Success Lane Development Limited v. Fergurson Hong Kong Limited Trading As New World Millennium Hong Kong Hotel
Read the full judgment text of DCCJ 2191/2023 on BabelCite. This District Court judgment was delivered on 26 July 2024.
1. This is an application of the Plaintiff (“P”) for leave to appeal from the Costs Order (“Injunction Costs Order Absolute”), which was given by this Court in §97 of the Decision handed down on 25 September 2023, [2023] HKDC 1325 (“Injunction Decision”), as varied in §36 of the variation of costs Decision given on 1 March 2024, [2024] HKDC 25 (“Injunction VOC Decision”).
Cited by 2 cases · Cites 10 cases
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DCCJ 2191/2023 [2024] HKDC 1221 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 2191 OF 2023 --------------------------------------- BETWEEN
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--------------------------- DECISION --------------------------- APPLICATION 1.This is an application of the Plaintiff (“P”) for leave to appeal from the Costs Order (“Injunction Costs Order Absolute”), which was given by this Court in §97 of the Decision handed down on 25 September 2023, [2023] HKDC 1325 (“Injunction Decision”), as varied in §36 of the variation of costs Decision given on 1 March 2024, [2024] HKDC 25 (“Injunction VOC Decision”). PROCEDURAL HISTORY 2.The procedural history of the present action has been concisely set out in the Injunction Decision[1], the Injunction VOC Decision and the Leave Decision[2] (collectively, “Three Decisions”), which I should not repeat in details here. For convenience, the abbreviations used therein are adopted for this Decision unless otherwise stated. For the present purpose, it may be convenient just briefly set out the relevant procedural history as follows. 3.On 2 June 2023, P commenced the present proceedings. Ms Yung Mei Chun Jessie (“Ms Yung”) filed an affirmation for conducting the present proceedings for P as its director under Order 5A of the Rules of the District Court, Cap 336H (“RDC”). 4.On the same day, Ms Yung made the first urgent ex-parte without notice application (“First Ex-parte Application”) for P for an injunction order. During the ex-parte hearing, the application was dismissed by HHJ Harold Leong. The defendant (“D”) was not notified of that application and did not participate. 5.On 12 July 2023, Ms Yung made another urgent ex-parte without notice application for P for an injunction order of almost identical terms (“Second Ex-parte Application”) by filing her affirmation (“Yung’s First Affirmation”) in support of the Second Ex-parte Application. During the ex-parte hearing, HHJ E Yip ordered in terms of the draft order (“Draft Order”) annexed to the ex-parte summons, being the Ex-parte Injunction Order[3], and, scheduled the Return Hearing on 21 July 2023. D was not notified of that application and did not participate. 6.After the Ex-parte Injunction Order was served on D on 16 July 2023, D then made the Stay Application (with notice to P) on 18 July 2023. This Court granted the Stay Order with costs be reserved[4]. 7.On 19 July 2023, P applied for continuation of the Ex-parte Injunction Order by way of inter-parte Summons (“Injunction Application”). THE INJUNCTION COSTS ORDER ABSOLUTE 8.By §§96 and 97 of the Injunction Decision, this court dismissed the Injunction Application with a costs order nisi in favour of D (“Injunction Costs Order Nisi”). 9.By the Summons dated 9 October 2023 (“Injunction VOC Summons”), D applied to vary the Injunction Costs Order Nisi. By §36 of the Injunction VOC Decision which was handed down on 1 March 2024, this Court made the Injunction Costs Order Absolute that:-
APPLICATIONS RELATING TO THE INJUNCTION DECISION 10.In parallel, P took out the Two Summonses[5] for leave to appeal against the Injunction Decision and to adduce new evidence for the purpose of the appeal. By the Leave Decision handed down on 1 March 2024, the Two Summonses were dismissed with costs to D. 11.On 15 March 2024, P, through its then solicitors[6], took out three summonses regarding various costs orders granted by this Court, followed by another Summons dated 16 April 2024. The present application was one of the three summonses filed on 15 March 2024. LEGAL PRINCIPLES 12.Leave to appeal under section 63A of the District Court Ordinance, Cap 336, shall not be granted unless this court is persuaded that the intended appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard. 13.Reasonable prospect of success connotes the prospect of success must be reasonable and more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125. 14.The Appellate Court has stressed repeatedly that costs is very much a matter of discretion for the judge and the Court of Appeal would be very circumspect in intervening with the exercise of a judge’s discretion in the award of costs unless it was shown that the judge failed to exercise the discretion or exercised upon a false principle, or did not exercise it judicially, or the exercise of discretion was demonstrably flawed. 