Gold Topmont Ltd v. Outstanding Management Consultation Ltd
Read the full judgment text of HCMP 636/2022 on BabelCite. This High Court CFI judgment was delivered on 11 September 2024 before Hon Ng J.
Civil procedure – injunction – winding-up petition – undertaking to court – costs – summary judgment – release from undertaking – Plaintiff sought injunction to restrain Defendant from presenting winding-up petition based on statutory demand – Defendant had obtained summary judgment in separate proceedings for over HK$811 million – Defendant gave undertaking not to present winding-up petition pending determination of O 14 Summons – Plaintiff conceded OS and Injunction Summons should be dismissed following summary judgment – Defendant sought formal release from undertaking via D's Summons – Court held 4 situations in L v C for releasing party from undertaking not exhaustive – Court held most important consideration was O 14 Judgment confirmed Plaintiff had no bona fide defence – OS and Injunction Summons dismissed – Release from undertaking granted – Costs of all applications to Defendant.
Legal issues: Release from undertaking · Costs of applications
Outcome: OS and Injunction Summons dismissed; D's Summons para 1 granted; release from undertaking granted; costs to Defendant.
Cites 2 cases
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HCMP 636/2022 [2024] HKCFI 2392 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 636 OF 2022 _________________
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________________ JUDGMENT ________________ Introduction 1.There are 3 applications before this court:
2.On 18 January 2023, this court entered summary judgment in favour of the Defendant against the Plaintiff in HCA321 in the sum of over HK$811 million plus interest (“O 14 Judgment”). 3.At the beginning of this hearing, Ms Lee, with her practical sense, conceded that the OS and the Injunction Summons should be dismissed in light of the summary judgment against the Plaintiff. In view of the concession by Ms Lee, this court dismissed the OS and the Injunction Summons. 4.In view of this court’s dismissal of the OS and the Injunction Summons, this court formally granted para 1 of D’s Summons, subject to argument on costs. 5.Ms Lee also conceded that D’s Undertaking had completed its course while Ms Chow did not ask for any particular Order on the rest of D’s Summons. In view of that, Ms Chow, with her practical sense, was content that this court made no order regarding paras 2 and 3[1] of D’s Summons, again subject to argument on costs. 6.Thus, all 3 applications have been dealt with substantively at the beginning of the hearing within minutes. What is left are essentially arguments on costs of the 3 applications. Procedural History 7.A Joint Chronology of Events was filed by the parties at this court’s request on 27 March 2024. The following is a summary of it. 8.On 12 April 2022, the Defendant issued a Writ of Summons in HCA321 against the Plaintiff and Mr Pan Sutong (“Pan”) to recover over HK$811 million plus interest. By the O 14 Summons, the Defendant applied for summary judgment against the Plaintiff and Pan. 9.On 3 May 2022, the Defendant issued a statutory demand and served on the Plaintiff on 11 May 2022. 10.On 13 May 2022, the Defendant issued the O 14 Summons against the Plaintiff. 11.On 18 May 2022, the Plaintiff’s solicitors wrote to the Defendant’s solicitors requesting the Defendant to give an undertaking not to present a winding-up petition against the Plaintiff pending the determination of the O 14 Summons. 12.On 23 May 2022, the Plaintiff’s solicitors wrote to the Defendant’s solicitors threatening at para 5 that “if [the Defendant] does not give the Requested Undertaking by 10:00am tomorrow (24 May 2022 (Tuesday)), we shall take out an application for an injunction to restrain your client from presenting the [statutory demand] against Gold Topmont Limited, and pending that, an interim injunction to the same effect. By that time we shall also ask for a cost order against your client.” 13.On 24 May 2022, the Plaintiff issued the OS and the Injunction Summons. 14.On 26 May 2022, the Consent Order was made by Lisa Wong J. Apart from the D’s Undertaking, it provided for (i) the Injunction Summons be heard together with the O 14 Summons and (ii) directions for filing of evidence in respect of the Injunction Summons. 15.On 10 November 2022, Receivers were appointed as the only directors of the Plaintiff and the joint managers and receivers over the properties owned and developed by the Plaintiff, viz a luxury residential development in Ho Man Tin named Grand Homm(“Development”). 16.On 15 August 2022, this court heard the O 14 Summons and directed the Injunction Summons be adjourned until the determination of the O 14 Summons. 17.On 18 January 2023, this court granted the O 14 Judgment in favour of the Defendant against the Plaintiff. 18.On 15 February 2023, the Plaintiff filed a notice of appeal in CACV45/2023 (“Appeal”) against the O 14 Judgment drawn up by Mr William Wong SC and Ms Rosa Lee. 19.Also on 15 February 2023, the Plaintiff’s solicitors wrote to the Defendant’s solicitors stating inter alia:
20.On 16 February 2023, the Plaintiff filed a Notice of Setting down the Appeal. The appeal in CACV45/2023 was never heard. 21.On 17 February 2023, the Defendant’s solicitors wrote to the Plaintiff’s solicitors stating inter alia:
22.On 14 July 2023, the Defendant’s solicitors wrote to the Plaintiff’s solicitors (i) stating the Defendant hereby withdrew the statutory demand, and (ii) proposing the discontinuance of HCMP636/2022 by consent. 23.On 21 July 2023, the Defendant’s solicitors wrote to the Plaintiff’s solicitors stating that the Defendant considered the D’s Undertaking had been satisfactorily complied with and no longer exists in light of the O 14 Judgment and the withdrawal of the statutory demand, and that they had instructions to issue a fresh statutory demand against the Plaintiff. 24.On 26 July 2023, the Plaintiff’s solicitors wrote to the Defendant’s solicitors stating inter alia:
