to HK10,318.25.  The overall position remains being USD311,833 being frozen.  The reduction in the Proprietary Injunction does not affect the overall result.

8.D7 relied on Société Générale, Singapore Branch v Inter-pacific Group Pte Ltd & others [2020] HKCFI 1508 where Mr Recorder Manzoni SC continued an ex parte proprietary injunction against the 8^th  and 9^th defendants but reduced the limit to the remaining amounts sitting at their respective bank accounts traceable to the plaintiff's funds.  Counsel for D7[1] relied on the learned Recorder’s findings[2] that the plaintiff has not achieved anything more by coming to court than it could have achieved by accepting the offer of the 8^th and 9^th defendants, and that despite continuation of the proprietary injunction, the plaintiff was ordered to pay costs of the 8^th and 9^th defendant. 

9.Société Générale is markedly different from the present case in one material aspect.  The learned Recorder in Société Générale refused to conclude that there is a risk of dissipation and for this reason he refused a Mareva injunction[3]. Were the plaintiff there successful in obtaining the Mareva injunction, it would have achieved more by coming to court than it could have achieved by accepting the offer of the 8^th and 9^th defendants, i.e. the reduced proprietary injunction.  In that event, the plaintiff would have much to say on the costs order that should be made.

10.In contrast to the plaintiff in Société Générale, P here succeeded in continuing the Mareva Injunction, and in the amount asked for in the Summons.  

11.D7 only offered payment of the sum of HK$10,318.25 into court[4]. This is meagre comparing with USD311,833 being the amount ordered to be subject to the Mareva Injunction.  P’s overall achievement in the Summons was not affected, notwithstanding the reduction in the amount subject to the Proprietary Injunction.

12.Secondly, I do not consider P has raised issues or made allegations on which it failed, has caused a significant increase in the length or costs of the Summons and its hearing.  P applied for continuation of the Proprietary Injunction and it succeeded.  D7 raised the issue that the fund subject thereto should be reduced to HK$10,318.25 and adduced bank statements showing HK$10,318.25 being the remaining P’s traceable proprietary funds in D7’s account[5]. P disputed the “lowest intermediate balance” rule as a matter of law but failed[6]. This was a proper debate on legal arguments.  I do not consider such arguments to be significantly lengthy.  Further, nothing can be said that P’s arguments, though not accepted, were improperly, unnecessarily, or unreasonably made.

13.Having revisited those general principles on costs helpfully summarized by To J in KJ v KMLM and KCK (Variation; Costs) [2014] HKFLR 227 at paragraphs 13-19, nothing warrants this Court to depart from the starting point that costs should follow the event.

14.For the above reasons, I maintain the exercise of my discretion under Section 52A(1)  of the High Court Ordinance and Order 62 rule 2(4)  of the Rules of the High Court in the Decision dated 24 August 2023 and make absolute the order nisi set out in paragraph 57 thereof.

15.I also dismiss D7’s Variation Summons with costs be paid by D7 to P forthwith.  I have considered P’s Statement of Costs, and order that P’s costs of the Variation Summons be summarily assessed at HK$60,000.

Mr Toby Brown and Mr Jeremy Yau, instructed by C. P. Lin & Co., for the plaintiff

Mr Tasman Tam, instructed by M.C.A Lai Solicitors LLP, for the 7^th defendant