15.The judge is the best person to exercise the discretion on costs because he is most familiar with the conduct of the case and the impact of the success and failure on each issue canvassed before him. The mere fact that the appellate judges might have exercised the discretion in a different manner is not a sufficient ground to warrant interference with the decision of the primary judge: see Progetto Jewellery Co Ltd v Lau Chiu Ying and Another [2022] 2 HKLRD 845 §§36-38. 16.Pursuant to Practice Direction 14.3, the Court will give preference to summary assessment of costs where an interlocutory application is concerned, unless there is good reason not to do so, eg where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily. 17.Following the Civil Justice Reform, immediate payment of costs of interlocutory proceedings by way of summary assessment is encouraged. The objective is to discourage unnecessary and disproportionate interlocutory applications and the court should be more astute to the impact of costs on legal proceedings: Midland Business Management Ltd v Lo Man Kui (No 2) [2011] 2 HKLRD 667, §§9 and 12. 18.With these principles in mind, I now turn to deal with P’s intended grounds of appeal as set out in its Draft Notice of Appeal (“Draft Notice”) as annexed to the present summons. INTENDED GROUNDS OF APPEAL 19.It may be convenient to state at the outset that P has, in the Draft Notice and submissions, repeated some of its arguments raised in the Injunction Application, the Two Summonses[7] and the Injunction VOC Summons. Given those arguments have been considered and determined in the Three Decisions, they will not be revisited in the present application. GROUND 1: AN INDEMNITY COSTS ORDER SHOULD NOT BE MADE 20.Under Ground 1 of the Draft Notice, P argues that this Court was erred in awarding indemnity costs to D. Such argument is bound to fail. 21.P had not made application for variation of the Injunction Costs Order Nisi. On the other hand, D’s Injunction VOC Summons had not touched on the indemnity basis of the costs order. In the premises, rather than challenge the costs order nisi within the required 14 days period, P’s design to overturn the indemnity basis of the costs order by now seeking leave to appeal is procedurally unjustified and untenable. 22.The Court of Appeal has been critical of such tactics. In Chan Wai Yee v Kwong Wai Piu, the Administrator of the Estate of Wong Chin also known as Kwong Wong Chun (or Gine), Deceased CACV 411/2020, unreported, 1 March 2022, the plaintiff’s attempt to challenge the Judge’s costs order by including it as a ground of appeal as opposed to challenging it by way of application for variation within 14 days was regarded as “unacceptable” and “tantamount to an abuse of process”. The Court of Appeal made it clear that such a ground of appeal, stand-alone or not, is liable to be struck out, with the possibility of a wasted costs order against the relevant party. 23.Strictly, absent an application for variation of the Injunction Costs Order Nisi within the required 14 day period, P should not be allowed to completely ignore Order 42 rule 5B(3) the Rules of the District Court (“RDC”) but unjustifiably persist on challenging the costs order by way of an appeal. 24.Procedural error aside, P’s intended grounds of appeal against the indemnity basis of the costs order are unmeritorious. They essentially are a repetition of its arguments put forward in the Injunction Application, the Two Summonses as well as D’s Injunction VOC Summons. Those arguments were to assert that the Ex-parte Injunction Order should continue and this Court was wrong in dismissing the Injunction Application. 25.Those arguments were rejected with reasons set out in the Three Decisions, which I should not repeat here. Suffices it for the present purpose just to refer to the Dismissal Grounds as summarized in §8 of the Leave Decision for my reasons for the dismissal of the Injunction Application. 26.In gist, premised on the grounds that (A) there was deliberate material non-disclosure on P’s part in the Second Ex-parte Application (§§33-41 of the Injunction Decision); (B) P abused the ex-parte procedure (§§42-48); (C) P failed to satisfy the requisite merits threshold (§§49-71); (D) damages would be adequate remedy to P (§§74-82); and (E) the balance of convenience fell in favour of discharging the Ex-parte Injunction Order (§§72-73, 83-95), this Court ordered P to pay indemnity costs of the Injunction Application and the Stay Application to D. 27.On such basis, P’s arguments in §§1-2 of the Draft Notice that this Court was erred in allowing indemnity costs because P’s mere failure to disclose material facts in an ex-parte application and an unjustified ex-parte application did not “automatically” attract an indemnity costs order are unjustified. 28.Such arguments are an oversimplification of P’s procedurally and legally defective application in the Second Ex-parte Application, ending up with the Stay Application and the Injunction Application, as examined in the Injunction Decision. They endeavor to play down P’s multiple unacceptable conducts in prosecuting its applications, which fully justified an order for indemnity costs. 29.I should not burden this Decision by repeating all those special and unusual features, which were set out in details in the Three Decisions. It may be convenient just to focus on a few events for illustration. 30.First, the Ex-parte Injunction Order was discharged due to P’s deliberate material non-disclosure in the Second Ex-parte Application (§§33-41; 42-48 of the Injunction Decision; §§33-56 of the Leave Decision and §21 of the Injunction VOC Decision). The non-disclosure was demonstrably material and deliberate in light of:-