25.On 17 November 2023, the Defendant filed D’s Summons to sort out all the loose ends in these proceedings and to seek a formal release of D’s Undertaking. 26.On 12 December 2023, D’s Summons, scheduled for 15 minutes, was heard by Recorder Rachel Lam SC as a call-over hearing. Apart from giving directions for the filing of evidence, hearing bundles and submissions, the learned Recorder directed the OS, the Injunction Summons and D’s Summons be heard together. 27.The point to emphasise is that the Plaintiff, after issuing the OS and the Injunction Summons, did not see fit to restore them for hearing. It is only after the Defendant had issued D’s Summons and appeared before Recorder Rachel Lam SC that there was a direction that the OS, the Injunction Summons and D’s Summons be heard together and a determination of the three before this court on 5 March 2024. Deliberation on Costs 28.This deliberation will be brief given the OS and the Injunction Summons were dismissed and as, night follows day, the release of D’s Undertaking naturally follows the determination of the O 14 Summons and the dismissal of the Injunction Summons. 29.In her skeleton, Ms Chow submits that it is clear that the Defendant is the overwhelming successful party. 30.The Defendant’s position on costs is as follows:
31.Ms Chow emphasises that this court has granted 14 Judgment in favour of the Defendant. There is no dispute that both the Judgment Debt and the statutory demand Debt are based on the same outstanding principal sum plus interest under the “Facility Agreement” as defined in the O 14 Judgment. The slight difference reflects the Judgment Debt included interest up to 31 March 2022 only whereas the statutory demand Debt included interest up to 3 May 2022. Hence, both the OS and the Injunction Summons must fail on merits. Indeed the Plaintiff has not even applied for a stay of execution of the O 14 Judgment pending the appeal which never came on for hearing. 32.Ms Chow then submits that it became necessary for the Defendant to take out D’s Summons in order to persuade Recorder Rachel Lam SC to restore the OS and Injunction Summons for determination, given the Plaintiff‘s inaction and its failure to prosecute them diligently, adopting a “strategic” decision to maximise the “benefit” of D’s Undertaking not to present a winding-up petition pending the substantive determination of inter alias the Injunction Summons. The Plaintiff had even initially opposed the fixing of this substantive hearing at the call-over hearing on 12 December 2023, attracting criticism from Recorder Rachel Lam SC. 33.In Ms Lee’s skeleton at para 2, she states the Plaintiff’s position as follows:
34.By these summons, this court take it to mean the Injunction Summons and D’s Summons. 35.At para 18 of Ms Lee’s skeleton, she referred to Au-yeung J’s Judgment in Wang Linping and Anr v Chan Kin Sun and Others [2020] HKCFI 256 at [101] in which the learned Judge endorsed the 4 situations which in general would release a party from its undertaking to the Court set out in Deputy Judge Grace Chan in L v C unrep., FCMC 5952/2012, 3 July 2015. She further submits that in the present case, none of the 4 identified situations apply. 36.In this court’s view, the 4 situations which in general would release a party from its undertaking to the Court set out by Deputy Judge Grace Chan in L v C are not exhaustive. As far as this court is aware, no higher Court has stated that they are exhaustive – none has been presented to this court by Ms Lee. 37.Further, in this court’s view, the most important consideration is that by the O 14 Judgment, this court had decided and confirmed that the Plaintiff had no bona fide defence to the Defendant’s claim. Which in turn means that the Plaintiff was not justified in issuing the OS, which also in turn means the Plaintiff’s Injunction Summons was not justified. In other words, had a winding up petition been presented on the outstanding principal sum and interest under the Facility Agreement, say at the date of the statutory demand on 3 May 2022 or shortly thereafter, the Defendant would have obtained a winding up Order from the Court. 38.Having considered Ms Chow and Ms Lee’s skeletons, this court’s view is clear. Costs of the OS, the Injunction Summons and D’s Summons should be to the Defendant. Disposition and Costs 39.The OS and the Injunction Summons are hereby dismissed. 40.In view of this court’s dismissal of the OS and the Injunction Summons, this court hereby grants para 1 of D’s Summons. There be no order regarding paras 2 and 3 of D’s Summons. Para 2 is unnecessary in light of the O 14 Summons which naturally led to the dismissal of the OS and the Injunction Summons. Para 3 is unnecessary because Recorder Rachel Lam SC had already given directions at the call-over hearing on 12 December 2023. That does not mean D’s Summons is unmeritorious. 41.Since the parties have argued costs at the hearing, this court’s order is not on a nisi basis. 42.Costs of the OS and the Injunction Summons be to the Defendant and paid by the Plaintiff forthwith, to be summarily assessed if not agreed. 43.Costs of D’s Summons also be to the Defendant and paid by the Plaintiff forthwith, to be summarily assessed if not agreed.
Ms Rosa Lee, instructed by M/s Charles Chu & Kenneth Sit, for the Plaintiff Ms Theresa Chow and Mr Sam Ng, instructed by M/s LCP, for the Defendant [1] Concerning directions for the further conduct of the OS and the Injunction Summons. | |||||||||||||||||||||||||||||
Cases cited in this judgment