Re Success Lane Development Ltd

HCCW 3/2025

[2025] HKCFI 3409

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 3 OF 2025

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DECISION

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1.By a Notice of Appeal filed on 11 June 2025, Ms Yung Mei Chun Jessie, who had been joined as a party to these proceedings for the purpose of costs, appeals against the costs order of Master M Lam dated 28 May 2025 by which the costs of Ms Yung’s Summons filed on 6 May 2025, summarily assessed at HK$20,000, was awarded against her.

2.Since this is a costs only appeal, the court must be satisfied that the costs order is unreasonable or the Master erred in law before it will allow the appeal: see Hong Kong Civil Procedure 2025, vol 1, [58/1/6].

3.I first set out the relevant procedural chronology. On 17 March 2025, a winding up order was made against the Company (Success Lane Development Ltd). By another order of the same date, Ms Yung, who was at all material times a director of the Company, was joined as a party to the proceedings for the purpose of costs, and she was granted leave to file evidence to explain why she should not bear costs personally.

4.On 7 April 2025, the deadline for Ms Yung to file her evidence, she filed a Summons seeking an extension of 28 days to do so. On 14 April 2025, the Company filed a Notice of Appeal against the winding up order as well as the joinder order.

5.On 23 April 2025, Master M Leung made an order extending the time for Ms Yung to file her evidence to 6 May 2025, as well as ordering that any further time extension application will be “visited by an unless order with a short period of extension”.

6.By her Summons filed on 6 May 2025 (the extended deadline for filing her evidence), Ms Yung sought to (a) stay the filing of her evidence pending the final determination of the Company’s appeal; and (b) an extension, if necessary, of 28 days pending the final determination of (a).

7.On 27 May 2025, the day before the return date of the 6 May 2025 Summons, a Notice to Act was filed by Ms Yung’s solicitors. In the morning of 28 May 2025 (at around 10:30am), a speaking note and authorities of Ms Yung’s counsel was served on the Petitioner’s solicitors.

8.The hearing before Master M Lam on 28 May 2025 was contentious. The Petitioner was represented by solicitors and Ms Yung was represented by counsel. Having rejected Ms Yung’s case, an order was made by the learned Master for her to file of her evidence by 4pm on 18 June 2025, failing which she shall be deemed to have elected not to oppose the costs order against her personally and be debarred from filing any evidence in that regard.

9.After considering the statement of costs of the Petitioner, by way of summary assessment costs in the sum of HK$20,000 (reduced from HK$25,728 claimed in the statement of costs) was ordered against Ms Yung in favour of the Petitioner.

10.In respect of the grounds relied upon for this appeal. Ms Yung submitted that, firstly, the Petitioner’s solicitors had made false statements to the court at the hearing on 28 May 2025, namely, (a) a personal costs order had been made against her on 17 March 2025; and (b) no appeal had been lodged by her against the personal costs order. Secondly, the time costs claimed in the Petitioner’s statement of costs were inflated.

11.Before dealing with these grounds, I remind myself of the following dicta of the Court of Appeal in Success Lane Development Ltd v Ferguson Hong Kong Ltd, [2024] HKCA 926, [15] :

“…There is a large measure of discretion left to the court conducting the summary assessment, using a broad brush rather than carrying out a mini-taxation. The Court of Appeal will not interfere with the quantum of assessment unless there is something that strikes one as clearly outside the wide range of acceptable outcomes. The judge heard the arguments and saw the written evidence filed below and accordingly has a distinct advantage over this court in deciding whether there were costs that were unreasonable or unreasonably [incurred[1]]…”

12.In respect of the first ground, Mr Leung, who appeared for the Petitioner, accepted that he had made an error that a personal costs order had been made against Ms Yung. However, it appears to this court that it was an obvious error which, most probably, was innocently made. The reason being that the issue before the court below was whether Ms Yung should be granted a stay or an extension of time for filing her evidence on why she should not bear costs personally. Plainly, the costs order had yet to be determined. I disagree with Ms Yung that the Master was misled by the error because he granted an extension of time to Ms Yung for filing her evidence (on unless basis).

13.As regards the lack of appeal on Ms Yung’s part, it is strictly speaking correct. The appeal on foot is that of the Company, albeit that the joinder order is part of the appeal. In any case, the appeal was brought to the notice of the court on 28 May 2025, and I am unable to see how the alleged erroneous statement was relevant to the decision below on costs. It was simply a case where Ms Yung failed on both of the relief sought under her Summons and she had to bear the costs of it which was summarily assessed.

14.The allegation of overstating the time costs is based on the premise that the Petitioner had only 4 hours to prepare for the hearing on 28 May 2025 because the speaking note of Ms Yung’s counsel was only served on the petitioner at 10:30am for a hearing which took place at 14:30pm. It is clearly a misconception given that Ms Yung’s Summons was filed on 6 May 2025, and there is no reason to doubt that the Petitioner’s solicitors had prepared for the hearing prior to 28 May 2025.

15.I find no merit with either of the two grounds. In any case, I see no legitimate reason to interfere with the summary assessment of the Master by which the claimed costs had been reduced by over 22%.

16.Accordingly, this appeal is dismissed with costs to the Petitioner, which are summarily assessed at HK$20,000.

Mr H Y Leung, of Y.T. Chan & Co., for the Petitioner

The former director of the Company appeared in person