31.P’s argument in §4 of the Draft Notice that this Court erred in finding that P had failed to disclose the possible defence by D and/or to take into account such disclosure by P is unmeritorious. 32.Such argument can be tested by a comparison of Yung’s First Affirmation and §§54-63 of the Injunction Decision, which set out the emails exchanged between P and D in the period concerned. It is apparent that Ms Yung, in her affirmation, merely mentioned that there was a disagreement of room rentals between P and D. Out of the whole series of emails exchanged between P and D, only a small amount of them was chosen to be disclosed. The disclosed emails were strictly confined to those, which merely indicated the existence of a general disagreement of room rentals. 33.Not a word or email about D’s reasons of its disagreement of the room rentals was mentioned. The full picture was not accounted for. Such omission was apparently deliberate bearing in mind that they formed part and partial of the wholes series of the emails exchanged between the parties. The omission resulting from a cut-and-paste exercise could not be innocent. 34.Mere references to the existence of a dispute on rental payment but silence on D’s declared reasons of its disagreement, giving rise to D’s alleged right of lien, could hardly be argued as an innocent omission. The non-disclosure of D’s possible defence was serious and apparently intentional. 35.Thus analyzed, P’s failure in discharging its duty to make full and frank disclosure on all material matters was demonstrably deliberate and serious. It deprived HH Judge E Yip of the chance to realistically assess the merit of P’s application, which was seriously material to the learned Judge’s exercise of discretion. 36.In the premises, P’s complaint that this Court imposed indemnity costs “automatically” upon an “innocent” failure to disclose material facts or an unjustified application is unjustified. 37.Likewise, P’s contention that this Court was erred in finding P had abused the ex-parte process is unfounded. The facts speak for themselves. Both of the ex-parte applications were intentionally proceeded by P on an ex-parte without notice to D basis. P could offer no valid reason as to why the extreme urgent ex-parte without notice to D procedure was employed, instead of notifying D, still less of taking out an inter-parte summons, not only in the First Ex-parte Application but again, knowingly in the Second Ex-parte Application (§§42-48 of the Injunction Decision; §§43-46 of the Leave Decision). 38.In particular, there was no extreme urgency, and Ms Yung had personal knowledge of the dismissal of the First Ex-parte Application and the reasons of the dismissal of it. There was no justified ground for not taking out inter-parte summons or at least, notifying D of such applications. 39.Hence, this Court’s conclusion that P’s material non-disclosure and abuse of process was serious and deliberate, necessitating an indemnity costs order to show the Court’s disapproval could not be flawed (§§33, 47-48, 96-97 of the Injunction Decision; §§17-25 of the Injunction VOC Decision). 40.All matters considered, the Dismissal Grounds as set out in the Injunction Decision and the Leave Decision, including the multiple improper and unacceptable features of P’s application, sufficiently warranted an indemnity costs order. P’s arguments under Ground 1 of the Draft Notice is bound to fail. GROUND 2: COSTS SHOULD NOT BE AWARDED FORTHWITH 41.In §5 of the Draft Notice, P referred to Asia-Pac Infrastructure Development Limited v Ing Yim Leung Alexander and Others[9] to contend that this court in awarding the costs to be paid forthwith, had failed to give consideration to the fact that P was a litigant in person and it had not conducted the case in “bad faith and dishonesty”. 42.Such contentions are misconceived. Asia-Pac did not make a ruling that “bad faith and dishonesty” are prerequisites for an order of summary assessment and immediate payment. Nor did it prohibit such order to be made against a losing litigant in person. It only indicated that the court would make such order to show disapproval of “bad faith and dishonesty” of a party. The rationale of the ruling of Asia-Pac should not be taken out of context. 43.Plainly, the status of being a litigant in person will not automatically attract absolute privilege of protection from an order of immediate assessment and payment of costs. There is no statutory provision or legal principle, which exempts litigant in person as a class from summary assessment. Nor can I find any special circumstances of this case which render summary assessment and immediate payment of costs inappropriate. 