Cao Shuhui v. Dacheng Group Holdings (Hong Kong) Co Ltd and Another
Read the full judgment text of HCMP 587/2023 on BabelCite. This High Court CFI judgment was delivered on 15 July 2024.
1. On 20 February 2024, this Court handed down its decision (the “Decision”) and granted:
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HCMP 587/2023 [2024] HKCFI 1787 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 587 OF 2023 ________________________
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______________________________ DECISION ON COSTS ______________________________ 1.On 20 February 2024, this Court handed down its decision (the “Decision”) and granted:
2.This Court made a costs order nisi to which both the Plaintiff and the 2nd Defendant took out summonses dated 27 February 2024 and 4 March 2024 respectively to vary the same. Directions were given by this Court to dispose of both applications on paper. Parties have since filed their respective skeleton submissions with schedule of costs. 3.First, I am of the view that the Plaintiff as the successful party should not be ordered to pay costs to the 2nd Defendant. The Plaintiff’s application to commence a derivative action on behalf of the Company against the 2nd Defendant is successful. 4.Although the Plaintiff failed to obtain a leave to commence a derivative action against Henan Shi Shang, it does not necessarily mean that the Plaintiff should be ordered to pay costs to the Plaintiff. It is true that the Plaintiff was not totally successful, but a party who is not totally successful in any application does not ipso facto has to pay for the costs of the losing party in respect of the items, claims or issues that it did not prevail. On the facts of the present case, the Plaintiff applied for leave to commence one derivative action against both the 2nd Defendant and Henan Shi Shang. This Court does not allow the Plaintiff to commence the derivative action against Henan Shi Shang on jurisdiction ground. 5.Hence, I am of the view that there are only two issues to be resolved, namely, the issue of apportionment and the issue of whether costs should be reserved or paid forthwith. 6.On the issue of apportionment, in exercising its discretion on costs, the Court should take into account, inter alia, the following matters:
7.Applying the above principles to the facts of the present case, I am of the view that the Plaintiff should be entitled to 70% of its costs of the application. Mr Fong is correct that objectively the Plaintiff is the successful party for the reasons he set out in his written submissions. 8.The 30% reduction in costs is to fairly take into account the incurred costs (including expert evidence and submissions) relating to the intended claim against Henan Shi Shang. Such costs should not be incurred given the inherent jurisdictional problem. 9.On the issue of whether the 70% of the Plaintiff’s costs should be reserved or to be paid forthwith, Ms Ho for the 2nd Defendant submitted that the 70% costs should be costs in the cause of the intended derivative action or, alternatively, be reserved. 10.Ms Ho submitted that the Court is entitled to order costs in the cause if it is of the view that the justice of the case demands that the question of costs to be decided by reference to the ultimate merits of the case even if the application fails and/or there are proper justifications as to why it would be more appropriate to make an order “in the cause” or to reserve costs. (See Midland Business Management Ltd v Lo Man Kui [2011] 2 HKLRD 667 at §11 per Lam J (as Lam PJ then was). 11.Ms Ho also referred this Court to the cases of Chu Kong v Up Profit Ltd HCMP 305/2016, 23 December 2016, Harris J and Chu Kong v Up Profit Ltd HCMP 305/2016, 22 February 2016 at §§6 to 7 and 10, per Harris J. 12.However, each case depends on its own facts. This is a self-contained application. Application of this nature is to be dealt with on a summary and efficient manner. It is never supposed to be blossomed into a full enquiry into the merits of the intended claims. Save in exceptional and special circumstances, normally, the application is to be decided by applying the relevant test to the facts of a particular case. 13.It does not matter that a respondent has put forward respectable grounds to oppose the application. The key issue is whether the applicant has satisfied the relevant legal test. 14.In the present case, in relation to the intended claims against the 2nd Defendant, the Plaintiff does satisfy the relevant test. She comes to this Court and she prevails in her application. I am of the view that she should be entitled to the costs of this application. 15.Finally, I also accede to the application to make a gross sum assessment of the Plaintiff’s costs. Doing the best I can, I summarily assess the Plaintiff’s entitlement to costs at HK$550,000. 16.The 2nd Defendant is hereby ordered to pay the sum of HK$550,000 to the Plaintiff forthwith. 17.Finally, it remains for this Court to thank Mr Fong for the Plaintiff and Ms Ho and Ms Chan for their helpful written submissions to which this Court has taken into consideration.
Mr David Fong instructed by Messrs Chin & & Associates for the Plaintiff The 1st Defendant, 大诚集团控股(香港)有限公司, acting in person, absent Ms Sabrina Ho and Ms Tiffany Chan instructed by Messrs Ling & Lawyers for the 2nd Defendant | |||||||||||||||||||||||||||||||
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