44.It is wrong to complain this Court to have failed to consider P being a litigant in person in assessing the “attribute of the parties”. My observation was that P was not unfamiliar with civil procedures as illustrated in the procedural history. P has, since the commencement of the present proceedings, managed to initiate and prosecute a number of applications with a considerable amount of affirmations, legal submissions and legal authorities in support (§§29, 33-48 of the Injunction Decision; §41 of the Leave Decision). 45.P’s criticism that this Court was erred in finding that P was familiar with civil procedures and well-versed in law is misconceived and in ignorance of §41 of the Leave Decision. Given the bone of the disputes in the Injunction Application was essentially factual, procedural and within Ms Yung’s personal knowledge, her demonstrated knowledge and experience in prosecuting the present proceedings was sufficient to form the basis of my analysis in the Injunction Decision. P’s attempt to misinterpret my observation as if I had regarded Ms Yung as possessing professional legal qualifications or had legal work experience is undesirable. 46.Further, not only P had not asserted any actual financial strain, let alone any solid proof, I did not ignore the fact that Ms Yung had, at one of the hearings of the Injunction Application, emphasized that P was financially sound (notwithstanding its share capital was insignificant) and was capable of meeting any financial liabilities or consequences if the situation warrants. 47.Absent any solid proof of special circumstances, P’s complaint that this Court was erred in taking into account the unfairness of keeping the costs from D is unconvincing. There has been no justification to keep D out of pocket for the costs for a prolonged period pending trial, bearing in mind that most of those applications had already concluded at or around the amendment of pleading stage. It is necessary for the Court to ensure the fairness to the parties in exercising the discretion as to costs and to keep a successful party from its costs may amount to prejudice: §§16 & 21 Seridom Servicios Integrados Idom SAU v Heng Wen Trade Co, Ltd [2019] HKCFI 761. 48.In §6 of the Draft Notice, P complained this Court to have failed in giving consideration to the merits of P’s position in connection with the Injunction Decision. It appears to have referred to §28 of the Injunction VOC Decision ([2024] HKDC 25), but mistakenly cited as ([2023] HKDC 1325), to argue that this Court erred in finding the intended grounds of appeal from the Injunction Decision do not assist P in the costs application. 49.Such complaint is unsubstantiated. It neglects the reasons for dismissal of the Injunction Application as elaborated in the Three Decisions. Indeed, in §28 of the Injunction VOC Decision, this Court specifically referred to the Leave Decision to illustrate that this Court had already considered and determined all P’s intended grounds of appeal were unmeritorious with reasons given therein, as such, those intended grounds of appeal do not assist P in the costs application. 50.In §§7-8 of the Draft Notice, P argued that the Injunction Application[10] and the Stay Application[11] were not severable and independent from the rest of the action. 51.Such arguments are without merit. All those applications were indeed originated from and premised on P’s Second Ex-parte Application for the Ex-parte Injunction Order. They were interlocutory applications which have been determined and concluded. No matter what the outcome of the subsequent inspection, loss assessment or final trial, if any, will be in future, it will not change the fact that the P’s Second Ex-parte Application and the Injunction Application were procedurally defective and legally unmeritorious. 52.All those interlocutory applications and the costs incurred therein would not have otherwise took place in the ordinary course of legal proceedings but solely for P’s deliberate applications for the Ex-parte Injunction Order and its continuation. Upon their determination, those applications were wholly disposed of. Their costs could be ascertained and assessed separately and independently by referring to the relevant summonses. Each of the summonses are clearly severable and self-contained from the rest of the action. 53.In §9 of the Draft Notice, P argued that this Court was wrong in failing to consider D’s Stay Application was unwarranted. Such argument is hopeless. P had not sought variation of the Injunction Costs Order Nisi within the 14-day and is therefore not entitled to seek to overturn this aspect of the costs order or slip in such ground of appeal. 54.In any event, given the imminent draconian effect of the Ex-parte Injunction Order, D was understandably to have taken immediate action to have it stayed, not to mention P’s continuous criticisms of D’s non-compliance of the said order and P’s enforcement actions already taken during that period. GROUND 3: COSTS SHOULD NOT BE SUMMARILY ASSESSED 55.§§10-12 of the Draft Notice can be dealt with together. P refers to Order 62 r 9C RDC to argue that this court was erred in failing to consider “the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily” as well as the risks of summary assessment. 56.Such arguments are illusory. Not only that P was unable to actually elaborate what aspects of D’s costs and to what extent those aspects fell outside the scope of summary assessment. It also could not justify, even after D’s submission of the Statement of Costs, which items and what amounts of D’s costs could not be summarily assessed. 57.General criticisms that the costs sought by D in the sum of HK$470,535.33 were excessive and that there existed a possibility of overlapping of costs among multiple related applications did not render summary assessment inapplicable. Such concerns could be properly addressed during the assessment exercises, in that P was entitled to raise its objections by lodging its List of Objections. 58.It should be borne in mind that this Court, having the conduct of the Injunction Application, the Stay Application, as well as some other related applications, has been familiar with the procedural history and the development of this case as well as the disputes between the parties, and, accordingly, was in a better position to properly assess the costs than the taxing master and to guard against double claim. Thus viewed, P’s argument is unsounded. 59.All matters considered, P’s complaint that this Court did not consider the suitability of summary assessment is unfounded. I should not repeat my reasons as summarized in the Injunction VOC Decision and the matters set out above. 60.It is also noteworthy that P’s complaint in §4 of P’s Submissions dated 6 May 2024 that this Court had wrongfully stated “that P applied for a set of cost orders against D and thus D should apply for the same set of orders against P” is a misinterpretation of §33 of the Injunction VOC Decision. In §33, this Court stated clearly that P’s “request is unjustified for the reasons set out above.” and such request “demonstrates that P has regarded an order for immediate summary assessment of costs to be appropriate in the present context, which is contradictory to P’s grounds of opposition to D’s present application.”. The ruling should not be taken out of context. 61.For completeness sake, I should note in passing that P has also mentioned various procedural matters in its skeleton submissions[12]. Those matters are not relevant to the present application and are illusory. Suffice it to say that the true facts regarding P’s conducts of the present proceedings are well documented in the original documents of these proceedings as well as the transcripts of the hearings. It leaves no room for any attempt to suggest otherwise. 62.Indeed, this Court has repeatedly acceded to P’s requests for extension of time for lodging skeleton submissions in various applications and for transcripts of all the hearings before this Court so as to ensure that P would have reasonable time to prepare its case. DISPOSITION 63.Having considered all the submissions of both parties, I am not convinced that there is a reasonable chance that the appellate court would interfere with the discretion I exercised in the making of the Injunction Costs Order Absolute. I do not accept that P’s intended grounds of appeal have a reasonable prospect of success. There is no other reason in the interests of justice why the appeal should be heard. I refuse to grant P leave to appeal and dismiss the present application accordingly. 64.There is no reason why costs should not follow the event in this application. I order P to pay D’s costs of this application, including all costs reserved, summarily assessed at HK$26,000, payable forthwith.
The Plaintiff acting in person Messrs Y T Chan & Co, for the Defendant [1] See §29 of the Injunction Decision, [2023] HKDC 1325. [2] The Leave Decision was handed down on 1 March 2024, [2024] HKDC 336, in that this Court dismissed P’s application for leave to appeal against the Injunction Decision and its application for adducing new evidence for the purpose of appeal. [3] See §1, 29 -31 of the Injunction Decision, [2023] HKDC 1325, for the terms of the order. [4] See §29 of the Injunction Decision [5] Respectively dated 12 October 2023 (“Leave Summons”) and 19 December 2023 (“Evidence Summons”). [6] P changed to act in person shortly after taking out the three summonses. [7] ie §3 of P’s Submissions dated 6 May 2024 [8] Basing on P’s usual practice of obtaining transcripts of hearings. [9] HCA 16778/ 1999, unreported, 17 July 2000 §16 [10] “Injunction Application” refers to P’s application on 19 July 2023 for continuation of the Ex-parte Injunction Order granted by HH Judge E Yip on 12 July 2023 (“Ex-parte Injunction Order”) , which was dismissed in the Injunction Decision, handed down on 25 September 2023, [2023] HKDC 1325. [11] “Stay Application” refers to D’s urgent ex-parte application on 18 July 2023 to stay the Ex-parte Injunction Order. [12] §2 of P’s First Submissions | |||||||||||||||||||||||
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